SECURITIES AND EXCHAGNE COMMISSION
Washington D.C. 20849
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
PIONEER HI-BRED INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Iowa 42-0470520
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Capital Square, 400 Locust Street, Des Moines, Iowa 50309
(Address of Principal Executive Offices) (Zip Code)
PIONEER HI-BRED INTERNATIONAL, INC.
SAVINGS PLAN
(Full title of the Plan)
Susan Griggs
800 Cap[ital Square, 400 Locust Street
Des Moines, Iowa 50309
(515) 248-4820
(Name and address of agent for service)
(telephone number, including area code,
name of agent for service)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of securities Amount to be offering price per aggregate Amount of
to be registered Registered (1) share(2) offering price registration fee
- ------------------- -------------- ------------------ -------------- -----------------
Common Stock
<S> <C> <C> <C> <C> <C>
Par value $1 2,000,000 $31.0625 $62,125,000 $18,370.00
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to rule 416 (c) under the Securities act of 1933, this
registration statement also covers an indeterminate amount of interest to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Estimated solely for purposes of calculation of the registration fee
pursuant to Rule 457(h) and based on the average of the high and low prices
of the Common Stock of Piioneer Hi-Bred International, Inc. as reported on
September 11, 1998 in the New York Stock Exchange.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2 Registrant Information and Employee Plan Annual Information.*
*Information required by Part 1 of Form S-8 to be contained in the
Section10(a) prospectus is omitted from this Registration Statement in
accordance with Rute 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part 1 of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which previously have been filed by the
Company with the Securities and Exchange Commission (the "Commission"), are
incorporated herein by reference and made a part hereof:
(i) The Company's latest annual report on Form 10K, for the
fiscal year ended August 31, 1997, filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934;
(ii) The Pioneer Hi-Bred International, Inc. Savings Plan's
latest annual report, filed pursuant to section 13(a) or 15(d);
(iii) All Quarterly Reports and other reports filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since the
end of the fiscal year covered by the annual report referred to in (i)
above;
(iv) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A, dated October 19, 1995,
(Registration Statement No. 95581557), including any amendment or report
filed for the purpose of updating such description and;
(v) The description of the Preferred Share Purchase Rights
attached to Common Stock contained in the Company's Registration Statement
on Form 8A/A-1 (Registration statement No. 001-11551), filed December 17,
1996, as amended in the Company's Registration Statement on Form 8-A/A-2
(Registration Statement No. 97672184), filed August 28, 1997, including
any amendment or report filed for purposes of updating such description.
All reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act:) subsequent to the date of this Registration Statement and prior
to the filing of a post-effective amendment hereto which indicates that all
securities offered hereunder have been sold or which deregisters all securities
offered hereunder have bben sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such documents.
For purposes of this Registration Statement, any statement contained
in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or susperseded to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated herein by reference modifies or supersedes such
statement in such document. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
Item 4. Description of Securities.
<PAGE>
Not applicable
Item 5. Interests of Named Experts and Counsel.
None
Item 6. Indemnification of Directors and Officers.
Iowa business Corporation Act. the Company is subject to the Iowa Business
Corporation Act (the "Act") which provides for or permits indemnification of
Directors and officers in certain situations. Unless limited by its Articles
of Incorporation, indemnification is mandatory for a Director or an officer
(not an employee) who was wholly successful, on the merits or otherwise, in the
defense of any proceeding to which the Director or officer was a party because
such person is or was a Director or officer of the corporation against
reasonable expenses incurred by the Director or officer in connection with the
proceeding. In addition, unless the Articles of Incorpoiration provide
otherwise, a Director or officer may apply for limited court ordered
indemnification if certain standards are met.
The Act by its terms expressly permits indemnification where a Director,
officer, employee or agent acted in good faith and in a manner such person
reasonably believed to be in (if acting in its official capacity), or not
opposed to, the Company's best interests, and, in a criminal action, if such
person had no reasonable cause to believe that his or her conduct was unlawful.
No indemnification is permitted in connection with a proceeding by or in the
right of a corporation in which the person was adjudged liable to the
corporation or in connection with any other proceeding charging improper
personal benefit to the Director, whether or not involving action in an official
capacity, in which the person was adjuged liable on the basis that personal
benefit was improperly received.
The Act also permits advancement of expenses to a Doirector, officer, employees
or agents upon 1) receipt of an undertaking by such to repay all amounts
advanced if it shall ultimately be determined that he or she is not entitled to
be indemnified by the corporation; 2) the person furnishes the corporation a
written affirmation of the person's good faith belief he or she has met the
applicable standard or conduct; or 3) determination is made that the facts then
known to those making the determination would not preclude indemnification.
Generally, the above pprovisions of the Act are permissive in nature. The only
indemnification requirement imposed by the Act is that, unless limited by its
Articles of Incorporation, a company must indemnify a Director or officer
against reasonable expenses incurred in connection with the wholly succesful
defense of a proceeding.
The Act specifically provides that, subject to certain limitations, its terms
shall not be deemed exclusive of any other right to indemnification to which a
Director or officer may be entitled under a corporation's Articles of
Incorporation or Bylaws, or any agreement, vote of shareholders or disinterested
Directors, or otherwise. However, indemnification cannot be provided in the
case of 1) breach of the director's duty of loyalty to the corporation or
shareholders; 2) an act or omission not in good faith; 3) an intentional
misconduct; 4) a knowing violation of the law; 5) a transaction from which the
person seeking indemnification derives an improper personal benefit; 6)
liability for certain unlawful distributions; and 7) the person being adjudged
liable to the corporation in a proceeding by or in the right of the corporation.
Indemnification by or in the right of the corporation is limited to reasonable
expenses in connection with the proceeding.
THE ABOVE IS A SUMMARY OF THE ACT WHICH SHOULD BE READ AND REVIEWED CAREFULLY.
Bylaws. Under the Bylaws and Indemnification Agreements, officers, Directors
and employees will be indemnified to the fullest extent permitted by law. Under
the current Iowa law, indemnification is generally not permitted in the
circumstances set forth in the last full paragraph of the section titled "Iowa
Business Corporation Act."
<PAGE>
The key terms of the Bylaw provisions are the following:
a) The Company is reuired to indemnify officers, directors and
employees for expenses and liabilities by reason of the fact that
such person is or was a director, officer or employee of the
Company or while a director, officer or employee of the Company was
serving for another entity at the request or with the approval of the
Company to the fullest extent permitted by law as the law exists or
may thereafter be amended (but only to the extent greater protection
is permitted). The provision does limit indemnification for
proceedings initiated by the indemnitee, except with Company consent,
to enforce the indemnification provision;
b) Mandatory expense advancement is provided upon a promise to repay if
it is later determined that the person was not entitled to
indemnification;
c) The following make determinations as to whether the applicable
standard was met: 1) the board of directors by majority vote of a
quorum consisting of directors not at the time parties to the
proceeding, 2) if a quorum cannot be obtained, a committee duly
designated by the board of directors, in which designation directors
who are parties may participate, consisting solely of two or more
directors not at the time parties to the proceeding, 3) special legal
counsel of 4) the shareholders;
d) Partial indemnification is provided if some but not all liabilities
and expenses are entitled to indemnification;
e) Company consent to settlement is required;
f) An individual may bring suit to enforce the Bylaw provisions if they
are not paid within 60 days after a written claim;
g) The rights under the Bylaws are nonexclusive of other rights to
indemnification;
h) The Company is authorized to set up trusts for payment of
indemnification (the Company does not currently anticipate setting up
such a trust);
i) The Company is authorized to provide insurance (the Company currently
has insurance);
j) The right to indemnification is contractual and cannot be amended
retroactively;
k) Indemnification is provided for suits to enforce the contractual
rights;
l) The Company is provided subrogation rights;
m) The potential indemnitee must provide notice of proceedings;
n) The Company is entitled to participate in any suit or to asusme the
defenses of the indemnitees, with counsel reasonably satisfactory
to the indemnitee. Indemnitee shall haave the right to employ its
own counsel. After the Company assumes defense, fees and expense of
such counsel will be at the expense of the indemnitee unless 1)
authorized by theCompany; 2) the Company has not employed counsel or
cannot in good faith without conflict assume the defense of
indemnitee; or 3) the counsel selected by the Company does not in fact
assume the defense;
0) The Company may, by Board of Directors resolution, provide
indemnification to officers, directors or employees of other entities
not otherwise provided indemnification by the Bylaws. The Company is
reviewing which officers, directors and employees of its affiliates it
may want to provide indemnification protection;
p) Indemnification and advancements are provided to an indemnitee for
serving as a witness; and
q) Directors, officers or employees are provided the protection stated
above for serving employee benefit plans.
Indemnification Agreements. The Indemnification Agreements are Intended to
supplement the indemnification provisions of the Bylaws in order to attract
and retain qualified Directors and officers.
The terms of the Indemnification Agreements closely parallel the Bylaws. The
Indemnification Agreements reuire indemnifications of and advancement of
expenses for directors and officers to the fullest extent allowed by law as now
exist or may be amended, but only to any extent greater protection is provided.
The Indemnification Agreements also set forth a number of procedural and
substantitve matters which presently are not covered or are covered in less
detail in the Bylaws, including the following:
First, each Indemnificatin Agreement requires that, at the time of any Change in
Control, as defined in the Indemnification Agreement, the Company will obtain at
its epxnes and maintain for the duration of the Indemnification Agreement an
<PAGE>
irrevocalbe standby letter of credit in the amount of $1,000,000 or more in
favor of each person covered by an agreement to secure the oblications of the
Company under the Indemnification Agreement. A person covered by an
Indemnification Agreement could draw upon the letter of credit any time after
he or she makes a demand upon the Company for payment of a claim for
indemnification which is not subsequently paid by the Company. Each letter of
credit would provide a person covered by an Inemnification Agreement with the
assurance that, notwithstanding the inability of the Company or unwillingness of
a new Board of directors to pay for indemnification under the Indemnification
Agreement, the person will have a minimum amount of protection from liability.
Second, the Indemnificatin Agreements establish a presumption that a person
covered by an Indemnification Agreement has met the applicable standard of
conduct required for indemnification, and the Company has the burden of proof
(by clear and convincing evidence) to overcome such presumption in reaching
any contrary determination. The terminatin of any claim, issue or matter does
not adversely affect the right to indemnification or create a presumption that
the person did not act in good faith. Reliance on certain information is
deemed to be in good faith and knowledge and actions of others is not imputed
to the indemnitee. The right of a person covered by an Indemnification
Agreement to indemnification under the Indemnification Agreement will be
determined by a forum selected by such persons consisting of either; (i)
disinterested members of the Board of Directors; (ii) independent legal counsel;
or (iii) a panel of three arbtrators. If the Company does not submit the claim
to a selected forum within 30 days after notice thereof or if the selected
forum fails to reach a decision within 30 days, the person covered by an
Indemnification Agreement is automatically deemed to be entitled to
indemnification under the Indemnification Agreement.
Third, the Indemnification Agreement does not terminate until the later of 10
years after the person ceases to serve in a capacity covered under the
Indemnification Agreement or termination of all proceedings in respect to which
the officer or director is granted the right of indemnification.
Fourth, the Indemnification agreement explicitly states that all dismissals,
with or without prejudice, shall be deemed successful defenses if there is no
finding indemnitee did not act in good faith.
Fifth, the Indemnificatin Agreement obligates the Company to use reasonable
efforts to purchase and maintain insurance.
Sixth, the Indemnification Agreement prevents suits by or on behalf of the
Comany against the Indemnitee two years after the person ceases to be a director
or officer or serve for the Company.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits:
Exhibit No. Description
4.1 Pioneer Hi-Bred International, Inc. Savings Plan
4.2 Articles of Incorporation of the Company, as amended, as
presently in effect.
4.3 Bylaws of the Company, as amended, as presently in effect.
4.4 Amended and Restated Rights Agreement dated December 13, 1966
(incorporated by reference to Exhibit 1 to the company's Form
8A/A filed December 17, 1996, file No. 001-11551), as amended
in the Company's Registration Statement on Form 8-A/A-2
(Registration Statement No. 97672184 by reference to Exhibit 1),
filed August 28, 1997, including any amendment or report filed
for purposes of updating such description.
<PAGE>
4.5 Specimen of the Companh's Common Stock
5.1 Opinion of Legal Counsel (relating to legality of securities
being registered).
23.1 Consent of Independent auditors.
23.2 consent of Legal Counsel (included in Exhibits 5.1 hereto).
The Registrant hereby undertakes that the Plan and any amendment thereto will be
submitted to the Internal Revenue Service ("IRS") in a timely manner and all
changes required by the IRS in order to qualify the plan will be made.
Item 9. Undertakings
(a) the undersigned Registrant hereby undertakes;
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration statement.
(i) To include any prospectus required by Section 10(a) (3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-=effective amendment thereof) which, individually or in
the aggregate, reprsent a fundamental change in the information set
forth in the Registration statement.
4.5 (iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (a) (1)
(i) and (a) (1) (ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs in
contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and each filing of an employees benefit plan's pursuant to Section
15(d0 of the Exchange act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
----------
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirement for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Des Moines, State of Iowa on the 14th
day of September, 1998.
PIONEER HI-BRED INTERNATIONAL, INC.
Registrant
By:/s/ Jerry L. Chicoine
Executive Vice President
Chief Operating Officer & Secretary
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title
/s/ Charles S. Johnson Chairman, President,
Charles S. Johnson Chief Executive Officer
and Director
/s/ Jerry L. Chicoine Executive Vice President,
Jerry L. Chicoine Chief Operating Officer
and Director
/s/ Brian G. Hart Vice President
Brian G. Hart and Chief Financial Officer
/s/ Duane A. Suess Corporate Controller
Duane A. Suess
/s/ Thomas N. Urban Director
Thomas N. Urban
/s/ Dr. Owen J. Newlin Director
Dr. Owen J. Newlin
/s/ Nancy Y. Bekavac Director
Nancy Y. Bekavac
/s/ C. Robert Brenton Director
C. Robert Brenton
/s/ Charles O. (Chad) Holliday, Jr. Director
Chad Holliday
/s/ Fred S. Hubbell Director
Fred S. Hubbell
/s/ Luiz Kaufmann Director
Luiz Kaufmann
<PAGE>
/s/ William F. (Bill) Kirk Director
Bill Kirk
/s/ Dr. F. Warren McFarlan Director
Dr. F. Warren McFarlan
/s/ Dr. Virginia Walbot Director
Dr. Virginia Walbot
/s/ H. Scott Wallace Director
H. Scott Wallace
/s/ Fred W. Weitz Director
Fred W. Weitz
/s/ Herman H.F. Wijffels Director
Herman H.F. Wijffels
Pursuant to the requirements of the Securities Act of 1933, the Plan
Administrator (Pioneer Hi-Bred International, Inc. has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Des Moines, State of Iowa, on September 14,
1998.
By (Signature and Title) /s/ Charles S. Johnson
PIONEER HI-BRED INTERNATIONAL, INC.
Plan Administrator
Charles S. Johnson
Chief Executive Officer of
Pioneer Hi-Bred International, Inc.
PIONEER HI-BRED INTERNATIONAL, INC.
SAVINGS PLAN
ARTICLE I
GENERAL
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Sec. 1.1 Name of Plan. The name of the discretionary contribution
profit sharing plan set forth herein is Pioneer Hi-Bred International, Inc.
Savings Plan. It is sometimes herein referred to as the "Plan".
Sec. 1.2 Purpose. The Plan has been established so that eligible
employees may have an additional source of retirement income.
Sec. 1.3 Effective Date. The "Effective Date" of the Plan, the date as
of which the Plan was established, is September 1, 1979.
Sec. 1.4 Company. The "Company" is Pioneer Hi-Bred International,
Inc., an Iowa corporation, and any Successor Employer thereof.
Sec. 1.5 Participating Employers. The Company is a Participating
Employer in the Plan. As of October 1, 1998, the following subsidiaries of
the Company are also Participating Employers:
(a) PHI Insurance Services, Inc.
(b) The Advantage Corporation
(c) PHI Financial Services, Inc.
(d) Pioneer Hi-Bred of Puerto Rico, Inc.
The President of the Company may from time to time take written action adding
additional subsidiaries as Participating Employers effective as of the date
specified in such action or removing Participating Employers from the Plan. Any
such written action shall be deemed to be an amendment of the Plan. Any
Successor Employer to a Participating Employer shall also be a Participating
Employer in the Plan.
Sec. 1.6 Construction and Applicable Law. The Plan is intended to
meet the requirements for qualification under section 401(a) of the Code and the
requirements applicable to qualified cash or deferred arrangements under section
401(k) of the Code. The Plan is also intended to be in full compliance with
applicable requirements of ERISA. The Plan shall be administered and construed
consistent with said intent. It shall also be construed and administered
according to the laws of the State of Iowa to the extent that such laws are not
preempted by the laws of the United States of America. All controversies,
disputes, and claims arising hereunder shall be submitted to the United States
District Court for the Southern District of Iowa, except as otherwise provided
in any trust agreement entered into with a Funding Agency.
Sec. 1.7 Benefits Determined Under Provisions in Effect at
Termination of Employment. Except as may be specifically provided herein to the
contrary, benefits under the Plan attributable to service prior to a
Participant's Termination of Employment shall be determined and paid in
accordance with the provisions of the Plan as in effect as of the date the
Termination of Employment occurred unless he or she becomes an Active
Participant after that date and such active participation causes a contrary
result under the provisions hereof. However, the provisions of this document
shall apply to any such Participant to the extent necessary to maintain the
qualified status of the Plan under Code section 401(a) or to comply with the
requirements of ERISA.
Sec. 1.8 Effective Date of Document. Unless a different date is
specified for some purpose in this document, the provisions of this Plan
document are generally effective as of October 1, 1998. However, any provision
necessary to comply with a requirement of federal legislation or a Treasury
regulation, which requirement has an earlier effective date, shall be effective
retroactively to the date required by the applicable law or regulation.
<PAGE>
ARTICLE II
MISCELLANEOUS DEFINITION
------------------------
Sec. 2.1 Account. "Account" means a Participant's or Beneficiary's
interest in the Fund of any of the types described in Sec. 7.1.
Sec. 2.2 Active Participant. An employee is an "Active Participant"
only while he or she is both a Participant and a Qualified Employee.
Sec. 2.3 Affiliate. "Affiliate" means any trade or business entity
under Common Control with a Participating Employer, or under Common Control
with a Predecessor Employer while it is such.
Sec. 2.4 Beneficiary. "Beneficiary" means the person or persons
designated as such pursuant to the provisions of Article VIII.
Sec. 2.5 Board. The "Board" is the board of directors of the Company,
and includes any executive committee thereof authorized to act for said
board of directors.
Sec. 2.6 Certified Earnings. Commencing February 1, 1997, "Certified
Earnings" of a Participant from a Participating Employer for a Plan Year
means the amount determined by the Participating Employer and reported to
the Company to be the total earnings paid to the Participant by the
Participating Employer during such Plan Year for service as a Qualified
Employee, subject to the following:
(a) Certified Earnings include Before-Tax Contributions to this Plan and
any contributions made by salary reduction to any other plan which
meets the requirements of Code sections 125, 401(k), 402(h)(1)(B), or
403(b), whether or not such contributions are actually excludable
from the Participant's gross income for federal income tax purposes.
Certified Earnings do not include Qualified Non-Elective or Matching
Contributions to this Plan.
b) Extraordinary and non-recurring items (such as lump sum
payments to terminate an employment contract or terminal vacation
pay); relocation payments, mobility premiums, cost of living ("COLA")
payments, relocation bonuses or mortgage interest differential
payments; payments in the nature of reimbursements for expenses (such
as mileage payments for use of personal vehicles and construction
travel allowances); reimbursements for employee or dependent
educational expenses (such as College Aid scholarships or tuition
reimbursements); severance pay; any income derived from use of an
automobile provided by a Participating Employer, from employer-paid
life insurance as described in Code section 79 or from employer-paid
trips by the Participant's spouse; benefits derived from the
Participant's participation in any stock-based compensation program
maintained by any Participating Employer; bonuses, incentives or other
amounts paid after the Participant's Termination of Employment;
payments or contributions to or for the benefit of the employee under
any other deferred compensation, pension, insurance, or other employee
benefit plan; or other similar fringe benefits or items of special
compensation shall not be included in computing Certified Earnings,
except as provided in subsection (a) or to the extent such amounts are
required to be included in determining the regular rate of pay of a
Participant who is a non-exempt employee under the Federal Fair Labor
Standards Act for purposes of computing overtime pay thereunder.
c) Effective for Plan Years commencing after 1996, Certified
Earnings of a Participant for any Plan Year shall not exceed $160,000,
adjusted for each Plan Year to take into account any cost of living
increase provided for that year in accordance with regulations
prescribed by the Secretary of the Treasury. The dollar increase in
effect on January 1 of any calendar year shall apply to Plan Years
beginning in that calendar year. If a Plan Year is shorter than 12
months, the limit under this subsection for that year shall be
multiplied by a fraction, the numerator of which is the number of
months in the short Plan Year and the denominator of which is 12.
Sec. 2.7 Code. "Code" means the Internal Revenue Code of 1986 as from
time to time amended.
Sec. 2.8 Common Control. Effective for Plan Years commencing after
1988, a trade or business entity (whether a corporation, partnership, sole
proprietorship or otherwise) is under "Common Control" with another trade or
business entity (i) if both entities are corporations which are members of a
controlled group of corporations as defined in Code section 414(b), or (ii) if
both entities are trades or businesses (whether or not incorporated) which are
under common control as defined in Code section 414(c), or (iii) if both
entities are members of an affiliated service group as defined in Code section
414(m), or (iv) if both entities are required to be aggregated pursuant to
regulations under Code section 414(o). Service for all entities under Common
Control shall be treated as service for a single employer to the extent required
by the Code; provided, however, that an individual shall not be a Qualified
Employee by reason of this section. In applying the first sentence of this
section for purposes of Article VI, the provisions of subsections (b) and (c) of
section 414 of the Code are deemed to be modified as provided in Code section
415(h).
Sec. 2.9 ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974 as from time to time amended.
Sec. 2.10 Family Member. Family aggregation rules ceased to apply
to this Plan effective January 1, 1997.
Sec. 2.11 Forfeitures. "Forfeitures" means that part of the Fund so
recognized under Sec. 9.2(b).
Sec. 2.12 Fund. "Fund" means the aggregate of assets described in
Sec. 11.1.
Sec. 2.13 Funding Agency. "Funding Agency" is a trustee or trustees
or an insurance company appointed and acting from time to time in accordance
with the provisions of Sec. 11.2 for the purpose of holding, investing, and
disbursing all or a part of the Fund.
Sec. 2.14 Highly Compensated Employee. "Highly Compensated Employee"
for any Plan Year means an individual described as such in Code section 414(q).
(a) Unless otherwise provided in Code section 414(q), commencing January
1, 1997, each employee who meets one of the following requirements is
a "Highly Compensated Employee":
(1) The employee at any time during the current or prior Plan Year
was a more than 5-percent owner as defined in Code section
414(q)(2), or was the spouse, child, parent or grandparent of
such an owner to whom the owner's stock is attributed pursuant
to Code section 318 (regardless of the Compensation of the
owner or family member).
(2) The employee received Compensation from the employer in exces
of $80,000for the prior Plan Year.
(3) The individual is a former employee who had a separation year
prior to the current Plan Year and such individual performed
services for the employer and was a Highly Compensated Employee
for either (i) such separation year, or (ii) any Plan Year
ending on or after the individual's 55th birthday. A
"separation year" is the Plan Year in which the individual
separates from service with the employer. With respect to an
individual who separated from service before January 1, 1987,
the individual will be included as a Highly Compensated
Employee only if the individual was a more than 5-percent owner
or received Compensation in excess of $50,000 during (i) the
employee's separation year (or the year preceding such
separation year), or (ii) any year ending on or after such
individual's 55th birthday (or the last year ending before such
individual's 55th birthday).
(b) The dollar amount specified in paragraph (2) of subsection (a) shall
be indexed for cost of living increases for each calendar year after
1996 as provided in the applicable Treasury regulations. For any Plan
Year, the applicable dollar amount shall be the dollar amount in
effect for the calendar year in which the Plan Year commences.
(c) For purposes of this section, "employer" includes all Participating
Employers and all Affiliates, and "employee" includes Leased
Employees.
(d) For purposes of this section, "Compensation" means the amount defined
as such under Sec. 6.1(f) plus the Before-Tax Contributions to this
Plan and any other elective deferral contributions made by or on
behalf of the employee to any other plan maintained by a
Participating Employer or an Affiliate which are not includible in
the gross income of the employee under Code sections 125, 401(k),
402(h)(1)(B), or 403(b). Commencing January 1, 1998, Compensation
means the amount defined as such under Sec. 6.1(f).
Sec. 2.15 Leased Employee. "Leased Employee" means any person defined
as such by Code section 414(n). In general, a Leased Employee is any person who
is not otherwise an employee of a Participating Employer or an Affiliate
(referred to collectively as the "recipient") and who pursuant to an agreement
between the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and related persons
determined in accordance with Code section 414(n)(6)) on a substantially
full-time basis for a period of at least one year and such services are
performed under primary direction or control by the recipient. For purposes of
the requirements listed in Code section 414(n)(3), any Leased Employee shall be
treated as an employee of the recipient, and contributions or benefits provided
by the leasing organization which are attributable to services performed for the
recipient shall be treated as provided by the recipient. However, if Leased
Employees constitute less than 20% of the Participating Employers' non-highly
compensated work force within the meaning of Code section 414(n)(5)(C)(ii),
those Leased Employees covered by a plan described in Code section 414(n)(5)
shall be disregarded. Notwithstanding the foregoing, no Leased Employee shall be
a Qualified Employee or a Participant in this Plan.
Sec. 2.16 Named Fiduciary. The Company is a "Named Fiduciary" for
purposes of ERISA with authority to control or manage the operation and
administration of the Plan, including control or management of the assets of the
Plan. Other persons are also Named Fiduciaries under ERISA if so provided
thereunder or if so identified by the Company, by action of the Board. Such
other person or persons shall have such authority to control or manage the
operation and administration of the Plan, including control or management of the
assets of the Plan, as may be provided by ERISA or as may be allocated by the
Company, by action of the Board.
Sec. 2.17 Non-Highly Compensated Employee. "Non-Highly Compensated
Employee" means an employee of the Participating Employers who is not a Highly
Compensated Employee.
Sec. 2.18 Normal Retirement Age. "Normal Retirement Age" is age 65.
Sec. 2.19 Participant. A "Participant" is an individual describe
as such in Article IV.
Sec. 2.20 Plan Year. A "Plan Year" is the calendar year.
Sec. 2.21 Predecessor Employer. Any corporation, partnership, firm,
or individual, a substantial part of the assets and employees of which are
acquired by a successor is a "Predecessor Employer" if named in this section,
subject to any conditions and limitations with respect thereto imposed by this
section; provided, however, that any such corporation, partnership, firm, or
individual may be named as a Predecessor Employer only if all of its employees
who at the time of the acquisition become employees of the successor and
Participants hereunder are treated uniformly, the use of service with it does
not produce discrimination in favor of Highly Compensated Employees, and there
is no duplication of benefits for such service. To be considered a Predecessor
Employer, the acquisition of assets and employees of a corporation, partnership,
firm, or individual must be by a Participating Employer, by an Affiliate, or by
another Predecessor Employer. Any other employer shall be a Predecessor Employer
if so required by regulations prescribed by the Secretary of the Treasury. As of
October 1, 1998, there are no Predecessor Employers.
Sec. 2.22 Qualified Employee. "Qualified Employee" means any
employee of a Participating Employer, subject to the following:
(a) An employee is not a Qualified Employee prior to the date as of which
his or her employer becomes a Participating Employer.
(b) A nonresident alien within the meaning of Code section 7701(b)(1)(B)
while not receiving earned income (within the meaning of Code section
911(d)(2)) from a Participating Employer which constitutes income
from sources within the United States (within the meaning of Code
section 861(a)(3)) is not a Qualified Employee.
(c) Except as provided in paragraphs (1) and (2), below, an employee is
not a Qualified Employee unless his or her services are performed
within the United States, or the principal base of operations to
which the employee frequently returns is within the United States.
(1) A Qualified Employee who is transferred by a Participating
Employer to a location outside the United States on a temporary
assignment or as a project employee will continue to be a
Qualified Employee during the period the individual works in
either of those categories.
(2) A Qualified Employee who was transferred by a Participating
Employer to a location outside the United States as an
indefinite transferee prior to 1995 will continue to be a
Qualified Employee until the date the individual becomes
covered by any retirement plan maintained by a Participating
Employer or an Affiliate for employees located outside the
United States.
(d) Eligibility of employees in a collective bargaining unit to
participate in the Plan is subject to negotiations with the
representative of that unit. During any period that an employee is
covered by the provisions of a collective bargaining agreement between
a Participating Employer and such representative, the employee shall
not be considered a Qualified Employee for purposes of this Plan
unless such agreement expressly so provides. For purposes of this
section only, such an agreement shall be deemed to continue after its
formal expiration during collective bargaining negotiations pending
the execution of a new agreement.
(e) An employee shall be deemed to be a Qualified Employee during a period
of absence from active service which does not result from a
Termination of Employment, provided he or she is a Qualified Employee
at the commencement of such period of absence.
(f) Notwithstanding anything herein to the contrary, an individual is not
a Qualified Employee during any period during which the individual is
classified by a Participating Employer as an independent contractor or
is classified by a Participating Employer as any other status in which
the person is not treated as a common law employee of a Participating
Employer for purposes of withholding of taxes, regardless of the
correct legal status of the individual. The previous sentence applies
to all periods of such service of an individual who is subsequently
reclassified as an employee, whether the reclassification is
retroactive or prospective.
Sec. 2.23 Successor Employer. A "Successor Employer" is any entity
that succeeds to the business of a Participating Employer through merger,
consolidation, acquisition of all or substantially all of its assets, or
any other means and which elects before or within a reasonable time after
such succession, by appropriate action evidenced in writing, to continue
the Plan; provided, however, that in the case of such succession with
respect to any Participating Employer other than the Company, the acquiring
entity shall be a Successor Employer only if consent thereto is granted by
the Company, by action of the Board or a duly authorized officer.
Sec. 2.24 Top-Heavy Plan. "Top-Heavy Plan" is defined in Sec.
14.2(a).
Sec. 2.25 Valuation Date. "Valuation Date" means the date on which the
Fund and Accounts are valued as provided in Article VII. Each of the
following is a Valuation Date:
(a) Effective January 1, 1998, each business day on which the New York
Stock Exchange is open for business. Prior to 1998, the Valuation
Dates were the last day of each calendar month.
(b) Such other day, as designated by the Company in written notice to the
Funding Agency, as the Company may consider necessary or advisable to
provide for the orderly and equitable administration of the Plan.
<PAGE>
ARTICLE III
SERVICE PROVISIONS
------------------
Sec. 3.1 Employment Commencement Date. "Employment Commencement
Date" means the date on which an employee first performs an Hour of Service for
a Participating Employer (whether before or after the Participating Employer
becomes such), an Affiliate, or a Predecessor Employer. The date on which an
employee first performs an Hour of Service after a 1-Year Break in Service is
also an "Employment Commencement Date".
Sec. 3.2 Termination of Employment. The "Termination of Employment"
of an employee for purposes of the Plan shall be deemed to occur upon
resignation, discharge, retirement, death, failure to return to active work at
the end of an authorized leave of absence or the authorized extension or
extensions thereof, failure to return to work when duly called following a
temporary layoff, or upon the happening of any other event or circumstance
which, under the policy of a Participating Employer, Affiliate, or Predecessor
Employer as in effect from time to time, results in the termination of the
employer-employee relationship; provided, however, that a Termination of
Employment shall not be deemed to occur upon a transfer between any combination
of Participating Employers, Affiliates, and Predecessor Employers.
(a) Solely for purposes of this Plan, a Participant's Termination of
Employment shall be deemed to occur on the date the Participant has
been disabled for six months as defined in Sec. 9.1(b) (if an actual
Termination of Employment has not occurred prior to that date) for
purposes of determining the Participant's entitlement to
distributions under Sec. 9.1 and Article X, but Sec. 10.1(h) will not
apply to a Participant described in this subsection.
(b) Notwithstanding the foregoing, a Termination of Employment shall be
deemed not to have occurred for purposes of entitling a Participant
to distributions from his or her Before-Tax Account or Qualified
Non-Elective Contribution Account if the Participant has not incurred
a "separation from service" or "disability" as defined in applicable
regulations, except as provided in Sec. 10.12.
Sec. 3.3 Hours of Service. "Hours of Service" are determined
according to the following subsections with respect to each applicable
computation period. The Company may round up the number of Hours of Service at
the end of each computation period or more frequently as long as a uniform
practice is followed with respect to all employees determined by the Company to
be similarly situated for compensation, payroll, and recordkeeping purposes.
(a) Hours of Service are computed only with respect to service with
Participating Employers (for service both before and after the
Participating Employer becomes such), Affiliates, and Predecessor
Employers and are aggregated for service with all such employers.
(b) For any portion of a computation period during which a record of
hours is maintained for an employee, Hours of Service shall be
credited as follows:
(1) Each hour for which the employee is paid, or entitled to
payment, for the performance of duties for his or her employer
during the applicable computation period is an Hour of Service.
(2) Each hour for which the employee is paid, or entitled to
payment, by his or her employer 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, is an Hour of
Service. 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 of Service shall not be credited under this paragraph
with respect to payments under a plan maintained solely for the
purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws or with
respect to a payment which solely reimburses the individual for
medical or medically related expenses incurred by the employee.
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the employer is an
Hour of Service. Such Hours of Service shall be credited to the
computation period or periods to which the award or agreement
for back pay pertains, rather than to the computation period in
which the award, agreement, or payment is made. Crediting of
Hours of Service for back pay awarded or agreed to with respect
to periods described in paragraph (2) shall be subject to the
limitations set forth therein.
(4) Notwithstanding the preceding provisions of this subsection,
with respect to Hours of Service to be credited to an employee
in connection with a period of no more than 31 days, as
determined by the Company, which extends beyond one computation
period, all such hours may be credited to the second
computation period. Crediting of Hours of Service under this
paragraph shall be done by the Company consistently with
respect to all employees within the same job classifications,
reasonably defined.
(5) Hours under this subsection shall be calculated and credited
pursuant to section 2530.200b-2 of the Department of Labor
Regulations, which are incorporated herein by this reference.
(6) The Company may use any records to determine Hours of Service
which it considers an accurate reflection of the actual facts.
(c) For any portion of a computation period during which an employee is
within a classification for which a record of hours for the
performance of duties is not maintained, the employee shall be
credited with 190 Hours of Service for each month for which he or she
would otherwise be credited with at least one Hour of Service under
subsection (b).
(d) Nothing in this section shall be construed as denying an employee
credit for an Hour of Service if credit is required by any federal
law other than ERISA. The nature and extent of such credit shall be
determined under such other law.
(e) In no event shall duplicate credit as an Hour of Service be given for
the same hour.
Sec. 3.4 Eligibility Computation Period. An employee's first
Eligibility Computation Period is the 12-consecutive-month period beginning on
his or her Employment Commencement Date. The second Eligibility Computation
Period is the Plan Year commencing in said 12-consecutive-month period. Each
subsequent Plan Year prior to the end of the Plan Year in which the employee has
a 1-Year Break In Service is an Eligibility Computation Period. If subsequent to
a 1-Year Break In Service the employee has another Employment Commencement Date,
Eligibility Computation Periods for the period beginning on such date shall be
computed as though such date were the employee's first Employment Commencement
Date.
Sec. 3.5 Year of Eligibility Service. A "Year of Eligibility Service"
is an Eligibility Computation Period in which an employee has at least 1000
Hours of Service. The Year of Eligibility Service will be credited to the
employee on the date during the Eligibility Computation Period on which the
employee has been credited with 1000 Hours of Service.
Sec. 3.6 Year of Vesting Service. A "Year of Vesting Service" is a
Plan Year in which an employee has at least 1000 Hours of Service, subject to
the following:
(a) Any Plan Year prior to the Plan Year in which the employee's
Participating Employer first maintained the Plan or a predecessor
plan (or, if earlier, the earliest Plan Year in which any trade or
business entity at that time under Common Control with that
Participating Employer first maintained the Plan or a predecessor
plan) shall be disregarded.
(b) If the Participant has had a 1-Year Break In Service prior to the
first day of the first Plan Year beginning in 1985, or a period of
five consecutive 1-Year Breaks In Service ending on or after that
date, for purposes of determining the vested percentage of the
Participant's Accounts attributable to employer contributions which
accrued before such break, any Years of Vesting Service after such
break in service shall not be taken into account.
(c) If a nonvested Participant has had a period of five consecutive
1-Year Breaks In Service, for purposes of determining the vested
percentage of the Participant's Accounts (if any) attributable to
employer contributions made on his or her behalf after such period,
Years of Vesting Service prior to such period shall not be taken into
account if the number of consecutive 1-Year Breaks In Service within
such period equals or exceeds the aggregate number of Years of
Vesting Service before such period, subject to the following:
(1) If any Years of Vesting Service are not required to be taken
into account by reason of a break-in-service period to which
this subsection applies, or if any service was disregarded
under the provisions of the Plan previously in effect by reason
of a break-in-service period of any length, such Years of
Vesting Service shall not be taken into account in applying
this subsection to a subsequent break-in-service period or in
determining the Participant's Years of Vesting Service.
(2) For purposes of this subsection, a "nonvested Participant" is a
Participant who has no vested right to an accrued benefit under
the Plan derived from employer contributions (including
Before-Tax Contributions).
(d) Notwithstanding the first sentence of this section, commencing
January 1, 1998, a Participant's Years of Vesting Service shall not
be less than the number of years determined as follows:
(1) The Participant will be credited with one Year of Vesting
Service as of the June 1st of the Plan Year in which the
Participant is first credited with a Year of Eligibility
Service.
(2) Commencing with the Plan Year following the Plan Year in which
the Participant was first credited with a Year of Eligibility
Service, the Participant will be credited with one Year of
Vesting Service on each June 1st, provided that he or she is a
Qualified Employee on that June 1st.
(3) Years of Vesting Service credited under this subsection (d)
shall be subject to the rules in subsections (a), (b) and (c)
for disregarding service.
Sec. 3.7 1-Year Break In Service. "1-Year Break In Service" means
a Plan Year in which the employee has 500 or fewer Hours of Service. The 1-Year
Break In Service shall be recognized as such on the last day of such Plan Year.
(a) Notwithstanding the provisions of Sec. 3.3, for purposes of
determining whether a 1-Year Break In Service has occurred with
respect to a Plan Year beginning after 1984, an individual who is
absent from work for maternity or paternity reasons, or because the
individual is receiving workers' compensation benefits, shall receive
credit for the Hours of Service which would otherwise have been
credited to such individual but for such absence, or in any case in
which such hours cannot be determined, 8 Hours of Service per day of
such absence; provided, however, that the total number of Hours of
Service recognized under this subsection shall not exceed 501 hours.
The Hours of Service credited under this subsection shall be credited
in the Plan Year in which the absence begins if the crediting is
necessary to prevent a 1-Year Break In Service in that Plan Year or,
in all other cases, in the following Plan Year.
(b) For purposes of subsection (a), an absence from work for maternity or
paternity reasons means an absence that started during a Plan Year
beginning after 1984 (i) by reason of the pregnancy of the individual,
(ii) by reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
(c) For purposes of subsection (a), an absence from work for workers'
compensation means (i) the individual is receiving payments from a
State Workers' Compensation program, and (ii) meets the requirements
that enable him or her to receive such payments.
Sec. 3.8 Periods of Military Service. Notwithstanding any provision
of this Plan to the contrary, effective December 12, 1994, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code section 414(u).
Sec. 3.9 Credit for Service with Optimum. Commencing January 1, 1998,
if an individual was employed by Optimum Quality Grains, L.L.C. immediately
prior to the date he or she becomes an employee of a Participating Employer, and
Optimum Quality Grains, L.L.C. was a 50% or more direct or indirect subsidiary
of the Company immediately prior to that date, the individual will be credited
with his or her prior continuous service with Optimum as if such service had
been service for a Participating Employer for purposes of determining the
individual's Years of Eligibility Service and Years of Vesting Service under
this Plan.
<PAGE>
ARTICLE IV
PLAN PARTICIPATION
------------------
Sec. 4.1 Entry Date. Commencing May 1, 1998, "Entry Date" means
January 1st and the first day of each payroll period beginning during each Plan
Year.
Sec. 4.2 Eligibility for Participation. Eligibility to
participate in the Plan shall be determined as follows:
(a) An employee of a Participating Employer shall become a Participant in
the Plan on the earliest Entry Date (on or after the date the Plan
becomes effective with respect to his or her Participating Employer)
on which all of the following requirements are met:
(1) The employee is a Qualified Employee.
(2) The employee has been credited with one Year of Eligibility
Service.
(b) If a former Participant is reemployed and meets the requirements of
subsection (a) on the date of rehire, the employee will become a
Participant again on that date.
(c) If a former employee who was not previously a Participant is
reemployed as a Qualified Employee, if the employee meets the
requirements of subsection (a) on the date of rehire, and if the
employee would have met the requirements of subsection (a) on the
immediately preceding Entry Date if he or she had been a Qualified
Employee on that Entry Date, the employee shall become a Participant
on the date of rehire.
(d) If an employee of a Participating Employer or an Affiliate who is
neither a Participant nor a Qualified Employee is transferred to a
position in which he or she is a Qualified Employee, and if the
employee would have met the eligibility requirements of subsection
(a) on the Entry Date preceding the transfer had he or she been a
Qualified Employee on that Entry Date, the employee shall become a
Participant on the date of transfer.
Sec. 4.3 Duration of Participation. A Participant shall continue
to be such until the later of:
(a) The Participant's Termination of Employment.
(b) The date all benefits, if any, to which the Participant is entitled
hereunder have been distributed from the Fund.
Sec. 4.4 No Guarantee of Employment. Participation in the Plan
does not constitute a guarantee or contract of employment with the Participating
Employers. Such participation shall in no way interfere with any rights the
Participating Employers would have in the absence of such participation to
determine the duration of an employee's employment.
<PAGE>
ARTICLE V
CONTRIBUTIONS
-------------
Sec. 5.1 Before-Tax Contributions. Each Active Participant may
elect to have his or her Participating Employer make Before-Tax Contributions on
his or her behalf, subject to the following:
(a) Commencing February 1, 1997, the Participant may elect to have his or
her current earnings reduced by any whole percent the Participant may
designate, but not exceeding 15 percent of Certified Earnings. This
election may only be made pursuant to a written salary reduction
agreement or an alternative means authorized by the Company. The
agreement shall be in such form and executed subject to such rules as
the Company may prescribe. Each election shall apply only to earnings
which become payable after the election is filed with the Company.
Each election shall continue in effect until a new election is made
pursuant to this section.
(b) Each Participating Employer will make a Before-Tax Contribution with
respect to each Participant in its employ who elects to have earnings
for that period reduced pursuant to this section. The amount of the
contribution will be equal to the amount by which the Participant's
earnings were reduced.
(c) Commencing May 1, 1998, the salary reduction agreement may be
effective as of the first day of the pay period occurring as soon as
administratively feasible after the date on which the employee has
satisfied the eligibility requirements of Sec. 4.2 and elected to make
Before-Tax Contributions, or the first day of any subsequent pay
period, provided that the employee has submitted the agreement to the
Company or its designated agent prior to the payroll cut-off date
established by the Company for that pay period.
(d) An Active Participant may amend his or her salary reduction agreement
to increase or decrease the contribution rate, or to discontinue or
recommence contributions, effective as of the first day of any pay
period by filing an approved amendment form with the Company or its
designated agent (or by making the amendment using an alternative
means authorized by the Company) prior to the payroll cut-off date
established by the Company for that pay period.
(e) All Before-Tax Contributions by a Participant shall cease when the
Participant ceases to be a Qualified Employee.
(f) Effective January 1, 1998, Before-Tax Contributions by a Participant
for any calendar year may not exceed $10,000, and shall cease at the
point that limit is reached during the year. The limit in the previous
sentence shall be adjusted for any cost of living increases provided
for any calendar year in accordance with regulations issued by the
Secretary of the Treasury.
(g) Notwithstanding the foregoing provisions, if the Participant has
received a hardship distribution from this Plan in accordance with
Sec. 9.4(a) or from any other plan maintained by a Participating
Employer or an Affiliate, no Before-Tax Contributions shall be made to
this Plan on behalf of such Participant for 12 months following the
date on which the hardship distribution was made. Furthermore, the
limit under subsection (f) for the calendar year following the year in
which the hardship withdrawal is made shall be reduced by the amount
of Before-Tax Contributions (and any elective contributions to any
other plan maintained by the employer) for the calendar year in which
the hardship withdrawal was made.
(h) If a Participant's Before-Tax Contributions are suspended under
subsection (g), the Participant may elect to recommence Before-Tax
Contributions effective as of the first day of the pay period
immediately following the end of the 12-month suspension period by
filing a new election with the Company prior to the payroll cut-off
date established by the Company for that pay period.
Sec. 5.2 Matching Contributions. The Participating Employers will
match each Participant's Before-Tax Contributions as follows:
(a) Commencing February 1, 1997, for each pay period ending in a Plan
Year, the Participant's Participating Employer will make a Matching
Contribution equal to (i) 50% of the total Before-Tax Contributions
made by the Participant for the current pay period and all pay
periods ending during the Plan Year prior to the current pay period,
minus (ii) the total Matching Contributions made for the Participant
for pay periods ending during the Plan Year prior to the current pay
period, subject to the following:
(1) The total of the Matching Contributions for the current pay
period and all pay periods ending during the Plan Year prior to
the current pay period may not exceed 3% of the Participant's
total Certified Earnings for such pay periods.
(2) The total of the Matching Contributions for a Participant for
all pay periods ending in a Plan Year shall not exceed
$3,000.00. Matching Contributions during a Plan Year shall
cease when this limit is reached.
(b) No Matching Contribution will be made with respect to any amount by
which the Participant's Before-Tax Contributions must be reduced
pursuant to Sec. 5.4, Sec. 5.5 or Sec. 5.7. Any such Matching
Contributions which are made before the amount of the reduction is
determined shall be forfeited and shall be applied as a credit
against future contributions from the Participating Employers.
(c) Any Forfeitures attributable to a Participating Employer for a Plan
Year (adjusted for any allocable investment earnings or losses on the
Plan's Forfeiture Account) which are not used to reinstate Accounts
pursuant to Sec. 9.2(b) shall be credited against the Participating
Employer's Matching Contributions for that Plan Year.
Sec. 5.3 Qualified Non-Elective Contributions. For each Plan Year the
Company shall determine whether it will make a Qualified Non-Elective
Contribution to the Fund for such Plan Year and, if it is determined that a
contribution will be made, the amount of the contribution or the formula by
which the amount of the contribution will be calculated. The contribution of
each Participating Employer other than the Company for a Plan Year shall be an
amount which is the same percent of the Certified Earnings of its employees
eligible to share in the contribution for that year as the contribution of the
Company for the Plan Year bears to the total Certified Earnings of its employees
eligible to share in the contribution for that year. Qualified Non-Elective
Contributions shall be paid to the Funding Agency designated by the Company.
(a) To be eligible to share in the Qualified Non-Elective Contributions of
a Participating Employer for a Plan Year, a Participant (i) must have
been an Active Participant at some time during the Plan Year, (ii)
must be employed by the Participating Employer or an Affiliate on the
last day of the Plan Year, and (iii) must have completed at least
1,000 Hours of Service during the Plan Year.
(b) The Company may designate that part or all of the Qualified
Non-Elective Contribution of the Participating Employers under this
section for a Plan Year shall be used to satisfy the requirements of
Sec. 5.4(c) and/or Sec. 5.6(c) for that Plan Year. The Company shall
designate whether the Qualified Non-Elective Contribution will be
allocated among all those Participants who satisfy the requirements of
subsection (a), or only among the Non-Highly Compensated Employees who
satisfy those requirements. A Qualified Non-Elective Contribution
shall be allocated in proportion to the Certified Earnings of those
eligible Participants who are employed by the Participating Employers.
Notwithstanding any provisions of the Plan to the contrary, any
Qualified Non-Elective Contributions shall be subject to the
withdrawal restrictions of Sec. 9.4, and shall be 100% vested and
nonforfeitable when made.
Sec. 5.4 Adjustment of Contributions Required by Code Section 401k).
If necessary to satisfy the requirements of Code section 401(k), Before-Tax
Contributions shall be adjusted in accordance with the following:
(a) Each Plan Year, the "deferral percentage" will be calculated for each
Active Participant. Each Participant's deferral percentage is
calculated by dividing the amount referred to in paragraph (1) by the
amount referred to in paragraph (2):
(1) The total Before-Tax Contributions (including Excess Deferrals of
Highly Compensated Employees distributed under Sec. 5.5 but
excluding Excess Deferrals of Non-Highly Compensated Employees
that arise solely from contributions made under plans of the
Participating Employers or Affiliates), if any, allocated to the
Participant's Accounts with respect to the Plan Year. The Company
may also elect to include all or part of the Qualified
Non-Elective Contributions to be allocated to the Participant's
Accounts with respect to that Plan Year, provided that the
provisions of Treasury Regulationss. 1.401(k)-1(b) are satisfied.
(2) The Participant's Compensation with respect to the Plan Year.
For purposes of this section, a Participant's "Compensation"
for the Plan Year means compensation determined according to a
definition selected by the Company for that year which
satisfies the requirements of Code section 414(s). The same
definition of Compensation shall be used for all Participants
for a particular Plan Year, but different definitions may be
used for different Plan Years. The Company shall also determine
whether Compensation includes or does not include the
Before-Tax Contributions to this Plan and any contributions
made pursuant to a salary reduction agreement by or on behalf
of the Participant to any other plan which meets the
requirements of Code sections 125, 401(k), 402(h)(1)(B), or
403(b), and whether or not it includes amounts paid prior to
the date an individual became a Participant. Compensation shall
be subject to the limit provided under Sec. 2.6(c).
(b) Each Plan Year, the average deferral percentage for Active
Participants who are Highly Compensated Employees and the average
deferral percentage for Active Participants who are Non-Highly
Compensated Employees will be calculated. A separate average deferral
percentage shall be calculated for Active Participants in a collective
bargaining unit who are required to be disaggregated pursuant to
Treasury Regulationss. 1.401(k)-1(g)(11) (ii)(B). Such Participants
shall be disregarded in calculating the average deferral percentage
for Active Participants who are not in such collective bargaining
units. In each case, the average is the average of the percentages
calculated under subsection (a) for each of the employees in the
particular group. The deferral percentage for each Participant and the
average deferral percentage for a particular group of employees shall
be calculated to the nearest one-hundredth of one percent.
(c) If the requirements of either paragraph (1) or (2) are satisfied, then
no further action is needed under this section:
(1) The average deferral percentage for Participants who are Highly
Compensated Employees is not more than 1.25 times the average
deferral percentage for Participants who are Non-Highly
Compensated Employees.
(2) The excess of the average deferral percentage for Participants
who are Highly Compensated Employees over the average deferral
percentage for Participants who are Non-Highly Compensated
Employees is not more than two percentage points, and the
average deferral percentage for such Highly Compensated
Employees is not more than 2 times the average deferral
percentage for such Non-Highly Compensated Employees.
The requirements of this subsection (c) shall be applied separately
with respect to Participants in a collective bargaining unit who are
required to be disaggregated pursuant to Treasury Regulation ss.
1.401(k)-1(g)(11)(ii)(B).
(d) Commencing January 1, 1997, if neither of the requirements of
subsection (c) is satisfied, then the Before-Tax Contributions with
respect to Highly Compensated Employees shall be reduced, beginning
with the contributions representing the greatest dollar amount per
Participant, to the extent necessary to make the aggregate dollar
amount of such reductions equal to the amount by which the Before-Tax
Contributions (prior to such reduction) had exceeded the requirements
of subsection (c)(1) or (c)(2), whichever is less. Such reduction
shall be made in accordance with the methodology prescribed at the
time of the reduction by the Internal Revenue Service under Notice
97-2 or other applicable Notices or Treasury Regulations.
(e) At any time during the Plan Year, the Company may make an estimate of
the amount of Before-Tax Contributions by Highly Compensated Employees
that will be permitted under this section for the year and may reduce
the percent specified in Sec. 5.1(a) for such Participants to the
extent the Company determines in its sole discretion to be necessary
to satisfy at least one of the requirements in subsection (c).
(f) If Before-Tax Contributions with respect to a Highly Compensated
Employee are reduced pursuant to subsection (d), the Excess Before-Tax
Contributions shall be distributed, subject to the following:
(1) For purposes of this subsection, "Excess Before-Tax
Contributions" mean the amount by which Before-Tax
Contributions for Highly Compensated Employees have been
reduced under subsection (d).
(2) Excess Before-Tax Contributions (adjusted for income or losses
allocable thereto as specified in paragraph (3), if any) shall
be distributed to Participants on whose behalf such excess
contributions were made for the Plan Year no later than the
last day of the following Plan Year. Furthermore, the Company
shall attempt to distribute such amount by the 15th day of the
third month following the Plan Year for which the excess
contributions were made to avoid the imposition on the
Participating Employers of an excise tax under Code section
4979.
(3) Income or losses allocable to Excess Before-Tax Contributions
for the Plan Year shall be determined by multiplying the amount
of income or loss for the Plan Year which is allocable to the
Participant's Before-Tax Contributions (and to other amounts
credited to the Participant that the Company elects to include
under subsection (a)(1) by a fraction. The numerator of the
fraction is the Participant's Excess Before-Tax Contributions
for the Plan Year. The denominator of the fraction is the total
balance in the Participant's Accounts attributable to
Before-Tax Contributions (and to other amounts the Company has
elected to include under subsection (a)(1)) on the first day of
the Plan Year, plus Before-Tax Contributions for the Plan Year
and any other amounts the Company has elected to include under
subsection (a)(1) for the Plan Year.
(4) The amount of Excess Before-Tax Contributions and income or
losses allocable thereto which would otherwise be distributed
pursuant to this subsection shall be reduced, in accordance
with regulations, by the amount of Excess Deferrals and income
or losses allocable thereto previously distributed to the
Participant pursuant to Sec. 5.5 for the calendar year ending
with or within the Plan Year.
(g) The deferral percentage for any Participant who is a Highly
Compensated Employee for the Plan Year, and who is eligible to
participate in two or more plans with cash or deferred arrangements
described in Code section 401(k) to which any Participating Employer
or Affiliate contributes, shall be determined as if all employer
contributions were made under a single arrangement unless mandatorily
disaggregated pursuant to regulations under Code section 401(k). This
subsection shall be applied by treating all cash or deferred
arrangements with Plan Years ending within the same calendar year as a
single arrangement.
(h) If two or more plans which include cash or deferred arrangements are
considered as one plan for purposes of Code section 401(a)(4) or Code
section 410(b), the cash or deferred arrangements shall be treated as
one for the purposes of applying the provisions of this section unless
mandatorily disaggregated pursuant to regulations under Code section
401(k).
(i) If the entire Account balance of a Highly Compensated Employee has
been distributed during the Plan Year in which an excess arose, the
distribution shall be deemed to have been a corrective distribution of
the excess and income attributable thereto to the extent that a
corrective distribution would otherwise have been required under
subsection (f) of this section, Sec. 5.5 or Sec. 5.6(f).
(j) A corrective distribution of excess contributions under subsection (f)
of this section, Excess Aggregate Contributions under Sec. 5.6(f), or
Excess Deferrals under Sec. 5.5 may be made without regard to any
notice or Participant or spousal consent required under Article VIII
or X.
(k) In the event of a complete termination of the Plan during the Plan
Year in which an excess arose, any corrective distribution under
subsection (f) of this section or Sec. 5.6(f) shall be made as soon as
administratively feasible after the termination, but in no event later
than 12 months after the date of termination.
Sec. 5.5 Distribution of Excess Deferrals. Notwithstanding any
other provisions of the Plan, Excess Deferrals for a calendar year and income or
losses allocable thereto shall be distributed no later than the following April
15 to Participants who claim such Excess Deferrals, subject to the following:
(a) For purposes of this section, "Excess Deferrals" means the amount of
Before-Tax Contributions for a calendar year that the Participant
claims pursuant to the procedure set forth in subsection (b) because
the total amount deferred for the calendar year exceeds $10,000 for
1998 (indexed for inflation for subsequent calendar years) or such
other limit imposed on the Participant for that year under Code
section 402(g).
(b) The Participant's written claim, specifying the amount of the
Participant's Excess Deferral for any calendar year, shall be
submitted to the Company no later than the March 1 following such
calendar year. The claim shall include the Participant's written
statement that if such amounts are not distributed, such Excess
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code section 401(k), 403(b), or 408(k),
exceed the limit imposed on the Participant by Code section 402(g) for
the year in which the deferral occurred. A Participant shall be deemed
to have submitted such a claim to the extent the Participant has
Excess Deferrals for the calendar year taking into account only
contributions under this Plan and any other plan maintained by a
Participating Employer or an Affiliate.
(c) Excess Deferrals distributed to a Participant with respect to a
calendar year shall be adjusted to include income or losses allocable
thereto using the same method specified for excess Before-Tax
Contributions under Sec. 5.4(f)(3).
(d) The amount of Excess Deferrals and income allocable thereto which
would otherwise be distributed pursuant to this section shall be
reduced, in accordance with applicable regulations, by the amount of
excess Before-Tax Contributions and income allocable thereto
previously distributed to the Participant pursuant to Sec. 5.4 for the
Plan Year beginning with or within such calendar year, and by the
amount of any deferrals properly distributed as excess annual
additions under Sec. 6.1.
Sec. 5.6 Adjustment of Contributions Required by Code Section
401(m). After the provisions of Sec. 5.4 and Sec. 5.5 have been satisfied, the
requirements set forth in this section must also be met. If necessary to
satisfy the requirements of Code section 401(m), Matching Contributions shall be
adjusted in accordance with the following:
(a) Each Plan Year, the "contribution percentage" will be calculated for
each Active Participant (other than an Active Participant who is in a
collective bargaining unit required to be disaggregated pursuant to
Treasury Regulation ss. 1.401(m)-1(b)(3)(ii)). Each Participant's
contribution percentage is calculated by dividing the amount referred
to in paragraph (1) by the amount referred to in paragraph (2).
(1) The total Matching Contributions under Sec. 5.2, if any,
allocated to the Participant's Accounts with respect to the
Plan Year. The Company may also elect to include all or part of
the Before-Tax Contributions and Qualified Non-Elective
Contributions to be allocated to the Participant's Accounts
with respect to that Plan Year, provided that the requirements
of Treasury Regulation ss.1.401(m)-1(b) are satisfied and
provided that the requirements of Sec. 5.4 are met before such
contributions are used under this section and continue to be
met after the exclusion for purposes of Sec. 5.4 of those
contributions that are used to satisfy the requirements of this
section. However, any Matching Contributions that are
forfeited, either to correct excess contributions under
subsection (f) of this section, or because the contributions to
which they relate are Excess Before-Tax Contributions under
Sec. 5.4, Excess Deferrals under Sec. 5.5 or excess
contributions under subsection (f) of this section, shall be
disregarded.
(2) The Participant's Compensation with respect to the Plan Year
For purposes of this section, "Compensation" has the same
meaning as provided in Sec.
5.4(a)(2).
(b) Each Plan Year, the average contribution percentage of Active
Participants who are Highly Compensated Employees and the average
contribution percentage for Active Participants who are Non-Highly
Compensated Employees will be calculated. In each case, the average is
the average of the percentages calculated under subsection (a) for
each of the employees in the particular group. In calculating average
contribution percentages, Participants employed in a collective
bargaining unit required to be disaggregated pursuant to Treasury
Regulation ss. 1.401(m)-1(f)(14) shall be disregarded. The
contribution percentage for each Participant and the average
contribution percentage for a particular group of employees shall be
calculated to the nearest one-hundredth of one percent.
(c) If the requirements of either paragraph (1) or (2) are satisfied, then
no further action is needed under this section:
(1) The average contribution percentage for Participants who are
Highly Compensated Employees is not more than 1.25 times the
average contribution percentage for Participants who are
Non-Highly Compensated Employees.
(2) The excess of the average contribution percentage for
Participants who are Highly Compensated Employees over the
average contribution percentage for Participants who are
Non-Highly Compensated Employees is not more than two
percentage points, and the average contribution percentage for
such Highly Compensated Employees is not more than 2 times the
average contribution percentage for such Non-Highly Compensated
Employees.
(d) Commencing January 1, 1997, if neither of the requirements of
subsection (c) is satisfied, then the Matching Contributions with
respect to Highly Compensated Employees shall be reduced, beginning
with the contributions representing the greatest dollar amount per
Participant, to the extent necessary to make the aggregate dollar
amount of such reductions equal to the amount by which the Matching
Contributions (prior to such reduction) had exceeded the requirements
of subsection (c)(1) or (c)(2), whichever is less. Such reduction
shall be made in accordance with the methodology prescribed at the
time of the reduction by the Internal Revenue Service under Notice
97-2 or other applicable Notices or Treasury Regulations.
(e) At any time during the Plan Year, the Company may make an estimate of
the amount of Matching Contributions on behalf of Highly Compensated
Employees that will be permitted under this section for the year. If
the Company determines in its sole discretion that reductions are
necessary to assure that at least one of the requirements in
subsection (c) are satisfied, the Company may take written action
amending Sec. 5.2 to reduce or eliminate Matching Contributions for
Highly Compensated Employees with respect to Certified Earnings to be
paid from the date such action is adopted to the end of the Plan Year.
(f) If contributions with respect to a Highly Compensated Employee are
reduced pursuant to subsection (d), the Excess Aggregate Contributions
shall be treated as follows:
(1) For purposes of this subsection, "Excess Aggregate
Contributions" mean the amount by which Matching Contributions
must be reduced under subsection (d).
(2) Excess Matching Contributions (adjusted for income or losses
allocable thereto) shall be forfeited (if otherwise forfeitable
under the provisions of Sec. 9.2 if the Participant were to
terminate employment on the last day of the Plan Year for which
the contribution was made). Excess Matching Contributions which
are non-forfeitable (adjusted for income or losses allocable
thereto) shall be distributed to Participants on whose behalf
such excess contributions were made for the Plan Year no later
than the last day of the following Plan Year. Furthermore, the
Company shall attempt to distribute such amount by the 15th day
of the third month following the Plan Year for which the excess
contributions were made to avoid the imposition on the
Participating Employers of an excise tax under Code section
4979.
(3) Income or losses allocable to Excess Aggregate Contributions
shall be determined in the same manner specified for Excess
Before-Tax Contributions under Sec. 5.4(f)(3).
(4) Amounts forfeited by Highly Compensated Employees pursuant to
paragraph (2) shall be applied to reduce future Matching
Contributions as provided in Sec.
5.2.
(g) The contribution percentage for any Participant who is a Highly
Compensated Employee for the Plan Year, and who is eligible to make
nondeductible employee contributions or to receive matching
contributions under two or more plans described in Code section 401(a)
that are maintained by the Participating Employers or any Affiliate,
shall be determined as if all such contributions were made under a
single arrangement unless mandatorily disaggregated pursuant to
regulations under Code section 401(m).
(h) If two or more plans maintained by the Participating Employers or
Affiliates are treated as one plan for purposes of satisfying the
eligibility requirements of Code section 410(b), those plans must be
treated as one plan for purposes of applying the provisions of this
section unless mandatorily disaggregated pursuant to regulations under
Code section 401(m).
(i) Notwithstanding the foregoing, if neither subparagraph (c)(1) of this
section nor Sec. 5.4(c)(1) was satisfied, the requirements set forth
in Sec. 5.7 must also be satisfied.
Sec. 5.7 Multiple Use of the Alternative Limitations. If neither
Sec. 5.4(c)(1) nor Sec. 5.6(c)(1) was satisfied, the following additional
requirements must also be satisfied:
(a) The sum of the following two amounts must not exceed the greater of
the limit determined under subsection (b) or the limit determined
under subsection (c):
(1) The average deferral percentage for Highly Compensated Employees
(determined under Sec. 5.4(b) following any adjustments required
by Sec. 5.4).
(2) The average contribution percentage for Highly Compensated
Employees (determined under Sec. 5.6(b) following any
adjustments required by Sec.
5.6).
(b) The limit under this subsection is the sum of the following amounts:
(1) 1.25 multiplied by the greater of:
(A) The average deferral percentage for Non-Highly Compensated
Employees (determined under Sec. 5.4(b) following any
adjustments required by Sec. 5.4), or
(B) The average contribution percentage for Non-Highly
Compensated Employees (determined under Sec. 5.6(b)
following any adjustments required by Sec. 5.6).
(2) Two percentage points plus the lesser of:
(A) The average deferral percentage for Non-Highly Compensated
Employees, or
(B) The average contribution percentage for Non-Highly
Compensated Employees.
Notwithstanding the foregoing, the amount under this paragraph
(2) cannot exceed the lesser of (A) or (B) above, multiplied by
two, or such other limit as may be prescribed by Treasury
Regulations.
(c) The limit under this subsection (c) is the amount that would be
determined under subsection (b) by:
(1) Substituting "lesser" for "greater" in paragraph (1) of
subsection (b), and
(2) Substituting "greater" for "lesser" each place that word
appears in paragraph (2) of subsection (b).
(d) If the amount determined under subsection (a) exceeds the greater of
the limits determined under subsections (b) and (c), an additional
amount must be treated as Excess Before-Tax Contributions and
distributed under Sec. 5.4. In addition, any Matching Contributions
attributable to those Before-Tax Contributions shall be treated as
forfeited and shall be applied as a credit against future
contributions from the Participating Employers. Appropriate
adjustments under this subsection must be made pursuant to Treasury
regulations until the sum of the average deferral percentage and
average contribution percentage for Highly Compensated Employees is
equal to the greater of the limits determined under subsections (b)
and (c).
(e) For Plan Years commencing after 1996, this section shall be applied in
accordance with the provisions of IRS Notice 97-2 or other applicable
Notices or Treasury Regulations.
Sec. 5.8 Time of Contributions. Before-Tax Contributions, Matching
Contributions, and Qualified Non-Elective Contributions by a Participating
Employer for a Plan Year shall be paid to the Funding Agency no later than the
time (including extensions thereof) prescribed by law for filing the employer's
federal income tax return for the tax year in which the Plan Year ends.
Before-Tax Contributions and any other contributions taken into account under
Sec. 5.4(a)(1) shall be paid to the Funding Agency no later than 12 months
following the end of the Plan Year, if earlier. In addition, Before-Tax
Contributions or Matching Contributions shall be paid to the Funding Agency by
any earlier date that may be specified in Treasury or Department of Labor
regulations.
Sec. 5.9 Allocations. Contributions under Sections 5.1, 5.2, and
5.3 shall be allocated to the Accounts of Participants as follows:
(a) Before-Tax Contributions with respect to each Participant electing
deferrals pursuant to Sec. 5.1 for a Plan Year shall be allocated to
the Before-Tax Account of each such Participant as of the last day of
the Plan Year.
(b) Matching Contributions for a Plan Year, and the Forfeitures credited
against such Contributions, shall be allocated to the Matching Account
of each eligible Participant as of the last day of the Plan Year.
(c) Qualified Non-Elective Contributions for a Plan Year shall be
allocated to the Qualified Non-Elective Contribution Account of each
eligible Participant as of the last day of the Plan Year.
(d) Allocations shall be reflected in Accounts as provided in Article VII.
However, the Funding Agency shall treat contributions as though they
had been allocated to the Accounts as of the Valuation Date coinciding
with or following the date they were deposited with the Funding Agency
for purposes of allocating investment gains and losses pursuant to
Sec. 7.2 and Sec. 7.3.
(e) Before-Tax Contributions and Matching Contributions for a Plan Year
which are deposited with the Funding Agency after the end of that Plan
Year but prior to the deadline specified in Sec. 5.8 shall also be
allocated to the appropriate Before-Tax Account or Matching Account as
of the last day of that Plan Year except to the extent the Company
determines that it is necessary to treat some or all of such
contributions as being contributions for the Plan Year in which they
are deposited with the Funding Agency in order to satisfy the
requirements of Sec. 5.4 or Sec. 5.6.
Sec. 5.10 Limitations on Contributions. In no event shall the
amount of a Participating Employer's contribution under this Article for any
Plan Year exceed the lesser of:
(a) The maximum amount allowable as a deduction in computing its taxable
income for that Plan Year for federal income tax purposes.
(b) The aggregate amount of the contributions by such Participating
Employer that may be allocated to Accounts of Participants under the
provisions of Article VI.
<PAGE>
ARTICLE VI
LIMITATION ON ALLOCATIONS
-------------------------
Sec. 6.1 Limitation on Allocations. Notwithstanding any provisions of
the Plan to the contrary, allocations to Participants under the Plan shall not
exceed the maximum amount permitted under Code section 415. For purposes of the
preceding sentence, the following rules shall apply to Plan Years commencing
after 1986 unless otherwise provided in Code section 415:
(a) The Annual Additions with respect to a Participant for any Plan Year
shall not exceed the lesser of:
(1) $30,000, adjusted for each Plan Year commencing on or after
January 1, 1995 to reflect cost of living increases for that
Plan Year published by the Secretary of the Treasury.
(2) 25% of the Compensation of such Participant for such Plan Year.
(b) If a Participant is also a participant in one or more other defined
contribution plans maintained by a Participating Employer or an
Affiliate, and if the amount of employer contributions and forfeitures
otherwise allocated to the Participant for a Plan Year must be reduced
to comply with the limitations under Code section 415, such
allocations under this Plan and each of such other plans shall be
reduced pro rata in the sequence specified in subsection (c), and pro
rata within each category within that sequence, to the extent
necessary to comply with said limitations, except that reductions to
the extent necessary shall be made in allocations under profit sharing
plans and stock bonus plans before any reductions are made under money
purchase plans.
(c) If for any Plan Year the limitation described in subsection (a) would
otherwise be exceeded by contributions to this Plan with respect to
any Participant, the Participant's Annual Additions shall be adjusted
in the following sequence, but only to the extent necessary to reduce
Annual Additions to the level permitted in subsection (a):
(1) The Participant's after-tax voluntary employee contributions
for the Plan Year, if any, shall be refunded to the Participant
during the Plan Year or as soon as reasonably possible
following the end of the Plan Year.
(2) The Participant's Before-Tax Contributions for the Plan Year,
if any, shall be reduced, and that amount shall be refunded to
the Participant.
(3) If, after the adjustments in paragraphs (1) and (2) there is an
excess amount with respect to a Participant for a Plan Year,
such excess amount shall be held unallocated in a suspense
account. The suspense account will be applied to reduce future
employer contributions for all Participants in the current Plan
Year, the next Plan Year, and in each succeeding Plan Year, if
necessary. The suspense account will participate in the
allocation of the investment gains and losses of the Fund and
the value of such account will be considered in valuing other
Accounts under the Plan.
(4) Any amounts refunded under paragraphs (1) or (2) shall be
disregarded for purposes of applying the limits under Sec. 5.4,
Sec. 5.5 and Sec. 5.6.
(d) If the Participant is also a participant in one or more defined
benefit plans maintained by a Participating Employer or an Affiliate,
the sum of the Participant's defined benefit plan fraction and defined
contribution plan fraction, determined according to Code section
415(e), for any Plan Year may not exceed 1.0. If the sum of a
Participant's defined benefit fraction and defined contribution
fraction would otherwise exceed 1.0 for any Plan Year, the benefits
provided under the defined benefit plan or plans shall be reduced to
the extent necessary to reduce the sum of the fractions to 1.0. This
subsection (d) ceases to apply commencing January 1, 2000.
(e) For purposes of this section, "Annual Additions" means the sum of the
following amounts allocated to a Participant for a Plan Year under
this Plan and all other defined contribution plans maintained by a
Participating Employer or an Affiliate in which he or she
participates:
(1) Employer contributions, including Before-Tax Contributions made
under this Plan. Excess Before-Tax Contributions, and Excess
Aggregate Contributions which are distributed under the
provisions of Article V are included in Annual Additions, but
Excess Deferrals which are distributed under Sec. 5.5 are not
included in Annual Additions.
(2) Forfeitures, if any.
(3) Voluntary non-deductible contributions, if any.
(4) Amounts attributable to medical benefits as described in Code
sections 415(1)(2) and 419A(d)(2).
An Annual Addition with respect to a Participant's Accounts shall be
deemed credited thereto with respect to a Plan Year if it is
allocated to the Participant's Accounts under the terms of the Plan
as of any date within such Plan Year.
(f) For purposes of this section, "Compensation" means an employee's
earned income, wages, salaries, fees for professional services and
other amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the course of
employment with the Participating Employers and Affiliates to the
extent that the amounts are includible in gross income (including, but
not limited to, commissions, compensation for services on the basis of
a percentage of profits, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan
described in Treasury Regulationss. 1.62-2(c)), subject to the
following:
(1) Compensation excludes any employer contributions to a plan of
deferred compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, any distributions from a plan of deferred
compensation, and any other amounts which receive special tax
benefits. However, any amounts received by an employee pursuant
to an unfunded non-qualified plan of deferred compensation may
be considered as Compensation in the year such amounts are
includible in the employee's gross income. Notwithstanding the
foregoing, for Plan Years commencing on or after January 1,
1998, Compensation includes the Before-Tax Contributions to
this Plan and any other elective deferrals which are not
includible in the gross income of the employee under Code
sections 125, 401(k), 402(h)(1)(B), 403(b) or 457.
(2) Compensation excludes amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) becomes transferable, is no longer subject to a
substantial risk of forfeiture, or becomes taxable pursuant to
an election under Code section 83(b).
<PAGE>
ARTICLE VII
INDIVIDUAL ACCOUNTS
-------------------
Sec. 7.1 Accounts for Participants. The following Accounts may be
established under the Plan for a Participant:
(a) A Before-Tax Account and Matching Account shall be established for
each Participant who makes or receives contributions allocable to
such an Account.
(b) A Qualified Non-Elective Account shall be established for each
Participant who receives a Qualified Non-Elective Contribution under
Sec. 5.3.
(c) A Rollover Account shall be established for each Participant who
makes a Rollover Contribution, as provided by Sec. 7.5.
(d) A Voluntary After-Tax Account shall be maintained for each
Participant who elected to make Voluntary After-Tax Contributions
prior to 1988. A Voluntary Deductible Account shall be maintained for
each Participant who elected to make voluntary deductible
contributions under the provisions of the Plan previously in effect.
More than one of any of the above types of Accounts may be established if
required by the Plan or if considered advisable by the Company in the
administration of the Plan. The Company may also cause the Funding Agency to
establish a Forfeiture Account for the Plan (which may be divided into multiple
subaccounts) to hold amounts which have become Forfeitures under Sec. 9.2(b),
and investment earnings and losses allocable to such amounts, until they are
applied as provided in Sec. 5.2(c). Except as expressly provided herein to the
contrary, the Fund shall be held and invested on a commingled basis, Accounts
shall be for bookkeeping purposes only, and the establishment of Accounts shall
not require any segregation of Fund assets.
Sec. 7.2 Valuation Procedure. As of each Valuation Date, the value
of each Account shall be adjusted to reflect the effect of distributions,
transfers, withdrawals, income, realized and unrealized profits and losses,
contributions, and all other transactions with respect to the Account since the
next preceding Valuation Date, as follows:
(a) The value of each Account determined in accordance with this section
as of the preceding Valuation Date (and adjusted as provided in
subsection (c) below) shall be adjusted to reflect any investment
gains, losses or expenses credited to or charged against the Account
by the Funding Agency pursuant to Sec. 7.3.
(b) There shall be added to the adjusted value of each Account the amount
of any contributions made for that Account pursuant to Article V
during the period subsequent to the preceding Valuation Date and
ending on the current Valuation Date.
(c) From the value of each Account determined as of the next preceding
Valuation Date, there shall be deducted the amount of all
distributions and withdrawals, if any, made from the Account since
the preceding Valuation Date. There shall also be deducted any
non-vested portion of a Matching Account which has become a
Forfeiture since the preceding Valuation Date.
(d) The Plan's Forfeiture Account shall be adjusted as of each Valuation
Date to reflect any investment earnings and losses on the investments
held for that Account, transfers into that Account of amounts which
have become Forfeitures under Sec. 9.2(b), and withdrawals from that
Account to reinstate Accounts pursuant to Sec. 9.2(b) or to be
applied as credits against Matching Contributions pursuant to Sec.
5.2(d).
Sec. 7.3 Investment of Accounts. Each Participant shall direct the
investment of his or her Accounts, subject to the following:
(a) The Company shall determine the class or classes of investments which
will be made available as investment options under this Plan from time
to time. The Company may in its sole discretion add additional
options, merge options, or delete existing options at any time. If one
or more existing investment options are to be replaced by one or more
new options, the transfers from old to new options shall be made
pursuant to such rules and procedures as the Company establishes for
this purpose, and the resulting investments shall continue to be held
for the Participant until the Participant files a new investment
direction.
(b) All investment directions shall be filed in writing on a prescribed
form (or by using an alternative method authorized by the Company) and
shall be filed with the Company, or with such agent or agents as may
be designated from time to time by the Company for this purpose. Each
investment direction shall remain in effect until a new investment
direction is made by the Participant. An initial investment direction
shall be made by the Participant when an Account is first established
for the Participant. Thereafter, a Participant may change the
investment of the existing Account balances and future contributions
at such intervals as may be authorized by the Company or the
designated agent. All investment directions must be in such increments
for any investment option as are specified by the Company or its
designated agent. Each investment direction must be received by the
Company, or by an agent appointed by the Company for this purpose,
prior to the deadline established from time to time by the Company or
its agent for the date it is to be effective (which deadline can vary
depending on the type of election or the manner in which the direction
is made). Each such investment direction will be implemented within a
reasonable period of time, as determined by the Company or its
designated agent and by the Funding Agency, after the direction is
received by the Funding Agency. Notwithstanding the foregoing, the
Company may establish rules delaying the effective date of investment
elections, or establishing blackout periods during which investment
elections or other transactions will not be processed, as the Company
determines is advisable for the administration of the Plan.
(c) All investment directions by a Participant shall be complete as to the
terms of the investment transaction. An investment direction shall
provide for both the investment of existing Account balances and the
investment of future contributions on behalf of the Participant. The
Company or its agent may allow Participants to make separate
investment directions for separate Accounts or groups of Accounts. No
Funding Agency shall have any obligation whatsoever to invest or
manage any assets held in a Participant's Accounts, its sole duty
being to follow within a reasonable period of time all proper
directions of the Participant which are made in accordance with the
Plan and which are not contrary to ERISA. If a Participant fails to
provide directions as to the investment of any cash held in his or her
Accounts, the Company may in its sole discretion designate an
investment vehicle or vehicles to be used to hold such funds.
(d) All earnings and losses on the investments held for each of the
Participant's Accounts shall be credited directly to such Account, and
the Account shall be charged with all expenses attributable to such
investments. If assets of an Account are commingled for investment
with assets of other Accounts, all such Accounts shall share
proportionately in the investment experience of and expenses
chargeable to the commingled fund according to a method which the
Funding Agency determines in its sole discretion to be reasonable. The
Funding Agency may also charge to each Account such portion of the
general expenses of the Fund as the Funding Agency determines in its
sole discretion to be reasonable.
(e) Following the death of the Participant, each of his or her
Beneficiaries shall have the right to direct the investment of the
portion of the Participant's Accounts held on behalf of the
Beneficiary. An "alternate payee" pursuant to the terms of a qualified
domestic relations order shall have the right to direct the investment
of the Accounts held on behalf of the alternate payee after the order
is determined to be qualified, unless the order specifically provides
to the contrary. In each such case, the directions shall be subject to
the same terms and conditions as applied to the Participant.
(f) Except as provided in Sections 7.6 and 7.7, the Funding Agency shall
at all times retain title to all assets held for Accounts, and shall
have the voting power with respect to all stock or other securities
held for Accounts, unless that voting power has been delegated in
writing to an investment manager or other entity or individual.
(g) All investment directions shall be in accordance with such rules and
regulations as the Company or the Funding Agency may establish from
time to time for this purpose.
(h) The Plan's Forfeiture Account shall be invested in such investments as
the Company may designate from time to time for this purposes.
(i) Each Account shall be valued by the Funding Agency at fair market
value as of each Valuation Date and at such other times as may be
necessary for the proper administration of the Plan. If fair market
value of an asset is not available, it shall be deemed to be fair
value as determined in good faith by the Company or other Named
Fiduciary assigned such function, or if such asset is held in trust
and the trust agreement so provides, as determined in good faith by
the trustee. If any portion of the fund is invested in a contract
issued by an insurance company, of a type sometimes referred to as a
"guaranteed income contract", under which the insurance company pays a
guaranteed minimum rate of interest for a stated period of time, and
if no event has occurred that will result in repayment of principal at
a discounted value, the fair market value of the contract shall be
deemed to be its book value.
(j) Notwithstanding anything herein to the contrary, if the Plan receives
a recovery on an investment (including, but not limited to, a recovery
from the Federal Deposit Insurance Corporation, a state insurance
guaranty association or the Securities Industry Protection
Corporation, or a recovery under federal or state securities laws)
which recovery is earmarked by the paying entity as attributable to a
specific Participant or Beneficiary, the amount recovered shall be
allocated only to the Account(s) of such Participant or Beneficiary,
and the Accounts of other Participants and Beneficiaries shall not
share in the recovery. The Company shall make appropriate adjustments
in allocations of investment earnings and losses and Account values to
reflect the provisions of this subsection.
Sec. 7.4 Participant Statements. Each Plan Year the Company ma
cause each Participant to be provided with a statement of Account balances as of
the end of the immediately preceding Plan Year.
Sec. 7.5 Rollover Accounts. At the request of a Qualified Employee
and with the consent of the Company, the Plan may accept a transfer to the Fund
of an amount that constitutes a Rollover Contribution. The Company shall grant
such consent in its sole discretion and only if it is certain that the amount to
be transferred will constitute a proper Rollover Contribution. Notwithstanding
any provisions of the Plan to the contrary, the following shall apply with
respect to a Rollover Contribution:
(a) A Rollover Account shall be established for each employee who makes a
Rollover Contribution. From the date the assets of the Rollover
Contribution are transferred to the Fund through the first Valuation
Date following such transfer, the Rollover Account shall be valued at
the fair market value of said assets on the date of such transfer.
(b) No employer or employee contributions or Forfeitures shall ever be
added to a Rollover Account. In the event of the employee's
Termination of Employment entitling him or her to a benefit under
Sec. 9.2, the vested percentage in the Rollover Account shall be
100%.
(c) The employee shall be treated the same as a Participant hereunder
from the time of the transfer, but shall not actually be a
Participant and shall not be eligible to receive an allocation of
employer contributions or Forfeitures or to make employee
contributions until he or she has satisfied the requirements of
Article IV.
(d) Notwithstanding anything herein to the contrary, if the Company
subsequently determines that an amount received pursuant to this
section does not qualify as a Rollover Contribution, such amount
(adjusted for investment earnings or losses allocated to such amount
after it was received by the Plan) shall be returned as soon as
reasonably possible to the individual or entity that transferred the
amount to the Plan (or to the Participant if the transferor refuses
to accept the return).
(e) For purposes of this section, "Rollover Contribution" means a
contribution of an amount which may be rolled over to this Plan
pursuant to Code section 401(a)(31), 402(c), 403(a)(4), 408(d)(3), or
any other provision of the Code which may permit rollovers to this
Plan from time to time.
Sec. 7.6 Voting of Company Stock. Before each annual or special
meeting of the stockholders of the Company, the Company shall cause to be sent
to each Participant a copy of the proxy solicitation material therefor, together
with a form requesting confidential instructions to the Funding Agency on how to
vote the shares of Company stock held in the Company Stock Fund. Instructions
received from Participants by the Funding Agency shall be held in the strictest
confidence and shall not be divulged or released to any person, including
officers or employees of the Company. To be effective, such instructions must be
received by the Funding Agency at least the number of days prior to the
stockholder's meeting specified in the materials sent to the Participants. The
Funding Agency shall vote all shares of Company stock held in the Company Stock
Fund in proportion to "votes" cast by Participants, as follows:
(a) The Funding Agency shall determine the aggregate number of votes
which may be cast with respect to all shares of Company stock held in
the Company Stock Fund.
(b) The Company shall determine the Participant's aggregate interest in
the Company Stock Fund as a percentage of the interests of all
Participants in said Fund.
(c) The number of "votes" the Participant may cast shall be determined by
applying the percentage in (b) to the aggregate number of shares in
(a).
(d) The Funding Agency shall determine the number of "votes" for,
against, and abstaining with respect to each proposition and shall
vote, in person or by proxy, shares of Company stock held in the
Company Stock Fund equal to the "votes" received in the manner
directed in those "votes".
(e) Notwithstanding anything in this section to the contrary, if a matter
to be voted upon is one with respect to which shares of a particular
class must vote separately, shares of that class held by the Plan
shall be voted in accordance with this section applied as if the Plan
held only those shares.
The determinations in subsections (a), (b), and (c) shall be as of a Valuation
Date designated by the Company which is not more than 90 days prior to the
meeting. It is intended that shares held for the benefit of Participants who do
not give voting instructions with respect to any matter will not be voted by the
Funding Agency on that matter. The Company may require verification of the
Funding Agency's compliance with voting instructions received from Participants
by any independent auditor selected by the Company. The rights extended to
Participants by this section shall also apply to the Beneficiaries of deceased
Participants. For purposes of this Sec. 7.6, each Participant or Beneficiary who
gives voting instructions shall be deemed a "named fiduciary" (within the
meaning of ERISA) with respect to such instructions. For purposes of this Sec.
7.6 and Sec. 7.7, the "Company Stock Fund" is any investment fund established
and made available to Participants under Sec. 7.3 which is primarily invested in
shares of stock of the Company.
Sec. 7.7 Tender or Exchange Offers Regarding Company Stock. As soon
as practicable after the commencement of a tender or exchange offer (an "Offer")
for shares of Company stock, the Company shall use its best efforts to cause
each Participant whose Accounts has allocated to them any shares of Company
stock to be advised in writing of the terms of the Offer, and to be provided
with forms by which the Participant may instruct the Funding Agency, or revoke
such instruction, to tender or exchange shares of Company stock, to the extent
permitted under the terms of such Offer. The Funding Agency shall follow the
directions of each Participant. In advising Participants of the terms of the
Offer, the Company may include statements from the Board setting forth its
position with respect to the Offer. The giving of instructions by a Participant
to the Funding Agency to tender or exchange shares and the tender or exchange
thereof shall not be deemed a withdrawal or suspension from the Plan or a
forfeiture of any portion of such Participant's interest in the Plan solely by
reason of the giving of such instructions and the Funding Agency's compliance
therewith.
(a) The number of shares as to which a Participant may provide
instructions shall be determined as follows:
(1) The Funding Agency shall determine the aggregate number of
shares held in the Company Stock Fund.
(2) The Company shall determine the Participant's aggregate
interest in the Company Stock Fund as a percentage of the
interests of all Participants in said Fund.
(3) The Participant may provide instructions with respect to a
number of shares of Company stock determined by applying the
percentage in (2) to the aggregate number of shares in (1). If
the Participant directs tender or exchange of the shares for
which he or she may provide instructions, the Funding Agency
shall follow that instruction. The Funding Agency shall not
tender or exchange the shares for which a Participant may
provide instructions if the Participant (i) directs against
their tender or exchange or (ii) gives no direction.
(b) The determination of the number of shares as to which a Participant
may provide instructions shall be as of the close of business on the
day preceding the date on which the Offer is commenced or such earlier
date as shall be designated by the Company as the Company, in its sole
discretion, deems appropriate for reasons of administrative
convenience. Any securities received by the Funding Agency as a result
of a tender or exchange of shares of Company stock shall be held, and
any cash so received shall be invested in short-term investments
pending any reinvestment by the Funding Agency, as it may deem
appropriate, consistent with the purposes of the Plan. The rights
extended to Participants by this section shall also apply to the
Beneficiaries of deceased Participants.
(c) If a tender or exchange offer is limited so that all of the shares
that the Funding Agency has been directed to tender or exchange cannot
be sold or exchanged, the shares that each Participant directed be
tendered or exchanged shall be deemed to have been sold or exchanged
in the same ratio that the number of shares actually sold or exchanged
bears to the total number of shares that the Funding Agency was
directed to tender or exchange.
(d) For purposes of this Sec. 7.7, each Participant or Beneficiary who is
entitled to give such instructions shall be deemed a "named fiduciary"
(within the meaning of ERISA) with respect to such instructions.
<PAGE>
ARTICLE VIII
DESIGNATION OF BENEFICIARY
--------------------------
Sec. 8.1 Persons Eligible to Designate. Any Participant may designate
a Beneficiary to receive any amount payable from the Fund as a result of the
Participant's death, provided that the Beneficiary survives the Participant. The
Beneficiary may be one or more persons, natural or otherwise. By way of
illustration, but not by way of limitation, the Beneficiary may be an
individual, trustee, executor, or administrator. The Beneficiary with respect to
one Account may be different from the Beneficiary with respect to another
Account. A Participant may also change or revoke a designation previously made,
without the consent of any Beneficiary named therein.
Sec. 8.2 Special Requirements for Married Participants.
Notwithstanding the provisions of Sec. 8.1, if a Participant is married at the
time of his or her death, the Beneficiary shall be the Participant's spouse
unless the spouse has consented in writing to the designation of a different
Beneficiary, the spouse's consent acknowledges the effect of such designation,
and the spouse's consent is witnessed by a representative of the Plan or a
notary public. Such consent shall be deemed to have been obtained if it is
established to the satisfaction of the Company that such consent cannot be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as may be prescribed by federal regulations.
Any consent by a spouse shall be irrevocable. Any designation of a Beneficiary
which has received spousal consent may be changed (other than by being revoked)
without spousal consent only if the consent by the spouse expressly permits
subsequent designations by the Participant without any requirement for further
consent by the spouse. Any such consent shall be valid only with respect to the
spouse who signed the consent, or in the case of a deemed consent, the
designated spouse. The provisions of this section shall apply only to
Participants who have at least one Hour of Service on or after August 23, 1984.
Sec. 8.3 Form and Method of Designation. Any designation or a
revocation of a prior designation of Beneficiary shall be in writing on a form
acceptable to the Company and shall be filed with the Company. The Company and
all other parties involved in making payment to a Beneficiary may rely on the
latest Beneficiary designation on file with the Company at the time of payment
or may make payment pursuant to Sec. 8.4 if an effective designation is not on
file, shall be fully protected in doing so, and shall have no liability
whatsoever to any person making claim for such payment under a subsequently
filed designation of Beneficiary or for any other reason.
Sec. 8.4 No Effective Designation. If there is not on file with
the Company an effective designation of Beneficiary by a deceased Participant,
the Beneficiary shall be the person or persons surviving the Participant in the
first of the following classes in which there is a survivor, share and share
alike:
(a) The Participant's spouse.
(b) The Participant's children, except that if any of the Participant's
children predecease the Participant but leave issue surviving the
Participant, such issue shall take by right of representation the
share their parent would have taken if living.
(c) The Participant's parents.
(d) The Participant's brothers and sisters.
(e) The Participant's estate.
Determination of the identity of the Beneficiary in each case shall be made by
the Company.
Sec. 8.5 Successor Beneficiary. If a Beneficiary who survives the
Participant subsequently dies before receiving all payments to which the
Beneficiary was entitled, the successor Beneficiary, determined in accordance
with the provisions of this section, shall be entitled to the balance of any
remaining payments due. A Beneficiary who is not the surviving spouse of the
Participant may not designate a successor Beneficiary. A Beneficiary who is the
surviving spouse may designate a successor Beneficiary only if the Participant
specifically authorized such designations on the Participant's Beneficiary
designation form. If a Beneficiary is permitted to designate a successor
Beneficiary, each such designation shall be made according to the same rules
(other than Sec. 8.2) applicable to designations by Participants. If a
Beneficiary is not permitted to designate a successor Beneficiary, or is
permitted to do so but fails to make such a designation, the balance of any
payments remaining due will be payable to a contingent Beneficiary if the
Participant's Beneficiary designation so specifies, and otherwise to the estate
of the deceased Beneficiary.
<PAGE>
ARTICLE IX
BENEFIT REQUIREMENTS
--------------------
Sec. 9.1 Benefit on Retirement, Disability or Change in Control.
If a Participant's Termination of Employment occurs (for any reason other than
death) under any of the following circumstances, the Participant shall be 100%
vested and shall be entitled to a benefit equal to the value of all of his or
her Accounts:
(a) The Participant has reached age 55.
(b) The Participant's Termination of Employment has occurred due to a
bodily injury or disease which the Company determines, based on
competent medical evidence, makes the Participant unfit to perform
the normal duties of his or her position with a Participating
Employer and causes the Participant to be eligible to receive
benefits under a long-term disability plan of a Participating
Employer or Social Security disability benefits.
(c) The Participant has an Involuntary Termination of Employment within
three years after the date a Change in Control occurs. For purposes
of this subsection:
(1) The term "Change in Control" means (i) the acquisition, whether
directly, indirectly, beneficially (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended
(the "1934 Act")), or of record, of securities of the Company
representing 25% or more in number of the total of a) the
number of shares of common stock then outstanding, b) the
number of shares of common stock issuable upon conversion
(whether or not then convertible) or otherwise of Class B
Common Stock, and c) the number of shares of common stock
issuable upon conversion (whether or not then convertible) or
otherwise constituting the common stock equivalent of any other
class or series of capital stock which votes for or in the
election of directors (hereinafter, "Total Shares") by any
"person" (within the meaning of Sections 13(d) and 14(d)(2) of
the 1934 Act), including any corporation or group of associated
persons acting in concert, other than (I) the Company and/or
(II) any employee pension benefit plan (within the meaning of
Section 3(2) of ERISA) of the Company or any of its
subsidiaries, including a trust established pursuant to any
such plan, or (ii) the nomination and election of 25% or more
of the Company's Board of Directors without recommendation of
such Board. The ownership of record of 25% or more of the Total
Shares of the Company by a person engaged in the business of
acting as nominee for unrelated beneficial owners shall not of
itself be deemed to constitute a Change in Control.
(2) The term "Involuntary Termination of Employment" means (i) the
Termination of Employment of a Participant by the Company or a
subsidiary other than a Termination for Cause, or (ii) in the
case of a Participant who is employed by a subsidiary of the
Company, either (I) the sale of a substantial portion of the
assets of the subsidiary within the meaning of Code section
280G, or (II) the acquisition by an unrelated third party of
ownership of more than 50% of the then outstanding stock of the
subsidiary. "Termination for Cause" means the Termination of
Employment of a Participant as a direct result of an act or
acts of dishonesty constituting a felony under the laws of the
United States or the State of Iowa and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of any Participating Employer. An act or acts of
dishonesty constituting the felony are established either by
(i) the specific admission of the Participant, or (ii) a final
nonappealable judgment of a court of competent jurisdiction.
The benefit shall be paid at the times and in the manner determined under
Article X.
Sec. 9.2 Other Termination of Employment. If a Participant's
Termination of Employment occurs (for any reason other than death) under
circumstances such that the Participant is not entitled to a benefit under Sec.
9.1, the Participant shall be entitled to a benefit equal to the value of all of
his or her Accounts other than any Matching Account and also a benefit equal to
the vested percentage of the value of the Participant's Matching Account,
subject, however, to the following:
(a) The vested percentage shall depend upon the number of the
Participant's Years of Vesting Service at the time of the Termination
of Employment, as follows:
Vesting Schedule
Years of Vesting Service Vested Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
Notwithstanding the foregoing, if a Participant's Termination of
Employment occurred as of December 31, 1997 and the Participant was
employed by Optimum Quality Grains, L.L.C. as of January 1, 1998, the
Participant's vested percentage shall be 100% regardless of his or
her Years of Vesting Service. A Participant described in the previous
sentence may file an election with the Company (in such manner as may
be prescribed by the Company from time to time) at any time prior to
his or her termination of employment with Optimum to have his or her
Accounts in the Plan transferred to the Optimum Quality Grains,
L.L.C. Retirement and Savings Plan. Such transfer shall be made as
soon as administratively feasible after the election is received by
the Company or its designated agent and the Company or its agent has
determined in its sole discretion that such plan-to-plan transfer
will not jeopardize the qualified status of this Plan under Code
section 401(a).
(b) The disposition of the portion of a Participant's Matching Account
that is not vested shall be as provided below:
(1) The portion of the Participant's Matching Account that is not
vested shall become a Forfeiture as of the earlier of the
following dates:
(A) The date the Participant incurs his or her fifth
consecutive 1-Year Break In Service.
(B) The date that the vested portion of all of the
Participant's Accounts has been distributed to the
Participant. If the Participant was 0% vested in a
particular Account, that Account will be deemed for
purposes of this subparagraph (B) to have been distributed
when the Participant's Termination of Employment occurred.
The Participant shall lose all claim to the amount forfeited on
the date as of which the Forfeiture occurs. The Forfeiture
shall be transferred to the Plan's Forfeiture Account for
application as provided in paragraph (4) below and in Sec.
5.2(c).
(2) If a former Participant whose Account was forfeited under
paragraph (1) is subsequently reemployed and completes a Year
of Vesting Service before incurring five consecutive 1-Year
Breaks In Service, a separate Matching Account shall be
reinstated for the Participant as of the last Valuation Date of
the Plan Year in which such Year of Vesting Service is
completed. The Participant shall be entitled to such Account in
accordance with the provisions of this Article IX upon any
subsequent Termination of Employment, subject to the provisions
of paragraph (3). The total value of such Account as of such
Valuation Date shall be equal to the value of the Forfeiture on
the date as of which the Forfeiture occurred. The reinstated
Account shall be funded as provided in paragraph (4).
(3) If a Participant referred to in paragraph (2) who received a
distribution from a Matching Account as a result of a previous
Termination of Employment is not 100% vested in the reinstated
Matching Account upon a subsequent Termination of Employment,
the benefit to which the Participant is entitled therefrom
shall be determined as follows:
(A) To the value of such reinstated Account there shall be
added the amount of the benefit from the Matching Account
which the Participant received as a result of the prior
Termination of Employment.
(B) The applicable vested percentage from the vesting schedule
shall be applied to such sum.
(C) From the result obtained in (B), there shall be subtracted
the amount added to the value of the reinstated Account
under (A).
(4) The amount required to reinstate an Account pursuant to
paragraph (2) as of the last Valuation Date of a Plan Year
shall be provided from the following sources in the priority
indicated:
(A) Amounts forfeited under this subsection (b).
(B) Employer contributions for the Plan Year.
(C) Net income or gain of the Fund not previously allocated to
other Accounts.
(5) If Forfeitures are to be applied as a credit against future
contributions and a Forfeiture would exceed the amount
remaining due from the Participating Employers for the Plan
Year, the Forfeiture shall instead occur on the first day of
the following Plan Year.
(6) This subsection (b) shall not apply to any Forfeiture Account
which became a Forfeiture pursuant to the provisions of the
Plan in effect prior to the adoption of this version of this
subsection. Any such Forfeiture Account shall be disposed of
pursuant to such prior Plan provisions.
(c) The benefit under this section shall be paid at the times and in the
manner determined under Article X.
Sec. 9.3 Death. If a Participant's Termination of Employment is the
result of death, his or her Beneficiary shall be entitled to a benefit equal to
the value of all of the Participant's Accounts. Such benefit shall be paid at
the times and in the manner determined under Article X. If a Participant's death
occurs after his or her Termination of Employment, distribution of the vested
balance of the Participant's Accounts shall be made to the Beneficiary in
accordance with the provisions of Article X, and any non-vested portion of the
Participant's Matching Account shall be treated as becoming a Forfeiture under
Sec. 9.2(b) as of the date of the Participant's death.
Sec. 9.4 Withdrawals Before Termination of Employment.
A Participant may request a cash withdrawal from his or her Accounts at any time
prior to the date benefits first become payable to the Participant under
Sec. 9.1 or Sec. 9.2 pursuant to the following:
(a) A withdrawal may be made from the Participant's Before-Tax and
Matching Accounts only to meet a financial hardship.
(1) A hardship withdrawal will be permitted only if the Company
determines that both of the following requirements are met:
(A) The withdrawal must be made on account of one of the
following reasons:
(i) Expenses for medical care described in section 213(d)
of the Code incurred by the Participant, the
Participant's spouse, or any dependents of the
Participant, as defined in section 152 of the Code,
or expenses necessary for any of those persons to
obtain such medical care, which are not reimbursable
from insurance or any other source.
(ii) Costs directly related to the purchase of the
principal residence of the Participant (excluding
mortgage payments).
(iii)Payment of tuition for the next 12 months of
post-secondary education for the Participant, or for
his or her spouse, children or dependents.
(iv) The need to prevent the eviction of the Participant
from his or her principal residence or foreclosure on
the mortgage of the Participant's principal
residence.
(B) All of the following requirements must be satisfied:
(i) The amount of the distribution cannot exceed the
amount of the immediate and heavy financial need of
the Participant. The Company may reasonably rely on
the Participant's representation as to that amount.
However, the amount of the distribution may include
any amounts determined by the Company to be necessary
to pay any federal, state or local income taxes or
penalties reasonably expected to result from the
distribution.
(ii) The Participant must have obtained all distributions,
other than hardship distributions, and all nontaxable
loans currently available under all plans maintained
by the Participating Employers or any Affiliate.
(iii)The Participant's elective contributions and employee
contributions under the Plan and all other qualified
and nonqualified plans of deferred compensation
maintained by the Participating Employers or any
Affiliate will be suspended pursuant to the terms of
the plan or an otherwise legally enforceable
agreement for at least 12 months after the receipt of
the hardship distribution.
(iv) For the calendar year immediately following the
calendar year of the hardship distribution, the
Participant may not make contributions under all
plans maintained by the Participating Employers or
any Affiliate in excess of the applicable limit under
section 402(g) of the Code for such next calendar
year less the amount of the Participant's elective
contributions for the calendar year of the hardship
distribution.
(v) Notwithstanding the foregoing provisions of this
subparagraph (B), this subparagraph (B) will be
satisfied if the IRS issues a revenue ruling, notice,
or other document of general applicability which
establishes an alternative method under which
distributions will be deemed to be necessary to
satisfy an immediate and heavy financial need and all
of the requirements of such alternative method are
met.
(2) With respect to any such hardship withdrawal, earnings credited
to the Participant's Before-Tax Account after December 31, 1988
cannot be withdrawn under this subsection (a), and no
withdrawals under this subsection (a) may be made from any
Qualified Non-Elective Account which is attributable to
contributions used to calculate deferral percentages under Sec.
5.4(a)(1) and earnings attributable to such contributions.
(3) No withdrawal shall be permitted under this subsection unless
the Participant has previously withdrawn or concurrently
withdraws the maximum amount permitted to be withdrawn under
subsection (b). Except as otherwise provided in paragraph (2),
all amounts shall be withdrawn from the Participant's
Before-Tax Account before any withdrawals are made from the
Participant's Matching Account.
(4) Notwithstanding the foregoing, amounts may be withdrawn from a
Matching Account only to the extent the Participant would be
vested in such amounts if his or her Termination of Employment
occurred on the date of the withdrawal. If a Participant who
has made a withdrawal under this section from a Matching
Account subsequently has a Termination of Employment before
becoming 100% vested, the amount to which the Participant is
entitled from that Account as of the Valuation Date specified
in Sec. 9.2 shall be adjusted by (i) adding to the value of
that Account the amount which has been withdrawn, (ii)
multiplying the result by the vested percentage from Sec.
9.2(a), and (iii) subtracting from that result the amount which
has been withdrawn.
(b) A withdrawal may be made from the Participant's Voluntary After-Tax,
Rollover and Voluntary Deductible Accounts for any reason.
Withdrawals under this subsection shall be made in the following
order of priority (i) the portion of the Participant's Voluntary
After-Tax Account equal to the contributions made by the Participant
prior to 1987, (ii) the remainder of the Voluntary After-Tax Account,
(iii) any Rollover Account, (iv) any Voluntary Deductible Account.
(c) Requests for withdrawals under this section shall be made pursuant to
applicable rules and regulations adopted by the Company which are
uniform and non-discriminatory as to all Participants and shall be
submitted in writing to the Company on such form as the Company
prescribes for this purpose. The Company shall determine whether the
requirements of this section have been met.
(d) The Company shall direct the Funding Agency respecting the payment of
withdrawals under this section. Commencing January 1, 1998, payment
shall be made to the Participant as soon as administratively feasible
following the date the withdrawal request has been approved by the
Company or its designated agent, and shall be based on values
determined as of a Valuation Date selected by the Funding Agency
which is on or before the date of payment.
(e) The amount of a withdrawal under this section from any Account may
not exceed the balance standing to the credit of the Account on the
applicable Valuation Date less any portion of the Account
attributable to any outstanding loan.
(f) Withdrawals shall be taken pro rata from the investments held for the
Accounts of the Participant subject to the withdrawal.
(g) Only two withdrawals under this section may be made in any calendar
year.
Sec. 9.5 Loans to Participants. The Company may authorize a loan
to a Participant who is an employee of a Participating Employer or an Affiliate
and who makes application therefor. Each such loan shall be subject to the
following provisions:
(a) The amount of any loan to a Participant, when added to the balance of
all other loans to the Participant under this Plan and all related
plans which are outstanding on the day on which such loan is made,
shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of (i) the highest
outstanding balance of loans to the Participant from the Plan
and all related plans during the one-year period ending on the
day before the date the loan is made, over (ii) the outstanding
balance of loans to the Participant from the Plan and all
related plans on the date the loan is made; or
(2) 50% of the amount to which the Participant would be entitled in
the event his or her Termination of Employment were to occur on
the date the loan is made.
For purposes of this section, a related plan is any "qualified
employer plan", as defined in Code section 72(p)(4), sponsored by the
Participant's Participating Employer or any related employer,
determined according to Code section 72(p)(2)(D).
(b) The minimum amount of any loan shall be $1,000.00. Only one loan may
be outstanding to a Participant at any time.
(c) Each loan shall be evidenced by the Participant's promissory note
payable to the order of the Funding Agency, in such form and executed
in such manner as is determined under procedures established by the
Company or its designated agent. Each loan shall be adequately
secured as determined by the Company. A loan shall be considered
adequately secured whenever the outstanding balance does not exceed
the amount in which the Participant would have a vested interest in
the event of his or her Termination of Employment.
(d) The Company shall determine the rate of interest to be paid with
respect to each loan, which shall be a reasonable rate of interest
within the meaning of Code section 4975. The rate shall be based on
the interest rates charged by persons in the business of lending
money in the region in which the Company operates for loans which
would be made under similar circumstances.
(e) Each such loan shall provide for the payment of accrued interest and
for repayment of principal in substantially equal installments not
less frequently than monthly. There will be no penalty for prepayments
of any loan, but any prepayment must be in the form of a lump sum
payment of the entire outstanding balance of the loan. While the
Participant is employed by the Participating Employers, all loans
shall be repaid through payroll deductions to the extent possible,
except in the case of temporary employees for whom the Company
authorizes an alternate method of repayment. The Participant shall
execute any documents required to authorize such deductions.
(f) Each loan shall extend for a stated period determined by agreement of
the Participant and the Company, not exceeding five years.
(g) Failure to pay any installment of interest or principal when due shall
constitute a default on the loan (subject to any applicable grace
period for correcting the default). Upon any such default, the entire
loan balance shall be declared to be in default to the extent required
by applicable regulations. Events of default shall also include any
other events identified as such in the Participant's note. In the
event of a default on a loan, foreclosure on the note and application
of the Participant's Accounts to satisfy the note will occur as of the
earliest date on which the Participant or Beneficiary is eligible to
receive payment of benefits under the Plan attributable to the loan,
but will not occur prior to that date. Loan repayments will be
suspended under this Plan as permitted under Code section 414(u)(4)
(relating to periods of military service).
(h) If a loan to a Participant is outstanding on the date a distribution
is to be made from the Fund with respect to the portion of the
Participant's Account or Accounts represented by the loan, the balance
of the loan, or a portion thereof equal to the amount to be
distributed, if less, shall on such date become due and payable. The
portion of the loan due and payable shall be satisfied by offsetting
such amount against the amount to be distributed to the Participant.
Alternatively, the portion of the Participant's Account or Accounts
equal to the outstanding balance on the loan may be distributed in
kind by distribution of the Participant's note.
(i) If a loan to a Participant is outstanding at the time of the
Participant's death, and if the loan is not repaid by the
Participant's executor or administrator, the note shall be
distributed in kind to the Participant's Beneficiary.
(j) The Company shall administer the loan program under this section and
shall direct the Funding Agency with respect to the making of loans
to Participants, the collection thereof, and all other matters
pertaining thereto. The Funding Agency shall follow such directions
to the extent possible and shall not take any independent action with
respect to such loans, except to the extent the Funding Agency has
agreed to process loans on behalf of the Plan.
(k) In accordance with the foregoing standards and requirements, loans
shall be available to all Participants on a reasonably equivalent
basis.
(l) All loans shall be governed by such non-discriminatory written rules
as the Company may adopt, which shall be deemed to be a part of this
Plan. Applications for loans shall be filed with the Company or its
designated agent (which may be the Funding Agency) in such manner as
the Company may prescribe from time to time for this purpose. The
loan principal will be disbursed by the Funding Agency within a
reasonable time after the application has been received and approved.
(m) The Company shall cause to be furnished to any Participant receiving
a loan any information required to be furnished pursuant to the
Federal Truth In Lending Act, if applicable, or pursuant to any other
applicable law.
(n) The portion of a Participant's Account or Accounts represented by the
outstanding loan principal shall be segregated for investment
purposes. In lieu of sharing in income or losses on investments of the
Fund, the segregated portion of the Participant's Accounts shall be
credited with all interest paid by the Participant on the loan.
Repayments of principal and interest on a loan shall be reinvested in
accordance with the investment designation in effect under Sec. 7.3
for future contributions at the time the repayment is received by the
Funding Agency. The Funding Agency may charge to the Participant's
Accounts any expenses attributable to the loan and such portion of the
general expenses of the Fund as the Funding Agency determines in its
discretion to be reasonable. In the event of a Forfeiture under Sec.
9.2(b), no portion of an outstanding loan may be transferred to the
Forfeiture Account.
(o) The investments held in the Participant's Accounts shall be
liquidated on a pro rata basis to provide the Fund with cash equal to
the loan principal. The loan principal shall be obtained from the
Participant's Accounts in the order of priority established by the
Company for this purpose.
(p) Solely for purposes of this section, a former Participant (or any
Beneficiary of a deceased Participant or alternate payee of a
Participant under a qualified domestic relations order) who is
entitled to a benefit from the Plan, and who is a "party in interest"
as defined in section 3(14) of ERISA, is considered to be an employee
of a Participating Employer who is eligible to receive a loan from
the Plan. No such person who is not a "party in interest" is eligible
to receive a loan.
<PAGE>
ARTICLE X
DISTRIBUTION OF BENEFITS
------------------------
Sec. 10.1 Time and Method of Payment. The benefit to which a
Participant or Beneficiary may become entitled under Article IX shall be
distributed to that individual at such time as he or she elects, subject to the
following:
(a) The distribution may be made at any time after the date as of which
the Participant or Beneficiary becomes entitled to a benefit payment
under Article IX. The amount of the distribution will be determined
pursuant to Sec. 10.3.
(1) All distributions shall be made by payment in a single sum
except as provided in paragraph (2).
(2) If the Participant's Termination of Employment occurs after the
Participant reaches age 55, the Participant may elect to make
partial withdrawals from his or her Accounts, subject to the
following:
(A) No more than two such withdrawals may be made during any
calendar year.
(B) The amount to be distributed to the Participant on or
after January 1 of the calendar year in which the
Participant attains age 70 1/2 and on or before April 1
following that year shall be at least equal to the
Participant's entire interest in the Plan as of the
December 31st preceding such calendar year divided by the
smaller of:
(i) The joint life and last survivor expectancy
(determined pursuant to Treasury Regulation
ss.1.72-9) of the Participant and the Participant's
oldest designated Beneficiary, if any, based on the
age of each individual as of their birthdays in such
calendar year.
(ii) In the case of distributions to a Participant whose
designated Beneficiary is not the Participant's
spouse, the applicable divisor provided in
regulations under Code section 401(a)(9)(G) relating
to incidental death benefits.
(C) The amount to be distributed to the Participant by December
31st of each calendar year following the year in which the
Participant attains age 70 1/2shall be at least equal to the
Participant's entire interest in the Plan as of the December
31st preceding each such calendar year divided by the
smaller of (i) the life expectancy determined in
subparagraph (B)(I) reduced by one year for each subsequent
calendar year, or (ii) the applicable divisor determined
under subparagraph (B)(II)
(b) Unless the Participant elects otherwise, distribution must be made or
commence no later than the 60th day after the close of the Plan Year in
which the Participant reaches Normal Retirement Age or in which the
Participant's Termination of Employment occurs, whichever is later;
provided, however, that if the amount of the payment to be made cannot be
determined by the later of the aforesaid dates, a payment retroactive to
such date may be made no later than 60 days after the earliest date on
which the amount of such payment can be ascertained. For purposes of this
subsection, the failure of a Participant to elect to receive a distribution
shall be deemed to be an election to defer distribution of the benefit.
(c) The distribution to a Participant must be made or distributions must
commence by April 1 following the calendar year in which the Participant
attains age 70 1/2 unless the Participant's death occurs before that date.
However, if the Participant attained age 70 1/2before January 1, 1988 and
is not a more than 5-percent owner, distribution is not required to be made
(or commence under subsection (a)(2)) until April 1 following the calendar
year in which the Participant's Termination of Employment occurs, if later.
For purposes of this subsection, a "more than 5-percent owner" is a person
who was a more than 5-percent owner of a Participating Employer (as defined
in Code section 416) at any time during the Plan Year ending with or within
the calendar year in which he or she attained age 70 1/2.
(d) If the Participant dies before receiving the entire distribution and
before the date that the distribution was required to occur or
commence under subsection (c), the Participant's Accounts shall be
distributed in a lump sum to the Beneficiary not later than December
31 of the year containing the fifth anniversary of the Participant's
death; provided, however, that if the designated Beneficiary is the
surviving spouse of the Participant, the payment may be made any time
on or before the later of (i) December 31 of the year in which the
Participant would have reached age 70 1/2, or (ii) December 31 of the
year following the year in which the Participant's death occurred. If
a surviving spouse who is entitled to benefits under this subsection
dies before the distribution to the surviving spouse has been made,
this subsection (other than the special exception which applies to a
designated Beneficiary who is the surviving spouse of the Participant)
shall be applied as if the surviving spouse were the Participant, with
the date of death of the surviving spouse being substituted for the
date of death of the Participant.
(e) If the Participant dies after the date that distribution was required
to commence under subsection (c), any remaining benefit shall be
distributed to the Beneficiary at least as rapidly as the method
specified in subsection (a)(2)(C), but the Beneficiary may elect to
receive a lump sum distribution of the remaining benefit at any time.
(f) For purposes of this section, "designated Beneficiary" means any
individual who is a Beneficiary pursuant to Article VIII. If more
than one Beneficiary is entitled to benefits following the
Participant's death, the interest of each Beneficiary shall be
segregated into a separate Account for purposes of applying this
section.
(g) Notwithstanding the foregoing, distributions may be made to any
Participant or Beneficiary pursuant to any designation made prior to
January 1, 1984 which satisfied all the requirements of Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982, as
in effect on January 1, 1984, and the regulations thereunder;
provided, however, that any designation of Beneficiary included as a
part of such designation must comply with the spousal consent
requirements under Sec. 8.2.
(h) Notwithstanding the foregoing, commencing January 1, 1998 (regardless
of when the Participant's Termination of Employment occurred), if the
total vested value of the Accounts of a Participant (or a Beneficiary
following the Participant's death) is $5,000 or less following the
date the Participant's Termination of Employment or death occurs, a
single-sum distribution shall be made to the Participant (or
Beneficiary) as of the earliest date permitted by the Plan. However,
this subsection shall not apply to a Participant if the total vested
value of the Participant's Accounts exceeded $5,000 at the time any
previous distribution was made to the Participant.
(i) Notwithstanding any provision of the Plan to the contrary,
distributions under this section shall be made in accordance with the
requirements of Code section 401(a)(9), including the incidental
death benefit requirements of Code section 401 (a)(9)(G) and the
regulations thereunder. No distribution option otherwise permitted
under this Plan will be available to a Participant or Beneficiary if
such distribution option does not meet the requirements of Code
section 401(a)(9), including subparagraph (G) thereof.
(j) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election, a distributee may elect, at
the time and in the manner prescribed by the Company, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection:
(1) An "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include
any distribution to the extent such distribution is required
under Code section 401(a)(9), and the portion of any
distribution that is not includible in gross income.
(2) An "eligible retirement plan" is an individual retirement
account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an annuity
plan described in Code section 403(a), or a qualified trust
described in Code section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) A "distributee" includes a Participant or former Participant.
In addition, the Participant's or former Participant's
surviving spouse and the Participant's or former Participant's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code section
414(p), are distributees with regard to the interest of the
spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
Sec. 10.2 Form of Distribution. Distributions will be made in cash
only, except as otherwise provided in Sec. 9.5, and except that a Participant
whose Termination of Employment has occurred and who has elected to have some or
all of his or her Accounts invested in a Company Stock Fund pursuant to Article
VII may elect, prior to such deadline as may be established from time to time by
the Company or its designated agent, to receive the portion of such Accounts
representing whole shares of Company stock in kind by distribution of shares of
Company stock. Any fractional shares of Company stock shall be distributed in
cash in all events.
Sec. 10.3 Accounting Following Termination of Employment. If
distribution of a benefit is deferred or delayed for any reason, the
undistributed Accounts shall continue to be revalued as of each Valuation Date
as provided in Article VII. Commencing January 1, 1998, payment shall be made as
of a Valuation Date determined by the Funding Agency which occurs as soon as
administratively feasible following the date the Participant (or Beneficiary
following the Participant's death) files the request for payment with the
Company or its designated agent (or following the Participant's Termination of
Employment or death in the case of an automatic payment under Sec. 10.1(h)). If
a Participant has more than one Account, each distribution shall be made from
such Account or Accounts as the Participant designates.
Sec. 10.4 Reemployment. Except where distributions are required
under Sec. 10.1, entitlement to a distribution from the Fund shall cease upon
reemployment of a Participant in a regular position by a Participating Employer,
and shall recommence in accordance with the provisions of this Article upon the
Participant's subsequent Termination of Employment.
Sec. 10.5 Source of Benefits. All benefits to which persons become
entitled hereunder shall be provided only out of the Fund and only to the extent
that the Fund is adequate therefor. No benefits are provided under the Plan
except those expressly described
herein.
Sec. 10.6 Incompetent Payee. If in the opinion of the Company a
person entitled to payments hereunder is disabled from caring for his or her
affairs because of mental or physical condition, or age, payment due such person
may be made to such person's guardian, conservator, or other legal personal
representative upon furnishing the Company with evidence satisfactory to the
Company of such status. Prior to the furnishing of such evidence, the Company
may cause payments due the person under disability to be made, for such person's
use and benefit, to any person or institution then in the opinion of the Company
caring for or maintaining the person under disability. The Company shall have no
liability with respect to payments so made. The Company shall have no duty to
make inquiry as to the competence of any person entitled to receive payments
hereunder.
Sec. 10.7 Benefits May Not Be Assigned or Alienated. Except as
otherwise expressly permitted by the Plan or required by law, the interests of
persons entitled to benefits under the Plan may not in any manner whatsoever be
assigned or alienated, whether voluntarily or involuntarily, or directly or
indirectly. However, the Plan shall comply with the provisions of any court
order which the Company determines is a qualified domestic relations order as
defined in Code section 414(p). Notwithstanding any provisions in the Plan to
the contrary, an individual who is entitled to payments from the Plan as an
"alternate payee" pursuant to a qualified domestic relations order shall receive
a lump sum payment from the Plan as soon as administratively feasible after the
Valuation Date coincident with or next following the date of the Company's
determination that the order is a qualified domestic relations order, unless the
order specifically provides for payment to be made at a later time.
Sec. 10.8 Payment of Taxes. The Funding Agency may pay any estate,
inheritance, income, or other tax, charge, or assessment attributable to any
benefit payable hereunder which in the Funding Agency's opinion it shall be or
may be required to pay out of such benefit. The Funding Agency may require,
before making any payment, such release or other document from any taxing
authority and such indemnity from the intended payee as the Funding Agency shall
deem necessary for its protection.
Sec. 10.9 Conditions Precedent. No person shall be entitled to a
benefit hereunder until his or her right thereto has been finally determined by
the Company nor until the person has submitted to the Company relevant data
reasonably requested by the Company, including, but not limited to, proof of
birth or death.
Sec. 10.10 Company Directions to Funding Agency. The Company shall
issue such written directions to the Funding Agency as are necessary to
accomplish distributions to the Participants and Beneficiaries in accordance
with the provisions of the Plan.
Sec. 10.11 Effect on Unemployment Compensation. For purposes of any
unemployment compensation law, a distribution hereunder in one sum to the extent
attributable to employer contributions, shall be considered to be a severance
payment and shall be allocated over a period of weeks equal to the one sum
payment divided by the employee's regular weekly pay while employed by the
Participating Employers, which period shall commence immediately following the
employee's Termination of Employment.
Sec. 10.12 Special Distribution Events. Notwithstanding anything
herein to the contrary, if the agreement between the buyer and the seller in one
of the following types of transaction provides that distributions are to be made
to affected Participants, each such Participant shall receive a distribution of
his or her vested Account balance as soon as administratively feasible after
either of the following events:
(a) The disposition by a Participating Employer to an unrelated
corporation of substantially all of the assets (within the meaning of
Code section 409(d)(2)) used in a trade or business of such
Participating Employer if such Participating Employer continues to
maintain this Plan after the disposition, but only with respect to
employees who continue employment with the corporation acquiring such
assets.
(b) The disposition by a Participating Employer or by an Affiliate to an
unrelated entity of such corporation's interest in a subsidiary
(within the meaning of Code section 409(d)(3)) which was a
Participating Employer if such corporation continues to maintain this
Plan, but only with respect to employees who continue employment with
such subsidiary.
All distributions under this section are subject to any applicable consent
requirements under Sec. 10.1. In addition, distributions under this section must
be made in a lump sum.
<PAGE>
ARTICLE XI
FUND
----
Sec. 11.1 Composition. All sums of money and all securities and other
property received by the Funding Agency for purposes of the Plan, together with
all investments made therewith, the proceeds thereof, and all earnings and
accumulations thereon, and the part from time to time remaining shall constitute
the "Fund". The Company may cause the Fund to be divided into any number of
parts for investment purposes or any other purposes necessary or advisable for
the proper administration of the Plan.
Sec. 11.2 Funding Agency. The Fund may be held and invested as one
fund or may be divided into any number of parts for investment purposes. Each
part of the Fund, or the entire Fund if it is not divided into parts for
investment purposes, shall be held and invested by one or more trustees or by an
insurance company. The trustee or trustees or the insurance company so acting
with respect to any part of the Fund is referred to herein as the Funding Agency
with respect to such part of the Fund. The selection and appointment of each
Funding Agency shall be made by the Company. The Company shall have the right at
any time to remove a Funding Agency and appoint a successor thereto, subject
only to the terms of any applicable trust agreement or group annuity contract.
The Company shall have the right to determine the form and substance of each
trust agreement and group annuity contract under which any part of the Fund is
held, subject only to the requirement that they are not inconsistent with the
provisions of the Plan. Any such trust agreement may contain provisions pursuant
to which the trustee will make investments on direction of a third party.
Sec. 11.3 Compensation and Expenses of Funding Agency. The Funding
Agency shall be entitled to receive such reasonable compensation for its
services as may be agreed upon with the Company. The Funding Agency shall also
be entitled to reimbursement for all reasonable and necessary costs, expenses,
and disbursements incurred by it in the performance of its services. Such
compensation and reimbursements shall be paid from the Fund if not paid directly
by the Participating Employers in such proportions as the Company shall
determine.
Sec. 11.4 Funding Policy. The Company shall adopt a procedure, and
revise it from time to time as it shall consider advisable, for establishing and
carrying out a funding policy and method consistent with the objectives of the
Plan and the requirements of ERISA. It shall advise each Funding Agency of the
funding policy in effect from time to time.
Sec. 11.5 Securities and Property of Participating Employers. An
agreement with a Funding Agency may provide that all or any part of the Fund may
be invested in qualifying employer securities or qualifying employer real
property, as those terms are used in ERISA; provided, however, that the Company
shall take any steps necessary to assure that investments in securities of any
Participating Employer or any trade or business entity directly or indirectly
controlling, controlled by, or under Common Control with a Participating
Employer do not exceed those that can be acquired by that part of the Fund
attributable to contributions by Participating Employers (other than Before-Tax
Contributions), as distinguished from that part of the Fund, if any,
attributable to contributions by Participants or Before-Tax Contributions,
unless there has been compliance with any applicable securities laws. If
qualifying employer securities or qualifying employer real property are
purchased or sold as an investment of the Fund from or to a disqualified person
or party in interest, as those terms are used in ERISA, and if there is no
generally recognized market for such securities or property, the purchase shall
be for not more than fair market value and the sale shall be for not less than
fair market value, as determined in good faith by the Company or other Named
Fiduciary assigned such function, or if such assets are held in trust and the
trust agreement so provides, as determined in good faith by the trustee.
Sec. 11.6 No Diversion. The Fund shall be for the exclusive purpose
of providing benefits to Participants under the Plan and their beneficiaries and
defraying reasonable expenses of administering the Plan. Such expenses may
include premiums for the bonding of Plan officials required by ERISA. No part of
the corpus or income of the Fund may be used for, or diverted to, purposes other
than for the exclusive benefit of employees of the Participating Employers or
their beneficiaries. Notwithstanding the foregoing:
(a) If any contribution or portion thereof is made by a Participating
Employer by a mistake of fact, the Funding Agency shall, upon written
request of the Company, return such contribution or portion thereof to
the Participating Employer within one year after the payment of the
contribution to the Funding Agency; however, earnings attributable to
such contribution or portion thereof shall not be returned to the
Participating Employer but shall remain in the Fund, and the amount
returned to the Participating Employer shall be reduced by any losses
attributable to such contribution or portion thereof.
(b) Contributions by the Participating Employers are conditioned upon the
deductibility of each contribution under Code section 404. To the
extent the deduction is disallowed, the Funding Agency shall return
such contribution to the Participating Employer within one year after
the disallowance of the deduction; however, earnings attributable to
such contribution (or disallowed portion thereof) shall not be
returned to the Participating Employer but shall remain in the Fund,
and the amount returned to the Participating Employer shall be reduced
by any losses attributable to such contribution (or disallowed portion
thereof).
(c) Contributions by a Participating Employer are conditioned upon initial
qualification of the Plan as to such Participating Employer under Code
section 401(a). If the Plan receives an adverse determination letter
from the Internal Revenue Service with respect to such initial
qualification, the Funding Agency shall, upon written request of the
Company, return the amount of such contribution to the Participating
Employer within one year after the date of denial of qualification of
the Plan. For this purpose, the amount to be so returned shall be the
contributions actually made, adjusted for the investment experience
of, and any expenses chargeable against, the portion of the Fund
attributable to the contributions actually made.
In the case of any such return of contribution the Company shall cause such
adjustments to be made to the Accounts of Participants as it considers fair and
equitable under the circumstances resulting in the return of such contribution.
<PAGE>
ARTICLE XII
ADMINISTRATION OF PLAN
----------------------
Sec. 12.1 Administration by Company. The Company is the
"administrator" of the Plan for purposes of ERISA. Except as expressly otherwise
provided herein, the Company shall control and manage the operation and
administration of the Plan and make all decisions and determinations incident
thereto. In carrying out its Plan responsibilities, the Company shall have
discretionary authority to construe the terms of the Plan. Except in cases where
the Plan expressly provides to the contrary, action on behalf of the Company may
be taken by any of the following:
(a) The Board.
(b) The chief executive officer of the Company.
(c) Any person or persons, natural or otherwise, or committee, to whom
responsibilities for the operation and administration of the Plan are
allocated by the Company, by resolution of the Board or by the chief
executive officer of the Company, but action of such person or
persons or committee shall be within the scope of said allocation.
Sec. 12.2 Certain Fiduciary Provisions. For purposes of the Plan:
(a) Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
(b) A Named Fiduciary, or a fiduciary designated by a Named Fiduciary
pursuant to the provisions of the Plan, may employ one or more persons
to render advice with regard to any responsibility such fiduciary has
under the Plan.
(c) To the extent permitted by any applicable trust agreement or group
annuity contract a Named Fiduciary with respect to control or
management of the assets of the Plan may appoint an investment manager
or managers, as defined in ERISA, to manage (including the power to
acquire and dispose of) any assets of the Plan.
(d) At any time the Plan has more than one Named Fiduciary, if pursuant to
the Plan provisions fiduciary responsibilities are not already
allocated among such Named Fiduciaries, the Company, by action of the
Board or its chief executive officer, may provide for such allocation;
except that such allocation shall not include any responsibility, if
any, in a trust agreement to manage or control the assets of the Plan
other than a power under the trust agreement to appoint an investment
manager as defined in ERISA.
(e) Unless expressly prohibited in the appointment of a Named Fiduciary
which is not the Company acting as provided in Sec. 12.1, such Named
Fiduciary by written instrument may designate a person or persons
other than such Named Fiduciary to carry out any or all of the
fiduciary responsibilities under the Plan of such Named Fiduciary;
except that such designation shall not include any responsibility, if
any, in a trust agreement to manage or control the assets of the Plan
other than a power under the trust agreement to appoint an investment
manager as defined in ERISA.
(f) A person who is a fiduciary with respect to the Plan, including a
Named Fiduciary, shall be recognized and treated as a fiduciary only
with respect to the particular fiduciary functions as to which such
person has responsibility.
Each Named Fiduciary (other than the Company), each other fiduciary, each person
employed pursuant to (b) above, and each investment manager shall be entitled to
receive reasonable compensation for services rendered, or for the reimbursement
of expenses properly and actually incurred in the performance of their duties
with the Plan and to payment therefor from the Fund if not paid directly by the
Participating Employers in such proportions as the Company shall determine.
Notwithstanding the foregoing, no person so serving who already receives
full-time pay from any employer or association of employers whose employees are
Participants, or from an employee organization whose members are Participants,
shall receive compensation from the Plan, except for reimbursement of expenses
properly and actually incurred. Furthermore, no Participant, Beneficiary, or
"alternate payee" under a qualified domestic relations order who is eligible to
direct the investment of his or her Accounts shall receive any compensation or
reimbursement of expenses with respect to such investing.
Sec. 12.3 Discrimination Prohibited. No person or persons in
exercising discretion in the operation and administration of the Plan shall
discriminate in favor of Highly Compensated Employees.
Sec. 12.4 Evidence. Evidence required of anyone under this Plan may
be by certificate, affidavit, document, or other instrument which the person
acting in reliance thereon considers to be pertinent and reliable and to be
signed, made, or presented to the proper party.
Sec. 12.5 Correction of Errors. It is recognized that in the
operation and administration of the Plan certain mathematical, accounting and
other errors may be made or mistakes may arise by reason of factual errors in
information supplied to the Company or Funding Agency. The Company shall have
power to cause such equitable adjustments to be made to correct for such errors
as the Company in its discretion considers appropriate. Such adjustments shall
be final and binding on all persons. The Company may recover any overpayment
from the person who received it. Any return of a contribution due to a mistake
in fact will be subject to Sec. 11.6.
Sec. 12.6 Records. Each Participating Employer, each fiduciary with
respect to the Plan, and each other person performing any functions in the
operation or administration of the Plan or the management or control of the
assets of the Plan shall keep such records as may be necessary or appropriate in
the discharge of their respective functions hereunder, including records
required by ERISA or any other applicable law. Records shall be retained as long
as necessary for the proper administration of the Plan and at least for any
period required by ERISA or other applicable law.
Sec. 12.7 General Fiduciary Standard. Each fiduciary shall
discharge its duties with respect to the Plan solely in the interests of
Participants and their beneficiaries and with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
Sec. 12.8 Prohibited Transactions. A fiduciary with respect to the
Plan shall not cause the Plan to engage in any prohibited transaction within the
meaning of ERISA.
Sec. 12.9 Claims Procedure. The Company shall establish a claims
procedure consistent with the requirements of ERISA. Such claims procedure shall
provide adequate notice in writing to any Participant or beneficiary whose claim
for benefits under the Plan has been denied, setting forth the specific reasons
for such denial, written in a manner calculated to be understood by the claimant
and shall afford a reasonable opportunity to a claimant whose claim for benefits
has been denied for a full and fair review by the appropriate Named Fiduciary of
the decision denying the claim.
Sec. 12.10 Bonding. Plan personnel shall be bonded to the extent
required by ERISA. Premiums for such bonding may, in the sole discretion of the
Company, be paid in whole or in part from the Fund. Such premiums may also be
paid in whole or in part by the Participating Employers in such proportions as
the Company shall determine. The Company may provide by agreement with any
person that the premium for required bonding shall be paid by such person.
Sec. 12.11 Waiver of Notice. Any notice required hereunder may be
waived by the person entitled thereto.
Sec. 12.12 Agent For Legal Process. The Company shall be the agent
for service of legal process with respect to any matter concerning the Plan,
unless and until the Company designates some other person as such agent.
Sec. 12.13 Indemnification. In addition to any other applicable
provisions for indemnification, the Participating Employers jointly and
severally agree to indemnify and hold harmless, to the extent permitted by law,
each director, officer, and employee of the Participating Employers against any
and all liabilities, losses, costs, or expenses (including legal fees) of
whatsoever kind and nature which may be imposed on, incurred by, or asserted
against such person at any time by reason of such person's services as a
fiduciary in connection with the Plan, but only if such person did not act
dishonestly, or in bad faith, or in willful violation of the law or regulations
under which such liability, loss, cost, or expense arises.
<PAGE>
ARTICLE XIII
AMENDMENT, TERMINATION, MERGER
------------------------------
Sec. 13.1 Amendment. Subject to the non-diversion provisions of Sec.
11.6, the Company, by action of the Board, or by written action of a person so
authorized by resolution of the Board, may amend the Plan at any time and from
time to time. No action by a person other than the Board shall be an amendment
of the Plan unless it specifically references the Plan and states that it alters
the terms or conditions of the Plan. No amendment of the Plan shall have the
effect of changing the rights, duties, and liabilities of any Funding Agency
without its written consent. Also, no amendment shall divest a Participant or
Beneficiary of Accounts accrued prior to the amendment or decrease a
Participant's accrued benefit except to the extent permitted by Code section
411(d)(6).
(a) Promptly upon adoption of any amendment to the Plan, the Company will
furnish a copy of the amendment, together with a certificate
evidencing its due adoption, as follows:
(1) To each Funding Agency then acting.
(2) To any other Participating Employer that is not under Common
Control with the Company. The amendment shall be effective as
to such a Participating Employer and its employees unless,
within 30 days of receipt of the certificate it notifies the
Company and each Funding Agency in writing that it is
discontinuing its joint participation in the Plan pursuant to
Sec.
13.8.
(b If an amendment to the Plan that is effective for a Plan Year
beginning after 1988 changes the vesting schedule of the Plan, each
Participant having not less than three years of service by the end of
the election period with respect to such amendment shall be permitted
within such election period to elect to have his or her vested
percentage computed under the Plan without regard to such amendment.
Each election shall be made in writing by filing with the Company
within the election period a form available from the Company for the
purpose. The election period shall be a reasonable period determined
by the Company commencing not later than the date the amendment is
adopted and shall be in conformance with any applicable regulation
prescribed by the Secretary of Labor or the Secretary of the Treasury.
Notwithstanding the foregoing, no election need be provided for any
Participant whose vested percentage under the Plan, as amended, cannot
at any time be less than the vested percentage determined without
regard to such amendment.
Sec. 13.2 Permanent Discontinuance of Contributions. The Company, by
action of the Board, may completely discontinue contributions in support of the
Plan by all Participating Employers. In such event, notwithstanding any
provisions of the Plan to the contrary, (i) no employee shall become a
Participant after such discontinuance, (ii) any amount held in the Plan's
Forfeiture Account shall be applied as provided in Sec. 5.2(c) or to pay Plan
expenses, and (iii) the Accounts of each Participant which have not become a
Forfeiture prior to the date of such discontinuance shall be nonforfeitable.
Subject to the foregoing, all of the provisions of the Plan shall continue in
effect, and upon entitlement thereto distributions shall be made in accordance
with the provisions of Article X.
Sec. 13.3 Termination. The Company, by action of the Board, may
terminate the Plan as applicable to all Participating Employers and their
employees. After such termination no employee shall become a Participant, no
further contributions shall be made and any amount in the Plan's Forfeiture
Account shall be applied as provided in Sec. 5.2(c) or to pay Plan expenses. The
Accounts of each Participant which have not become a Forfeiture prior to the
date of such termination shall be nonforfeitable, distributions shall be made to
Participants, Beneficiaries and alternate payees promptly after the termination
of the Plan, but not before the earliest date permitted under the Code and
applicable regulations, and the Plan and any related trust agreement or group
annuity contract shall continue in force for the purpose of making such
distributions.
Sec. 13.4 Partial Termination. If there is a partial termination of
the Plan, either by operation of law, by amendment of the Plan, or for any other
reason, which partial termination shall be confirmed by the Company, any then
existing Account of a Participant who was in the classification of employees
with respect to which the partial termination occurs which has not become a
Forfeiture prior to the date of the partial termination shall be nonforfeitable.
Subject to the foregoing, all of the provisions of the Plan shall continue in
effect as to each such Participant, and upon entitlement thereto distributions
shall be made in accordance with the provisions of Article X.
Sec. 13.5 Merger, Consolidation, or Transfer of Plan Assets. In the
case of any merger or consolidation of the Plan with any other plan, or in the
case of the transfer of assets or liabilities of the Plan to any other plan,
provision shall be made so that each Participant, Beneficiary and alternate
payee would (if such other plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or greater than
the benefit he or she would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then terminated). No such
merger, consolidation, or transfer shall be effected until such statements with
respect thereto, if any, required by ERISA to be filed in advance thereof have
been filed.
Sec. 13.6 Deferral of Distributions. Notwithstanding any provisions
of the Plan to the contrary, in the case of a complete discontinuance of
contributions to the Plan or of a complete or partial termination of the Plan,
the Company or the Funding Agency may defer any distribution of benefit payments
to Participants and Beneficiaries with respect to which such discontinuance or
termination applies (except for distributions which are required to be made
under Sec. 10.1) until after the following have occurred:
(a) Receipt of a final determination from the Treasury Department or any
court of competent jurisdiction regarding the effect of such
discontinuance or termination on the qualified status of the Plan
under Code section 401(a).
(b) Appropriate adjustment of Accounts to reflect taxes, costs, and
expenses, if any, incident to such discontinuance or termination.
Sec. 13.7 Reorganizations of Participating Employers. In the event
two or more Participating Employers are consolidated or merged or in the event
one or more Participating Employers acquires the assets of another Participating
Employer, the Plan shall be deemed to have continued, without termination and
without a complete discontinuance of contributions, as to all the Participating
Employers involved in such reorganization and their employees. In such event, in
administering the Plan the corporation resulting from the consolidation, the
surviving corporation in the merger, or the employer acquiring the assets shall
be considered as a continuation of all of the Participating Employers involved
in the reorganization.
Sec. 13.8 Discontinuance of Joint Participation of a Participating
Employer. The Company, by action of the Board or the President of the Company,
may discontinue the joint participation in the Plan by another Participating
Employer. A Participating Employer which is not under Common Control with the
Company may discontinue its joint participation in the Plan with the other
Participating Employers by action of its board of directors and on appropriate
written notice to the Company and each Funding Agency then acting.
(a) If the Company determines in its sole discretion to spin off the
portion of the Plan attributable to the withdrawing employer, the
Company shall cause a determination to be made of the equitable part
of the Fund assets held on account of Participants of the withdrawing
employer and their Beneficiaries. The Company shall direct the Funding
Agency or Funding Agencies to transfer assets representing such
equitable part to a separate fund for the plan of the withdrawing
employer. Such withdrawing employer may thereafter exercise, with
respect to such separate fund, all the rights and powers reserved to
the Company with respect to the Fund. The plan of the withdrawing
employer shall, until amended by the withdrawing employer, continue
with the same terms as the Plan herein, except that with respect to
the separate plan of the withdrawing employer the words "Participating
Employer", "Participating Employers", and "Company" shall thereafter
be considered to refer only to the withdrawing employer. Any such
spinoff shall be effected in such manner that each Participant or
Beneficiary would (if the Plan and the plan of the withdrawing
employer then immediately terminated) receive a benefit which is equal
to or greater than the benefit the individual would have been entitled
to receive immediately before such spinoff if the Plan had then
terminated. No transfer of assets pursuant to this section shall be
effected until such statements with respect thereto, if any, required
by ERISA to be filed in advance thereof have been filed.
(b) If subsection (a) does not apply, the Accounts of Participants of the
withdrawing employer and their Beneficiaries shall continue to be
held in the Plan for distribution in accordance with the provisions
hereof.
Sec. 13.9 Participating Employers Not Under Common Control. If a
Participating Employer is not under Common Control with the Company, the
provisions of the Plan (other than this Article XIII) shall be applied as though
a separate plan is being maintained for that Participating Employer to the
extent required by Code section 413(c).
<PAGE>
ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS
-------------------------
Sec. 14.1 Key Employee Defined. "Key Employee" means any employee
or former employee of the employer who at any time during the determination
period was an officer of the employer or is deemed to have had an ownership
interest in the employer and who is within the definition of key employee in
Code section 416(i). "Non-Key Employee" means any employee who is not a Key
Employee.
Sec. 14.2 Determination of Top-Heavy Status. The top-heavy status
of the Plan shall be determined according to Code section 416 and the
regulations thereunder, using the following standards and definitions:
(a) The Plan is a Top-Heavy Plan for a Plan Year if either of the
following applies:
(1) If this Plan is not part of a required aggregation group and
the top-heavy ratio for this Plan exceeds 60 percent.
(2) If this Plan is part of a required aggregation group of plans
and the top-heavy ratio for the group of plans exceeds 60
percent.
Notwithstanding paragraphs (1) and (2) above, the Plan is not a
Top-Heavy Plan with respect to a Plan Year if it is part of a
permissive aggregation group of plans for which the top-heavy ratio
does not exceed 60 percent.
(b) The "top-heavy ratio" shall be determined as follows:
(1) If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and has
not maintained any defined benefit plan which during the 5-year
period ending on the determination date has or has had accrued
benefits, the top-heavy ratio for this Plan 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 under the Plan or plans as of the
determination date (including any part of any account balance
distributed in the five-year period ending on the determination
date), and the denominator of which is the sum of the account
balances (including any part of any account balance distributed
in the five-year period ending on the determination date) of
all employees under the Plan or plans as of the determination
date. Both the numerator and denominator of the top-heavy ratio
shall be increased to reflect any contribution not actually
made as of the determination date but which is required to be
taken into account on that date under Code section 416 and the
regulations thereunder.
(2) If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
maintains or has maintained one or more defined benefit plans
which during the 5-year period ending on the determination date
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 of all Key Employees under the aggregated defined
contribution plan or plans, determined according to paragraph
(1) above, and the present value of accrued benefits of all Key
Employees under the defined benefit plan or plans as of the
determination date, and the denominator of which is the sum of
such account balances of all employees under the aggregated
defined contribution plan or plans and the present value of
accrued benefits of all employees under the defined benefit
plan or plans as of the determination date. The account
balances and accrued benefits in both the numerator and
denominator of the top-heavy ratio shall be adjusted to reflect
any distributions made in the five-year period ending on the
determination date and any contributions due but unpaid as of
the determination date.
(3) For purposes of paragraphs (1) and (2), 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 the 12-month period ending on the 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 an
employee (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (ii) 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
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. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference
to the determination dates that fall within the same calendar
year.
(c) "Required aggregation group" means (i) each qualified plan of the
employer in which at least one Key Employee participates in the Plan
Year containing the determination date, or any of the four preceding
Plan Years, and (ii) any other qualified plan of the employer that
enables a plan described in (i) to meet the requirements of Code
sections 401(a)(4) and 410.
(d) "Permissive aggregation group" means the required aggregation group
of plans plus any other plan or plans of the employer which, when
consolidated as a group with the required aggregation group, would
continue to satisfy the requirements of Code sections 401(a)(4) and
410.
(e) "Determination date" means, for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that year is the determination
date.
(f) The "determination period" for a Plan Year is the Plan Year in which
the applicable determination date occurs and the four preceding Plan
Years.
(g) The "valuation date" is the last day of each Plan Year and is the
date as of which account balances or accrued benefits are valued for
purposes of calculating the top-heavy ratio.
(h) For purposes of establishing the "present value" of benefits under a
defined benefit plan to compute the top-heavy ratio, any benefit
shall be discounted only for mortality and interest based on the
interest rate and mortality table specified in the defined benefit
plan for this purpose.
(i) If an individual has not performed services for the employer at any
time during the five-year period ending on the determination date
with respect to a Plan Year, any account balance or accrued benefit
for such individual shall not be taken into account for such Plan
Year.
(j) For purposes of determining if a defined benefit plan included in a
required aggregation group of which this Plan is a part is a
Top-Heavy Plan, the accrued benefit to any employee (other than a Key
Employee) shall be determined as follows:
(1) Under the method which is used for accrual purposes under all
defined benefit plans maintained by the employer.
(2) If there is no method described in paragraph (1), as if such
benefit accrued not more rapidly than the lowest accrual rate
permitted under Code section 411(b)(1)(C).
Sec. 14.3 Minimum Contribution Requirement. For any Plan Year with
respect to which the Plan is a Top-Heavy Plan, the employer contributions and
Forfeitures allocated to each Active Participant who is not a Key Employee and
whose Termination of Employment has not occurred prior to the end of such Plan
Year shall not be less than the minimum amount determined in accordance with the
following:
(a) The minimum amount shall be the amount equal to that percentage of
the Participant's Compensation for the Plan Year which is the smaller
of:
(1) 3 percent.
(2) The percentage which is the largest percentage of Compensation
allocated to any Key Employee from employer contributions and
Forfeitures for such Plan Year.
For purposes of this section, "Compensation" means the amounts
specified in Sec. 6.1(f), subject to the limitation in Sec. 2.6(c).
(b) For purposes of this section, any employer contribution attributable
to a salary reduction or similar arrangement shall be taken into
account. Any employer contribution attributable to a salary reduction
or similar arrangement (including Before-Tax Contributions and
Matching Contributions under this Plan) may not be used to satisfy
the minimum amount of employer contributions which must be allocated
under subsection (a).
(c) This section shall not apply to any Participant who is covered under
any other plan of the employer under which the minimum contribution
or minimum benefit requirement applicable to Top-Heavy Plans will be
satisfied.
Sec. 14.4 Participation under Defined Benefit Plan and Defined
Contribution Plan. If a Participant is also a participant in a defined benefit
plan maintained by the employer, with respect to any Plan Year for which the
Plan is a Top-Heavy Plan, Sec. 6.1(d) shall be applied:
(a) By substituting "1.0" for "1.25" in paragraphs (2)(B) and (3)(B) of
Code section 415(e).
(b) By substituting "$41,500" for "$51,875" in Code section
415(e)(6)(B)(i).
The foregoing provisions of this section shall be suspended with respect to any
individual so long as there are no employer contributions, forfeitures, or
voluntary nondeductible contributions allocated to such individual, and no
defined benefit plan accruals for such individual, either under this Plan or
under any other plan that is in a required aggregation group of plans, within
the meaning of Code section 416(g)(2)(A)(i), that includes this Plan.
Sec. 14.5 Definition of Employer. For purposes of this Article XIV,
the term "employer" means all Participating Employers and any trade or business
entity under Common Control with a Participating Employer.
Sec. 14.6 Exception For Collective Bargaining Unit. Section 14.3
shall not apply with respect to any employee included in a unit of employees
covered by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or more employers
if there is evidence that retirement benefits were the subject of good faith
bargaining between such employee representative and such employer or employers.
<PAGE>
ARTICLE XV
MISCELLANEOUS PROVISIONS
------------------------
Sec. 15.1 Insurance Company Not Responsible for Validity of Plan. No
insurance company that issues a contract under the Plan shall have any
responsibility for the validity of the Plan. An insurance company to which an
application may be submitted hereunder may accept such application and shall
have no duty to make any investigation or inquiry regarding the authority of the
applicant to make such application or any amendment thereto or to inquire as to
whether a person on whose life any contract is to be issued is entitled to such
contract under the Plan.
Sec. 15.2 Headings. Headings at the beginning of articles and
sections hereof
are for convenience of reference, shall not be considered a part of the text of
the Plan, and shall not influence its construction.
Sec. 15.3 Capitalized Definitions. Capitalized terms used in the
Plan shall have their meaning as defined in the Plan unless the context clearly
indicates to the contrary.
Sec. 15.4 Gender. Any references to the masculine gender include
the feminine and vice versa.
Sec. 15.5 Use of Compounds of Word "Here". Use of the words
"hereof", "herein", "hereunder", or similar compounds of the word "here" shall
mean and refer to the entire Plan unless the context clearly indicates to the
contrary.
Sec. 15.6 Construed as a Whole. The provisions of the Plan shall be
construed as a whole in such manner as to carry out the provisions thereof and
shall not be construed separately without relation to the context.
Dated: September 14, 1998 PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Joseph G.(Joe) Dollison
By: Joseph G.(Joe) Dollison
Its Treasurer
<PAGE>
THIRD RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF PIONEER HI-BRED INTERNATIONAL, INC.
TO THE SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to the provisions of Section 490.1007 of the Iowa Business
Corporation Act, Chapter 490, Code of Iowa, the undersigned Corporation adopts
the following Third Restated and Amended Articles of Incorporation
ARTICLE I
The name of the corporation shall be PIONEER HI-BRED INTERNATIONAL,
INC., and its principal place of business shall be in the City of Des Moines,
Polk County, Iowa.
ARTICLE II
The duration of the Corporation's existence hereunder is perpetual.
ARTICLE III
The purpose or purposes for which the Corporation is organized are: This
Corporation shall have unlimited power to engage in and to do any lawful act
concerning any or all lawful businesses for which corporations may be organized
under Chapter 490 of the Code of Iowa.
ARTICLE IV
A. The aggregate amount of authorized capital stock of this Corporation
shall be $l50,000,000 divided into (i) 150,000,000 shares, consisting of one
class designated as common and having a par value of One Dollar ($1.00) per
share, and (ii) 10,000,000 shares, consisting of one class designated as serial
preferred without par value.
B. 1. Each outstanding share of common stock shall entitle the holder
thereof to five votes on each matter properly submitted to the holders of shares
of common stock for their vote, consent, waiver, release or other action; except
that no holder shall be entitled to exercise more than one vote on any such
matter in respect of any share of common stock with respect to which there has
been a change in beneficial ownership during the thirty-six (36) months
immediately preceding the date on which a determination is made of the
shareholders who are entitled to take any such action.
2. A change in beneficial ownership of an outstanding share of
common stock shall be deemed to have occurred whenever a change occurs in any
person or group of persons who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise has or shares (i) voting
power, which includes the power to vote, or to direct the voting of such share;
(ii) investment power, which includes the power to direct the sale or other
disposition of such share; (iii) the right to receive or retain the proceeds of
any sale or other disposition of such share; or (iv) the right to receive any
distributions, including cash dividends, in respect of such share.
a. In the absence of proof to the contrary provided in
accordance with the procedures referred to in subparagraph (4) of this
paragraph B, a change in beneficial ownership shall be deemed to have occurred
whenever a share of common
stock is transferred of record into the name of any other person.
b. In the case of a share of common stock held of
record in the name of a corporation, general partnership, limited
partnership, voting trustee, bank, trust company, broker, nominee or clearing
agency, or in any other name except a natural person, if it has not been
established pursuant to such procedures that there has been no change in the
person or persons who direct the exercise of the rights referred to in
clauses 2(i) through 2(iv) of this paragraph with respect to such share
of common stock during the period of thirty-six months immediately
preceding the date on which a determination is made of the shareholders who
are entitled to take any action (or since November 14, 1985 for any period
ending on or before November 14, 1988), then a change in beneficial ownership
shall be deemed to have occurred during such period.
c. In the case of a share of common stock held of
record in the name of any person as trustee, agent, guardian or custodian
under the Uniform Gifts to Minors Act as in effect in any state, a change in
beneficial ownership shall be deemed to have occurred whenever there is a
change in the beneficiary of such trust, the principal of such agent, the ward
of such guardian or the minor for whom such custodian is acting or in such
trustee, agent, guardian or custodian.
3. Notwithstanding anything in this paragraph B to the contrary,
no change in beneficial ownership shall be deemed to have occurred solely as a
result of:
a. any event that occurred prior to November 14,
1985 or pursuant to the terms of any contract (other than a contract for the
purchase and sale of shares of common stock contemplating prompt settlement),
including contracts providing for options, rights of first refusal and
similar arrangements in existence on such date to which any holder of shares of
common stock is a party;
b. any transfer of any interest in shares of common
stock pursuant to a bequest or inheritance, by operation of law upon the
death of any individual, or by any other transfer without valuable
consideration, including a gift that is made in good faith and not for the
purpose of circumventing this Article IV;
c. any change in the beneficiary of any trust, or any
distribution of a share of common stock from trust, by reason of the birth,
death, marriage or divorce of any natural person, the adoption of any natural
person prior to age 18 or the passage of a given period of time or the
attainment by any natural person of a specific age, or the creation or
termination of any guardianship or custodial arrangement;
d. any appointment of a successor trustee, agent,
guardian or custodian with respect to a share of common stock if neither such
successor has nor its predecessor had the power to vote or to dispose of such
share of common stock without further instructions from others, whose
identities remain unchanged;
e. any change in the person to whom dividends
or other distributions in respect to a share of common stock are to be paid
pursuant to the issuance or modification of a revocable dividend payment order;
or
f. except as provided in subparagraph (5) of this
paragraph B, any issuance of a share of common stock by the Corporation or any
transfer by the Corporation of a share of common stock held in treasury,
(i.e., the person acquiring the share shall be deemed on the date of issuance
or transfer by the Corporation to have continuously beneficially owned such
share for thirty-six (36) months), unless otherwise determined by the Board of
Directors at the time of authorizing such issuance or transfer.
4. For purposes of this paragraph B, all determinations
concerning changes in beneficial ownership, or the absence of any such change,
shall be made by the Corporation. Written procedures designed to facilitate such
determinations shall be established by the Corporation and refined from time to
time. Such procedures shall provide, among other things, the manner of proof of
facts that will be accepted and the frequency with which such proof may be
required to be renewed. The Corporation and any transfer agent shall be entitled
to rely on all information concerning beneficial ownership of the common stock
coming to their attention from any source and in any manner reasonably deemed by
them to be reliable, but neither the Corporation nor any transfer agent shall be
charged with any other knowledge concerning the beneficial ownership of the
common stock.
5. In the event of any stock split or stock dividend with respect
to the common stock, each share of common stock acquired by reason of such split
or dividend shall be deemed to have been beneficially owned by the same person
continuously from the same date as that on which beneficial ownership of the
share of common stock, with respect to which such share of common stock was
distributed, was acquired.
6. Each share of common stock, whether at any particular time the
holder thereof is entitled to exercise five votes for one, shall be identical to
all other shares of common stock in all other respects, and together all of the
common shares shall constitute a single class of shares of the Corporation.
7. Notwithstanding any provision in this paragraph B to the
contrary, if at any time the common stock will be ineligible for inclusion on
the National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation System (or such other similar automated quotation
system as may exist at the time) so long as some but not all shares of common
stock have five votes per share, then, upon a determination by the Board of
Directors that the provisions of this paragraph B no longer are in the best
interests of the shareholders, and without any shareholder action, each
outstanding share of common stock shall entitle the holder thereof to one vote
on each matter properly submitted thereafter to the holders of common stock for
their vote, consent, waiver, release or other action.
C. The preferences, voting rights, if any, limitations and relative
rights of the serial preferred stock are as follows:
1. The holders of the preferred stock shall be entitled to
receive dividends when and as declared by the Board of Directors at such rate as
shall be fixed by resolution of the Board of Directors as hereafter provided,
which dividends shall be cumulative, before any dividends shall be paid or set
apart for payment on the common stock. The holders of the preferred stock shall
have no rights to share in any dividend or distribution of profits or assets of
the Corporation, whether in the form of cash, stock dividend or otherwise,
except to the extent specifically provided herein or in said resolutions of the
Board of Directors.
2. In the event of any liquidation, dissolution or winding up of
the Corporation, the holders of the preferred stock shall be entitled to be paid
such amounts as shall be fixed by resolution of the Board of Directors, as
hereafter provided, before any amount shall be paid on the common stock. After
the payment to the holders of the preferred stock of all such amounts to which
they are entitled pursuant to said resolutions of the Board of Directors, the
remaining assets and funds of the Corporation shall be divided and paid to the
holders of common stock. Neither the consolidation nor the merger of the
Corporation with or into any other corporation or corporations, nor a
reorganization of the Corporation alone, nor the sale or transfer by the
Corporation of all or any part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for the purpose of
this subparagraph (2).
3. The preferred stock shall be subject to redemption in whole or
in part at such price and at such time and place and in such manner as the Board
of Directors shall determine.
4. Each share of preferred stock shall be entitled to such
privileges of conversion, if any, as are provided and declared by the Board of
Directors at such time as the issue of which it is a part is established by the
Board of Directors.
The preferred stock may be issued from time to time in
series.
Authority is hereby expressly granted to the Board of Directors to authorize one
or more series of preferred stock and to fix the number of shares to constitute
such series and distinctive designations thereof and, with respect to each
series of preferred stock, to fix by resolution or resolutions providing for the
issuance of such series such variations in respect thereof as may be determined
by the Board of Directors. All shares of every series of preferred stock shall
be alike in every particular, and all series of preferred stock hereafter
created shall rank equally and be identical in all respects, except as to the
following rights and preferences which may constitute variations as between
different series of preferred stock:
a. The rate of the dividend on the shares of such
series;
b. The price at, and the terms and conditions upon
which shares may be redeemed;
c. The amount payable upon shares in the event of
involuntary liquidation;
d. The amount payable upon shares in the event
of voluntary liquidation;
e. Sinking fund provisions for the redemption or
purchase of shares;
f. The terms and conditions on which shares may be
converted, if the shares of any series are issued with the privilege of
conversion; and
g. Voting rights, if any.
D. The holder of any share of such common or serial preferred stock
shall have no preemptive rights to acquire any additional shares of the
Corporation or to acquire any treasury stock of the Corporation.
ARTICLE V
A. The number of directors of the Corporation shall be not less than
twelve (12) and not greater than sixteen (16), and, effective as of the annual
meeting of shareholders in 1982, the Board of Directors shall be divided into
three classes, designated Class I, Class II and Class III. Such classes shall be
as nearly equal in number as possible. The term of directors of one class shall
extend to each annual meeting of shareholders and in all cases as to each
director, until his successor shall be elected and shall qualify, or until his
earlier resignation, removal from office, death or incapacity. Additional
directorships resulting from an increase in number of directors shall be
apportioned among the classes as equally as possible. The initial term of office
of directors of Class I shall extend to the annual meeting of shareholders in
1983, that of Class II shall extend to the annual meeting in 1984, and that of
Class III shall extend to the annual meeting in 1985, and in all cases as to
each director until his successor shall be elected and shall qualify or until
his earlier resignation, removal from office, death or incapacity. At each
annual meeting of shareholders, the number of directors equal to the number of
directors of the class whose term extends to the time of such meeting shall be
elected to hold office until the third succeeding annual meeting of shareholders
after their election. The Board of Directors may, upon a majority vote of its
members, increase or decrease the number of directors within the limits set
forth above. Vacancies in the Board of Directors or new directorships created by
an increase in the number of directors shall be filled by majority vote of the
remaining members of the Board and the person filling such vacancy or
newly-created directorship shall serve out the remainder of the term for the
vacated directorship or, in the case of a new directorship, the term designated
for the class of directors of which that directorship is a part.
B. The shareholders may at any time at a meeting expressly called for
that purpose remove any or all of the directors, only for cause, by a vote of
two-thirds of the shares then entitled to vote at an election of directors. For
purposes of this Article, removal "for cause" shall mean that the director to be
removed has been convicted of a felony by a court of competent jurisdiction and
such conviction is no longer subject to direct appeal, or that the director to
be removed has been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation by a court of competent jurisdiction
and such adjudication is no longer subject to direct appeal.
C. This Article V may not be amended, altered or repealed without the
approval of two-thirds of the shares entitled to vote at the time such
amendment, alteration or repeal is proposed.
ARTICLE VI
The Board of Directors of this Corporation shall have the power to adopt
a corporate seal which shall be the corporate seal of this Corporation.
ARTICLE VII
The private property of the shareholders of this Corporation shall at
all times be exempt from liability of corporate debts of any kind and this
Article shall not be amended or repealed.
<PAGE>
ARTICLE VIII
In the event that any shareholder shall become indebted to the
Corporation, the Corporation shall have a lien upon any shares of stock in this
Corporation owned by such shareholder for the full amount of such indebtedness.
ARTICLE IX
Stock in this Corporation shall be transferred only by assignment upon
the books of the Corporation, subject to and in accordance with such
restrictions as may be provided in the by-laws of this Corporation.
ARTICLE X
To the fullest extent permitted by the Iowa Business Corporation Act as
the same now exists or may hereafter be amended, a director of the Corporation
shall not be liable to the Corporation or its stock-holders for monetary damages
for breach of fiduciary duty as a director. Any repeal or modification of this
ARTICLE X by the stockholders of the Corporation only shall be applied
prospectively, to the extent that such repeal or modification would, if applied
retrospectively, adversely affect any limitation on the personal liability of a
director of the Corporation existing immediately prior to such repeal or
modification.
The above Third Restated and Amended Articles of Incorporation do not
contain an amendment requiring the approval of the Corporation's shareholders,
and were unanimously adopted by the Corporation's Board of Directors on
September 9, 1996.
Dated this 15th day of January, 1997.
PIONEER HI-BRED INTERNATIONAL, INC.
SEAL
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Senior Vice President,
CFO & Secretary
STATE OF IOWA, COUNTY OF POLK:SS
On this 15th day of January, 1997, before me, a notary public in and for
the State of Iowa, personally appeared Jerry L. Chicoine, to me personally
known, who being by me duly sworn do say that he is the Senior Vice President,
CFO and Secretary, respectively of said corporation, that the corporate seal has
been affixed to this document and that said Third Restated and Amended Articles
of Incorporation were signed on behalf of said corporation by authority of its
Board of Directors and the said Jerry L. Chicoine acknowledges the execution of
said instrument to be the voluntary act and deed of said corporation by it
voluntarily executed.
/s/ Susan E. Griggs
By: Susan E. Griggs
Notary Public in and
for the State of Iowa
<PAGE>
Form of Articles of Amendment
of the
Third Restated and Amended Articles of Incorporation
of Pioneer Hi-Bred International, Inc.
To the Secretary of State of the State of Iowa:
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Third Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International, Inc.
(the "Corporation).
2. On December 13, 1996, the Corporation adopted an amendment to its
Articles of Incorporation, the text of which is attached hereto as
Exhibit A.
3.The amendment was duly adopted by the board of directors without
shareholder approval, as shareholder approval is not required pursuant
to Section 490.602 of the Iowa Business Corporation Act.
Date: February 3, 1997
Pioneer Hi-Bred International, Inc.
/s/ Charles S. Johnson
By: Charles S. Johnson
Title: Chairman, President and CEO
<PAGE>
EXHIBIT "A"
DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
OF
PIONEER HI-BRED INTERNATIONAL, INC.
1. Designation and Amount.
(a) There shall be a series of Preferred Stock of the
Corporation created out of the authorized but unissued
shares of the capital stock of the Corporation, which
series shall be designated Series A Junior Participating
Preferred Stock (the "Participating Preferred Stock"), to
consist of one hundred and fifty thousand (150,000)
shares, without par
value.
(b) Subject of paragraph 4(e) of this designation, the number
of shares of said series may at any time or from time to
time be increased or decreased by the Board of Directors
notwithstanding that shares of such series may be
outstanding at such time of increase or decrease.
2. Dividend Rate.
(a) The holders of shares of Participating Preferred Stock shall
be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first
day of each November, February, May and August in each year
(each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or
fraction of a share of Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $230.00 or (b) 1,000 times the aggregate per
share amount of all cash dividends and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value of One
Dollar ($1.00) per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share
or fraction of a share of Participating Preferred Stock.
(b) On or after the first issuance of any share or fractional
share of Participating Preferred Stock, no dividend on
Common Stock shall be declared unless concurrently therewith
a dividend or distribution is declared on the Participating
Preferred Stock as provided in paragraph (a) above; and the
declaration of any such dividend on the Common Stock shall
be expressly conditioned upon payment or declaration of and
provision for a dividend on the Participating Preferred
Stock as above provided. In the event no dividend or
distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $230.00 per share on the Participating
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Participating Preferred Stock,
unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of
shares of Participating Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. The Board of Directors may fix a record
date for the determination of holders of shares of
Participating Preferred Stock entitled to receive payment of
a dividend distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for
the payment thereof.
3. Dissolution. Liquidation and Winding Up. In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation (hereinafter referred to as a "Liquidation"), the holders of
Participating Preferred Stock shall receive at least $1,000.00 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Participating Preferred Stock shall be entitled to receive at least
an aggregate amount per share equal to 1,000 times the aggregate amount to be
distributed per share to holders of Common Stock (the "Participating Preferred
Liquidation Preference").
4. Voting Rights. The holders of shares of Participating Preferred Stock
shall have the following voting rights:
(a) Each share of Participating Preferred Stock shall entitle the
holder thereof to five thousand (5,000) votes on all matters submitted to a vote
of the stockholders of the Corporation, except that no holder of Participating
Preferred Stock shall be entitled to exercise more than one thousand (1,000)
votes on any such matter in respect of any share of Participating Preferred
Stock if such holder would have been entitled to exercise no more than one vote
on any such matter in respect of any share of Common Stock under Article IV.B of
the Articles of Incorporation, had such shares of Participating Preferred Stock
been shares of Common Stock.
(b) Except as otherwise provided herein, or by law, the Articles
of Incorporation or the By-laws of the Corporation, the holders of shares of
Participating Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(c) If and whenever dividends on the Participating Preferred
Stock shall be in arrears in an amount equal to six quarterly dividend payments,
then and in such event the holders of the Participating Preferred Stock, voting
separately as a class (subject to the provisions of subparagraph (d) below),
shall be entitled at the next annual meeting of the stockholders or at any
special meeting to elect two (2) directors. Each share of Participating
Preferred Stock shall be entitled to one vote, and holders of fractional shares
shall have the right to a fractional vote. Upon election, such directors shall
become additional directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically increased by such
number of directors. Such right of the holders of Participating Preferred Stock
to elect directors may be exercised until all dividends in default on the
Participating Preferred Stock shall have been paid in full, and dividends for
the current dividend period declared and funds therefor set apart, and when so
paid and set apart, the right of the holders of Participating Preferred Stock to
elect such number of directors shall cease, the term of such directors shall
thereupon terminate, and the authorized number of directors of the Corporation
shall thereupon return to the number of authorized directors otherwise in
effect, but subject always to the same provisions for the vesting of such
special voting rights in the case of any such future dividend default or
defaults. The fact that dividends have been paid and set apart as required by
the preceding sentence shall be evidenced by a certificate executed by the
President and the chief financial officer of the Corporation and delivered to
the Board of Directors. The directors so elected by holders of Participating
Preferred Stock shall serve until the certificate described in the preceding
sentence shall have been delivered to the Board of Directors or until their
respective successors shall be elected or appointed and qualify.
At any time when such special voting rights have been so vested in the
holders of the Participating Preferred Stock, the Secretary of the Corporation
may, and upon the written request of the holders of record of 10% or more of the
number of shares of the Participating Preferred Stock then outstanding addressed
to such Secretary at the principal office of the Corporation in the State of
Iowa, shall, call a special meeting of the holders of the Participating
Preferred Stock for the election of the directors to be elected by them as
hereinabove provided, to be held in the case of such written request within
forty (40) days after delivery of such request, and in either case to be held at
the place and upon the notice provided by law and in the By-laws of the
Corporation for the holding of meetings of stockholders; provided, however that
the Secretary shall not be required to call such a special meeting (i) if any
such request is received less than ninety (90) days before the date fixed for
the next ensuing annual or special meeting of stockholders or (ii) if at the
time any such request is received, the holders of Participating Preferred Stock
are not entitled to elect such directors by reason of the occurrence of an event
specified in the third sentence of subparagraph (d) below.
(d) if; at any time when the holders of Participating Preferred
Stock are entitled to elect directors pursuant to the foregoing provisions of
this paragraph 4, the holders of any one or more additional series of Preferred
Stock are entitled to elect directors by reason of any default or event
specified in the Articles of Incorporation, as in effect at the time of the
designation for such series, and if the terms for such other additional series
so permit, the voting rights of the two or more series then entitled to vote
shall be combined (with each series having a number of votes proportional to the
aggregate liquidation preference of its outstanding shares). In such case, the
holders of Participating Preferred Stock and of all such other series then
entitled so to vote, voting as a class, shall elect such directors. If the
holders of any such other series have elected such directors prior to the
happening of the default or event permitting the holders of Participating
Preferred Stock to elect directors, or prior to a written request for the
holding of a special meeting being received by the Secretary of the Corporation
from the holders of not less than 10% of the then outstanding shares of
Participating Preferred Stock, then such directors so previously elected will be
deemed to have been elected by and on behalf of the holders of Participating
Preferred Stock as well as such other series, without prejudice to the right of
the holders of Participating Preferred Stock to vote for directors if such
previously elected directors shall resign, cease to serve or fail to stand for
reelection while the holders of Participating Preferred Stock are entitled to
vote. If the holders of any such other series are entitled to elect in excess of
two (2) directors, the Participating Preferred Stock shall not participate in
the election of more than two (2) such directors, and those directors whose
terms first expire shall be deemed to be the directors elected by the holders of
Participating Preferred Stock; provided that, if at the expiration of such terms
the holders of Participating Preferred Stock are entitled to vote in the
election of directors pursuant to the provisions of this paragraph 4, then the
Secretary of the Corporation shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders referred to in subparagraph
(c)) of holders of Participating Preferred Stock for the purpose of electing
replacement directors (in accordance with the provisions of this paragraph 4) to
be held on or prior to the time of expiration of the expiring terms referred to
above.
(e) Except as otherwise set forth herein or required by law, the
Articles of Incorporation or the By-laws of the Corporation, holders of
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for the taking of any
corporate action. No consent of the holders of outstanding shares of
Participating Preferred Stock at any time outstanding shall be required in order
to permit the Board of Directors to: (i) increase the number of authorized
shares of Participating Preferred Stock or to decrease such number to a number
not below the sum of the number of shares of Participating Preferred Stock then
outstanding and the number of shares with respect to which there are outstanding
rights to purchase; or (ii) to issue Preferred Stock which is senior to the
Participating Preferred Stock, junior to the Participating Preferred Stock or on
a parity with the Participating Preferred Stock.
5. Redemption. The shares of Participating Preferred Stock shall not
be redeemable.
6. Conversion Rights. The Participating Preferred Stock is not
convertible into Common Stock or any other security of the Corporation.
<PAGE>
Articles of Amendment
of the
Third Restated and Amended Articles of Incorporation
of
Pioneer Hi-Bred International, Inc.
To the Secretary of State
of the State of Iowa
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Third Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International,
Inc. (the "Corporation").
2. On August 5, 1997, the Corporation adopted an amendment to its Third
Restated and Amended Articles of Incorporation, the text of which is
attached hereto as Exhibit A.
3. The amendment was duly adopted by the Board of Directors of the
Corporation without shareholder approval, as shareholder approval is not
required pursuant to Section 490.602 of the Iowa Business Corporation
Act.
Dated: September 9, 1997.
/s/ John D. James
By: John D. James
Senior Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
PIONEER HI-BRED INTERNATIONAL, INC.
<PAGE>
Pioneer Hi-Bred International, Inc., an Iowa corporation (the "Corporation"),
does hereby certify that the Board of Directors of the Corporation duly adopted
the following resolution, at a meeting duly convened and held on August 5, 1997,
in respect of a series of Preferred Stock of the Corporation, pursuant to
authority conferred upon the Board by Article IV of the Articles of
Incorporation of the Corporation and in accordance with Section 602 of the
Business Corporation Act of the State of Iowa:
BE IT RESOLVED, that the issuance of a series of Preferred Stock of the
Corporation is hereby authorized, and the designation, amount, powers,
preferences and relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof, of the shares of such
series of Preferred Stock of the Corporation, are hereby fixed as follows:
1. Designation; Class and Amount; Certain Definitions. The series of
Preferred Stock, the issuance of which is hereby authorized, shall comprise
200,000 shares the distinctive serial designation of which shall be "Preferred
Stock, Series A", which is sometimes herein referred to as "Series A Convertible
Preferred Stock". Each share of Series A Convertible Preferred Stock shall be
identical in all respects with all other shares of Series A Convertible
Preferred Stock. The number of shares of Series A Convertible Preferred Stock
which are purchased or otherwise acquired by the Corporation or converted into
Common Stock shall be canceled and shall revert to authorized but unissued
shares of Series A Convertible Preferred Stock undesignated as to series. The
Corporation shall not issue, sell or otherwise transfer shares of Series A
Convertible Preferred Stock to any Person other than the members of the Investor
Group. Certain capitalized terms used herein have the meanings specified
therefor in Section 10 below.
2. Dividends. (a) Except as set forth in the Investment Agreement, each
Holder of shares of Series A Convertible Preferred Stock shall participate with
the holders of Common Stock in all Dividends, when, as and if declared by the
Board and paid or distributed by the Corporation on or in respect of the Common
Stock on a share for share basis and in like tenor and forms as the Dividend
paid on the Common Stock as if all shares of Series A Convertible Preferred
Stock were converted into the number of shares of Common Stock (whether or not
the Series A Convertible Preferred Stock is then so convertible) calculated in
accordance with Section 6 below, immediately prior to the record date for such
Dividend. Except as set forth above, holders of shares of Series A Convertible
Preferred Stock shall not be entitled to receive any dividends. Except to the
extent payable in respect of dividends paid on the Common Stock, no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on shares of Series A Convertible Preferred Stock.
(b) Dividends on the Series A Convertible Preferred Stock in
respect of each Dividend shall be payable, when and if declared by the Board of
Directors, concurrently with each date of payment (each such date, a "Dividend
Payment Date") by the Corporation of Dividends on the Common Stock. Dividends
payable in cash shall be paid by wire transfer in immediately available funds to
the accounts designated by the respective Holders in written notices given to
the Corporation at least two Business Days prior to the payment date or by such
other means as may be agreed to by the Corporation and the respective Holders.
(c) The Corporation will cause written notice of each Dividend
on the Series A Convertible Preferred Stock to be given to each Holder within
five Business Days after it is determined by the Board of Directors.
3. Voting Rights
(a) Except as otherwise provided herein or as required by law,
the Holders of Series A Convertible Preferred Stock shall not be entitled to any
Vote.
(b) At any meeting called for the purpose of voting on (or
acting by written consent with respect to) any matter to be voted upon by the
holders of Common Stock of the Corporation, the holders of shares of Series A
Convertible Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters so submitted to a vote of stockholders of
the Corporation. At any such meeting or in connection with any such action by
written consent, each share of Series A Convertible Preferred Stock shall carry,
as of the record date applicable to such vote, a number of votes equal to the
Per Share Vote Amount as calculated by the Corporation for such meeting.
(c) In accordance with Section 6.2(b) of the Investment
Agreement, the Corporation will cause written notice of any vote as to which
holders of Common Stock are entitled to vote as a separate class or voting group
under the Articles of Incorporation or Iowa Law (a "Class Vote"), to be given to
each Holder at least 15 Business Days prior to such Class Vote.
4. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
Holders of shares of Series A Convertible Preferred Stock then outstanding shall
be entitled, for each share of Series A Convertible Preferred Stock, to be paid
out of the assets of the Corporation available for distribution to its
stockholders the amount of cash or other property that would be payable on the
number of shares of Common Stock then issuable upon conversion of such share of
Series A Convertible Preferred Stock (whether or not then convertible) (such
amount payable being adjusted appropriately to reflect any stock split, stock
dividend, reverse stock split, or any transaction with comparable effect upon
the Common Stock) (the "Liquidation Preference"). This entitlement of the
Holders of shares of Series A Convertible Preferred Stock, to the extent equal
to $.01 for each share of Series A Convertible Preferred Stock, shall be
satisfied before any similar payment shall be made or any assets distributed to
the holders of the Common Stock or any other security junior in rank to the
Series A Convertible Preferred Stock as to distribution of assets upon such
dissolution, liquidation or winding up and otherwise shall be satisfied on a
pari passu basis with the holders of the Common Stock. If the assets of the
Corporation are not sufficient to pay in full the liquidation payments payable
to all of the Holders of the outstanding shares of Series A Convertible
Preferred Stock, then the Holders of all such shares shall share ratably in such
distribution of assets in accordance with the liquidation preference to which
they are entitled. For the purposes of this section, neither the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation nor the consolidation or merger of the Corporation with one or more
other corporations shall be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, unless such voluntary sale, conveyance, exchange
or transfer shall be in connection with a dissolution or winding up of the
business of the Corporation.
5. Restrictions on Transfer. The shares of Series A Convertible
Preferred Stock are subject to the provisions of the Investment Agreement
(including the provisions thereof restricting transfer of such stock).
6. Conversion. (a)(i) Concurrently with the transfer of Beneficial
Ownership of any share of Series A Convertible Preferred Stock to any Person
other than the Investor or another member of the Investor Group or Other
Investor Affiliate, such share of Series A Convertible Preferred Stock shall
convert into [100]* fully-paid and non-assessable shares of Common Stock (as
adjusted pursuant to Section 6(c)), in accordance with the procedures provided
in clause (b) of this Section 6.
(ii) At any time (x) at the direction of the Corporation,
but only if the Corporation intends to recommend approval of a Voting Amendment
(as defined in the Investment Agreement), and (y) at the direction of the
Investor, following the approval and effectiveness of a Voting Amendment, share
of Series A Convertible Preferred Stock shall be mandatorily convertible into
fully-paid and non-assessable shares of Common Stock, with each share of
Series A Convertible Preferred Stock being converted into [100]* shares of
Common Stock (as adjusted pursuant to Section 6(c)).
<PAGE>
(iii) The Investor shall have the right, in accordance
with Section 8.8
of the Investment Agreement, at any time that the Investor may exercise the
Optional Conversion Right (as defined in the Investment Agreement) in accordance
with the Investment Agreement, to cause all shares of Series A Convertible
Preferred Stock to be converted into fully-paid and non-assessable shares of
Common Stock, with each share of Series A Convertible Preferred Stock being
converted into [100]* shares of Common Stock (as adjusted pursuant to Section
6(c)).
(iv) At any time that all outstanding shares of Common
Stock (or whatever security received upon conversion or exchange thereof)
have the same vote per share, if any, without any time phase voting, all shares
of Series A Convertible Preferred Stock shall be convertible into
fully-paid and non-assessable shares of Common Stock, with each such
share of Series A Convertible Preferred Stock being converted into [100]*
shares of Common Stock (as adjusted pursuant to Section 6(c)).
(v) Except as set forth in this Section 6(a), the shares
of Series A Convertible Preferred Stock are not convertible at the option of
the Holder thereof.
(b) (i) Any Holder of shares of Series A Convertible Preferred Stock
required (or in the case of clauses (iii) or (iv) above requesting) to convert
any or all such shares into Common Stock shall surrender the certificate(s)
evidencing such shares of Series A Convertible Preferred Stock of the Holder at
the office of the transfer agent appointed for the purpose of such conversion by
the Corporation. Such surrendered certificate(s), if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank, or accompanied
by proper instruments of transfer to the Corporation or in blank.
(ii) The Corporation shall, within one Business Day after
such surrender of certificates evidencing shares of Series A Convertible
Preferred Stock accompanied by written notice and in compliance with any other
conditions contained herein, issue and deliver, or cause to be issued and
delivered, to the Person(s) for whose account such certificate(s) evidencing
shares of Series A Convertible Preferred Stock were so surrendered, or to th
nominee(s) of such Person(s), certificates representing the number of full
shares of Common Stock to which such Person shall be entitled pursuant to
the then-applicable conversion rate. Such conversion shall be deemed to have
been made on the date of such surrender of the certificate(s) evidencing
shares of Series A Convertible Preferred Stock to be converted (the
"Surrender Date") and the Person(s) entitled to receive the Common Stock
deliverable upon conversion of such Series A Convertible Preferred Stock
shall be treated for all purposes as the record holder(s) of such Common
Stock on such date and thereafter. Conversion of Series A Convertible
Preferred Stock may otherwise be achieved in accordance with such procedures as
the Corporation and a majority of the Holders may agree.
(iii) In the event that fewer than all shares of Series A
Convertible Preferred Stock represented by a surrendered certificate are to
be converted hereunder, a new certificate shall be issued at the Corporation's
expense representing the shares of Series A Convertible Preferred Stock
not so converted.
(iv) In connection with the conversion of any shares of
Series A Convertible Preferred Stock, no fractions of shares of Common Stock
shall be issued, but in lieu thereof the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Market Price (as defined in the
Investment Agreement) per share of Common Stock on the day on which such
shares of Series A Convertible Preferred Stock are deemed to have been
converted.
(c) The conversion rate shall be adjusted from time to time as
follows:
* Number of shares of Common Stock each share is convertible into is subject to
adjustment prior to closing in the event of a stock split, stock combination or
similar adjustment in the number of shares of Common Stock outstanding.
(i) In case the Corporation shall, at any time or from
time to time while any of the shares of Series A Convertible Preferred Stock are
outstanding, (A) subdivide or reclassify its outstanding shares of Common Stock
into a larger number of shares, or (B) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the conversion rate in
effect immediately prior to such action shall be adjusted so that the Holder
of any shares of Series A Convertible Preferred Stock thereafter surrendered
for conversion shall be entitled to receive the number of shares of Common Stock
which such Holder would have owned or have been entitled to receive immediately
following such action had such shares of Series A Convertible Preferred Stock
been converted immediately prior thereto. An adjustment made pursuant to this
Section 6(c)(i) shall become effective immediately after the close of business
on the effective date of a subdivision, reclassification or combination. If,
as a result of an adjustment made pursuant to this Section 6(c)(i), the Holder
of any shares of Series A Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes of
capital stock of the Corporation, the Board of Directors shall make an
appropriate allocation of the adjusted conversion rate between or among shares
of such classes of capital stock in accordance with the entitlements of the
Common Stock underlying the Series A Convertible Preferred Stock in connection
with such adjustment.
(ii) Whenever an adjustment in the conversion rate is
required, the Corporation shall forthwith place on file with its Transfer Agent
a statement signed by its Chief Executive Officer, Chief Financial Officer
or a Vice President and by its Secretary, Assistant Secretary, Treasurer or
Assistant Treasurer, stating the adjusted conversion rate determined as provided
herein. Such statements shall set forth in reasonable detail such facts as
shall be necessary to show the reason and the manner of computing such
adjustment.
(d) (i) The Corporation shall at all times reserve and keep available,
free from preemptive rights, out of its authorized and unissued stock, such
number of shares of its Common Stock as shall from time to time be sufficient to
effect the conversion of all shares of Series A Convertible Preferred Stock from
time to time outstanding, solely for the purpose of effecting such conversion.
The Corporation shall, from time to time, in accordance with the laws of the
State of Iowa, increase the authorized number of shares of Common Stock if at
any time the number of shares of authorized and unissued Common Stock shall not
be sufficient to permit the conversion of all the then outstanding shares of
Series A Convertible Preferred Stock.
(ii) The Corporation will pay any and all stamp and
transfer taxes that may be payable in respect of the issuance or delivery of
shares of Common Stock upon conversion of shares of Series A Convertible
Preferred Stock pursuant hereto. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of shares of Common Stock in a name other
than that in which the shares of Series A Convertible Preferred Stock so
converted were registered and no such issuance or delivery shall be made unless
and until the person requesting such issuance has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the
Corporation that such tax has been paid.
(e) In case of (i) any reclassification or change of outstanding shares
of Common Stock (other than a change in par value or from par value to no par
value or from no par value to par value, or as a result of a subdivision or
combination) or (ii) any consolidation or merger of the Corporation with one or
more other corporations (other than a consolidation or merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of Series A Convertible Preferred Stock) or (iii) any sale or
conveyance to another corporation or other entity of all or substantially all of
the property of the Corporation, then the Corporation, or such successor
corporation or other entity, as the case may be, shall make appropriate
provision so that the holder of each share of Series A Convertible Preferred
Stock then outstanding shall have the right to convert such share into the kind
and amount of shares of stock or other securities and property receivable upon
such consolidation, merger, sale, reclassification, change or conveyance by a
holder of the number of shares of Common Stock into which such shares of Series
A Convertible Preferred Stock might have been converted immediately prior to
such consolidation, merger, sale, reclassification, change or conveyance,
subject to adjustment which shall be as nearly equivalent as may be practicable
to the adjustments provided for in Section 6(c). If the holders of Common Stock
are entitled to elect the consideration payable pursuant any consolidation,
merger, sale, conveyance or other transaction or event set forth above, the
Holders also shall be entitled to elect between such forms of consideration. The
provisions of this paragraph shall apply similarly to successive consolidations,
mergers, sales, conveyances or other transactions or events.
(f) Whenever the number of shares of Common Stock into which each share
of Series A Convertible Preferred Stock is convertible is adjusted as provided
in this Section 6, the Corporation shall promptly mail to the Holders a notice
in accordance with Section 8 below stating that the number of shares of Common
Stock into which the shares of Series A Convertible Preferred Stock are
convertible has been adjusted and setting forth the new number of shares of
Common Stock (or describing the new stock, securities, cash or other property)
into which each share of Series A Convertible Preferred Stock is convertible, as
a result of such adjustment, a brief statement of the facts requiring such
adjustment and the computation thereof, and when such adjustment became
effective.
7. Limited Priority. The Series A Convertible Preferred Stock shall, to
the extent of the Liquidation Preference set forth in Section 4, be senior in
rank as to distribution of assets upon any liquidation, dissolution or winding
up of the affairs of the Corporation, to the Common Stock, or any class of
equity securities of the Corporation which by its terms are junior to the Series
A Convertible Preferred Stock, unless the Holders of 66 2/3 percent of the
outstanding shares of the Series A Convertible Preferred Stock shall otherwise
consent.
8. Notices. The Corporation shall provide notice to each Holder of any
action taken or proposed to be taken or any determination made by the
Corporation and/or the Holder under the terms of this Certificate of
Designations. Notice of any such action or determination by the Corporation
and/or the Holder and all other notices and other communications provided for in
this Certificate of Designations shall be delivered by facsimile and by
reputable overnight courier,
(a) If to the Company, to:
Pioneer Hi-Bred International, Inc,
700 Capital Square
Des Moines, Iowa 50309
Attention: General Counsel
Telephone: 515-248-4800
Telecopier: 515-248-4844
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Facsimile: (212) 859-4000
Attn.: Stephen Fraidin
or such other address as the Corporation shall have furnished to the Holders in
writing,
(b) if to a Holder, to the address and facsimile number of such Holder
listed on the Stock Books of the Corporation.
9. Definitions. Certain capitalized terms are used herein as defined
below:
"Affiliate" of a Person has the meaning set forth in Rule 12b-2 under
the Exchange Act.
"Articles of Incorporation" means the Third Restated and Amended
Articles of Incorporation of the Corporation, as amended from time to time.
"Beneficially Owned" with respect to any securities means having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act, as in effect on the date hereof, without limitation by
the 60-day provision in paragraph (d)(1)(i) thereof). The terms "Beneficial
Ownership" and "Beneficial Owner" have correlative meanings.
"Board" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which banking institutions in the State of Iowa are authorized or obligated by
law or executive order to close.
"Certificate of Designations" means this Certificate of Designations,
Powers, Preferences and Relative, Participating, Optional or other Rights, and
the Qualifications, Limitations or Restrictions Thereof, creating the Series A
Convertible Preferred Stock.
"Common Stock" means the Common Stock, par value $1.00 per share, of
the Corporation.
"Common Voting Power" means, in respect of any record date for any
meeting of stockholders (or action by written consent in lieu of a meeting) the
aggregate Votes represented by all then outstanding Voting Securities other than
the Series A Convertible Preferred Stock as determined by the Board in
accordance with the procedures set forth in the Articles of Incorporation based
on the actual Votes entitled to be voted at such meeting (excluding any
estimation of any kind, including as to who would have been entitled to 5 Votes
per share if such shareholders had taken the requisite steps to obtain such
Vote).
"Dividend" means any dividend or distribution on or in respect of the
Common Stock of the Corporation, whether in cash, additional shares of Common
Stock or other property.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Holder" means a holder of record of a share or shares of Series A
Convertible Preferred Stock.
"Investment Agreement" means the Agreement, dated as of August 6, 1997,
between the Investor and the Corporation, as amended and/or restated from time
to time.
"Investor" means E.I. du Pont de Nemours and Company.
"Investor Group" shall have the meaning set forth in the Investment
Agreement.
"Investor Group Total Ownership Percentage" means, with respect to the
Investor Group calculated at a particular point in time, the ratio, expressed as
a percentage, of (a) the total number of shares of Common Stock Beneficially
Owned by the Investor Group and issuable upon conversion of (whether or not then
convertible), or otherwise constituting the economic equivalent of, all Common
Securities (as defined in the Investment Agreement) Beneficially Owned by the
Investor Group, over (b) the total number of shares of Common Stock then
outstanding and the number of shares of Common Stock issuable upon conversion
(whether or not then convertible) of, or otherwise constituting the economic
equivalent of, all outstanding Common Securities; provided that in no event
shall the Investor Group Total Ownership Percentage of all Holders of Series A
Convertible Preferred Stock be greater than 20%.
"Iowa Law" shall mean the Business Corporation Act of the State of Iowa
"Liquidation Preference" has the meaning specified in Section 4 above.
"Other Investor Affiliate" shall have the meaning set forth in the
Investment Agreement.
"Per Share Vote Amount" means in respect of any record date for any
meeting of stockholders (or action by written consent in lieu of a meeting) that
number of Votes per share of Series A Convertible Preferred Stock equal to (x)
the Total Preferred Vote Amount as of such record date amount divided by (y) the
number of shares of Series A Convertible Preferred Stock outstanding as of such
record date.
"Person" means any individual, corporation, company, association,
partnership, joint venture, limited liability company, trust or unincorporated
organization, group (within the meaning of Rule 13d-5 under the Exchange Act) or
a government or any agency or political subdivision thereof.
"Series A Convertible Preferred Stock" has the meaning specified in
Section 1 above.
"Stock Books" means the stock transfer books of the Corporation
relating to its Common Stock and Preferred Stock.
"Subsidiary" means, as to any Person, any other Person more than fifty
percent (50%) of the shares of the voting stock or other voting interests of
which are owned or controlled, or the ability to select or elect more than fifty
percent (50%) of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries. A Subsidiary that is directly
or indirectly wholly-owned by another Person except for directors' qualifying
shares shall be deemed wholly-owned for purposes of this Agreement.
"Surrender Date" has the meaning specified in Section 6 above.
"13D Group" shall mean any group of Persons who, with respect to those
acquiring, holding, voting or disposing of Voting Securities would, assuming
ownership of the requisite percentage thereof, be required under Section 13(d)
of the Exchange Act and the rules and regulations thereunder to file a statement
on Schedule 13D with the Securities and Exchange Commission as a "person" within
the meaning of Section 13(d)(3) of the Exchange Act, or who would be considered
a "person" for purposes of Section 13(g)(3) of the Exchange Act.
"Total Preferred Vote Amount" means, in respect of the record date for
any meeting (or action by written consent in lieu of a meeting) of shareholders
of the Corporation to vote on any matter, an aggregate number of Votes equal to
(a) the Common Voting Power as of such record date multiplied by (b) a fraction,
the numerator of which is the Investor Group Total Ownership Percentage
(expressed as a fraction carried to two decimal places) as of such record date
and the denominator of which is 1.00 minus the Investor Group Total Ownership
Percentage (expressed as a fraction carried to two decimal places) as of such
record date; provided that in no event shall the Total Preferred Vote Amount be
greater than 20% of Total Voting Power.
"Total Voting Power" means in respect of any record date for any meeting
of stockholders (or action by written consent in lieu of a meeting) the
aggregate Votes represented by all then outstanding Voting Securities as
determined by the Board in accordance with the procedures set forth in the
Articles of Incorporation based on the actual Votes entitled to be voted at such
meeting (excluding any estimation of any kind, including as to who would have
been entitled to 5 Votes per share if such shareholders had taken the requisite
steps to obtain such Vote).
"Votes" shall mean, at any time, with respect to any Voting Securities,
the total number of votes that would be entitled to be cast by the holders of
such Voting Securities generally (by the terms of such Voting Securities, the
Articles of Incorporation or any certificate of designations for such Voting
Securities) in a meeting for the election of directors held at such time,
including the votes that would be able to be cast by holders of shares of Series
A Convertible Preferred Stock in accordance with the procedures set forth in the
Articles of Incorporation based on the actual number of Votes entitled to be
voted at such meeting (excluding any estimation of any kind, including as to who
would have been entitled to 5 Votes per share if such shareholders had taken the
requisite steps to obtain such Vote).
<PAGE>
"Voting Securities" means the shares of Common Stock, the Series A
Convertible Preferred Stock and any other securities of the Corporation entitled
to vote generally for the election of directors, and any securities (other than
employee stock options) which are convertible into, or exercisable or
exchangeable for, Voting Securities.
IN WITNESS WHEREOF, Pioneer Hi-Bred International, Inc., has caused this
Certificate to be made under the seal of the Corporation and signed and attested
by the undersigned officers of the Corporation this 9th day of September, 1997.
PIONEER HI-BRED INTERNATIONAL, INC.
/s/ John D. James
By John D. James
Title: Senior Vice Preisdent
(Corporate Seal)
Attest:
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
ARTICLES OF CORRECTION FOR
PIONEER HI-BRED INTERNATIONAL, INC.
TO: SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to ss. 490.124 of the Iowa Business Corporation Act, the
undersigned corporation adopts the following Articles of Correction:
1. The name of the corporation is Pioneer Hi-Bred International, Inc.
2. A description of the document to be corrected is as follows:
Articles of Amendment of the Third Restated and Amended Articles of
Incorporation of Pioneer Hi-Bred International, Inc. in the form of
the Certificate of Designations attached as Exhibit A thereto.
3. The document to be corrected was filed by the Secretary of State on
September 10, 1997.
4. The incorrect statements in the document to be corrected are contained
in paragraphs (i), (iii) and (iv) of Section 6(a) thereof and in the
case of each such paragraph the incorrect item is the reference to
"[100]*" appearing therein and the footnote referred to by each such
reference.
5. The document was incorrect because it should have read as set forth
below in paragraph 6 and because the corresponding footnote should in
each case have been deleted.
6. The following is the correct statement and it should replace the
incorrect statement in the case of each of the foregoing paragraphs:
"100," and there should be no footnote.
Dated this 16th day of September, 1997.
PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
ARTICLES OF AMENDMENT
OF THE
THIRD RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
To the Secretary of State
of the State of Iowa
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Third Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International, Inc. (the
"Corporation").
2. The Third Restated and Amended Articles of Incorporation are hereby amended
to create a new class of Common Stock called Class B Common Stock, the text
of which is attached hereto as Exhibit A. In addition, upon the filing in
the Office of the Secretary of State of the State of Iowa of this
Certificate of Amendment, (i) each of the outstanding 164,445.86 shares of
Series A Convertible Preferred Stock of the Corporation issued and
outstanding immediately prior to such filing of this Certificate of
Amendment shall be automatically reclassified and changed without any
further action on the part of the Corporation or shareholders of the
Corporation into one hundred fully paid and nonassessable shares of Class B
Common Stock, and (ii) each of the 200,000 authorized shares of Series A
Convertible Preferred Stock will revert to serial preferred without
designation and the Certificate of Designation of Series A Convertible
Preferred Stock will cease to be in force and effect.
3. The date of the adoption of the amendment was January 27, 1998.
4. The amendment was approved by the shareholders. The designation, number of
outstanding shares, number of votes entitled to be cast by each voting
group entitled to vote separately on the amendment and the number of votes
of each voting group indisputably represented at the meeting is as follows:
<TABLE>
<CAPTION>
Votes Entitled to Votes Represented
Designation of Group Shares Outstanding be Cast on Amendment at Meeting
-------------------- ------------------- -------------------- -------------------
<S> <C> <C> <C>
Common 65,758,411.083 158,453,436 121,712,477
Series A Convertible Preferred 65,922,856.943* 198,066,794 161,325,835
and Common
</TABLE>
* 65,758,411.083 shares of Common and 164,445.86 shares of Series A
Convertible Preferred, which under certain circumstances are each
convertible into 100 shares of Common Stock
5. The total number of votes cast for and against the amendment by each voting
group entitled to vote separately on the amendment is as follows:
Voting Group Votes For Votes Against
Common 115,512,282 1,213,910
Series A Convertible Preferred 155,125,640 1,213,910
and Common
6. The number of votes cast for the amendment of each voting group was
sufficient for approval by that voting group.
7. The effective date and time of this document is the time and date of filing
of this document in the office of the Secretary of State of the State of
Iowa.
Dated: January 29, 1998.
PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT A
AMENDMENT TO THE
THIRD RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
I.
The Corporation's Third Restated and Amended Articles of Incorporation
is hereby amended by deleting clause (ii) of paragraph A of Article IV in its
entirety and inserting the following so that clauses (ii) and (iii) of paragraph
A of Article IV shall hereafter read as follows:
"(ii) 120,000,000 shares of Class B Common Stock without par value, and
(iii) 10,000,000 shares, consisting of one class designated as serial preferred
without par value."
II.
The Corporation's Third Restated and Amended Articles of Incorporation
is hereby amended by deleting paragraph D of Article IV in its entirety and
inserting the following so paragraph D and E of Article IV shall hereafter read
as follows:
"D. 1. Designation; Class and Amount; Certain Definitions. The series of
Class B Common Stock, the issuance of which is hereby authorized, shall comprise
of 120,000,000 shares the distinctive serial designation of which shall be
"Class B Common Stock." Each share of Class B Common Stock shall be identical in
all respects with all other shares of Class B Common Stock. The number of shares
of Class B Common Stock which are purchased or otherwise acquired by the
Corporation or converted into Common Stock shall be canceled and shall revert to
authorized but unissued shares of Class B Common Stock. The Corporation shall
not issue, sell or otherwise transfer shares of Class B Common Stock to any
Person other than the members of the Investor Group. Certain capitalized terms
used herein have the meanings specified therefor in Section 9 below.
2. Dividends. (a) Except as set forth in the Investment
Agreement, each Holder of shares of Class B Common Stock shall participate with
the holders of Common Stock in all Dividends (other than Dividends in respect of
which (x) an adjustment is made in the number of shares of Common Stock issuable
upon conversion as prescribed in Section 6(c)(i) or Section 6(c)(iii) below or
(y) an adjustment is not required to be so made because of the satisfaction of
the proviso to the end of the first sentence of Section 6 (c)(i) below), when,
as and if declared by the Board and paid or distributed by the Corporation on or
in respect of the Common Stock on a share for share basis and in like tenor and
forms as the Dividend paid on the Common Stock as if all shares of Class B
Common Stock were converted into the number of shares of Common Stock (whether
or not the Class B Common Stock is then so convertible) calculated in accordance
with Section 6 below, immediately prior to the record date for such Dividend.
Except as set forth above, holders of shares of Class B Common Stock shall not
be entitled to receive any dividends. Except to the extent payable in respect of
dividends paid on the Common Stock, no interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
shares of Class B Common Stock.
(b) Dividends on the Class B Common Stock in respect of
each Dividend shall be payable, when and if declared by the Board of Directors,
concurrently with each date of payment (each such date, a "Dividend Payment
Date") by the Corporation of Dividends on the Common Stock. Dividends payable in
cash shall be paid by wire transfer in immediately available funds to the
accounts designated by the respective Holders in written notices given to the
Corporation at least two Business Days prior to the payment date or by such
other means as may be agreed to by the Corporation and the respective Holders.
(c) The Corporation will cause written notice of each
Dividend on the Class B Common Stock to be given to each Holder within five
Business Days after it is determined by the Board of Directors.
3. Voting Rights. (a) Except as otherwise provided herein, or
expressly provided in the Investment Agreement or as required by law, the
Holders of Class B Common Stock shall not be entitled to any Vote.
(b) At any meeting called for the purpose of voting on
(or acting by written consent with respect to) any matter to be voted upon by
the holders of Common Stock of the Corporation, the holders of shares of Class
B Common Stock and the holders of shares of Common Stock shall vote together as
one class on all matters so submitted to a vote of stockholders of the
Corporation. At any such meeting or in connection with any such action by
written consent, each share of Class B Common Stock shall carry, as of the
record date applicable to such vote, a number of votes equal to the Per Share
Vote Amount as calculated by the Corporation for such meeting.
(c) In accordance with Section 6.2(b) of the Investment
Agreement, the Corporation will cause written notice of any vote as to which
holders of Common Stock are entitled to vote as a separate class or voting group
under the Articles of Incorporation or Iowa Law (a "Class Vote"), to be given to
each Holder at least 15 Business Days prior to such Class Vote.
4. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the Holders of shares of Class B Common Stock then outstanding
shall be entitled, for each share of Class B Common Stock, to be paid out of the
assets of the Corporation available for distribution to its stockholders the
amount of cash or other property that would be payable on the number of shares
of Common Stock then issuable upon conversion of such share of Class B Common
Stock (whether or not then convertible) (such amount payable being adjusted
appropriately to the extent required in Section 6 (c) below to reflect any stock
split, stock dividend, reverse stock split, or any transaction with comparable
effect upon the Common Stock) (the "Liquidation Preference"). This entitlement
of the Holders of shares of Class B Common Stock, to the extent equal to $.01
for each share of Class B Common Stock, shall be satisfied before any similar
payment shall be made or any assets distributed to the holders of the Common
Stock or any other security junior in rank to the Class B Common Stock as to
distribution of assets upon such dissolution, liquidation or winding up and
otherwise shall be satisfied on a pari passu basis with the holders of the
Common Stock. If the assets of the Corporation are not sufficient to pay in full
the liquidation payments payable to all of the Holders of the outstanding shares
of Class B Common Stock, then the Holders of all such shares shall share ratably
in such distribution of assets in accordance with the liquidation preference to
which they are entitled. For the purposes of this section, neither the voluntary
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets of
the Corporation nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless such voluntary sale, conveyance,
exchange or transfer shall be in connection with a dissolution or winding up of
the business of the Corporation.
5. Restrictions on Transfer. The shares of Class B Common Stock are
subject to the provisions of the Investment Agreement (including the provisions
thereof restricting transfer of such stock).
6. Conversion. (a) (i) Concurrently with the transfer of Beneficial
Ownership of any share of Class B Common Stock to any Person other than the
Investor or another member of the Investor Group or Other Investor Affiliate,
such share of Class B Common Stock shall convert into one fully-paid and
non-assessable share of Common Stock (as adjusted pursuant to Section 6(c)), in
accordance with the procedures provided in clause (b) of this Section 6.
(ii) At any time (x) at the direction of the Corporation,
but only if the Corporation intends to recommend approval of a Voting
Amendment (as defined in the Investment Agreement), and (y) at the direction of
the Investor, following the approval and effectiveness of a Voting Amendment,
shares of Class B Common Stock shall be mandatorily convertible into
fully-paid and non-assessable shares of Common Stock, with each share of Class
B Common Stock being converted into one share of Common Stock (as adjusted
pursuant to Section 6(c)).
(iii) At any time that all outstanding shares of Common
Stock (or whatever security received upon conversion or exchange thereof) have
the same vote per share, if any, without any time-phased voting, all shares of
Class B Common Stock shall be convertible into fully-paid and non-assessable
shares of Common Stock, with each such share of Class B Common Stock being
converted into one share of Common Stock (as adjusted pursuant to Section 6(c)).
(iv) Except as set forth in this Section 6(a), the shares
of Class B Common Stock are not convertible at the option of the Holder thereof.
(b) (i) Any Holder of shares of Class B Common Stock required (or
in the case of clause (iii) above requesting) to convert any or all such shares
into Common Stock shall surrender the certificate(s) evidencing such shares of
Class B Common Stock of the Holder at the office of the transfer agent appointed
for the purpose of such conversion by the Corporation. Such surrendered
certificate(s), if the Corporation shall so require, shall be duly endorsed to
the Corporation or in blank, or accompanied by proper instruments of transfer to
the Corporation or in blank.
(ii) The Corporation shall, within one Business Day after
such surrender of certificates evidencing shares of Class B Common Stock
accompanied by written notice and in compliance with any other conditions
contained herein, issue and deliver, or cause to be issued and delivered, to
the Person(s) for whose account such certificate(s) evidencing shares of Class
B Common Stock were so surrendered, or to the nominee(s) of such
Person(s), certificates representing the number of full shares of Common
Stock to which such Person shall be entitled pursuant to the
then-applicable conversion rate. Such conversion shall be deemed to have been
made on the date of such surrender of the certificate(s) evidencing shares
of Class B Common Stock to be converted (the "Surrender Date") and the
Person(s) entitled to receive the Common Stock deliverable upon conversion of
such Class B Common Stock shall be treated for all purposes as the record
holder(s) of such Common Stock on such date and thereafter. Conversion of
Class B Common Stock may otherwise be achieved in accordance with such
procedures as the Corporation and a majority of the Holders may agree.
(iii) In the event that fewer than all shares of Class B
Common Stock represented by a surrendered certificate are to be converted
hereunder, a new certificate shall be issued at the Corporation's expense
representing the shares of Class B Common Stock not so converted.
(iv) In connection with the conversion of any shares of
Class B Common Stock, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect
of such fractional interest in an amount equal to such fractional interest
multiplied by the Market Price (as defined in the Investment Agreement) per
share of Common Stock on the day on which such shares of Class B Common Stock
are deemed to have been converted.
(c) The conversion rate shall be adjusted from time to time as
follows:
(i) In case the Corporation shall, at any time or from
time to time while any of the shares of Class B Common Stock are outstanding,
(A) subdivide or reclassify its outstanding shares of Common Stock into a
larger number of shares (including a subdivision effected by declaring and
paying a Dividend payable in additional shares of Common Stock), or (B) combine
or reclassify its outstanding shares of Common Stock into a smaller number
of shares, the conversion rate in effect immediately prior to such action shall
be adjusted so that the Holder of any shares of Class B Common Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares
of Common Stock which such Holder would have owned or have been entitled to
receive immediately following such action had such shares of Class B Common
Stock been converted immediately prior thereto (which adjustments shall be in
lieu of payment of any Dividend on the Class B Common Stock); provided that no
adjustment pursuant to this Section 6 (c)(i) shall be made in connection
with a subdivision, combination or reclassification (including by way of a
Dividend payable in additional shares of Common Stock) described above if the
Corporation shall concurrently therewith subdivide, combine or reclassify
(including by way of a Dividend payable in additional shares of Class B Common
Stock) the outstanding Class B Common Stock on the same basis as the Common
Stock is so subdivided, combined or reclassified. An adjustment made pursuant
to this Section 6(c)(i) shall become effective immediately after the close of
business on the effective date of a subdivision, reclassification or
combination. If, as a result of an adjustment made pursuant to this Section
6(c)(i), the Holder of any shares of Class B Common Stock thereafter surrendered
for conversion shall become entitled to receive shares of two or more classes of
capital stock of the Corporation, the Board of Directors shall make an
appropriate allocation of the adjusted conversion rate between or among shares
of such classes of capital stock in accordance with the entitlements of the
Common Stock underlying the Class B Common Stock in connection with such
adjustment.
(ii) Whenever an adjustment in the conversion rate is
required, the Corporation shall forthwith place on file with its Transfer
Agent a statement signed by its Chief Executive Officer, Chief Financial
Officer or a Vice President and by its Secretary, Assistant Secretary,
Treasurer or Assistant Treasurer, stating the adjusted conversion rate
determined as provided herein. Such statements shall set forth in reasonable
detail such facts as shall be necessary to show the reason and the manner of
computing such adjustment.
(iii) In the event that prior to the issuance of the Class
B Common
Stock the Company shall (A) subdivide or reclassify its outstanding shares of
Common Stock into a larger number of shares (including a subdivision effected by
declaring or paying a Dividend payable in additional shares of Common Stock) or
(B) combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares, the conversion ratio applicable to the Class B Common Stock
shall be appropriately adjusted.
(d) (i) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized and unissued
stock, such number of shares of its Common Stock as shall from time to time be
sufficient to effect the conversion of all shares of Class B Common Stock from
time to time outstanding, solely for the purpose of effecting such conversion.
The Corporation shall, from time to time, in accordance with the laws of the
State of Iowa, increase the authorized number of shares of Common Stock if at
any time the number of shares of authorized and unissued Common Stock shall not
be sufficient to permit the conversion of all the then outstanding shares of
Class B Common Stock.
(ii) The Corporation will pay any and all stamp and
transfer taxes that may be payable in respect of the issuance or delivery of
shares of Common Stock upon conversion of shares of Class B Common Stock
pursuant hereto. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
and delivery of shares of Common Stock in a name other than that in which the
shares of Class B Common Stock so converted were registered and no such issuance
or delivery shall be made unless and until the person requesting such
issuance has paid to the Corporation the amount of any such tax or has
established to the satisfaction of the Corporation that such tax has been paid.
(e) In case of (i) any reclassification or change of outstanding
shares of Common Stock (other than a change in par value or from par value to no
par value or from no par value to par value, or as a result of a subdivision or
combination) or (ii) any consolidation or merger of the Corporation with one or
more other corporations (other than a consolidation or merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of Class B Common Stock) or (iii) any sale or conveyance to another
corporation or other entity of all or substantially all of the property of the
Corporation, then the Corporation, or such successor corporation or other
entity, as the case may be, shall make appropriate provision so that the holder
of each share of Class B Common Stock then outstanding shall have the right to
convert such share into the kind and amount of shares of stock or other
securities and property receivable upon such consolidation, merger, sale,
reclassification, change or conveyance by a holder of the number of shares of
Common Stock into which such shares of Class B Common Stock might have been
converted immediately prior to such consolidation, merger, sale,
reclassification, change or conveyance, subject to adjustment which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
Section 6(c)(to the extent adjustment would be required pursuant to Section 6(c)
above). If the holders of Common Stock are entitled to elect the consideration
payable pursuant to any consolidation, merger, sale, conveyance or other
transaction or event set forth above, the Holders also shall be entitled to
elect between such forms of consideration. The provisions of this paragraph
shall apply similarly to successive consolidations, mergers, sales, conveyances
or other transactions or events.
(f) Whenever the number of shares of Common Stock into which each
share of Class B Common Stock is convertible is adjusted as provided in this
Section 6, the Corporation shall promptly mail to the Holders a notice in
accordance with Section 8 below stating that the number of shares of Common
Stock into which the shares of Class B Common Stock are convertible has been
adjusted and setting forth the new number of shares of Common Stock (or
describing the new stock, securities, cash or other property) into which each
share of Class B Common Stock is convertible, as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the computation
thereof, and when such adjustment became effective.
7. Limited Priority. The Class B Common Stock shall, to the extent of
the Liquidation Preference set forth in Section 4, be senior in rank as to
distribution of assets upon any liquidation, dissolution or winding up of the
affairs of the Corporation, to the Common Stock, or any class of equity
securities of the Corporation which by its terms are junior to the Class B
Common Stock, unless the Holders of 66 2/3 percent of the outstanding shares of
the Class B Common Stock shall otherwise consent.
8. Notices. The Corporation shall provide notice to each Holder of
any action taken or proposed to be taken or any determination made by the
Corporation and/or the Holder under the terms of this Third Restated and Amended
Articles of Incorporation. Notice of any such action or determination by the
Corporation and/or the Holder and all other notices and other communications
provided for in this Third Restated and Amended Articles of Incorporation shall
be delivered by facsimile and by reputable overnight courier,
(a) If to the Company, to:
Pioneer Hi-Bred International, Inc.
800 Capital Square, 400 Locust Street
Des Moines, Iowa 50309
Attention: General Counsel
Telephone: (515) 248-4800
Facsimile: (515) 248-4844
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Telephone: (212) 859-8000
Facsimile: (212) 859-4000
Attn.: Stephen Fraidin
or such other address as the Corporation shall have furnished to the
Holders in writing,
(b) if to a Holder, to the address and facsimile number of such
Holder listed on the Stock Books of the Corporation.
9. Definitions. Certain capitalized terms are used herein as defined
below:
"Affiliate" of a Person has the meaning set forth in Rule 12b-2
under the Exchange Act.
"Articles of Incorporation" means the Third Restated and Amended
Articles of Incorporation of the Corporation, as amended from time to time.
"Beneficially Owned" with respect to any securities means having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act, as in effect on the date hereof, without limitation by
the 60-day provision in paragraph (d)(1)(i) thereof). The terms "Beneficial
Ownership" and "Beneficial Owner" have correlative meanings.
"Board" means the Board of Directors of the Corporation.
"Business Day" means any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of Iowa are authorized or
obligated by law or executive order to close.
"Class B Common Stock" has the meaning specified in Section 1
above.
"Common Stock" means the Common Stock, par value $1.00 per share,
of the Corporation.
"Common Voting Power" means, in respect of any record date for
any meeting of stockholders (or action by written consent in lieu of a meeting)
the aggregate Votes represented by all then outstanding Voting Securities other
than the Class B Common Stock as determined by the Board in accordance with the
procedures set forth in the Articles of Incorporation based on the actual Votes
entitled to be voted at such meeting (excluding any estimation of any kind,
including as to who would have been entitled to 5 Votes per share if such
shareholders had taken the requisite steps to obtain such Vote).
"Dividend" means any dividend or distribution on or in respect of
the Common Stock of the Corporation, whether in cash, additional shares of
Common Stock or other property.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Holder" means a holder of record of a share or shares of Class B
Common Stock.
"Investment Agreement" means the Agreement, dated as of August 6,
1997, between the Investor and the Corporation, as amended and/or restated from
time to time.
"Investor" means E.I. du Pont de Nemours and Company.
"Investor Group" shall have the meaning set forth in the
Investment Agreement.
"Investor Group Total Ownership Percentage" means, with respect
to the Investor Group calculated at a particular point in time, the ratio,
expressed as a percentage, of (a) the total number of shares of Common Stock
Beneficially Owned by the Investor Group and issuable upon conversion of
(whether or not then convertible), or otherwise constituting the economic
equivalent of, all Common Securities (as defined in the Investment Agreement)
Beneficially Owned by the Investor Group, over (b) the total number of shares of
Common Stock then outstanding and the number of shares of Common Stock issuable
upon conversion (whether or not then convertible) of, or otherwise constituting
the economic equivalent of, all outstanding Common Securities; provided that in
no event shall the Investor Group Total Ownership Percentage of all Holders of
Class B Common Stock be greater than 20%.
"Iowa Law" shall mean the Business Corporation Act of the State
of Iowa.
"Liquidation Preference" has the meaning specified in Section 4
above.
"Other Investor Affiliate" shall have the meaning set forth in
the Investment Agreement.
"Per Share Vote Amount" means in respect of any record date for
any meeting of stockholders (or action by written consent in lieu of a meeting)
that number of Votes per share of Class B Common Stock equal to (x) the Total
Preferred Vote Amount as of such record date amount divided by (y) the number of
shares of Class B Common Stock outstanding as of such record date.
"Person" means any individual, corporation, company, association,
partnership, joint venture, limited liability company, trust or unincorporated
organization, group (within the meaning of Rule 13d-5 under the Exchange Act) or
a government or any agency or political subdivision thereof.
"Stock Books" means the stock transfer books of the Corporation
relating to its Common Stock and Preferred Stock.
"Subsidiary" means, as to any Person, any other Person more than
fifty percent (50%) of the shares of the voting stock or other voting interests
of which are owned or controlled, or the ability to select or elect more than
fifty percent (50%) of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries. A Subsidiary that is directly
or indirectly wholly-owned by another Person except for directors' qualifying
shares shall be deemed wholly-owned for purposes of this Agreement.
"Surrender Date" has the meaning specified in Section 6 above.
"13D Group" shall mean any group of Persons who, with respect to
those acquiring, holding, voting or disposing of Voting Securities would,
assuming ownership of the requisite percentage thereof, be required under
Section 13(d) of the Exchange Act and the rules and regulations thereunder to
file a statement on Schedule 13D with the Securities and Exchange Commission as
a "person" within the meaning of Section 13(d)(3) of the Exchange Act, or who
would be considered a "person" for purposes of Section 13(g)(3) of the Exchange
Act.
"Total Preferred Vote Amount" means, in respect of the record
date for any meeting (or action by written consent in lieu of a meeting) of
shareholders of the Corporation to vote on any matter, an aggregate number of
Votes equal to (a) the Common Voting Power as of such record date multiplied by
(b) a fraction, the numerator of which is the Investor Group Total Ownership
Percentage (expressed as a fraction carried to two decimal places) as of such
record date and the denominator of which is 1.00 minus the Investor Group Total
Ownership Percentage (expressed as a fraction carried to two decimal places) as
of such record date; provided that in no event shall the Total Preferred Vote
Amount be greater than 20% of Total Voting Power.
"Total Voting Power" means in respect of any record date for any
meeting of stockholders (or action by written consent in lieu of a meeting) the
aggregate Votes represented by all then outstanding Voting Securities as
determined by the Board in accordance with the procedures set forth in the
Articles of Incorporation based on the actual Votes entitled to be voted at such
meeting (excluding any estimation of any kind, including as to who would have
been entitled to 5 Votes per share if such shareholders had taken the requisite
steps to obtain such Vote).
"Votes" shall mean, at any time, with respect to any Voting
Securities, the total number of votes that would be entitled to be cast by the
holders of such Voting Securities generally (by the terms of such Voting
Securities, the Articles of Incorporation or any certificate of designations for
such Voting Securities) in a meeting for the election of directors held at such
time, including the votes that would be able to be cast by holders of shares of
Class B Common Stock in accordance with the procedures set forth in the Articles
of Incorporation based on the actual number of Votes entitled to be voted at
such meeting (excluding any estimation of any kind, including as to who would
have been entitled to 5 Votes per share if such shareholders had taken the
requisite steps to obtain such Vote).
"Voting Securities" means the shares of Common Stock, the Class B
Common Stock and any other securities of the Corporation entitled to vote
generally for the election of directors, and any securities (other than employee
stock options) which are convertible into, or exercisable or exchangeable for,
Voting Securities.
E. The holder of any shares of such Common Stock, Class B Common Stock
or Serial Preferred Stock shall have no preemptive rights to acquire any
additional shares of the Corporation or to acquire any treasury stock of the
Corporation."
<PAGE>
ARTICLES OF AMENDMENT
OF THE
THIRD RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
To the Secretary of State
of the State of Iowa
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Third Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International, Inc. (the
"Corporation").
2. The Third Restated and Amended Articles of Incorporation are hereby amended
to increase the number of authorized shares of Common Stock, the text of
which is attached hereto as Exhibit A.
3. The date of the adoption of the amendment was January 27, 1998.
4. The amendment was approved by the shareholders. The designation, number of
outstanding shares, number of votes entitled to be cast by each voting group
entitled to vote separately on the amendment and the number of votes of each
voting group indisputably represented at the meeting is as follows:
<TABLE>
<CAPTION>
Votes Entitled to Votes Represented
Designation of Group Shares Outstanding be Cast on Amendment at Meeting
-------------------- ------------------ -------------------- -----------------
<S> <C> <C> <C>
Common 65,758,411.083 158,453,436 121,712,477
Series A Convertible Preferred 65,922,856.943* 198,066,794 161,325,835
and Common
</TABLE>
* 65,758,411.083 shares of Common and 164,445.86 shares of Series A
Convertible Preferred, which under certain circumstances are each
convertible into 100 shares of Common Stock
5. The total number of votes cast for and against the amendment by each voting
group entitled to vote separately on the amendment is as follows:
Voting Group Votes For Votes Against
------------ ---------- -------------
Common 109,971,563 10,891,420
Series A Convertible Preferred 149,584,921 10,891,420
and Common
6. The number of votes cast for the amendment of each voting group was
sufficient for approval by that voting group.
<PAGE>
7. The effective date and time of this document is the time and date of filing
of this document in the office of the Secretary of State of the State of
Iowa.
Dated: January 29, 1998.
PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT A
AMENDMENT TO THE
THIRD RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
ARTICLE IV
Article IV of the Articles of Incorporation shall be amended by
replacing the following language of paragraph A:
A. The aggregate amount of authorized capital stock of this
Corporation shall be $150,000,000 divided into (i) 150,000,000 shares,
consisting of one class designated as common and having a par value of One
Dollar ($1.00) per share,
with the following language:
A. The aggregate amount of authorized capital stock of this
Corporation shall be $600,000,000 divided into (i) 600,000,000 shares,
consisting of one class designated as common and having a par value of One
Dollar ($1.00) per share,
<PAGE>
ARTICLES OF AMENDMENT
OF THE
THIRD RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
To the Secretary of State
of the State of Iowa
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Third Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International, Inc.
(the "Corporation").
2. On March 10, 1998 the Corporation adopted an amendment to its Third
Restated and Amended Articles of Incorporation, as amended, attached
hereto as Exhibit A.
3. The Third Restated and Amended Articles of Incorporation are hereby
amended.
4. The amendment was duly adapted by the Board of Directors of the
Corporation without shareholder approval, as shareholder approval is
not required pursuant to Section 490.602 of the Iowa Business
Corporation Act.
5. The effective date and time of this document is the time and date of
filing of this document in the office of the Secretary of State of the
State of Iowa.
Dated: September 14, 1998.
PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Jerry L. Chicoine
By: Jerry L. Chicoine
Title: Executive Vice President,
Chief Operating Officer
and Secretary
<PAGE>
EXHIBIT A
AMENDMENT TO THE
THIRD RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
PIONEER HI-BRED INTERNATIONAL, INC.
The Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock of the Corporation ("Designation") was filed on February 25,
1997 with the Secretary of the State of the State of Iowa.
Paragraph 1(a) of the Designation shall be amended by deleting in its
entirety and substituting the following language as Paragraph 1(a):
1. Designation and Amount.
(a) There shall be a series of Preferred Stock of the Corporation
created out of the authorized but unissued shares of the capital stock
of the Corporation, which series shall be designated Series A Junior
Participating Preferred Stock (the "Participating Preferred Stock"), to
consist of six hundred thousand (600,000) shares, without par value.
Paragraphs 2(a) and 2(b) of the Designation shall be amended by deleting
in their entirety and substituting the following language as Paragraphs 2(a) and
2(b):
2. Dividend Rate.
(a) The holders of shares of Participating Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of each November, February,
May and August in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of
a share of Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $90 or (b)
1,000 times the aggregate per share amount of all cash dividends and
1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock, par value of One Dollar ($1.00) per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Participating Preferred Stock.
(b) On or after the first issuance of any share or fractional
share of Participating Preferred Stock, no dividend on Common Stock
shall be declared unless concurrently therewith a dividend or
distribution is declared on the Participating Preferred Stock as
provided in paragraph (a) above; and the declaration of any such
dividend on the Common Stock shall be expressly conditioned upon payment
or declaration of and provision for a dividend on the Participating
Preferred Stock as above provided. In the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $90.00 per
share on the Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
RESTATED AND AMENDED BYLAWS
OF
PIONEER HI-BRED INTERNATIONAL, INC.
ARTICLE I.
PRINCIPAL OFFICE
The principal office of the Corporation shall be located at 700 Capital Square,
400 Locust Street in the City of Des Moines, in the County of Polk, State of
Iowa.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders shall
be held on the fourth Tuesday of January of each year, beginning with the year
1988 at the hour of 2:00 P.M. for the purpose of electing directors and for the
transaction of such other business as may come before the meeting; PROVIDED,
HOWEVER, that the President may in any year designate an earlier date as the day
of the annual meeting that year. If the day fixed for the annual meeting as
herein provided shall be a legal holiday, and a different day is not designated
by the President, such meeting shall be held on the next succeeding business
day. If the election of directors shall not be held on the day designated herein
for any annual meeting or any adjournment thereof, the Board of Directors shall
cause the election to be held at a meeting of the shareholders as soon
thereafter as conveniently may be held.
SECTION 2. Special Meetings. Special meetings of shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Article of
Incorporation, may be called by the President and shall be called by the
President or Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of shareholders of at least 50% of all
of the votes entitled to be cast on any issue proposed to be considered at the
proposed special meeting. Such request shall state the purpose or purposes of
the proposed meeting. Business transacted at any special meeting of the
shareholders shall be limited to the purposes stated in the notice. Such request
by shareholders shall be signed, dated, and delivered to the corporation's
Secretary in one or more written demands. Any request by shareholders or
otherwise shall state the purpose or purposes of the proposed meeting. Business
transacted at any special meeting of the shareholders shall be limited to the
purposes stated in the notice.
SECTION 3. Place of Meeting. The Board of Directors or the President may
designate any place, either within or without the State of Iowa, as the place of
meeting for any annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders may designate any
place, either within or without the State of Iowa, as the place for the holding
of such meeting. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the registered office of the Corporation
in the State of Iowa.
SECTION 4. Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) or more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each shareholder 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, addressed to the
shareholder at his address as it appears on the records of the Corporation, with
postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the Corporation may provide that the
stock transfer books shall be closed for a stated period, but not to exceed, in
any case, seventy (70) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days and, for a meeting of shareholders, not less than ten (10) days, prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. If the transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders entitled to receive payment
of a dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the
transfer books for shares of the Corporation shall make, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shall be subject to inspection by any
shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate thereof kept in this
State, shall be prima facie evidence as to who are the shareholders entitled to
examine such list or share ledger or transfer book or to vote at any meeting of
shareholders.
SECTION 7. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business as otherwise provided by statute or by the Articles of
Incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, a majority of the shareholders entitled to vote
thereat, present in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which by express provision of the statutes or of the Articles of
Incorporation a different vote is required, in which case, such express
provision shall govern and control the decision of such question.
SECTION 8. Proxies. Each shareholder shall at every meeting of the
shareholders be entitled to that number of votes as is determined by the
Corporation in accordance with Article IV of the Articles of Incorporation of
the Corporation, as presently in effect or as may be amended hereafter, upon
each matter submitted to vote of the shareholders to be voted in person or by
proxy executed in writing by said shareholder or by his duly authorized
attorney-in-fact, for each share of the capital stock having voting power held
by such shareholder. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
SECTION 9. Voting of Shares by Certain Holders. Shares standing in the
name of another Corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the Bylaws of such Corporation may prescribe, or, in the
absence of such provision, as the Board of Directors of such Corporation may
determine. Shares standing in the name of a deceased person, a minor, ward or an
incompetent person, may be voted by his administrator, executor, court appointed
guardian or conservator, either in person or by proxy without a transfer of such
shares into the name of such administrator, executor, court appointed guardian
or conservator. Shares standing in the name of a trustee may be voted by him
either in person or by proxy.
Shares standing in the name of the receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
be contained in an appropriate order of the court by which such receiver was
appointed. A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to this Corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any time, but shares of its own stock
held by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
SECTION 10. Inspectors. At any meeting of shareholders, the chairman of
the meeting may, or upon the request of any shareholder, shall appoint one or
more persons as inspectors for such meeting. Such inspectors shall ascertain and
report the number of shares represented at the meeting, based upon their
determination of the validity and effect of proxies; count all votes and report
the results; and do such other acts as are proper to conduct the election and
voting with impartiality and fairness to all the shareholders. Each report of an
inspector shall be in writing and signed by him or by a majority of them if
there be more than one inspector acting at such meeting. If there is more than
one inspector, the report of the majority shall be the report of the inspectors.
The report of the inspector or inspectors on the number of shares represented at
the meeting and the results of the voting shall be prima facie evidence thereof.
SECTION 11. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all the
shareholders entitled to vote with respect to the subject matter thereof.
SECTION 12. Voting by Ballot. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any shareholder
shall demand that voting be by ballot.
SECTION 13. Shareholder Business Proposals. At any annual meeting of the
Corporation's shareholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
shareholder. Business may be properly brought before an annual meeting by a
shareholder only if written notice of the shareholder's intent to propose such
business has been given, either by personal delivery or by United States mail,
first class postage prepaid, to the Secretary of the Corporation no later than
ninety days in advance of such annual meeting, provided that in the event that
less than ninety days' notice or prior public disclosure of the date of such
annual meeting is given or made to shareholders, the shareholder's submission
shall be timely if received by the Secretary of the Corporation not later than
the close of business on the tenth day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made (whichever
first occurs). Each notice of new business must set forth: (i) the name and
address of the shareholder who intends to raise the new business; (ii) the
business desired to be brought forth at the meeting and the reasons for
conducting such business at the meeting; (iii) a representation that the
shareholder is a holder of record of stock of the Corporation entitled to vote
with respect to such business and intends to appear in person or by proxy at the
meeting to move the consideration of such business; (iv) such shareholder's
beneficial ownership of the Corporation's voting stock; and (v) such
shareholder's interest in such business. The chairman of the meeting may refuse
to acknowledge a motion to consider any business that he determines was not made
in compliance with the foregoing procedures.
An adjourned meeting, if notice of the adjourned meeting is not required
to be given to shareholders, shall be regarded as a continuation of the original
meeting, and any notice of new business must meet the foregoing requirements
based upon the date on which notice or public disclosure of the date of the
original meeting was given or made. In the event of an adjourned meeting where
notice of the adjourned meeting is required to be given to shareholders, any
notice of new business made by a shareholder with respect to the adjourned
meeting must meet the foregoing requirements based upon the date on which notice
or public disclosure of the date of the adjourned meeting was given or made.
No action may be taken by the Board of Directors (whether through
amendment of the Bylaws or otherwise) to amend, alter, change or repeal,
directly or indirectly, the provisions of this Article II, Section 13 of the
Bylaws, unless two-thirds of the directors (based on the number of directors
then authorized, regardless of whether there are any vacancies) shall concur in
such action.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by statute or
by the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the shareholders.
SECTION 2. Number, Tenure and Qualifications. The number of directors
which shall constitute the whole Board shall be such number, not less than
twelve (12) nor more than sixteen (16), as may be determined from time to time
by vote of a majority of the entire Board of Directors. The directors shall be
divided into three (3) classes each of which shall be as nearly equal in number
as possible except as provided in Section 3 of this Article. The directors shall
be elected at an annual meeting of the shareholders, and shall hold an office
for a term of the lesser of (a) three (3) years or (b) until the end of the term
for the Class of Directors to which such Director has been elected and until his
successor is elected and qualified. A Director need not be a shareholder of this
Corporation.
SECTION 3. Vacancies. Any vacancy occurring in the Board of Directors
and any directorship to be filled by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. Any director
elected to fill a vacancy created other than by reason of an increase in the
number of directors shall be elected for the unexpired term of his or her
predecessor in office.
No action may be taken by the Board of Directors (whether through
amendment of the Bylaws or otherwise) to amend, alter, change or repeal,
directly or indirectly, the provisions of this Article III, Section 3 of the
Bylaws, unless two-thirds of the directors (based on the number of directors
then authorized, regardless of whether there are any vacancies) shall concur in
such action.
SECTION 4. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw, immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Iowa, for the holding of additional regular meetings without other
notice than such resolution.
SECTION 5. Special Meetings. Special Meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place, either within or without the State of Iowa, as the place for
the holding of such meeting.
SECTION 6. Notice. Notice shall be given at least 24 hours in advance of
the time set for such meeting and may be given by telephone or telegram. If
notice be given by telegram, such notice shall deem to be delivered when
delivered to the telegraph company. Any director may waive notice of a meeting
by written waiver, executed either before or after the time stated in the
notice. Attendance at a meeting shall constitute a waiver of notice of such
meeting, except where a director attends such meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened.
SECTION 7. Quorum. A majority of the number of directors currently in
office shall constitute a quorum for transaction of business at any meeting of
the Board of Directors, provided, that if less than a majority of such number of
directors are present at said meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
SECTION 8. Manner of Acting. 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, except as may be otherwise specifically provided by statute, the
Articles of Incorporation or these Bylaws. Members of the Board of Directors or
any committee designated by such board, may participate in a meeting of such
board or committee by conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting.
SECTION 9. Informal Action. Unless specifically prohibited by statute,
the Articles of Incorporation or these Bylaws, any action required to be taken
at a meeting of the Board of Directors, or any other action which may be taken
at a meeting of the Board of Directors or of any committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the directors entitled to vote with respect to the
subject matter thereof, or by all the members of such committee and filed with
the minutes of proceedings of the Board or committee as the case may be. Any
such consent signed by all the Directors or all the members of such committee
shall have the same effect as a unanimous vote, and may be stated as such in any
document filed with the Secretary of State, or issued for any other reason.
SECTION 10. Compensation. The Directors may be paid for their expenses,
if any, of attendance at such meeting of the Board of Directors, and may be paid
a fixed sum for attendance at each meeting of the Board of Directors, or a
stated salary or fee as such director. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
SECTION 11. Presumption of Assent. A Director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the Secretary
of the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to directors
who voted in favor of such action.
SECTION 12. Removal of Directors. The shareholders may at any time at a
meeting expressly called for that purpose remove any or all of the directors,
for cause, by a vote of two-thirds of the shares then entitled to vote at an
election of directors. For the purposes of this Section 12, removal "for cause"
shall mean that the director to be removed has been convicted of a felony by a
court of competent jurisdiction and such conviction is no longer subject to
direct appeal, or that the director to be removed has been adjudged to be liable
for negligence or misconduct in the performance of his duty to the Corporation
by a court of competent jurisdiction and such adjudication is no longer subject
to direct appeal. Any vacancy in the Board of Directors resulting from the
removal of a director shall be filled by majority vote of the remaining members
of the Board of Directors.
SECTION 13. Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole board, designate an executive
committee and/or one or more other committees, each committee to consist of two
or more of the Directors of the Corporation, which, to the extent provided in
the resolution, shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
The Compensation Committee shall consist of no less than three and no
more than eight directors who are not at the time of their election employees of
the Corporation or otherwise entitled to participate in any compensation or
incentive plan administered by the Committee, except to the extent otherwise
determined by a majority of the directors who are not members of the
Compensation Committee. The Compensation Committee shall be responsible for all
executive compensation programs of the Corporation, including, without
limitation, stock incentive plans and shall evaluate and recommend to the Board
of Directors compensation for executive officers. It shall review summaries of
current compensation paid all other officers, and shall periodically report
changes in the compensation plans for all officers and employees to the Board of
Directors. It shall receive and review such reports of compensation and benefit
plan administration from the Corporation's management as it may require. The
Compensation Committee shall also review, and make recommendations concerning,
management structure and succession planning, management retirement policy, and
officer supervision and training to assure the full development of management
potential and an orderly succession of management.
The Nominating Committee shall consist of not less than three nor more
than nine directors and shall be responsible for establishing criteria for the
election of directors, reviewing management's evaluation of any officers
proposed for nomination to the Board of Directors, and reviewing the
qualifications of, and when appropriate interviewing, candidates who may be
proposed for nomination to the Board of Directors, including those nominees
recommended by shareholders. The Committee shall be responsible for recommending
to the Board of Directors, not less than 120 days prior to each annual meeting
of the shareholders, a slate of directors to be elected for the following year.
The Committee shall also perform such other duties in connection with the search
for qualified directors and the selection, election, or termination of directors
as the Board of Directors may request.
The Audit Committee shall consist of not less than three nor more than
nine directors, a majority of whom shall be independent directors. The Committee
shall have general oversight responsibility with respect to the Corporation's
financial reporting. In performing its oversight responsibility, the Committee
shall make recommendations to the Board of Directors as to the selection,
retention, or change in the independent accountants of the Corporation, review
with the independent accountants the scope of their examination and other
matters (relating to both audit and non-audit activities), and review generally
the internal auditing procedures of the Corporation. In addition, the Committee
shall review corporate policies relating to compliance with laws and
regulations, ethics, and conflicts, and (consistent with the NASDAQ listing
requirement) it shall conduct a review of all material related party
transactions on an ongoing basis. In undertaking the foregoing responsibilities,
the Audit Committee shall have unrestricted access, if necessary, to company
personnel and documents and shall be provided with the resources and assistance
necessary to discharge its responsibilities, including periodic reports from
management assessing the impact of regulation, accounting, and reporting or
other significant matters that may affect the Corporation. The Committee shall
have authority to appoint and dismiss the Corporation's director of internal
audit. The duties and responsibilities of the Audit Committee shall be set forth
in further detail in a charter developed by the Committee, provided that the
duties and responsibilities set forth therein shall be consistent with this
Section 13 and any resolution passed by a majority of the Directors relating to
the responsibilities of the Committee.
In addition, the Board of Directors may, by resolution passed by a
majority of the Directors, designate an executive committee and/or one or more
other committees, each committee to consist of two or more of the Directors of
the Corporation, which, to the extent provided in the resolution, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors.
SECTION 14. Committee Minutes. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required.
SECTION 15. Shareholder Nomination of Director Candidates. Subject to
the rights of holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, nominations for the
election of directors may be made by the Board of Directors or a committee
appointed by the Board of Directors or by any shareholder entitled to vote in
the election of directors generally. However, any shareholder entitled to vote
in the election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such shareholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (i) with respect to an election to be held at an
annual meeting of shareholders, ninety days prior to the anniversary date of the
records date set for the immediately preceding annual meeting of shareholders,
and (ii) with respect to an election to be held at a special meeting of
shareholders for the election of directors, the close of business on the tenth
day following the date on which notice of such meeting is first given to
shareholders. Each such notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (c) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder; (d) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to serve as a director
of the Corporation if so elected. The presiding officer at the meeting may
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedures.
No action may be taken by the Board of Directors (whether through
amendment of the Bylaws or otherwise) to amend, alter, change or repeal,
directly or indirectly, the provisions of this Article III, Section 15 of the
Bylaws, unless two-thirds of the directors (based on the number of directors
then authorized, regardless of whether there are any vacancies) shall concur in
such action.
ARTICLE IV.
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be a President,
Vice President, Secretary and a Treasurer. The Board of Directors may also
choose additional Vice Presidents and one or more Assistant Secretaries and
Assistant Treasurers. Any two or more offices may be held by the same person,
except that the offices of President and Secretary shall not be held by the same
person.
SECTION 2. Election and Term of Office. The officers of the Corporation
shall be elected annually by the Board of Directors at the first meeting of the
Board of Directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Each officer shall hold office
until his successor shall have been duly elected or until his death or until he
shall resign or shall have been removed in the manner herein provided. Election
or appointment of an officer or agent shall not of itself create contract
rights.
SECTION 3. Other Officers. The Board of Directors may appoint such other
officers and agents, as it shall deem necessary, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board.
SECTION 4. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed from office by the affirmative vote of a
majority of the Board of Directors at any meeting whenever in its judgment the
best interests of the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, and new offices may be
filled by the Board of Directors, at any meeting thereof for the unexpired
portion of the term.
SECTION 6. President. The President shall be the principal executive
officer of the Corporation and shall, in general, supervise and control all of
the business and affairs of the Corporation. Unless otherwise provided by the
Board, he shall preside at all meetings of the shareholders and the Board of
Directors. He may sign, with the Secretary or any other proper officer of the
Corporation thereunto authorized by the Board of Directors, certificates for
shares of the Corporation, any deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from time to time.
SECTION 7. Vice President. In the absence of the President, or in the
event of his inability or refusal to act, the Vice President, or if there shall
be more than one, the Vice Presidents, in the order determined by the Board of
Directors, shall perform the duties of the President, and when so acting, shall
have all powers of and be subject to all restrictions upon the President. Any
Vice President may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the Corporation; and shall perform such other duties
as from time to time may be assigned to him by the President or by the Board of
Directors.
SECTION 8. Secretary. The Secretary shall: (1) attend all meetings of
the Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required; (2) see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; (3) keep a
register of the post office address of each shareholder which shall be furnished
to the Secretary by such holder; (4) have general charge of the stock transfer
books of the Corporation; (5) perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors; and (6) have custody of the
corporate seal of the Corporation and have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by his
signature. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
signature.
SECTION 9. Assistant Secretary. The Assistant Secretary, or, if there be
more than one, the Assistant Secretaries, in the order determined by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
SECTION 10. Treasurer. The Treasurer shall: (1) have charge and custody
of and be responsible for all funds and securities of the Corporation; (2)
receive and give receipts for monies due and payable to the Corporation from any
source whatsoever, and deposit all moneys and other valuable effects in the name
and to the credit of the Corporation in such banks, trust companies or other
depositories as shall be designated by the Board of Directors; (3) disburse the
funds of the Corporation as may be ordered by the Board of Directors, taking
proper vouchers for such disbursements; (4) keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation; (5) render to
the President and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation; and (6) perform all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors. If
required by the Board of Directors, give a bond in such sum and with such surety
or sureties as the Board of Directors may determine for the faithful performance
of the duties of his office and for the restoration to the Corporation, in case
of his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his possession or
under his control belonging to the Corporation.
SECTION 11. Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers, in the order determined by the
Board of Directors, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
SECTION 12. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.
ARTICLE V.
CONTRACTS, LOANS AND CHECKS
SECTION 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation, shall be signed by such officer or officers, agent or agents,
of the Corporation and in such manner as shall from time to time be determined
by resolution of the Board of Directors.
ARTICLE VI.
INDEMNIFICATION
SECTION 1. Indemnification. The Corporation shall indemnify every person
who is or was a party or involved (as a witness or otherwise)or is threatened to
be made a party or involved (as a witness or otherwise) (hereafter Indemnitee)
in any threatened, pending or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, formal or informal, and
whether or not by or in the right of the Corporation or otherwise (hereafter a
"Proceeding"), by reason of the fact that he is or was a director, officer, or
employee of the Corporation, or while a director, officer or employee of the
Corporation, is or was serving at the request of the Corporation (or such
service was approved by the Corporate Management Committee (committee of
Executive Officers selected by the President) or successor committees) as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise, or by reason of any action alleged to have been taken or
not taken by him while acting in any such capacity, against expenses (including
counsel fees and expenses when incurred) (hereafter "Expenses") and all
liability and loss, including judgment, fine, (including excise taxes assessed
with respect to an employee benefit plan), and penalties and amounts paid or to
be paid in settlement (whether with or without court approval) (hereafter
"Liabilities"), actually incurred by him in connection with such Proceeding, to
the fullest extent permitted by law 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).
Notwithstanding anything in this Article to the contrary, except with respect to
a proceeding to enforce rights to indemnification or advancement of expenses
under this Article, the Corporation shall provide indemnification and
advancement of Expenses under this Article to persons seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by the Board of Directors.
SECTION 2. Advancement of Expenses. The right to indemnification
conferred in this Article shall include the right to be paid by the Corporation
the Expenses incurred in connection with the proceeding in advance of the final
disposition thereof promptly after receipt by the Corporation of a request
therefor stating in reasonable detail the Expenses incurred, provided, however,
that to the extent required by law, the payment of such Expenses in advance of
the final disposition of a proceeding shall be made only upon the Corporation's
receipt of an undertaking by or on behalf of such person to repay such amounts
if it shall ultimately be determined that he is not entitled to be indemnified
under this Article or otherwise (this undertaking need not be secured and must
be accepted without reference to the ability to repay).
SECTION 3. Determination. Any indemnification, under these Articles
(unless ordered by court or as otherwise provided in Section 2 for the
advancement of expenses) shall be made by the Corporation upon a determination
that the indemnification of the Indemnitee is proper in the circumstances
because he has met the applicable standard of conduct. Such determination shall
be made (1) by the board of directors by majority vote of a quorum consisting of
directors not at the time parties to the Proceeding, (2) if a quorum cannot be
obtained, by a majority vote of a committee duly designated by the board of
directors, in which designation directors who are parties may participate,
consisting solely of two or more directors not at the time parties to the
proceeding, (3) by special legal counsel selected by the board of directors by
vote as set forth in clause "(1) or (2)" of this Section 3, if a quorum of the
board of directors cannot be obtained and a committee cannot be designated,
selected by majority vote of the full board of directors, in which selection
directors who are parties may participate, or (4) by the shareholders, but
shares owned by or voted under the control of directors who are at the time
parties to the proceeding shall not be voted on the determination.
SECTION 4. Partial Indemnification. If a person is entitled under this
Article to indemnification by the Corporation for some or a portion of
Liabilities and Expenses but not, however, for all of the total amounts thereof,
the Corporation shall nevertheless indemnify such person for the portion thereof
to which he is entitled.
SECTION 5. Specific Limitations On Indemnification. Notwithstanding
anything in these Bylaws to the contrary, the Corporation shall not be obligated
to make any payment under this Article for indemnification for Liabilities and
Expenses in connection with Proceedings settled without the consent of the
Corporation, which consent, however, shall not be unreasonably withheld.
SECTION 6. Payment and Factual Determinations. If a claim for
indemnification or advancement of expenses under this Article is not paid in
full by the Corporation within sixty (60) days after a written claim has been
received by the Corporation, the claimant may, at any time thereafter, bring
suit against the Corporation to recover the unpaid amount of the claim. The
claimant shall also be entitled to be paid the expenses of prosecuting such
claim to the extent he is successful in whole or in part on the merits or
otherwise in establishing his right to indemnification or to the advancement of
expenses.
SECTION 7. Other Rights. The right to indemnification, including the
right to the advancement of expenses, conferred in this Article shall not be
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses hereunder may be entitled under any Articles of
Incorporation, Bylaws, agreement, vote of shareholders or directors, or
otherwise. Subject to applicable law, to the extent that any rights to
indemnification or advancement of expenses of such person under any such
Articles of Incorporation, Bylaw, agreement, vote of shareholders or directors,
or otherwise, are broader or more favorable to such person, the broader or more
favorable rights shall control.
The Corporation shall have the express authority to enter into such
agreements as the Board of Directors deems appropriate for the indemnification
of, including the advancement of expenses to, present or future directors,
officers, employees and agents of the Corporation in connection with their
service to, or status with, the Corporation or any other corporation,
partnership, joint venture, trust or other enterprise, including any employee
benefit plan, for whom such person is serving at the request of the Corporation.
SECTION 8. Trust. The Corporation may create a fund of any nature which
may, but need not, be under the control of a trustee, or otherwise to secure or
insure in any manner its indemnification obligations, including its obligation
to advance expenses, whether arising under or pursuant to this Article or
otherwise.
SECTION 9. Insurance. The corporation may purchase and maintain
insurance on behalf of an individual who is or was a director, officer,
employee, or agent of the corporation, or who, while a director, officer
employee or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against liability asserted against
or incurred by that individual in that capacity or arising from the individual's
status as a director, officer, employee, or agent, whether or not the
corporation would have power to indemnify that individual against the same
liability.
SECTION 10. Contract. The right to indemnification, including the right
to advancement of expenses provided herein, shall be a contract right, shall
continue as to a person who has ceased to be a director, officer, employee, or
to serve in any other of the capacities described in Section 1, and shall inure
to the benefit of the heirs, personal representatives, executors and
administrators of such person. Notwithstanding any amendment, alteration, or
repeal of this Article or any of its provisions or the adoption of any provision
inconsistent with the Article or any of its provisions, any person, shall be
entitled to indemnification, including the right to the advancement of expenses,
in accordance with the provisions hereof with respect to any action taken or
omitted prior to such amendment, alteration, or repeal or adoption of such
inconsistent provision, except to the extent such amendment, alteration, repeal,
or inconsistent provision provides broader rights with respect to
indemnification, including the advancement of expenses, than the Corporation was
permitted to provide prior to the amendment, alteration, repeal, or the adoption
of such inconsistent provision or to the extent otherwise prescribed by law.
SECTION 11. Subrogation. In the event of any payment under this Article,
the Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
SECTION 12. Notice of Proceedings. Indemnitee agrees promptly to notify
the Corporation in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses covered hereunder, but Indemnitee's omission to so notify the
Corporation shall not relieve the Corporation from any liability which it may
have to Indemnitee under this Article unless such omission materially prejudices
the rights of the Corporation (including without limitation, the Corporation
having lost significant substantive or procedural rights with respect to the
defense of any Proceeding). If such omission does materially prejudice the
rights of the Corporation, the Corporation shall be relieved from liability
under this Article only to the extent of such prejudice; but such omission will
not relieve the Corporation from any liability which it may have to Indemnitee
otherwise than under this Article.
SECTION 13. Defense of Claims. The Corporation will be entitled to
participate at its own expense in any Proceeding of which it has notice. The
Corporation jointly with any other indemnifying party similarly notified of any
Proceeding will be entitled to assume the defense of Indemnitee therein, with
counsel reasonably satisfactory to Indemnitee. After notice from the Corporation
to Indemnitee of its election to assume the defense of Indemnitee in any
Proceeding, the Corporation will not be liable to Indemnitee under this Article
for any Expenses subsequently incurred by Indemnitee in connection with the
defense thereof, except as otherwise provided below. Indemnitee shall have the
right to employ its own counsel in any such Proceeding but the fees and expenses
of such counsel incurred after notice from the Corporation of its assumption of
the defense thereof shall be at the expense of Indemnitee unless: (i) the
employment of counsel by Indemnitee has been authorized by the Corporation; or
(ii) the Corporation shall not in fact have employed counsel to or cannot in
good faith without conflict assume the defense of Indemnitee in such Proceeding
or such counsel has not in fact assumed such defense; in each of which case the
fees and expenses of Indemnitee's counsel shall be advanced by the Corporation.
SECTION 14. Other Entities. The board of directors may by resolution
provide for indemnification to officers, directors, or employees of other
entities not otherwise provided indemnification herein as it determines
appropriate.
SECTION 15. Employee Benefit Plans. A director, officer, or employee is
considered to be serving an employee benefit plan at the Corporation's request
if such person's duties to the Corporation also imposed duties on, or otherwise
involves services by, that person to the plan or to the participants in or
beneficiaries of the plan.
ARTICLE VII.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Every holder of shares in the
Corporation shall be entitled to have a certificate in such form as may be
determined by the Board of Directors. Such certificates shall be signed by the
President or Vice President and by the Secretary or Assistant Secretary and
shall be sealed with the seal of the Corporation or a facsimile thereof. The
signatures of the President or Vice President and the Secretary or Assistant
Secretary or other persons signing for the Corporation upon a certificate may be
facsimiles. If the certificate is countersigned by a transfer agent or
registered by a registrar, the signatures of the person signing for such
transfer agent or registrar also may be facsimiles. In case any officer or other
authorized person who has signed or whose facsimile signature has been place
upon such certificate for the Corporation, shall have ceased to be such officer
or employee or agent before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer or employee or agent
at the date of its issue. All certificates for shares shall be consecutively
numbered or otherwise identified. The name of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the books of the Corporation. All certificates surrendered
to the Corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfers of shares of the Corporation
shall be made only on the books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation.
SECTION 3. Registered Shareholder. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to, or interest in, such shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
ARTICLE VIII.
FISCAL YEAR
SECTION 1. Fiscal Year. This Corporation shall operate on a fiscal year
basis beginning September 1 of each year and ending August 31 of the following
year.
ARTICLE IX.
DIVIDENDS
SECTION 1. Dividends. The Board of Directors, from time to time, may
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and its Articles of
Incorporation.
ARTICLE X.
WAIVER OF NOTICE
SECTION 1. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes or of the Articles of Incorporation or of
these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE XI.
AMENDMENTS
SECTION 1. Amendments. Except where otherwise specifically noted, these
Bylaws may be altered, amended or repealed and new Bylaws may be adopted at any
meeting of the Board of Directors of the Corporation by a majority vote of the
directors present at the meeting.
Number SHARES
COMMON STOCK THIS CERTIFICATE IS
TRANSFERABLE IN THE CITIES
OF NEW YORK OR BOSTON
PAR VALUE
$1.00 PER SHARE CUSIP 723686 10 1
PIONEER HI-BRED INTERNATIONAL, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF IOWA
This Certifies that
S P E C I M E N See Reverse for Certain Definitions is the owner of
FULL PAID AND NON-ASSESSBLE SHARES OF THE COMMON STOCK OF
Pioneer Hi-Bred Pioneer Hi-Bred International,Inc.,transferable on
the books of the Corporation by the
International, Inc. holder hereof in person or by Attorney upon surrender
of this Certificate properly endorsed. This Seal
Corporate Certificate is not valid until countersigned by
the Transfer Agent and Registered by the Registrar.
Des Moines, Iowa Witness the seal of said Corporation and
the signatures of its duly authorized officers.
Dated:
/s/Charles S. Johnson COUNTERSIGNED AND REGISTERED:
Chairman, President and CEO BankBoston, N.A.
/s/Jerry L. Chicoine TRANSFER AGENT AND REGISTRAR,
Secretary BY: /s/Mary Penezic
AUTHORIZED SIGNATURE
<PAGE>
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Pioneer Hi-Bred
International, Inc. and the First National Bank of Boston (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of Pioneer Hi-Bred
International, Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Pioneer Hi-Bred International, Inc.
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor from such holder.
Under certain circumstances set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Amended and Restated Rights
Agreement) and certain related persons, whether currently held by or on behalf
of such Person or by any subsequent holder, may become null and void.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
TEN COM - as tenants in common UNIF GIFT MIN ACT Custodian
---------- --------------
<S> <C> <C>
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
Act
----------------------
(State)
</TABLE>
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above
list
For value received, __________ hereby sell, assign and transfer unto PLEASE
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------ Shares
of the capital stock represented by the within Certificate and do hereby
irrevocably constitute and appoint__________________________________Attorney to
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.
Dated ___________________________
------------------------------
Pioneer Hi-Bred International, Inc.
400 Locust Street 700 Capital Square
Des Moines, IA 50309
Re: Registration Statement on Form S-8 for 25,000 Shares of Common Stock
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 (the"Registration
Statement") to be filed by Pioneer Hi-Bred International Inc., an Iowa
corporation (the "Company"), with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as
amended(the "Securities Act"), of 25,000 shares of the Company's Common Stock,
par value $1 per share (the "Common Stock"), reserved for issuance under the
Pioneer Hi-Bred International, Inc. Director Stock Program (the "Plan").
As Corporate Counsel for the Company, I have examined the Company's Certificate
of Incorporation and Bylaws and the records of certain corporate proceedings and
actions taken by the Company in connection with the Plan.
Based upon the foregoing and in reliance thereon, I am of the opinion that the
shares of Common Stock being offered under the Plans, when issued, in accordance
with the provisions of the plans, will be validly issued, fully paid and
nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
/s/ William J. DeMeulenaere
-----------------------
William J. DeMeulenaere
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Pioneer Hi-Bred International, Inc.:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Des Moines, Iowa
September 10, 1998
