SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
Form 10-Q
QUARTERLY REPORT
PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995
Commission File Number: 1-871
__________________________________________
BUCYRUS-ERIE COMPANY
DELAWARE 39-0188050
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN 53172
(414) 768-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding November 9, 1995
Common Stock, par value $.01 per share 10,234,574
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information:
Consolidated Condensed Balance Sheets -
September 30, 1995 and December 31, 1994 3-4
Consolidated Condensed Statements of Operations -
Quarters and nine months ended September 30, 1995
and 1994 5-6
Consolidated Condensed Statements of Cash Flows -
Nine months ended September 30, 1995 and 1994 7-8
Notes to Consolidated Condensed Financial Statements 9-11
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-17
Part II. Other Information 18
Signature Page 19
Exhibit Index EI-1
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
September 30, December 31, September 30, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash Accounts payable and
equivalents $ 11,816 $ 16,209 accrued expenses $ 41,203 $ 32,703
Receivables 31,312 26,220 Liabilities to customers
Inventories 77,098 82,393 on uncompleted contracts
Prepaid expenses and and warranties 7,568 6,239
other current assets 1,585 1,856 Income taxes 2,476 2,820
________ ________ Short-term obligations 2,880 -
Total Current Assets 121,811 126,678 Current maturities of
long-term debt 1,152 7,123
OTHER ASSETS: ________ ________
Restricted funds Total Current
on deposit 2,877 3,675 Liabilities 55,279 48,885
Intangible assets - net 9,140 9,497
Other assets 2,468 2,414 DEFERRED LIABILITIES:
________ ________ Income taxes 514 122
14,485 15,586 Liabilities to customers on
uncompleted contracts
PROPERTY, PLANT AND EQUIPMENT: and warranties 3,211 3,261
Cost 38,239 35,897 Postretirement benefits 11,542 11,828
Less accumulated Deferred plant closing
depreciation (2,863) (207) expenses and other 7,465 7,071
________ ________ ________ ________
35,376 35,690 22,732 22,282
LONG-TERM DEBT, less
current maturities 57,330 53,170
COMMON SHAREHOLDERS' INVESTMENT:
Common stock - par value
$.01 per share, authorized
20,000,000 shares, issued
and outstanding 10,234,574
shares in 1995 and 10,170,417
shares in 1994 102 102
Additional paid-in capital $ 54,259 $ 53,898
Accumulated deficit (17,647) (552)
Cumulative foreign
currency translation
adjustments (383) 169
________ ________
36,331 53,617
________ ________ ________ ________
$171,672 $177,954 $171,672 $177,954
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
Quarter Ended September 30, Nine Months Ended September 30,
1995 1994 1995 1994
(Predecessor (Predecessor
Company) Company)
<S> <C> <C> <C> <C>
Revenues:
Net shipments $ 61,408 $ 50,648 $173,990 $144,611
Interest, royalties and
miscellaneous 314 157 933 2,018
________ ________ ________ ________
61,722 50,805 174,923 146,629
________ ________ ________ ________
Costs and Expenses:
Cost of products sold 58,625 41,668 156,102 120,904
Product development, selling,
administrative, and
miscellaneous expenses 9,761 7,778 26,188 22,943
Interest expense (Predecessor
Company contractual
interest not recognized
in 1994 - $6,986 and
$16,835, respectively) 1,558 2,674 4,574 11,324
Restructuring expenses 2,577 - 2,577 -
Reorganization items 446 1,385 919 6,514
________ ________ ________ ________
72,967 53,505 190,360 161,685
________ ________ ________ ________
Loss before income taxes (11,245) (2,700) (15,437) (15,056)
Income taxes 806 458 1,658 1,196
________ ________ ________ ________
Net loss (12,051) (3,158) (17,095) (16,252)
Redeemable preferred stock
accretion - - - (106)
Redeemable preferred stock
dividends - - - (40)
Redeemable preferred stock
reorganization item - - - (40,555)
________ ________ ________ ________
Net loss attributable to
common shareholders $(12,051) $ (3,158) $(17,095) $(56,953)
Weighted average number of
common shares outstanding 10,234,574 9,269,859 10,192,978 9,268,293
Net loss per share of
common stock:
Net loss $ (1.18) $ (.34) $ (1.68) $ (1.75)
Redeemable preferred stock
dividends, accretion and
reorganization item - - - (4.39)
__________ __________ __________ __________
Net loss per share
attributable to
common shareholders $ (1.18) $ (.34) $ (1.68) $ (6.14)
<FN>
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
<CAPTION>
Nine Months Ended September 30,
1995 1994
(Predecessor
Company)
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (17,095) $ (16,252)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Inventory obsolescence
adjustment 4,416 -
Depreciation 2,773 5,832
Amortization of goodwill,
intangible assets and
other items 896 2,914
Deferred rent (interest) on
sale and leaseback
financing arrangement - 5,189
Payment in kind interest on the
Secured Notes due
December 14, 1999 4,180 -
Amortization of debt discount - 71
Gain on sale of property,
plant and equipment (26) (14)
Non-cash reorganization items - 1,080
Changes in assets and liabilities:
Increase in receivables (5,233) (3,385)
Decrease (increase) in
inventories 404 (4,325)
Decrease (increase) in other
current assets 260 (294)
(Increase) decrease in
other assets (53) 103
Increase in current liabilities
other than income taxes,
short-term obligations
and current maturities
of long-term debt 10,209 16,336
Increase in income taxes 53 589
Decrease in deferred
liabilities other than
income taxes (731) (776)
_________ _________
Net cash provided by
operating activities 53 7,068
_________ _________
Cash Flows From Investing Activities
Decrease in restricted funds
on deposit 798 948
Purchases of property, plant
and equipment (2,205) (2,054)
Proceeds from sale of property,
plant and equipment 76 75
_________ _________
Net cash used in
investing activities (1,331) (1,031)
_________ _________
Cash Flows From Financing Activities
Proceeds from issuance of project
financing obligations 3,581 7,239
Reduction of project financing
obligations (6,861) (4,340)
Net increase (decrease) in other
bank borrowings 179 (308)
Payments of current maturities of
long-term debt (30) (27)
_________ _________
Net cash (used in) provided by
financing activities (3,131) 2,564
_________ _________
Effect of exchange rate
changes on cash 16 (15)
_________ _________
Net (decrease) increase in cash
and cash equivalents (4,393) 8,586
Cash and cash equivalents at
beginning of period 16,209 13,696
_________ _________
Cash and cash equivalents at
end of period $ 11,816 $ 22,282
Supplemental Disclosures of Cash Flow Information
1995 1994
Cash paid (received) during
the period for:
Interest on long-term debt
and bank borrowings $ 171 $ 222
Income taxes - net of refunds 1,079 (395)
</TABLE>
Supplemental Schedule of Non-Cash Investing and Financing Activities
(A) On June 27, 1995, the Company issued 64,157 shares of common stock as
payment in full of $362 of liabilities for certain legal and professional
fees incurred in connection with the Company's reorganization under
chapter 11 of the Bankruptcy Code.
(B) Prior to February 18, 1994 (the "Petition Date"), the Predecessor Company
increased the carrying amount of the Series A redeemable preferred stock
by amounts representing the estimated fair value of the pre-petition
dividends not declared or paid, but which were payable under mandatory
redemption features. The Predecessor Company also recorded preferred
stock discount accretion on these securities prior to the Petition Date.
As of the Petition Date, the Predecessor Company increased the carrying
amount of the Series A redeemable preferred stock to the amount of the
allowed claim in the Amended Plan. The amounts as reflected in the
consolidated condensed financial statements were as follows:
1994
Redeemable preferred stock dividends at
net book value $ 129
Redeemable preferred stock accretion 106
Write-up of redeemable preferred stock issued
at a discount to amount of allowed claim
in the Amended Plan 40,555
________
$ 40,790
See accompanying notes to consolidated condensed financial statements.
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Dollars In Thousands, Except Per Share Amounts)
1. In the opinion of Bucyrus-Erie Company (the "Company"), the accompanying
consolidated condensed financial statements contain all adjustments
(consisting of normal recurring accruals and other adjustments as stated
in Notes 3, 4 and 5) necessary to present fairly the financial results
for the interim periods. Certain items are included in these statements
based on estimates for the entire year. Also, certain warranty expenses
previously included in product development and selling expense are now
included in cost of products sold, and certain engineering expenses
previously included in cost of products sold are now included in product
development expense. Reclassifications have been made to the 1994
consolidated condensed financial statements to present them on a basis
consistent with the current year.
2. Certain notes and other information have been condensed or omitted from
these interim consolidated condensed financial statements. Therefore,
these statements should be read in conjunction with the Company's 1994
annual report on Form 10-K filed with the Securities and Exchange
Commission on April 17, 1995.
3. Restructuring expenses of $2,577 for the quarter and nine months ended
September 30, 1995 consist of employee severance expenses recorded to
reflect the cost of reduced employment and the resignation of three
former officers of the Company.
4. On February 18, 1994 (the "Petition Date"), B-E Holdings, Inc.
("Holdings" or the "Predecessor Company") and the Company, which at such
time was a wholly-owned subsidiary of Holdings, commenced voluntary
petitions under chapter 11 of the Bankruptcy Code and filed a prepackaged
joint plan of reorganization in the United States Bankruptcy Court,
Eastern District of Wisconsin (the "Bankruptcy Court"). On December 1,
1994, the Bankruptcy Court entered an order confirming the Second Amended
Joint Plan of Reorganization of Holdings and the Company as modified on
December 1, 1994 (the "Amended Plan"). The Amended Plan was effective on
December 14, 1994 (the "Effective Date") and on such date Holdings was
merged with and into the Company.
The Company and Holdings accounted for the reorganization by using the
principles of fresh start reporting as required by AICPA Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code". Accordingly, the consolidated financial statements
of the Company for periods subsequent to the Effective Date are not
comparable to the consolidated financial statements of prior periods.
The Predecessor Company consolidated financial statements are those of
Holdings which include the accounts and operating results of the Company.
The acquisition of the Company by the Predecessor Company on February 4,
1988 was accounted for as a purchase and, accordingly, the assets and
liabilities were recorded at their estimated fair values as of the
acquisition date. The excess of the related purchase cost over the fair
value of identifiable net assets was allocated to goodwill. The
Predecessor Company consolidated financial statements for periods
subsequent to the date of the acquisition included the related
depreciation and amortization charges associated with the fair value
adjustments.
Reorganization items included in the Consolidated Condensed Statements of
Operations consist of the following:
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
(Predecessor (Predecessor
Company) Company)
<S> <C> <C> <C> <C>
Legal and
professional
fees $ 446 $1,520 $ 919 $ 5,688
Net adjustment of
debt to amount of
allowed claim in
the Amended Plan - - - (33)
Interest income - (135) - (254)
Write-off
previously
recorded
capitalized
financing costs - - - 1,113
______ ______ ______ _______
$ 446 $1,385 $ 919 $ 6,514
Write-up of
redeemable
preferred stock
issued at a
discount to
amount of allowed
claim in the
Amended Plan $ - $ - $ - $40,555
</TABLE>
5. Inventories are summarized as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Raw materials and parts $ 10,028 $ 13,529
Inventoried costs relating to
uncompleted contracts 4,103 6,525
Customers' advances offset
against costs incurred on
uncompleted contracts (1,309) (2,619)
Work in process 15,717 13,069
Finished products (primarily
replacement parts) 48,559 51,889
________ ________
$ 77,098 $ 82,393
</TABLE>
The remaining fair value adjustment included in inventory as of
September 30, 1995 and December 31, 1994 was $1,535 and $10,065,
respectively. The Company completed an evaluation of its inventory and
recorded a charge of $4,416 to cost of products sold for the quarter
ended September 30, 1995 for the eventual scrapping and disposal of
excess inventory which existed for certain older and discontinued machine
models.
6. Net loss per share of common stock is based on the weighted average
number of common shares outstanding during the period. Net loss
attributable to common shareholders for the Predecessor Company includes
redeemable preferred stock dividends earned but not declared.
7. On March 7, 1995, Jackson National Life Insurance Company ("JNL"),
currently the holder of approximately 41.31% of the Company's common
stock, amended a complaint (the "JNL Complaint") previously filed in a
civil action (the "JNL Suit") in the United States District Court,
Southern District of New York, to name as defendants certain of the
Company's current and/or former officers and directors (the "Management
Defendants") and others (collectively with the Management Defendants, the
"Defendants"). The JNL Complaint sought unspecified money damages and
other equitable relief from the Management Defendants in connection with
(i) JNL's purchase of the Predecessor Company's Resettable Senior Notes
and (ii) certain of the Defendants' alleged orchestration of a series of
financings for the Predecessor Company which are alleged to have had the
effect of rendering the Predecessor Company insolvent, incapable of
competing in its markets and unable to pay its creditors, including JNL.
The Management Defendants have rights to indemnification from the Company
for any costs and expenses incurred by them in connection with the JNL
Complaint pursuant to the Amended Plan and the Company's Restated Bylaws.
As previously reported in the Company's Report on Form 8-K dated May 31,
1995 (the "May 31, 1995 8-K"), the Company and JNL entered into a
Settlement Agreement (the "Settlement Agreement") dated May 23, 1995,
pursuant to which JNL agreed: (a) to execute general releases of all
claims, known or unknown, arising at any time through the date of such
releases, in favor of the Management Defendants, and (b) to discontinue
with prejudice, and without costs as against any party, the JNL Suit as
it relates to the Management Defendants. On June 8, 1995, JNL executed
releases in favor of the Management Defendants. A Stipulation and Order
of Dismissal, with prejudice and without costs and attorneys' fees to any
party, was entered by the judge in the JNL Suit on June 13, 1995.
In addition, JNL has filed a claim (the "JNL 503(b) Claim") against the
Company for reimbursement of approximately $3,300 for professional fees
and disbursements incurred in connection with the Company's chapter 11
proceedings pursuant to Section 503(b) of the Bankruptcy Code. As
previously reported in the May 31, 1995 8-K, pursuant to the Settlement
Agreement JNL agreed that, in the event that the JNL 503(b) Claim is
allowed in whole or in part by the Bankruptcy Court, in lieu of requiring
payment of any award in cash JNL will accept payment in common stock of
the Company at a price equal to $5.6375 per share (the average closing
price of such stock on the Nasdaq National Market on June 20, 21, 22, 23
and 26, 1995). The Company has filed an objection to the JNL 503(b)
Claim and a trial has been scheduled by the Bankruptcy Court to begin on
November 29, 1995. The Company has been advised by legal counsel that in
said counsel's opinion the JNL 503(b) Claim is without merit; however,
the ultimate outcome of this matter cannot presently be determined.
Accordingly, no provision for any loss that may result upon resolution of
this matter has been made in the accompanying consolidated financial
statements.
<PAGE>
BUCYRUS-ERIE COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars In Thousands)
The following information is provided to assist in the understanding of
Bucyrus-Erie Company's (the "Company") operations for the quarter and nine
months ended September 30, 1995.
The reorganization of the Company under chapter 11 of the Bankruptcy Code
was effective December 14, 1994 (the "Effective Date"). The reorganization
was accounted for using the principles of fresh start reporting, as required
by AICPA Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code". Under the principles of fresh
start reporting, total assets were recorded at their assumed reorganization
value, with the reorganization value allocated to identifiable tangible and
intangible assets on the basis of their estimated fair value, and liabilities
were adjusted to the present values of amounts to be paid where appropriate.
The consolidated financial statements for periods subsequent to the Effective
Date include the related amortization charges associated with the fair value
adjustments.
As a result of the implementation of fresh start reporting, the
consolidated financial statements of the Company for periods subsequent to the
Effective Date are not comparable to the consolidated financial statements of
prior periods. The consolidated financial statements presented for prior
periods are not the Company's, but instead are those of B-E Holdings, Inc.
(the "Predecessor Company"), the former parent of the Company which was merged
with and into the Company on the Effective Date.
The acquisition of the Company by the Predecessor Company on February 4,
1988 was accounted for as a purchase and, accordingly, the assets and
liabilities were recorded at their estimated fair values as of the acquisition
date. The excess of the related purchase cost over the fair value of
identifiable net assets was allocated to goodwill. The Predecessor Company
consolidated financial statements for periods subsequent to the date of the
acquisition included the related depreciation and amortization charges
associated with the fair value adjustments.
Net Shipments and Net Loss
Net shipments for the quarter and nine months ended September 30, 1995
were $61,408 and $173,990, respectively, compared with $50,648 and $144,611
for the quarter and nine months ended September 30, 1994, respectively.
Shipments of repair parts and services for the quarter ended September 30,
1995 were $39,234, which is an increase of 0.9% from the quarter ended
September 30, 1994. Shipments of repair parts and services for the nine
months ended September 30, 1995 were $117,144, which is an increase of 6.9%
from the nine months ended September 30, 1994. Both increases were due to
increased shipments at foreign locations. Machine shipments for the quarter
ended September 30, 1995 were $22,174, which is an increase of 88.6% from the
quarter ended September 30, 1994. Machine shipments for the nine months ended
September 30, 1995 were $56,846, which is an increase of 62.2% from the nine
months ended September 30, 1994. Both increases were due to increased blast
hole drill and electric mining shovel shipments, primarily in copper, coal and
iron markets. The pricing for machines and repair parts has continued to
remain steady with the changes primarily related to increased sales volume.
Net loss for the quarter and nine months ended September 30, 1995 was
$12,051 and $17,095, respectively, compared with a net loss of $3,158 and
$16,252 for the quarter and nine months ended September 30, 1994,
respectively. The increase in net loss for the quarter ended September 30,
1995 was primarily due to the recording of inventory obsolescence adjustments
of $4,416, an increase in customer warranty reserves of $1,018 and
restructuring expenses of $2,577. Net loss for the quarter and nine months
ended September 30, 1995 includes charges of $2,813 and $8,530, respectively,
which were charged to cost of products sold reflecting the effects of fresh
start reporting for inventories which were written up by $10,427 on the
Effective Date. Non-cash depreciation and amortization charges included in
the net loss for the quarter and nine months ended September 30, 1995 were
$1,252 and $3,669, respectively, compared with $2,805 and $8,746 for the
quarter and nine months ended September 30, 1994, respectively.
The Company's consolidated backlog on September 30, 1995 was $90,879
compared with $72,346 on December 31, 1994 and $74,299 on September 30, 1994.
Machine backlog increased 21.2% from December 31, 1994 and increased 19.7%
from September 30, 1994. Repair parts and service backlog increased 28.0%
from December 31, 1994 and increased 23.7% from September 30, 1994. The
increases in repair parts and service backlog were primarily at foreign
locations.
New orders for the quarter ended September 30, 1995 increased 81.1% from
the quarter ended September 30, 1994 and for the nine months ended
September 30, 1995 increased 32.9% from the nine months ended September 30,
1994. New machine orders for the quarter ended September 30, 1995 increased
307.2% from the quarter ended September 30, 1994 and for the nine months ended
September 30, 1995 increased 77.1% from the nine months ended September 30,
1994. The increases were both in electric mining shovel and blast hole drill
volume and represent strong machine sales activity. New repair parts and
service orders for the quarter ended September 30, 1995 increased 24.9% from
the quarter ended September 30, 1994 and for the nine months ended
September 30, 1995 increased 18.7% from the nine months ended September 30,
1994. Both increases in repair parts and service orders were at foreign
locations. Blast hole drill and electric mining shovel inquiries remained at
a relatively high level for the quarter. The Company believes that new
machine sales activity will improve in the near term as a result of the high
inquiry levels. These inquiries are primarily from South America and China as
a result of the continued strength of mineral prices. New walking dragline
activity is also expected in the near term in coal applications in Australia.
The North American market for electric mining shovels and blast hole drills
remains steady in iron ore, copper and the low sulphur coal fields in the
Western United States.
Interest, Royalties and Miscellaneous
Interest, royalties and miscellaneous for the quarter and nine months
ended September 30, 1995 were $314 and $933, respectively, compared with $157
and $2,018 for the quarter and nine months ended September 30, 1994,
respectively. Included in the amount for the nine months ended September 30,
1994 was an insurance settlement of $1,350 received in the second quarter of
1994.
Cost of Products Sold
Cost of products sold for the quarter ended September 30, 1995 was
$58,625 or 95.5% of net shipments compared with $41,668 or 82.3% of net
shipments for the quarter ended September 30, 1994. For the nine months ended
September 30, 1995, cost of products sold was $156,102 or 89.7% of net
shipments compared with $120,904 or 83.6% of net shipments for the nine months
ended September 30, 1994. Included in cost of products sold for the quarter
and nine months ended September 30, 1995 was $2,813 and $8,530, respectively,
as a result of the fair value adjustment to inventory. This adjustment was
made in accordance with the principles of fresh start reporting and is being
charged to cost of products sold as the inventory is sold. The Company
expects the remaining adjustment of $1,535 to be charged to cost of products
sold during the fourth quarter of 1995.
The Company has completed an evaluation of its inventory and determined
that excess levels existed for certain older and discontinued machine models.
Accordingly, a charge of $4,416 was made to cost of products sold for the
quarter ended September 30, 1995 for the eventual scrapping and disposal of
this inventory. The Company also recorded a charge to cost of products sold
of $1,018 for the quarter ended September 30, 1995 as a result of the
reestimation of certain customer warranty reserves.
Product Development, Selling, Administrative and Miscellaneous Expenses
Product development, selling, administrative and miscellaneous expenses
for the quarter ended September 30, 1995 were $9,761 or 15.9% of net shipments
compared with $7,778 or 15.4% of net shipments for the quarter ended
September 30, 1994. The amounts for the nine months ended September 30, 1995
and 1994 were $26,188 or 15.1% of net shipments and $22,943 or 15.9% of net
shipments, respectively.
Interest Expense
Interest expense for the quarter and nine months ended September 30, 1995
was $1,558 and $4,574, respectively, compared with $2,674 and $11,324 for the
quarter and nine months ended September 30, 1994, respectively. The decrease
was primarily due to the exchange of unsecured debt securities of the
Predecessor Company and the Company for shares of the Company's common stock
in connection with the Company's reorganization pursuant to the Amended Plan.
Restructuring Expenses
Restructuring expenses of $2,577 for the quarter and nine months ended
September 30, 1995 consist of employee severance expenses recorded to reflect
the cost of reduced employment and the resignation of three former officers of
the Company.
Income Taxes
Income tax expense for the quarter and nine months ended September 30,
1995 and 1994 consists primarily of foreign taxes at applicable statutory
rates.
Capitalization
The long-term debt to equity ratio as of September 30, 1995 and
December 31, 1994 was 1.6 to 1 and 1.0 to 1, respectively. The increase in
the ratio is due to net losses incurred in 1995.
Liquidity and Capital Resources
Working capital and current ratio are two financial measurements which
provide an indication of the Company's ability to meet its short-term
obligations. These measurements at September 30, 1995 and December 31, 1994
were as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Working capital $ 66,532 $ 77,793
Current ratio 2.2 to 1 2.6 to 1
</TABLE>
The decrease in working capital was primarily due to the inventory fair
value adjustment of $8,530 being charged to cost of products sold as the
inventory is sold and the inventory obsolescence adjustment of $4,416.
The table below summarizes the Company's cash position at September 30,
1995:
<TABLE>
<CAPTION>
Restricted Unrestricted
Location Cash Cash Total
<S> <C> <C> <C>
United States $ - $ 4,177 $ 4,177
Foreign Subsidiaries 21 6,248 6,269
Equipment Assurance Limited 2,856 1,391 4,247
________ ________ ________
$ 2,877 $ 11,816 $ 14,693
</TABLE>
The decrease in the Company's cash balances from December 31, 1994 was
primarily due to the payment of reorganization items and an increase in
receivables.
Approximately $1,658 of cash is required for payment of expenses that
were incurred in connection with the reorganization (primarily legal and
professional fees) and approximately $2,700 is required to be refunded to the
Internal Revenue Service for an excess refund received in 1993. Approximately
$1,000 of the legal and professional fees is expected to be paid in the fourth
quarter of 1995 and the remaining fees are expected to be paid in 1996. The
amount to be refunded to the Internal Revenue Service is expected to be paid
in the fourth quarter of 1995 or first quarter of 1996. A portion of the
unrestricted cash at the foreign subsidiaries and Equipment Assurance Limited
("EAL"), an off-shore insurance subsidiary of the Company, is not readily
repatriatable because it is required for working capital purposes at these
respective locations.
Pursuant to the Amended Plan, the Company entered into a Credit Agreement
dated as of December 14, 1994 (the "Credit Agreement"), with Bank One,
Milwaukee, National Association ("Bank One"). The Credit Agreement, as
amended, contains a credit facility for working capital and general corporate
purposes (the "Loan Facility"), a letter of credit facility (the "L/C
Facility") and a project financing loan facility (the "Project Financing
Facility"). Under the Loan Facility, the Company may borrow up to $5,000
through December 31, 1995, and from January 1, 1996 through December 31, 1996,
the Company may borrow up to $2,500, provided that it meets certain earnings
before interest, taxes, depreciation and amortization tests, as defined.
Borrowings under the Loan Facility mature on December 31, 1996 and interest is
payable at the Company's option either at a rate equal to Bank One's reference
rate plus 0.75% per annum or an adjusted LIBOR rate plus 2.75% per annum.
Under the L/C Facility, Bank One has agreed to issue letters of credit for the
benefit of the Company through April 30, 1997 in an aggregate amount not in
excess of $15,000 minus the then outstanding aggregate borrowings by the
Company under the Loan Facility, provided that no letter of credit may expire
after April 30, 1998. Under the Project Financing Facility, Bank One may make
project financing loans to the Company from time to time. Borrowings under
the Project Financing Facility bear interest at the Company's option either at
a rate equal to Bank One's reference rate or an adjusted LIBOR rate plus 2.25%
per annum. As of September 30, 1995, the Company had $179 of borrowings
outstanding under the Loan Facility and $3,467 of the L/C Facility was being
used. There were no borrowings under the Bank One Project Financing Facility.
The agreements relating to the Company's Secured Notes due December 14,
1999 and the Credit Agreement permit additional project financing which
enables the Company to borrow money to pay costs associated with the
manufacture of mining machinery or other products pursuant to binding purchase
contracts. Project financing borrowings are secured by the inventory being
financed and any accounts receivable relating to such inventory. Project
financing borrowings mature not later than the date of the final payment by
the customer under the applicable purchase contract. As of September 30,
1995, the Company had $2,957 of outstanding project financing borrowings not
related to the Bank One Project Financing Facility.
The Company believes that current levels of liquidity, together with
funds available from its Credit Agreement and other project financing
arrangements and funds generated by operations, will be sufficient to permit
the Company to satisfy its debt service requirements and fund operating
activities for the foreseeable future. The Company is subject to significant
business, economic and competitive uncertainties that are beyond its control.
Accordingly, there can be no assurance that the Company's financial resources
will be sufficient for the Company to satisfy its debt service obligations and
fund operating activities under all circumstances.
As required under various agreements, EAL has pledged $2,856 of its cash
to secure its reimbursement obligations for outstanding letters of credit at
September 30, 1995. This collateral amount is classified as Restricted Funds
on Deposit in the Consolidated Condensed Balance Sheets.
At September 30, 1995, the Company had approximately $1,974 of open
approved capital appropriations. The Company does not anticipate any
substantial increase in the level of capital expenditures for the remainder of
1995 or 1996.
The following table reconciles Loss Before Income Taxes to earnings
before interest, income taxes, depreciation, amortization, inventory fair
value adjustment charged to cost of products sold, restructuring expenses and
reorganization items ("Adjusted EBITDA"):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
(Predecessor (Predecessor
Company) Company)
<S> <C> <C> <C> <C>
Loss before income
taxes $(11,245) $ (2,700) $(15,437) $(15,056)
Restructuring
expenses 2,577 - 2,577 -
Reorganization items 446 1,385 919 6,514
Inventory fair value
adjustment charged
to cost of products
sold 2,813 - 8,530 -
Non-cash expenses:
Depreciation 953 1,860 2,773 5,832
Amortization of
goodwill, intangible
assets and other
items 299 945 896 2,914
Deferred rent
(interest) on sale
and leaseback
financing
arrangement - 1,848 - 5,189
Payment in kind
interest on the
Secured Notes due
December 14, 1999 1,445 - 4,180 -
Amortization of
debt discount - - - 71
________ ________ ________ ________
Cash available for
use before non-cash
interest expense
and income taxes (2,712) 3,338 4,438 5,464
Cash interest
expense (1) 113 826 394 6,064
________ ________ ________ ________
Adjusted EBITDA (2) $ (2,599) $ 4,164 $ 4,832 $ 11,528
<FN>
(1) Cash interest expense for the Predecessor Company includes all
accrued but unpaid interest prior to the Petition Date. Contractual interest
for the quarter and nine months ended September 30, 1994 of $6,986 and
$16,835, respectively, on the unsecured debt of the Predecessor Company did
not accrue subsequent to the Petition Date. Excludes amortization of debt
discount, deferred rent (interest) on the sale and leaseback financing
arrangement and interest on the Company's Secured Notes due December 14, 1999
that will be paid in kind.
(2) Adjusted EBITDA for the quarter and nine months ended September 30,
1995 is reduced by a $4,416 charge to cost of products sold for the eventual
scrapping and disposal of excess inventory which existed for certain older and
discontinued machine models.
</TABLE>
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index on last page of this report, which is
incorporated herein by reference.
(b) Report on Form 8-K
1. Items Reported:
A. Press release, dated July 25, 1995, of Bucyrus-Erie
Company announcing the resignation of certain members
of management and the appointment of interim
management.
B. Management Agreement, dated July 21, 1995, between
Bucyrus-Erie Company and Miller Associates.
2. Financial Statements: None.
3. Date: July 25, 1995
<PAGE>
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.
BUCYRUS-ERIE COMPANY
(Registrant)
Date November 13, 1995 /s/Craig R. Mackus
Craig R. Mackus
Controller
Principal Accounting Officer
Date November 13, 1995 /s/Frank W. Miller
Frank W. Miller
Interim President and CEO
<PAGE>
<TABLE>
BUCYRUS-ERIE COMPANY
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
Incorporated Sequential
Exhibit Herein By Filed Page
Number Description Reference Herewith Number
<S> <C> <C> <C> <C>
3.2 Restated Bylaws of X
Bucyrus-Erie Company,
as amended on
August 1-2, 1995.
(a) Amendment to X
Section 5.3 and 5.4
of Article V of the
Restated Bylaws of
Bucyrus-Erie Company
adopted by Board of
Directors at its
meeting of August 1-2,
1995.
10.1 Credit Agreement, Exhibit 10.1 to
dated as of Registrant's
December 14, 1994, December 14, 1994
between Bank One, 8-K
Milwaukee, National
Association and
Bucyrus-Erie Company
("1994 Credit
Agreement")
(a) First Amendment X
to 1994 Credit
Agreement dated
June 22, 1995.
(b) Second Amendment X
to 1994 Credit
Agreement dated
August 31, 1995.
10.2 Separation Agreement X
and Mutual Release
between Bucyrus-Erie
Company and P. W. Mork
dated July 25, 1995.
10.3 Separation Agreement X
and Mutual Release
between Bucyrus-Erie
Company and N. J.
Verville dated
July 25, 1995.
10.4 Separation Agreement X
and Mutual Release
between Bucyrus-Erie
Company and D. M.
Goelzer dated
July 25, 1995.
10.5 Becor Western Exhibit 10.11 to
Salaried Employees' B-E Holdings, Inc.
Retirement Plan Annual Report on
("BSERP"), as Form 10-K dated
restated through March 29, 1988.
June 4, 1987.
(a) Amendment Exhibit 10.6(b)
to BSERP, to Registrant's
Section 13.01(iii) Annual Report on
Form 10-K dated
March 29, 1990.
("Registrant's
1989 10-K")
(b) Amendments to Exhibit 10.6(c)
BSERP, Sections 1.23 to Registrant's
and new Supplements 1989 10-K.
No. 6 and 10.
(c) Amendment to Exhibit 10.6(d)
BSERP per U.S. to Registrant's
Internal Revenue 1989 10-K.
Service
Notice 88-131.
(d) Amendment to Exhibit 10.6(e)
BSERP, Section 1.06. to Registrant's
Annual Report
on Form 10-K dated
March 27, 1991.
(e) Amendment to X
BSERP, Section 1.06.
10.6 Restated Bucyrus-Erie X
Salaried Employees'
Savings Plan
27 Financial Data Schedule X
</TABLE>
EXHIBIT 3.2
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
RESTATED BYLAWS
OF
BUCYRUS-ERIE COMPANY
Incorporated under the Laws of the State of Delaware
ARTICLE I
GENERAL
Section 1.1. Effectiveness of Bylaws. These Bylaws have been
adopted in accordance with the provisions of the Second Amended Joint Plan of
Reorganization of B-E Holdings, Inc. and Bucyrus-Erie Company (as amended,
modified or supplemented from time to time, the "Plan") under chapter 11 of
title 11, United States Code (the "Bankruptcy Code") in proceedings under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for
the Eastern District of Wisconsin. These Bylaws shall constitute the Bylaws
of the Corporation and shall be effective for all purposes as of the Effective
Date (as defined in the Plan) of the Plan.
ARTICLE II
OFFICE AND RECORDS
Section 2.1. Delaware Office. The principal office of the
Corporation in the State of Delaware shall be located in the City of
Wilmington, County of New Castle, and the name and address of its registered
agent is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.
Section 2.2. Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.
Section 2.3. Books and Records. The books and records of the
Corporation may be kept at the Corporation's principal executive offices in
South Milwaukee, Wisconsin or at such other locations outside the State of
Delaware as may from time to time be designated by the Board of Directors.
ARTICLE III
STOCKHOLDERS
Section 3.1. Annual Meeting. The annual meeting of the
stockholders of the Corporation shall be held on the last Wednesday in April
of each year, if not a legal holiday, and if a legal holiday then on the next
succeeding business day, at 1:00 p.m., local time, at the principal executive
offices of the Corporation, or at such other date, place and/or time as may be
fixed by resolution of the Board of Directors. The first annual meeting of
stockholders following the Effective Date will take place in 1996 following
completion of the Corporation's fiscal year ending December 31, 1995 at such
time and place determined in accordance with the immediately preceding
sentence (the "1996 Annual Meeting").
Section 3.2. Special Meeting. Subject to the rights of the holders
of any series or class of stock as set forth in the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation") to elect
additional directors under specified circumstances, special meetings of the
stockholders may be called only by the Chairman of the Board, by the Board of
Directors pursuant to a written request signed by not less than three
directors and delivered to the Secretary or by the President or the Secretary
upon the written request, stating the time, place, and the purpose or purposes
of the meeting, of stockholders who together own of record a majority of the
outstanding stock of all classes entitled to vote at such meeting.
Section 3.3. Place of Meeting. The Board of Directors may
designate the place of meeting for any meeting of the stockholders. If no
designation is made by the Board of Directors, the place of meeting shall be
the principal executive offices of the Corporation.
Section 3.4. Notice of Meeting. Written or printed notice, stating
the place, day and hour of the meeting and the purpose or purposes for which
the meeting is called, shall be prepared and delivered by the Corporation not
less than ten days nor more than sixty days before the date of the meeting,
either personally, or by mail, to each stockholder of record entitled to vote
at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail with postage thereon prepaid, addressed to
the stockholder at his or her address as it appears on the stock transfer
books of the Corporation. Such further notice shall be given as may be
required by law. Meetings may be held without notice if all stockholders
entitled to vote are present, or if notice is waived as provided in Section
7.2 of these Bylaws. Any previously scheduled meeting of the stockholders may
be postponed by resolution of the Board of Directors upon public notice given
prior to the time previously scheduled for such meeting of stockholders.
Section 3.5. List of Stockholders. A complete list of the
stockholders entitled to vote at the ensuing election, arranged in
alphabetical order, with the address of each, and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, at the Corporation's principal executive
offices. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 3.6. Quorum and Adjournment. Except as otherwise provided
by law or by the Certificate of Incorporation, the holders of a majority of
the outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series voting as a class,
the holders of a majority of the shares of such class or series shall
constitute a quorum for the transaction of such business. The chairman of the
meeting or a majority of the voting power of the shares of Voting Stock so
represented may adjourn the meeting from time to time, whether or not there is
such a quorum (or in the case of specified business to be voted on as a class
or series, the chairman or a majority of the shares of such class or series so
represented may adjourn the meeting with respect to such specified business).
No notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 3.7. Proxies. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the stockholder or as
otherwise permitted by law, or by his or her duly authorized attorney-in-fact.
Such proxy must be filed with the Secretary of the Corporation or his or her
representative at or before the time of the meeting.
Section 3.8. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting delivered
pursuant to Section 3.4 of these Bylaws, (b) by or at the direction of the
Chairman of the Board or pursuant to a written request signed by not less than
three directors and delivered to the Secretary or (c) by any stockholder of
the Corporation who is entitled to vote at the meeting, who complied with the
notice procedures set forth in clauses (2) and (3) of paragraph (A) of this
Bylaw and who was a stockholder of record at the time such notice is delivered
to the Secretary of the Corporation.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1)
of this Bylaw, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive offices
of the Corporation not less than seventy days nor more than ninety days prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than twenty days, or delayed by more than seventy days, from such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the ninetieth day prior to such annual meeting and not later
than the close of business on the later of the seventieth day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made. Such stockholder's notice shall
set forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected; (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest
in such business of such stockholder and the beneficial owner, if any, on
whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder, as they appear
on the Corporation's books, and of such beneficial owner and (ii) the class
and number of shares of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least
eighty days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this Bylaw shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the tenth day following the day on which such public announcement
is first made by the Corporation.
(B) Special Meeting of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting pursuant to
Section 3.4 of these Bylaws. Nominations of persons for election to the Board
of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting
(i) by or at the direction of the Board of Directors or (ii) by any
stockholder of the Corporation who is entitled to vote at the meeting, who
complies with the notice procedures set forth in this Bylaw and who is a
stockholder of record at the time such notice is delivered to the Secretary of
the Corporation. Nominations by stockholders of persons for election to the
Board of Directors may be made at such a special meeting of stockholders if
the stockholder's notice as required by paragraph (A)(2) of this Bylaw shall
be delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the seventieth day
prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of
the nominees proposed by the Board of Directors to be elected at such meeting.
(C) General. (1) Only persons who are nominated in accordance with
the procedures set forth in this Bylaw shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as
shall have been brought before the meeting in accordance with the procedures
set forth in this Bylaw. Except as otherwise provided by law, the Certificate
of Incorporation or these Bylaws, the chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to
be brought before the meeting was made in accordance with the procedures set
forth in this Bylaw and, if any proposed nomination or business is not in
compliance with this Bylaw, to declare that such defective proposal or
nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
Section 3.9. Procedure for Election of Directors; Required Vote.
Other than the election of directors at any meeting of stockholders of the
Corporation held prior to the annual meeting of stockholders to be held in
1997 (the "1997 Annual Meeting"), which shall occur as provided in Section
5.04 of the Plan, election of directors at all meetings of the stockholders at
which directors are to be elected shall be by written ballot, and except as
otherwise set forth in the Certificate of Incorporation with respect to the
right of the holders of any series or class of stock to elect additional
directors under specified circumstances, a plurality of the votes cast thereat
shall elect the directors. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, all matters other than the
election of directors submitted to the stockholders at any meeting shall be
decided by a majority of the votes cast with respect thereto. Prior to the
1997 Annual Meeting, this Section 3.9 of these Bylaws shall not be amended,
added to, rescinded or repealed.
Section 3.10. Inspectors of Elections; Opening and Closing the
Polls.
(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve
the Corporation in other capacities, including, without limitation, as
officers, employees, agents or representatives of the Corporation, to act at
the meeting and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate has been appointed to act, or if all inspectors
or alternates who have been appointed are unable to act, at a meeting of
stockholders, the chairman of the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by the General Corporation Law of
the State of Delaware (the "GCL").
(B) The chairman of the meeting shall fix and announce at the
meeting the time of the opening and the closing of the polls for each matter
upon which the stockholders will vote at a meeting.
Section 3.11. No Stockholder Action by Written Consent. Subject to
the rights of the holders of any series or class of stock as set forth in the
Certificate of Incorporation to elect additional directors under specific
circumstances or to consent to specific actions taken by the Corporation, any
action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of stockholders
of the Corporation and may not be effected by any consent in writing by such
stockholders.
ARTICLE IV
BOARD OF DIRECTORS
Section 4.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors. In addition to the powers and authorities by these Bylaws
expressly conferred upon them, the Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
law or by the Certificate of Incorporation or by these Bylaws required to be
exercised or done by the stockholders.
Section 4.2. Number, Tenure and Qualifications. Subject to the
rights of the holders of any series or class of stock as set forth in the
Certificate of Incorporation to elect directors under specified circumstances,
as provided in Section 5.04(b) of the Plan from the Effective Date (as defined
in the Plan) until the 1997 Annual Meeting, the Board of Directors shall
consist of seven members, and thereafter the number of directors shall be
fixed from time to time by the Board of Directors, but shall consist of not
more than fifteen nor less than three directors. Upon the Effective Date, the
Board of Directors shall consist of those directors selected as provided in
Section 5.04 of the Plan (the "Original Directors"). Each Original Director
shall hold office from and after the Effective Date until the 1996 Annual
Meeting, and from and after the 1996 Annual Meeting until the 1997 Annual
Meeting as provided in Section 5.04 of the Plan, and otherwise pursuant to the
terms of the Certificate of Incorporation, the Plan, these By-Laws and the
GCL, and until their successors have been duly elected, or appointed pursuant
to Section 4.7(B) of these Bylaws and qualified. Directors shall be elected
annually and shall hold office from the time of such director's election and
qualification until their successors shall have been duly elected and
qualified. At each succeeding annual meeting of stockholders of the
Corporation beginning with the 1997 Annual Meeting, if authorized by a
resolution of the Board of Directors, directors may be elected to fill any
vacancy on the Board of Directors, regardless of how such vacancy shall have
been created. Prior to the 1997 Annual Meeting, this Section 4.2 of these
Bylaws shall not be amended, added to, rescinded or repealed except (x) by
resolution of the Board of Directors increasing the number of directors passed
at a meeting thereof by not less than two-thirds of the number of directors
fixed from time to time by these Bylaws, or (y) by resolution of the Board of
Directors increasing the number of directors passed at a meeting thereof in
connection with any transaction involving the Corporaiton that requires
approval of the stockholders of the Corporation under the GCL and that is
approved at such meeting, provided that in either case notice of the proposed
change was given in a notice given no less than twenty-four hours prior to the
meeting.
Section 4.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this Bylaw immediately after
the Annual Meeting of Stockholders at the principal executive offices of the
Corporation or at such other place as may be fixed by resolution of the Board
of Directors. The Board of Directors may, by resolution, provide the time and
place for the holding of additional regular meetings without notice other than
such resolution.
Section 4.4. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman of the Board, the
President or not less than three directors. The person or persons authorized
to call special meetings of the Board of Directors may fix the place and time
of the meetings.
Section 4.5. Notice. Notice of any special meeting shall be given
to each director at his or her business or residence in writing by hand
delivery, overnight mail, courier service, telegram or facsimile transmission
or orally by telephone communication. If by telegram, overnight mail, or
courier service such notice shall be deemed adequately delivered when the
telegram is delivered to the telegraph company or its notice is delivered to
the overnight mail or courier service company at least twenty-four hours
before such meeting. If by facsimile transmission, such notice shall be
deemed adequately delivered when the notice is transmitted at least twenty-
four hours before such meeting. If by telephone or by hand delivery, the
notice shall be given at least twelve hours prior to the time set for the
meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of such meeting, except for amendments to these Bylaws as provided
under Section 9.1 of these Bylaws. A meeting may be held at any time without
notice if all the directors are present or if those not present waive notice
of the meeting as provided in Section 7.4 of these Bylaws.
Section 4.6. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, but if at any meeting of
the Board of Directors there shall be less than a quorum present, a majority
of the directors present may adjourn the meeting from time to time without
further notice. The act of the majority of the directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors. The
directors present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough directors
to leave less than a quorum.
Section 4.7. Vacancies; Vacancies Prior to the 1997 Annual Meeting.
(A) Subject to the rights of the holders of any series or class of stock
as set forth in the Certificate of Incorporation to elect additional directors
under specified circumstances, and unless the Board of Directors otherwise
determines, vacancies resulting from death, resignation, retirement,
disqualification, removal from office or other cause, and newly created
directorships resulting from any increase in the authorized number of
directors, may be filled only by the affirmative vote of a majority of the
remaining directors, though less than a quorum of the Board of Directors, and
directors so chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of office of the class to which they
have been elected expires and until such director's successor shall have been
duly elected and qualified. No decrease in the number of authorized directors
shall shorten the term of any incumbent director.
(B) Notwithstanding the provisions of Section 4.7(A) of these Bylaws, if
prior to the 1997 Annual Meeting, there shall be a vacancy in the Board of
Directors resulting from the death, resignation, retirement or removal for
cause (an "Original Director Vacancy Event") of any Original Director, the
provisions of this Section 4.7(B) of these Bylaws shall govern the appointment
of a successor to fill the remainder of the original unexpired term of office
of such Original Director. If an Original Director Vacancy Event shall occur
in respect of an Original Director (or any successor thereto) prior to the
1997 Annual Meeting who is: (i) a director nominated by the Board of
Directors of the Corporation prior to the Effective Date of the Plan, the
Board of Directors shall appoint an officer of the Corporation who served in
such capacity prior to the Effective Date of the Plan, or, in the absence of
any such person, an officer of the Corporation then serving in such capacity;
(ii) a director selected by the Holder of the Allowed Class 4B Claim (as
defined in the Plan) (a "Class 4B Director") the remaining Class 4B Directors
(or their successors) shall appoint the successor to such Class 4B Director,
provided, however, if an Original Director Vacancy Event occurs in respect of
(x) both Class 4B Directors or (y) the remaining Class 4B Director prior to
the appointment of a successor to the other Class 4B Director, then, if at the
time the Original Director Vacancy Event described in sub-clause (x) or (y)
occurs, Jackson National Life Insurance Company owns (1) 30% or more of the
then issued and outstanding shares of Common Stock, the President of Jackson
National Life Insurance Company shall appoint successors to such Class 4B
Directors or (2) less than 30% of the then issued and outstanding shares of
Common Stock, a majority of the remaining Original Directors shall appoint
successors to such Class 4B Directors; or (iii) a director selected by the
Creditors Committee (as defined in the Plan) (a "Committee Director") the
remaining Committee Directors (or successors) shall appoint the successor to
such Committee Director, provided, however, if an Original Director Vacancy
Event occurs in respect of (x) all Committee Directors or (y) the remaining
Committee Director prior to the appointment of a successor to the other
Committee Director, a majority of the remaining Original Directors shall
appoint successors to such Committee Directors. Prior to the 1997 Annual
Meeting, this Section 4.7(B) of these Bylaws shall not be amended, added to,
rescinded or repealed.
Section 4.8. Committees of the Board of Directors. The Board of
Directors may from time to time, by resolution passed by a majority of the
Board of Directors, designate one or more committees, each committee to
consist of one or more directors of the Corporation. The Board of Directors
may designate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
Any such committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise such powers and authority of the Board
of Directors in the management of the business and affairs of the Corporation
as provided in such resolution, and may authorize the seal of the Corporation
to be affixed to all papers which may require it, except as otherwise provided
by law. Unless the resolution of the Board of Directors expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Any such committee may adopt
rules governing the method of calling and time and place of holding its
meetings. Unless otherwise provided by the Board of Directors, a majority of
any such committee (or the member thereof, if only one) shall constitute a
quorum for the transaction of business, and the vote of a majority of the
members of such committee present at a meeting at which a quorum is present
shall be the act of such committee. Each such committee shall keep a record
of its acts and proceedings and shall report thereon to the Board of Directors
whenever requested so to do. Any or all members of any such committee may be
removed, with or without cause, by resolution of the Board of Directors,
passed by a majority of the Board of Directors.
Section 4.9. Removal. Any director may be removed from office at
any time, but only for cause or otherwise pursuant to the GCL. Prior to the
1997 Annual Meeting, this Section 4.9 of these Bylaws shall not be amended,
added to, rescinded or repealed.
Section 4.10. Action by Consent of Board of Directors. Any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if all members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 4.11. Conference Telephone Meetings. Members of the Board
of Directors, or any committee thereof, may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
Section 4.12. Records. The Board of Directors shall cause to be
kept a record containing the minutes of the proceedings of the meetings of the
Board of Directors and of the stockholders, appropriate stock books and
registers and such books of records and accounts as may be necessary for the
proper conduct of the business of the Corporation.
ARTICLE V
OFFICERS
Section 5.1. Elected Officers. The elected officers of the
Corporation shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary, a Treasurer and a Controller, and such other
officers, as the Board of Directors from time to time may deem proper. The
Chairman of the Board shall be chosen from the directors. All officers chosen
by the Board of Directors shall each have such powers and duties as generally
pertain to their respective offices, subject to the specific provisions of
this Article V. Such officers shall also have such powers and duties as from
time to time may be conferred by the Board of Directors. The Board of
Directors may from time to time elect, or the Chairman of the Board or the
President may appoint, such other officers (including one or more Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers, and Assistant
Controllers) and such agents, as may be necessary.
Section 5.2. Election and Term of Office. The elected officers of
the Corporation shall be elected annually by the Board of Directors at the
regular meeting of the Board of Directors held after each annual meeting of
the stockholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as convenient.
Subject to Section 5.13 of these Bylaws, each officer shall hold office until
his or her successor shall have been duly elected and shall have qualified or
until his or her death or until such officer shall resign.
Section 5.3. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and of the Board of
Directors and shall perform all duties incidental to such office which may be
required by law and all such other duties as are properly required by the
Board of Directors. The Chairman of the Board shall be responsible for the
preparation of the agenda for each such meeting after consultation with each
of the Directors and the President. The Chairman of the Board shall also have
such other powers and duties as may be delegated to such position by the Board
of Directors. The Chairman of the Board shall see that all orders and
resolutions of the Board of Directors and of any committee thereof are carried
into effect through the proper corporate officers.
Section 5.4. President. The President shall be the Chief Executive
Officer and shall act in a general executive capacity. The President shall be
responsible for the administration and operation of the Corporation's business
and general supervision of its policies and affairs and shall have such other
powers and duties as may from time to time be prescribed by the Restated
Bylaws or by Resolution of the Board of Directors. The President shall be
responsible for carrying out and implementing all action taken by the Board of
Directors and shall submit reports on a regular basis to the Board of
Directors. The President may sign, alone or with the Secretary or any other
proper officer of the Corporation authorized by the Board of Directors,
certificates, contracts, and other instruments of the Corporation as
authorized by the Board of Directors.
Section 5.5. Vice President. Each Vice President shall have such
powers and perform such duties as may be prescribed by the Bylaws, by
Resolution of the Board of Directors or by the Chairman of the Board. The
performance of any duty by a Vice President shall, in respect of any other
person dealing with the Corporation, be conclusive evidence of his power to
act. Any Vice President may, by Resolution of the Board of Directors, be
designated an Executive Vice President or a Senior Vice President.
Section 5.6. Secretary. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and directors and all other
notices required by law or by these Bylaws, and in case of absence or refusal
or neglect so to do, any such notice may be given by any person thereunto
directed by the Chairman of the Board, the President, or the Board of
Directors, upon whose request the meeting is called as provided in these
Bylaws. The Secretary shall record or cause to be recorded all the
proceedings of the meetings of the Board of Directors, any committees thereof
and the stockholders of the Corporation in a book to be kept for that purpose,
and shall perform such other duties as may be assigned by the Board of
Directors, the Chairman of the Board or the President. The Secretary shall
have the custody of the seal of the Corporation and shall affix the same to
all instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the President, and attest to the same. The Secretary
shall have charge of the stock ledger and such other books and papers as the
Board of Directors may direct. The Secretary shall have all such further
powers and duties as generally are incident to the office of Secretary or as
may be prescribed by the Bylaws, by Resolution of the Board of Directors or by
the Chairman of the Board.
Section 5.7. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. The
Treasurer shall deposit all moneys and other valuables in the name and to the
credit of the Corporation in such depositaries as may be designated by the
Board of Directors. The Treasurer shall disburse the funds of the Corporation
as may be ordered by the Board of Directors, the Chairman of the Board or the
President, taking proper vouchers for such disbursements. The Treasurer shall
render to the Chairman of the Board, the President and the Board of Directors,
whenever requested, an account of all transactions engaged in as Treasurer and
of the financial condition of the Corporation. If required by the Board of
Directors, the Treasurer shall give the Corporation a bond for the faithful
discharge of duties in such amount and with such surety as the Board of
Directors shall prescribe. The Treasurer shall have all such further powers
and duties as generally are incident to the office of Treasurer or as may be
prescribed by the Bylaws, by Resolution of the Board of Directors, or by the
Chairman of the Board.
Section 5.8. Controller. The Controller shall be the principal
officer in charge of the accounts of the Corporation. The Controller shall
render to the Board of Directors and the Chairman of the Board regularly and
whenever otherwise required an account of the operation and financial
condition of the Corporation. The Controller shall perform all the duties
incidental to the office of Controller, and shall have such other powers and
duties as may be prescribed by the Bylaws, by Resolution of the Board of
Directors, or by the Chairman of the Board.
Section 5.9. Assistant Treasurer. In the absence or inability to
act of the Treasurer, any duly appointed Assistant Treasurer may perform all
the duties and exercise all the powers of the Treasurer. The performance of
any such duty shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his power to act. An Assistant
Treasurer shall also perform such other duties as the Treasurer or the
Chairman of the Board may assign to him.
Section 5.10. Assistant Controllers. In the absence or inability
to act of the Controller, any duly appointed Assistant Controller may perform
all of the duties and exercise all the powers of the Controller. The
performance of any such duty shall, in respect of any other person dealing
with the Corporation, be conclusive evidence of his power to act. An
Assistant Controller shall perform such other duties as the Controller or the
Chairman of the Board may assign to him.
Section 5.11. Assistant Secretaries. In the absence or inability
to act of the Secretary, any duly appointed Assistant Secretary may perform
all the duties and exercise all the powers of the Secretary. The performance
of any such duty shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his power to act. An Assistant
Secretary shall also perform such other duties as the Secretary or the
Chairman of the Board may assign to him.
Section 5.12. Removal. Any officer elected by the Board of
Directors may be removed by a majority of the members of the Board of
Directors whenever, in their judgment, the best interests of the Corporation
would be served thereby. Any officer or agent appointed by the Chairman of
the Board or the President may be removed by him whenever, in his judgment,
the best interests of the Corporation would be served thereby. No elected
officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of such officer's
death, resignation, removal or the election of such officer's successor,
whichever event shall first occur, except as otherwise provided in an
employment contract or an employee plan.
Section 5.13. Vacancies. A newly created office and a vacancy in
any office because of death, resignation or removal may be filled by the Board
of Directors for the unexpired portion of the term at any meeting of the Board
of Directors. Any vacancy in an office appointed by the Chairman of the Board
or the President because of death, resignation or removal may be filled by the
Chairman of the Board or the President.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFERS
Section 6.1. Stock Certificates and Transfers.
(A) The interest of each stockholder of the Corporation shall be
evidenced by certificates for shares of stock in such form as the appropriate
officers of the Corporation may from time to time prescribe. The shares of
the stock of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by the holder's attorney, upon
surrender for cancellation of certificates for the same number of shares, with
an assignment and power of transfer endorsed thereon or attached thereto, duly
executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require.
(B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution
prescribe, which resolution may permit all or any of the signatures on such
certificates to be in facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation with the same
effect as if such officer, transfer agent or registrar were such officer,
transfer agent or registrar at the date of issue.
Section 6.2. Lost, Stolen or Destroyed Certificates. No
certificate for shares of stock in the Corporation shall be issued in place of
any certificate alleged to have been lost, destroyed or stolen, except on
production of such evidence of such loss, destruction or theft and on delivery
to the Corporation of a bond of indemnity in such amount, upon such terms and
secured by such surety, as the Board of Directors or any authorized officer
may in its or his discretion require.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January and end on the thirty-first day of December
of each year.
Section 7.2. Dividends. The Board of Directors may from time to
time declare, and the Corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and conditions provided by law and the
Certificate of Incorporation.
Section 7.3. Seal. The seal of the Corporation shall be circular
in form and shall bear, in addition to any other emblem or device approved by
the Board of Directors, the name of the Corporation, the year of its
incorporation and the words "Corporate Seal" and "Delaware". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or in any
other manner reproduced.
Section 7.4. Waiver of Notice. Whenever any notice is required to
be given to any stockholder or director of the Corporation under the
provisions of the GCL, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any annual or special
meeting of the stockholders of the Board of Directors need be specified in any
waiver of notice of such meeting.
Section 7.5. Audits. The accounts, books and records of the
Corporation shall be audited upon the conclusion of each fiscal year by an
independent certified public accountant selected by the Board of Directors,
and it shall be the duty of the Board of Directors to cause such audit to be
made annually.
Section 7.6. Resignations. Any Director or any officer, whether
elected or appointed, may resign at any time by serving written notice of such
resignation on the Chairman of the Board, the President or the Secretary, and
such resignation shall be deemed to be effective when said notice is received
by the Chairman of the Board, the President or the Secretary or at such later
date as is stated therein. No formal action shall be required of the Board of
Directors or the stockholders to make any resignation effective.
Section 7.7. Indemnification and Insurance. (A) Each person who
was or is made a party or is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she or a person of whom he or she is the legal representative
is or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of any
other corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the GCL as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including, without limitation,
attorneys' fees, judgments, fines, excise taxes or penalties under the
Employee Retirement Income Security Act of 1974, as amended, and amounts paid
or to be paid in settlement) reasonably incurred by such indemnitee in
connection therewith; provided, however, that, except as provided in paragraph
(C) of this Bylaw with respect to proceedings seeking to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors.
(B) The right to indemnification conferred in paragraph (A) of this Bylaw
shall include the right to be paid by the Corporation the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses"); provided,
however, that, if the GCL requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this paragraph (B) or otherwise.
(C) If a claim under paragraphs (A) or (B) of this Bylaw is not paid in
full by the Corporation within thirty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement
of expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right of an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
Corporation shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the GCL. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or stockholders)
to have made a determination prior to the commencement of such action that
indemnification of the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth in the GCL,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or stockholders) that the indemnitee has
not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Bylaw or otherwise shall be on the
Corporation.
(D) The right to indemnification and the advancement of expenses
conferred in this Bylaw shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, provision of these Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss under the GCL.
(F) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to the
advancement of expenses, to any employee or agent of the Corporation to the
fullest extent of the provisions of this Bylaw with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
(G) The rights to indemnification and to the advancement of expenses
conferred in paragraphs (A) and (B) of this Bylaw shall be contract rights and
such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
ARTICLE VIII
CONTRACTS, PROXIES, ETC.
Section 8.1. Contracts. Except as otherwise required by law, the
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
Corporation by such officer or officers of the Corporation as the Board of
Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board may determine. The Chairman of
the Board, the President or any Vice President may execute bonds, contracts,
deeds, leases and other instruments to be made or executed for or on behalf of
the Corporation. Subject to any restrictions imposed by the Board of
Directors, the Chairman of the Board or the President may delegate contractual
powers to others under such officer's jurisdiction, it being understood,
however, that any such delegation of power shall not relieve such officer of
responsibility with respect to the exercise of such delegated power.
Section 8.2. Proxies. Unless otherwise provided by resolution
adopted by the Board of Directors, the Chairman of the Board, the President or
the Vice President-Finance may from time to time appoint an attorney or
attorneys or agent or agents of the Corporation, to cast the votes which the
Corporation may be entitled to cast as the holder of stock or other securities
in any other corporation, any of whose stock or other securities may be held
by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing, in the name of
the Corporation as such holder, to any action by such other corporation, and
may instruct the person or persons so appointed as to the manner of casting
such votes or giving such consent, and may execute or cause to be executed in
the name and on behalf of the Corporation and under its corporate seal or
otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
ARTICLE IX
AMENDMENTS
Section 9.1. Amendments. Except as these Bylaws may expressly
provide to the contrary, these Bylaws may be amended, added to, rescinded or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of the Board of Directors, in a notice given no less than
twenty-four hours prior to the meeting.
EXHIBIT 3.2(a)
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
AMENDMENT TO SECTION 5.3 AND 5.4 OF ARTICLE V
OF THE RESTATED BYLAWS OF BUCYRUS-ERIE COMPANY
ADOPTED BY BOARD OF DIRECTORS
AT ITS MEETING OF AUGUST 1-2, 1995
Section 5.3. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors and
shall perform all duties incidental to such office which may be required by
law and all such other duties as are properly required by the Board of
Directors. The Chairman of the Board shall be responsible for the preparation
of the agenda for each such meeting after consultation with each of the
Directors and the President. The Chairman of the Board shall also have such
other powers and duties as may be delegated to such position by the Board of
Directors. The Chairman of the Board shall see that all orders and
resolutions of the Board of Directors and of any committee thereof are carried
into effect through the proper corporate officers.
Section 5.4. President. The President shall be the Chief Executive
Officer and shall act in a general executive capacity. The President shall be
responsible for the administration and operation of the Corporation's business
and general supervision of its policies and affairs and shall have such other
powers and duties as may from time to time be prescribed by the Restated
Bylaws or by Resolution of the Board of Directors. The President shall be
responsible for carrying out and implementing all action taken by the Board of
Directors and shall submit reports on a regular basis to the Board of
Directors. The President may sign, alone or with the Secretary or any other
proper officer of the Corporation authorized by the Board of Directors,
certificates, contracts, and other instruments of the Corporation as
authorized by the Board of Directors.
EXHIBIT 10.1(a)
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of June 22, 1995,
amends and supplements the Credit Agreement dated as of December 14, 1994 (the
"Credit Agreement") between Bucyrus-Erie Company (the "Company") and Bank One,
Milwaukee, National Association (the "Bank").
RECITAL
The Company and the Bank desire to amend and supplement the Credit
Agreement as provided below.
AGREEMENTS
In consideration of the promises and agreements set forth in the Credit
Agreement, as amended hereby, the Company and the Bank agree as follows:
1. Definitions and References. Capitalized terms not defined herein
have the meanings assigned in the Credit Agreement. Upon the fulfillment of
the conditions set forth in section 3 below, all references to the Credit
Agreement contained in the Loan Documents shall mean the Credit Agreement as
amended by this First Amendment to Credit Agreement.
2. Amendments.
(a) The definition of Revolving Note contained in section 1 of the
Credit Agreement is amended to read as follow:
"Revolving Note" means (a) the promissory note issued by the
Company and payable to the order of the Bank evidencing loans under
section 2.1(a)(i) in the form of Exhibit A attached hereto and (b) the
Supplemental Revolving Note.
(b) The following definition is inserted, in appropriate alphabetical
order, into section 1 of the Credit Agreement:
"Supplemental Revolving Note" means the promissory note issued by
the Company and payable to the order of the Bank evidencing loans under
section 2.1(a)(ii) in the form of Exhibit E attached hereto.
(c) Section 2.1(a) of the Credit Agreement is amended by inserting
"(i)" after "(a)" in such subsection and adding the following subsection
immediately following subsection (a)(i):
(ii) The Bank will lend to the Company, subject to the terms and
conditions hereof, up to the maximum amount of $200,000 at any time
outstanding during the period from June 22, 1995 through the Revolving
Note Maturity Date. Loans may be made, repaid and made again. All loans
under this subsection shall be evidenced by the Supplemental Revolving
Note. Although the Supplemental Revolving Note shall be expressed to be
payable in the amount of $200,000, the Company shall be obligated to pay
only the amount actually disbursed to or for the account of the Company,
together with interest on the unpaid balance of the amounts so disbursed,
which remain outstanding from time to time as shown on the records of the
Bank.
The amount of loans which the Company is entitled to receive
under section 2.1(a)(i) shall be reduced by the unpaid principal balance
of loans outstanding under this section 2.1(a)(ii) and, for the purposes
of the limitations on the maximum amounts of loans made by the Bank to the
Company under sections 2.1(b) and 2.2, loans under sections 2.1(a)(i) and
2.1(a)(ii) shall be combined.
Notwithstanding any provision of this Agreement to the
contrary, the outstanding principal balance of loans under section
2.1(a)(ii) shall bear interest at the rate which is equal to the Reference
Rate plus 2 percentage points and such rate shall change on each day on
which the Reference Rate changes. The unpaid principal balance of such
loans, and all accrued interest, shall be due and payable ON DEMAND. In
the absence of demand by the Bank, accrued interest shall be due and
payable on the first Business Day of each month.
(d) Section 2.6(a)(i) of the Credit Agreement is amended by deleting
"October 3, 1995" and inserting "March 31, 1996" in its place.
(e) Section 2.6(b)(i) of the Credit Agreement is amended by deleting
"October 3, 1995" and inserting "the date of demand by the Bank" in its place.
(f) Exhibit E attached hereto shall be deemed to be an exhibit to the
Credit Agreement.
3. Conditions for Effectiveness. This First Amendment shall be
effective upon its execution and delivery by the Company and the Bank and the
receipt by the Bank of (a) the Supplemental Revolving Note, duly executed by
the Company and (b) such other documents as the Bank may reasonably request
relating to this First Amendment.
4. Representations and Warranties. The Company represents and warrants
to the Bank that:
(a) The execution and delivery of this First Amendment are within the
Company's corporate power and corporate authority, have been duly authorized
by all necessary corporate action on the part of the Company, are not in
violation of any existing law, rule or regulation of any governmental agency
or authority, any order or decision of any court, the Certificate of
Incorporation or By-Laws of the Company or the terms of any agreement,
restriction or undertaking to which the Company is a party or which it is
bound, and do not require the approval or consent of the shareholders of the
Company, any governmental body, agency or authority or any other person or
entity.
(b) The representations and warranties set forth in section 3 of the
Credit Agreement are true and correct in all material respects as of the date
of this First Amendment and no Default or Event of Default has occurred and is
continuing.
5. Costs and Expenses. The Company agrees to pay all costs and expenses
(including reasonable attorneys' fees) paid or incurred by the Bank in
connection with the execution and delivery of this First Amendment and the
consummation of the transactions contemplated hereby.
6. Full Force and Effect. The Company and the Bank confirm that the
Credit Agreement, as amended hereby, remains in full force and effect.
BANK ONE, MILWAUKEE,
NATIONAL ASSOCIATION
BY /s/William E. Shaw
Its Vice President
BUCYRUS-ERIE COMPANY
BY /s/N. J. Verville
Its V P
<PAGE>
EXHIBIT E
SUPPLEMENTAL REVOLVING NOTE
$200,000 Milwaukee, Wisconsin
June __, 1995
FOR VALUE RECEIVED, the undersigned BUCYRUS-ERIE COMPANY, a Delaware
corporation promises to pay to the order of BANK ONE, MILWAUKEE, NATIONAL
ASSOCIATION (the "Bank") the principal sum of $200,000, or such lesser amount
as is shown to be outstanding according to the records of the Bank ON DEMAND.
The undersigned further agrees to pay interest on the principal balance
outstanding from time to time at such rates and payable at such times as set
forth in the Credit Agreement referred to below.
Payments of both principal and interest are to be made in immediately
available funds in lawful currency of the United States of America at the
office of the Bank, 111 East Wisconsin Avenue, Milwaukee, Wisconsin, or such
other place as the holder hereof shall designate to the undersigned in
writing.
This Note is the Supplemental Revolving Note issued pursuant to a
Credit Agreement dated as of December 14, 1994, as amended, between the
undersigned and the Bank.
The undersigned agrees to pay all costs of collection, including
reasonable attorneys' fees.
BUCYRUS-ERIE COMPANY
BY ________________________________
Its ____________________________
EXHIBIT 10.1(b)
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of August 31, 1995,
amends and supplements the Credit Agreement dated as of December 14, 1994 (the
"Credit Agreement") between Bucyrus-Erie Company (the "Company") and Bank One,
Milwaukee, National Association (the "Bank"), as amended on June 22, 1995.
RECITAL
The Company and the Bank desire to amend and supplement the Credit
Agreement as provided below.
AGREEMENTS
In consideration of the promises and agreements set forth in the Credit
Agreement, as amended hereby, the Company and the Bank agree as follows:
1. Definitions and References. Capitalized terms not defined herein
have the meanings assigned in the Credit Agreement. Upon the fulfillment of
the conditions set forth in section 3 below, all references to the Credit
Agreement contained in the Loan Documents shall mean the Credit Agreement as
amended by this First Amendment to Credit Agreement.
2. Amendments.
(a) The definition of Revolving Note contained in section 1 of the
Credit Agreement is amended to read as follows:
"Revolving Note" means (a) the promissory note issued by the
Company and payable to the order of the Bank evidencing loans under
section 2.1(a)(i) in the form of Exhibit A attached hereto and (b) the
Supplemental Revolving Note.
(b) The definition of Supplemental Revolving Note contained in
section 1 of the Credit Agreement is amended to read as follows:
"Supplemental Revolving Note" means the promissory note issued
by the Company and payable to the order of the Bank evidencing loans
under section 2.1(a)(ii) in the form of Exhibit F attached hereto.
(c) Section 2.1(a) of the Credit Agreement is amended by deleting
section 2.1(a)(ii) and inserting the following in its place:
(ii) The Bank will lend to the Company, subject to the terms
and conditions hereof, up to the maximum amount of $300,000 at any time
outstanding during the period from August 31, 1995 through the Revolving
Note Maturity Date. Loans may be made, repaid and made again. All loans
under this subsection shall be evidenced by the Supplemental Revolving
Note. Although the Supplemental Revolving Note shall be expressed to be
payable in the amount of $300,000, the Company shall be obligated to pay
only the amount actually disbursed to or for the account of the Company,
together with interest on the unpaid balance of the amounts to disbursed,
which remain outstanding from time to time as shown on the records of the
Bank.
The amount of loans which the Company is entitled to
receive under section 2.1(a)(i) shall be reduced by the unpaid principal
balance of loans outstanding under this section 2.1(a)(ii) and, for the
purposes of the limitations on the maximum amounts of loans made by the
Bank to the Company under sections 2.1(b) and 2.2, loans under sections
2.1(a)(i) and 2.1(a)(ii) shall be combined.
Notwithstanding any provision of this Agreement to the
contrary, the outstanding principal balance of loans under section
2.1(a)(ii) shall bear interest at the rate which is equal to the
Reference Rate plus 2 percentage points and such rate shall change on
each day on which the Reference Rate changes. The unpaid principal
balance of such loans, and all accrued interest, shall be due and payable
ON DEMAND. In the absence of demand by the Bank, accrued interest shall
be due and payable on the first Business Day of each month.
(d) Exhibit F attached hereto shall be deemed to be an exhibit to
the Credit Agreement.
3. Conditions for Effectiveness. This Second Amendment shall be
effective upon its execution and delivery by the Company and the Bank and the
receipt by the Bank of (a) the Supplemental Revolving Note, duly executed by
the Company and (b) such other documents as the Bank may reasonably request
relating to this Second Amendment.
4. Representations and Warranties. The company represents and warrants
to the Bank that:
(a) The execution and delivery of this Second Amendment are within
the Company's corporate power and corporate authority, have been duly
authorized by all necessary corporate action on the part of the Company, are
not in violation of any existing law, rule or regulation of any governmental
agency or authority, any order or decision of any court, the Certificate of
Incorporation or By-Laws of the Company or the terms of any agreement,
restriction or undertaking to which the Company is a party or which it is
bound, and do not require the approval or consent of the shareholders of the
Company, any governmental body, agency or authority or any other person or
entity.
(b) The representation and warranties set forth in section 3 of the
Credit Agreement are true and correct in all material respects as of the date
of this Second Amendment and no Default or Event of Default has occurred and
is continuing.
5. Costs and Expenses. The Company agrees to pay all costs and expenses
(including reasonable attorneys' fees) paid or incurred by the Bank in
connection with the execution and delivery of this Second Amendment and the
consummation of the transactions contemplated hereby.
6. Full Force and Effect. The Company and the Bank confirm that the
Credit Agreement, as amended hereby, remains in full force and effect.
BANK ONE, MILWAUKEE,
NATIONAL ASSOCIATION
BY /s/William E. Shaw
Its Vice President
BUCYRUS-ERIE COMPANY
BY /s/James D. Annand
Its Interim CFO
<PAGE>
EXHIBIT F
SUPPLEMENTAL REVOLVING NOTE
$300,000.00 Milwaukee, Wisconsin
August 31, 1995
FOR VALUE RECEIVED, the undersigned BUCYRUS-ERIE COMPANY, a Delaware
corporation promised to pay to the order of BANK ONE, MILWAUKEE, NATIONAL
ASSOCIATION (the "Bank") the principal sum of $300,000.00, or such lesser
amount as is shown to be outstanding according to the records of the Bank ON
DEMAND. The undersigned further agrees to pay interest on the principal
balance outstanding from time to time at such rates and payable at such times
as set forth in the Credit Agreement referred to below.
Payments of both principal and interest are to be made in immediately
available funds in lawful currency of the United States of America at the
office of the Bank, 111 East Wisconsin Avenue, Milwaukee, Wisconsin, or such
other place as the holder hereof shall designate to the undersigned in
writing.
This Note is the Supplemental Revolving Note issued pursuant to a Credit
Agreement dated as of December 14, 1994, as amended, between the undersigned
and the Bank.
The undersigned agrees to pay all costs of collection, including
reasonable attorneys' fees.
BUCYRUS-ERIE COMPANY
By _______________________________
Its ___________________________
This note replaces and increases by $100,000.00 that certain note dated
June 22, 1995.
EXHIBIT 10.2
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
SEPARATION AGREEMENT AND MUTUAL RELEASE
This Separation Agreement and Mutual Release (the
"Agreement") is made and entered into as of the Effective Date of
this Agreement (as set forth in Paragraph 15 below), by and
between Phillip W. Mork ("Mork"), residing at S96 W32644 Valley
Ct. Road, Mukwonago, WI 53122 and Bucyrus-Erie Company ("BEC"),
a Delaware corporation, located at 1100 Milwaukee Avenue, South
Milwaukee, Wisconsin 53172-0500, on behalf of itself individually
and any past and present parents and subsidiaries (collectively,
the "Company").
WHEREAS, Mork and BEC have been parties to an
Employment and Consulting Agreement dated July 1, 1992, as
amended by the amendment dated November 28, 1994 (the "Employment
Agreement");
WHEREAS, Mork was employed in senior executive
positions by the Company and has been a member of the Board of
Directors of BEC;
WHEREAS, Mork voluntarily resigns his employment and
all positions held by him effective immediately upon his
execution of this Agreement; and
WHEREAS, Mork voluntarily resigns as a member of the
Board of Directors effective immediately upon his execution of
this Agreement;
NOW, THEREFORE, in an effort to clearly state the
mutual obligations between Mork and the Company (the "Parties"),
for and in consideration of the mutual promises and covenants
herein contained and for good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. Termination of Prior Agreements and
Understandings. The Parties agree that any prior agreements and
understandings between them, whether oral or written and of
whatever nature, are hereby canceled, terminated and superseded
by this Agreement and shall be of no further force or effect,
including, without limitation, the Employment Agreement.
2. Mork's Termination and Last Day of Employment.
Effective immediately upon his execution of this Agreement, Mork
voluntarily resigns his employment and all positions he held with
the Company, and also effective immediately upon his execution of
this Agreement, Mork voluntarily resigns his membership on the
Board of Directors of BEC.
3. Payments and Benefits to Mork.
(a) BEC shall pay or cause to be paid to Mork the
sum of $419,907.06 (four hundred nineteen thousand nine hundred
and seven U.S. dollars and six cents), less applicable
withholdings and deductions, the net of which shall be payable in
eighteen (18) equal monthly installments (the "Separation
Payment"). BEC shall make this Separation Payment by mailing to
Mork's address listed in Paragraph 16 or any other address
designated in writing by Mork each installment via check payable
to the order of "Phillip Mork", on the fifteenth of each month
commencing on August 15, 1995 and continuing through and
including January 15, 1997. Each monthly installment shall be
adjusted in accordance with the following formula:
Sa = S x CPI
2
CPI
1
where: Sa = adjusted compensation for a given
month;
S = unadjusted monthly compensation as
set forth above;
CPI = Consumers Price Index (all Items,
2 Wage Earners and Clerical Workers,
Revised ((CPI-W) (1967 = 100)) in
effect for the month which is two
months prior to the given month);
CPI = Consumers Price Index in effect on
1 the date which is eight months
prior to the date of termination.
(b) Commencing February 15, 1997, BEC shall pay
or cause to be paid to Mork the sum of $200,000.00 (two hundred
thousand U.S. dollars), less applicable withholdings or
deductions, the net of which shall be payable in sixty (60) equal
monthly installments, which shall constitute the special payment
to Mork (the "Special Payment"). BEC shall commence the Special
Payment by mailing to the address listed in Paragraph 16 below,
or to any other address designated in writing by Mork, each
installment via check payable to the order of "Phillip Mork", on
the fifteenth of each month, commencing on February 15, 1997 and
continuing through and including January 15, 2002.
(c) The payments provided in Paragraphs 3(a) and
3(b) shall be made without regard to whether Mork is able to
perform services for the Company during the Consultation Period
(as defined in Paragraph 4 hereof) or whether other employment is
available to Mork or whether the Company desires consulting
services from Mork. In the event Mork dies while receiving
payments pursuant to Paragraphs 3(a) and 3(b), the remainder of
such payments shall each be converted to a lump sum pursuant to
the following formula:
LSC = C + C + ... C
2 P
(1+I) (1+I) (1+I)
LSC = total amount of lump sum compensation
C = amount of last payment prior to Mork's death
in the event of the application of this
formula to the Separation Payment or
$3,333.33 in the event of application of this
formula to the Special Payment
P = the number of months remaining until the last
installment of the Special Payment or the
Separation Payment, as applicable, is made
1/12
I = (1 + N) - 1
N = (A - B) X .01
A = The Corporate high grade AAA Bond Index yield
to maturity annual percentage rate reported
by Standard and Poors Corporation as of the
end of the month two (2) months prior to the
month in which the full-time employment of
Mork is terminated.
B = The percentage increase in the Consumers
Price Index (as defined in subparagraph 3(a)
hereof) during the twelve (12) month period
ending on the end of the month two (2) months
prior to the month in which the full-time
employment of Mork is terminated.
Payment of such lump sum shall be made at the end of the month in
which Mork dies to his surviving spouse, and if he is deceased
without leaving a surviving spouse, said payment shall be made to
his estate. In the event Mork becomes disabled while receiving
payments pursuant to Paragraph 3(a) or 3(b), he shall continue to
receive such payments on the same basis as before he became
disabled. If Mork violates in any material respect the non-
competition provisions contained in subparagraph 4(a) hereof or
the provisions of Paragraphs 4(b), 9(a) or 11 of this Agreement,
he shall have no right to any payments, and shall promptly return
to the Company all amounts paid to him pursuant to this
Agreement.
(d) Through January 15, 2002, except for periods
during which Mork is employed full-time by another party, Mork
shall also be provided by BEC with such insurance benefits
(including life and medical insurance and dental and vision care)
as BEC generally provides for any group or class of employee of
which Mork would have been a member had his employment continued.
When Mork is employed full-time by another party prior to January
15, 2002, he shall first look to said other party for payment of
all insurance benefits of the kind described in the preceding
sentence which are available to employees of said other party and
BEC shall provide him with such insurance only to the extent of
any excess of insurance available under BEC's plan over the
insurance available under said other party's plan. This
provision shall be deemed to satisfy any obligation to Mork which
BEC may have pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985.
(e) The Consultation Period (as defined in
Paragraph 4 hereof) shall be counted for purposes of determining
Credited Service under the Bucyrus Salaried Employees Retirement
Plan and the Company's Supplementary Retirement Benefit Plan and
compensation paid to Mork during the Consultation Period shall be
counted for the purpose of determining Mork's benefits pursuant
to said plans to the extent that such compensation falls within
the scope of compensation as defined in said plans. Also, Mork
shall be entitled to participate in the Company's 401-K Savings
Plan on the same basis as regular salaried employees with respect
to such compensation.
(f) Mork shall be reimbursed for all reasonable
costs and expenses previously approved by the Company and
incurred by Mork in providing services to the Company pursuant to
Paragraphs 4(a) and 10(a) hereof.
4. Consultant Agreement.
(a) In consideration for the Separation Payment,
Special Payment and other valuable consideration in this
Agreement, for two years following the date of execution of this
Agreement by Mork (the "Consultation Period"), Mork shall serve
as consultant to BEC. During the Consultation Period Mork will
supply advice from time to time on reasonable advance notice with
respect to the affairs of the Company, but during the
Consultation Period Mork may at his sole discretion serve as a
part-time or full-time regular employee of any other business
which does not compete with the business of the Company or its
subsidiaries, and his consulting services shall not require his
presence at times and places not compatible with such other
employment. Mork shall promptly notify the Company in writing
whenever he commences or terminates employment elsewhere during
the Consultation Period, giving the name of the employer, the
nature of its business and the title of Mork's position. A
business which competes with the business of the Company or its
subsidiaries is defined to be any business having any product or
products or service or services which compete with a product or
products or service or services of the Company or its
subsidiaries representing collectively at least ten percent (10%)
of the net revenue of the Company and its subsidiaries during the
last full fiscal year of the Company. For the purpose of
determining whether Mork is employed by a competing business, the
term "business" shall be defined to include not only the entity
by whom Mork is employed but also any direct or indirect parent
or subsidiary of such entity and any other entity controlled
directly or indirectly by an entity directly or indirectly
controlling such entity.
(b) As part of this Agreement, during the
Consultation Period, Mork further agrees not to solicit, directly
or indirectly, any of the Company's customers, nor to employ,
directly or indirectly, any person employed by the Company as of
the date of his execution of this Agreement. For purposes of
this Paragraph, "indirect" solicitation or employment shall mean
solicitation or employment through Mork's efforts by any entity
with which Mork becomes associated.
(c) During the Consultation Period, at Mork's
option (to be exercised by the written request mailed to any
officer of the Company or to its Director or Manager of Human
Resources), the Company will provide, at its expense,
outplacement services by a professional third party specialized
in providing such assistance on an individual basis to key
executives and employees. Reasonable initial travel expenses for
consultation with the outplacement firm will be reimbursed for
travel outside the greater Milwaukee area, when such travel is at
the request of the outplacement firm. Services will be provided
by Janotta Bray Beal & Associates, 2600 North Mayfair Road,
Milwaukee, Wisconsin 53226, unless an alternative firm is agreed
to by the Company and Mork.
5. Purpose of Payment. The Company is providing and
Mork is accepting the Separation Payment, the Special Payment and
the other good and valuable consideration provided for in this
Agreement in full and complete satisfaction of all of Mork's
Claims (as defined in Paragraph 7 hereof) against the Company,
its successors and assigns, and all of their past and present
directors, officers, shareholders, consultants, agents,
representatives, attorneys, employees, employee benefit plans and
plan fiduciaries (collectively, the "Releasees"). Mork
acknowledges (i) that no other monies or other consideration,
except as expressly set forth in this Agreement, are due and
owing to him or on his behalf by the Company or any of the other
Releasees; and (ii) the sufficiency of the consideration for this
Agreement generally and specifically for the release of any
claims up to the Effective Date of this Agreement he may have
ever had, may now have or may hereafter assert against the
Releasees arising under the Age Discrimination in Employment Act
of 1967, as amended by, inter alia, the Older Workers Benefit
Protection Act of 1990.
6. No Admissions. This Agreement does not constitute
an admission by the Company or any of the Releasees of any
violation of any contract or of any statutory, constitutional or
common law of any federal, state or local government of the
United States or of any other country or political subdivision
thereof, and Mork and the Releasees expressly deny any such
liability. This Agreement may not be introduced in any action or
proceeding by anyone for any purpose except to evidence its
terms.
7. Release by Mork.
(a) In consideration of this Agreement and the
monies and other good and valuable consideration provided to Mork
pursuant to this Agreement, Mork hereby irrevocably and
unconditionally releases, waives and forever discharges the
Company and each of the other Releasees from any and all actions,
causes of action, claims, demands, damages, rights, remedies and
liabilities (hereinafter referred to as "Mork's Claims") of
whatever kind or character, in law or equity, suspected or
unsuspected, past or present, that he has ever had, or may now
have, (even if later asserted) against the Releasees or any of
them, arising out of or related to Mork's employment and
positions with the Company or the termination of that employment
and those positions, from the beginning of time to the Effective
Date hereof, including without limitation: (i) any claims
arising from any federal, state and/or local labor or civil
rights laws including, without limitation, the federal Civil
Rights Acts of 1866, 1871, 1964 and 1991, the Age Discrimination
in Employment Act of 1967, as amended by, inter alia, the Older
Workers Benefit Protection Act of 1990, the Workers' Adjustment
and Retraining Notification Act, the Employee Retirement Income
Security Act of 1974, as amended, the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Americans with Disabilities Act
of 1990, the Wisconsin Fair Employment Act and employment and
labor laws, or the Delaware Fair Employment Practices Act and
employment and labor laws, as each may have been amended from
time to time, and (ii) any and all other claims arising under or
in regard to any contract, any and all other federal, state or
local constitutions, statutes, rules or regulations, or under any
common law right of any kind whatsoever, or under the laws of any
country or political subdivision, and including, without
limitation, any of Mork's Claims for any kind of tortious conduct
(including but not limited to any defamation, business tort or
intentional infliction of emotional distress), breach of
contract, promissory or equitable estoppel, breach of the
Company's policies, rules, regulations, handbooks or manuals,
breach of express or implied covenants of good faith, wrongful
termination, discharge or dismissal, and failure to pay in whole
or part any compensation, bonus, incentive compensation,
severance pay or benefits of any kind whatsoever, including but
not limited to any rights Mork may have under the Employment
Agreement; provided, however, that nothing herein shall be deemed
a release of any entitlements Mork may have with respect to
vested benefits under the terms of any employee pension,
retirement, savings, deferred compensation or similar plan
maintained by the Company for the benefit of its employees
generally or any release of indemnification rights Mork may have
in his capacity as an officer, director or employee of the
Company under the Company's Bylaws or the Delaware General
Corporation Law.
(b) Execution of this Agreement by Mork operates
as a complete bar and defense against any and all of Mork's
Claims against the Company or the other Releasees. If Mork
should hereafter raise any of Mork's Claims in any action, claim
or proceeding against the Company or any of the Releasees, the
Agreement may be raised as and shall constitute a complete bar to
any such action, claim or proceeding and the Company or the
Releasees shall recover from Mork all costs incurred including
attorneys' fees. Nothing contained herein is intended to prevent
Mork from enforcing this Agreement.
8. Release by the Company.
(a) The Company agrees to forever release and
discharge Mork from any and all actions, causes of action,
claims, demands, damages, rights, remedies and liabilities
(hereinafter referred to as "Company Claims") of whatsoever kind
or character, in law or equity, suspected or unsuspected, past or
present, that it has ever had, may now have, or may later assert,
against Mork, whether or not arising out of or related to his
employment and the positions he has held with the Company, from
the beginning of time to the Effective Date hereof, with the
exception of those claims stated in Subparagraph 8(b) below to be
expressly excluded from the Company's release.
(b) Execution of this Agreement by BEC operates
as a complete bar and defense against any and all of the Company
Claims against Mork, provided that BEC may enforce its rights
under this Agreement (including without limitation BEC's rights
pursuant to Paragraphs 4, 9 and 10 of this Agreement), and
provided further, that expressly excluded from BEC's release and
covenant not to sue are any: (i) Company Claims against Mork in
regard to any criminal violations of law where Mork is convicted
or pleads guilty and as to which Mork had no reasonable cause to
believe his conduct was lawful; and (ii) Company Claims against
Mork in regard to any matter as to which Mork did not act in good
faith and did not act in a manner he reasonably believed to be in
or not opposed to the best interests of the Company. If the
Company should hereafter make any of the Company Claims (other
than any excluded from the Company's release in this Paragraph
8(b)) in any action, claim or proceeding against Mork, this
Agreement may be raised as and shall constitute a complete bar to
any such action, claim or proceeding and Mork shall recover from
the Company all costs incurred, including attorneys' fees.
Nothing contained herein is intended to prevent the Company from
enforcing this Agreement.
9. Confidentiality.
(a) Mork agrees that he will not, directly or
indirectly, use or disclose, or permit or aid the disclosure, to
any person, firm, entity or corporation, of any privileged,
confidential or proprietary business information relating to the
business, affairs, clients, plans, proposals, finances or
financial condition of the Company or any of the other Releasees,
except with the Company's express written consent or in direct
response to any subpoena or other legal process initiated against
or served upon Mork. In the event disclosure is sought from Mork
in direct response to any such subpoena or other legal process,
Mork shall give the Company reasonable notice under the
circumstances in order to afford the Company an opportunity to
evaluate its legal rights and take such action as may be
appropriate to protect the interests of the Company. Mork
acknowledges that he is not authorized to and shall not waive the
attorney-client privilege on behalf of the Company or any of the
Releasees.
(b) Mork and the Company agree that the existence
of this Agreement and its terms and conditions shall remain
confidential except to the extent that such Party is advised by
counsel that disclosure is required by law or regulations of any
governmental authority, or, as to the Company only, in connection
with the conduct of business by the Company.
(c) Mork is obligated to surrender and
acknowledges that he has surrendered all papers, contracts,
drafts, data, records, plans, proposals and other information,
including any copies thereof, related to the Company or any of
the other Releasees in the possession of or under the control of
Mork, including but not limited to any such items in the
possession or under the control of his attorneys.
10. Cooperation.
(a) At the request by or on behalf of the
Company, and upon reasonable notice to Mork, Mork agrees to
cooperate with the Company in connection with the financial
affairs, legal affairs or business matters arising during Mork's
employment about which Mork has knowledge or information and/or
with respect to any investigation, litigation, legal proceedings
or other circumstances arising in connection with such financial
affairs, legal affairs and/or business matters (collectively,
"Such Matters"), including providing the Company with full,
complete, truthful and accurate information, to the best of his
knowledge, concerning Such Matters, and/or testifying in regard
to Such Matters. In requesting Mork's cooperation, BEC will not
unreasonably interfere with Mork's employment elsewhere. Subject
to and without limiting the provisions of Paragraph 9 hereof,
this Paragraph shall not act to impede Mork from discussing Such
Matters personally relating to Mork with his lawyers or from
cooperating with any government investigation of the businesses
of the Company to the extent required by law or from giving
testimony under oath in any legal proceeding. If Mork discusses
Such Matters with his lawyers, Mork shall cause his lawyers to
honor the confidentiality provisions of Paragraph 9 of this
Agreement.
(b) The Company shall issue the press release and
employee communication attached hereto as Exhibits A and B,
respectively.
(c) With regard to reference requests from
prospective employers, Mork shall request that any prospective
employers communicate directly with the then President of BEC
("the President") in order to inquire about Mork's employment by
BEC. Upon any inquiry from a prospective employer, Mork hereby
consents to having the President only confirm that Mork was
employed by BEC and shall give Mork's final position, dates of
employment, and final salary.
11. No Derogatory Comments.
(a) Mork represents and warrants that he shall
refrain from any action that materially harms the reputation or
goodwill of the Company, including its parent corporations,
subsidiaries or affiliates and any of its officers, directors,
employees, agents or shareholders, including, but not limited to
(1) making derogatory comments to the Company's employees,
lenders, suppliers, customers, and others in the trade about the
character and ability of the Company's directors, officers,
executives, employees, representatives and agents, and the manner
in which the Company conducts its business, and (2) divulging any
information regarding the operations of the Company to any
federal, state or local agency or authority unless as a result of
any subpoena served on Mork or as otherwise required by law.
(b) The Company represents and warrants that it
shall refrain from any action that materially harms the
reputation or good will of Mork, including but not limited to (1)
making derogatory comments to the Company's employees, lenders,
suppliers, customers and others in the trade about the character
and ability of Mork and the manner in which he conducted his
business as an employee, director and officer of the Company, and
(2) divulging any information regarding Mork to any federal,
state or local agency or authority unless as a result of any
subpoena served on the Company or as otherwise required by law.
12. No Assignments. Each of the Parties hereto
represents and warrants to each other Party hereto that he or it
has not heretofore assigned or transferred, or purported to
assign or transfer, to any person or entity, any claim and/or the
proceeds of any claim released by such Party hereunder.
13. Remedies for Breach. In the event that either
Party fails or refuses to comply with any of the provisions,
terms or conditions of this Agreement, in its sole discretion the
non-breaching Party may in addition to the remedies provided in
subparagraph 3(c) recover against the breaching Party damages
(including reasonable attorneys' fees) accruing to the non-
breaching Party as a consequence of the breach. Regardless of
and in addition to any right to damages the non-breaching Party
may have, the non-breaching Party shall have the right to seek
injunctive relief.
14. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement
between the Parties and supersedes any and all prior agreements,
arrangements, negotiations, discussions or understandings between
the Parties relating to the subject matter hereof. No oral
understanding, statements, promises or inducements contrary to
the terms of this Agreement exist. This Agreement cannot be
changed or terminated orally. Should any provision of this
Agreement be held invalid, illegal or unenforceable, it shall be
deemed to be modified so that its purpose can lawfully be
effectuated and the balance of this Agreement shall remain in
full force and effect.
(b) This Agreement shall extend to, be binding
upon, and inure to the benefit of the Parties and their
respective successors, heirs and assigns.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
By his execution hereof, Mork hereby waives any right he may have
to arbitration as against the Company, including but not limited
to BEC and any of the other Releasees, and, as to any dispute
with regard to this Agreement, hereby submits to the exclusive
jurisdiction of the state and federal courts located in the State
of Delaware and further agrees not to assert that any action
brought in such jurisdiction has been brought in an inconvenient
forum.
(d) This Agreement may be executed in any number
of counterparts each of which when so executed shall be deemed to
be an original and all of which when taken together shall
constitute one and the same agreement.
15. Effective Date/Revocation. Mork may revoke this
Agreement in writing at any time during a period of seven (7)
calendar days after the execution of this Agreement by the
Parties (the "Revocation Period"). This Agreement shall become
effective and enforceable automatically on the date of actual
receipt by the Company's special counsel, Seymour H. Chalif, Esq.
of Kaye, Scholer, Fierman, Hays & Handler, of the Certificate of
Non-Revocation of Separation Agreement and Mutual Release (the
form of which is Exhibit C hereto) executed and dated by Mork at
least one day after expiration of the Revocation Period (the
"Effective Date").
16. Representations. Each Party hereto represents,
warrants and acknowledges that in executing this Agreement, he or
it does not rely and has not relied upon any representation or
statement made by any other Party or any other Party's agents,
representatives or attorneys with regard to the subject matter,
basis or effect of this Agreement or otherwise, other than those
representations, warranties, assurances and statements contained
in the Agreement itself.
17. Any notices or requests under this Agreement shall
be in writing, addressed as follows:
(a) If to Mork:
Mr. Phillip W. Mork
S96 W32644 Valley Ct. Rd.
Mukwonago, WI 53122
Telephone No. (414) 363-8051
with a copy to:
Niebler & Muren, S.C.
450 N. Sunnyslope Road
P.O. Drawer 825
Brookfield, WI 53008-0825
Telephone No. (414) 784-6630
Fax No. (414) 784-7630
Attention: Richard K. Griepentrog, Esq.
(b) If to BEC:
Bucyrus-Erie Company
1100 Milwaukee Avenue
South Milwaukee, WI 53172-0500
Telephone No. (414) 768-4000
Fax No. (414) 768-5060
Attention: President
With a copy to:
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Telephone No. (212) 836-8597
Fax No. (212) 836-7150
Attention: Seymour H. Chalif, Esq.
IN SIGNING THIS SEPARATION AGREEMENT AND MUTUAL RELEASE
("AGREEMENT"), MORK ACKNOWLEDGES THAT: (A) HE HAS READ AND
UNDERSTANDS THIS AGREEMENT AND HE IS HEREBY ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, (B) HE
HAS SIGNED THIS AGREEMENT VOLUNTARILY, ON THE ADVICE OF HIS
ATTORNEY, AND UNDERSTANDS THAT IT CONTAINS A FULL AND FINAL
RELEASE OF ALL CLAIMS, AS SET FORTH IN PARAGRAPH SEVEN AGAINST
THE RELEASEES AS OF THE EFFECTIVE DATE OF THIS AGREEMENT, (C) HE
HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO
CONSIDER THE MATTERS MEMORIALIZED IN THIS AGREEMENT, AND (D) THIS
AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR
OTHER EMPLOYMENT TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS
OF EMPLOYEES.
/s/ Phillip W. Mork July 25, 1995
Phillip W. Mork Date of Execution
by Mork
By:/s/ C. Scott Bartlett, Jr. July 25, 1995
Bucyrus-Erie Company Date of Execution
Director by BEC
<PAGE>
EXHIBIT A
PRESS RELEASE
* * *
FOR IMMEDIATE RELEASE July 25, 1995
The Bucyrus-Erie Company announced today that Phillip
W. Mork has resigned as its President and member of its Board of
Directors, effective immediately. Frank W. Miller, a consultant
to the Board of Directors of Bucyrus-Erie, has been appointed by
the Board to serve as the interim President and Chief Executive
Officer of Bucyrus-Erie until a successor to Mr. Mork is
selected. Mr. Miller is President of Miller Associates, a
Lowell, Massachusetts management consulting firm, and formerly
was Vice Chairman and Chief Executive Officer of Darling
International. In making the appointment, the Board of Directors
concluded that Mr. Miller's management background meets the
requirements of the Company during this period.
In addition, Norbert J. Verville has resigned today as
Vice President-Finance and Treasurer. The Board of Directors has
appointed James D. Annand, from Miller Associates, to be interim
Chief Financial Officer. Mr. Annand has served as the general
manager and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
David M. Goelzer has also resigned effective today as
Vice President and Secretary of the Company and is expected to
continue as General Counsel until October 1, 1995 when his
resignation from that position will take effect.
Bucyrus-Erie is pleased that Messrs. Mork, Verville and
Goelzer have agreed to remain as consultants to the Company.
In announcing these resignations and the appointment of
Mr. Miller, the Board of Directors has assured suppliers and
customers of Bucyrus-Erie of its intention to continue to service
its commitments on a mutually beneficial basis in the years to
come.
For additional information, please call T.W. Sullivan
at (414) 768-4000.
<PAGE>
EXHIBIT B
EMPLOYEE COMMUNICATION
TO: ALL EMPLOYEES
FROM: BOARD OF DIRECTORS OF THE BUCYRUS-ERIE COMPANY
DATE: JULY 25, 1995
RE: CHANGE OF LEADERSHIP
We have announced today the resignation of Phillip W.
Mork as President and member of the Board of Directors, effective
immediately. Frank W. Miller, who has been serving as a
consultant to the Board of Directors, will serve as interim
President and Chief Executive Officer during a search which the
Board has commenced for a new President and Chief Executive
Officer. Mr. Miller is President of Miller Associates, a Lowell,
Massachusetts management firm, and former Vice Chairman and Chief
Executive Officer of Darling International. In making the
appointment, the Board of Directors concluded that Mr. Miller's
management background meets the requirements of the Company
during this period.
We also have announced the resignation of Norbert J.
Verville as Vice President-Finance and Treasurer, effective
today. The Board has appointed James D. Annand as interim Chief
Financial Officer. Mr. Annand has served as the general manager
and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
Finally, also effective today, David M. Goelzer has
resigned as Vice President and Secretary. In order to assist in
the transition of leadership, Mr. Goelzer's resignation as
General Counsel will be effective no later than October 1, 1995.
Messrs. Mork, Verville and Goelzer will be serving as consultants
to Bucyrus-Erie.
You should know that we are taking steps today to
notify each of our suppliers and customers of this change and of
our sincere appreciation for their loyalty and cooperation. We
are also informing our suppliers and customers that we look
forward to continuing our business relationships with them during
the years to come.
The Board of Directors takes this opportunity to thank
each of you for your continued dedication to Bucyrus-Erie and for
your hard work. We also thank Messrs. Mork, Verville and Goelzer
for their many years of dedicated service and wish them well in
their future endeavors.
<PAGE>
EXHIBIT C
CERTIFICATE OF NON-REVOCATION OF
SEPARATION AGREEMENT AND MUTUAL RELEASE
I hereby certify and represent that seven (7) calendar days
have passed since the Parties have signed the Separation
Agreement and Mutual Release (the "Agreement") and that I have
NOT exercised my rights to revoke that Agreement pursuant to the
Older Workers Benefit Protection Act of 1990. I understand that
the Bucyrus-Erie Company on behalf of themselves and their
subsidiaries and affiliates, in providing me with benefits under
the Agreement, is relying on this Certificate, and that I can no
longer revoke the Agreement.
/s/Phillip W. Mork August 2 , 1995
Phillip W. Mork Date of Execution
by Mork
IMPORTANT:
This Certificate should be signed, dated and returned
to the Company's special counsel, Seymour H. Chalif, Esq. of
Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue, New
York, New York 10022, no earlier than on the eighth (8th)
calendar day after the Agreement is executed by the Parties.
EXHIBIT 10.3
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
SEPARATION AGREEMENT AND MUTUAL RELEASE
This Separation Agreement and Mutual Release (the
"Agreement") is made and entered into as of the Effective Date of
this Agreement (as set forth in Paragraph 15 below), by and
between Norbert J. Verville ("Verville"), residing at 13500
Highwood Dr., Elm Grove, WI 53122 and Bucyrus-Erie Company
("BEC"), a Delaware corporation, located at 1100 Milwaukee
Avenue, South Milwaukee, Wisconsin 53172-0500, on behalf of
itself individually and any past and present parents and
subsidiaries (collectively, the "Company").
WHEREAS, Verville and BEC have been parties to an
Employment and Consulting Agreement dated July 1, 1992, as
amended by the amendment dated November 28, 1994 (the "Employment
Agreement");
WHEREAS, Verville was employed in senior executive
positions by the Company; and
WHEREAS, Verville voluntarily resigns his employment
and all positions he held with the Company, including his
position as Vice President-Finance and Treasurer, effective
immediately upon his execution of this Agreement;
NOW, THEREFORE, in an effort to clearly state the
mutual obligations between Verville and the Company (the
"Parties"), for and in consideration of the mutual promises and
covenants herein contained and for good and valuable
consideration, the sufficiency of which is hereby acknowledged,
the Parties hereby agree as follows:
1. Termination of Prior Agreements and
Understandings. The Parties agree that any prior agreements and
understandings between them, whether oral or written and of
whatever nature, including, without limitation, the Employment
Agreement, are hereby canceled, terminated and superseded by this
Agreement and shall be of no further force or effect.
2. Verville's Termination and Last Day of Employment.
Effective immediately upon his execution of this Agreement,
Verville voluntarily resigns his employment and all positions he
held with the Company.
3. Payments and Benefits to Verville.
(a) BEC shall pay or cause to be paid to Verville
the sum of $334,552.50 (three hundred thirty four thousand five
hundred fifty two U.S. dollars and fifty cents), less applicable
withholdings and deductions, the net of which shall be payable in
eighteen (18) equal monthly installments (the "Separation
Payment"). BEC shall make this Separation Payment by mailing to
Verville's address listed in Paragraph 16 or any other address
designated in writing by Verville each installment via check
payable to the order of "Norbert Verville", on the fifteenth of
each month commencing on August 15, 1995 and continuing through
and including January 15, 1997. Each monthly installment shall
be adjusted in accordance with the following formula:
Sa = S x CPI
2
CPI
1
where: Sa = adjusted compensation for a given
month;
S = unadjusted monthly compensation as
set forth above;
CPI = Consumers Price Index (all Items,
2 Wage Earners and Clerical Workers,
Revised ((CPI-W) (1967 = 100)) in
effect for the month which is two
months prior to the given month);
CPI = Consumers Price Index in effect on
1 the date which is eight months
prior to the date of termination.
(b) Commencing February 15, 1997, BEC shall pay
or cause to be paid to Verville the sum of $50,000 (fifty
thousand U.S. dollars), less applicable withholdings or
deductions, the net of which shall be payable in twenty-four (24)
equal monthly installments, which shall constitute the special
payment to Verville (the "Special Payment"). BEC shall commence
the Special Payment by mailing to the address listed in Paragraph
16 below, or to any other address designated in writing by
Verville, each installment via check payable to the order of
"Norbert Verville", on the fifteenth of each month, commencing on
February 15, 1997 and continuing through and including January
15, 1999.
(c) The payments provided in Paragraphs 3(a) and
3(b) shall be made without regard to whether Verville is able to
perform services for the Company during the Consultation Period
(as defined in Paragraph 4 hereof) or whether other employment is
available to Verville or whether the Company desires consulting
services from Verville. In the event Verville dies while
receiving payments pursuant to Paragraphs 3(a) and 3(b), the
remainder of such payments shall each be converted to a lump sum
pursuant to the following formula:
LSC = C + C + ... C
2 P
(1+I) (1+I) (1+I)
LSC = total amount of lump sum compensation
C = amount of last payment prior to Verville's
death in the event of the application of this
formula to the Separation Payment or $2083.33
in the event of application of this formula
to the Special Payment.
P = the number of months remaining until the last
installment of the Special Payment or the
Separation Payment, as applicable, is made
1/12
I = (1 + N) - 1
N = (A - B) X .01
A = The Corporate high grade AAA Bond Index yield
to maturity annual percentage rate reported
by Standard and Poors Corporation as of the
end of the month two (2) months prior to the
month in which the full-time employment of
Verville is terminated.
B = The percentage increase in the Consumers
Price Index (as defined in subparagraph 3(a)
hereof) during the twelve (12) month period
ending on the end of the month two (2) months
prior to the month in which the full-time
employment of Verville is terminated.
Payment of such lump sum shall be made at the end of the month in
which Verville dies to his surviving spouse, and if he is
deceased without leaving a surviving spouse, said payment shall
be made to his estate. In the event Verville becomes disabled
while receiving payments pursuant to Paragraph 3(a) or 3(b), he
shall continue to receive such payments on the same basis as
before he became disabled. If Verville violates in any material
respect the non-competition provisions contained in Subpara-
graph 4(a) hereof or the provisions of Paragraphs 4(b), 9(a) or
11 of this Agreement, he shall have no right to any payments, and
shall promptly return to the Company all amounts paid to him
pursuant to this Agreement.
(d) Through January 15, 1999, except for periods
during which Verville is employed full-time by another party,
Verville shall also be provided by BEC with such insurance
benefits (including life and medical insurance and dental and
vision care) as BEC generally provides for any group or class of
employee of which Verville would have been a member had his
employment continued. When Verville is employed full-time by
another party prior to January 15, 1999, he shall first look to
said other party for payment of all insurance benefits of the
kind described in the preceding sentence which are available to
employees of said other party and BEC shall provide him with such
insurance only to the extent of any excess of insurance available
under BEC's plan over the insurance available under said other
party's plan. This provision shall be deemed to satisfy any
obligation to Verville which BEC may have pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985.
(e) The Consultation Period (as defined in
Paragraph 4 hereof) shall be counted for purposes of determining
Credited Service under the Bucyrus Salaried Employees Retirement
Plan and the Company's Supplementary Retirement Benefit Plan and
compensation paid to Verville during the Consultation Period
shall be counted for the purpose of determining Verville's
benefits pursuant to said plans to the extent that such
compensation falls within the scope of compensation as defined in
said plans. Also, Verville shall be entitled to participate in
the Company's 401-K Savings Plan on the same basis as regular
salaried employees with respect to such compensation.
(f) Verville shall be reimbursed for all
reasonable costs and expenses previously approved by the Company
and incurred by Verville in providing services to the Company
pursuant to Sections 4(a) and 10(a) hereof.
4. Consultant Agreement.
(a) In consideration of the Separation Payment,
Special Payment and other valuable consideration in this
Agreement, for two years following the date of execution of this
Agreement by Verville (the "Consultation Period"), Verville shall
serve as consultant to BEC. During the Consultation Period
Verville will supply advice from time to time on reasonable
advance notice with respect to the affairs of the Company, but
during the Consultation Period Verville may at his sole
discretion serve as a part-time or full-time regular employee of
any other business which does not compete with the business of
the Company or its subsidiaries, and his consulting services
shall not require his presence at times and places not compatible
with such other employment. Verville shall promptly notify the
Company in writing whenever he commences or terminates employment
elsewhere during the Consultation Period, giving the name of the
employer, the nature of its business and the title of Verville's
position. A business which competes with the business of the
Company or its subsidiaries is defined to be any business having
any product or products or service or services which compete with
a product or products or service or services of the Company or
its subsidiaries representing collectively at least ten percent
(10%) of the net revenue of the Company and its subsidiaries
during the last full fiscal year of the Company. For the purpose
of determining whether Verville is employed by a competing
business, the term "business" shall be defined to include not
only the entity by whom Verville is employed but also any direct
or indirect parent or subsidiary of such entity and any other
entity controlled directly or indirectly by an entity directly or
indirectly controlling such entity.
(b) As part of this Agreement, during the
Consultation Period, Verville further agrees not to solicit,
directly or indirectly, any of the Company's customers, nor to
employ, directly or indirectly, any person employed by the
Company as of the date of his execution of this Agreement. For
purposes of this Paragraph, "indirect" solicitation or employment
shall mean solicitation or employment through Verville's efforts
by any entity with which Verville becomes associated.
(c) During the Consultation Period, at Verville's
option (to be exercised by the written request mailed to any
officer of the Company or to its Director or Manager of Human
Resources), the Company will provide, at its expense,
outplacement services by a professional third party specialized
in providing such assistance on an individual basis to key
executives and employees. Reasonable initial travel expenses for
consultation with the outplacement firm will be reimbursed for
travel outside the greater Milwaukee area, when such travel is at
the request of the outplacement firm. Services will be provided
by Janotta Bray Beal & Associates, 2600 North Mayfair Road,
Milwaukee, Wisconsin 53226, unless an alternative firm is agreed
to by the Company and Verville.
5. Purpose of Payment. The Company is providing and
Verville is accepting the Separation Payment, the Special Payment
and the other good and valuable consideration provided for in
this Agreement in full and complete satisfaction of all of
Verville's Claims (as defined in Paragraph 7 hereof) against the
Company, its successors and assigns, and all of their past and
present directors, officers, shareholders, consultants, agents,
representatives, attorneys, employees, employee benefit plans and
plan fiduciaries (collectively, the "Releasees"). Verville
acknowledges (i) that no other monies or other consideration,
except as expressly set forth in this Agreement, are due and
owing to him or on his behalf by the Company or any of the other
Releasees; and (ii) the sufficiency of the consideration for this
Agreement generally and specifically for the release of any
claims up to the Effective Date of this Agreement he may have
ever had, may now have or may hereafter assert against the
Releasees arising under the Age Discrimination in Employment Act
of 1967, as amended by, inter alia, the Older Workers Benefit
Protection Act of 1990.
6. No Admissions. This Agreement does not constitute
an admission by the Company or any of the Releasees of any
violation of any contract or of any statutory, constitutional or
common law of any federal, state or local government of the
United States or of any other country or political subdivision
thereof, and Verville and the Releasees expressly deny any such
liability. This Agreement may not be introduced in any action or
proceeding by anyone for any purpose except to evidence its
terms.
7. Release by Verville.
(a) In consideration of this Agreement and the
monies and other good and valuable consideration provided to
Verville pursuant to this Agreement, Verville hereby irrevocably
and unconditionally releases, waives and forever discharges the
Company and each of the other Releasees from any and all actions,
causes of action, claims, demands, damages, rights, remedies and
liabilities (hereinafter referred to as "Verville's Claims") of
whatever kind or character, in law or equity, suspected or
unsuspected, past or present, that he has ever had or may now
have (even if later asserted) against the Releasees or any of
them arising out of or related to Verville's employment and
positions with the Company or the termination of that employment
and those positions, from the beginning of time to the Effective
Date hereof, including without limitation: (i) any claims
arising from any federal, state and/or local labor or civil
rights laws including, without limitation, the federal Civil
Rights Acts of 1866, 1871, 1964 and 1991, the Age Discrimination
in Employment Act of 1967, as amended by, inter alia, the Older
Workers Benefit Protection Act of 1990, the Workers' Adjustment
and Retraining Notification Act, the Employee Retirement Income
Security Act of 1974, as amended, the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Americans with Disabilities Act
of 1990, the Wisconsin Fair Employment Act and employment and
labor laws, or the Delaware Fair Employment Practices Act and
employment and labor laws, as each may have been amended from
time to time, and (ii) any and all other claims arising under or
in regard to any contract, any and all other federal, state or
local constitutions, statutes, rules or regulations, or under any
common law right of any kind whatsoever, or under the laws of any
country or political subdivision, and including, without
limitation, any of Verville's Claims for any kind of tortious
conduct (including but not limited to any defamation, business
tort or intentional infliction of emotional distress), breach of
contract, promissory or equitable estoppel, breach of the
Company's policies, rules, regulations, handbooks or manuals,
breach of express or implied covenants of good faith, wrongful
termination, discharge or dismissal, and failure to pay in whole
or part any compensation, bonus, incentive compensation,
severance pay or benefits of any kind whatsoever, including but
not limited to any rights Verville may have under the Employment
Agreement; provided, however, that nothing herein shall be deemed
a release of any entitlements Verville may have with respect to
vested benefits under the terms of any employee pension,
retirement, savings, deferred compensation or similar plan
maintained by the Company for the benefit of its employees
generally or any release of indemnification rights Verville may
have in his capacity as an officer, director or employee of the
Company under the Company's By-laws or the Delaware General
Corporation Law.
(b) Execution of this Agreement by Verville
operates as a complete bar and defense against any and all of
Verville's Claims against the Company or the other Releasees. If
Verville should hereafter raise any of Verville's Claims in any
action, claim or proceeding against the Company or any of the
Releasees, the Agreement may be raised as and shall constitute a
complete bar to any such action, claim or proceeding and the
Company or the Releasees shall recover from Verville all costs
incurred including attorneys' fees. Nothing contained herein is
intended to prevent Verville from enforcing this Agreement.
8. Release by the Company.
(a) The Company agrees to forever release and
discharge Verville from any and all actions, causes of action,
claims, demands, damages, rights, remedies and liabilities
(hereinafter referred to as "Company Claims") of whatsoever kind
or character, in law or equity, suspected or unsuspected, past or
present, that it has ever had, may now have, or may later assert,
against Verville, whether or not arising out of or related to his
employment and the positions he has held with the Company, from
the beginning of time to the Effective Date hereof, with the
exception of those claims stated in Subparagraph 8(b) below to be
expressly excluded from the Company's release.
(b) Execution of this Agreement by BEC operates
as a complete bar and defense against any and all of the Company
Claims against Verville, provided that BEC may enforce its rights
under this Agreement (including without limitation BEC's rights
pursuant to Paragraphs 4, 9 and 10 of this Agreement), and
provided further, that expressly excluded from BEC's release and
covenant not to sue are any: (i) Company Claims against Verville
in regard to any criminal violations of law where Verville is
convicted or pleads guilty and as to which Verville had no
reasonable cause to believe his conduct was lawful; and
(ii) Company Claims against Verville in regard to any matter as
to which Verville did not act in good faith and did not act in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company. If the Company should hereafter make
any of the Company Claims (other than any excluded from the
Company's release in this Paragraph 8(b)) in any action, claim or
proceeding against Verville, this Agreement may be raised as and
shall constitute a complete bar to any such action, claim or
proceeding and Verville shall recover from the Company all costs
incurred, including attorneys' fees. Nothing contained herein is
intended to prevent the Company from enforcing this Agreement.
9. Confidentiality.
(a) Verville agrees that he will not, directly or
indirectly, use or disclose, or permit or aid the disclosure, to
any person, firm, entity or corporation, of any privileged,
confidential or proprietary business information relating to the
business, affairs, clients, plans, proposals, finances or
financial condition of the Company or any of the other Releasees,
except with the Company's express written consent or in direct
response to any subpoena or other legal process initiated against
or served upon Verville. In the event disclosure is sought from
Verville in direct response to any such subpoena or other legal
process, Verville shall give the Company reasonable notice under
the circumstances in order to afford the Company an opportunity
to evaluate its legal rights and take such action as may be
appropriate to protect the interests of the Company. Verville
acknowledges that he is not authorized to and shall not waive the
attorney-client privilege on behalf of the Company or any of the
Releasees.
(b) Verville and the Company agree that the
existence of this Agreement and its terms and conditions shall
remain confidential except to the extent that such Party is
advised by counsel that disclosure is required by law or
regulations of any governmental authority, or, as to the Company
only, in connection with the conduct of business by the Company.
(c) Verville is obligated to surrender and
acknowledges that he has surrendered all papers, contracts,
drafts, data, records, plans, proposals and other information,
including any copies thereof, related to the Company or any of
the other Releasees in the possession of or under the control of
Verville, including but not limited to any such items in the
possession or under the control of his attorneys.
10. Cooperation.
(a) At the request by or on behalf of the
Company, and upon reasonable notice to Verville, Verville agrees
to cooperate with the Company in connection with the financial
affairs, legal affairs or business matters arising during
Verville's employment about which Verville has knowledge or
information and/or with respect to any investigation, litigation,
legal proceedings or other circumstances arising in connection
with such financial affairs, legal affairs and/or business
matters (collectively, "Such Matters"), including providing the
Company with full, complete, truthful and accurate information,
to the best of his knowledge, concerning Such Matters, and/or
testifying in regard to Such Matters. In requesting Verville's
cooperation, BEC will not unreasonably interfere with Verville's
employment elsewhere. Subject to and without limiting the
provisions of Paragraph 9 hereof, this Paragraph shall not act to
impede Verville from discussing Such Matters personally relating
to Verville with his lawyers or from cooperating with any
government investigation of the businesses of the Company to the
extent required by law or from giving testimony under oath in any
legal proceeding. If Verville discusses Such Matters with his
lawyers, Verville shall cause his lawyers to honor the
confidentiality provisions of Paragraph 9 of this Agreement.
(b) The Company shall issue the press release and
employee communication attached hereto as Exhibits A and B,
respectively.
(c) With regard to reference requests from
prospective employers, Verville shall request that any
prospective employers communicate directly with the then
President of BEC (the "President") in order to inquire about
Verville's employment by BEC. Upon any inquiry from a
prospective employer, Verville hereby consents to having the
President only confirm that Verville was employed by BEC and
shall give Verville's final position, dates of employment, and
final salary.
11. No Derogatory Comments.
(a) Verville represents and warrants that he
shall refrain from any action that materially harms the
reputation or goodwill of the Company, including its parent
corporations, subsidiaries or affiliates and any of its officers,
directors, employees, agents or shareholders, including, but not
limited to (1) making derogatory comments to the Company's
employees, lenders, suppliers, customers, and others in the trade
about the character and ability of the Company's directors,
officers, executives, employees, representatives and agents, and
the manner in which the Company conducts its business, and (2)
divulging any information regarding the operations of the Company
to any federal, state or local agency or authority unless as a
result of any subpoena served on Verville or as otherwise
required by law.
(b) The Company represents and warrants that it
shall refrain from any action that materially harms the
reputation or good will of Verville, including but not limited to
(1) making derogatory comments to the Company's employees,
lenders, suppliers, customers and others in the trade about the
character and ability of Verville and the manner in which he
conducted his business as an employee and officer of the Company,
and (2) divulging any information regarding Verville to any
federal, state or local agency or authority unless as a result of
any subpoena served on the Company or as otherwise required by
law.
12. No Assignments. Each of the Parties hereto
represents and warrants to each other Party hereto that he or it
has not heretofore assigned or transferred, or purported to
assign or transfer, to any person or entity, any claim and/or the
proceeds of any claim released by such Party hereunder.
13. Remedies for Breach. In the event that either
Party fails or refuses to comply with any of the provisions,
terms or conditions of this Agreement, in its sole discretion the
non-breaching Party may in addition to the remedies provided in
Subparagraph 3(c) recover against the breaching Party damages
(including reasonable attorneys' fees) accruing to the non-
breaching Party as a consequence of the breach. Regardless of
and in addition to any right to damages the non-breaching Party
may have, the non-breaching Party shall have the right to seek
injunctive relief.
14. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement
between the Parties and supersedes any and all prior agreements,
arrangements, negotiations, discussions or understandings between
the Parties relating to the subject matter hereof. No oral
understanding, statements, promises or inducements contrary to
the terms of this Agreement exist. This Agreement cannot be
changed or terminated orally. Should any provision of this
Agreement be held invalid, illegal or unenforceable, it shall be
deemed to be modified so that its purpose can lawfully be
effectuated and the balance of this Agreement shall remain in
full force and effect.
(b) This Agreement shall extend to, be binding
upon, and inure to the benefit of the Parties and their
respective successors, heirs and assigns.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
By his execution hereof, Verville hereby waives any right he may
have to arbitration as against the Company, including but not
limited to BEC and any of the other Releasees, and, as to any
dispute with regard to this Agreement, hereby submits to the
exclusive jurisdiction of the state and federal courts located in
the State of Delaware and further agrees not to assert that any
action brought in such jurisdiction has been brought in an
inconvenient forum.
(d) This Agreement may be executed in any number
of counterparts each of which when so executed shall be deemed to
be an original and all of which when taken together shall
constitute one and the same agreement.
15. Effective Date/Revocation. Verville may revoke
this Agreement in writing at any time during a period of seven
(7) calendar days after the execution of this Agreement by the
Parties (the "Revocation Period"). This Agreement shall become
effective and enforceable automatically on the date of actual
receipt by the Company's special counsel, Seymour H. Chalif, Esq.
of Kaye, Scholer, Fierman, Hays & Handler, of the Certificate of
Non-Revocation of Separation Agreement and Mutual Release (the
form of which is Exhibit C hereto) executed and dated by Verville
at least one day after expiration of the Revocation Period (the
"Effective Date").
16. Representations. Each Party hereto represents,
warrants and acknowledges that in executing this Agreement, he or
it does not rely and has not relied upon any representation or
statement made by any other Party or any other Party's agents,
representatives or attorneys with regard to the subject matter,
basis or effect of this Agreement or otherwise, other than those
representations, warranties, assurances and statements contained
in the Agreement itself.
17. Any notices or requests under this Agreement shall
be in writing, addressed as follows:
(a) If to Verville:
Mr. N.J. Verville
13500 Highwood Drive
Elm Grove, WI 53122
Telephone No. (414) 786-8402
Fax No.
with a copy to:
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, WI 53202
Telephone No. (414) 273-3500
Fax No. (414) 273-5198
Attention: Patricia Leiker, Esq.
(b) If to BEC:
Bucyrus-Erie Company
1100 Milwaukee Avenue
South Milwaukee, WI 53172-0500
Telephone No. (414) 768-4000
Fax No. (414) 768-5060
Attention: President
With a copy to:
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Telephone No. (212) 836-8597
Fax No. (212) 836-7150
Attention: Seymour H. Chalif, Esq.
IN SIGNING THIS SEPARATION AGREEMENT AND MUTUAL RELEASE
("AGREEMENT"), VERVILLE ACKNOWLEDGES THAT: (A) HE HAS READ AND
UNDERSTANDS THIS AGREEMENT AND HE IS HEREBY ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, (B) HE
HAS SIGNED THIS AGREEMENT VOLUNTARILY, ON THE ADVICE OF HIS
ATTORNEY, AND UNDERSTANDS THAT IT CONTAINS A FULL AND FINAL
RELEASE OF ALL CLAIMS, AS SET FORTH IN PARAGRAPH SEVEN AGAINST
THE RELEASEES AS OF THE EFFECTIVE DATE OF THIS AGREEMENT, (C) HE
HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO
CONSIDER THE MATTERS MEMORIALIZED IN THIS AGREEMENT, AND (D) THIS
AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR
OTHER EMPLOYMENT TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS
OF EMPLOYEES.
/s/ Norbert Verville July 25 , 1995
Norbert Verville Date of Execution
by Verville
By:/s/ C. Scott Bartlett, Jr. July 25 , 1995
Bucyrus-Erie Company Date of Execution
Director by BEC
<PAGE>
EXHIBIT A
PRESS RELEASE
* * *
FOR IMMEDIATE RELEASE July 25, 1995
The Bucyrus-Erie Company announced today that Phillip
W. Mork has resigned as its President and member of its Board of
Directors, effective immediately. Frank W. Miller, a consultant
to the Board of Directors of Bucyrus-Erie, has been appointed by
the Board to serve as the interim President and Chief Executive
Officer of Bucyrus-Erie until a successor to Mr. Mork is
selected. Mr. Miller is President of Miller Associates, a
Lowell, Massachusetts management consulting firm, and formerly
was Vice Chairman and Chief Executive Officer of Darling
International. In making the appointment, the Board of Directors
concluded that Mr. Miller's management background meets the
requirements of the Company during this period.
In addition, Norbert J. Verville has resigned today as
Vice President-Finance and Treasurer. The Board of Directors has
appointed James D. Annand, from Miller Associates, to be interim
Chief Financial Officer. Mr. Annand has served as the general
manager and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
David M. Goelzer has also resigned effective today as
Vice President and Secretary of the Company and is expected to
continue as General Counsel until October 1, 1995 when his
resignation from that position will take effect.
Bucyrus-Erie is pleased that Messrs. Mork, Verville and
Goelzer have agreed to remain as consultants to the Company.
In announcing these resignations and the appointment of
Mr. Miller, the Board of Directors has assured suppliers and
customers of Bucyrus-Erie of its intention to continue to service
its commitments on a mutually beneficial basis in the years to
come.
For additional information, please call T.W. Sullivan
at (414) 768-4000.
<PAGE>
EXHIBIT B
EMPLOYEE COMMUNICATION
TO: ALL EMPLOYEES
FROM: BOARD OF DIRECTORS OF THE BUCYRUS-ERIE COMPANY
DATE: JULY 25, 1995
RE: CHANGE OF LEADERSHIP
We have announced today the resignation of Phillip W.
Mork as President and member of the Board of Directors, effective
immediately. Frank W. Miller, who has been serving as a
consultant to the Board of Directors, will serve as interim
President and Chief Executive Officer during a search which the
Board has commenced for a new President and Chief Executive
Officer. Mr. Miller is President of Miller Associates, a Lowell,
Massachusetts management firm, and former Vice Chairman and Chief
Executive Officer of Darling International. In making the
appointment, the Board of Directors concluded that Mr. Miller's
management background meets the requirements of the Company
during this period.
We also have announced the resignation of Norbert J.
Verville as Vice President-Finance and Treasurer, effective
today. The Board has appointed James D. Annand as interim Chief
Financial Officer. Mr. Annand has served as the general manager
and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
Finally, also effective today, David M. Goelzer has
resigned as Vice President and Secretary. In order to assist in
the transition of leadership, Mr. Goelzer's resignation as
General Counsel will be effective no later than October 1, 1995.
Messrs. Mork, Verville and Goelzer will be serving as consultants
to Bucyrus-Erie.
You should know that we are taking steps today to
notify each of our suppliers and customers of this change and of
our sincere appreciation for their loyalty and cooperation. We
are also informing our suppliers and customers that we look
forward to continuing our business relationships with them during
the years to come.
The Board of Directors takes this opportunity to thank
each of you for your continued dedication to Bucyrus-Erie and for
your hard work. We also thank Messrs. Mork, Verville and Goelzer
for their many years of dedicated service and wish them well in
their future endeavors.
<PAGE>
EXHIBIT C
CERTIFICATE OF NON-REVOCATION OF
SEPARATION AGREEMENT AND MUTUAL RELEASE
I hereby certify and represent that seven (7) calendar days
have passed since the Parties have signed the Separation
Agreement and Mutual Release (the "Agreement") and that I have
NOT exercised my rights to revoke that Agreement pursuant to the
Older Workers Benefit Protection Act of 1990. I understand that
the Bucyrus-Erie Company on behalf of themselves and their
subsidiaries and affiliates, in providing me with benefits under
the Agreement, is relying on this Certificate, and that I can no
longer revoke the Agreement.
______________________________ __________________ , 1995
Norbert Verville Date of Execution
by Verville
IMPORTANT:
This Certificate should be signed, dated and returned
to the Company's special counsel, Seymour H. Chalif, Esq. of
Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue, New
York, New York 10022, no earlier than on the eighth (8th)
calendar day after the Agreement is executed by the Parties.
EXHIBIT 10.4
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
SEPARATION AGREEMENT AND MUTUAL RELEASE
This Separation Agreement and Mutual Release (the
"Agreement") is made and entered into as of the Effective Date of
this Agreement (as set forth in Paragraph 15 below), by and
between David M. Goelzer ("Goelzer"), residing at 7307 N. Bridge
Lane, Fox Point, WI 53217 and Bucyrus-Erie Company ("BEC"), a
Delaware corporation, located at 1100 Milwaukee Avenue, South
Milwaukee, Wisconsin 53172-0500, on behalf of itself individually
and any past and present parents and subsidiaries (collectively,
the "Company").
WHEREAS, Goelzer and BEC have been parties to an
Employment and Consulting Agreement dated July 1, 1992, as
amended by the amendment dated November 28, 1994 (the "Employment
Agreement");
WHEREAS, Goelzer was employed in senior executive
positions by the Company; and
WHEREAS, Goelzer voluntarily resigns as Vice President
and Secretary of BEC effective immediately upon execution of the
Agreement, and resigns his employment and all other positions he
may be holding, including but not limited to his position as
General Counsel of BEC, effective October 1, 1995 or at such an
earlier date as may be set by the interim President of BEC;
NOW, THEREFORE, in an effort to clearly state the
mutual obligations between Goelzer and the Company (the
"Parties"), for and in consideration of the mutual promises and
covenants herein contained and for good and valuable
consideration, the sufficiency of which is hereby acknowledged,
the Parties hereby agree as follows:
1. Termination of Prior Agreements and
Understandings. The Parties agree that any prior agreements and
understandings between them, whether oral or written and of
whatever nature, are hereby canceled, terminated and superseded
by this Agreement and shall be of no further force or effect,
including, without limitation, the Employment Agreement.
2. Goelzer's Termination and Last Day of Employment.
Effective immediately upon his execution of this Agreement,
Goelzer voluntarily resigns his positions as Vice President and
Secretary of the Company. In addition, unless the interim
President of BEC sets an earlier date for Goelzer's resignation
from employment, Goelzer hereby voluntarily resigns his
employment and all other positions he may be holding, including
but not limited to his position as General Counsel of BEC,
effective midnight, October 1, 1995. Goelzer hereby agrees that
his resignation from employment and all other positions he may be
holding shall take effect immediately upon his notification by
the interim President of BEC of such resignation prior to October
1, 1995.
3. Payments and Benefits to Goelzer.
(a) BEC shall pay or cause to be paid to Goelzer
his current base salary, less applicable withholdings and
deductions, through October 1, 1995, or through such earlier date
on which Goelzer voluntarily resigns his employment, including
but not limited to his position as General Counsel.
(b) BEC shall pay or cause to be paid to Goelzer
the sum of $223,206.12 (two hundred twenty three thousand two
hundred six U.S. dollars and twelve cents), less applicable
withholdings and deductions, the net of which shall be payable in
eighteen (18) equal monthly installments (the "Separation
Payment"). BEC shall make this Separation Payment by mailing to
Goelzer's address listed in Paragraph 16 or any other address
designated in writing by Goelzer each installment via check
payable to the order of "David Goelzer", on the fifteenth of each
month, commencing on October 15, 1995, or the fifteenth day of
the month following the month in which he ceases to be an
employee of the Company, whichever is earlier, and continuing
through and including March 15, 1997, but not later than 18
months after the date of the first Separation Payment. Each
monthly installment shall be adjusted in accordance with the
following formula:
Sa = S x CPI
2
CPI
1
where: Sa = adjusted compensation for a given month;
S = unadjusted monthly compensation as set
forth above;
CPI = Consumers Price Index (all Items, Wage
2 Earners and Clerical Workers, Revised
((CPI-W) (1967 = 100)) in effect for the
month which is two months prior to the
given month);
CPI = Consumers Price Index in effect on the
1 date which is eight months prior to the
date of termination.
(c) Commencing April 15, 1997, or 18 months after the
date of the first Separation Payment, whichever is earlier, BEC
shall pay or cause to be paid to Goelzer the sum of $50,000
(fifty thousand U.S. dollars), less applicable withholdings or
deductions, the net of which shall be payable in twenty-four (24)
equal monthly installments, which shall constitute the special
payment to Goelzer (the "Special Payment"). BEC shall commence
the Special Payment by mailing to the address listed in Paragraph
16 below, or to any other address designated in writing by
Goelzer, each installment via check payable to the order of
"David Goelzer", on the fifteenth of each month, commencing on
April 15, 1997 or 18 months after the date of the first
Separation Payment, whichever is earlier, and continuing through
and including March 15, 1999 but not later than 24 months after
the first Special Payment, whichever is earlier.
(d) The payments provided in Paragraphs 3(b) and 3(c)
shall be made without regard to whether Goelzer is able to
perform services for the Company during the Consultation Period
(as defined in Paragraph 4 hereof) or whether other employment is
available to Goelzer or whether the Company desires consulting
services from Goelzer. In the event Goelzer dies while receiving
payments pursuant to Paragraphs 3(b) and 3(c), the remainder of
such payments shall each be converted to a lump sum pursuant to
the following formula:
LSC = C + C + ... C
2 P
(1+I) (1+I) (1+I)
LSC = total amount of lump sum compensation
C = amount of last payment prior to Goelzer's
death in the event of the application of this
formula to the Separation Payment or
$2,083.33 in the event of application of this
formula to the Special Payment
P = the number of months remaining until the last
installment of the Special Payment or the
Separation Payment, as applicable, is made
1/12
I = (1 + N) - 1
N = (A - B) X .01
A = The Corporate high grade AAA Bond Index yield
to maturity annual percentage rate reported
by Standard and Poors Corporation as of the
end of the month two (2) months prior to the
month in which the full-time employment of
Goelzer is terminated.
B = The percentage increase in the Consumers
Price Index (as defined in subparagraph 3(b)
hereof) during the twelve (12) month period
ending on the end of the month two (2) months
prior to the month in which the full-time
employment of Goelzer is terminated.
Payment of such lump sum shall be made at the end of the month in
which Goelzer dies to his surviving spouse, and if he is deceased
without leaving a surviving spouse, said payment shall be made to
his estate. In the event Goelzer becomes disabled while
receiving payments pursuant to Paragraph 3(b) or 3(c), he shall
continue to receive such payments on the same basis as before he
became disabled. If Goelzer violates in any material respect the
non-competition provisions contained in subparagraph 4(a) hereof
or the provisions of Paragraph 4(b), 9(a) or 11 of this
Agreement, he shall have no right to any payments, and shall
promptly return to the Company all amounts paid to him pursuant
to this Agreement.
(e) Through March 15, 1999, or 42 months after the
date of the first Separation Payment, whichever is earlier,
except for periods during which Goelzer is employed full-time by
another party, Goelzer shall also be provided by BEC with such
insurance benefits (including life and medical insurance and
dental and vision care) as BEC generally provides for any group
or class of employee of which Goelzer would have been a member
had his employment continued. When Goelzer is employed full-time
by another party prior to March 15, 1999, or 42 months after the
date of the first Separation Payment, whichever is earlier, he
shall first look to said other party for payment of all insurance
benefits of the kind described in the preceding sentence which
are available to employees of said other party and BEC shall
provide him with such insurance only to the extent of any excess
of insurance available under BEC's plan over the insurance
available under said other party's plan. This provision shall be
deemed to satisfy any obligation to Goelzer which BEC may have
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985.
(f) The Consultation Period (as defined in Paragraph 4
hereof) shall be counted for purposes of determining Credited
Service under the Bucyrus Salaried Employees Retirement Plan and
the Company's Supplementary Retirement Benefit Plan and
compensation paid to Goelzer during the Consultation Period shall
be counted for the purpose of determining Goelzer's benefits
pursuant to said plans to the extent that such compensation falls
within the scope of compensation as defined in said plans. Also,
Goelzer shall be entitled to participate in the Company's 401-K
Savings Plan on the same basis as regular salaried employees with
respect to such compensation.
(g) Goelzer shall be reimbursed for all reasonable
costs and expenses previously approved by the Company and
incurred by Goelzer in providing services to the Company pursuant
to Paragraphs 4(a) and 10(a) hereof.
4. Consultant Agreement.
(a) In consideration of the Separation Payment,
Special Payment and other valuable consideration in this
Agreement, for two years following Goelzer's last day of
employment (the "Consultation Period") Goelzer shall serve as
consultant to BEC. During the Consultation Period Goelzer will
supply advice from time to time on reasonable advance notice with
respect to the affairs of the Company, but during the
Consultation Period Goelzer may at his sole discretion serve as a
part-time or full-time regular employee of any other business
which does not compete with the business of the Company or its
subsidiaries, and his consulting services shall not require his
presence at times and places not compatible with such other
employment. Goelzer shall promptly notify the Company in writing
whenever he commences or terminates employment elsewhere during
the Consultation Period, giving the name of the employer, the
nature of its business and the title of Goelzer's position. A
business which competes with the business of the Company or its
subsidiaries is defined to be any business having any product or
products or service or services which compete with a product or
products or service or services of the Company or its
subsidiaries representing collectively at least ten percent (10%)
of the net revenue of the Company and its subsidiaries during the
last full fiscal year of the Company. For the purpose of
determining whether Goelzer is employed by a competing business,
the term "business" shall be defined to include not only the
entity by whom Goelzer is employed but also any direct or
indirect parent or subsidiary of such entity and any other entity
controlled directly or indirectly by an entity directly or
indirectly controlling such entity.
(b) As part of this Agreement, during the
Consultation Period, Goelzer further agrees not to solicit,
directly or indirectly, any of the Company's customers, nor to
employ, directly or indirectly, any person employed by the
Company as of the date of execution of this Agreement by Goelzer.
For purposes of this Paragraph, "indirect" solicitation or
employment shall mean solicitation or employment through
Goelzer's efforts by any entity with which Goelzer becomes
associated.
(c) During the Consultation Period, at Goelzer's
option (to be exercised by the written request mailed to any
officer of the Company or to its Director or Manager of Human
Resources), the Company will provide, at its expense,
outplacement services by a professional third party specialized
in providing such assistance on an individual basis to key
executives and employees. Reasonable initial travel expenses for
consultation with the outplacement firm will be reimbursed for
travel outside the greater Milwaukee area, when such travel is at
the request of the outplacement firm. Services will be provided
by Janotta Bray Beal & Associates, 2600 North Mayfair Road,
Milwaukee, Wisconsin 53226, unless an alternative firm is agreed
to by the Company and Goelzer.
5. Purpose of Payment. The Company is providing and
Goelzer is accepting the Separation Payment, the Special Payment
and the other good and valuable consideration provided for in
this Agreement in full and complete satisfaction of all of
Goelzer's Claims (as defined in Paragraph 7 hereof) against the
Company, its successors and assigns, and all of their past and
present directors, officers, shareholders, consultants, agents,
representatives, attorneys, employees, employee benefit plans and
plan fiduciaries (collectively, the "Releasees"). Goelzer
acknowledges (i) that no other monies or other consideration,
except as expressly set forth in this Agreement, are due and
owing to him or on his behalf by the Company or any of the other
Releasees; and (ii) the sufficiency of the consideration for this
Agreement generally and specifically for the release of any
claims up to the Effective Date of this Agreement he may have
ever had, may now have or may hereafter assert against the
Releasees arising under the Age Discrimination in Employment Act
of 1967, as amended by, inter alia, the Older Workers Benefit
Protection Act of 1990.
6. No Admissions. This Agreement does not constitute
an admission by the Company or any of the Releasees of any
violation of any contract or of any statutory, constitutional or
common law of any federal, state or local government of the
United States or of any other country or political subdivision
thereof, and Goelzer and the Releasees expressly deny any such
liability. This Agreement may not be introduced in any action or
proceeding by anyone for any purpose except to evidence its
terms.
7. Release by Goelzer.
(a) In consideration of this Agreement and the
monies and other good and valuable consideration provided to
Goelzer pursuant to this Agreement, Goelzer hereby irrevocably
and unconditionally releases, waives and forever discharges the
Company and each of the other Releasees from any and all actions,
causes of action, claims, demands, damages, rights, remedies and
liabilities (hereinafter referred to as "Goelzer's Claims") of
whatever kind or character, in law or equity, suspected or
unsuspected, past or present, that he has ever had or may now
have, (even if later asserted) against the Releasees or any of
them arising out of or related to Goelzer's employment and
positions with the Company or the termination of that employment
and those positions, from the beginning of time to the Effective
Date hereof, including without limitation: (i) any claims
arising from any federal, state and/or local labor or civil
rights laws including, without limitation, the federal Civil
Rights Acts of 1866, 1871, 1964 and 1991, the Age Discrimination
in Employment Act of 1967, as amended by, inter alia, the Older
Workers Benefit Protection Act of 1990, the Workers' Adjustment
and Retraining Notification Act, the Employee Retirement Income
Security Act of 1974, as amended, the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Americans with Disabilities Act
of 1990, the Wisconsin Fair Employment Act and employment and
labor laws, or the Delaware Fair Employment Practices Act and
employment and labor laws, as each may have been amended from
time to time, and (ii) any and all other claims arising under or
in regard to any contract, any and all other federal, state or
local constitutions, statutes, rules or regulations, or under any
common law right of any kind whatsoever, or under the laws of any
country or political subdivision, and including, without
limitation, any of Goelzer's Claims for any kind of tortious
conduct (including but not limited to any defamation, business
tort or intentional infliction of emotional distress), breach of
contract, promissory or equitable estoppel, breach of the
Company's policies, rules, regulations, handbooks or manuals,
breach of express or implied covenants of good faith, wrongful
termination, discharge or dismissal, and failure to pay in whole
or part any compensation, bonus, incentive compensation,
severance pay or benefits of any kind whatsoever, including but
not limited to any rights Goelzer may have under the Employment
Agreement; provided, however, that nothing herein shall be deemed
a release of any entitlements Goelzer may have with respect to
vested benefits under the terms of any employee pension,
retirement, savings, deferred compensation or similar plan
maintained by the Company for the benefit of its employees
generally or any release of indemnification rights Goelzer may
have in his capacity as an officer, director or employee of the
Company under the Company's By-Laws or the Delaware General
Corporation Law.
(b) Execution of this Agreement by Goelzer
operates as a complete bar and defense against any and all of
Goelzer's Claims against the Company or the other Releasees. If
Goelzer should hereafter raise any of Goelzer's Claims in any
action, claim or proceeding against the Company or any of the
Releasees, the Agreement may be raised as and shall constitute a
complete bar to any such action, claim or proceeding and the
Company or the Releasees shall recover from Goelzer all costs
incurred including attorneys' fees. Nothing contained herein is
intended to prevent Goelzer from enforcing this Agreement.
8. Release by the Company.
(a) The Company agrees to forever release and
discharge Goelzer from any and all actions, causes of action,
claims, demands, damages, rights, remedies and liabilities
(hereinafter referred to as "Company Claims") of whatsoever kind
or character, in law or equity, suspected or unsuspected, past or
present, that it has ever had, may now have, or may later assert,
against Goelzer, whether or not arising out of or related to his
employment and the positions he has held with the Company, from
the beginning of time to the Effective Date hereof, with the
exception of those claims stated in Subparagraph 8(b) below to be
expressly excluded from the Company's release.
(b) Execution of this Agreement by BEC operates
as a complete bar and defense against any and all of the Company
Claims against Goelzer, provided that BEC may enforce its rights
under this Agreement (including without limitation BEC's rights
pursuant to Paragraphs 4, 9 and 10 of this Agreement), and
provided further, that expressly excluded from BEC's release and
covenant not to sue are any: (i) Company Claims against Goelzer
in regard to any criminal violations of law where Goelzer is
convicted or pleads guilty and as to which Goelzer had no
reasonable cause to believe his conduct was lawful; and
(ii) Company Claims against Goelzer in regard to any matter as to
which Goelzer did not act in good faith and did not act in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company. If the Company should hereafter make
any of the Company Claims (other than any excluded from the
Company's release in this Paragraph 8(b)) in any action, claim or
proceeding against Goelzer, this Agreement may be raised as and
shall constitute a complete bar to any such action, claim or
proceeding and Goelzer shall recover from the Company all costs
incurred, including attorneys' fees. Nothing contained herein is
intended to prevent the Company from enforcing this Agreement.
9. Confidentiality.
(a) Goelzer agrees that he will not, directly or
indirectly, use or disclose, or permit or aid the disclosure, to
any person, firm, entity or corporation, of any privileged,
confidential or proprietary business information relating to the
business, affairs, clients, plans, proposals, finances or
financial condition of the Company or any of the other Releasees,
except with the Company's express written consent or in direct
response to any subpoena or other legal process initiated against
or served upon Goelzer. In the event disclosure is sought from
Goelzer in direct response to any such subpoena or other legal
process, Goelzer shall give the Company reasonable notice under
the circumstances in order to afford the Company an opportunity
to evaluate its legal rights and take such action as may be
appropriate to protect the interests of the Company. Goelzer
acknowledges that he is not authorized to and shall not waive the
attorney-client privilege on behalf of the Company or any of the
Releasees.
(b) Goelzer and the Company agree that the
existence of this Agreement and its terms and conditions shall
remain confidential except to the extent that such Party is
advised by counsel that disclosure is required by law or
regulations of any governmental authority, or, as to the Company
only, in connection with the conduct of business by the Company.
(c) As of the last day of employment, Goelzer is
obligated to surrender and will acknowledge that he has
surrendered all papers, contracts, drafts, data, records, plans,
proposals and other information, including any copies thereof,
related to the Company or any of the other Releasees in the
possession of or under the control of Goelzer, including but not
limited to any such items in the possession or under the control
of his attorneys.
10. Cooperation.
(a) At the request by or on behalf of the
Company, and upon reasonable notice to Goelzer, Goelzer agrees to
cooperate with the Company in connection with the financial
affairs, legal affairs or business matters arising during
Goelzer's employment about which Goelzer has knowledge or
information and/or with respect to any investigation, litigation,
legal proceedings or other circumstances arising in connection
with such financial affairs, legal affairs and/or business
matters (collectively, "Such Matters"), including providing the
Company with full, complete, truthful and accurate information,
to the best of his knowledge, concerning Such Matters, and/or
testifying in regard to Such Matters. In requesting Goelzer's
cooperation, BEC will not unreasonably interfere with Goelzer's
employment elsewhere. Subject to and without limiting the
provisions of Paragraph 9 hereof, this Paragraph shall not act to
impede Goelzer from discussing Such Matters personally relating
to Goelzer with his lawyers or from cooperating with any
government investigation of the businesses of the Company to the
extent required by law or from giving testimony under oath in any
legal proceeding. If Goelzer discusses Such Matters with his
lawyers, Goelzer shall cause his lawyers to honor the
confidentiality provisions of Paragraph 9 of this Agreement.
(b) The Company shall issue the press release and
employee communication attached hereto as Exhibits A and B,
respectively.
(c) With regard to reference requests from
prospective employers, Goelzer shall request that any prospective
employers communicate directly with the then President of BEC
(the "President"), in order to inquire about Goelzer's employment
by BEC. Upon any inquiry from a prospective employer, Goelzer
hereby consents to having the President only confirm that Goelzer
was employed by BEC and shall give Goelzer's final position,
dates of employment, and final salary.
11. No Derogatory Comments.
(a) Goelzer represents and warrants that he shall
refrain from any action that materially harms the reputation or
goodwill of the Company, including its parent corporations,
subsidiaries or affiliates and any of its officers, directors,
employees, agents or shareholders, including, but not limited to
(1) making derogatory comments to the Company's employees,
lenders, suppliers, customers, and others in the trade about the
character and ability of the Company's directors, officers,
executives, employees, representatives and agents, and the manner
in which the Company conducts its business, and (2) divulging any
information regarding the operations of the Company to any
federal, state or local agency or authority unless as a result of
any subpoena served on Goelzer or as otherwise required by law.
(b) The Company represents and warrants that it
shall refrain from any action that materially harms the
reputation or good will of Goelzer, including but not limited to
(1) making derogatory comments to the Company's employees,
lenders, suppliers, customers and others in the trade about the
character and ability of Goelzer and the manner in which he
conducted his business as an employee and officer of the Company,
and (2) divulging any information regarding Goelzer to any
federal, state or local agency or authority unless as a result of
any subpoena served on the Company or as otherwise required by
law.
12. No Assignments. Each of the Parties hereto
represents and warrants to each other Party hereto that he or it
has not heretofore assigned or transferred, or purported to
assign or transfer, to any person or entity, any claim and/or the
proceeds of any claim released by such Party hereunder.
13. Remedies for Breach. In the event that either
Party fails or refuses to comply with any of the provisions,
terms or conditions of this Agreement, in its sole discretion the
non-breaching Party may, in addition to the remedies provided in
subparagraph 3(d), recover against the breaching Party damages
(including reasonable attorneys' fees) accruing to the non-
breaching Party as a consequence of the breach. Regardless of
and in addition to any right to damages the non-breaching Party
may have, the non-breaching Party shall have the right to seek
injunctive relief.
14. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement
between the Parties and supersedes any and all prior agreements,
arrangements, negotiations, discussions or understandings between
the Parties relating to the subject matter hereof. No oral
understanding, statements, promises or inducements contrary to
the terms of this Agreement exist. This Agreement cannot be
changed or terminated orally. Should any provision of this
Agreement be held invalid, illegal or unenforceable, it shall be
deemed to be modified so that its purpose can lawfully be
effectuated and the balance of this Agreement shall remain in
full force and effect.
(b) This Agreement shall extend to, be binding
upon, and inure to the benefit of the Parties and their
respective successors, heirs and assigns.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
By his execution hereof, Goelzer hereby waives any right he may
have to arbitration as against the Company, including but not
limited to BEC and any of the other Releases, and, as to any
dispute with regard to this Agreement, hereby submits to the
exclusive jurisdiction of the state and federal courts located in
the State of Delaware and further agrees not to assert that any
action brought in such jurisdiction has been brought in an
inconvenient forum.
(d) This Agreement may be executed in any number
of counterparts each of which when so executed shall be deemed to
be an original and all of which when taken together shall
constitute one and the same agreement.
15. Effective Date/Revocation. Goelzer may revoke
this Agreement in writing at any time during a period of seven
(7) calendar days after the execution of this Agreement by the
Parties (the "Revocation Period"). This Agreement shall become
effective and enforceable automatically on the date of actual
receipt by the Company's special counsel, Seymour H. Chalif, Esq.
of Kaye, Scholer, Fierman, Hays & Handler, of the Certificate of
Non-Revocation of Separation Agreement and Mutual Release (the
form of which is Exhibit C hereto) executed and dated by Goelzer
at least one day after expiration of the Revocation Period (the
"Effective Date").
16. Representations. Each Party hereto represents,
warrants and acknowledges that in executing this Agreement, he or
it does not rely and has not relied upon any representation or
statement made by any other Party or any other Party's agents,
representatives or attorneys with regard to the subject matter,
basis or effect of this Agreement or otherwise, other than those
representations, warranties, assurances and statements contained
in the Agreement itself.
17. Any notices or requests under this Agreement shall
be in writing, addressed as follows:
(a) If to Goelzer:
D.M. Goelzer
7307 N. Bridge Lane
Fox Point, WI 53217
Telephone No. (414) 351-6064
Fax No.
with a copy to:
Godfrey & Kahn, SC
780 N. Water Street
Milwaukee, WI 53202
Telephone No. (414) 273-3500
Fax No. (414) 273-5198
Attention: Patricia Leiker, Esq.
(b) If to BEC:
Bucyrus-Erie Company
1100 Milwaukee Avenue
South Milwaukee, WI 53172-0500
Telephone No. (414) 768-4000
Fax No. (414) 768-5060
Attention: President
With a copy to:
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Telephone No. (212) 836-8597
Fax No. (212) 836-7150
Attention: Seymour H. Chalif, Esq.
IN SIGNING THIS SEPARATION AGREEMENT AND MUTUAL RELEASE
("AGREEMENT"), GOELZER ACKNOWLEDGES THAT: (A) HE HAS READ AND
UNDERSTANDS THIS AGREEMENT AND HE IS HEREBY ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, (B) HE
HAS SIGNED THIS AGREEMENT VOLUNTARILY, ON THE ADVICE OF HIS
ATTORNEY, AND UNDERSTANDS THAT IT CONTAINS A FULL AND FINAL
RELEASE OF ALL CLAIMS, AS SET FORTH IN PARAGRAPH SEVEN AGAINST
THE RELEASEES AS OF THE EFFECTIVE DATE OF THIS AGREEMENT, (C) HE
HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO
CONSIDER THE MATTERS MEMORIALIZED IN THIS AGREEMENT, AND (D) THIS
AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR
OTHER EMPLOYMENT TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS
OF EMPLOYEES.
/s/ David M. Goelzer July 25 , 1995
David M. Goelzer Date of Execution
by Goelzer
By: /s/ C. Scott Bartlett, Jr. July 25 , 1995
Bucyrus-Erie Company Date of Execution
Director by BEC
<PAGE>
EXHIBIT A
PRESS RELEASE
* * *
FOR IMMEDIATE RELEASE July 25, 1995
The Bucyrus-Erie Company announced today that Phillip
W. Mork has resigned as its President and member of its Board of
Directors, effective immediately. Frank W. Miller, a consultant
to the Board of Directors of Bucyrus-Erie, has been appointed by
the Board to serve as the interim President and Chief Executive
Officer of Bucyrus-Erie until a successor to Mr. Mork is
selected. Mr. Miller is President of Miller Associates, a
Lowell, Massachusetts management consulting firm, and formerly
was Vice Chairman and Chief Executive Officer of Darling
International. In making the appointment, the Board of Directors
concluded that Mr. Miller's management background meets the
requirements of the Company during this period.
In addition, Norbert J. Verville has resigned today as
Vice President-Finance and Treasurer. The Board of Directors has
appointed James D. Annand, from Miller Associates, to be interim
Chief Financial Officer. Mr. Annand has served as the general
manager and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
David M. Goelzer has also resigned effective today as
Vice President and Secretary of the Company and is expected to
continue as General Counsel until October 1, 1995 when his
resignation from that position will take effect.
Bucyrus-Erie is pleased that Messrs. Mork, Verville and
Goelzer have agreed to remain as consultants to the Company.
In announcing these resignations and the appointment of
Mr. Miller, the Board of Directors has assured suppliers and
customers of Bucyrus-Erie of its intention to continue to service
its commitments on a mutually beneficial basis in the years to
come.
For additional information, please call T.W. Sullivan
at (414) 768-4000.
<PAGE>
EXHIBIT B
EMPLOYEE COMMUNICATION
TO: ALL EMPLOYEES
FROM: BOARD OF DIRECTORS OF THE BUCYRUS-ERIE COMPANY
DATE: JULY 25, 1995
RE: CHANGE OF LEADERSHIP
We have announced today the resignation of Phillip W.
Mork as President and member of the Board of Directors, effective
immediately. Frank W. Miller, who has been serving as a
consultant to the Board of Directors, will serve as interim
President and Chief Executive Officer during a search which the
Board has commenced for a new President and Chief Executive
Officer. Mr. Miller is President of Miller Associates, a Lowell,
Massachusetts management firm, and former Vice Chairman and Chief
Executive Officer of Darling International. In making the
appointment, the Board of Directors concluded that Mr. Miller's
management background meets the requirements of the Company
during this period.
We also have announced the resignation of Norbert J.
Verville as Vice President-Finance and Treasurer, effective
today. The Board has appointed James D. Annand as interim Chief
Financial Officer. Mr. Annand has served as the general manager
and chief financial officer of a number of organizations,
including investment, manufacturing and wholesale/retail
businesses.
Finally, also effective today, David M. Goelzer has
resigned as Vice President and Secretary. In order to assist in
the transition of leadership, Mr. Goelzer's resignation as
General Counsel will be effective no later than October 1, 1995.
Messrs. Mork, Verville and Goelzer will be serving as consultants
to Bucyrus-Erie.
You should know that we are taking steps today to
notify each of our suppliers and customers of this change and of
our sincere appreciation for their loyalty and cooperation. We
are also informing our suppliers and customers that we look
forward to continuing our business relationships with them during
the years to come.
The Board of Directors takes this opportunity to thank
each of you for your continued dedication to Bucyrus-Erie and for
your hard work. We also thank Messrs. Mork, Verville and Goelzer
for their many years of dedicated service and wish them well in
their future endeavors.
<PAGE>
EXHIBIT C
CERTIFICATE OF NON-REVOCATION OF
SEPARATION AGREEMENT AND MUTUAL RELEASE
I hereby certify and represent that seven (7) calendar days
have passed since the Parties have signed the Separation
Agreement and Mutual Release (the "Agreement") and that I have
NOT exercised my rights to revoke that Agreement pursuant to the
Older Workers Benefit Protection Act of 1990. I understand that
the Bucyrus-Erie Company on behalf of themselves and their
subsidiaries and affiliates, in providing me with benefits under
the Agreement, is relying on this Certificate, and that I can no
longer revoke the Agreement.
/s/ D M Goelzer August 2 , 1995
David Goelzer Date of Execution
by Goelzer
IMPORTANT:
This Certificate should be signed, dated and returned
to the Company's special counsel, Seymour H. Chalif, Esq. of
Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue, New
York, New York 10022, no earlier than on the eighth (8th)
calendar day after the Agreement is executed by the Parties.
EXHIBIT 10.5(e)
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
BUCYRUS-ERIE COMPANY
RESOLUTION - REVISION TO SECTION 1.06 OF THE BUCYRUS SALARIED
EMPLOYEES' RETIREMENT PLAN
RESOLVED, that the Bucyrus Salaried Employees' Retirement Plan
shall be amended, effective January 1, 1994, by adding the
following language at the end of Section 1.06 thereof, which
defines the term "Compensation":
"Further, as provided in Model Amendment No. 1 set forth in
Internal Revenue Service Notice 88-131 and as adopted by the
Company, for any Plan Year from 1989 through 1993, Compensation
taken into account under the Plan for the purpose of calculating
an Employee's Accrued Benefit (the Employee's accrued retirement
income, including the right to any optional benefit provided
under the Plan) shall not exceed $200,000, adjusted for changes
in the cost of living, as provided under Code Section
401(a)(17). Starting with the Plan Year beginning on January 1,
1994, Compensation taken into account under the Plan for the
purpose of calculating an Employee's Accrued Benefit shall not
exceed $150,000, adjusted for changes in the cost of living, as
provided under Code Section 401(a)(17). Finally, as provided in
option 3 of Part II of Internal Revenue Service Revenue
Procedure 94-13, from and after January 1, 1994, the Accrued
Benefit of each '401(a)(17) Employee' as defined below will be
determined as follows:
(a) Unless otherwise provided in the Plan, each 401(a)(17)
Employee's Accrued Benefit under this Plan will be the
greater of the Accrued Benefit determined for the Employee
under (i) or (ii) below:
(i) the Employee's Accrued Benefit determined with
respect to the benefit formula applicable for the
Plan Year beginning on January 1, 1994, as applied
to the Employee's total years of Credited Service
taken into account under the Plan for the purpose of
benefit accruals, or
(ii) the sum of:
(1) the Employee's Accrued Benefit as of the last
day of the Plan Year beginning before January
1, 1994, frozen in accordance with Section
1.401(a)(4)-13 of the regulations, and
(2) the Employee's Accrued Benefit determined under
the benefit formula applicable for the Plan
Year beginning on or after January 1, 1994, as
applied to the Employee's years of Credited
Service credited to the Employee for Plan Years
beginning on or after January 1, 1994, for
purposes of benefit accruals, not to exceed 35
less the number of years of credited service
used in determining the Accrued Benefit under
the immediately-preceding subsection (1) above.
(b) A '401(a)(17) Employee' means an Employee whose current
Accrued Benefit as of a date on or after the first day of
the first Plan Year beginning on or after January 1, 1994,
is based on Compensation for a year beginning prior to the
first day of the first Plan Year beginning on or after
January 1, 1994 that exceeded $150,000."
CERTIFICATION
I, David M. Goelzer, Vice President, Secretary and General
Counsel of Bucyrus-Erie Company, a Delaware corporation, do hereby
certify that the foregoing is a true and correct copy of a certain
resolution duly adopted by written consent as of June 7, 1994
without a meeting of the Board of Directors and that said
resolution is as effective as if adopted at a meeting of the Board
duly called and held on that date.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
said Company this 13th day of June 1994.
/s/ David M. Goelzer
Vice President, Secretary and General Counsel
EXHIBIT 10.6
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1995
BUCYRUS-ERIE SALARIED EMPLOYEES'
SAVINGS PLAN
(Amended and Restated Effective January 1, 1989)
<PAGE>
BUCYRUS-ERIE SALARIED EMPLOYEES'
SAVINGS PLAN
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2
ELIGIBILITY FOR PARTICIPATION . . . . . . . . . . . . . . . . . . . . 11
SECTION 3
SALARY DEFERRAL AGREEMENTS AND EMPLOYEE CONTRIBUTIONS . . . . . . . . 13
SECTION 4
EMPLOYER CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5
INVESTMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6
PARTICIPANT ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7
VESTING AND FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9
WITHDRAWALS DURING EMPLOYMENT . . . . . . . . . . . . . . . . . . . . 36
SECTION 10
ADOPTION OF PLAN BY AFFILIATED COMPANIES. . . . . . . . . . . . . . . 42
SECTION 11
ADMINISTRATION OF PLAN. . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 12
ADMINISTRATION OF THE TRUST . . . . . . . . . . . . . . . . . . . . . 48
SECTION 13
AMENDMENT OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . 50
<PAGE>
SECTION 14
TERMINATION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 15
MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 16
TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 53
<PAGE>
BUCYRUS-ERIE SALARIED EMPLOYEES' SAVINGS PLAN
INTRODUCTION
Bucyrus-Erie Company, a Delaware corporation ("Company"), established a
retirement income plan for certain of its employees known as the Bucyrus Inc.
Salaried Employees' Savings Plan ("Plan"). The Plan was amended from time to
time to make changes required by new legislation or that were in the best
interests of participants and beneficiaries. Effective with the change of
name of the Company from Bucyrus-Erie Company to Becor Western Inc., the name
of the Plan was changed to Becor Western Salaried Employees' Savings Plan.
Subsequently, when the name of the Company was changed back to Bucyrus-Erie
Company, the name of the Plan was changed back to the Bucyrus-Erie Salaried
Employees' Savings Plan.
Effective January 1, 1989, the Company has decided to amend and restate the
Plan in order to comply with the provisions of the Tax Reform Act of 1986, the
Omnibus Budget Reconciliation Act of 1986, the Revenue Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Revenue Reconciliation
Act of 1989, the Unemployment Compensation Amendments Act of 1992, the Omnibus
Budget Reconciliation Act of 1993 and Internal Revenue Service regulations as
of the dates the provisions of these Acts and regulations are effective with
respect to the Plan. This amended and restated Plan also makes other
clarifying and desirable revisions. The Plan is to be maintained according to
the terms and conditions of this instrument. The assets of the Plan are held,
administered and managed by the Trustee in accordance with the terms and
conditions of the trust agreement, which is considered to be an integral part
of the Plan.
It is intended that this Plan, as amended and restated, together with the
trust created by the trust agreement (the "Trust"), meet all the pertinent
requirements of the Internal Revenue Code of 1986, as amended (herein referred
to as the "Code"), and the Employee Retirement Income Security Act of 1974 as
amended (hereinafter referred to as "ERISA"), and shall be interpreted,
wherever possible, to comply with the terms of said laws, as amended, and all
formal regulations and rulings issued thereunder.
The provisions of this Plan, as amended and restated, only shall apply to
Participants whose employment terminates on or after January 1, 1989. The
benefits payable to Participants who terminate employment prior to that date
shall be determined in accordance with the provisions of the Plan in effect on
the date their employment terminated. Any amendment to the Plan only shall be
applicable to Participants who are in the employ of the Company on the date
the amendment is effective unless the language of the amendment provides
otherwise.
<PAGE>
SECTION 1
DEFINITIONS
1.1 Affiliated Company means any corporation which is a member of a
controlled group of corporations which includes the Company, determined
under the provisions of Internal Revenue Code Section 1563(a) (without
regard to Code Sections 1563(a)(4) and 1563(e)(3)(C)). A corporation
shall be treated as an Affiliated Company only while it is a member of a
the controlled group. Further, the term shall include any members of
the same "affiliated service group" within the meaning of Code Section
414(m).
1.2 Code means the Internal Revenue Code of 1986 as amended from time to
time.
1.3 Committee means the Savings Plan Committee appointed by the Company, as
set forth in Section 11.2.
1.4 Company means Bucyrus-Erie Company, a Delaware corporation, and its
successors and assigns.
1.5 Compensation means the total wages, salaries, fees and other amounts
received for a particular Plan Year (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment by the Participant from an Employer or subsidiary
of the Company to the extent that amounts are includable in gross
income, but excluding reimbursements or other expenses, deferred
compensation, fringe benefits, welfare benefits, moving expenses (not
deductible by employee), the value of nonqualified stock options if
nontaxable at the time of grant and the vesting of restricted stock or
other property. Compensation also includes Employer Salary Deferral
contributions made in accordance with a salary reduction agreement
between an Employee and the Employer, and Employer contributions to the
Bucyrus-Erie Company Section 125 Cafeteria Plan arrangement. Amounts
not received by an Employee which are nevertheless included as income
for income tax purposes under the Code shall not be treated as
Compensation hereunder. In addition, effective from and after January
1, 1989, Compensation for any Plan Year in excess of $200,000 (or such
larger amount as the Commissioner of the Internal Revenue Service may
determine for such year) shall not be counted or recognized for any
purpose under this Plan. This $200,000 limitation automatically shall
be adjusted to the extent prescribed by Section 401(a)(17) of the Code
without the necessity of any amendment to the Plan.
Furthermore, effective from and after January 1, 1994, in addition to
other applicable limitations set forth in the Plan, and notwithstanding
any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual compensation of each
Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner of the Internal Revenue
Service for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code . The cost-of-living adjustment in effect for
a calendar year applies for any period, not exceeding 12 months, over
which compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
1.6 Disability as applied to any Participant means any permanent disability
as that term is defined in any permanent disability benefits plan or
plans maintained by the Company or an Affiliated Company and in which
the Participant participates; or, in the absence of any such plan,
disability means that the Participant
(a) has been totally incapacitated by bodily injury or disease so as
to be prevented thereby from engaging in any occupation or
employment for remuneration or profit;
(b) such total incapacity shall have continued for a period of six (6)
consecutive months; and
(c) such total incapacity will, in the opinion of a qualified
physician, be permanent and continuous during the remainder of
such Employee's life:
but shall not mean any incapacity which was contracted, suffered or
incurred while the Employee was engaged in, or resulted from his having
engaged in, a criminal enterprise, or which resulted from a self-
inflicted injury, or service in the armed forces of any country.
1.7 Early Retirement Date means a date prior to Normal Retirement Date on
which a Participant is eligible to retire under the terms of a tax
qualified retirement plan which is sponsored by the Company or
Affiliated Company and which covers the Participant.
1.8 Effective Date of this amended and restated Plan means January 1, 1989.
1.9 Employee means any person in the employment of an Employer as a salaried
employee, and any United States Citizen who is employed as a salaried
employee by a foreign subsidiary of the Company upon whose behalf the
Company has entered into an agreement with the U.S. Treasury under Code
Section 3121(1) and hourly employees at the Flight Structures Division
of Western Gear Corporation.
1.10 Employee Account means the account established in accordance with
Section 6.1.
1.11 Employer and Employers means Bucyrus-Erie Company and all of its
Affiliated Companies which have adopted the Plan in accordance with
Section 10. Minserco, Inc. became an Employer under the Plan effective
January 13, 1988 and Boonville Mining Services, Inc. became an Employer
under the Plan effective April 1, 1991.
1.12 Employer Account means the account established in accordance with
Section 6.1.
1.13 Enrollment Date means the first day of an Employee's payroll period
coincident with or next following January 1, April 1, July 1, or October
1.
1.14 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.15 Highly Compensated Employee means, for any Plan Year, an Employee of an
Employer or an Affiliated Company who
(1) At any time during that Plan Year ("Determination Year") or the
preceding Plan Year ("Look-Back Year") was a five percent owner of
the Employer (as defined in Section 416(i)(1) of the Code), or
(2) during the preceding Plan Year:
(i) received Compensation in excess of $99,000, (as adjusted
annually by the Commissioner of the Internal Revenue Service
for increases in the cost of living); or
(ii) received Compensation in excess of $66,000, (as adjusted
annually by the Commissioner of the Internal Revenue Service
for increases in the cost of living), and was among the top
20 percent of the Employees (disregarding those Employees
excludable under Code Section 414(q)(8)) when ranked on the
basis of Compensation paid for that year; or
(iii) was an officer of the Employer or an Affiliated Company and
received Compensation in excess of $59,400 (as adjusted
annually by the Commissioner of the Internal Revenue Service
for increases in the cost of living) provided that for this
purpose, no more than 50 Employees (or if lesser the greater
of 3 or 10% of all Employees) shall be treated as officers,
or if there is no such officer, the highest paid officer of
the Employer for that year;
(3) would be a member of the group of Employees described in
subparagraph (b) above if such subparagraph (b) were applicable to
the current Plan Year and unless the Employer elects to waive the
following limitation for the current Plan Year, is a member of the
group consisting of the 100 Employees receiving the greatest
Compensation for that Plan Year.
To the extent required under Section 414(q)(6) of the Code, if any
individual is the spouse, lineal ascendant or descendant, or the
spouse of any lineal ascendant or descendant, of either a 5% owner
described in (a) above, or a member of the group consisting of the
10 Highly Compensated Employees paid the greatest Compensation
during the Plan Year, ("a Family Member") then such individual for
purposes of the Actual Deferral Percentage Test under Section 3.3,
the Actual Contribution Percentage Test under Section 4.1 and the
Aggregate Limit under Section 4.2 hereof, shall not be considered
a separate Employee and any Compensation (and any applicable
contribution or benefit on behalf of such individual) paid to
such individual shall be treated as if it were paid to (or on
behalf of) such 5% owner or Highly Compensated Employee. To the
extent required by Section 414(q)(9) of the Code, a former
employee who was a Highly Compensated Employee when he separated
from the service with the Company and all Affiliates or at any
time after attaining age 55 shall be treated as a Highly
Compensated Employee.
For purposes of determining a Highly Compensated Employee,
Compensation shall be determined without regard to Sections 125,
402(a)(8), 402(h)(1)(B), and Employee contributions made pursuant
to a salary reduction agreement under Section 403(b) of the Code.
1.16 Hour of Service shall mean:
(1) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Company or an Affiliated
Company. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed;
and
(2) Each hour for which an Employee is paid, or entitled to payment,
by the Company or Affiliated Company on account of a period of
time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. No more than 501 hours
of service shall be credited under this paragraph for any single
continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by
this reference; and
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or
Affiliated Company. The same hours of service shall not be
credited both under paragraph (1) or paragraph (2), as the case
may be, and under this paragraph (3). These hours shall be
credited to the Employee for the computation period or periods to
which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(4) Where the Company or Affiliated Company maintains the plan of a
predecessor employer, service for such predecessor employer shall
be treated as service for the Company or Affiliated Company.
1.17 Normal Retirement Date means the first day of the month coincident with
or next following the attainment of Normal Retirement Age. A
Participant will attain his "Normal Retirement Age" on his 65th birthday
at which age his Plan benefits shall be fully vested and nonforfeitable.
A Participant who continues in employment beyond age 65 shall have as
his Normal Retirement Date the date of his actual later retirement.
1.18 Participant means any person who has elected to participate in the Plan
in accordance with Section 2 and who has not received a total
distribution of all amounts that could become payable under the Plan.
1.19 Plan Year shall mean the calendar year.
1.20 Retirement means termination of employment after satisfaction of the
Plan's requirements for separation from service with an Employer on an
Early Retirement Date or a Normal Retirement Date.
1.21 Service is the period beginning with the later of (i) July 1, 1979 and
(ii) the date that an Employee first completes an Hour of Service (or
the date an Employee again completes an Hour of Service following a
termination of employment of more than 12 consecutive months) and ends
on the earlier of (i) the date the Employee quits, retires, is
discharged or dies and (ii) the first anniversary of the first date of a
period in which an Employee remains absent from service with the Company
or Affiliated Company for any reason other than quit, retirement,
discharge or death. If an employee terminates employment by reason of
quit, retirement or discharge and subsequently performs an Hour of
Service within the next succeeding 12 month period, such termination of
employment shall be ignored in determining the Employee's Vesting
Service; provided, however, if such termination occurs during a period
of absence, such next succeeding 12 month period shall begin on the
first day of the absence instead of the date of termination. All
periods of Service shall be aggregated. Periods of less than one year
shall be aggregated on the basis that 12 months (30 days are deemed to
be a month in the case of aggregation of fractional months) or 365 days
shall equal a whole year. Since all periods of Service included in
Vesting Service are aggregated in accordance with Section 1.19, whether
or not continuous, this Plan does not use special definitions of one
year breaks in service either for eligibility for participation or for
the calculation of Vesting Service, nor does the Plan contain any
special rules respecting maternity or paternity absences, as defined in
Section 202(b)(5) of ERISA.
1.22 Trust means the trust created by agreement between the Company and
Trustee pursuant to Section 12.
1.23 Trust Fund means the assets of the Trust.
1.24 Trustee means the corporate trustee appointed by the Company. Such term
shall also include reference to all successor trustees, whether they be
individual or corporate trustees.
1.25 Valuation Date means the last day of each calendar month in which the
New York Stock Exchange is open for trading.
1.26 Vesting Service means an Employee's Service but excluding the following
periods:
(1) Periods prior to July 1, 1980.
(2) The periods during which the Employee was eligible to become a
Participant but declined to do so.
(3) With respect to a period during which a Participant's Basic
Contributions have been suspended, the portion of such period in
excess of 12 months.
1.27 Rollover Account means the separate account of a Participant consisting
of his Rollover Contributions made under the provisions of Section 3.8
hereof, increased by Net Gains and decreased by Net Losses and by
Distributions therefrom, all in accordance with the provisions of this
Plan. Rollover amounts may be invested at the discretion of the
Participant in accordance with Section 5.
1.28 Rollover Contribution means a transfer to an employee benefit plan
qualified under Section 401(a) of the Code (the transferee plan) of the
amount distributed to an Employee from another employee benefit plan
similarly qualified under Section 401(a) of the Code (the "other plan")
if such distribution:
(a) Constitutes any of the Employee's interest (less the amount, if
any, deemed contributed by him under subsection 402(e)(4)(D)(i) of
the Code) in the other plan; and
(b) Is transferred to the transferee plan within 60 days after receipt
by the Employee; provided, however, that if such distribution had
previously been deposited in an Individual Retirement Account (as
defined in Section 408 of the Code), the transfer may occur within
60 days after his receipt of the amount of such distributions from
the Individual Retirement Account if it includes the earnings
thereon.
1.29 Transferred Benefit means, effective May 1, 1985, (i) a transfer to the
Trustee under the provisions of Section 3.9 of an amount by the
custodian of a pension benefit plan qualified for tax favored treatment
under Section 401(a) of the Code or by the trustee(s) of a trust
forming a part of such plan which plan provides for such transfers, for
the benefit of a person who is or was a Participant in such plan, and
(ii) a transfer by the Trustee under the provisions of this Section of
an amount for the benefit of a Participant to the custodian of a pension
benefit plan qualified for tax favored treatment under Section 401(a) of
the Code or to the trustee(s) of a trust forming such plan; provided
such plan provides for the receipt of such transfers.
<PAGE>
SECTION 2
ELIGIBILITY FOR PARTICIPATION
2.1 Each Employee who was a Participant in the Plan on December 31, 1988
shall continue to be a Participant in the Plan.
Any Employee who was an Employee of Boonville Mining Services, Inc.
prior to April 1, 1991 became a Participant hereunder as of April 1,
1991.
2.2 Every other Employee may elect to become a Participant as of any
Enrollment Date after becoming an Employee by making proper application
not less than 30 days prior to such date on a form prescribed and
approved therefore.
2.3 With respect to an Employee who is transferred to a different employment
status whereby he is no longer an Employee, no further contributions
shall be made by the Employee or by the Employer on his behalf while in
such employment status, but all other provisions of the Plan shall
continue to apply. With respect to an employee who is transferred to
the status of Employee, such employee will become eligible to
participate on the next following Enrollment Date.
2.4 A former Participant who again becomes an Employee after a period of
severance may elect to become a Participant immediately upon becoming an
Employee.
2.5 Notwithstanding the foregoing, if an Employee is employed on an
Occasional or Temporary basis, as such terms are defined in the
Employer's industrial relations policy, then such Employee shall be
eligible to become a Participant provided the Employee has completed
1,000 or more hours of service during the 12-month period following the
Employee's most recent date of employment or during any calendar year
beginning after such date. Thereafter, such Employee may elect to
become a Participant on any Enrollment Date. In the case of a former
Participant who is reemployed, the former Participant shall be deemed to
have become a Participant as of his date of reemployment.
2.6 An Employee who makes a Rollover Contribution to the Trust Fund as
provided in Section 3.8 hereof before becoming a Participant shall be
deemed to be a Participant as of the date of such Rollover Contribution
solely for the purpose of maintaining such Employee's Rollover Account.
Such Employee will not receive an allocation of Employer Contributions
(if any) or Forfeitures (if any) or have any other interest in the Trust
Fund or under this Plan until he satisfies the requirements of Section
2.2.
2.7 Effective May 1, 1985, an Employee who requests that a Transferred
Benefit be accepted into the Trust Fund as provided in Section 3.9
hereof before becoming a Participant shall be deemed to be a Participant
as of the date such Transferred Benefit is accepted solely for the
purpose of maintaining such Employee's Rollover Account. Such Employee
will not receive an allocation of Employer Contributions (if any) or
Forfeitures (if any) or have any of his interest in the Trust Fund or
under this Plan until he satisfies the requirements of Section 2.2.
<PAGE>
SECTION 3
SALARY DEFERRAL AGREEMENTS AND EMPLOYEE CONTRIBUTIONS
3.1 Each eligible Employee may become a Participant by entering into a Basic
Salary Agreement whereby the Participant agrees to have his Compensation
reduced by an amount equal to 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9% or 10%
of Compensation and the Employer agrees to contribute that amount to the
Trust Fund ("Base Salary Deferral Contributions").
If a Participant has in effect a Basic Salary Deferral Agreement
specifying a reduction of 6%, the Participant may also enter into a
Supplemental Salary Deferral Agreement whereby the Participant agrees to
have his Compensation reduced by an additional 1%, 2%, 3%, 4%, 5%, 6%,
7%, 8%, 9% or 10% of Compensation and the Employer agrees to contribute
that amount to the Trust Fund ("Supplemental Salary Deferral
Contributions").
Hereafter, Base Salary Deferral Contributions and Supplemental Salary
Deferral Contributions shall be referred to in the aggregate as
"Employer Salary Deferral Contributions". Salary Deferral Agreements
can be made effective as of an Enrollment Date if the agreement is
executed not less than one (1) month nor more than two (2) months before
such date.
3.2 If a Participant has in effect a Basic Salary Deferral Agreement
specifying a reduction of 6%, the Participant may also elect to make
after-tax Employee Supplemental Contributions by payroll deductions in
an amount of 1%, 2%, 3%, 4%, 5% and 6% of his Compensation. Such
election can be made effective as of an Enrollment Date by making proper
application not less than one (1) month nor more than two (2) months
prior to such date on a form presented and approved therefor; provided,
that such change cannot be made more often then once every six (6)
months.
Notwithstanding the foregoing provisions of this Section 3.2 and Section
3.1 above, no Participant shall be permitted to elect to have Employer
Salary Deferral Contributions on his behalf in excess of $7,000 (as
adjusted annually by the Commissioner of the Internal Revenue Service
for increases in the cost of living).
3.3 A Salary Deferral Agreement may be changed by a Participant with respect
to the amount of the reduction in Compensation as of any January 1 or
July 1 if such change is executed not less than one (1) month nor more
than two (2) months before such date. A Salary Deferral Agreement may
be changed or revoked by the Employer at any time if necessary to insure
that a Participant's additions will not exceed the limitation of Section
4.4, or to insure that the Employer's contributions will not exceed the
amounts permitted under Section 4.2.
If a Salary Deferral Agreement is changed or revoked by the Employer in
accordance with the preceding sentence, then the amount of any reduction
shall be converted into Employee Contributions and the limit of 6% on
the Employee Supplemental Contributions shall be increased by such
converted amount.
Further, a Salary Deferral Agreement may be changed or reversed by the
Employer at any time to insure that the Actual Deferral Percentage test
under Section 401(k)(3) of the Code is satisfied. The Actual Deferral
Percentage test is satisfied if either of the following specified tests
is met:
(1) the Actual Deferral Percentage for eligible Highly Compensated
Employees is not more than the Actual Deferral Percentage for all
other eligible Employees multiplied by 1.25; or
(2) the excess of the Actual Deferral Percentage for eligible Highly
Compensated Employees over that of all other eligible Employees
is not more than two percentage points, and the Actual Deferral
Percentage for the eligible Highly Compensated Employees is not
more than the Actual Deferral Percentage of all other eligible
Employees multiplied by 2.
A Participant may elect to increase or decrease his rate of
Employee Supplemental Contribution as of an Enrollment Date
provided that he notifies the Company in writing at least one (1)
month but not more than two (2) months in advance, and provided,
further, that such increase or decrease cannot be made more
frequently than once every six (6) months.
(3) As used in this subsection, "Actual Deferral Percentage" means the
average of the ratios of:
(A) Each Participant's Employer Salary Deferral Contributions
which were allocated to the Participant's Salary Deferral
Tax Account with respect to the Plan Year to
(B) Each Participant's Compensation for the Plan year increased
by any amount which is contributed by the Employer or an
Affiliated Company pursuant to a salary reduction agreement
and which is not includable in the gross income of the
Participant under Section 125, 402(a)(8), 402(h) or 403(b)
of the Code.
(4) If neither Actual Deferral Percentage test is satisfied as of the
end of the Plan Year, the Committee shall cause the Employer
Salary Deferral Contributions, if any, and the Trust Fund earnings
or losses allocable to such Employer Salary Deferral Contributions
for the Highly Compensated Employees to be reduced and refunded to
each Highly Compensated Employee until either (1) or (2), above is
satisfied. The sequence of such reductions and refunds shall
begin with Highly Compensated Employees whose Employer Salary
Deferral Contributions, as a percentage of the Highly Compensated
Employee's Compensation, was the largest, then the second greatest
percentage, etc. For example, all Highly Compensated Employees
who elected a 10% contribution shall have their Employer Salary
Deferral Contributions reduced from 10% to 9%. If neither Actual
Deferral Percentage Test is then satisfied, all Highly Compensated
Employees who elected a Employer Salary Deferral Contribution of
9% (including those reduced to 9% as provided above) shall have
their Employer Salary Deferral Contributions reduced from 9% to
8%. This process shall continue through the remaining Employer
Salary Deferral Contributions on a pro-rata basis until (1) or (2)
above is satisfied. Once either (1) or (2) above is satisfied,
the Committee shall refund the appropriate dollar amounts of
Employer Salary Deferral Contributions and any earnings or losses
attributable to such amounts, to each affected Highly Compensated
Employee no later than two and one half months following the close
of such Plan Year. Any earnings or losses attributable to refunds
of Employer Salary Deferral Contributions shall be determined in
accordance with any of the methods allowed under Internal Revenue
Service Regulations 1.401(k)-1(f)(4)(ii), including allocating the
earnings or losses for the period between the end of the Plan Year
and the date of distribution.
(5) The amount of the Employer Salary Deferral Contribution to be made
pursuant to a Participant's election shall reduce the cash
Compensation otherwise payable to the Participant by the Employer.
(6) The amount of each Participant's Employer Salary Deferral
Contribution as determined under this Section 3.3 is subject to
the provisions of Section 4.5.
(7) For purposes of the Actual Deferral Percentage test the Plan will
take into account the actual deferral ratios of all Eligible
Employees. An Eligible Employee is any Employee who is directly
or indirectly eligible to make a cash or deferred election under
the Plan for any portion of the Plan Year and includes: an
Employee who would be a Plan Participant but for the failure to
make required contributions; an Employee whose eligibility to make
elective contributions has been suspended because of an election
(other than certain one-time elections) not to participate or the
receipt of a hardship distribution; and an Employee who cannot
defer because of the Code Section 415 limits on annual additions.
In the case of an Eligible Employee who makes no elective
contributions, the deferral ratio that is to be included in
determining the Actual Deferral Percentage is zero.
(8) In determining whether the Plan satisfies the Actual Deferral
Percentage test, all elective contributions that are made under
two or more plans that are aggregated for the purposes of Code
Sections 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)) are to be treated as made under a single plan.
If two or more plans are permissively aggregated for purposes of
Code Section 401(k), the aggregated plans must also satisfy Code
Sections 401(a)(4) and 410(b) as though they were a single plan.
(9) In calculating the Actual Deferral Percentage for purposes of
Section 401(k), the actual deferral ratio of a Highly Compensated
Employee will be determined by treating all cash or deferred
arrangements under which the Highly Compensated Employee is
eligible (other than those that may not be permissively
aggregated) as a single arrangement.
(10) In addition, the amount of excess Employer Salary Deferral
Contributions to be distributed shall be reduced by excess
deferrals previously distributed for the taxable year ending in
the same Plan Year and excess deferrals to be distributed for a
taxable year will be reduced by Excess Employer Salary Deferral
Contributions previously distributed for the Plan Year beginning
in such taxable year.
(11) The Employer may at its sole discretion make fully vested
contributions to the Plan which will be allocated to the Salary
Deferral Accounts of one or more Participants who are non-Highly
Compensated Employees in such amounts as the Employer directs for
the purpose of complying with the applicable limits on Employer
Salary Deferral Contributions in the Code. Such contributions
will not be taken into account in the allocation of Employer
Matching Contributions.
3.4 A Participant may elect to suspend his after-tax Employee Supplemental
Contributions as of the beginning of a payroll period provided that he
notifies the Company in writing at least one (1) month but not more than
two (2) months in advance of that date. In the event of such election
to suspend Employee Supplemental Contributions, the Participant may not
resume making Employee Supplemental Contributions for a period of at
least three (3) months subsequent to the effective date of the
suspension. The election to resume contributions can be made as of an
Enrollment Date by making proper application not less than one (1) month
but no more than two (2) months prior to such date on a form prescribed
and approved therefor.
A Participant make revoke a Supplemental Salary Deferral Agreement as of
the beginning of a payroll period provided such revocation is executed
at least one (1) month but not more than two (2) months in advance of
that date. In the event of such revocation, a new Supplemental Salary
Deferral Agreement may not be entered into for a period of at least
three (3) months subsequent to the effective date of the revocation.
The new Supplemental Salary Deferral Agreement can be entered into as of
an Enrollment Date by making proper application not less than one (1)
month but no more than two (2) months prior to such date.
3.5 If a Participant is not making an Employee Supplemental Contribution and
does not have in effect a Supplemental Salary Deferral Agreement or is
making a simultaneous election to suspend such Supplemental
Contributions and/or revoke such Supplemental Salary Deferral Agreement
and he notifies the Company in writing at least one (1) month but not
more than two (2) months in advance of that date, the Participant may
revoke his Basic Salary Deferral Agreement as of the beginning of a
payroll period on an Enrollment Date. In the event the Participant
revokes his Basic Salary Deferral Agreement, he may not enter into a new
Basic Salary Deferral Agreement for a period of at least six (6) months
subsequent to the effective date of the revocation. The new Basic
Salary Deferral Agreement can be entered into as of an Enrollment Date
by making proper application not less than one (1) month but no more
than two (2) months prior to such date.
3.6 A Participant may not make up suspended contributions.
3.7 During the period in which a Basic Salary Deferral Agreement has been
revoked and a new one has not been effected, an Employee will contribute
to be treated as a Participant with all other Plan provisions continuing
to apply with respect to such Participant.
3.8 Each Participant, and each other Employee who would be eligible to
participate but for his failure to satisfy the eligibility requirement
of Section 2.2, may apply in writing to the Committee on the form
provided for that purpose to make a Rollover Contribution to the Plan.
Upon approval by the Committee, the Rollover contribution shall be
deposited in the Trust and credited to such Participant's Rollover
Account.
3.9 Effective May 1, 1985, each Participant, and each other Employee who
would be eligible to participate but for his failure to satisfy the
eligibility requirement of Section 2.2, may apply in writing to the
Committee on the form provided for the purpose to request acceptance of
a Transferred Benefit to the Trust Fund. If both employee and employer
contributions were make to the Trust Fund which is transferred, such
transferred amount shall be divided into two portions representing (i)
accrued benefits attributable to employee contribution which shall be
received by the Trustee and credited to the Participant's Rollover
Account and (ii) accrued benefits attributable to employer contributions
which shall be received by the Trustee and credited to the Participant's
Rollover Account. Prior to acceptance of a Transferred Benefit, the
Committee may require the submission of evidence so that it may be
reasonably satisfied that such transfer qualifies as a Transferred
Benefit.
<PAGE>
SECTION 4
EMPLOYER CONTRIBUTIONS
4.1 The Employer shall contribute to the Trust Fund with respect to each
Participant an amount equal to the amount by which a Participant's
Compensation has been reduced in accordance with a Basic or Supplemental
Salary Deferral Agreement, such amount to be referred to as Employer
Salary Deferral Contribution. Such Employer Salary Deferral
Contribution shall be deposited in the Trust Fund no later than 30 days
following the end of the calendar year.
As soon as practicable after the last day of each month following the
Effective Date, the Employer shall contribute to the Trust Fund with
respect to each Participant an amount equal to fifty percent (50%) of
the amount by which a Participant's compensation has been reduced in
accordance with a Basic Salary Deferral Agreement, such amount to be
referred to as Employer Matching Contribution.
The Employer may also make an additional contribution with respect to
any Plan Year. The determination as to the amount of the additional
Employer Contribution with respect to any Plan Year shall be made by the
Company, by action of its Board of Directors, no less than thirty (30)
days prior to the end of the Plan Year and shall be allocated to
Participants as of the end of the Plan Year in proportion to the
Employer Matching Contributions made during the Plan Year on their
behalf and not withdrawn. Such contribution shall be deposited in the
Trust as soon as practicable after the end of the Plan Year but within
the time required to obtain a tax deduction for such year.
Notwithstanding any other provision of the Plan to the contrary,
effective for Plan Years beginning on and after January 1, 1987, the
Employer Contributions for the Highly Compensated Employees for the Plan
Year shall be reduced and refunded if neither of the Actual Contribution
Percentage tests set forth in (1) and (2) below is satisfied:
(1) The Actual Contribution Percentage of the Highly Compensated
Employees is not more than the Actual Contribution Percentage of
all other Participants multiplied by 1.25.
(2) The Actual Contribution Percentage of the Highly Compensated
Employees is not more than two (2) percentage points greater than
the Actual Contribution Percentage of all other Participants, and
the Actual Contribution Percentage of the Highly Compensated
Employees is not more than the Actual Contribution Percentage of
all other Participants multiplied by 2.0.
(3) As used in this subsection, "Actual Contribution Percentage: means
the average of the ratios of:
(A) Each Participant's share of the Employer Matching
Contribution and Employee Supplemental Contributions which
was allocated to the Participant's Employer Matching Account
with respect to the Plan Year to
(B) Each Participant's Compensation for the Plan Year increased
by any amount which is contributed by the Employer or an
Affiliate pursuant to a salary reduction agreement and which
is not includable in the gross income of the Participant
under Section 125, 402(a)(8), 402(h) or 403(b) of the Code.
(4) If neither Actual Contribution Percentage test is satisfied as of
the end of the Plan Year, the Committee shall cause the Employer
Matching Contributions, if any, and the Employee Supplemental
Contributions, if any, and the Trust Fund earnings or losses
allocable to such Employer Matching Contribution and Employee
Supplemental Contributions for the Highly Compensated Employees to
be reduced and distributed to the appropriate Highly Compensated
Employees or alternatively treated by the Employer as forfeitures
until either (1) or (2) above is satisfied. The sequence of such
reductions and refunds shall begin with the Highly Compensated
Employees whose Employer Matching Contribution and Employee
Supplemental Contributions, as a percentage of the Highly
Compensated Employee's Compensation, was the largest, then the
second greatest percentage, etc. For example, all Highly
Compensated Employees who received a 6% Employer Matching
Contribution shall have their Employer Matching Contributions
reduced from 6% to 5%. If neither Actual Contribution Percentage
is satisfied all Highly Compensated Employees who received a 5%
Employer Matching Contribution (including those reduced to 5% as
provided above) shall have their Employer Matching Contributions
reduced until either (1) or (2) above is satisfied. The Committee
shall refund the appropriate dollar amounts of Employer Matching
Contributions and Employee Supplemental Contributions and any
income attributable to such amounts to the Employer no later than
two and one half months following the close of such Plan Year.
Any earnings or losses attributable to refunds of Employer
Matching Contributions and Employee Supplemental Contributions
shall be determined in accordance with any of the methods allowed
under Internal Revenue Service Regulations 1.401(m)-1(e)(3)(ii)
including allocation the earnings or losses for the period between
the end of the Plan Year and the date of distribution.
(5) For purposes of determining the Actual Contribution Percentage,
the Plan will take into account the actual contribution ratios of
all Eligible Employees. For this purpose, an Eligible Employee is
any Employee who is directly or indirectly eligible to receive a
matching contribution or make employee contributions and includes:
an Employee who would be a Plan Participant but for the failure to
make required contributions; an Employee whose right to make
employee contributions has been suspended because of an election
not to participate; and an Employee who cannot make an employee
contribution or receive a matching contribution because Code
Section 415(c)(1) or Code Section 415(e) prevents the Employee
from receiving additional Annual Additions. In the case of an
Eligible Employee who makes no employee contributions and who
receives no matching contributions, the contribution ratio that is
to be included in determining the Actual Contribution Percentage
is zero.
(6) In determining whether the Plan satisfies the Actual Contribution
Percentage test, all matching contributions that are made under
two or more plans that are aggregated for the purposes of Section
401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii)) are to
be treated as made under a single plan. If two or more plans are
permissively aggregated for purposes of Section 401(m), the
aggregated plans must also satisfy Sections 401(a)(4) and 410(b)
as though they were a single plan.
(7) The actual contribution ratio of a Highly Compensated Employee
will be determined by treating all plans subject to Code Section
401(m) under which the Highly Compensated Employee is eligible
(other than those that may not be permissively aggregated) as a
single plan.
(8) Notwithstanding the foregoing provisions of this subsection 4.1,
the reduction of Employer Matching Contributions and Employee
Supplemental Contributions with respect to Highly Compensated
Employees shall be carried out in a manner that will meet the
requirements of Code Section 401(a)(4).
(9) The Employer may in its sole discretion make full vested
contributions to the Plan, which will be allocated to the Employer
Matching Accounts of one or more Participants who are non-highly
Compensated Employees, in such amounts as the Employer directs for
the purpose of complying with applicable limits on Employer
Matching Contributions in the Code. Such contributions will not
be taken into account in the allocation of Employer Matching
Contributions.
4.2 Multiple Use
(a) This Section 4.2 will be applicable if the 2.0 test is used to
satisfy both the Actual Deferral Percentage test and the Actual
Contribution Percentage test. If this Section 4.2 is applicable,
the Committee shall determine whether a "Multiple Use" has
occurred, and if such a Multiple Use has occurred, the Company
Matching Contributions and Employee Supplemental Contributions of
the Highly Compensated Employees shall be reduced and refunded in
accordance with the provisions of subsection (c) below.
(b) A Multiple Use occurs when for the Highly Compensated Employees,
the sum of the Actual Deferral Percentage used to satisfy the 2.0
test plus the Actual Contribution Percentage used to satisfy the
2.0 test exceeds the "Aggregate Limit." The Aggregate Limit is
the greater of (1) or (2) below, determined as follows:
(1) (i) First, multiply 125% by the greater of (I) the Actual
Deferral Percentage, or (II) the Actual Contribution
Percentage of the non-Highly Compensated Employees;
(ii) Second, add 2.0 to the lesser of (I) or (II) above
provided that such sum shall not exceed 2 times the lesser
of (I) or (II) above; and;
(iii) Finally, add the results from (i) and (ii) above to
determine the Aggregate Limit; or
(2) (i) First, multiply 1.25 by the lesser of (I) the Actual
Deferral Percentage, or (II) the Actual Contribution
Percentage of the non-Highly Compensated Employees;
(ii) Second, add 2.0 to the greater of (I) or (II) above
provided that such sum shall not exceed 2 times the greater
of (I) or (II) above; and
(iii) Finally, add the results from (i) and (ii) above to
determine the Aggregate Limit.
(c) If a Multiple Use has occurred, such Multiple Use shall be
corrected by reducing the Annual Contribution Percentage of Highly
Compensated Employees in accordance with the provisions of Section
4.1(4) until the sum of the Actual Deferral Percentage plus the
Actual Contribution Percentage for the Highly Compensated
Employees equals the Aggregate Limit.
(d) Net earnings or losses to be refunded with the Company Matching
Contributions and Employee Supplemental Contributions shall be
equal to the net earnings or losses on such contributions for the
Plan Year in which the contributions were made plus the net
earnings or losses on such Company Matching Contributions and
Employee Supplemental Contributions for the Plan Year following
the Plan Year for which the excess was contributed. Net earnings
or losses shall be determined in accordance with any of the
methods allowed in Section 1.401(m)-1(e)(3)(ii) of the Internal
Revenue Service regulations, including allocating the earnings or
losses between the end of the Plan Year and the date of
distribution.
4.3 Employer contributions may be made only from current or accumulated
earnings. If in any Plan Year the total amount of such contributions
required under the provisions of Section 4.1 should exceed such
earnings, the Employer's obligation to make contributions shall be
reduced by the amount of such excess. In the event of such a reduction,
the Employer contributions with respect to each Participant shall be
reduced proportionately for that plan year.
Net earnings shall be determined in accordance with the Employer's usual
tax accounting practices and policies. After net earnings have been
determined for any taxable year, no effect shall be given for purposes
of this Plan to any subsequent change therein. The Employer may rely
upon estimates of earnings by its principal accounting officer or
independent accountants. The Employer's determination of contributions
shall be binding on all participants and the Trustee. If, however, the
Employer in any year makes a contribution in excess of the amount
allowable as a deduction in arriving at the Employer's taxable income
for such plan year, the amount of the excess shall be treated as an
Employer contribution for the year next succeeding the year in which the
excess contribution was made.
Notwithstanding the foregoing, if an Employer is prevented in whole or
in part from making the contribution which it would otherwise have made
by reason of having no or insufficient earnings, then so much of the
contribution which such Employer was so prevented from making may be
made, for the benefit of the Participants of such Employer by the other
Employer(s) to the extent of their accumulated or current earnings, but
the other Employer(s) shall be under no obligation to do so. If there
is more than one such other Employer and the group of participating
Employers does not file consolidated federal income tax returns, the
contribution by each such other Employer shall be limited to the
proportion of its total current and accumulated earnings or profits
remaining after adjustment for its contribution to this Plan without
regard to this section which the total prevented contribution bears to
the total current and accumulated earnings or profits of all of the
Employers remaining after adjustment for all their contributions to this
Plan without regard to this section. An Employer on behalf of whose
Participants a contribution is made hereunder shall not reimburse the
contributing Employer(s).
4.4 Employer contributions under 4.1 shall be reduced by forfeitures
resulting from the application of the vesting provisions in Section 7.4.
4.5 Contributions and other additions to the Plan when expressed as the
annual addition defined below, cannot exceed the lesser of $30,000 (or
such other amount as adjusted by the Secretary of the Treasury or his
delegate under Section 415(d) of the Code) or twenty-five percent (25%)
of the Participant's Compensation, which, for purposes of this Section,
shall exclude Employer Salary Deferral Contributions and contributions
under the Bucyrus-Erie Company Code Section 125 Cafeteria Plan
arrangement. For these purposes, the annual addition shall be the sum
for any Plan year of (a) the Employer contributions, (b) forfeitures
allocated to the Participant's account during the year and (c) any
Employee contributions.
Any excess annual additions shall be placed in the Interest Income Fund
in a suspense account and the sum, together with earnings thereon, shall
be used to reduce Employer contributions for the next Plan Year pursuant
to Section 4.3 until the limitations of this Section 4.5 are reached,
and any remaining excess shall be so used in each subsequent Plan Year
until no amounts remain unallocated.
4.6 If any Participant hereunder is also a participant under any defined
benefit plan maintained by the Company or an Affiliated Company for any
year, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any such year shall not exceed 1.0. As
used in the preceding sentence, the "defined benefit plan fraction"
shall mean a fraction (i) the numerator of which is the projected annual
benefit of the Participant (the annual benefit to which such participant
would be entitled under the terms of the defined benefit plan on the
assumptions that he continues employment until his normal retirement age
as determined under the terms of such defined benefit plan, that his
compensation continues at the same rate as in effect in the Plan Year
under consideration until the date of his normal retirement age and that
all other relevant factors used to determine benefits under such defined
benefit plan remain constant as of the current Plan Year for all future
Plan Years) under all defined benefit plans maintained by the Company,
determined as of the close of the Plan Year, and (ii) the denominator as
of the close of the Plan Year, and (ii) the denominator of which is the
lesser of (I) the product of 1.25, multiplied by the dollar limitation
in effect under Code subsection 415(b)(1)(A) for the calendar year in
which the Plan Year ends, or (II) the product of 1.4, multiplied by 100
percent of the Participant's average compensation for his high three
years As used in the first sentence of this paragraph, the "defined
contribution plan fraction" for any Plan Year, shall mean a fraction (i)
the numerator of which is the sum of the Annual Additions to the
Participant's account under all defined contribution plans maintained by
the Company in such Plan Year, and (ii) the denominator of which is the
sum of the lesser of the following amounts determined for the Plan Year
and for each prior year of service with the Employer or an Affiliated
Company: (I) the product of 1.25, multiplied by the dollar limitation in
effect under Code subsection 415(c)(1)(A), or (II) the produce of 1.4,
multiplied by 25 percent of the Participant's compensation for such
year.
For purposes of Sections 4.4 and 4.5 all defined benefit plans shall be
aggregated and all defined contribution plans shall be aggregated.
Other requirements on the limitation of benefits and contributions
contained in Code Section 415 which are applicable to the benefits
accrued under this Plan and to the Company's contributions under this
Plan shall be incorporated by reference.
<PAGE>
SECTION 5
INVESTMENT PROVISIONS
5.1 The assets of the Plan shall be invested by the Trustee in accordance
with the instructions of the Company pursuant to Section 12 of the Plan
and in accordance with the further provisions of this Section, and the
Trust Agreement, in one or more of the following three (3) Funds:
(a) Equity Fund - a fund consisting of equity-type securities (which
may include investments in portfolios which hold securities of the
Company or B-E Holdings, Inc., but provided always that the
Trustee may not invest Plan assets directly in such securities),
without regard to whether such investments pay dividends or other
forms of return, including, but not limited to, common stocks or
other securities or obligations convertible or exercisable into
equity securities.
(b) Interest Income Fund - a fund represented by an investment
contract(s), issued by an insurance company which may be
designated by the Company, in which the risk of loss of principal
is in general less than that of the Equity Fund and the Balance
Fund and the rate of interest credited on amounts held in the fund
is fixed for a specified period of time. The fixed rate of
interest and period for which the rate is fixed will be
communicated by the Company to Participants at regular intervals
and whenever there is a change in the rate.
(c) Balanced Fund - a diversified fund containing bonds and stocks
(which may include investments in portfolios which hold securities
of the Company or B-E Holdings, Inc., but provided always that the
Trustee may not invest Plan assets directly in such securities)
and money market securities. The actual mix of securities shall
be determined by the Investment Manager and will change from time
to time.
Nothing in this Subsection 5.1 shall prohibit the Trustee from
maintaining from time to time reasonable amounts in cash or cash
equivalents in any fund.
5.2 At the time of election to participate in the Plan the Participant must
elect, in the form prescribed by the Committee, to have his
contributions invested in one percent (1%) increments in any or all of
the funds described in Subsection 5.1.
Said election must total one hundred percent (100%) of his
contributions. In the absence of a valid election by any Participant,
one hundred percent (100%) of his contributions shall be credited to his
Account in the Interest Income Fund.
5.3 The Participant may, as of the first day of any month and upon one (1)
month's written notice to the Company, elect that his future
contributions be invested in a proportion different from that previously
selected but the new election shall be made in accordance with the
percentage specifications provided in Subsection 5.2. No such election
will be permitted until three (3) months have elapsed from the date of
initial participation or from the date of any prior election under this
subsection.
5.4 The selection of an investment option is the sole responsibility of each
Participant. Neither the Committee, the Trustee, nor the Company are
authorized or permitted to advise a Participant as to the selection of
any option or the manner in which his Contributions shall be invested.
The fact that a security is available to Participants for investment
under the Plan shall not be construed as a recommendation as to the
purchase of that security, nor shall the designation of an investment
option impose any liability on the Committee, the Trustee, or the
Company.
5.5 Contributions made by the Employer in accordance with Subsection 4.1
shall be invested in the same manner as the Employee Contributions.
5.6 Each Participant may elect, effective as of a Valuation Date and upon at
least one (1) month's, but not more than two (2) months' written notice
to the Committee, to reallocate his Account in one percent (1%)
increments among any or all of the Funds. Such reallocation must total
one hundred percent (100%) of his Account. Such reallocation shall
apply to the combined Employee Account and Employer Account. No such
election will be permitted until three (3) months have elapsed from the
date of initial participation or from the date of any prior election
under this subsection.
5.7 With respect to funds that were transferred to the Plan from the Western
Gear Corporation Savings Plan ("Western Plan") effective April 1, 1983,
these funds shall be held in the Western Gear Machinery Fund under which
the assets that had accumulated through various insurance contracts
under the Western Plan shall continue to be accounted for separately.
5.8 A Participant who terminates employment by reason of retirement, death,
disability, quit or discharge and does not receive immediate
distribution of his Participant Accounts may continue to invest the
entire balance of his Accounts under the provisions of Section 5.2 of
the Plan until his Accounts are distributed in accordance with the
terms of the Plan.
<PAGE>
SECTION 6
PARTICIPANT ACCOUNTS
6.1 There shall be maintained with respect to each of the Funds set forth in
Subsections 5.1 an Employee Account for each Participant who has
contributed to such Fund. Each such Account shall be credited with the
Employee contributions and shall be adjusted to reflect earnings or
losses arising therefrom. All dividends, interest and other income of
each Fund, as well as stock splits, stock dividends and the like, shall
be reinvested in that Fund. In a like manner there shall be maintained
for each Participant a Salary Deferral Account with respect to each of
the Funds set forth in Subsection 5.1 which shall be credited with the
Employer Salary Deferral Contributions made with respect to each
Participant and shall be adjusted to reflect earnings and losses arising
therefrom. In a like manner, there shall be maintained for each
Participant an Employer Account with respect to each of the Funds set
forth in Subsection 5.1 which shall be credited with Employer
contributions, made with respect to each Participant, other than
Employer Salary Deferral Contributions, and shall be adjusted to reflect
earnings or losses arising therefrom. In addition, when applicable, a
Rollover Account shall be maintained as may be required under Sections
3.8 or 3.9.
6.2 Participants' Accounts of each category shall be maintained by
calculating the value of each Account on each Valuation Date as follows:
(a) Contributions made to each Fund since the last Valuation Date
shall be added to the Account.
(b) Investment earnings and market appreciation (realized and
unrealized) of each Fund since the preceding Valuation Date shall
be allocated to Accounts based on the Account balances as of the
preceding Valuation Date, adjusted on a time-weighted basis for
contributions made since such preceding Valuation Date.
(c) Withdrawals and distributions to each Fund since the last
Valuation Date shall be deducted from the Account.
(d) Transfers between Funds in accordance with Section 5.6 shall be
reflected as of the effective date of the transfer.
6.3 With respect to funds transferred from the Western Plan, funds
attributable to Employee contributions shall be maintained in the
Employee Account and funds attributable to Employer contributions shall
be maintained in an Employer Account.
<PAGE>
SECTION 7
VESTING AND FORFEITURES
7.1 A Participant's interest in his Employee Account, his Salary Deferral
Account and, where applicable, his Rollover Account shall be fully
vested at all times.
7.2 A Participant's right to his Employer Account shall be fully vested in
the event of death while employed by the Employer, Disability,
retirement on an Early Retirement Date or the attainment of Normal
Retirement Age (age 65).
7.3 Except for the portion of the Employer Account attributable to the funds
transferred from the Western Plan that were attributable to Employer
Contributions, a Participant's vested right to his Employer Account
prior to full vesting under the provisions of Subsection 7.2 shall be
determined in accordance with a vesting percentage that is calculated in
accordance with the following table:
Years Vested
of Percentage
Vesting of Employer
Service Account
Less than 1 0%
1 Year 20%
2 Years 40%
3 Years 60%
4 Years 80%
5 Years or More 100%
7.4 If a Participant terminates employment with the Company or Affiliated
Company before being fully vested in the Employer Account, the non-
vested portion of his Employer Account, valued as of the Valuation Date
immediately preceding the termination of employment, shall become a
forfeiture upon termination of employment, to be used to reduce future
Employer Contributions pursuant to Section 4.3.
7.5 If a Participant is rehired within the 60-month period beginning on the
date of termination, the non-vested portion of his Employer Account at
such date of termination shall be reinstated; and future Employer
Contributions shall be increased by the amount forfeited pursuant to
Section 7.4. If the Participant had received a distribution in
connection with such prior termination, the vested percentage of his
Employer Account shall subsequently be determined as follows:
(a) The Participant's Employer Account at the applicable Valuation
Date will be increased by the amount of the prior distribution.
(b) The adjusted balance so determined will be multiplied by the
vested percentage applicable at the Valuation Date in accordance
with the provisions of Subsection 7.3.
(c) The amount determined in (b) will be reduced by the amount of the
prior distributions to determine the value of the Participant's
vested interest at such Valuation Date.
The above procedure will also be used in determining the Vested
Percentage of the Employer Account of a Participant who had elected to
withdraw a portion of his Employer Account in accordance with Section
9.3 prior to being 100% vested in such Employer Account.
<PAGE>
SECTION 8
DISTRIBUTIONS
8.1 In the event of retirement or Disability, distribution of the
Participant's vested interest in the Trust Fund shall commence as soon
as practicable, but not later than sixty (60) days after the close of
the Plan Year in which the Participant terminates employment.
Notwithstanding the foregoing, unless an election has been made under
Section 242(b) of the Tax Equity and Fiscal Responsibility Act of 1982,
distribution shall commence not later than the first day of April
following the calendar year in which a Participant attains the age of
70-1/2 or, if later, the April 1 following December 31, 1989.
Notwithstanding the foregoing, the distributions to a Participant who
was at least 70-1/2 before January 1, 1988 (other than a five percent (5%)
or greater owner of the Company or an Affiliated Company) are not
required to commence until the first day of April following the calendar
year in which occurs the later of the Participant's termination of
employment or his or her attainment of age 70-1/2. Furthermore, all
benefit distributions under the Plan shall comply with Section 401(a)(9)
of the Code. In addition, the distribution will be made in accordance
both with the minimum distribution requirements and the minimum
distribution incidental benefit requirements of proposed Internal
Revenue Service Regulations Section 1.401(a)(9)-1 and 1.401(a)(9)-2.
By election made by the Participant in a form prescribed therefore, at
least one (1) month prior to distribution, distribution may be made in
one of the following manners:
(a) in a lump sum during the year following termination of service in
the amount to the credit of the Participant's accounts as of the
Valuation Date elected by him.
(b) in annual installments over a period of not more than fifteen (15)
years, the amounts of which are calculated annually by dividing
the then current value of the Participant's accounts (determined
as of the Valuation Date elected by him, and as of the anniversary
of such day, in succeeding years) by the remaining number of
unpaid installments.
(c) an annuity to be paid in a series of substantially equal monthly
or annual installments over a fixed period, not in excess of
fifteen (15) years, but without any life contingency.
Regardless of the manner of distribution, written consent of the
Participantto the distribution shall be required unless either (i) the
value of his Accounts is $3,500 or less or (ii) the distribution is to
commence at or after age 65. Notwithstanding anything herein to the
contrary, no part of a Participant's interest in the Fund may be
distributed to the Participant before the later of (1) the normal
retirement date (under the applicable qualified retirement plan of
Bucyrus-Erie and its Affiliates) or (2) age 62, without the consent of
the Participant. Furthermore, if a Participant terminates his
employment and the present value of the Participant's entire interest in
his Account is not greater than $3,500, the Participant shall receive an
immediate distribution of the present value of the entire vested portion
of such interest and the non-vested portion will be treated as
forfeitures. For purposes of this Section 8.1, if the present value of
a Participant's entire interest in his Account is zero, the Participant
shall be deemed to have received a distribution of his entire interest
in his Account.
8.2 On termination of service for reasons other than death, Disability, or
retirement the entire vested interest of the Participant shall be
distributed to him in a lump sum a soon as practicable after the
Valuation Date coincident with or next succeeding such termination;
provided, however, that written consent of the Participant, and the
Participant's spouse, to the distribution shall be required if both (i)
the vested interest of such Participant in his Account(s) is greater
than $3,500 and (ii) the distribution is to commence before age 65.
8.3 Upon the death of any Participant whether serving as an Employee or
having terminated his service for any reason whatsoever and prior to
commencement of or complete distribution of his Participant's Account,
his entire interest in the Trust Fund shall be payable to the
beneficiary previously designated by him; except that as to any
Participant who is credited with an Hour of Service after August 22,
1984, the distribution of whose account has not commenced before that
date, then his surviving spouse, if any, shall be deemed designated as
his beneficiary for 100% of his remaining account balances under the
Plan despite any attempted designation to the contrary, unless the
surviving spouse consents to the contrary designation in writing
witnessed by a plan representative or notary public. Such account(s)
shall be paid to the Participant's beneficiary in one of the manners
described in Section 8.1(a), (b) or (c); provided that if payments under
this Subsection have not commenced, the beneficiary or executor of the
Participant's estate may elect within sixty (60) days from the date of
the Participant's death, subject to the approval of the Committee, to
rescind the form of payment elected by the Participant in favor of the
alternate form available.
8.4 Subject to the spousal provisions of Subsection 8.3, in the absence of
any prior beneficiary designation by the deceased Participant,
distribution shall be made in the form of a cash lump sum to his estate.
Provided further, however, that in such a case the administrator or
executor of the Participant's estate, subject to the approval of the
Committee, may elect in writing to the Committee within sixty (60) days
from the date of the Participant's death that payments shall be made in
installments in accordance with Subsection 8.1(b) rather than as a lump
sum.
8.5 Distribution to a Participant's Beneficiary must commence no later than
one year after the Participant's death, except that if the Participant's
Beneficiary is his surviving spouse, then distribution must commence no
later than the earlier of (a) the date on which the Participant would
have attained age 70-1/2, or (b) one year after the death of his surviving
spouse. If a Participant's Beneficiary is other than an individual,
then distribution to such Beneficiary must be completed within 5 years
after the Participant's death. If distribution commenced prior to the
Participant's death, then the balance of the Account(s) must be
distributed at least as rapidly as under the method being used at date
of death.
8.6 If a benefit payment under the Plan is made to a Participant before he
attains age 59-1/2, such Participant shall be advised by the Committee that
an additional income tax may be imposed equal to 10% of the portion of
the amount so received which is included in his or her gross income for
such taxable year, unless such distribution is made on account of death,
disability or after he has attained age 55, or is an annuity for the
life of the Participant or the joint lives of the Participant and his or
her contingent annuitant or is used by the Participant to pay for
medical expenses which are deductible under Code Section 213.
<PAGE>
SECTION 9
WITHDRAWALS DURING EMPLOYMENT
9.1 A Participant may elect to withdraw from the Trust Fund an amount equal
to all or a part of his Employee Account. No more than one withdrawal
can be made during a calendar year. In the event the amount of the
withdrawal exceeds the portion of the account attributable to Employee
Supplemental Contributions, all Salary Deferral Agreements will be
revoked coincident with the effective date of the withdrawal and no new
Salary Deferral Agreement can become effective prior to an Enrollment
Date six (6) months following the effective date of the withdrawal.
9.2 A Participant who has completed 5 years of Vesting Service may withdraw
an amount equal to all or a part of his vested Employer Account. In the
event of such withdrawal, all Salary Deferral Agreements will be revoked
coincident with the effective date of the withdrawal and no new Salary
Deferral Agreement can become effective prior to an Enrollment Date six
(6) months following the effective date of the withdrawal.
9.3 In the event of the financial hardship of a Participant, the Committee
may, upon the written application of the Participant, permit him to
withdraw all or a portion of his Employee Account and/or his vested
Employer Account. No withdrawals will be permitted pursuant to this
Section except upon the occurrence of such events which in the opinion
of the Employer constitute a bona fide financial hardship arising from
one or more of the following events:
(a) expenses connected with a death within the Participant's immediate
family;
(b) extraordinary medical expenses for one or more members of the
Participant's immediate family which are not covered by insurance
programs sponsored by the Employer;
(c) the educational costs of one or more members of the Participant's
immediate family, or
(d) purchase of a principal place of residence.
The Committee shall make whatever inquiry it deems necessary to
determine the existence of a hardship situation and the decision of the
Committee shall be final. The standards established by the Committee
for determining whether or not a financial hardship exists shall be
uniformly applied to all Participants who make application for
withdrawals pursuant to this Section 9.3.
9.4 (a) Effective for Plan Years before the 1989 Plan Year, a Participant
may for any of the purposes listed in subsection (i) below elect
to withdraw from his Salary Deferral Account, with the approval of
the Committee, any amount not in excess of his Salary Deferral
Account as of the Valuation Date coinciding with or immediately
preceding the date of such withdrawal; provided, however, that no
portion of his Salary Deferral Account shall be withdrawn prior to
the Participant attaining age 59-1/2, or in the case of a Participant
who has not attained age 59-1/2, the determination by the Committee
that he has incurred a financial hardship. In any case where the
Participant claims financial hardship, he shall submit a written
request for such distribution in accordance with procedures
prescribed by the Committee. As used herein "financial hardship"
means an immediate and heavy financial need created by the
hardship, and the funds necessary to meet the Participant's needs
are not reasonably available from his other resources.
(i) A Participant may request a withdrawal for only one of the
following purposes: the purchase of a residence for the
Participant; the financing of the higher education of a child or
children of the Participant; the payment of the extraordinary
medical expenses of the Participant, his spouse or any other
person dependent upon him; the provision of supplemental pay to
the Participant during a period of layoff; or for any other good
reason approved by the Committee.
(b) Effective for Plan Years after the 1988 Plan Year, a Participant
who has attained age 59-1/2 may elect to withdraw from his Salary
Deferral Account any amount not in excess of the balance of such
Account determined as of the Valuation Date applicable to such
withdrawal.
(i) A Participant who has not attained age 59-1/2 may upon the
determination by the Committee that he has incurred a financial
hardship, make a hardship withdrawal from his Salary Deferral
Account. Distributions form the Participant's Salary Deferral
Account because of hardship shall not exceed the lesser of:
(I) the amount of the immediate and heavy financial need;
or
(II) the balance of the Participant's Salary Deferral
Account as of end of the month preceding the date the
request is received by the Committee; or
(III) (A) the sum of the Participant's Salary Deferral
Account as of December 31, 1988 plus the Participant's
Employer Salary Deferral Contributions made on or after
January 1, 1989, reduced by (B) the aggregate amount
distributed from the Participant's Salary Deferral Account
on or after January 1, 1989.
(ii) In any case where the Participant claims financial hardship,
he shall submit a written request for such distribution in
accordance with procedures prescribed by the Committee. The
Committee shall determine whether the Participant has a "financial
hardship" on the basis of such written request in accordance with
this Section 9.4(b), and such determination shall be made in a
uniform and nondiscriminatory manner. The Committee shall only
make a determination of "financial hardship" if the distribution
is requested on account of an immediate and heavy financial need
of the Participant and the funds to be distributed are necessary
to satisfy the Participant's need. The amount of the distribution
shall not be in excess of the immediate and heavy financial need
of the Participant, taking into account any amounts necessary to
pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution.
(I) The determination of whether a Participant has an
immediate and heavy financial need is to be made by the
Committee on the basis of all relevant facts and
circumstances.
(II) The determination of whether a distribution is
necessary to satisfy the immediate and heavy financial need
of the Participant shall be made by the Committee on the
basis of all relevant facts and circumstances. The
Committee shall determine that a distribution is necessary
to satisfy the financial need of either (A) or (B) is
satisfied:
(A) Unless the Committee has actual knowledge to the
contrary, the Committee relies on the written
representation of the Participant that the immediate
and heavy financial need cannot be relieved:
(1) through reimbursement or compensation by
insurance or otherwise;
(2) by reasonable liquidation of the
Participant's assets to the extent such liquidation
would not itself cause an immediate and heavy
financial need;
(3) by cessation of Employer Salary Deferral
Contributions;
(4) by other distributions or nontaxable loans
available from the Plan or any other plan in which the
Participant participates; or
(5) by borrowing from commercial sources on
reasonably commercial terms in an amount sufficient to
satisfy the need.
(B) The Participant reasonably demonstrates that all
of the following requirements are satisfied:
(1) the distribution is not in excess of the
amount of the immediate and heavy financial need of
the Participant, taking into account any amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the distribution;
(2) the Participant has obtained all
distributions (other than hardship distributions), and
all nontaxable loans currently available under all of
the plans maintained by the Employer or any Affiliated
Company;
(3) the Participant will not make any
contributions to any retirement plan (other than
mandatory employee contributions to a defined benefit
plan) maintained by the Employer or an Affiliated
Company for twelve months after receiving the hardship
distributions; and
(4) the Participant's Employer Salary Deferral
Contributions to this Plan and to all plans maintained
by the Employer or an Affiliated Company in the
calendar year following the calendar year of the
hardship distribution do not exceed the limitation in
Code Section 402(g)(1) applicable for the following
calendar year, minus the amount of his Employer Salary
Deferral Contributions for the calendar year of the
hardship distribution.
9.5 Subject to applicable governmental regulations, a Participant may elect
to withdraw from the Trust Fund all of his Rollover Account.
9.6 Upon the request of a Participant, the Committee may authorize a loan to
such Participant from his Salary Deferral Account, Employer Account and
Employee Account as of the last day of the month immediately preceding
the date of the loan. Such loans shall be made available to all
Participants on a reasonably equivalent basis. A Participant may not
have more than one loan outstanding at any time.
Subject to such rules and regulations as may from time to time be
promulgated by the Committee, the minimum amount of any loan shall not
be less than $1,000 and the maximum amount of any loan shall not exceed
50% of the total vested amount of the Participant's Salary Deferral,
Employer and Employee Accounts as of the Valuation Date next preceding
the date of such authorization; provided, however, that the amount of
such loan shall not exceed $50,000 reduced by the highest outstanding
balance of loans to said Participant from the Trust Fund or from the
trust of any other plan maintained by the Employer during 1 year period
ending on the day before the date on which such loan is made or
modified. The Committee reserves the right to charge a reasonable fee
to cover the administrative costs of processing any loans, such fee to
be deducted form the proceeds of the loan.
Loans shall be made on such terms as the Committee may prescribe,
provided that any such loan shall be evidenced by a note, shall bear a
rate of interest on the unpaid principal thereof at the rate in effect
on the date the loan request is approved and shall be secured by the
Participant's Accounts, and such other security as the Committee in its
discretion deems appropriate. The interest rate shall be set at one
percentage point above the prime rate as published in the Wall Street
Journal on the first day of the month prior to the month in which the
loan was disbursed.
Loans shall be repaid by the Participant by payroll deductions or any
other method approved by the Committee which require level amortization
of principal and interest and repayments not less frequently than
quarterly. Such Loans shall be repaid over a period not less than one
year nor more than five years, in accordance with procedures established
by the Committee from time to time. A Participant may elect to prepay
in full the outstanding principal on his loan. No partial prepayments
shall be permitted.
Loans shall be made first from the Participant's Salary Deferral
Account, then from his Employer Account, and finally from his Employee
Account, and shall be held for the benefit of the Participant. Loans
shall be deemed made pro rata from the separate investment funds in
which such Accounts are invested. Loan principal payments shall be
allocated among the investment funds in accordance with the last written
investment election made. In the event a Participant is entitled to
receive a distribution of his Accounts, the unpaid balance of any loan,
including any unpaid interest, shall be charged first against his Salary
Deferral Account, then against his Employer Account and finally against
his Employee Account. If after charging all of the Participant's
Accounts with the unpaid balance of the loan, including any unpaid
interest, there still remains an unpaid balance of such loan and
interest, then the remaining unpaid balance of such loan and interest
shall be charged against any property pledged as security with respect
to such loan.
<PAGE>
SECTION 10
ADOPTION OF PLAN BY AFFILIATED COMPANIES
10.1 With the approval of the Board of Directors or the Executive Committee
of the Company, any Affiliated Company may by resolution of the Board of
Directors of such Affiliated Company adopt this Plan in respect of its
Employees, and become a party to the funding arrangement applicable
hereto. From and after the effective date of such adoption, the terms
"Employer" and "Employers" shall include reference to each such
Affiliated Company but the term "Company" shall continue to refer at all
times exclusively to Bucyrus-Erie Company. In the case of an Affiliated
Company adopting this Plan on or after such date, notwithstanding any
provision hereof to the contrary, Vesting Service shall begin as of the
date as of which such subsidiary or affiliate shall have adopted the
Plan with respect to its Employees, unless the Board of Directors or
Executive Committee of the Company shall specify an earlier date.
10.2 With the approval of the Board of Directors of the Executive Committee
of the Company, any Affiliated Company that has previously adopted this
Plan may by resolution of its Board of Directors continue the Plan in
respect of its Employees by means of a separate instrument under which
the Affiliated Company shall be the Company for all purposes of the
Plan, provided that such Affiliated Company shall also segregate from
the Trust Fund and continue a trust, and provided further that such
Affiliated Company shall continue to be an Employer under the Plan until
such separate instrument and segregation have been approved by the
Internal Revenue Service as meeting the requirements for a qualified
plan and trust under the provisions of Sections 401 and 501 of the Code
or the provisions of any law superseding or modifying such sections.
<PAGE>
SECTION 11
ADMINISTRATION OF PLAN
11.1 The Company shall be responsible for the general administration of the
Plan and shall be the "administrator" and a "named fiduciary" of the
Plan within the meaning of ERISA. The Company shall have such powers as
may be necessary to carry out the provisions of the Plan and may from
time to time establish rules for the administration of the Plan and the
transaction of the Plan's business. In making such rules, the Company
shall pursue uniform policies and shall not discriminate in favor of or
against any employee or beneficiary.
11.2 The Company shall by resolution of its Board of Director or Executive
Committee, establish a Savings Plan Committee herein called the
Committee - consisting of a chairman and two additional members, to act
for the Company in the general matters of administration of the Plan,
hereinafter set forth and to whom such matters are hereby allocated and
delegated. The chairman and each such additional member of the
Committee shall serve at the pleasure of the Board of Directors or
Executive Committee until their successors be appointed in like manner.
Expenses of the Committee properly and actually incurred may be paid or
reimbursed in whole or in part by the Company. The members of the
Committee shall not receive compensation with respect to their service
as such.
11.3 The Committee shall have such powers as may be necessary to direct the
general administration of the Plan, including, but not by way of
limitation, the following:
(a) to construe and interpret the Plan and to make equitable
adjustments for any mistakes or errors made in the administration
thereof;
(b) to establish and administer a reasonable claims procedure under
the Plan, including a procedure for appeal of a denied claim,
consistent with such regulations relating thereto as may be issued
from time to time by the Secretary of Labor, and to make
determinations as to the right of any person to a benefit;
(c) to establish a written procedure for determining the qualified
status of any "domestic relations order" and complying with the
requirements of paragraph 206(d)(3) of ERISA relating to such
domestic relations orders.
(d) to appoint or employ any other agents as it deems advisable,
including accounting or legal advisors, to assist it in the
performance of its duties hereunder;
(e) to prescribe such procedures, rules and regulations as it shall
deem necessary or proper for the efficient administration of the
Plan or any of its duties hereunder;
(f) to decide questions of eligibility and determine the amount,
manner, and time of payment of any benefits;
(g) to prescribe the form and manner of application for any benefits
hereunder or forms to be used in the general administration
hereof;
(h) to receive from the Employers and from Employees such information
as shall be necessary for proper administration of the Plan;
(i) to furnish the Company, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate; and
(j) to direct the Trustee concerning all benefits which are to be paid
from the Trust Fund pursuant to the provisions of the Plan.
11.4 The Committee in its regulations may delegate the authority to any one
or more of its members to take any action on behalf of the Committee and
as to such actions, no meeting or unanimous consent shall be required,
except that: (i) a formal meeting or unanimous consent shall be required
concerning the actions set forth in subparagraph (a) through (d)
inclusive, of the foregoing paragraph, and (ii) the consent of two
members shall be required concerning the actions set forth in
subparagraph (e) through (i), inclusive, of the foregoing paragraph.
Subject to the foregoing, the Committee may also act at a meeting or by
its unanimous written consent. A majority of the members of the
Committee shall constitute a quorum for the transaction of business and
shall have full power to act hereunder. All decisions of the Committee
which require a formal meeting shall be made by vote of the majority
present at any meeting at which a quorum is present, except for actions
in writing without a meeting, which must be unanimous. The Committee
may appoint a Secretary who may, but need not be, a member of the
Committee. The Secretary shall keep a record of all meetings and
forward all required communications to all necessary parties. The
Committee may adopt such by-laws and regulations as it deems desirable
for the conduct of its affairs.
A dissenting Committee member who, at the time of the making of any
decision by the majority, registers his dissent in writing delivered at
that time to the other Committee members shall be immune from any and
all liability occasioned by or resulting from the decision of the
majority. All rules and decisions of the Committee shall, subject to
the provisions of the Plan, be uniformly and consistently applied to all
persons in similar circumstances. The Committee shall be entitled to
rely upon Company records as to information pertinent to calculations or
determinations made pursuant to the Plan. A member of the Committee may
not vote or decide upon any matter relating solely to himself or vote in
any case in which his individual right or claim to any benefit under the
Plan is particularly involved. If, in the case in which a Committee
member is so disqualified to so act, the remaining members cannot agree,
the President of the Company will appoint a temporary substitute member
to exercise all of the powers of the disqualified member concerning the
matter in which he is disqualified to act.
11.5 (a) Claims for benefits under the Plan made by an Employee or
beneficiary covered by the Plan must be submitted in writing at
the Employee's, or deceased Employee's, payroll location.
All claims, after review at the local level, will be forwarded for
approval to the person or persons designated by the Secretary of
the Committee. Approved claims will be processed and instructions
issued to the Trustee authorizing payments as claimed.
If a claim is denied by the Committee in whole or in part, the
claimant will be advised by written notice, in a manner calculated
to be understood by the claimant, of the specific reason or
reasons for the denial, with specific references to the pertinent
Plan provisions on which the denial is based.
(b) Upon denial of a claim in whole or in part, a claimant or his duly
authorized representative shall have the right to submit a written
request to the Committee for a full and fair review of the denied
claim, to be permitted to review documents pertinent to the denial
and to submit issues and comments in writing. A request for
review of the claim must be submitted within sixty (60) days of
the mailing to the claimant of written notice of denial of the
claim, in whole or in part.
The Committee will advise the claimant of the results of the
review not more than sixty (60) days after receipt of the written
request for review unless special circumstances require an
extension of time for processing, in which case a decision shall
be rendered as soon as possible. The decision on review shall be
in writing.
11.6 The Company shall from time to time furnish the Trustee with the names
and specimen signatures of the current members of the Committee and the
Trustee shall be fully protected by and entitled to rely on any written
notice, instruction, direction or other communication delivered to it
and signed by any member of the Committee. Unless and until the Trustee
is notified of any change in the membership of the Committee, the
Trustee shall be fully protected in relying upon the most recent list of
the members of the Committee delivered to it by the Company.
11.7 To the extent permitted by ERISA, the Company shall indemnify and save
harmless its Board of Directors, the Committee and each member thereof
(and any delegate, who is employed by the Company, which it appoints)
against all liabilities and expenses, including attorneys' fees,
reasonably incurred by them in connection with any legal action to which
they may be a party or any threatened legal action arising out of their
discharge in good faith of responsibilities under or incident to the
Plan, except with regard to any matters as to which they shall be
adjudged to be liable for gross negligence or willful misconduct in the
performance of their duties. This indemnity shall not preclude such
further indemnities as may be available by the purchase of insurance, as
such indemnities are permitted by law. Payments with respect to any
indemnity and payment of expenses or fees under this Section shall be
made only from assets of the Company and shall not be made directly from
funds of the Plan.
11.8 Except as limited by the following paragraph below, this Plan will be
construed and enforced according to the laws of the State of Wisconsin
and any applicable laws of the United States. It is intended that the
Plan and Trust meet all requirements of Section 401 and related
provisions of the Code and all applicable provisions of ERISA and
regulations thereunder and that the Plan and Trust shall be construed,
operated and administered accordingly. In the event of any conflict
between any part, clause or provision of the Plan or Trust and the Code
and ERISA and regulations thereunder, the provisions of such law shall
be deemed controlling and and the conflicting part, clause or provision
of the Plan or Trust shall be deemed superseded to the extent of the
conflict.
11.9 The Committee shall establish and administer a reasonable written
procedure for determining the qualified status of any "domestic
relations orders" as defined in paragraph 206(d)(3) of ERISA, including
segregation to the extent required by law of any Accounts thereby
contested, in accordance with such regulations as may be issued by the
Secretary of Labor. The Committee shall also provide written notice to
any alternate payee whose claim for benefits has been denied, setting
forth the specific reasons for such denial.
<PAGE>
SECTION 12
ADMINISTRATION OF THE TRUST
12.1 Pursuant to the terms and provisions of the Trust Agreement, such
Trustees as the Company may appoint, will receive and invest all
contributions made under the Plan by the Company and by the Participants
to the Trust Fund held by the Trustees and all income derived therefrom.
The Company may remove the Trustee and may appoint successor or
additional trustees and may divide their duties and responsibilities as
it sees fit.
12.2 All assets of the Trust Fund, whether representing contributions made by
the Employer or by the Participants, shall be held by the Trustees as a
trust fund for the benefit of Participants under the Plan. Except for
the provisions of the following paragraph, in no event shall it be
possible at any time prior to the satisfaction of all liabilities,
fixed, or contingent, under the Plan with respect to such Participants,
for any part of the assets of the Trust Fund whether principal or
income, to be used for, or diverted to, purposes other than for the
exclusive benefit of such Participants.
The Company shall pay all expenses incurred in the administration of the
Plan, including expenses and fees of the Trustee, except that if not so
paid, such expenses and fees may be paid from the Trust Fund.
12.3 The Trust Agreement also specifically provides among other things, for
the investment or reinvestment of the Trust Fund and the income derived
therefrom, and for the management of such Fund, the responsibilities and
immunities of the Trustees, the removal of the Trustees and the
appointment of successors, accountings by the Trustees and the
disbursement of the Trust Fund in accordance with the directions of the
Committee.
12.4 The rights of all persons under the Plan are subject to all the terms
and provisions of said Trust Agreement.
12.5 The Company, by action of its Board of Directors or any committee
thereof, shall exercise all powers in the Trust Agreement which relate
to the investment policy, practice and management to be followed by the
Trustee. In furtherance of its duties it may engage investment
managers, who may be authorized to direct the Trustee in the making of
investments, and may discharge any investment manager so engaged and
engage other investment managers at any time in its sole judgment.
12.6 In the event it is determined within one (1) year of payment that
amounts have been contributed to the fund by the Company as a result of
accounting, mathematical, or bookkeeping error or other mistake of fact,
such amount shall be returned to the Company, unless otherwise
determined by the Company. If the Plan is not qualified by the IRS or
if the deduction of contributions are not allowed, then the Company's
contributions that were conditioned on the Plan's qualification or the
deductibility shall be returned within one year after receipt of the
adverse ruling unless otherwise determined by the Company.
<PAGE>
SECTION 13
AMENDMENT OF PLAN
13.1 The Plan may be amended by adoption of a resolution of the Board of
Directors or the Executive Committee of the Company from time to time in
any respect, except that under no condition shall such amendment or
amendments result in or permit the return or repayment to the Employers
of any property held or acquired by the Trustee hereunder or the
proceeds hereof, or result in, or permit the distribution of, any such
property for the benefit of anyone other than the Employees covered
hereunder and their beneficiaries or contingent annuitants.
13.2 Subject to the foregoing limitation and to any applicable Federal law,
rule or regulation, any amendment may be made retroactively which, in
the judgement of the Company, is necessary or advisable so that the Plan
will be a qualified plan within the meaning of the applicable provisions
of the Code and regulations made pursuant thereto, or under any Federal
law, rule, act, regulation or directive which supersedes, supplements or
supplants the Code.
<PAGE>
SECTION 14
TERMINATION OF PLAN
14.1 The Plan may be terminated by the Company by adoption of a resolution of
its Board of Directors or its Executive Committee specifying that the
Plan is begin so terminated. In the event the Plan is so terminated, or
in the event of the complete discontinuance of contributions under the
Plan, the rights of Participants to their accounts as of the date of
such termination shall become nonforfeitable. The Plan may likewise be
terminated by the Board of Directors of any Employer hereunder solely
insofar as the Plan pertains to its Employees; provided, however, that
no such termination by an Employer other than the Company shall be
effective unless the Board of Directors or the Executive Committee of
the Company shall indicate, by adoption of a resolution, its consent and
approval of such action. If the Plan is terminated immediately
following its merger or consolidation with, or a transfer of its assets
and/or liabilities to, another plan, the benefit payable to each
affected employee shall not be less than that which he would have
received if the Plan had terminated immediately before the merger,
consolidation or transfer.
14.2 In the event of termination, partial termination of the Plan or a
complete discontinuance of Contributions under the Plan each affected
Participant shall be one hundred percent (100%) vested in all amounts
credited to his Participant Accounts at the date of such termination,
partial termination, or complete discontinuance of Contributions. In
the event of a Plan Termination, such amounts shall be distributed to
such persons in a reasonable length of time and in a manner permitted
under the Plan and as determined by the Committee.
<PAGE>
SECTION 15
MISCELLANEOUS PROVISIONS
15.1 The Committee shall cause to be furnished to each Participant, no less
frequently than once in each Plan Year, a statement including but not
limited to the following:
(a) the value of his Employee Account in each Fund;
(b) the value of his Employer Account; and
(c) the value of that portion of the amount in (b) above that is
vested.
15.2 In no event shall any merger or consolidation of any other retirement,
profit sharing, or other employee benefit plan with this Plan, or any
transfer of assets or liabilities of this Plan to any other plan, result
in a diminution, attributable to such merger, consolidation or asset
transfer, of the Accounts of any Participant or beneficiary; provided,
however, the Committee shall distribute a Participant's Account(s) in
accordance with a domestic relations order determined to be qualified
under Section 11.9.
15.3 No Participant, nor any beneficiary of any Participant, shall have any
power to assign, transfer, pledge, encumber or anticipate any payment to
be made under the Plan, nor shall the right to receive any such payment
be in any manner subject to levy, attachment or other legal process to
enforce payment of any claim against any Participant or any beneficiary;
provided, however, the Committee shall distribute a Participant's
Account(s) in accordance with a domestic relations order determined to
be qualified under Section 11.9.
15.4 Wherever applicable, the masculine pronoun as used herein shall be
deemed to mean the feminine, and the singular the plural.
<PAGE>
SECTION 16
TOP HEAVY PROVISIONS
16.1 Definitions. For purposes of this Section 16:
(a) A "Key Employee" is any current or former Employee (and the
beneficiaries of such Employee) who at any time during the
Determination Period was an officer of the Company or an
Affiliated Company if such individual's annual compensation
exceeds 50% of the defined benefit dollar limitation in Code
Section 415(b)(1), an owner (or considered an owner under Code
Section 318) of one of the 10 largest interests in the Employer if
such individual's compensation exceeds 100% of the defined
contribution dollar limitation in Code Section 415(c)(1), a
five-percent owner of the Employer, or a one-percent owner of the
Employer who has an annual compensation of more than $150,000.
Annual compensation means Section 415 Compensation plus amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the employee's gross income
under Code Sections 125, 402(e)(3), 402(h) or 403(b). The
"Determination Period" is the Plan Year containing the Top-Heavy
Determination Date and the four (4) preceding Plan Years. The
determination of who is a Key Employee will be made in accordance
with Code Section 416(i)(1) and the regulations thereunder.
(b) For any Plan Year beginning after December 31, 1983, this Plan is
"Top-Heavy" if any of the following conditions exists:
(i) The Top-Heavy Ratio for this Plan exceeds 60% and this Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans;
(ii) This Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60%; or
(iii) This Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60%.
(c) The Top-Heavy Ratio shall be determined as follows:
(i) If the Employer maintains one or more defined contribution
plans and the Employer has not maintained any defined
benefit plan (including any simplified employee pension as
defined in Code Section 408(k)) which during the 5-year
period ending on the Top-Heavy Determination Date(s) has or
has had accrued benefits, the Top-Heavy Ratio for this Plan
alone or for the Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the
Top-Heavy Determination Date(s) (including any part of any
account balance distributed in the 5-year period ending on
the Top-Heavy Determination Date(s)), and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period
ending on the Top-Heavy Determination Date(s)), both
determined in accordance with Code Section 416 and the
regulations thereunder. Both the numerator and the
denominator of the Top-Heavy Ratio are increased to reflect
any contributions not actually made as of the Top-Heavy
Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the
regulations thereunder.
(ii) If the Employer maintains one or more contribution benefit
plans and the Employer maintains or has maintained one or
more defined benefit plans which during the 5-year period
ending on the Top-Heavy Determination Date(s) has or has had
any accrued benefits, the Top-Heavy Ratio for any Required
or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances under the aggregated defined contribution plan or
plans for all Key Employees, determined in accordance with
(i) above, and the Present Value of accrued benefits under
the aggregated defined benefit plan or plans for all Key
Employees as of the Top-Heavy Determination Date(s), and the
denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for
all Participants, determined in accordance with (i) above,
and the Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all
Participants, as of the Top-Heavy Determination Date(s), all
determined in accordance with Code Section 416 and the
regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator
of the Top-Heavy Ratio are increased for any distribution of
an accrued benefit made in the 5-year period ending on the
Top-Heavy Determination Date.
(iii) For purposes of (i) and (ii) above the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Top-Heavy Determination Date, except as provided in Code
Section 416 and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account
balances and accrued benefits of a Participant (A) who is
not a Key Employee but who was a Key Employee in a prior
year, or (B) who has not been credited with at least one
hour of service with any employer maintaining the Plan at
any time during the 5-year period ending on the Top-Heavy
Determination Date will be disregarded. The calculation of
the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account, will be
made in accordance with Code Section 416 and the regulations
thereunder. Deductible employee contributions will not be
taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans the value of account balances
and accrued benefits will be calculated with reference to
the Top Heavy Determination Date(s) that fall within the
same calendar year.
(iv) The accrued benefit of a Participant other than a Key
Employee shall be determined under (1) the method, if any,
that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer, or (2) if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Code Section 41 1 (b)(1)(C).
(d) "Permissive Aggregation Group" means the Required Aggregation
Group of plans plus any other plan or plans of the Employer which,
when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Code Sections
401(a)(4) and 410.
(e) "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the Determination Period
(regardless of whether the plan has terminated), and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Code Section
401(a)(4) or 410.
"Top-Heavy Determination Date" means, for any Plan Year subsequent
to the first Plan Year, the last day of the preceding Plan Year
or, for the first Plan Year of the Plan, the last day of that
year.
(g) "Present Value" shall be based on an interest assumption and a
post-retirement mortality assumption specified in the defined
benefit plan or plans.
(h) "Employer" means the Employer except for purposes of determining
ownership under Code Section 416(i)(1).
(i) "Aggregation Group" means a group of qualified plans consisting of
this Plan and certain other defined contribution plans and defined
benefit plans maintained by the Employer which are aggregated for
purposes of determining whether the group as a whole is Top-Heavy.
The Aggregation Group includes plans which must be aggregated for
this purpose (the "Required Aggregation Group") and other plans
which are aggregated for this purpose (the "Permissive Aggregation
Group").
16.2 While the Plan is a top heavy plan, the following special rules shall
apply:
(a) The provisions of the Plan's regular vesting schedule in
Subsection 7.3 shall continue to apply, since these provisions are
more favorable than provisions set out in Code Section
416(b)(1)(B).
(b) If contributions or forfeitures or both are allocated to the
Employer Account of any Key Employee, then the total amount
thereof, expressed as a percentage of the Key Employee's Code
Section 415 compensation, limited to the first $200,000 thereof,
($150,000 after January 1, 1994) subject to adjustment
automatically in accordance with Code Section 415(d)(2), for the
Key Employee receiving the largest such percentage shall be
determined. All Participants, regardless of whether they have
Salary Deferral Agreements in effect for the Plan Year, who remain
in the Company's employ at the end of such Plan Year and who are
not Key Employees shall then be entitled to receive certain
minimum allocations to their Employer Accounts as follows:
(i) if the percentage so determined for the Key Employee equals
or exceeds 3%, then otherwise eligible non-Key Employees
must receive allocations of at least 3% of their Code
Section 415 compensation; and
(ii) if the percentage so determined for the Key Employee is less
than 3%, then otherwise eligible non-Key Employees must
receive allocations at least equal to such percentage.
For purposes of satisfaction of the minimum contribution
requirements herein imposed, no contributions or benefits under
the Social Security Act shall be taken into account.
(c) No more than the first $200,000 ($150,000 after January 1, 1994
and subject to adjustment automatically in accordance with Section
416(d)(2) of the Code) of Compensation of any Participant shall be
taken into account under the Plan.
16.3 For any Plan Year for which this Plan is a Top Heavy Plan, the
provisions of Subsection 4.5 of this Plan governing maximum benefit
limitations shall be modified as follows:
(a) Unless part (b) below is applicable, the defined benefit plan
fraction and defined contribution plan fraction used for purposes
of Section 415(e) of the Code when a Participant participates in
both a defined benefit and a defined contribution plan maintained
by the Company shall be calculated in accordance with Section
416(h)(1) of the Code ; or
(b) If the aggregation value of the Accounts of Key Employees would
not exceed ninety percent (90%) of the aggregate value of the
Accounts of all Participants under this Plan or the top heavy
aggregation group which includes this Plan, and the "three percent
(3%)" figure contained in Subsection 16.3(b) of this Plan is
changed to four percent (4%), part (a) above shall not apply.
<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> 11,816
<SECURITIES> 0
<RECEIVABLES> 31,996
<ALLOWANCES> (684)
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0
0
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</TABLE>
