<PAGE>
As filed with the Securities and Exchange Commission
on November 21, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------
IMC GLOBAL INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3492467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
IMC Global Inc.
2100 Sanders Road
Northbrook, Illinois 60062
(708) 272-9200
(Address of Principal Executive Offices)
SALARY REDUCTION PLAN FOR HOURLY EMPLOYEES
REPRESENTED BY LOCAL #35 INTERNATIONAL CHEMICAL
WORKERS UNION AT FLORIDA MINERALS OPERATIONS
OF IMC-AGRICO MP, INC.
(Full title of the plan)
Marschall I. Smith
Senior Vice President and General Counsel
IMC Global Inc.
2100 Sanders Road
Northbrook, Illinois 60062
(847) 272-9200
(Name, address and telephone number,
including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered price per share offering price registration fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value 10,000 shares(1)(3) $33.57(2) $335,700(2) $102
=====================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered
pursuant to the employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rules 457(h)(1) and 457(c) under the Securities Act of 1933,
based upon the average of the high and low sale prices of the Common Stock
of IMC Global Inc. on The New York Stock Exchange on November 20, 1997.
(3) Includes 10,000 associated rights ("Rights") to purchase 1/200 of a share
of Junior Participating Preferred Stock, Series C, par value $1.00 per
share. Rights initially are attached to and trade with the Common Stock of
the Registrant. The value attributable to such Rights, if any, is reflected
in the market price of the Common Stock.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by IMC Global Inc. (the "Company") are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(c) The description of the Company's common stock, par value $1.00
per share (the "Common Stock"), which is contained in the Registration
Statement on Form 8-A/A-1 filed January 12, 1996 under Section 12 of the
Exchange Act, including any subsequent amendment or any report filed for
the purpose of updating such description;
(d) The description of the Company's Rights contained in the
Company's Registration Statement on Form 8-A filed June 23, 1989, as
amended by Forms 8-A/A dated September 7, 1995 and January 12, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act and all documents filed by the employee benefit
plan described herein pursuant to Section 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the respective dates of filing of such
documents.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. 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
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
II-1
<PAGE>
The legal matters in connection with the issuance and due
authorization of the Common Stock offered hereby have been passed upon by
Marschall I. Smith, Esq., Senior Vice President and General Counsel of the
Corporation. As of August 31, 1997, Mr. Smith was the beneficial owner of
approximately 86,000 shares of IMC Global Inc.'s Common Stock, approximately
69,000 of which are shares issuable upon the exercise of currently vested
options or options which will vest within 60 days of the effective date of this
Registration Statement.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Company's charter and by-laws provide for indemnification of the
Company's directors and officers for liabilities and expenses that they may
incur in such capacities. In general, directors and officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of the Company, and with respect to
any criminal action or proceeding, actions that the indemnitee had no reasonable
cause to believe were unlawful. Reference is made to the Company's charter
incorporated by reference as set forth below as Exhibits 4.1, 4.2, 4.3 and 4.4
hereto, and by-laws set forth below as Exhibit 4.5 hereto.
Section 145 of the General Corporation Law of the State of Delaware
gives corporations the power to indemnify directors and officers under certain
circumstances. In addition, under Section 145, where a director or officer is
successful on the merits or otherwise in the defense of any action, or any
claim, issue or matter therein, the corporation must indemnify such director or
officer against expenses actually and reasonably incurred.
The Company also maintains directors and officers liability and
corporate reimbursement insurance which provides for coverage against loss
arising from claims made against directors and officers in their capacity as
such.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
The Company will submit or has submitted the Salary Reduction Plan for
Hourly Employees Represented by Local #35 International Chemical Workers Union
at Florida Minerals Operations of IMC-Agrico MP, Inc. (the "Plan") and any
amendment thereto to the Internal Revenue Service ("IRS") in a timely manner and
has made or will make all changes required by the IRS in order to qualify the
Plan.
Exhibit Description of Exhibit
- -------- ----------------------
4.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to the Company's Report on Form 8-K dated November 1, 1994).
II-2
<PAGE>
4.2 Certificate of Amendment to Restated Certificate of Incorporation,
dated October 20, 1994 (incorporated by reference to Exhibit 3.2 to
the Company's Report on Form 10-K dated September 24, 1997).
4.3 Certificate of Amendment to Restated Certificate of Incorporation,
dated October 23, 1995 (incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form 8-A/A-1 dated January 12,
1996).
4.4 Certificate of Amendment to Restated Certificate of Incorporation,
dated March 1, 1996 (incorporated by reference to Exhibit 4.4 of the
Company's Post-Effective Amendment No. 1 on Form S-8 to Form S-4 (No.
333-0439) dated March 1, 1996).
4.5 Bylaws of the Company (incorporated by reference to Exhibit 4.5 of the
Company's Registration Statement on Form S-4 dated November 17, 1997).
4.6 Rights Agreement, dated June 21, 1989, between the Company and The
First National Bank of Chicago, as Rights Agent (incorporated by
reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1989).
4.7 Amendment to Rights Agreement, effective as of April 29, 1993
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form 8-A/A-1 dated January 12, 1996).
4.8 Amendment to Rights Agreement, dated August 17, 1995 (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form
8-A/A dated September 7, 1995).
5.1 Opinion of Marschall I. Smith, Esq., Senior Vice President and General
Counsel of the Company, as to the legality of the securities being
registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Marschall I. Smith (included in the opinion filed as
Exhibit 5.1).
24.1 Powers of Attorney.
99.1 Salary Reduction Plan for Hourly Employees Represented by Local #35
International Chemical Workers Union at Florida Minerals Operations of
IMC-Agrico MP, Inc.
Item 9. Undertakings
------------
(a) The undersigned registrant hereby undertakes:
II-3
<PAGE>
(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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 that 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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements 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 Northbrook, state of
Illinois, on this 21st day of November, 1997.
IMC GLOBAL INC.
By: /s/ Marschall I. Smith
---------------------------
Marschall I. Smith
Senior Vice President
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated:
Signature Title(s) Date
--------- -------- ----
* Chief Executive Officer November 21, 1997
- --------------------- (principal executive officer),
Robert E. Fowler, Jr. President (principal operating
officer) and Director
/s/ Lynn F. White Senior Vice President November 21, 1997
- --------------------- (principal financial officer)
Lynn F. White
/s/ Anne M. Scavone Vice President and Controller November 21, 1997
- --------------------- (principal accounting officer)
Anne M. Scavone
* Chairman and Director November 21, 1997
- ---------------------
Wendell F. Bueche
* Director November 21, 1997
- ---------------------
Raymond F. Bentele
* Director November 21, 1997
- ---------------------
Rod F. Dammeyer
* Director November 21, 1997
- ---------------------
Dr. James M. Davidson
II-6
<PAGE>
* Director November 21, 1997
- ---------------------
Harold H. MacKay
* Director November 21, 1997
- ---------------------
David B. Mathis
* Director November 21, 1997
- ---------------------
Donald Mazankowski
* Director November 21, 1997
- ---------------------
Thomas H. Roberts, Jr.
* Director November 21, 1997
- ---------------------
Joseph P. Sullivan
* Director November 21, 1997
- ---------------------
Richard L. Thomas
* Director November 21, 1997
- ---------------------
Billie B. Turner
*By /s/ Marschall I. Smith
----------------------
Marschall I. Smith
Attorney in Fact
II-7
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
as amended, the Benefits Committee administering the Salary Reduction Plan for
Hourly Employees Represented by Local #35 International Chemical Workers Union
at Florida Mineral Operations of IMC-Agrico MP, Inc., has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Northbrook, state of Illinois on this 21st day
of November, 1997.
SALARY REDUCTION PLAN FOR HOURLY EMPLOYEES
REPRESENTED BY LOCAL #35 INTERNATIONAL
CHEMICAL WORKERS UNION AT FLORIDA MINERALS
OPERATIONS OF IMC-AGRICO MP, INC.
By: /s/ Marschall I. Smith
--------------------------------
Marschall I. Smith
Member of the Benefits Committee
II-8
<PAGE>
INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
-------------------------------------------------------
Exhibit Description of Exhibit
- -------- ----------------------
4.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to the Company's Report on Form 8-K dated November 1, 1994).
4.2 Certificate of Amendment to Restated Certificate of Incorporation,
dated October 20, 1994 (incorporated by reference to Exhibit 3.2 to
the Company's Report on Form 10-K dated September 24, 1997).
4.3 Certificate of Amendment to Restated Certificate of Incorporation,
dated October 23, 1995 (incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form 8-A/A-1 dated January 12,
1996).
4.4 Certificate of Amendment to Restated Certificate of Incorporation,
dated March 1, 1996 (incorporated by reference to Exhibit 4.4 of the
Company's Post-Effective Amendment No. 1 on Form S-8 to Form S-4 (No.
333-0439) dated March 1, 1996).
4.5 Bylaws of the Company (incorporated by reference to Exhibit 4.5 of the
Company's Registration Statement on Form S-4 dated November 17, 1997).
4.6 Rights Agreement, dated June 21, 1989, between the Company and The
First National Bank of Chicago, as Rights Agent (incorporated by
reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1989).
4.7 Amendment to Rights Agreement, effective as of April 29, 1993
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form 8-A/A-1 dated January 12, 1996).
4.8 Amendment to Rights Agreement, dated August 17, 1995 (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form
8-A/A dated September 7, 1995).
*5.1 Opinion of Marschall I. Smith, Esq., Senior Vice President and General
Counsel of the Company, as to the legality of the securities being
registered.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Arthur Andersen LLP.
*23.3 Consent of Marschall I. Smith (included in the opinion filed as
Exhibit 5.1).
*24.1 Powers of Attorney.
<PAGE>
*99.1 Salary Reduction Plan for Hourly Employees Represented by Local #35
International Chemical Workers Union at Florida Minerals Operations of
IMC-Agrico MP, Inc.
_____________________
* Filed herewith.
<PAGE>
Exhibit 5.1
November 17, 1997
IMC Global Inc.
2100 Sanders Road
Northbrook, Illinois 60062
Re: 10,000 shares of Common Stock, $1.00 par value per share, and
10,000 Preferred Stock Purchase Rights.
-------------------------------------------------------------
Dear Ladies and Gentlemen:
I refer to the Registration Statement on Form S-8 (the "Registration
Statement") being filed by IMC Global Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), relating to (i)
the participations (the "Participations") in the Salary Reduction Plan for
Hourly Employees Represented by Local #35 International Chemical Workers Union
at Florida Minerals Operations of IMC-Agrico MP, Inc. (the "Plan"), and (ii)
10,000 shares of Common Stock, $1.00 par value per share (the "Registered Common
Stock"), together with 10,000 preferred stock purchase rights (the "Registered
Rights") associated therewith, in connection with the Plan. The terms of the
Rights are set forth in the Rights Agreement dated as of June 21, 1989, as
amended by the Amendment to Rights Agreement effective as of April 29, 1993 and
the Amendment to Rights Agreement dated as of August 17, 1995 (collectively, the
"Rights Agreement") between the Company and The First National Bank of Chicago.
I am familiar with the proceedings to date with respect to the Plan
and the Registration Statement, and have examined such records, documents and
matters of law, and satisfied myself as to such matters of fact, as I have
considered relevant for the purposes of this opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is duly incorporated and validly existing under the
laws of the State of Delaware.
2. The Participations will be legally issued and non-assessable,
provided: (i) the Registration Statement, as it may be amended, shall have
become effective under the Act and the Prospectus then in use by the Company
shall comply with the Act and the Rules and Regulations of the Commission
thereunder; and (ii) the Participations shall have been duly issued and paid for
in accordance with the terms of the Plan.
3. Any shares of the Registered Common Stock which are newly issued
in connection with the Plan will constitute shares of Common Stock of the
Company which have
<PAGE>
IMC Global Inc.
November 17, 1997
Page 2
been duly authorized and validly issued and are fully paid and non-assessable
when (i) the Registration Statement shall have become effective under the
Securities Act; (ii) the Company's Board of Directors or a duly authorized
committee thereof shall have duly adopted final resolutions authorizing the
issuance of such shares as contemplated by the Plan; and (iii) certificates
representing such shares shall have been duly executed, countersigned and
registered and duly delivered upon payment of the agreed consideration therefor
(not less than the par value thereof) determined in accordance with the terms of
the Plan.
4. The Registered Rights associated with the newly issued shares of
Registered Common Stock referred to in paragraph 3 will be legally issued when
(i) such Registered Rights shall have been duly issued in accordance with the
terms of the Rights Agreement and (ii) such associated shares shall have been
duly issued and paid for as set forth in paragraph 3.
This opinion is limited to the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
I do not find it necessary for the purposes of this opinion to cover,
and accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states.
I have assumed, for the purpose of this opinion, that the Board of
Directors of the Company adopted the Rights Agreement on an informed basis after
reasonable investigation, in the good faith exercise of business judgment in
furtherance of what the Board of Directors honestly and reasonably believed to
be necessary and appropriate to protect the Company from coercive acquisition
techniques and in the best interests of the Company and its stockholders.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ Marschall I. Smith
----------------------
Marschall I. Smith
Senior Vice President and General Counsel
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Salary Reduction Plan for Hourly Employees Represented by
Local #35 International Chemical Workers Union at Florida Minerals Operations of
IMC-Agrico MP, Inc. and in the related Prospectus of our report dated July 23,
1997, except for Note 22, as to which the date is September 5, 1997, with
respect to the consolidated financial statements of IMC Global Inc. included in
its Annual Report (Form 10-K) for the year ended June 30, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Chicago, Illinois
November 17, 1997
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 pertaining to the Salary
Reduction Plan for Hourly Employees Represented by Local #35 International
Chemical Workers Union at Florida Minerals Operations of IMC-Agrico MP, Inc. and
in the related Prospectus of our report dated January 22, 1996, included in the
IMC Global Inc. Annual Report on Form 10-K for the year ended June 30, 1997
filed with the Securities Exchange Commission. It should be noted that we have
not audited any financial statements of the company subsequent to June 30, 1995
or performed any audit procedures subsequent to the date of our report.
/s/ Arthur Andersen LLP
Chicago, Illinois
November 17, 1997
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Robert E. Fowler, Jr.
- -------------------------
Robert E. Fowler, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Wendell F. Bueche
- ---------------------
Wendell F. Bueche
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Raymond F. Bentele
- ----------------------
Raymond F. Bentele
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Rod F. Dammeyer
- -------------------
Rod F. Dammeyer
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Dr. James M. Davidson
- -------------------------
Dr. James M. Davidson
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Harold H. MacKay
- --------------------
Harold H. MacKay
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ David B. Mathis
- -------------------
David B. Mathis
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Donald Mazankowski
- ----------------------
Donald Mazankowski
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Thomas H. Roberts, Jr.
- --------------------------
Thomas H. Roberts, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Joseph P. Sullivan
- ----------------------
Joseph P. Sullivan
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Richard L. Thomas
- ---------------------
Richard L. Thomas
<PAGE>
POWER OF ATTORNEY
The undersigned, being a Director and/or Officer of IMC Global Inc., a
Delaware corporation (the "Company"), hereby constitutes and appoints Robert E.
Fowler, Jr., Marschall I. Smith and Rose Marie Williams his or her true and
lawful attorneys and agents, each with full power and authority (acting alone
and without the other) to execute and deliver in the name and on behalf of the
undersigned as such Director and/or Officer, Registration Statements on Form S-8
under the Securities Exchange Act of 1934, as amended, relating to the
registration of shares of the common stock of the Company to be issued pursuant
to (i) the Salary Reduction Plan for Hourly Employees represented by Local #35
International Chemical Workers' Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. and (ii) the Salary Reduction Plan for Hourly Employees of IMC
Global Operations Inc. Represented by the United Steelworkers of America at
Carlsbad, New Mexico (collectively, the "Registration Statements"), and to
execute and deliver any and all amendments to such Registration Statements for
filing with the Securities and Exchange Commission; and in connection with the
foregoing, to do any and all acts and things and execute any and all instruments
which such attorneys and agents may deem necessary or advisable to enable the
Company to comply with the securities laws of the United States. The undersigned
hereby grants to such attorneys and agents, and each of them, full power of
substitution and revocation in the premises and hereby ratifies and confirms all
that such attorneys and agents may do or cause to be done by virtue of these
presents.
Dated this 28th day of October, 1997.
/s/ Billie B. Turner
- --------------------
Billie B. Turner
<PAGE>
Exhibit 99.1
SALARY REDUCTION PLAN FOR HOURLY EMPLOYEES
Represented by Local #35
International Chemical Workers Union
at Florida Minerals Operations
of IMC-Agrico MP, Inc.
(As Amended and Restated Effective January 1, 1996)
<PAGE>
SALARY REDUCTION PLAN FOR HOURLY EMPLOYEES
Represented by Local #35
International Chemical Workers Union
at Florida Minerals Operations
of IMC-Agrico MP, Inc.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C>
ARTICLE 1 TITLE.......................................................... 1
ARTICLE 2 DEFINITIONS.................................................... 2
ARTICLE 3 PARTICIPATION
Section 3.1. Eligibility Requirements................................... 6
Section 3.2. Applications............................................... 7
Section 3.3. Termination of Participation.............................. 7
Section 3.4. Safe-Harbor For Leased Employees........................... 7
ARTICLE 4 SALARY REDUCTION CONTRIBUTIONS
Section 4.1. Contributions Allowed...................................... 8
Section 4.2. Changes in Amount of Contributions......................... 9
Section 4.3. Automatic Suspension of Contributions...................... 9
Section 4.4. Voluntary Suspension of Contributions...................... 10
Section 4.5. Rollover Contributions..................................... 10
Section 4.6. Actual Deferral Percentage................................. 12
Section 4.7. Definitions................................................ 12
Section 4.8. Special Rules.............................................. 13
Section 4.9. Distribution of Excess Deferrals........................... 14
Section 4.10. Distribution of Excess Contributions....................... 14
ARTICLE 5 EMPLOYER CONTRIBUTIONS
Section 5.1. Amount of Contributions.................................... 15
Section 5.2. Statutory Limitations on Contributions..................... 16
Section 5.3. Limitation Year............................................ 19
ARTICLE 6 TRUST AND INVESTMENT PROVISIONS
Section 6.1. Trustee.................................................... 19
Section 6.2. Investment of Contributions................................ 19
Section 6.3. Limitations on Investment Directions....................... 20
Section 6.4. Change in Investment Direction............................. 20
Section 6.5. Investment Income.......................................... 21
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C>
Section 6.6. Expenses of Funds...........................................21
Section 6.7. Investment Manager..........................................21
Section 6.8. ERISA Section 404(c) Plan...................................22
ARTICLE 7 PARTICIPANTS' PLAN ACCOUNTS
Section 7.1. Plan Accounts and Vesting...................................23
Section 7.2. Units.......................................................24
Section 7.3. Valuation of Funds..........................................25
Section 7.4. Valuation of Fund Sub-Accounts as of a Valuation Date.......25
Section 7.5. Value of Plan Accounts......................................25
Section 7.6. Committee to Furnish Annual Statements of
Value of Plan Accounts.....................................25
Section 7.7. Transfers from Other Savings and Profit Sharing Plans.......25
ARTICLE 8 WITHDRAWALS, DISTRIBUTION AND LOANS
Section 8.1. Hardship Withdrawal from Salary Reduction Accounts..........28
Section 8.2. Other Withdrawals from Salary Reduction Account.............29
Section 8.3. Loans.......................................................30
Section 8.4. Distribution Upon Termination of Employment.................33
Section 8.5. Time and Manner of Distributions............................33
Section 8.6. Designation of Beneficiary..................................33
Section 8.7. Distribution to Minor and Disabled Distributees.............35
Section 8.8. Deferral of Distribution upon Termination of Employment.....35
Section 8.9. Conditions for Distributions to Beneficiary, Upon Death
of a Participant............................................38
Section 8.10. Direct Rollovers............................................39
ARTICLE 9 SPECIAL RULES RELATING TO RE-EMPLOYMENT OF
TERMINATED EMPLOYEES AND EMPLOYMENT BY RELATED
ENTITIES........................................................39
ARTICLE 10 ADMINISTRATION
Section 10.1. The Committee...............................................40
Section 10.2. Plan Administrator..........................................43
Section 10.3. Claims Procedure............................................43
Section 10.4. Notices to Participants and Distributees....................44
Section 10.5. Notices to Committee or Employers...........................44
Section 10.6. Records.....................................................45
Section 10.7. Reports of Trust Fund.......................................45
ARTICLE 11 PARTICIPATION BY OTHER EMPLOYERS
Section 11.1. Adoption of Plan............................................45
Section 11.2. Withdrawal from Plan........................................45
Section 11.3. Company as Agent for Employers..............................45
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C>
ARTICLE 12 CONTINUANCE BY A SUCCESSOR......................................46
ARTICLE 13 NON-ASSIGNABILITY EXCEPTIONS FOR DOMESTIC RELATIONS
ORDERS AND LOANS
Section 13.1. Domestic Relations Orders...................................47
Section 13.2. Loans.......................................................47
ARTICLE 14 MISCELLANEOUS
Section 14.1. Expenses....................................................48
Section 14.2. Non-Assignability...........................................48
Section 14.3. Employment Non-Contractual..................................48
Section 14.4. Limitation of Rights........................................49
Section 14.5. Merger or Consolidation with Another Plan...................49
Section 14.6. Reversion of Employer contributions.........................49
ARTICLE 15 AMENDMENT, WITHDRAWAL AND TERMINATION
Section 15.1. Amendment...................................................50
Section 15.2. Withdrawal..................................................50
Section 15.3. Termination.................................................50
Section 15.4. Trust to be Applied Exclusively for Participants and Their
Beneficiaries...............................................51
Section 15.5. Distribution Upon Sale of Assets............................51
Section 15.6. Distributions Upon Sale of Subsidiary.......................51
ARTICLE 16 TRANSFER OF ACCOUNT BALANCES
Section 16.1. Transfer of Accounts and Vesting............................52
Section 16.2. Participant Accounts........................................52
Section 16.3. Contributions...............................................53
Section 16.4. Distribution from Participant's Accounts Upon Termination
of Employment...............................................53
Section 16.5. Distribution of Benefits Upon Death.........................57
Section 16.6. Withdrawals from Members' Accounts During Employment........60
</TABLE>
-iii-
<PAGE>
SALARY REDUCTION PLAN FOR HOURLY EMPLOYEES
Represented by Local #35
International Chemical Workers Union
at Florida Minerals Operations
of IMC-Agrico MP, Inc.
----------------------------------
The Salary Reduction Plan for Hourly Employees Represented by Local
#35 International Chemical Workers Union at Florida Minerals Operations of IMC-
Agrico MP, Inc. (the "Plan," known before July 1, 1993 as the "Salary Reduction
Plan for Hourly Employees Represented by Local #35 International Chemical
Workers Union at Florida Minerals Operations of IMC Fertilizer, Inc.) was
adopted effective January 1, 1988.
Effective July 1, 1993, IMC-Agrico MP, Inc. assumed sponsorship of
this Plan. All employees of IMC Fertilizer, Inc. who became employees of IMC-
Agrico MP, Inc. on July 1, 1993 automatically became participants in this Plan
with no break or interruption in employment, service, or Plan participation.
This amendment and restatement is effective January 1, 1996 unless
otherwise noted. In all cases where this Plan refers to a person, the reference
pertains to both genders.
ARTICLE 1
----------
TITLE
-----
The title of this Plan is the "Salary Reduction Plan for Hourly
Employees Represented by Local #35 International Chemical Workers Union at
Florida Minerals Operations of IMC-Agrico MP, Inc."
<PAGE>
ARTICLE 2
----------
DEFINITIONS
-----------
As used herein, the following words and phrases shall have the
following respective meanings unless the context clearly indicates otherwise:
(1) Active Participant. A participant who is presently making
contributions to the Plan pursuant to Section 4.1.
(2) Administrator. The Plan Administrator appointed by the Company
pursuant to Section 10.2. and as defined in ERISA.
(3) Affiliate. Any corporation which is a member of the same
controlled group of corporations (within the meaning of Section
414(b) of the Code) as an Employer or an unincorporated trade or
business which is under common control with an Employer (as
determined under Section 414(c) of the Code).
(4) Beneficiary. The person or persons who shall be entitled under
Section 8.8 to receive benefits in the event of the death of a
Participant.
(5) Break in Service. Any period during which an Employee is not
employed by an Employer which is not included in a Period of
Employment and which is in excess of twelve months.
(6) Code. The Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder.
(7) Committee. The Committee appointed by the Board of Directors of
the Company pursuant to Section 10.1.
(8) Company. IMC-Agrico MP, Inc., a Delaware corporation, and any
organization which shall succeed to the business of such
corporation and adopt the Plan pursuant to Article 12.
(9) Compensation. Regular straight time hourly earnings for all
straight time hours actually worked, and vacation pay.
Compensation considered under the Plan shall not be in excess of
$150,000 annually as adjusted by the Secretary in accordance with
Section 401(a)(17) of the Code. For Plan Years beginning prior to
January 1, 1997, in the case of a participant who is a Highly
Compensated Employee and who is a "5-percent owner" (as defined
in Section 416(i)(1)(A)(iii) of the Code) or one of the ten most
highly compensated Employees of an Employer, all members of the
family unit which includes such Employee will be treated as one
Employee and the limitations set forth in the preceding sentence
will be allocated among all the members of
-2-
<PAGE>
such family unit in proportion to their amount of compensation.
For this purpose, a family unit of a person includes that person,
his or spouse, and his or her lineal descendants who have not
attained age 19 before the end of the Plan Year. For purposes of
Article 4 the term "compensation" shall have the meaning
prescribed in Section 414(s) of the Code and for purposes of
Section 5.2, the term "compensation" shall have the meaning
prescribed by Section 415 of the Code.
(10) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
(11) Distributee. A person entitled to receive a distribution from the
Trust under Article 8. A Distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse or former Employee's spouse or former spouse who
is the alternate payee under a qualified domestic relations
order, as defined in Article 13 and Section 414(p) of the Code,
are Distributees with regard to the interest of the spouse or
former spouse.
(12) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement
annuity.
(13) Eligible Rollover Distribution. An Eligible Rollover Distribution
is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities.)
(14) Employee. An individual who is employed by an Employer.
Notwithstanding anything in this Plan to the contrary, an
individual who provides services to an Employer pursuant to a
written agreement with an entity that is not an Employer or
pursuant to a contract that identifies the individual as an
-3-
<PAGE>
independent contractor shall not be an Employee, regardless of
the individual's employment status under common law.
(15) Employer. The Company and any other corporation which shall, with
the consent of the Company, elect to participate in the Plan in
the manner described in Section 11.1 and any successor
corporation which shall adopt the Plan pursuant to Article 12. If
any such corporation shall withdraw from participation in the
Plan pursuant to Section 11.2, or shall terminate its
participation in the Plan pursuant to Section 15.3, such
corporation shall thereupon cease to be an Employer.
(16) ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
(17) Family Member. An individual described in Section 414(q)(6)(B) of
the Code.
(18) Highly Compensated Employee. Effective January 1, 1997, a
Participant or former Participant who is a highly compensated
employee as defined in Code Section 414(q). Generally, any
Participant or former Participant is considered a Highly
Compensated Employee if such Participant or former Participant:
a) was a "five percent owner" (as defined in Code Section
416(i)) at any time during the Plan Year or the preceding
Plan Year, or
b) for the preceding Plan Year received compensation (as
defined in Code Section 414(q)) from the Employer in excess
of $80,000 (as adjusted for cost-of-living increases
pursuant to Section 414(q)(1) of the Code) and, if an
Employer elects, was in the top-paid group of Employees for
such preceding Plan Year.
(19) Investment Manager. The investment manager who may be appointed
pursuant to Section 6.6.
(20) Military Service. Effective December 12, 1994, the performance of
duty on a voluntary or involuntary basis in a uniformed service,
within the meaning of the Uniformed Services Employment and
Reemployment Rights Act of 1994, for a period not longer than
five years.
(21) Non-Highly Compensated Employee. An Employee of an Employer who
is not a Highly Compensated Employee.
(22) Participant. An Employee who has satisfied the requirements set
forth in Section 3.1, has elected to participate in the Plan
pursuant to Section 3.2, and whose participation has not
terminated pursuant to Section 3.3.
-4-
<PAGE>
(23) Period of Employment. Each period of time during which an
Employee is employed by an Employer. An Employee's employment
shall not be terminated by reason of a leave of absence from
active employment granted by his Employer, pursuant to a policy
uniformly applied in all similar circumstances, because of (a)
Military Service, attendance at a school or training program at
the request of his Employer, government service in a civilian
capacity, jury duty, or layoff; or (b) because of disability,
provided that if he does not return to active employment with an
Employer before the later of (i) the time specified in his leave,
or if not specified therein, three years from the inception
thereof, (ii) cessation of his disability, as the case may be,
his employment shall be considered terminated as of the earlier
of twelve months after the last day of the month in which such
leave began and the last day of the month in which such leave of
absence terminated.
Maternity or paternity leave shall be deemed to be a Period of
Employment where necessary to prevent a Break in Service, either
in the Plan Year such leave is begun or the following Plan Year.
An Employee's absence from Service because of compulsory
engagement in Military Service shall be considered a leave of
absence granted by his Employer and notwithstanding any provision
of the first paragraph of this subsection shall not terminate his
Service or create a Break in Service if he returns to active
employment with an Employer within thirty days following the
period of time during which he has reemployment rights under any
applicable federal law.
(24) Plan. The plan herein set forth, as from time to time amended.
(25) Plan Accounts. The sum of a Participant's Salary Reduction
Account and Rollover Account.
(26) Plan Year. The Plan Year shall mean the calendar year.
(27) Salary Reduction Contributions. The contributions made by an
Employer pursuant to Section 4.1(a) on behalf of an Active
Participant in lieu of current Compensation.
(28) Service. If ever required by the terms of this Plan or by
operation of law to determine eligibility, participation or
vesting, an Employee's Service shall be the total of his Periods
of Employment by an Employer. Any Break in Service of less than
twelve months duration shall be included in an Employee's
Service.
(29) Trust. The trust created by agreement between the Company and the
Trustee, as from time to time amended.
-5-
<PAGE>
(30) Trustee. The trustee provided for in Section 6.1, or any
successor trustee or, if there shall be more than one trustee
acting at any time, all of such trustees collectively.
(31) Trust Fund. All money and property of every kind held by the
Trustee under the Trust.
(32) Union. Local #35 of the International Chemical Workers Union at
the Florida Minerals Operations of IMC-Agrico MP, Inc.
(33) Valuation Date. The last day of the calendar month. Effective
April 1, 1996, the Valuation Date shall be each business day.
(34) Voice Response System. The Marshall & Ilsley Mi Retirement Line
automated voice response system.
ARTICLE 3
---------
PARTICIPATION
-------------
Section 3.1. Eligibility Requirements.
(a) Active Participants. A person who:
(i) is an Employee of an Employer at the Florida Minerals
Operations;
(ii) is paid on an hourly basis;
(iii) falls within the jurisdiction of the Union;
(iv) has an effective application under Section 3.2 on file with the
Committee; shall be eligible to be a Participant in the Plan
and shall commence active participation on the date specified
in subsection (b).
(b) Commencement Date for Active Participation. A person who has
satisfied the conditions of subsection (a) above shall become an Active
Participant as soon as practicable following the date such conditions are first
satisfied.
Section 3.2. Applications. An eligible Employee under Section 3.1(a)
may become an Active Participant by applying through the Voice Response System,
in the manner prescribed by
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<PAGE>
the Committee. Such application must be made prior to the date upon which
participation is to commence or, if participation is to commence on an effective
date, such application must be made prior to a date to be prescribed by the
Committee and communicated to all eligible Employees. Such application shall
authorize the Employee's Employer to reduce his current Compensation in the
amount elected by the Employee pursuant to Article 4 and to contribute the
amount of such reduction to the Trust Fund and/or authorize the Employee's
Employer to deduct weekly contributions from the Employee's Compensation in the
amount specified by the Employee pursuant to Article 4. This application shall
evidence the Employee's acceptance of and agreement to all of the provisions of
the Plan.
Section 3.3. Termination of Participation. A Participant shall
continue as such until his termination of employment for whatever reason;
provided, however, if a Participant shall be transferred from one Employer to
another Employer or from an Employer to an Affiliate, such transfer shall not
terminate the Participant's participation in the Plan and such Participant shall
continue to participate in the Plan until an event shall occur which would have
terminated his participation had he continued in the service of an Employer
until the occurrence of such event, but during any period during which he is not
employed by an Employer he shall not be an Active Participant and shall not be
entitled to make contributions to the Plan pursuant to Section 4.1.
Section 3.4. Safe-Harbor For Leased Employees. Notwithstanding any
other provisions of the Plan, for purposes of the pension requirements of
Section 414(n)(3) of the Code, the Employees of the Employer shall include
leased employees within the meaning of Section 414(n)(2) of the Code, but no
such leased employee shall become a participant in, or be entitled to
contributions under, the Plan.
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<PAGE>
ARTICLE 4
---------
SALARY REDUCTION CONTRIBUTIONS
------------------------------
Section 4.1. Contributions Allowed. A Participant shall elect to
participate in the Plan by electing to have his Employer contribute to the Trust
Fund on his behalf in an amount the Employee has authorized, through the Voice
Response System, to forego in current Compensation. These contributions shall be
known as Salary Reduction Contributions.
(a) Salary Reduction Contributions. An Employer shall contribute to
the Trust Fund on behalf of each Active Participant employed by the Employer, an
amount equal to the amount the Active Participant has authorized by the Voice
Response System to forego in current Compensation. A Participant may elect an
amount which shall be in whole dollar increments ranging from $5.00 to $100.00
per week. Effective July 1, 1997, a Participant may elect an amount which shall
be in whole dollar increments ranging from $5.00 to $150.00 per week. Such
contributions will be made weekly at the close of each pay period.
Notwithstanding the foregoing, no contributions may be made under this
paragraph, unless such contribution complies with the provisions of Article 5 of
this Plan.
An agreement to reduce current Compensation under this paragraph shall
be subject to rules and regulations governing such agreements as promulgated by
the Internal Revenue Service.
Notwithstanding anything in this Section to the contrary, no Salary
Reduction Contribution Percentage elected by a Participant may result in a
dollar amount of Salary Reduction Contributions in any calendar year which
exceeds $9500 (or such amount as in effect for such year under Section 402(g) of
the Code). In the event a Participant's Salary Reduction Contributions under
this Subsection in any calendar year exceed $9500, or such Salary Reduction
Contributions in any calendar year, when combined with any other cash or
deferred arrangement contributions in such
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<PAGE>
calendar year, exceed $9500 (or such other amount as in effect for such year
under Section 402(g) of the Code), such excess, if it occurs under this
Subsection 4.1(a) shall be distributed to the Participant along with any accrued
interest or earnings thereon no later than April 15 of the calendar year
succeeding the year in which such excess was contributed. If such excess occurs
as a result of contributions made under this Subsection 4.1(a) when combined
with any other cash or deferred arrangement contributions made by the
Participant, then the excess will be distributed pursuant to Section 4.9 below.
(b) Military Service. Notwithstanding any provision of this Plan to
the contrary, effective December 12, 1994, Salary Reduction Contributions will
be permitted for periods of Military Service upon a Participant's reemployment
by an Employer after such Military Service, as required by the Uniformed
Services Employment and Reemployment Rights Act of 1994 and in accordance in
with Section 414(u) of the Code.
Section 4.2. Changes in Amount of Contributions. The amount of an
Active Participant's Salary Reduction Contributions shall continue in effect
until the Active Participant changes the amount of such contributions. An Active
Participant may change the amount of his Salary Reduction Contributions within
the limitations prescribed in Section 4.1 using the Voice Response System.
Section 4.3. Automatic Suspension of Contributions. An Active
Participant's Salary Reduction Contributions shall be suspended automatically
for the period and under the circumstances specified in Section 8.1 and for any
period during which the Active Participant is absent without Compensation or is
no longer an Active Participant.
Section 4.4. Voluntary Suspension of Contributions. Any Active
Participant may, by giving written notice, in the form prescribed by the
Committee, to his Employer, suspend his
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Salary Reduction Contributions effective as soon as practicable following the
date such notice has been given. Such a voluntarily suspended Participant may,
by notifying the Voice Response System, regain active status in the Plan at any
time following the suspension of contributions for at least six months.
Section 4.5. Rollover Contributions.
(a) With the consent of the Administrator, amounts may be transferred
from other qualified plans, provided that the trust from which such funds are
transferred permits the transfer to be made and, in the opinion of legal counsel
for the Employers, the transfer will not jeopardize the tax exempt status of the
Plan or Trust or create adverse tax consequences for the Employers. The amounts
transferred shall be set up in a separate account herein referred to as
"Rollover Account." Such account shall be fully vested at all times and shall
not be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account may not be withdrawn
by, or distributed to the Participant, in whole or in part, except as provided
in Paragraph (c) of this Section 4.5. The amount shall be credited in
participating units in accordance with the Participant's investment direction to
the appropriate sub-accounts of such Rollover Account. If a rollover
contribution is made by an eligible Employee prior to his becoming a
Participant, such Employee shall, until such time as he becomes a Participant,
be deemed to be a Participant for all purposes of the Plan except for purposes
of making contributions to the Plan pursuant to Section 4.1.
(c) Distributions may be made only in accordance with Article 8 of the
Plan and such distributions shall be valued in accordance with Sections 7.3
through 7.5 as applicable.
(d) For purposes of this Section 4.5 the term "amounts transferred
from other qualified plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions received by an Employee
which are eligible for tax-free rollover to a qualified plan
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<PAGE>
and which are transferred by the Employee to this Plan within sixty (60) days
following his receipt thereof; (iii) amounts transferred to this Plan from a
conduit individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (1) were previously
distributed to the Employee by another qualified plan, (2) were eligible for
tax-free rollover to a qualified plan, (3) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof, and (4)
amounts distributed to the Employee from a conduit individual retirement account
meeting the requirements of clause (iii) above, and transferred by the Employee
to this Plan within sixty (60) days of his receipt thereof from such conduit
individual retirement account. Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of this Section
and may also require the Employee to provide an opinion of counsel satisfactory
to the Employers that the amounts to be transferred meet the requirements of
this Section.
(e) For purposes of this Section, the term "qualified plan" shall mean
any tax qualified plan under Code Section 401(a).
(f) Notwithstanding anything herein to the contrary, this Plan shall
not accept any direct transfers from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan, which
transfer would result in the Plan's being required to provide for a life annuity
form of payment.
Section 4.6. Actual Deferral Percentage.
(a) Effective July 1, 1997, the Average Actual Deferral Percentage for
the current Plan Year for Eligible Participants who are Highly Compensated
Employees for such Plan Year shall not exceed the Average Actual Deferral
Percentage for the immediately preceding Plan Year for
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<PAGE>
Eligible Participants who are Non-Highly Compensated Employees for such
immediately preceding Plan Year multiplied by 1.25; or
(b) Effective July 1, 1997, the Average Actual Deferral Percentage
for the current Plan Year for Eligible Participants who are Highly Compensated
Employees for such Plan Year shall not exceed the Average Actual Deferral
Percentage for the immediately preceding Plan Year for Eligible Participants who
are Non-Highly Compensated Employees for such immediately preceding Plan Year
multiplied by 2, provided that the Average Actual Deferral Percentage for the
current Plan Year for Eligible Participants who are Highly Compensated Employees
for such Plan Year does not exceed the Average Actual Deferral Percentage for
the immediately preceding Plan Year for Eligible Participants who are Non-Highly
Compensated Employees for such immediately preceding Plan Year by more than two
(2) percentage points, or such lesser amount as the Secretary of the Treasury
shall prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
Section 4.7. Definitions. For purposes of Section 4.10 and
succeeding Sections in Article 4, the following definitions shall be used.
(a) "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage), of Salary Reduction Contributions on behalf of the Eligible
Participant for the Plan Year to the Eligible Participant's Compensation for the
Plan Year while an Eligible Participant.
(b) "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
(c) "Eligible Participant" shall mean any Employee of the Employer
who is otherwise authorized under the terms of the Plan to have Salary Reduction
Contributions allocated to his account for the Plan Year.
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<PAGE>
Section 4.8. Special Rules.
(a) For purposes of Section 4.10 and succeeding subsections in
Article 4, the Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to have Salary
Reduction Contributions allocated to his account under two or more plans or
arrangements described in Section 401(k) of the Code that are maintained by the
Employer or an Affiliate shall be determined as if all such Salary Reduction
Contributions were made under a single arrangement.
(b) For Plan Years beginning prior to January 1, 1997, for purposes
of determining the Actual Deferral Percentage of a Participant who is a Highly
Compensated Employee, the Salary Reduction Contributions and Compensation of
such Participant shall include the Salary Reduction Contributions and
Compensation of Family Members to the extent required by Section 401(k) of the
Code and the regulations thereunder.
(c) The determination and treatment of the Salary Reduction
Contributions and Actual Deferral Percentage of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the Treasury.
Section 4.9. Distribution of Excess Deferrals.
(a) Notwithstanding any other provision of the Plan, Excess Deferral
Amounts and income allocable thereto shall be distributed no later than April 15
of each year to Participants who claim such allocable Excess Deferral Amounts
for the preceding calendar year.
(b) For purposes of this Section, "Excess Deferral Amount" shall mean
the amount of Salary Reduction Contributions for a calendar year that the
Participant allocates to this Plan pursuant to the claim procedure set forth in
(c) below.
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<PAGE>
(c) The Participant's claim shall be in writing, shall be submitted
to the Plan Administrator no later than March 1; shall specify the Participant's
Excess Deferral Amount for the preceding calendar year; and shall be accompanied
by the Participant's written statement that if such amounts are not distributed,
such Excess Deferral Amount, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k) or 403(b) of the Code, exceeds
the limit imposed on the Participant by Section 402(g) of the Code for the year
in which the deferral occurred.
(d) Maximum Distribution Amount. The Excess Deferral Amount
distributed to a Participant with respect to a calendar year shall be adjusted
for income and, if there is a loss allocable to the Excess Deferral, shall in no
event be less than the lesser of the Participant's account under the Plan or the
Participant's Salary Reduction Contributions for the Plan Year.
Section 4.10. Distribution of Excess Contributions.
(a) Notwithstanding any other provision of the Plan, Excess
Contributions and income allocable thereto shall be distributed no later than
the last day of each Plan Year to Participants on whose behalf such Excess
Contributions were made for the preceding Plan Year.
(b) Excess Contributions. For purposes of this amendment, "Excess
Contributions" shall mean the amount described in Section 401(k)(8)(B) of the
Code.
(c) Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income allocable to the
Participant's Salary Reduction Contributions for the Plan Year by a fraction,
the numerator of which is the Excess Contribution on behalf of the Participant
for the preceding Plan Year and the denominator of which is the sum of the
Participant's account balances attributable to Salary Reduction Contributions on
the last day of the preceding Plan Year.
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<PAGE>
(d) Maximum Distribution Amount. The Excess Contributions which would
otherwise be distributed to the Participant shall be adjusted for income; shall
be reduced, in accordance with regulations, by the amount of Excess Deferrals
distributed to the Participant; and shall, if there is a loss allocable to the
Excess Contributions, in no event be less than the lesser of the Participant's
account under the Plan or the Participant's Salary Reduction Contributions for
the Plan Year.
(e) Accounting for Excess Contributions. Amounts distributed under
this Section 4.10 shall first be treated as distributions from the Participant's
Salary Reduction Account.
ARTICLE 5
----------
EMPLOYER CONTRIBUTIONS
----------------------
Section 5.1. Amount of Contributions.
(a) Subject to the limitations set forth in Section 5.2, each
Employer shall contribute for and on account of each weekly pay period of each
calendar year of such Employer the amount which the Participants who are
Employees of such Employer have agreed to forego in current Compensation.
Notwithstanding the foregoing, contributions by an Employer shall be delivered
to the Trustee no later than 10 days after each weekly pay period.
(b) This Plan is designed to qualify as a profit-sharing plan for
purposes of Sections 401(a), 402, 404 and 412 of the Code.
Section 5.2. Statutory Limitations on Contributions.
(a) Definition of Annual Additions. For purposes of the Plan, "Annual
Addition" shall mean the amount allocated to a Participant's Plan Accounts
during the Limitation Year which constitutes:
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(i) Employer contributions,
(ii) Salary Reduction Contributions,
(iii) Employee contributions,
(iv) Forfeitures, and
(v) Amounts described in Sections 415(l)(1) and 419A(d)(2) of the
Code.
(b) Maximum Annual Addition. The maximum Annual Addition that may
be contributed or allocated to a Participant's Plan Accounts under the Plan for
any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation, within the
meaning of Section 415(c)(3) of the Code for the Limitation
Year,
and the sum of (1) and (2) below shall not exceed 1.
(1) The aggregate Annual Additions as of the close of such
Plan Year to the Participant's Plan Accounts and in all
other defined contribution plans maintained by his
Employer and its Affiliates divided by the lesser of:
a) 125% of the aggregate maximum dollar amount which
under Section 415(c)(1)(A) of the Code (as adjusted
for increases in the cost of living in accordance with
Treasury Regulations) could have been contributed on
behalf of the Participant to a defined contribution
plan for all of the Participant's years of Service,
and
b) 35% of the aggregate of the Participant's Compensation
for all of the Participant's years of Service.
(2) The aggregate projected annual benefit of the Participant
under all defined benefit plans maintained by his Employer
and its Affiliates (determined as of the close of such
Limitation Year) divided by the lesser of:
a) 125% of the maximum dollar limitation contained in
Section 415(b)(1)(A) of the Code for such Limitation
Year (as
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adjusted for increases in the cost of living in
accordance with Treasury Regulations), and
b) 140% of the average of the Participant's Compensation
for the three consecutive calendar years of his
participation in such defined benefit plans during
which his Compensation was the highest.
(c) Special Rules. The Compensation limitation referred to in Section
5.2(b)(ii) shall not apply to:
(i) Any contribution for medical benefits (within the meaning of
Section 419A(f)(2) of the Code) after separation from Service
which is otherwise treated as an Annual Addition, or
(ii) Any amount otherwise treated as an Annual Addition under Section
415(l)(1) of the Code.
(d) Definitions. For purposes of this Section 5.2, "Defined
Contribution Dollar Limitation" shall mean $30,000 (as adjusted for cost-of-
living increases pursuant to Section 415(d) of the Code).
The term "his Employer and its Affiliates" shall include all
corporations and unincorporated businesses which are members of the same
controlled group of corporations under Section 414(b) of the Code or under
common control under Section 414(c) of the Code, as the case may be, with the
Participant's Employer and for this purpose more than 50% control as referenced
in Section 415(h) of the Code shall apply. The terms "defined contribution plan"
and "defined benefit plan" shall have the meanings set forth in Section 415 of
the Code. Salary Reduction Contributions shall be treated as Employer
contributions.
(e) If the limitations set forth in the first clause of Section
5.2(b) above would be exceeded by an Employer's contributions on behalf of a
Participant, first Employee contributions (should Employee contributions ever be
permitted under the Plan) and next Salary Reduction
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Contributions which are included in the Annual Additions described in 5.2(a)
above, together with any earnings thereon, will be distributed to the
Participant to the extent of such excess. If, after application of the foregoing
rule, as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's annual Compensation, or under other facts and
circumstances, the Annual Additions to a Participant's Plan Accounts in fact
exceed either of the limitations described in 5.2(b) for a Limitation Year, the
excess amount shall be withdrawn from the Participant's Plan Accounts and
deposited in a suspense account for such Limitation Year. Such suspense account
shall remain invested in the Fixed Income Fund and shall be allocated during
succeeding Plan Years among the Participants' Plan Accounts until the amount in
such suspense account is exhausted. If, during a Limitation Year, more than one
suspense account created pursuant to this Section shall exist, allocation of the
amounts contained in such accounts shall be allocated in the order of the
Limitation Years to which such accounts relate. Such excess amount or amounts
shall be used to reduce Employer contributions under Article 5 for the next
Limitation Year (and succeeding Limitation Years, if necessary) for all of the
remaining Participants in the Plan. If the limitation in the second clause of
Section 5.2(b) is exceeded, the benefit under the defined benefit plans shall be
reduced until the requirements of the second clause are satisfied.
Section 5.3. Limitation Year. For purposes of Section 5.2,
"Limitation Year" shall mean the Plan Year.
ARTICLE 6
---------
TRUST AND INVESTMENT PROVISIONS
-------------------------------
Section 6.1. Trustee. A Trust shall be created by the execution of a
Trust agreement between the Company and the Trustee. All contributions under the
Plan shall be paid to
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the Trustee, and the Trustee shall have responsibility for the custody and
investment thereof in accordance with the provisions of the Trust agreement. The
Trustee shall make distributions from the Trust Fund at such time or times, to
such person or persons and in such amounts as the Committee shall direct in
writing.
The Company shall have the sole right to determine the form and terms
of the Trust agreement, to amend such agreement at any time and from time to
time, and to remove any Trustee or Trustees and select their successors.
Trust assets shall be valued at least annually at the close of each
Plan Year.
Section 6.2. Investment of Contributions. Each Participant shall, by
means of the Voice Response System, direct that his Salary Reduction
Contributions be invested by the Trustee either entirely in one of the following
funds or in increments of no less than 1% to any combination of the following
funds.
(a) An Equity Fund which at the discretion of the Committee shall be
invested in mutual fund or similar investment vehicle which consists
substantially of equity securities of U.S. corporations.
(b) A Fixed Income Fund under which the funds shall be entrusted to
one or more insurance companies or banks, and/or to a portfolio of guaranteed
insurance contracts or other capital preservation investments of different
maturities and interest rates in which a group of retirement or savings plans
may participate, to be chosen at the sole discretion of the Committee, which
companies and/or banks, as applicable, pursuant to a contract or contracts or
other arrangement to be approved by the Committee, will invest the funds
according to its sole discretion at fixed or floating rate of interest on the
invested funds.
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<PAGE>
(c) A Balanced Fund which shall be invested at the discretion of the
Committee, in a mutual fund and other investment vehicle providing an investment
mix.
Section 6.3. Limitations on Investment Directions. No contributions
may be directed under Section 6.2 where the instructions (a) would violate the
provisions of the Plan, (b) would cause a Plan fiduciary to maintain the indicia
of ownership of any Plan assets outside the jurisdiction of the United States
District Courts, (c) would jeopardize the Plan's tax qualified status, (d) could
bring about a loss in excess of a Participant's account balance, or (e) would
result in a direct or indirect acquisition, sale or lease of property between a
Participant and the Company or an Affiliate, or a direct or indirect loan to the
Company or an Affiliate.
Section 6.4. Change in Investment Direction. Once given, an
investment direction may not be withdrawn or rescinded except as provided in
this Section, and any such investment direction shall continue in effect until
changed pursuant to this Section. Effective April 12, 1996, in accordance with
rules and procedures established by the Committee, a Participant may elect
effective on any Valuation Date to change his investment direction and/or
transfer his existing account balances in any fund or funds to any other fund or
in increments of no less than 1% of such account balances and/or contributions
of funds.
Any change in investment direction shall be made through the Voice
Response System in the manner prescribed by the Administrator.
Section 6.5. Investment Income. The income of each fund shall be
added to such fund and the fund shall be invested and reinvested without
distinction between principal and income.
Section 6.6. Expenses of Funds. All charges and expenses incurred in
connection with the purchase and sale of investments for a fund shall be charged
to such fund.
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Section 6.7. Investment Manager. The Company may appoint an
individual, or individuals, firm or corporation, which shall be known as the
Investment Manager or Investment Managers, and which may be responsible, within
the limitations set forth in the trust agreement, for selecting the investments
to be made for one or more of the Equity Fund, the Fixed Income Fund and the
Balanced Fund. The Investment Manager for a fund may either direct the Trustee
to make sales or investments or make sales and investments with respect to such
funds and direct the Trustee to take all necessary action to complete such sales
and investments.
Upon appointment or as soon as practicable after appointment, the
Company and each Investment Manager it has appointed shall enter into a written
agreement, which agreement shall include the following terms and conditions:
(a) The Company shall have the right, at any time, with or without
cause, to remove the Investment Manager. The Investment Manager may resign and
such resignation shall be effective upon delivery of a written resignation to
the Company. Upon the resignation, removal or failure or inability for any
reason of the Investment Manager to act hereunder, the Company may appoint a
successor. All successor Investment Managers shall have all of the rights and
privileges and all of the duties of their predecessors, but shall not be held
accountable for the acts of their predecessors.
(b) The Investment Manager shall acknowledge that it is a fiduciary
with respect to the Plan and the assets of the Plan subject to its control and
shall discharge its duties (i) solely in the interest of Participants and
Beneficiaries, (ii) for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and of defraying reasonable expenses of
administering the Plan, and (iii) with the care, skill, prudence, and diligence
under the circumstances then prevailing that a
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<PAGE>
prudent man 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.
(c) The Investment Manager shall maintain accurate and detailed
records of all investment directions given to the Trustee, and of sales and
investments made by the Investment Manager with regard to the funds, which shall
be available at all reasonable times for inspection by any person designated by
the Committee or the Company. The Investment Manager, at the direction of the
Committee or the Company, shall submit to the Committee, to the Company, to the
Company's auditors and to others designated by the Committee, such reports or
other information as they may reasonably require.
In the event that an Investment Manager has not been appointed for any
one or more of the Equity Fund, the Fixed Income Fund or the Balanced Fund, the
Committee shall direct the Trustee with respect to investments for any such fund
until an Investment Manager has been appointed for such fund.
Section 6.8. ERISA Section 404(c) Plan. The Plan is intended to meet
the requirements of Section 404(c) of ERISA and the provisions of the Plan shall
be construed and interpreted to meet such requirements. The fiduciaries of the
Plan may be relieved of liability for any losses which are the direct and
necessary result of investment instructions given by a Participant or
Beneficiary.
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ARTICLE 7
----------
PARTICIPANTS' PLAN ACCOUNTS
---------------------------
Section 7.1. Plan Accounts and Vesting. Effective January 1, 1988,
Participants' Plan Accounts were measured in dollars. Effective April 1, 1996,
Participants' Plan Accounts are measured in units of participation ("Units").
(a) Plan Accounts. The Committee shall establish and maintain, or
shall cause to be established and maintained by such agent or agents as it shall
select for this purpose, for each Participant on or after January 1, 1988 or in
the case of former Cyanamid Participants described in Article 16, on or after
August 1, 1987, the following accounts:
(i) Salary Reduction Account. This account shall reflect the value
(in units) of amounts contributed under Section 4.1(a),
investment earnings, gains, expenses and losses (realized and
unrealized), and the amount of any withdrawals and distributions
from the account.
(ii) Rollover Account. This account shall reflect the value (in units)
of amounts contributed under Section 4.5, investment earnings,
gains, expenses and losses (realized and unrealized), and the
amount of any withdrawals or distributions from the account.
Each of the foregoing accounts shall be composed of an Equity Fund
Sub-Account, a Fixed Income Fund Sub-Account and a Balanced Fund Sub-Account.
Such Accounts and Sub-Accounts shall be solely for accounting purposes, and
there shall be no segregation of assets of the funds among separate accounts.
The books of account, form and accounting methods used in the administration of
Participants' accounts shall be the sole responsibility of, and shall be subject
to the supervision and control of, the Committee.
(b) Vesting. Participants shall have a full and immediate
nonforfeitable interest in the value of their Plan Accounts.
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Section 7.2. Units.
(a) The interest of Participants in the funds shall be measured by
units in the particular fund, with gain or loss determined on a daily basis as
of each Valuation Date as provided in the succeeding subsections. Each unit
shall have an equal beneficial interest in the fund, and none shall have
priority or preference over any other.
(b) One unit is allocated to the Salary Reduction Account maintained
for each Participant for each unit paid to the Trust on behalf of such
Participant by an Employer prior to the first Valuation Date, and one unit is
allocated to the Rollover Account maintained for each Participant for each unit
paid to the Trust pursuant to Article 4 prior to such date. Units so allocated
to accounts are allocated to the appropriate sub-accounts comprising such
accounts in accordance with the Participants' directions made pursuant to
Section 6.2. As soon as practicable after the first Valuation Date, the Trustee
determined the value of each fund as of such Valuation Date in the manner
prescribed in Section 7.4, and the gain or loss so determined is divided by the
total number of units allocated to the accounts and sub-accounts of such fund
maintained for Participants in accordance with the preceding sentence. The
resulting quotient is the value of a unit in such fund as of such Valuation Date
and constitutes the initial gain or loss of a unit in such fund. Fractional
units shall be calculated to six decimal places. Salary Reduction Contributions
due but not received by the Trustee on a Valuation Date shall not be taken into
account for purposes of determining the gain or loss of units under this
subsection.
(c) If a Participant's interest in a fund or any part thereof is
distributed, withdrawn or transferred to an interest account pursuant to Article
8 of the Plan, the number of units representing such interest or portion thereof
as of the applicable Valuation Date shall be cancelled for purposes of any
subsequent determination of the gain or loss of units in such fund.
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Section 7.3. Valuation of Funds. The funds are valued on a unit method
applied on a daily basis. The value of a fund as of any Valuation Date shall be
the fair market value of all assets (including any uninvested cash) held by the
fund as determined by the Trustee on the basis of such evidence and information
as it may deem pertinent and reliable, reduced by the amount of any accrued
liabilities of the fund on such Valuation Date. The Trustee's determination of
fair market value shall be binding and conclusive upon all parties. Salary
Reduction Contributions pursuant to Section 4.1(a) which have been withheld from
Active Participants' Compensation which have not been received by the Trustee on
a Valuation Date and which, when received, would be part of the assets of the
fund, shall not be taken into account in valuing the fund.
Section 7.4. Valuation of Fund Sub-Accounts as of a Valuation Date.
The value of a Participant's fund sub-accounts as of any Valuation Date shall be
the units allocated or allocable to each such sub-account as of such Valuation
Date.
Section 7.5. Value of Plan Accounts. The value of a Participant's Plan
Accounts as of any Valuation Date shall be the sum of the values of the sub-
accounts comprising the Participant's accounts as described in Section 7.1(a).
Section 7.6. Committee to Furnish Annual Statements of Value of Plan
Accounts. The Committee shall, not less frequently than quarterly, deliver to
each Participant a statement setting forth the account balances of such
Participant.
Section 7.7. Transfers from Other Savings and Profit Sharing Plans.
(a) Transfer from the Other Plan to this Plan: Account Credits.
Whenever a participant in any other savings or profit sharing plan for hourly or
salaried employees of the Company (the "Other Plan") ceases pursuant to the
terms of the Other Plan to be an eligible employee, and he is not entitled,
under the terms of the Other Plan, to receive a distribution
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thereunder, but he thereafter becomes eligible to, and elects to become, a
Participant in this Plan, then such Participant's interest in the Other Plan
shall be transferred to the Trustee of this Plan to be held, invested,
reinvested and distributed pursuant to the terms of the Plan and the Trust, and,
as of the date of the transfer of any such Participant's interest in the Other
Plan,
(i) there shall be credited to the Employee Account of such
Participant that portion of his interest in the Other Plan which
is transferred to the Trustee and which represents the
Participant's contribution to the Other Plan,
(ii) there shall be credited to the Employer Account of such
Participant that portion of his interest in the Other Plan which
is transferred to the Trustee and which represents the
Employer's contributions to the Other Plan, if any, made on his
behalf, and
(iii) there shall be credited to the Salary Reduction Account of such
Participant that portion of his interest in the Other Plan which
is transferred to the Trustee and which represents salary
reduction contributions, if any, to the Other Plan.
Any amounts credited to a Participant's Employee Account, Employer
Account, Salary Reduction Account or Rollover Account shall be applied by
crediting units to such account, the units credited to the account to be
credited in accordance with the investment direction made by the Participant
upon his election to participate in this Plan to the appropriate sub-accounts of
such account.
(b) Transfer of Loan Account Balances. Any outstanding balance(s) owed
by a Participant for loan(s) granted to the Participant under the Other Plan
shall be transferred concurrently with the crediting of his interest to the Plan
as described at Section 7.7(a). All accounting of the loan(s) as assets of the
Other Plan account, applicable amortization, interest on the balance
outstanding, repayment credits and promissory note shall concurrently be
transferred to the Plan Accounts established for the Participant, to preclude
any default under or distribution by the Other Plan. The promissory note
evidencing any such loan, and all other documents evidencing any
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loan under the Other Plan, shall be concurrently transferred to the
Participant's Plan Accounts. In the event a Participant's transfer of employment
from another participating Employer changes such Participant's current payroll
status, any outstanding loan balance will be reamoritized in accordance with the
terms of the Plan.
(c) Distribution Under the Plan. Notwithstanding any provision of the
Other Plan to the contrary, upon a Participant's termination of employment,
while a Participant under this Plan, his total interest in the Plan, including
any amount transferred from the Other Plan, shall be distributed pursuant to the
provisions of Article 8 of this Plan, unless distribution pursuant to the
corresponding provisions of the Other Plan as necessary to preserve the
Participant's protected benefits under Section 411(d)(6) of the Code.
(d) Transfer from this Plan to the Other Plan: Account Credits.
Whenever a Participant in the Plan ceases pursuant to its terms to be an
eligible Employee, and he is not entitled, under the terms of the Plan, to
receive a distribution hereunder, but he thereafter becomes eligible to and
elects to become a participant in an Other Plan, then his interest hereunder
shall be transferred to the Trustee of the Other Plan to be held, invested,
reinvested and distributed pursuant to the terms of the Other Plan and its
trust, and as of the date of the transfer of any such Participant's interest in
this Plan, there shall be subtracted from the Salary Reduction Account of the
Participant that portion of his interest in this Plan which is transferred to
the Other Plan trustee and which represents Salary Reduction Contributions, if
any, to this Plan.
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ARTICLE 8
----------
WITHDRAWALS, DISTRIBUTION AND LOANS
-----------------------------------
Section 8.1. Hardship Withdrawal from Salary Reduction Accounts. A
Participant may request in writing that a hardship withdrawal be made from his
Salary Reduction Account. The value of his Salary Reduction Account shall be
determined pursuant to Sections 7.4 and 7.5, as applicable.
No hardship withdrawal under this Section 8.1 shall exceed the sum of
a Participant's Salary Reduction Contributions made after December 31, 1988 and
the amount of his Salary Reduction Contributions and income allocable thereto as
of December 31, 1988.
Approval of any application for hardship withdrawal from a
Participant's Salary Reduction Account shall only be given by the Committee
where the Participant has shown that withdrawal is requested for one of the
following reasons:
(a) Medical expenses of the Participant, the Participant's spouse, or
dependents, or to obtain medical treatment of the Participant, Participant's
spouse or dependents,
(b) Expenses for the purchase (excluding mortgage payments) of the
principal residence of the Participant,
(c) Tuition and room and board expenses for the next twelve month
period of post-secondary education of the Participant, the Participant's spouse,
children or dependents; and
(d) Expenses to prevent the eviction from, or foreclosure on the
mortgage on, the principal residence of the Participant.
In addition the Participant must further show that the amount
requested for hardship withdrawal is not in excess of the amount needed to
satisfy expenses described in (a) through (d) above of this Section 8.2.
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Hardship withdrawals under this Section 8.1(a) through (d) may include
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution.
To be eligible for hardship withdrawal the Participant must have first
obtained all distributions, other withdrawals and loans available to him under
this Plan and any other qualified plan maintained by the Employers.
A Participant who receives a hardship withdrawal under this Section
8.1 will be suspended from Plan participation for twelve months from the date on
which he receives his hardship withdrawal.
Salary Reduction Contributions made by such Participant in the
calendar year following the year of hardship distribution will be limited to the
annual dollar limitation in effect for that year, as denoted in Section 4.1(a),
minus the Participant's Salary Reduction Contributions for the calendar year in
which he received his hardship withdrawal.
Section 8.2. Other Withdrawals from Salary Reduction Account.
Withdrawals from the Salary Reduction Account are also permitted under the
following circumstances and such withdrawals will not subject the Participants
to any penalty under the Plan:
(a) Disability Withdrawal. A Participant may make a cash withdrawal
from his Salary Reduction Account at any time if the withdrawal is on account of
a disability. The Committee shall not approve any such application for
disability withdrawal unless it is satisfied that the Participant is disabled.
For the purposes of this subsection, a Participant shall be considered disabled
if (i) he is disabled within the meaning of the Company's Group Benefits Program
for U.S. Union Hourly Employees of IMC-Agrico MP, Inc., or (ii) he is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
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to result in death or to be of long-continued and indefinite duration, or (iii)
he is disabled within the meaning of uniform, nondiscriminatory rules which the
Committee may adopt. The Committee may require that the Participant submit
whatever evidence it deems necessary to establish whether the Participant is
disabled. The Committee may limit the amount which a disabled Participant may
withdraw from his accounts, if the Committee deems such limitation is in the
best interests of the Participant. The value of the Participant's account as of
the requested withdrawal date shall be determined pursuant to Sections 7.4 or
7.5, as applicable.
(b) Withdrawals from the Salary Reduction Account will also be
permitted for a Participant who has attained the age of 59-1/2 years upon
application made by him to the Administrator.
Section 8.3. Loans. Upon application of an Active Participant, the
Committee shall direct the Trustee to make a cash loan to a Participant. The
terms of a loan shall be determined at the sole discretion of the Committee
subject to the following conditions:
(a) The term of a loan shall not exceed five years except that where
the Participant has designated that the purpose of the loan is to purchase a
principal residence for the Participant, the term of the loan shall not exceed
ten years.
(b) A general purpose loan may not be used to purchase securities.
(c) A loan shall bear interest at the prevailing rate in the
surrounding community for loans of similar risk, date of maturity and date of
grant.
(d) The amount of a loan shall not exceed the lesser of 50% of the
value of the Participant's Plan Accounts or $50,000, and the loan shall be
secured by the value of the Participant's Plan Accounts. The Committee may
require the posting of other or additional security at any time during the term
of the loan. The amount of a loan secured by the Plan Accounts shall be equal to
a
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maximum of the lesser of 50% of the Plan Accounts or $50,000, minus the highest
outstanding loan balance within the past year. For purposes of this paragraph,
the value of the Participant's Plan Accounts shall be determined as at the
Valuation Date which next succeeds the date on which the request for the loan is
received.
(e) A loan shall be evidenced by a promissory note.
(f) Payments of principal and interest shall be made by approximately
equal payments on a basis that would permit the loan to be fully amortized over
its term. Prepayments of principal and interest of the full remaining balance of
the loan only, may be made without penalty. Loan payments by active Employees
shall be made by weekly (as applicable) payroll deductions except for
prepayments or where otherwise permitted by the Committee. Loan payments by
inactive Employees or former Employees shall be made monthly to the Plan
Administrator or his designee on the date and in the manner prescribed by him.
(g) Loans shall be granted on a reasonably equivalent basis and
Highly Compensated Employees, officers or shareholders of an Employer shall not
be granted preferential loan terms.
(h) If an active Employee defaults in the making of any payments on a
loan when due and such default continues for 60 days thereafter, or in the event
of such active Employee's bankruptcy, impending bankruptcy, insolvency or
impending insolvency, the loan shall be deemed to be in default, and the entire
unpaid balance with accrued interest shall become due and payable. If a former
Employee defaults in the making of any payment on a loan when due and such
default continues for 30 days thereafter, or in the event of the borrower's
bankruptcy, impending bankruptcy, insolvency or impending insolvency, the loan
shall be deemed to be in default and the entire unpaid balance with accrued
interest shall become due and payable. The Committee or its designee may
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pursue collection of the debt by any means generally available to a creditor
where a promissory note is in default, or, if the entire amount due is not paid
within 60 days following default or in the case of a former Employee or
Beneficiary, within 30 days following the default, the Committee or its designee
may execute upon the collateral and apply the proceeds from the sale or
disposition of such collateral in satisfaction of the unpaid principal and
accrued interest. Alternately, the Committee may treat the entire unpaid balance
of a loan deemed in default as a distribution from the Plan. The Participant or
Beneficiary shall remain personally liable for any remaining deficiency.
(i) Appropriate disclosure shall be made pursuant to the Truth in
Lending Act to the extent applicable.
(j) Amounts of principal and interest received on a loan shall be
credited to the Participant's Plan Accounts and the loan shall be considered an
asset of the Plan Accounts.
(k) The Committee shall, from time to time, establish the terms and
conditions on which the loans will be made, including the frequency, interest
rate, maturity dates, loan application fees, if any, and the selection and order
of sub-accounts used in making such loans. In making its determination with
respect to eligibility for loans and interest rates thereof, the Committee shall
adopt uniform and non-discriminatory rules and its determination shall be final
and binding.
(l) Notwithstanding any other provision of this Section 8.3 to the
contrary, loans may be granted only to Participants who are "parties in
interest" as defined under Section 3(14) of ERISA. Determination of who is a
party in interest shall be made by the Plan Administrator with the advice of
counsel.
(m) In the event a Participant's transfer of employment from another
participating Employer changes such Participant's current payroll status, any
outstanding loan balance will be reamoritized in accordance with the terms of
the Plan.
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Section 8.4. Distribution Upon Termination of Employment. Whenever a
Participant terminates his employment with his Employer or its Affiliate, then
the Participant, or, in a proper case, his Beneficiary, shall be entitled to a
distribution of an amount equal to the value of the Participant's Plan Accounts
determined as of the Valuation Date on which the distribution is processed.
Section 8.5. Time and Manner of Distributions.
(a) Any distribution to which a Participant becomes entitled by
reason of a withdrawal under Sections 8.1, 8.2 or 8.3 or distribution under
Section 8.4, or which is to be made to an alternate payee pursuant to the
provisions of Article 13, shall be paid by the Trustee in a lump sum at the
instruction of the Administrator within 60 days following the close of the
calendar month in which the withdrawal or request for receipt is received.
b) If full distribution of the amount to which a Distributee becomes
entitled cannot be made within 60 days following the date of termination or
request for receipt, if applicable, pursuant to Section 8.4 because the
Participant cannot be located, the undistributed balance of such amount shall
remain invested in such fund or funds in which such amount had been invested
immediately prior to the date of termination or request for receipt.
Section 8.6. Designation of Beneficiary.
(a) The Beneficiary of a Participant who is married shall be his
spouse. Should a Participant who is married desire to elect a Beneficiary other
than his spouse, he may do so only in the form prescribed by the Administrator,
which shall require the written consent of such spouse to the Participant's
election of another Beneficiary. To be effective, such written consent must be
notarized or witnessed by the Administrator or his designee.
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(b) If a Participant is not married or if the Participant proves to
the satisfaction of the Administrator that his spouse cannot be located, then
the Participant shall have the right to designate any Beneficiary or
Beneficiaries.
(c) The Beneficiary of a Participant shall receive any distribution
upon the death of the Participant or, in accordance with Section 8.5, in the
case of a Participant who dies subsequent to termination of his employment but
prior to distribution of the entire amount to which he is entitled under the
Plan, to receive any undistributed balance to which such Participant would have
been entitled subject to the provisions of Section 8.8, if applicable.
A Participant described in Paragraph (b) of this Section 8.6 may from
time to time without the consent of the non-spouse Beneficiary change or cancel
any such designation. A Participant who has obtained spousal consent in
accordance with Paragraph (a) of this Section 8.6 may change or cancel a
subsequent Beneficiary designation only upon obtaining spousal consent, in
accordance with Paragraph (a) of this Section, to the new Beneficiary
designation. Such designation and each change therein shall be made in the form
prescribed by the Administrator and shall be filed with the Administrator or his
designee.
If no Beneficiary has been named by a deceased unmarried Participant
or the spouse of a deceased Participant cannot be located or the designated
Beneficiary or spouse, as applicable, has predeceased the Participant or the
designated Beneficiary or spouse has died prior to complete disbursement of the
Participant's account balance, the balance of the deceased Participant's
accounts shall be distributed by the Trustee at the direction of the
Administrator, where applicable, (i) to the surviving spouse of such deceased
Participant, if any, or (ii) if there shall be no surviving spouse, the
surviving children of such deceased Participant, if any, in equal shares, or
(iii) if there shall be no surviving spouse or children, to the executors or
administrators of the estate of such deceased
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Participant, or (iv) if no executor or administrator shall have been appointed
for the estate of such deceased Participant within six months from the date of
the Participant's death, to the person or persons who would be entitled under
the intestate succession laws of the state of the Participant's domicile to
receive the Participant's personal estate.
Nothing in this Section 8.6 shall contravene any applicable provision
(directing payment to an alternate payee) of a qualified domestic relations
order determined to be such by the Administrator or the Committee in accordance
with the procedures set forth in Article 13.
Section 8.7. Distribution to Minor and Disabled Distributees. Any
distribution under this Article which is payable to a Distributee who is a minor
or to a Distributee who, in the opinion of the Committee, is unable to manage
his affairs by reason of illness or mental incompetency, may be made to or for
the benefit of any such Distributee in such of the following ways as the
Committee may direct: (a) directly to any such minor Distributee if, in the
opinion of the Committee, he is able to manage his affairs, (b) to the legal
representative of any such Distributee, (c) to a custodian under a Uniform Gifts
to Minors Act for any such minor Distributee, or (d) to some near relative of
such Distributee to be used for the latter's benefit. Neither the Committee nor
the Trustee shall be required to see to the application by any third party of
any distribution made to or for the benefit of a Distributee pursuant to this
Section.
Section 8.8. Deferral of Distribution upon Termination of Employment.
(a) Notwithstanding anything in this Article or Plan to the contrary,
a Participant who is terminating his employment and is eligible for early or
normal retirement under any pension plan of the Company will be permitted to
elect, at any time prior to his termination, to defer receipt of distribution of
his entire Plan Accounts. A Participant electing deferral of his distribution
under this Section 8.8 shall receive his distribution by notifying the
Administrator or his designee at least
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sixty days prior to the date he wishes to receive it. His Plan Accounts shall
then be valued according to the terms of Section 7.4. Prior to December 31,
1996, if a Participant has not notified the Administrator by sixty days prior to
his 70th birthday, his Plan Accounts shall automatically be distributed to him
on that birthday. Effective December 31, 1996, a Participant who is not a "five
percent owner" (as defined in Section 416(i) of the Code) may elect to defer
receipt of a distribution under this Section 8.8 until April 1 of the calendar
year following the later of the calendar year in which the Participant attains
age 70 1/2 or the calendar year in which the Participant terminates employment.
Any Participant who makes a deferral election under this Section
8.8(a) shall retain for the full duration of the deferral period the authority
to direct investments of his Plan Accounts, as provided under Section 6.2, 6.3
and 6.4. This Paragraph shall not be interpreted to allow or require the making
of any type of contributions to such Participant's Plan Accounts.
(b) A Participant who satisfies the following criteria must consent
to any distribution before it is made and is entitled to defer receipt of his
entire Plan Accounts until no later than his 70th birthday: (i) termination of
employment prior to eligibility for early or normal retirement under any pension
plan of the Company and (ii) a Plan Accounts valued in excess of $3500 as of the
Valuation Date occurring closest to his termination of employment. Such a
Participant may elect to receive the value of his entire Plan Accounts in a lump
sum at any time prior to his 70th birthday upon sixty days written notice to the
Plan Administrator or his designee. Any Participant who has not notified the
Plan Administrator within sixty days of his 70th birthday shall automatically
receive his distribution on that birthday. Effective for calendar years
commencing after December 31, 1996, a Participant who is not a "five percent
owner" (as defined in Section 416(i) of the Code) and who meets the requirements
of (i) and (ii) above is entitled to defer receipt of his entire Plan Accounts
until
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no later than April 1 of the calendar year following the later of the calendar
year in which the Participant attains age 70 1/2 or the calendar year in which
the Participant terminates employment. Any Participant who makes a deferral
election under this Section 8.8(a) shall retain, for the full duration of the
deferral period, the authority to direct investments of his Plan Accounts, as
provided under Sections 6.2, 6.3 and 6.4. This paragraph shall not be
interpreted to allow or require the making of any type of contributions to such
Participant's Plan Accounts.
A Participant who makes an election to defer distribution pursuant to
this paragraph shall be considered an inactive Participant for all purposes of
the Plan, including Article 5, for the period of time from termination of
employment until distribution on the applicable date of receipt.
(c) At the time the Participant elects to defer receipt of his
distribution pursuant to this Section, he must also elect to receive his
distribution in: (i) a lump sum on the date of distribution or (ii) in
substantially equal annual installments not to exceed ten, which installments
shall commence on the date requested for distribution.
(d) At the time the Participant elects to defer receipt of his
distribution pursuant to this Section, he must also make an election for the
method of distribution in the event of his death prior to total distribution.
The Participant shall elect that his Beneficiary, designated pursuant to Section
8.5, shall receive his Plan Accounts (i) in a lump sum within sixty days
following the date of his death or (ii) in equal annual installments not to
exceed five installments commencing on the date of his death.
(e) Notwithstanding the foregoing provisions of this Article 8,
distribution of the Participant's Plan Accounts shall begin not later than the
sixtieth day after the latest of the close of the Plan Year in which occurs:
(i) his termination of employment,
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(ii) the tenth anniversary of the commencement of his participation
in the Plan, or
(iii) his 65th birthday,
except to the extent that the Participant has elected to defer the distribution
pursuant to this Section 8.8.
(f) Notwithstanding subsection (e) and except as provided otherwise
in this subsection (f), distribution of a Participant's Plan Accounts shall be
made no later than the April 1 of the calendar year following the calendar year
in which the Participant attains age 70-1/2 regardless of whether he terminates
employment. Effective for calendar years beginning after December 31, 1996, with
respect to a Participant other than a "five percent owner" (as defined in
Section 416(i) of the Code), distribution of a Participant's Plan Accounts shall
be made no later than April 1 of the calendar year following the later of the
calendar year in which the Participant attains age 70-1/2 or the calendar year
in which the Participant terminates employment.
(g) If the amount of a distribution required to commence on the date
determined under this subsection cannot be ascertained by the Committee, or if
it is not possible to make such payment on such date because the Committee has
been unable to locate the Participant after making reasonable efforts to do so,
a payment retroactive to such date may be made no later than sixty days after
the earliest date on which the amount of such payment can be ascertained and the
Participant can be located.
Section 8.9. Conditions for Distributions to Beneficiary, Upon Death
of a Participant.
(a) Notwithstanding subsections (c) and (d) of Section 8.8 or any
other section of the Plan, if a Participant dies prior to entire distribution of
his Plan Accounts and after attainment
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of age 70, his Plan Accounts shall be distributed to his Beneficiary as rapidly
as the method in effect for distributions to the Participant.
(b) Notwithstanding Section 8.8 to the contrary, if the Participant
dies prior to entire distribution of his Plan Accounts and prior to age 70, his
Plan Accounts shall be distributed in a lump sum or by the method selected by
the Participant, provided that distribution shall begin not later than (i)
December 31, of the calendar year following the calendar year of the
Participant's death or (ii) the calendar year in which the Participant would
have attained age 70, whichever is later.
Section 8.10. Direct Rollovers. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a Distributee's election under
this Article, a Distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
ARTICLE 9
SPECIAL RULES RELATING TO RE-EMPLOYMENT
OF TERMINATED EMPLOYEES AND EMPLOYMENT
BY RELATED ENTITIES
If a terminated Participant who is entitled to receive payments
pursuant to Sections 8.4 or 8.8 is reemployed prior to receipt of his deferred
distribution pursuant to Section 8.8 or is reemployed prior to total
distribution, such payments shall remain deferred or be suspended, as
applicable, until the later of such Participant's subsequent termination of
employment or his attainment of age 70.
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ARTICLE 10
ADMINISTRATION
Section 10.1. The Committee.
(a) The Board of Directors of the Company shall appoint a Committee
consisting of certain members responsible (except for duties specifically vested
in the Trustee and the Investment Manager) for the administration of the
provisions of the Plan. The Company and the Committee shall be "named
fiduciaries" within the meaning of such term as used in ERISA. The Board of
Directors of the Company shall have the right at any time, with or without
cause, to remove any member of the Committee. A member of the Committee may
resign and his resignation shall be effective upon delivery of his written
resignation to the Company. Upon the resignation, removal or failure or
inability for any reason of any member of the Committee to act hereunder, the
Board of Directors of the Company may appoint a successor member. All successor
members of the Committee shall have all the rights, privileges and duties of
their predecessors, but shall not be held accountable for the acts of their
predecessors.
(b) Any member of the Committee may, but need not, be an employee or
director, officer or shareholder of any of the Employers, and such status shall
not disqualify him from taking any action hereunder or render him accountable
for any distribution or other material advantage received by him under the Plan,
provided that no member of the Committee who is a Participant shall take part in
any action of the Committee or any matter involving solely his rights under the
Plan.
(c) The Committee shall have the duty and authority to interpret and
construe the Plan in regard to all questions of eligibility and the status and
rights of Participants, Distributees and other persons under the Plan. Each
Employer shall, from time to time, upon request of the
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Committee, furnish to the Committee such data and information as the Committee
shall require in the performance of its duties.
(d) The Committee shall supervise the collection and delivery of such
contributions to the Trustee from time to time. Notwithstanding any other
provision of the Plan to the contrary the Committee has the right to lower the
Salary Reduction Contributions (on a prospective basis) of any Participant who
is a Highly Compensated Employee at any time during the Plan Year where the
Committee deems such action to be necessary to insure that the Plan complies
with the rules set forth in Sections 4.6(a) and 4.10(b)(i) and (ii).
(e) The members of the Committee may allocate their responsibilities
among themselves and may designate any person, partnership or corporation to
carry out any of their responsibilities. Any such allocation or designation
should be reduced to writing and such writing shall be kept with the records of
the meetings of the Committee.
(f) The Committee may act at a meeting, or by writing without a
meeting, by the vote or written assent of a majority of its members. The
Committee may select a chairman and shall keep the Trustee advised of the
identity of the member holding such office. The Committee shall appoint one of
its members to act as the Plan's agent for service of legal process. The
Committee shall select a secretary, who need not be a member of the Committee,
and shall keep the Trustee advised of the identity of the person holding such
office. The secretary shall keep records of all meetings of the Committee and
forward all necessary communications to the Trustee. The Committee may adopt
such rules and procedures as it deems desirable for the conduct of its affairs
and the administration of the Plan, provided that any such rules and procedures
shall be consistent with the provisions of the Plan and ERISA.
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(g) The members of the Committee, and each of them, shall discharge
their duties with respect to the Plan (i) solely in the interest of the
Participants and Beneficiaries, (ii) for the exclusive purpose of providing
benefits to Employees participating in the Plan and their Beneficiaries and of
defraying reasonable expenses of administering the Plan, and (iii) with the
care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent man 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. The Company shall indemnify the members of the Committee, and each of
them, from the effects and consequences of their acts, omissions and conduct in
their official capacity as members of the Committee. Such indemnification shall
extend to any action, suit or proceeding to which the members shall be made or
threatened to be made a party, whether civil, criminal, administrative or
investigative, and whether or not terminated by judgment, settlement, conviction
or upon a plea of nolo contendere or its equivalent; provided, however, such
indemnification shall not extend to any action, suit, or proceeding in which it
shall be finally adjudicated that (1) a member did not act in good faith, and
(2) with respect to any criminal action or proceeding, the member did not have
reasonable cause to believe his conduct was lawful.
(h) No member of the Committee shall receive any compensation or fee
for his services, unless otherwise agreed between such member of the Committee
and the Employers, but the Employers shall reimburse the Committee members for
any expenditures incurred in the discharge of their duties as Committee members.
(i) The Committee may employ such counsel (who may be of counsel for
any Employer) and agents and may arrange for such clerical and other services as
it may require in carrying out the provisions of the Plan.
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Section 10.2. Plan Administrator.
(a) The Company shall appoint a Plan Administrator (as such term is
used in ERISA) who may but need not be a Participant or shareholder of the
Company and such status shall not disqualify him from taking any action
hereunder or render him accountable for any distribution or other material
advantage received by him under the Plan, provided that he shall not take part
in any matter involving solely his rights under the Plan.
(b) The Plan Administrator shall be responsible for the operation of
the Plan within the policies, interpretations, rules and procedures of the
Committee. The Plan Administrator shall also perform such ministerial functions
with respect to the Plan as the Committee shall from time to time designate.
Section 10.3. Claims Procedure. If any Participant or Distributee
believes he is entitled to benefits in an amount greater than those which he is
receiving or has received, he may file a claim with the Administrator. Such a
claim shall be in writing and state the nature of the claim, the facts
supporting the claim, the amount claimed, and the address of the claimant. The
Plan Administrator shall review the claim and, within 90 days after receipt of
the claim, give written notice by registered or certified mail to the claimant
of his decision with respect to the claim. If special circumstances require an
extension of time, the claimant shall be so advised in writing within the
initial 90-day period and in no event shall such an extension exceed 90 days.
Such notice shall be written in a manner calculated to be understood by the
claimant and, if the claim is wholly or partially denied, set forth the specific
reasons for the denial, specific references to the pertinent Plan provisions on
which the denial is based, a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary, and an explanation of the
claim review procedure under the Plan. The Plan Administrator shall also
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advise the claimant that he or his duly authorized representative may request a
review by the Committee of the denial by filing with the Plan Administrator,
within 65 days after notice of the denial has been received by the claimant, a
written request for such review. The claimant shall be informed that he may have
reasonable access to pertinent documents and submit comments in writing to the
Committee within the same 65-day period. If a request is so filed, review of the
denial shall be made by the Committee within, unless special circumstances
require an extension of time, 60 days after receipt of such request, and the
claimant shall be given written notice of the resulting final decision. If
special circumstances require an extension of time, the claimant shall be so
advised in writing within the initial 60-day period and in no event shall such
extension exceed 60 days. Such notice shall include specific reasons for the
decision and specific references to the pertinent Plan provisions on which the
decision is based and shall be written in a manner calculated to be understood
by the claimant.
Section 10.4. Notices to Participants and Distributees. All
notices, reports and statements given, made, delivered or transmitted to a
Participant or Distributee shall be deemed to have been duly given, made,
delivered or transmitted when mailed by first class mail with postage prepaid
and addressed to such person at the address last appearing on the records of the
Committee. A Participant or Distributee may record any change of his address
from time to time by written notice filed with the Committee.
Section 10.5. Notices to Committee or Employers. Written
authorizations, directions, notices and other communications to the Employers or
the Committee shall be deemed to have been duly given, made or transmitted
either when delivered to such location as shall be specified upon the forms
prescribed by the Committee for the giving of such authorizations,
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directions, notices and other communications, or when mailed by first class mail
with postage prepaid and addressed to the addressees at the addresses specified
upon such forms.
Section 10.6. Records. The Committee shall keep a record of all of
its proceedings and shall keep or cause to be kept all books of account, records
and other data as may be necessary or advisable in its judgment for the
administration of the Plan.
Section 10.7. Reports of Trust Fund. The Committee shall keep on
file, in such form as it shall deem convenient and proper, all reports
concerning the Trust Fund received by it from the Trustee.
ARTICLE 11
PARTICIPATION BY OTHER EMPLOYERS
Section 11.1. Adoption of Plan. With the consent of the Company, any
corporation may become a participating Employer under the Plan by (a) taking
such action as shall be necessary to adopt the Plan, (b) filing with the
Committee a duly certified copy of the Plan as adopted by such corporation and
(c) executing and delivering such instruments and taking such other action as
may be necessary or desirable to put the Plan into effect with respect to such
corporation.
Section 11.2. Withdrawal from Plan. Any Employer may withdraw from
participant in the Plan at any time by filing with the Committee a duly
certified copy of a resolution of its board of directors to that effect and
giving notice of its intended withdrawal to the Committee, the other Employers
and the Trustee prior to the effective date of withdrawal.
Section 11.3. Company as Agent for Employers. Each corporation which
shall become a participating Employer pursuant to Section 11.1 or Article 12 by
so doing shall be deemed to have appointed the Company its agent to exercise on
its behalf all of the powers and authorities
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hereby conferred upon the Company by the terms of the Plan, including, but not
by way of limitation, the power to amend and terminate the Plan. The authority
of the Company to act as such agent shall continue unless and until the portion
of the Trust Fund held for the benefit of Employees of the particular Employer
and their Beneficiaries is set aside in a separate trust as provided in Section
14.2.
ARTICLE 12
CONTINUANCE BY A SUCCESSOR
In the event that any Employer shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that another corporation
other than an Employer shall succeed to all or substantially all of such
Employer's business, such successor corporation may be substituted for such
Employer under the Plan by adopting the Plan and becoming a party to the Trust
agreement. Contributions by such Employer and by its employees shall be
automatically suspended from the effective date of any such reorganization until
the date upon which the substitution of such successor corporation for the
Employer under the Plan becomes effective. If, within 90 days from the effective
date of any such reorganization, such successor corporation shall not have
elected to become a party to the Plan, or if the Employer shall adopt a plan of
complete liquidation other than in connection with a reorganization, the Plan
shall be automatically terminated with respect to employees of such Employer as
of the close of business on the 90th day following the effective date of such
reorganization or as of the close of business on the date of adoption of such
plan of complete liquidation, as the case may be, and the Committee shall direct
the Trustee to distribute the portion of the Trust applicable to such Employer
in the manner provided in Section 14.3.
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ARTICLE 13
NON-ASSIGNABILITY EXCEPTIONS FOR
DOMESTIC RELATIONS ORDERS AND LOANS
Section 13.1. Domestic Relations Orders. The restrictions imposed by
Section 14.2 shall not apply to a "qualified domestic relations order" defined
in Code Section 414(p), and those other domestic relations orders permitted to
be so treated by the Administrator under the provisions of the Retirement Equity
Act of 1984. The Administrator shall establish a written procedure to determine
the qualified status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the extent provided under
a "qualified domestic relations order," a former spouse of a Participant shall
be treated as the spouse or surviving spouse for all purposes under the Plan.
Notwithstanding anything else in the Plan to the contrary,
distribution from a Participant's Plan Accounts may be made to an Alternate
Payee (as defined in Code Section 414(p)), pursuant to a "qualified domestic
relations order" prior to attainment of age 50 or separation from service by the
Participant if the "qualified domestic relations order" provides that the Plan
and the Alternate Payee may agree in writing to an earlier distribution and
distribution is made pursuant to such written agreement.
Section 13.2. Loans. The restrictions imposed by Section 14.2 shall
not apply to the extent a Participant is indebted to the Plan, for any reason,
under the terms of the Plan. At the time a distribution is to be made to a
Participant or Beneficiary, such proportion of the amount distributed as shall
equal such indebtedness shall be paid by the Trustee to the Administrator, at
the direction of the Administrator or the Committee, to apply against or
discharge such indebtedness. Prior to making a payment, however, the Participant
or Beneficiary must be given written notice by the Administrator that such
indebtedness is to be paid in whole or part from the Participant's Plan
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Accounts. If the Participant or the Beneficiary does not agree that the
indebtedness is a valid claim against his Plan Accounts, he shall be entitled to
a review of the validity of the claim in accordance with Section 10.3.
ARTICLE 14
MISCELLANEOUS
Section 14.1. Expenses. Except as otherwise provided in Section 6.4
and elsewhere in the Plan, all costs and expenses incurred in administering the
Plan and the Trust Fund, including the fees of counsel and any agents for the
Committee, the expenses of the Committee, the fees, charges and costs of, and
incurred by, the Investment Manager, the fees and expenses of the Trustee, the
fees of counsel for the Trustee and other administrative expenses, shall be
borne by the several Employers in such proportions as the Committee shall
determine to be equitable and proper.
Section 14.2. Non-Assignability. It is a condition of the Plan, and
all rights of each Participant and Distributee shall be subject thereto, that no
right or interest of any Participant or Distributee in the Plan shall be
assignable or transferable in whole or in part, either directly or by operation
of law or otherwise, including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge or bankruptcy, but excluding devolution by death
or mental incompetency, and no right or interest of any Participant or
Distributee in the Plan shall be liable for, or subject to, any obligation or
liability of such Participant or Distributee, including claims for alimony or
the support of any spouse.
Section 14.3. Employment Non-Contractual. The Plan confers no right
upon any Employee to continue in employment.
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Section 14.4. Limitation of Rights. A Participant or Distributee
shall have no right, title or claim in or to any specific asset of the Trust,
but shall have the right only to distributions from the Trust Fund on the terms
and conditions herein provided.
Section 14.5. Merger or Consolidation with Another Plan. A merger or
consolidation with, or transfer of assets or liabilities to, any other plan
shall not be effected unless the terms of such merger, consolidation or transfer
are such that each Participant, Distributee, Beneficiary or other person
entitled to receive benefits from the Plan would, if the Plan were to terminate
immediately after the merger, consolidation or transfer, receive a benefit equal
to or greater than the benefit such person would be entitled to receive if the
Plan were to terminate immediately before the merger, consolidation, or
transfer.
Section 14.6. Reversion of Employer contributions. No part of the
Trust Fund shall revert or be repaid to an Employer either directly or
indirectly. However, any contribution made by the Company by reason of a good
faith mistake of fact, or the portion of any contribution made by the Company
which exceeds the maximum amount for which a deduction is allowable to the
Company for federal income tax purposes by reason of a good faith mistake in
determining the maximum allowable deduction, shall upon the request of the
Company be returned by the Trustee to the Company. The Company's request and the
return of any such contribution must be made within one year after such
contribution was mistakenly made or after the deduction of such excess portion
of such contribution was disallowed, as the case may be. The amount to be
returned to the Company pursuant to this paragraph shall be the excess of (a)
the amount contributed over (b) the amount that would have been contributed had
there not been a mistake of fact or a mistake in determining the maximum
allowable deduction. Earnings attributable to the amount contributed by mistake
shall not be returned to the Company, but losses attributable thereto shall
reduce the amount so returned. If
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return to the Company of the amount contributed by mistake would cause the
balance of any Participant's account as of the date such amount is to be
returned to be reduced to less than what would have been the balance of such
account as of such date had such amount not been contributed, the amount to be
returned to the Company shall be limited so as to avoid such reduction.
ARTICLE 15
AMENDMENT, WITHDRAWAL AND TERMINATION
Section 15.1. Amendment. The Company may at any time and from time
to time amend or modify the Plan by written instrument duly adopted by the Board
of Directors of the Company. Any such amendment or modification shall become
effective on such date as the Company shall determine and may apply to
Participants in the Plan at the time thereof as well as to future Participants.
Section 15.2. Withdrawal. If an Employer shall withdraw from the
Plan under Section 11.2, the Committee shall determine the portion of the Trust
Fund held by the Trustee which is applicable to the Participants and former
Participants of such Employer, and shall direct the Trustee to segregate such
portion in a separate trust. Such separate trust shall thereafter be held and
administered as a part of the separate plan of such Employer.
The portion of the Trust Fund applicable to the Participants and
former Participants of a particular Employer shall be the total amount credited
to the Plan Accounts of the Participants and former Participants of such
Employer.
Section 15.3. Termination. Any Employer may at any time terminate
its participation in the Plan by resolution of its board of directors to that
effect.
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A complete discontinuance of contributions by an Employer shall be
deemed a termination of such Employer's participation in the Plan for purposes
of this Section.
If the Internal Revenue Service shall refuse to issue an initial
favorable determination letter that the Plan and Trust as adopted by an Employer
meet the requirements of Section 401(a) of the Code and that the Trust is exempt
from tax under Section 501(a) of the Code, the Employer may terminate its
participation in the Plan and the Committee shall direct the Trustee to pay and
deliver the portion of the Trust Fund applicable to the Participants and former
Participants of such Employer, determined pursuant to Section 15.2, to such
Employer and such Employer shall pay to Participants or their Beneficiaries the
part of such Employer's portion of the Trust Fund as is attributable to
contributions made by Participants.
Section 15.4. Trust to be Applied Exclusively for Participants and
Their Beneficiaries. Subject only to the provisions of the second paragraph of
Section 15.3 and any other provision of the Plan to the contrary
notwithstanding, it shall be impossible for any part of the Trust to be used for
or diverted to any purpose not for the exclusive benefit of Participants and
their Beneficiaries either by operation or termination of the Plan, by power of
amendment or by other means.
Section 15.5. Distribution Upon Sale of Assets. All contributions
and income attributable thereto under the Plan shall be distributed to
Participants, as soon as administratively feasible after the sale, to an entity
that is not an Affiliated Employer, of substantially all of the assets used by
the Employer in the trade or business in which the Participant is employed.
Section 15.6. Distributions Upon Sale of Subsidiary. All
contributions and income attributable thereto under the Plan, shall be
distributed, as soon as administratively feasible after the
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sale, to an entity that is not an Affiliated Employer, of an incorporated
Affiliated Employer's interest in a subsidiary to Participants employed by such
subsidiary.
ARTICLE 16
TRANSFER OF ACCOUNT BALANCES
This Article applies only to certain hourly-paid employees of American
Cyanamid Corporation ("Cyanamid") at its Brewster Phosphates operation who
became employees of International Minerals Chemical Corporation ("IMC") as of
October 11, 1986 and the transfer of those employees' account balances from the
Cyanamid Employees Savings Plan to this Plan on or about August 1, 1987.
Cyanamid maintained a savings plan for certain or its employees known
as the "Cyanamid Employees Savings Plan" ("Cyanamid Plan"). Certain of the
former Cyanamid hourly paid employees who are now employees of the Company have
account balances in the Cyanamid Plan. The terms of this Plan shall apply in
this Article 16 except as otherwise noted herein.
Section 16.1. Transfer of Accounts and Vesting. The account balances
of all hourly employees at Brewster Phosphates in the Cyanamid Employees Savings
Plan who became hourly employees of IMC on or after October 11, 1986 shall be
transferred in cash from the Trust for the Cyanamid Employees Savings Plan to
the Life Insurance Company of North America to a guaranteed income contract
within which assets of the Plan are to be invested. Each Participant having an
account so transferred will be fully and nonforfeitably vested in such account
balance as increased by any investment gains and decreased by any investment
losses.
Section 16.2. Participant Accounts. Participants affected by this
Article shall have Accounts structured as follows:
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(a) Cyanamid Salary Reduction Sub-Account - consisting of
contributions and income accrued thereon primarily made by the employer under
the Cyanamid Employees Savings Plan by means of the Participant's election to
reduce his salary.
(b) Fertilizer Salary Reduction Sub-Account - consisting of
contributions and income accrued thereon made under Section 4.1 of this Plan
commencing January 1, 1988.
(c) Employee After Tax Sub-Account - consisting of contributions and
income thereon previously made by the Participant under the Cyanamid Employees
Savings Plan on an elective after-tax basis.
(d) Employer Sub-Account - consisting of contributions and income
thereon previously made by the employer to a Participant's account under the
Cyanamid Employees Savings Plan.
Section 16.3. Contributions. Contributions by salary reduction only
will be permitted pursuant to the terms of the Plan commencing January 1, 1988.
Section 16.4. Distribution from Participant's Accounts Upon
Termination of Employment.
(a)(i) Unless otherwise elected as provided below, a Participant who
is married on the "annuity starting date" and who does not die
before the "annuity starting date" shall have the value of his
benefits applied to the purchase of a non-transferable joint
and survivor annuity. The joint and survivor annuity shall be
equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall
continue to the spouse during the spouse's lifetime at a rate
equal to 50% of the rate at which such benefits were payable to
the Participant. An unmarried Participant shall have the value
of his benefit applied to the purchase of a non-transferable
life annuity. Such unmarried Participant, however, may elect in
writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an election
to waive the joint and survivor annuity by a married
Participant, but without the spousal consent requirement.
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(ii) Any election to waive the joint and survivor annuity must be
made by the Participant in writing during the election period
and be consented to by the Participant's spouse. Such election
shall designate a Beneficiary (or a form of benefits) that may
not be changed without spousal consent. Such spouses's consent
shall be irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a notary
public. Such consent shall not be required if it is established
to the satisfaction of the Administrator that the required
consent cannot be obtained because there is no spouse, the
spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant
and consented to by his spouse may be revoked by the
Participant in writing without the consent of the spouse at any
time during the election period. The number of revocations
shall not be limited. Any new election must comply with the
requirements of this paragraph. A former spouse's waiver shall
not be binding on a new spouse.
(iii) The election period to waive the joint and survivor annuity
shall be the 90 day period ending on the "annuity starting
date."
(iv) For purposes of this Section, the "annuity starting date" means
the first day of the first period for which an amount is
payable as an annuity, or, in the case of a benefit not payable
in the form of an annuity, the first day on which all events
have occurred which entitles the Participant to such benefit.
(v) With regard to the election the Administrator shall provide the
Participant within a reasonable period of time before the
"annuity starting date" (and consistent with Regulations), a
written explanation of:
(1) the terms and conditions of the joint and survivor annuity,
and
(2) the Participant's right to make an election to waive the
joint and survivor annuity, and
(3) the right of the Participant's spouse to consent to any
election to waive the joint and survivor annuity, and
(4) the right of the Participant to revoke such election, and
the effect of such revocation.
(5) general information on the relative financial effect on the
Participant of the various optional forms of benefit under
the Plan,
(6) if the annuity starting date is (or would be) before the
date specified in subsection (6) below, the right of the
Participant to defer receipt of the distribution as
provided in subsection (6) below.
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(vi) The distribution of a benefit in the form of a joint and
survivor annuity shall require the Participant's consent if
such distribution commences prior to the later of his Normal
Retirement Age or age 62. At least 30 days but no more than 90
days before the selected date, the Plan Administrator will
provide the Participant with election forms and the material
required by subsection (c) above, including a written
explanation of the Participant's right to defer receipt of the
distribution. The Participant must give written consent to the
distribution after receiving the notice and not more than 90
days before the annuity starting date. No consent shall be
valid if a significant detriment is imposed under the Plan on
any Participant who does not consent to the distribution.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive the retirement benefit in the form of a
joint and survivor annuity, or if such Participant is not married, in the form
of a life annuity, the Participant or his Beneficiary may elect to have any
amount to which he is entitled under the Plan in one or more of the following
methods:
(i) One lump-sum payment in cash; or
(ii) Payments through purchase of a non-transferable annuity over a
period 60, 120, 180, 300 or 360 months commencing the first day
of the month immediately following the month of termination of
his status as an Employee. The period over which such payment
is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's joint and survivor annuity
derived from Employer and Employee contributions may not be paid without his
written consent if the value exceeds $3,500. further, the spouse of a Retired
Participant must consent in writing to any immediate distribution. If the value
of the Participant's benefit derived from Employer and Employee contributions
does not exceed $3,500, the Administrator may immediately distribute such
benefit without such Participant's consent. No distribution may be made under
the preceding sentence after the annuity starting date unless the Participant
and his spouse consent in writing to such distribution.
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Any written consent required under this paragraph must be obtained not more than
90 days before commencement of the distribution and shall be made in a manner
consistent with Section 16.4(a)(2).
(d) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, whether under the Plan or through the
purchase of an annuity contract, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) of the
Regulations thereunder (including Regulation Section 1.401(a)(9)(2):
(i) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (1)
the calendar year in which the Participant attains age 70-1/2
or (2) the calendar year in which the Participant retires,
provided, however, that this clause (2) shall not apply in the
case of a Participant who is a "five (5) percent owner" at any
time during the 5-Plan Year period ending in the calendar year
in which he attains age 70-1/2 or, in the case of a Participant
who becomes a "five (5) percent owner" during any subsequent
Plan Year, clause (2) shall no longer apply and the required
beginning date shall be the April 1st of the calendar year
following the calendar year in which such subsequent Plan Year
ends. Alternatively, distributions to a Participant must begin
no later than the applicable April 1st as determined under the
preceding sentence and must be made over a period certain
measured by the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary)
in accordance with Regulations. For Plan Years beginning after
December 31, 1988, clause (2) above shall not apply to any
Participant unless the Participant had attained age 70-1/2
before January 1, 1988 and was not a "five (5) percent owner"
at any time during the Plan Year ending with or within the
calendar year in which the Participant attained age 66-1/2 or
any subsequent Plan Year.
(ii) Distributions to a participant and his Beneficiaries shall only
be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder. Additionally, for calendar years beginning before
1989, distributions may also be made under an alternative
method which provides that the then present value of the
payments to be made over the period of the Participant's life
expectancy exceeds fifty percent (50%) of the then present
value of the total payments to be made to the Participant and
his Beneficiaries.
(e) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse shall be redetermined annually in accordance with
Regulations. Life expectancy
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and joint and last survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation Section 172-9.
Section 16.5. Distribution of Benefits Upon Death.
(a) Unless otherwise elected as provided below, a Participant who dies
while employed and who has a surviving spouse shall have his death benefit paid
to his surviving spouse in the form of a Pre-Retirement Survivor Annuity. The
Participant's spouse may direct that payment of the Pre-Retirement Survivor
Annuity commence within a reasonable period after the Participant's death. If
the spouse does not so direct, payment of such benefit will commence at the time
the Participant would have attained the later of his Normal Retirement Age or
age 62. However, the spouse may elect a later commencement date. Any
distribution to the Participant's spouse shall be subject to the rules specified
in Section 16.5(j).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 16.4(a)(2). Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary or the alternative form of death
benefit to be paid in lieu of the Pre-Retirement Survivor Annuity.
Notwithstanding the foregoing, the nonspouse Beneficiary or the alternative form
of death benefit need not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit and that the spouse voluntarily elects
to relinquish one or both of such rights.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant attains
age 35 and end on the date of the
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Participant's death. In the event a Participant separates from Service prior to
the beginning of the election period, the election period shall begin on the
date of such separation from Service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant (and
consistent with Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that required pursuant to
Section 16.4(a)(5). For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the following periods
ends last:
(i) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(ii) A reasonable period after the individual becomes a Participant.
For this purpose, in the case of an individual who becomes a
Participant after age 32, the explanation must be provided by
the end of the three-year period beginning with the first day
of the first Plan Year for which the individual is a
Participant;
(iii) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(iv) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(v) A reasonable period after separation from Service in the case
of a Participant who separates before attaining age 35. For
this purpose, the Administrator must provide the explanation at
the time of separation or within one year after separation.
(e) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500, the Administrator
shall direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds $3,500, an immediate distribution of the entire amount may be made to
the surviving spouse,
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provided such surviving spouse consents in writing to such distribution. Any
written consent required under this paragraph must be obtained not more than 90
days before commencement of the distribution and shall be made in a manner
consistent with Section 16.4(a)(2).
(f) In the event the death benefit is not paid in the form of a Pre-
Retirement Survivor Annuity, it shall be paid to the Participant's Beneficiary
in a lump sum as elected by the Participant (or if no election has been made
prior to the Participant's death, by his Beneficiary) subject to the rules
specified in Section 16.5(g).
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance with
the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If the death benefit is paid in the
form of a Pre-Retirement Survivor annuity, then distributions to the
Participant's surviving spouse must commence on or before the later of: (1)
December 31st of the calendar year immediately following the calendar year in
which the Participant dies; or (2) December 31st of the calendar year in which
the Participant would have attained age 70-1/2. If it is determined, pursuant to
Regulations, that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to Section 16.4 as of his
date of death. If a Participant dies before he has begin to receive any
distribution of his interest under the Plan or before distributions are deemed
to have begun pursuant to Regulations (and distributions are not to be made in
the form of a Pre-Retirement Survivor Annuity), then his death benefit shall be
distributed to his Beneficiaries by December 31st of the calendar year in which
the fifth anniversary of his date of death occurs. However, in the event that
the Participant's spouse (determined as of the date of the Participant's death)
is his Beneficiary, then in lieu of the preceding
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rules, distributions must be made over a period not extending beyond the life
expectancy of the spouse (or over a period not extending beyond the life
expectancy of the spouse) and must commence on or before the later of: (1)
December 31st of the calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the calendar year in which
the Participant would have attained age 70-1/2. If the surviving spouse dies
before distributions to such spouse begin, then the 5-year distribution
requirement of this Section shall apply as if the spouse was the Participant.
However, the 5-year distribution requirement of the preceding sentence shall not
apply to any portion of the decreased Participant's interest which is payable to
or for the benefit of a designated Beneficiary. In such event, such portion
shall be distributed over a period not extending beyond the life of such
designated Beneficiary (or over a period not extending beyond the life
expectancy of such designated Beneficiary) provided such distribution begins not
later than December 31st of the calendar year immediately following the calendar
year in which the Participant died.
Section 16.6. Withdrawals from Members' Accounts During Employment.
(a) Withdrawals of 401(k) Contributions.
(i) Prior to a Participant attaining the age of 59-1/2, such
Participant may not withdraw while an Employee any 401(k)
contributions contributed in his behalf, or income thereon,
except in case of hardship or disability within the meaning of
Section 401(k) of the Code. No distribution based on hardship
shall exceed the amount determined to be necessary in light of
immediate and heavy financial needs of the Participant and not
reasonably available from the other resources of the
Participant. Effective January 1, 1989 no distribution based
on hardship may exceed the amount of the Participant's 401(k)
contributions. The decision of the Committee will be final in
determining the existence of a hardship and the amount which
may be withdrawn, but the Administrator shall make such
determinations on a uniform and non-discriminatory basis.
(ii) When a Participant has attained age 59-1/2, 401(k)
contributions contributed on behalf of such Participant and
income thereon may be withdrawn.
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<PAGE>
(b) Withdrawals of Employee After-Tax Contributions. A Participant may
withdraw from his accounts representing Employee After-Tax Contributions and
Income thereon cash in any amount equal to or less than his Employee After-Tax
Account.
(c) Withdrawals of Company Contributions. After the maximum permitted
withdrawals pursuant to Subsection (b), a Participant may withdraw in cash the
value of his Employer Account representing Company Contributions and Income
thereon which have been credited to such account for at least 24 months as of
the effective date of the withdrawal.
(d) Effective Date. Each withdrawal shall be effective as of the first
Valuation Date occurring at least 30 (or such lesser number as the Administrator
from time to time may determine) days after the date of receipt by the
Administrator of the Participant's withdrawal request in the form prescribed by
the Administrator. The value of Units credited to the Participant's accounts
shall be calculated (in the manner specified in Article 7 of the Plan) as of
such Valuation Date. The amounts to which the Participant is entitled shall be
delivered to the Participant as soon as practicable after the effective date of
the withdrawal.
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<PAGE>
IN WITNESS WHEREOF, IMC-Agrico MP, Inc. has caused its corporate seal
to be hereunto affixed by its officers thereunto duly authorized this ______ day
of ___________________, 1997.
IMC-AGRICO MP, INC.
By:
---------------------------
(Corporate Seal)
ATTEST:
- ----------------------
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<PAGE>
SURPLUS NOTE
$
___________ Lexington, Kentucky
_____________, 1997
FOR VALUE RECEIVED, as of __________, 1997, the undersigned, CHA HMO,
Inc., a Kentucky corporation (the "Maker"), promises and agrees to pay to the
order of ______________________, a Kentucky corporation having as its principal
place of business ____________________, Kentucky (hereinafter the "Lender"), the
principal sum of ____________dollars ($_______________.00), and accrued interest
thereon at Maker's principal place of business, or such other location agreeable
to the Maker, in immediately available funds, subject to the terms and
conditions set forth below. The outstanding principal balance of this Note shall
bear interest from and after the date hereof until this Note is fully paid, at a
simple rate of interest per annum equal to six percent (6%). All interest on
this Note shall be computed on the basis of the actual number of days elapsed
over a 365 day year.
1. The principal amount of this Note, together with all accrued interest
thereon, shall be repaid upon the expiration of the sixth (6th) calendar month
following (i) the end of the last month for which capitation payment is received
by the Maker pursuant to the Medicaid Health Care Partnership Contract Between
The Commonwealth of Kentucky Department for Medicaid Services And A Health Care
Partnership, Region 5 Managed Care Organization, LLC (hereinafter, the "Medicaid
Contract"), or (ii) June 30, 2000, whichever first occurs; provided, however,
that no repayment of principal or payment of interest shall be made if such
payment would impair the Required Surplus of Maker, as defined below, and
provided further, that no
<PAGE>
repayment of principal or payment of interest shall be made hereunder except to
the extent of Maker's surplus and reserves existing at the time of such payment
solely in connection with Maker's Medicaid business arising in connection with
the Medicaid Contract (the "Medicaid Surplus"). The Medicaid Surplus, which
shall be separately accounted for, available for repayment of principal and
payment of interest hereunder at any given time shall be defined as the positive
difference between (i) revenues received by Maker pursuant to the Medicaid
Contract and (ii) accrued medical and administrative expenses arising in
connection with the Medicaid Contract. No repayment of principal or payment of
interest shall be made hereunder without the prior written approval of the
Commissioner of the Department of Insurance for the Commonwealth of Kentucky
based upon a finding that such repayment does not cause the surplus and reserves
of Maker to be less than the minimum surplus and reserves required for Maker
pursuant to the terms of Chapter 304 of the Kentucky Revised Statutes (the
"Required Surplus"). The obligations of Maker evidenced by this Note shall not
constitute a legal liability of Maker except to the extent to which the total
surplus and reserves, including interest accruals, of Maker exceed the Required
Surplus of Maker.
2. All payments of principal and interest herein shall be postponed, deferred
and subordinated to the prior payment by Maker of all of accrued obligations
currently due and payable by Maker to any and all third parties ("Senior
Liabilities") from time to time. It is the intention of the parties that, in
the normal course of business, this subordination applies only to the periodic
payments on the Senior Liabilities as they become due and payable from time to
time; it is not the intention of the parties that in the normal course of
business Maker shall pay in full all Senior Liabilities before
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any payments are made on the Notes hereunder. In the event of insolvency, Maker
shall pay in full all Senior Liabilities before any payments are made on the
Notes hereunder, unless Maker obtains the prior approval of the Department of
Insurance for the Commonwealth of Kentucky to act otherwise.
3. As used herein, the term "Event of Default" shall mean the following:
(a) a default in the payment of principal and/or interest as and when the same
is or becomes due and payable hereunder and such default continues for a period
of thirty (30) day following the due date thereof; provided, however, that the
failure of Maker to make any repayment of principal or payment of interest
hereunder as a result of and to the extent of inadequacy of the Medicaid Surplus
or Required Surplus, or failure of the Department of Insurance for the
Commonwealth of Kentucky to approve such repayment or payment shall not be
deemed to constitute an Event of Default hereunder.
(b) default in the performance, or breach, of any covenant or warranty of the
Maker in this Note (other than a covenant or warranty a default in whose
performance or whose breach is specifically dealt with in section 8 hereof), and
continuance of such default or breach for a period of 90 days after there has
been given to the Maker by the holder of this Note a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(c) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Maker insolvent, or appointing a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Maker or of any
substantial part of its property, or ordering the winding up
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<PAGE>
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days, or
(d) the institution by the Maker of proceedings to be adjudicated bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under Federal Bankruptcy law or any other
applicable Federal or State law, or the consent by it to the filing of such
petition or to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Maker or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Maker in furtherance
of any such action.
4. If an Event of Default occurs and is continuing, the holder of this Note may
declare the principal of this Note to be due and payable immediately, by a
notice in writing to the Maker, and upon any such declaration such principal
shall become immediately due and payable, subject to the provisions of section 1
hereof.
5. To the extent that the Commissioner prohibits payment of all or a portion of
the principal or interest of this Note pursuant to the provisions of section 1
hereof, or to the extent that it is otherwise established that payment of
interest or principal would impair the Required Surplus of Maker, the failure by
the Maker to make a principal or interest payment hereunder shall not constitute
an Event of Default. The prohibition by the Commissioner of principal or
interest payments or nonpayment of principal or interest to the extent that such
payment would impair
4
<PAGE>
Required Surplus shall not be considered to be a cancellation or forgiveness of
the indebtedness hereunder and within 30 days after the removal of such
prohibition or impairment the Maker shall make payment of all amounts owing
hereunder.
6. To the extent that the Medicaid Surplus is insufficient to allow for
repayment of principal or payment of interest hereunder when such payments are
otherwise due hereunder, the failure of Maker to repay such principal or pay
such interest shall not constitute an Event of Default. In the event of a
Medicaid Surplus deficiency, Maker shall, subject to the requirements of
sections 1 and 12 hereof, and other provisions hereof, repay such principal and
pay such interest arising hereunder to the extent, if any, permitted by the
Medicaid Surplus, and this Note shall be canceled and the obligations of Maker
hereunder shall terminate. In the event the Medicaid Contract is renewed for one
(1) or more renewal terms commencing subsequent to June 30, 2000, this Note
shall remain in force and accrue interest hereunder with respect to all unpaid
principal amounts due hereunder, and Maker shall, subject to the conditions of
sections 1 and 12 hereof, and other provisions hereof, repay such principal and
pay such interest as may be permitted by a Medicaid Surplus determined to exist
upon the expiration of six (6) months following the end of each such renewal
term; upon the expiration of the six (6) month period following the final
renewal term, this Note shall be canceled and the obligations of Maker hereunder
shall terminate.
7. The Maker covenants that if default is made in the payment of the principal
of this Note and accrued interest thereon at the maturity hereof, other than to
the extent the Commissioner prohibits such principal payment or to the extent of
inadequacy of the Medicaid Surplus or Required Surplus, the Maker will, upon
demand by the holder of this Note, and subject to the
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<PAGE>
provisions of section 1 hereof, pay to it the whole amount then due and payable
on this Note for principal and interest, with interest upon the overdue
principal at the rate borne by this Note.
8. The Maker covenants that it shall not consolidate with or merge into any
other corporation or convey, transfer, or lease its properties and assets
substantially as an entirety to any Person, and the Maker shall not permit any
Person to consolidate with or merge into the Maker or convey, transfer or lease
its properties and assets substantially as an entirety to the Maker, unless:
(a) in the event that the Maker shall consolidate with or merge into another
corporation or convey, transfer, or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Maker is merged or the Person which acquires by
conveyance or transfer or which leases the properties and assets of the Maker
substantially as an entirety shall expressly assume, subject to the terms and
conditions hereof, the due and punctual payment of the principal of and interest
on this Note and the performance of every covenant of this Note on the part of
the Maker to be performed or observed;
(b) immediately after giving effect to such transactions no Event of Default,
and no event which, after notice or lapse or time or both, would become an Event
of Default, shall have happened and be continuing; and
(c) if, as a result of any such consolidation or merger or such conveyance,
transfer, or lease, capital stock of the Maker would become subject to a pledge,
lien or other encumbrance, the Maker or such successor corporation or Person, as
the case may be, shall take such steps as shall
6
<PAGE>
be necessary effectively to secure this Note equally and ratably with (or prior
to) all indebtedness secured thereby.
Upon any consolidation of the Maker with or merger of the Maker into any
other corporation or any conveyance, transfer, or lease of the properties and
assets of the Maker substantially as an entirety to any Person in accordance
with this section 8, the successor corporation formed by such consolidation or
into which the Maker is merged or to which such conveyance, transfer, or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Maker under this Note with the same effect as if such
successor corporation had been named as the Maker herein.
For purposes of this section 8, "Person" shall mean any individual,
corporation, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
9. As long as this Note remains outstanding, the Maker will not pay, or set
apart any funds or property for the payment of, any dividend on, or make any
distribution in respect to its shares to the holders of any shares of capital
stock of the Maker (other than dividends or distributions payable in its capital
stock or warrants or rights to purchase capital stock), and the Maker will not
purchase, redeem or otherwise acquire or retire for value any shares of capital
stock of the Maker, if, at the time of such declaration, payment, distribution,
purchase, redemption, other acquisition or retirement, an Event of Default shall
have occurred and be continuing or a prohibition by the Commissioner of payment
of a principal or interest amount otherwise due is in effect.
7
<PAGE>
10. In the event of reorganization, dissolution, liquidation, receivership,
insolvency or bankruptcy of the Maker, the claims of the holder of this Note
shall be subordinated to policyholder, claimant and beneficiary claims as well
as debts owed to all other classes of creditors. The claims of the holder of
this Note arising hereunder shall be superior to claims of the Maker's common
and preferred shareholders arising in respect of such shares.
11. Subject to the provisions of section 1 hereof, this Note may be repaid, in
whole at any time or in part from time to time, without premium or penalty and
with interest to the date of payment only.
12. Except as may be provided for to the contrary in this section 12, all
surplus notes issued in connection with financing the development expense
associated with the Medicaid Contract (the "Surplus Notes") shall have the same
rights and preferences; the principal of each shall be repaid and interest
accruing on each shall be paid concurrently. In the event that a Medicaid
Surplus or Required Surplus deficiency or action by the Commissioner of
Insurance precludes the repayment of the principal amounts outstanding on all
Surplus Notes, or accrued interest thereon, but would not preclude a partial
payment thereof (an "Event of Partial Payment"), such principal amounts as may
be repaid shall be repaid, and then such accrued interest as may be paid shall
be paid, in the manner set forth below. Notwithstanding any provision herein to
the contrary, any and all Surplus Notes issued to the owner of record and
beneficially of the capital shares of the Maker (the "Shareholder Notes") shall
(i) be subordinated to the rights of the holders of all other Surplus Notes (the
"Non-shareholder Notes") with respect to repayment of principal and payment of
interest in the Event of Partial Payment, in the manner set forth below, and
(ii) shall be prepaid,
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<PAGE>
without interest, immediately upon the receipt of, and to the extent of, funds
paid to the Maker in return for all of the Non-shareholder Notes issued
subsequent to the date of issuance of the Shareholder Notes. In the Event of
Partial Payment, subject to the terms and conditions of section 1 hereof, the
Medicaid Surplus shall be distributed first to repay the outstanding principal
amounts of all of the Non-shareholder Notes pro-rata in proportion to the
principal amount of each such Non-shareholder Note issued and outstanding as a
percentage of the aggregate sum of the principal amounts of all such Non-
shareholder Notes, then to repay the outstanding principal amounts of the
Shareholder Notes, then to pay accrued, unpaid interest with respect to the Non-
shareholder Notes, and then to pay accrued, unpaid interest with respect to the
Shareholder Notes.
13. Neither this Note nor any interest herein or right arising hereunder shall
be assigned, transferred, pledged, mortgaged or hypothecated in any manner
whatsoever without the prior written consent of the Maker; any such action for
which prior written consent of Maker shall not have been obtained shall be void.
14. Failure of the Lender to exercise any of its rights and remedies shall not
constitute a waiver of the right to exercise the same at that or any other time.
15. This Note shall be governed and construed in accordance with the laws of
the Commonwealth of Kentucky.
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<PAGE>
IN WITNESS WHEREOF, the Maker has executed this Note as of the day, month
and year first above written.
CHA HMO, Inc.
By:
--------------------------------
Title:
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10
