SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- -- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 1999
OR
- -- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-3295
--
MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 25-1190717
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 Lexington Avenue, New York, New York 10174-1901
(Address of principal executive offices, including zip code)
(212) 878-1800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
--------- ---------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT April 23, 1999
Common Stock, $.10 par value 21,566,602
<PAGE>
MINERALS TECHNOLOGIES INC.
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements:
Condensed Consolidated Statement of Income for the
three-month periods ended March 28, 1999 and
March 29, 1998 3
Condensed Consolidated Balance Sheet as of March 28, 1999
and December 31, 1998 4
Condensed Consolidated Statement of Cash Flows for the
three-month periods ended March 28, 1999 and
March 29, 1998 5
Notes to Condensed Consolidated Financial Statements 6
Independent Auditors' Report 9
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 3.
Quantitative and Qualitative Disclosures about Market Risk 13
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings 13
Item 6.
Exhibits and Reports on Form 8-K 14
Signature 15
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
THREE MONTHS ENDED
-----------------------------
MARCH 28, MARCH 29,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 1998
--------- ---------
Net sales $ 148,576 $ 144,102
Operating costs and expenses:
Cost of goods sold 103,227 99,273
Marketing, distribution and
administrative expenses 18,359 18,854
Research and development expenses 5,952 4,877
--------- ---------
Income from operations 21,038 21,098
Non-operating deductions, net 1,277 1,309
--------- ---------
Income before provision for taxes
on income and minority interests 19,761 19,789
Provision for taxes on income 6,228 6,428
Minority interests (198) 560
--------- ---------
Net income $ 13,731 $ 12,801
========= =========
Earnings per share:
Basic $ 0.63 $ 0.57
Diluted $ 0.62 $ 0.55
Cash dividends declared per common share $ 0.025 $ 0.025
Shares used in the computation of
earnings per share
Basic 21,697 22,548
Diluted 22,304 23,215
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(THOUSANDS OF DOLLARS) MARCH 28, DECEMBER 31,
1999* 1998**
--------- ------------
Current assets:
Cash and cash equivalents $ 16,223 $ 20,697
Accounts receivable, net 116,171 110,192
Inventories 59,093 63,657
Other current assets 15,261 16,284
--------- ---------
Total current assets 206,748 210,830
Property, plant and equipment, less
accumulated depreciation
and depletion March 28, 1999-$390,352;
Dec. 31, 1998-$381,690 514,007 524,529
Other assets and deferred charges 27,958 25,553
--------- ---------
Total assets $ 748,713 $ 760,912
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 13,472 $ 13,511
Accounts payable 32,718 32,084
Other current liabilities 57,959 52,343
--------- ---------
Total current liabilities 104,149 97,938
Long-term debt 88,090 88,167
Other non-current liabilities 87,455 85,644
--------- ---------
Total liabilities 279,694 271,749
--------- ---------
Shareholders' equity:
Common stock 2,556 2,553
Additional paid-in capital 144,853 144,088
Retained earnings 480,450 467,257
Accumulated other comprehensive loss (31,467) (9,612)
--------- ---------
596,392 604,286
Less treasury stock 127,373 115,123
--------- ---------
Total shareholders' equity 469,019 489,163
--------- ---------
Total liabilities and
shareholders' equity $ 748,713 $ 760,912
========= =========
* Unaudited
** Condensed from audited financial statements.
See accompanying Notes to Condensed Consolidated Financial Statements.
4
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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
-----------------------
(THOUSANDS OF DOLLARS) MARCH 28, MARCH 29,
1999 1998
--------- ---------
OPERATING ACTIVITIES
Net income $ 13,731 $ 12,801
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion and
amortization 14,050 13,209
Other non-cash items 1,991 2,922
Net changes in operating assets and
liabilities (3,004) (5,594)
-------- --------
Net cash provided by operating activities 26,768 23,338
-------- --------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (17,284) (18,655)
Other investing activities, net (788) 374
-------- --------
Net cash used in investing activities (18,072) (18,281)
-------- --------
FINANCING ACTIVITIES
Proceeds from issuance of short-term and
long-term debt 4,600 273
Repayment of debt (4,600) (551)
Purchase of common shares for treasury (12,250) (5,128)
Other financing activities, net 227 1,521
-------- --------
Net cash used in financing activities (12,023) (3,885)
-------- --------
Effect of exchange rate changes on cash and
cash equivalents (1,147) (449)
-------- --------
Net increase (decrease) in cash and cash
equivalents (4,474) 723
Cash and cash equivalents at beginning of period 20,697 41,525
-------- --------
Cash and cash equivalents at end of period $ 16,223 $ 42,248
======== ========
Interest paid $ 2,202 $ 2,235
======== ========
Income taxes paid $ 763 $ 3,381
======== ========
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared by management in accordance with the rules
and regulations of the United States Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
Therefore, these financial statements should be read in conjunction with
the consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended December 31,
1998. In the opinion of management, all adjustments, consisting solely
of normal recurring adjustments necessary for a fair presentation of the
financial information for the periods indicated, have been included. The
results for the three-month period ended March 28, 1999 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1999.
NOTE 2 -- INVENTORIES
The following is a summary of inventories by major category:
(THOUSANDS OF DOLLARS) MARCH 28, DECEMBER 31,
1999 1998
--------- ------------
Raw materials $ 17,030 $ 21,681
Work in process 5,517 5,483
Finished goods 20,169 19,650
Packaging and supplies 16,377 16,843
-------- --------
Total inventories $ 59,093 $ 63,657
======== ========
NOTE 3 -- LONG-TERM DEBT AND COMMITMENTS
The following is a summary of long-term debt:
MARCH 28, DECEMBER 31,
(THOUSANDS OF DOLLARS) 1999 1998
--------- ------------
7.75% Economic Development
Revenue Bonds Series 1990 Due 2010 $ -- $ 4,600
Variable/Fixed Rate Industrial
Development Revenue Bonds Due 2009 4,000 4,000
Variable/Fixed Rate Industrial
Development Revenue Bonds Due
April 1, 2012 7,545 7,545
Variable/Fixed Rate Industrial
Development Revenue Bonds Due
August 1, 2012 8,000 8,000
Economic Development Authority Refunding
Revenue Bonds Series 1999 Due 2010 4,600 --
6.04% Guarantied Senior Notes
Due June 11, 2000 26,000 26,000
7.49% Guaranteed Senior Notes
Due July 24, 2006 50,000 50,000
Other borrowings 1,417 1,533
-------- ---------
101,562 101,678
Less: Current maturities 13,472 13,511
-------- ---------
Long-term debt $ 88,090 $ 88,167
======== =========
6
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NOTE 4 -- EARNINGS PER SHARE (EPS)
Basic earnings per share are based upon the weighted average number
of common shares outstanding during the period. Diluted earnings per
share are based upon the weighted average number of common shares
outstanding during the period assuming the issuance of common shares for
all dilutive potential common shares outstanding. The following table
sets forth the computation of basic and diluted earnings per share:
BASIC EPS MARCH 28, MARCH 29,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 1998
--------- ---------
Net income $ 13,731 $ 12,801
-------- --------
Weighted average shares outstanding 21,697 22,548
-------- --------
Basic earnings per share $ 0.63 $ 0.57
======== ========
DILUTED EPS
Net income $ 13,731 $ 12,801
-------- --------
Weighted average shares outstanding 21,697 22,548
Dilutive effect of stock options 607 667
-------- --------
Weighted average shares outstanding, adjusted 22,304 23,215
-------- --------
Diluted earnings per share $ 0.62 $ 0.55
======== ========
NOTE 5 -- COMPREHENSIVE INCOME (LOSS)
The following are the components of comprehensive income (loss):
THREE MONTHS ENDED
---------------------
(THOUSANDS OF DOLLARS) MARCH 28, MARCH 29,
1999 1998
---------- ---------
Net income $ 13,731 $ 12,801
Other comprehensive income, net of tax:
Foreign currency translation adjustments (21,769) (962)
Unrealized holding gains (losses),
net of reclassification adjustments (86) 46
------- -------
Comprehensive income (loss) $ (8,124) $ 11,885
======= =======
The components of accumulated other comprehensive loss, net of related
tax are as follows:
MARCH 28, DECEMBER 31,
1999 1998
--------- ------------
Foreign currency translation adjustments $(30,466) $(8,697)
Minimum pension liability adjustments (1,001) (1,001)
Unrealized holding gains -- 86
------ -----
Accumulated other comprehensive loss $(31,467) $(9,612)
====== =====
The change in unrealized holding gains for the three months ended
March 28, 1999 includes reclassification adjustments of $174,000 for
gains realized in income from the sale of the securities. Foreign currency
translation losses increased for the three months ended March 28, 1999 as
a result of the stronger U.S. Dollar against the Latin American, European and
Asian currencies since December 31, 1998.
7
<PAGE>
MINERALS TECHNOLOGIES AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 -- SEGMENT AND RELATED INFORMATION
Segment information for the three months ended March 28, 1999 and
March 29, 1998 was as follows:
(THOUSANDS OF DOLLARS) THREE MONTHS ENDED MARCH 28, 1999
---------------------------------
SPECIALTY MINERALS REFRACTORIES TOTAL
Net sales $107,789 $40,787 $148,576
Income from operations $ 15,561 $ 5,477 $ 21,038
THREE MONTHS ENDED MARCH 29, 1998
---------------------------------
SPECIALTY MINERALS REFRACTORIES TOTAL
Net sales $ 98,304 $45,798 $144,102
Income from operations $ 14,737 $ 6,361 $ 21,098
A reconciliation of the totals reported for the operating segments to
the applicable line items in the consolidated financial statements is as
follows:
(THOUSANDS OF DOLLARS)
THREE MONTHS ENDED THREE MONTHS ENDED
INCOME BEFORE PROVISION MARCH 28, 1999 MARCH 29, 1998
FOR TAXES ON INCOME AND ------------------ ------------------
MINORITY INTERESTS
Income from operations
for reportable segments $21,038 $21,098
Non-operating deductions 1,277 1,309
------ ------
Income before provision for
taxes on income and minority
interests $19,761 $19,789
======= ======
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Minerals Technologies Inc.:
We have reviewed the condensed consolidated balance sheet of Minerals
Technologies Inc. and subsidiary companies as of March 28, 1999 and the
related condensed consolidated statements of income and cash flows for
the three-month periods ended March 28, 1999 and March 29, 1998. These
financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Minerals
Technologies Inc. and subsidiary companies as of December 31, 1998, and
the related consolidated statements of income, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our
report dated January 19, 1999, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information
set forth in the accompanying condensed consolidated balance sheet as of
December 31, 1998 is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been
derived.
KPMG LLP
New York, New York
April 30, 1999
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INCOME AND EXPENSE ITEMS
AS A PERCENTAGE OF NET SALES
----------------------------
THREE MONTHS ENDED
------------------
MARCH 28, MARCH 29,
1999 1998
--------- ---------
Net sales 100.0% 100.0%
Cost of goods sold 69.5 68.9
Marketing, distribution and
administrative expenses 12.3 13.1
Research and development expenses 4.0 3.4
---- ----
Income from operations 14.2 14.6
Net income 9.2% 8.9%
==== ====
RESULTS OF OPERATIONS
Three Months Ended March 28, 1999 as Compared With Three Months Ended
- ---------------------------------------------------------------------
March 29, 1998
- --------------
Net sales in the first quarter of 1999 increased 3.1% to $148.6
million from $144.1 million in the first quarter of 1998. Net sales in
the Specialty Minerals segment, which includes the Precipitated Calcium
Carbonate ("PCC") and Processed Minerals product lines, grew 9.7% in the
first quarter of 1999 to $107.8 million. Net sales in the Refractories
segment declined 10.9% in the first quarter of 1999.
Worldwide net sales of PCC grew 12.7% to $89.6 million from $79.5
million in the first quarter of 1998. This sales growth was primarily
attributable to the commencement of operations at five new satellite PCC
plants since January 1998 and to sales from the acquisition in April 1998
of a PCC business in the United Kingdom. The new satellite plants are
located at Courtland, Alabama; Docelles, France; Schongau, Germany;
Pensacola, Florida; and Madison, Maine.
Net sales of Processed Minerals products decreased 3.2%, to $18.2
million from $18.8 million in the prior year. The sales decline in
Processed Minerals was primarily due to the usage of a significant
portion of the Company's lime for the production of PCC instead of for
sales to third parties.
Net sales in the Refractories segment were $40.8 million as compared
to $45.8 million in the prior year. The sales decline was due primarily
to unfavorable economic conditions in the worldwide steel industry.
Net sales in the United States in the first quarter of 1999 increased
approximately 1%. Foreign sales increased approximately 9% in the first
quarter of 1999. This increase was due to the international expansion of
the Company's PCC product line.
Income from operations was $21.0 million, approximately the same as
in the first quarter of 1998. Operating income was negatively affected by
lower profits in the Refractories segment, higher research and
development spending, and operating losses in the Company's consolidated
joint ventures.
The provision for minority interests in the first quarter of 1999
decreased by aproximately $0.8 million. In 1999, the provision
for minority interests reflected the minority partners' share of losses
incurred in the consolidated joint ventures. In 1998, such joint
ventures operated profitably.
Net income increased 7.0% to $13.7 million from $12.8 million in the
prior year. Diluted earnings per share were $0.62 in the first quarter
of 1999 as compared to $0.55 in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remained strong in the first quarter
of 1999. Cash flows in the first quarter of 1999 were provided from
operations and were applied principally to fund capital expenditures and
the repurchase of common shares for treasury. Cash provided from
operating activities amounted to $26.8 million in the first quarter of
1999 as compared to $23.3 million in the prior year.
10
<PAGE>
On February 26, 1998, the Company's Board of Directors authorized a
$150 million program to repurchase Company stock on the open market from
time to time. As of April 9, 1999, the Company had repurchased
1,204,000 shares under this program at an average price of approximately
$47 per share.
The Company has available approximately $110 million in uncommitted,
short-term bank credit lines, none of which were in use at March 28,
1999. The Company anticipates that capital expenditures for all of 1999
will be approximately $90 million, principally for construction of
satellite PCC plants, expansion projects at existing satellite PCC
plants, a merchant manufacturing facility in Brookhaven, Mississippi
for the production of specialty PCC, and other opportunities which meet
the strategic growth objectives of the Company. The Company expects to
meet such requirements from internally generated funds, the
aforementioned uncommitted bank credit lines and, where appropriate,
project financing of certain satellite plants.
PROSPECTIVE INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS
The Securities and Exchange Commission encourages companies to
disclose forward-looking information so that investors can better
understand the companies' future prospects and make informed investment
decisions. This report may contain forward-looking statements that set
out anticipated results based on management's plans and assumptions.
Words such as "anticipate," "estimate," "expects," and "projects," and words
and terms of similar substance used in connection with any discussion of
future operating or financial performance identify these forward-looking
statements.
The Company cannot guarantee that the outcomes suggested in any
forward-looking statement will be realized, although it believes it has
been prudent in its plans and assumptions. Achievement of future
results is subject to risks, uncertainties and inaccurate assumptions.
Should known or unknown risks or uncertainties materialize, or should
underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Investors
should bear this in mind as they consider forward-looking statements and
should refer to the discussion of certain risks, uncertainties and
assumptions under the heading "Cautionary Factors That May Affect Future
Results" in Item 1 of the Company's Annual Report on Form 10-K for 1998.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The statement establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. The statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company will adopt SFAS 133 by
January 1, 2000. Adoption of SFAS 133 is not expected to have a material
effect on the consolidated financial statements.
YEAR 2000
The "year 2000 issue" arises because many computer programs and
electronically controlled devices denote years using only the last two
digits. Because these programs and devices may fail to recognize the
year 2000 correctly, calculations or other tasks that involve the years
2000 and beyond may cause the programs to produce erroneous results or
to fail altogether. Like other companies, the Company uses operating
systems, applications and electronically controlled devices that were
produced by many different vendors at different times, and many of which
were not originally designed to be year 2000 compatible.
THE COMPANY'S STATE OF READINESS
Information Technology
----------------------
The Company has completed its assessment of its exposure to year
2000-related risks arising from information technology, and is engaged in
remediation of the areas of exposure it has identified.
In 1996, the Company began a project to install new computer
hardware and software systems to improve the capability of its technology
to harmonize the various information technology platforms in
use, and to centralize certain financial functions. The project
encompasses corporate financial and accounting functions as well as
manufacturing and costing, procurement, planning and scheduling of
production and maintenance, and customer order management.
The Company has acquired substantially all of the hardware and
software required to implement this project, and is currently bringing
the majority of its domestic business locations on to the new systems
sequentially. This process is substantially complete, and the Company
expects the new systems to be operational in all affected U.S. locations
no later than the third quarter of 1999. Other U.S. manufacturing
locations are currently year 2000 compatible, with the exception of
three locations which are serviced by an information technology system
which is in the remediation phase. This phase is substantially complete,
and is scheduled to be completed no later than the second quarter of 1999.
11
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Outside of the United States, preparations for the year 2000 are
being carried out by the relevant business units on a decentralized basis.
Information technology systems have been evaluated and are in the process
of being remediated or replaced as required. The Company expects this
process to be completed by all non-U.S. locations no later than the third
quarter of 1999.
Non-Information Technology
--------------------------
The Company's exposures to the year 2000 issue other than in the area
of information technology arise mostly with respect to process control
systems and instrumentation at the Company's manufacturing locations and
in equipment used at customer locations. Telephone and e-mail systems,
operating systems and applications in free-standing personal computers,
local area networks, and site services such as electronic security systems
and elevators may also be affected. A failure of these systems which
interrupts the Company's ability to supply products to its customers
could have a material adverse impact on its results of operations. These
issues are being addressed by the individual business units, by obtaining
from vendors and service providers either necessary modifications to the
software or assurance that the system will not be disrupted by the year
2000 issue. This process is substantially complete, and is expected to be
completed no later than the third quarter of 1999.
Third Parties
-------------
The Company's divisions are communicating with their principal
customers and vendors to inquire about their year 2000 readiness. This
project is substantially complete, and we expect it to be completed no
later than the third quarter of 1999. The Company has received responses
from a substantial number of those customers and vendors an interruption
in the operations of which would have, in the Company's opinion, a
material adverse effect on the Company's results of operations. No such
customer or vendor has indicated that it expects such an interruption to
occur. However, because so many firms are exposed to the risk of failure
not only of their own systems, but of the systems of other firms, the
ultimate effect of the year 2000 issue is subject to a very high degree
of uncertainty.
COSTS
The Company expects to spend approximately $16-19 million before
January 1, 2000, for new computer hardware and software, other
information technology upgrades and replacements, and
upgrades and replacements to non-IT systems worldwide. These
expenditures, which include both internal and external costs, will provide
benefits to the Company which include, but are not limited to, the
achievement of year 2000 readiness. Of this amount approximately
$14 million had been expended as of March 28, 1999. These expenditures
will be capitalized or expensed in accordance with Statement of Position
98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use," which the Company has adopted.
The Company expects to finance these expenditures solely from working
capital, and does not expect the total cost associated with its plans to
address the year 2000 issue to have a material effect on its financial
position or results of operations.
None of the Company's other information technology projects has been
delayed due to the implementation of year 2000 solutions.
RISKS OF THE YEAR 2000 ISSUE
Like other companies, the Company relies on its customers for
revenues, on its suppliers for raw materials and on its other vendors for
products and services of all kinds. These third parties all face the year
2000 issue. An interruption in the ability of any of them to provide
goods or services, or to pay for goods or services provided to them, or an
interruption in the business operations of customers causing a decline in
demand for the Company's products could have a material adverse effect
on the Company. In particular, each of the Company's satellite PCC
plants relies on one customer for most or all of its business, and in
many cases for raw materials as well, so that a shutdown of a host
paper mill's operation could also cause the satellite PCC plant to shut
down. The Company believes that the most reasonably likely worst-case
scenario caused by the transition to the year 2000 would involve
interruption of its ability to obtain raw materials or to conduct
manufacturing operations at multiple manufacturing sites simultaneously.
CONTINGENCY PLAN
Based upon the risks described above, the Company is currently
engaged in preparing a contingency plan to mitigate the effects of an
interruption of its ability to obtain raw materials or to conduct
manufacturing operations at multiple manufacturing locations. The
components of this plan are being generated by the individual sites,
taking into consideration their particular conditions, such as customer
relationships and the availability of alternate sources of supply.
We expect that the Company's
12
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contingency plan, which will be the aggregate of these
individual plans, will be completed by the third quarter of 1999.
The statements in this section regarding the effect of the year 2000
and the Company's responses to it are forward-looking statements. They
are based on assumptions that the Company believes to be reasonable in
light of its current knowledge and experience. A number of contingencies
could cause actual results to differ materially from those described in
forward-looking statements made by or on behalf of the Company. Please
see "Cautionary Factors That May Affect Future Results" in Item 1 of the
Company's Annual Report on Form 10-K for 1998.
ADOPTION OF A COMMON EUROPEAN CURRENCY
On January 1, 1999, eleven European countries adopted the euro as
their common currency. From that date until January 1, 2002, debtors and
creditors may choose to pay or be paid in euros or in the former national
currencies. On and after January 1, 2002, the former national currencies
will cease to be legal tender.
The Company is currently reviewing its information technology systems
and upgrading them as necessary to ensure that it will be able to convert
among the former national currencies and the euro, and process
transactions and balances in euros, as required. The Company has sought
and received assurances from the financial institutions with which it
does business that they are capable of receiving deposits and making
payments both in euros and in the former national currencies. The
Company does not expect that adapting its information technology systems
to the euro will have a material impact on its financial condition or
results of operations. The Company is also reviewing contracts with
customers and vendors calling for payments in currencies that are to be
replaced by the euro, and intends to complete in a timely way any
required changes to those contracts.
Adoption of the euro is likely to have competitive effects in Europe,
as prices that had been stated in different national currencies become
directly comparable to one another. In addition, the adoption of a
common monetary policy by the countries adopting the euro can be expected
to have an effect on the economy of the region. These competitive and
economic effects cannot be predicted with certainty, and there can be no
assurance that they will not have a material effect on the Company's
business in Europe.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
-----------
The Company is exposed to various market risks, including the
potential loss arising from adverse changes in foreign currency exchange
rates. The Company does not enter into derivatives or other financial
instruments for trading or speculative purposes. When appropriate, the
Company enters into derivative financial instruments, such as forward
exchange contracts, to mitigate the impact of foreign exchange rate
movements on the Company's operating results. The counterparties are
major financial institutions. Such forward exchange contracts would not
subject the Company to additional risk from exchange rate movements
because gains and losses on these contracts would offset losses and gains
on the assets, liabilities and transactions being hedged. There were no
open forward exchange contracts outstanding at March 28,1999 or March
29,1998.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiary, Specialty Minerals Inc., are
defendants in a lawsuit captioned EATON CORPORATION V. PFIZER INC,
MINERALS TECHNOLOGIES INC. AND SPECIALTY MINERALS INC. which was filed on
July 31, 1996 and is pending in the U.S. District Court for the Western
District of Michigan. The suit alleges that certain materials sold to
Eaton for use in truck transmissions were defective, necessitating
repairs for which Eaton now seeks reimbursement. The amount of damages
claimed by Eaton is approximately $20 million plus interest. The Company
believes it has insurance coverage for a substantial portion of the
alleged damages, if it should be held liable. While all litigation
contains an element of uncertainty, the Company and Specialty Minerals
Inc. believe that they have valid defenses to the claims asserted by
Eaton in this lawsuit, are continuing to vigorously defend all such
claims, and believe that the outcome of this matter will not have a
material adverse effect on the Company's consolidated financial position
or results of operations.
The Company and its subsidiaries are not party to any other
material pending legal proceedings, other than ordinary routine
litigation incidental to their businesses.
13
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
10.1- Company Retirement Annuity Plan, as amended and restated
effective February 26, 1998 with certain earlier
effective dates
10.2- Company Nonfunded Supplemental Retirement Plan, as amended
January 28, 1999
10.3- Company Savings and Investment Plan, as amended and restated
effective as of April 22, 1999, with certain earlier
effective dates
10.4- Company Nonfunded Deferred Compensation and Supplemental
Savings Plan, as amended January 28, 1999
10.5- Company Stock and Incentive Plan, as amended and restated
as of January 28, 1999
10.6- Company Nonfunded Deferred Compensation and Unit Award Plan
for Non-Employee Directors, as amended February 26, 1998
15- Accountants' Acknowledgment (Part I Data)
27.1- Financial Data Schedule for the three months ended March 28,
1999
b) No reports on Form 8-K were filed during the first quarter
of 1999.
14
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Minerals Technologies Inc.
By: /s/ Neil M. Bardach
------------------------------
Neil M. Bardach
Vice President-Finance and
Chief Financial Officer; Treasurer (principal
financial officer)
May 7, 1999
15
<PAGE>
MINERALS TECHNOLOGIES INC.
RETIREMENT
ANNUITY
PLAN
(As amended and restated effective February 26, 1998
with certain earlier effective dates)
February 1998
<PAGE>
Minerals Technologies Inc.
Retirement Annuity Plan
(As amended and restated effective February 26, 1998
with certain earlier effective dates)
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1 Definitions 1
SECTION 2 Eligibility for Membership 6
SECTION 3 Service Credited Under Plan 7
SECTION 4 Benefits to Employees 10
SECTION 5 Contributions 26
SECTION 6 Funding the Plan 27
SECTION 7 Administration of the Trust Fund -
The Trust Agreement 28
SECTION 8 Committees 29
SECTION 9 Amendments and Changes in Plan and
Coverage 33
SECTION 10 Non-Alienation of Benefits 34
SECTION 11 Associate Companies 34
SECTION 12 Withdrawal from Plan 35
SECTION 13 Termination of Plan 35
(i)
<PAGE>
SECTION 14 Plan Mergers and Consolidations 38
SECTION 15 Claims Procedure 39
SECTION 16 Top-Heavy Rule 40
(ii)
<PAGE>
SCHEDULE A
SCHEDULE B
SCHEDULE C
SCHEDULE D
(iii)
<PAGE>
MINERALS TECHNOLOGIES INC.
RETIREMENT ANNUITY PLAN
SECTION 1
Definitions
Wherever used in this Plan:
a. "Anniversary Year" means 1) the twelve-month period
following the date on which an Employee first begins his
employment with an Employer, as well as successive
twelve-month periods thereafter, and 2) the twelve-month
period following the date on which an Employee returns to
the employ of the Company or an Associate Company after
incurring a One-Year Break in Service, as well as
successive twelve-month periods thereafter. No anniversary
year shall be credited for purposes of vesting unless in
such anniversary year the Employee has completed 1,000 or
more Hours of Service for an Employer.
b. "Annuitant" means a person receiving annuity payments
under this Plan.
c. "Annuity Trust Fund" means the trust fund created by
the Company to finance annuities under this Plan.
d. "Associate Company" means any corporation of which
Minerals Technologies Inc. owns directly or indirectly at
least 80% of the issued and outstanding shares of stock,
which, with the consent of the Company adopts this Plan and
executes the Trust Agreement pursuant to the provisions of
Section 11 hereof and when action is required to be taken
hereunder by an Associate Company such action shall be
authorized by its Executive Committee or its Board of
Directors.
e. "Career Earnings" means the Member's aggregate
Earnings during his period of Creditable Service, except
that
(1) his Earnings for each calendar year prior to 1998
shall be the average of the Member's Earnings
during the five consecutive calendar years prior
to 1998 during which he rendered Creditable
<PAGE>
Service which yield the highest average, provided
his Earnings are not reduced thereby; and
(2) only his Earnings during his last 35 years of
Creditable Service shall be counted; provided that,
such a calculation shall not lessen said Member's
Career Earnings below the result of a prior
calculation.
f. "Code" means the Internal Revenue Code of 1986, as
from time to time amended.
g. "Company" means Minerals Technologies Inc., a Delaware
corporation, and any successor corporation and when action
is required to be taken hereunder by the Company, such
action shall be authorized by the Executive Committee or
the Board of Directors of the Company.
h. "Disability Leave Status" means the status of a Member
who has been determined, pursuant to Section 4e. hereof, to
be totally and permanently disabled and who has fully
utilized his benefits under the Employer's short-term
disability program.
i. "Earnings" means the actual salary, wages, bonus, or
other remuneration earned by an Employee from an Employer
for his service with the Employer, as determined by such
Employer, provided that no part of the cost of any employee
benefit, including without limitation stock options,
perquisites and group insurance, or of any expense
reimbursement, including without limitation, relocation
costs, or of any remuneration received in the form of
salary continuance or lump sum severance by an Employee
while no longer providing services to the Company shall
constitute earnings hereunder. No part of any bonus or
other remuneration forming part of the compensation of any
Employee shall be used as a basis for a Retirement Annuity
under this Plan, if such bonus should cause such annuity to
become discriminatory under the applicable provisions of
the Code. In the case of a Member formerly employed by
Pfizer Inc. or any of its subsidiaries, ("Pfizer"),
"Earnings" shall include any such earnings from Pfizer to
the extent that Pfizer has transferred the accumulated
benefit obligation of such person under the Pfizer Inc.
Retirement Annuity Plan (the "Pfizer Plan") to the Company
under the terms and conditions of the Reorganization
Agreement between Pfizer Inc. and Minerals Technologies
Inc. dated as of September 28, 1992.
<PAGE>
With respect to Plan Years ending on or before December 31,
1993, a Member's Earnings shall not include any amounts in
excess of $200,000 (as adjusted by the Secretary of the
Treasury, or his delegate, at the same time and in the same
manner as under section 415(d) of the Code to reflect cost
of living increases).
In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the
Plan to the contrary, for Plan Years beginning on or after
January 1, 1994, the annual Earnings of each Employee taken
into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost-of-living in
accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
Earnings is determined (determination period) beginning in
such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period,
and the denominator of which is 12. For Plan Years
beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set
forth in this provision. For this purpose, for
determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is $150,000.
Furthermore, in determining Earnings, the rules of section
414(q)(6) of the Code shall apply, except that in applying
such rules, the term "family" shall include only the spouse
of the Employee and any lineal descendants of the Employee
who have not attained age 19 before the close of the
calendar year.
j. "Employee" means a person who is (1) included in a
group or class designated by the Company as eligible for
membership in the Plan and (2) is in the service of an
Employer within the United States of America or is a United
States citizen in the service of an Employer outside of the
continental limits of the United States of America.
Employee shall not include any person who is included in a
unit of employees covered by a collective bargaining
agreement that does not provide for the coverage of such
person under the Plan if there is evidence that retirement
benefits were the subject of good faith bargaining. A
person who is a United States citizen and who is employed
outside the continental limits of the United States of
America in the service of a foreign subsidiary (including
foreign subsidiaries of such foreign subsidiary) of
-3-
<PAGE>
the Company shall be considered, for all purposes of this
Plan, as employed in the service of the Company if (x) the
Company has entered into an agreement under section 3121(1)
of the Code which applies to the foreign subsidiary of
which such person is an employee and (y) contributions
under a funded plan of deferred compensation, whether or
not a plan described in section 401(a), 403(a), or 405(a),
of said Code, are not provided by any other person with
respect to the remuneration paid to such individual by the
foreign subsidiary. The groups and classes designated by
the Company are set forth in Schedule A.
k. "Employer" means the Company or any Associate Company.
For purposes of sections 410 and 411 of the Code,
"Employer" also shall mean any corporation or other trade
or business that is treated under the first sentence of
section 414(b) or under section 414(c) of the Code as
constituting the same "employer" as the Company or an
Associate Company, with respect to any period of such
affiliated status.
l. "Hours of Service" means all hours for which an
Employee is directly or indirectly paid, or entitled to
payment (including back pay for periods for which such
awards pertain), by an Employer (or any company which is a
member of the same controlled group of corporations, within
the meaning of section 1563(a) of the Code as the Employer
or any trade or business whether or not incorporated which
is under common control of an Employer as determined under
regulations prescribed under section 414 of the Code at the
time of such service) for the performance of duties, or for
reasons other than the performance of duties, such as
vacation, accident, injury, sickness, short-term disability
or authorized leave of absence. The Plan shall use the
equivalency method for determining Hours of Service
credited to an Employee based on months of employment
determined in accordance with Department of Labor
Regulation Section 2530.200b-3(e)(1)(iv). An Employee
shall be credited with 190 Hours of Service if under this
Section 1l. such Employee would be credited with at least
one Hour of Service during a month. In the case of a
payment which is made or due on account of a period during
which an Employee performs no duties, Hours of Service will
be determined in accordance with Department of Labor
regulations ' 2530.200b-2(b) and (c).
m. "Leased Employee" means any person performing services
for an Employer as a leased employee pursuant to an
agreement with a leasing organization who shall for
purposes of the Plan continue to be an employee of such
leasing organization, and not of an Employer,
notwithstanding amendments to the Code which require that
such person may have to be
-4-
<PAGE>
counted as an employee of an Employer in order to perform
certain plan qualification tests as contained therein.
n. "Member" means an Employee or former Employee to whom
an annuity is credited under the Plan.
o. "One-Year Break in Service" shall be an Anniversary
Year in which the Member does not perform more than five
hundred Hours of Service.
p. "Plan" means this Minerals Technologies Inc.
Retirement Annuity Plan.
q. "Plan Year" means (i) the period beginning October 22,
1992, the effective date of the Plan, and ending December
31, 1992, and (ii) each 12-month period thereafter
commencing on January 1 and ending on December 31 while the
Plan is in effect.
r. "Primary Social Security Benefit" means the annual
amount available to the Member at age 65, or later if the
Employee shall retire after age 65, under the Old Age
Insurance provisions of Title II of the Social Security Act
in effect at the time of his termination of employment,
without regard to any increases in the wage base or benefit
levels that take effect after the date of termination of
employment, subject to the following: if any Employee
terminates service prior to age 65, his Primary Social
Security Benefit shall be estimated by assuming
continuation of his Earnings until age 65 at the same rate
in effect at termination of employment; provided however,
that, if the Employee Retires pursuant to Section 4d.(ii),
his Primary Social Security Benefit shall be estimated by
assuming that he will not receive any income after
retirement which would be treated as wages for purposes of
the Social Security Act. The Retirement Committee may
adopt rules governing the computation of such amounts, and
the fact that an Employee does not actually receive such
amount because of failure to apply or continuance of work,
or for any other reason, shall be disregarded.
Notwithstanding the foregoing, actual salary history will
be used to calculate the Primary Social Security Benefit if
this will result in a larger benefit under the Plan for the
Employee but only if documentation of such history is
provided by the Employee within two years after the later
of his termination of employment or the date the Employee
receives notice of his benefits under the Plan.
s. "Retire" means to terminate service by a Member who is
an Employee in the service of an Employer after meeting the
requirements of
-5-
<PAGE>
Sections 4a., b. or d., respectively, for normal retirement,
late retirement or early retirement hereunder.
t. "Retirement Annuity" means the payments made pursuant
to Section 4a., b. or d. of the Plan to retired Members or
their beneficiaries.
u. "Trustee" means the trustee appointed by the Company
pursuant to Section 7.
v. "Vest" means to acquire, in accordance with the
express provisions of the Plan, a nonforfeitable interest
in an annuity under the Plan.
w. "Vested Annuity" means the payments made pursuant to
Section 4c. of the Plan.
Wherever used in this Plan, the masculine pronoun shall
include the feminine pronoun and the feminine pronoun shall
include the masculine and the singular includes the plural.
SECTION 2
Eligibility for Membership
a. Employees of the Company: All persons who were
Employees of the Company on October 22, 1992, shall be
included in the membership of the Plan as of October 22,
1992. All persons who become Employees of the Company on
or after October 22, 1992 shall become Members of the Plan
as of the date of their employment, subject to Section 1j.
hereof.
b. Employees of Associate Companies: Subject to Section
1j. hereof, whenever a corporation becomes an Associate
Company, all Employees who are in the service of such
corporation on the date it becomes an Associate Company
become Members of the Plan as of such date and all
Employees who enter the service of a corporation after it
has become an Associate Company become Members of the Plan
as of the date of employment.
c. Leased Employees: No Leased Employee shall be
eligible to become a Member of the Plan. However, if a
leased employee becomes an
-6-
<PAGE>
Employee of the Company, all years of service completed
while a Leased Employee shall be credited solely for
purposes of vesting pursuant to Section 4c. of the Plan but
shall not be deemed to be Prior Service within the meaning
of Section 3a.
SECTION 3
Service Credited Under Plan
a. Prior Service: service rendered by a person who is in
the service of an Employer, before the date on which he
becomes a Member, who continues in service on and after the
date he becomes a Member, shall be known as "Prior Service"
except as provided in Section 4a. and Section 11.
b. Membership Service: Service rendered by an Employee
for an Employer after the date he becomes a Member shall be
known as "Membership Service."
c. Special Service: Service rendered outside the United
States by a person employed by a corporation which is a
subsidiary or affiliate of the Company, but not an
Associate Company, at the time of such service (1) before
the date on which he becomes a Member, who continues in
service on and after the date he becomes a Member, or (2)
during a period of interrupted Membership Service followed
by a return to such service, shall be known as "Special
Service."
d. Creditable Service: Membership Service plus Prior
Service and Special Service, if any, shall be known as
"Creditable Service" under the Plan. A Member shall be
credited with a full year of Creditable Service under the
Plan only if he completes at least 1,000 Hours of Service
within an Anniversary Year and no fractional years will be
credited under the Plan; provided, however, that for
purposes only of 1) determining the Social Security
calculation used in Section 4a.2 and 2) determining a
member's Career Earnings, and his eligibility for early
retirement under clauses (i) and (ii) of Section 4d. below,
the Member's Creditable Service shall be determined on the
basis of his number of months of Membership Service plus
Prior Service and Special Service without regard to whether
he completes at least 1,000 Hours of
-7-
<PAGE>
Service within an Anniversary Year. "Creditable Service"
shall include any service credited to a Member under the
Pfizer Plan for a Member who is employed by the Company or
any of its subsidiaries on October 22, 1992 and who was an
active participant in the Pfizer Plan immediately prior to
such date. Creditable Service for purposes of benefit
accrual shall not be granted under the prior sentence until
there is a transfer of assets from the Pfizer Plan to the
Plan attributable to benefits accrued by Members under the
Pfizer Plan. "Creditable Service," for purposes of Section
4c., shall include each full year of service for the period
during which a Member was employed by Zedmark Refractories
Corporation and/or Zedmark, Inc. prior to October 3, 1989,
except if such Member was covered at such time by a
collective bargaining agreement that did not provide for
coverage of such Member under the Pfizer Plan.
"Creditable Service" for purposes of benefit accrual under
the Plan shall include each full year of service for the
period during which a Member was employed by Zedmark
Refractories Corporation and/or Zedmark, Inc. prior to
October 3, 1989, provided such number of full years of
service may not exceed the number of full years of service
the Member is employed by the Company after October 3,
1989; and provided, further, such Member was not covered,
on October 3, 1989, by a collective bargaining agreement
that did not provide for coverage of such Member under the
Pfizer Plan. "Creditable Service", for purposes of
Sections 4c. and 4d., shall include each full year of
service for the period during which a Member was employed
by Nalco Chemical Company prior to June 1, 1988, if such
Member was a Transferred Employee, as defined in the
Purchase Agreement dated June 1, 1988, between Quigley
Company, Inc. and Pfizer Inc. as purchasers and Nalco
Chemical Company as seller.
e. Military Service: For the purpose of this Plan,
those Employees who were in the service of the Armed Forces
of the United States, at the time they would have become
eligible for membership under the Plan except for such
service, or who subsequently enlisted in the Armed Forces
or were inducted into said Armed Forces, shall be credited
with all the benefits under this Plan for service actually
rendered to an Employer prior to their entrance into said
Armed Forces, and shall be credited with time spent on
active duty in said Armed Forces for the purposes of
computing length of service and benefits payable under the
Plan; provided that such Employees return to active service
with an Employer within the time limits provided by law
after their separation or discharge from active duty from
said Armed Forces, having satisfactorily completed their
period of training and service. Notwithstanding the
foregoing, in the case of any such military service up to
501 Hours of Service shall be credited under Section 11.
for any single continuous period of such service.
-8-
<PAGE>
f. Leave of Absence: Interruption of active service on
account of leave of absence authorized by an Employer or
transfer on Special Service shall not be considered
termination of service. Time spent on authorized leave of
absence shall be credited for the purpose of computing
length of service and benefits payable under the Plan on
the following basis: Members shall receive credit for each
full year spent on authorized leave of absence for each
full year of Creditable Service that they render to an
Employer following return to active service, except that
time spent on authorized leave of absence for medical
reasons shall be credited without requirement of subsequent
Creditable Service and time spent on civic leave shall be
credited upon return to active service. Notwithstanding
the foregoing, in the case of Maternity/Paternity Leave, as
defined below, up to 501 Hours of Service shall be credited
in the Anniversary Year in which the Maternity/Paternity
Leave begins, if the Employee would otherwise have incurred
a One-Year Break in Service in that Anniversary Year,
otherwise up to 501 Hours of Service shall be credited in
the following Anniversary Year to prevent a One-Year Break
in Service. Maternity/ Paternity Leave means an absence
from work (1) by reason of the pregnancy of an Employee,
(2) by reason of the birth of a child of an Employee, (3)
by reason of the placement of a child with the Employee in
connection with the adoption of the child, or (4) for the
purposes of caring for the child during the period
immediately following the birth or placement for adoption.
g. Termination of Service: On termination of service,
and after he has subsequently incurred a One-Year Break in
Service, a person shall forfeit all credit for service
previously credited under the Plan unless
(1) He is reemployed within five years after his
termination of service; or
(2) He is reemployed after his termination of service and
thereafter completes at least 24 consecutive months of
Creditable Service; or
(3) He is eligible to receive a Retirement Annuity or a
Vested Annuity under Section 4c.; or
(4) He is reemployed before the number of consecutive
One-Year Breaks in Service equals or exceeds the greater of
(a) five consecutive One-Year Breaks in Service or (b) the
aggregate number of Anniversary Years credited for vesting
under the Plan
-9-
<PAGE>
prior to such termination and thereafter
completes at least one such Anniversary Year.
If a reemployed Employee does not forfeit his service
credit as provided above, for purposes only of determining
his "Career Earnings," the last calendar year in which he
rendered Creditable Service shall be treated as being
consecutive with the first calendar year in which he
renders Creditable Service after his reemployment.
h. General: For the purpose of this Plan, length of
service shall be computed in accordance with the employment
records of the Company or Associate Company, or of a
subsidiary or affiliated corporation of either, as the case
may be. No Employee may voluntarily terminate his status
as an active Member in the Plan during his period of
employment.
SECTION 4
Benefits to Employees
a. Normal Retirement: Each Member who attains his normal
retirement date, i.e., age 65, shall be eligible for normal
retirement as of the first day of the month following, and
if permitted under the provisions of the Age Discrimination
in Employment Act, as amended, and other applicable law,
shall be retired as of the first day of the month
following.
Upon normal retirement, a Member shall receive a Retirement
Annuity, subject to the provisions of and payable in the
form described in Section 4f. hereof, which shall accrue
and be equal to the greater of:
1. 1.4 per cent of his Career Earnings; or
2. 1.75 per cent of his Career Earnings, less 1.50 per
cent of his Primary Social Security Benefit multiplied by
his years of Creditable Service, but in no event more than
35 years.
Unless otherwise provided under the Plan, each section
401(a)(17) Employee's accrued benefit under this Plan will
be the greater of the accrued benefit determined for such
Employee under (a) or (c) below:
-10-
<PAGE>
(a) the section 401(a)(17) Employee's accrued benefit
determined with respect to the benefit formula applicable
for the Plan Year beginning on or after January 1, 1994, as
applied to such Employee's total years of Creditable
Service taken into account under the Plan for the purposes
of benefit accruals, or
(b) the sum of:
(i) the section 401(a)(17) Employee's accrued benefit as
of the last day of the last Plan Year beginning before
January 1, 1994, frozen in accordance with Section
1.401(a)(4)-13 of the Treasury Regulations, and
(ii) the section 401(a)(17) Employee's accrued benefit
determined under the benefit formula applicable for the
Plan Year beginning on or after January 1, 1994, as applied
to such Employee's years of Creditable Service for Plan
Years beginning on or after January 1, 1994, for purposes
of benefit accruals.
A section 401(a)(17) Employee means an Employee whose
current accrued benefit as of a date on or after the first
day of the first Plan Year beginning on or after January 1,
1994, is based on Career Earnings for a year beginning
prior to the first day of the first Plan Year beginning on
or after January 1, 1994, that exceeded $150,000.
(1) In the case of any group or class which is designated
as eligible for membership in the Plan, an Employer may
limit the Prior Service of persons included in such group
or class to service rendered on and after a date to be
determined by the Employer.
(2) Except in the case of a person in the service of a
corporation which becomes an Associate Company, the Prior
Service benefits of any Employee who is a Member of the
Plan, but who was absent from his Employer during all or
part of the calendar year next preceding the date he
becomes a Member, because of sickness, disability, service
in the Armed Forces of the United States, or like reasons
beyond his control, and who entered the service of his
Employer prior to such calendar year, shall be computed by
crediting to him as Earnings for such calendar year -
(i) All Earnings actually received by such Employee in
such calendar year before or after the period of absence
from his Employer, and
-11-
<PAGE>
(ii) The Earnings he would have received in such
calendar year during the period of absence based on a
forty-hour week at his straight-time rate of pay at the
time of leaving his Employer and any increased rate to
which he would have been entitled as a result of automatic
length-of-service increases or a general increase, and any
bonuses or other payments made in such calendar year during
such period of absence to which he would normally have been
entitled.
b. Late Retirement: In the event that a Member remains
in service after attainment of his normal retirement date,
he may retire on his own application setting forth a date
for retirement which shall be the first of the month not
less than 30 days following the filing of the application.
c. Vesting: Upon the completion of five Anniversary
Years of Creditable Service, a Member shall acquire a
nonforfeitable right to receive, after his termination and
at his election, a Vested Annuity in an amount computed as
follows: either (i) at age 65, a Retirement Annuity
computed as provided in Section 4a. hereof, or (ii) prior
to age 65 but after age 55 (or age 50 if such annuity
payments commence prior to January 1, 1994), an annuity
which shall be computed by multiplying the Member's
Retirement Annuity computed as provided in Section 4a.
hereof by the applicable percentage set forth in Schedule
B1 (or Schedule B2 if such annuity payments commence prior
to January 1, 1994). The foregoing notwithstanding, the
Vested Annuity payable to a Member who terminates
employment on or after January 1, 1994, shall in no event
be less than the annuity to which he would have been
entitled had he terminated employment as of December 31,
1993, under the terms and conditions of the Plan as then in
effect (the "1993 Annuity").
A Member who terminates employment on or after January 1,
1994, may elect to receive his 1993 Annuity, if any, prior
to attaining age 55. If a Member makes such an election,
the remaining portion of his Vested Annuity, if any,
determined as of the date he elects to receive the 1993
Annuity and expressed as a benefit payable at age 65, shall
be the amount obtained by subtracting the Member's 1993
Annuity from the product of his Retirement Annuity
multiplied by the Actuarial Factor, and dividing the result
thereof by the Actuarial Factor. For purposes of this
computation, the "Actuarial Factor" shall mean the product
of 40% multiplied by the actuarial equivalent value of an
annual benefit of $1 commencing at age 55, determined as of
the date the Member begins to receive his 1993 Annuity.
The remaining portion of the Vested Annuity so determined
shall be payable under the terms and conditions of this
Plan in effect at the Member's termination of employment.
-12-
<PAGE>
A Member who terminates employment with a Vested Annuity
accrued as of December 31, 1993 may elect to receive such
amount accrued as of such date in any of the optional forms
of benefit available to such Member as of December 31,
1993. If the amount of the vested portion of a Member's
benefit at the time of the Member's termination of service
is zero, the Member shall be deemed to have received a
distribution of such zero vested interest in such benefit.
Notwithstanding anything herein to the contrary, a Member
who is not otherwise vested, shall become vested upon
attaining his normal retirement date, i.e., age 65.
d. Early Retirement: Any Member may retire before the
attainment of age 65 provided he has reached age 55 and (i)
has 10 years or more of Creditable Service; or (ii) his
attained age when added to his years of Creditable Service
equals or exceeds 90. On early retirement, a Member shall
receive a Retirement Annuity commencing at age 65, equal to
the annuity to which his Creditable Service up to the date
of his retirement would then produce, or, at his election
made at any time prior to age 65, a Retirement Annuity
commencing on the first day of any month following his
earlier retirement and prior to age 65, which shall be
computed by applying the percentages set forth in Schedule
C hereof to the amount of the annuity computed in
accordance with Section 4a.; provided that, if a Member's
attained age when added to his years of Creditable Service
equals or exceeds 90, his Retirement Annuity shall be
computed by so applying the percentage set forth in
Schedule D hereof.
e. Disability Leave Status: Upon total and permanent
disability as determined by a physician appointed by the
Member's Employer, a Member who has completed at least five
years of Creditable Service will be eligible for Disability
Leave Status. Such status may be terminated or suspended
by the Retirement Committee if at any time before age 65
the Member again engages in regular full-time employment,
fails or refuses to undergo any medical examination ordered
by the Retirement Committee, or the Retirement Committee
determines on the basis of medical examination that the
Member has sufficiently recovered to engage in regular
full-time employment. While on Disability Leave Status, a
Member will be credited with Membership Service, and with
Earnings at the same rate as he had earned in the calendar
year prior to the calendar year in which he became totally
and permanently disabled, until the Member Retires, dies,
reaches age 65, or his Disability Leave Status is sooner
terminated or suspended.
f. Form of Benefit Payments:
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(1) Normal Form: If a Member is married on the date his
benefits commence, such Member shall receive a benefit
payable in the form of a joint and survivor annuity which
shall provide for an amount actuarially reduced from the
amount computed under Section 4a. to be paid to the Member
for his lifetime; and for an annuity in an amount equal to
one-half of such reduced amount to be paid to the Member's
spouse to whom he was married on the date his benefits
commence, for her lifetime, if surviving at the time of the
Member's death. The form of benefit shall also provide
that if the Member dies after retirement but prior to the
date on which his benefit becomes payable, his surviving
spouse will nevertheless be entitled to receive the
lifetime annuity to which she would otherwise be entitled
beginning at the date that the Member's annuity would have
become payable and under such circumstances, at her option,
the surviving spouse may elect to have benefits commence
prior to the date on which the Member's annuity would have
become payable on an appropriately reduced actuarial basis.
The benefit payable to the Member and his spouse shall have
the equivalent actuarial value of the benefits determined
under Section 4a. above. In lieu of said joint and
survivor annuity, the Member may, in accordance with
section 417 of the Code, elect in writing, with the written
consent of his spouse, acknowledging the effect of such
election and witnessed by a Plan representative or a notary
public, at any time within 90 days prior to the
commencement of his benefits, to receive his benefits in
the form of a single annuity payable for his lifetime as
computed under Section 4a. above, or may revoke any such
election previously made by him. Notwithstanding the
foregoing, if a Member becomes divorced from his spouse
after his benefits commence, such Member may elect in
writing to cancel such joint and survivor annuity and to
receive his benefits thereafter in any form permitted under
the Plan; provided that, (a) the Member obtains a valid
written release, as determined by the Retirement Committee,
from his former spouse releasing the Plan from any claim
the former spouse may have against the Plan and (b) the
Member's benefit is adjusted actuarially, including, but
not limited to, adjustments for the value of benefits
previously paid and for the value of the protection
provided by the cancelled joint and survivor annuity while
it was in effect.
Each vested Member upon his termination of service and each
married Member within a reasonable period of time prior to
his benefit commencement date shall receive a written
explanation of the joint and survivor annuity form of
benefit, the right to elect to waive such benefit and the
consequences thereof, the right of the Member's spouse with
respect thereto and the right to revoke such waiver and the
consequences thereof, together with an explanation of the
optional forms of retirement benefit available to the
Member and a general
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explanation of the financial effect of the various optional
forms of retirement benefit, including the joint and survivor
retirement benefit and the straight life annuity. Such
married Member may request additional information within 60
days thereafter, in which case the Retirement Committee shall
within 30 days of such request furnish him with a written
explanation of the additional information requested, in which
case his deadline for making such election and his benefit
commencement date, if applicable shall be postponed if
necessary so that there is at least 60 days between the
furnishing of such additional information and the expiration
of the period during which he has the right to elect an
optional form of benefit other than the joint and survivor
annuity.
A Member who is not married at the time that his benefits
commence will receive his benefits in the form of a single
annuity payable for his lifetime as computed under Section
4a. above.
(2) Optional Forms: At any time within 90 days prior to
the commencement of his retirement benefits, a Member who
is eligible for a Retirement Annuity under Section 4a., b.,
or d. of the Plan may, in accordance with section 417 of
the Code, elect, with the written and witnessed consent of
his spouse in the case of a married Member, to convert the
benefits otherwise payable after retirement into a
retirement benefit of equivalent actuarial value in
accordance with one of the options named below, or may
revoke any such election previously made by him; provided,
however, that if one of the options named below shall be so
elected and the other named person or persons shall die
before the payment of any part of such benefit, then and in
that event the benefit shall be restored to the amount of
the Retirement Annuity as provided in Section 4a., b., or
d. hereof, as if no such election had been made; and
provided further, that if one of the options named below
shall be so elected and the Member shall die before the
date of his retirement then the election shall be of no
effect and no payments shall be due under the option.
Regardless of the form of payment, all distributions shall
comply with section 401(a)(9) of the Code and the Treasury
Regulations thereunder, including the minimum distribution
incidental death benefit requirement of section
401(a)(9)(G) of the Code and the Treasury Regulations
thereunder, and such provisions shall override any Plan
provisions otherwise inconsistent therewith.
Option 1: A reduced Retirement Annuity commencing at or
after the Member's retirement payable during his life, with
the provision that after his death it shall continue during
the life of and shall be paid to the person (including his
spouse) nominated by him by written designation duly
acknowledged and filed with the Retirement Committee at the
time such
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election is made, provided that if the Member
dies after retirement but prior to the date on which his
benefit becomes payable, his surviving beneficiary will
nevertheless be entitled to receive such a lifetime annuity
beginning at the date that the Member's annuity would have
become payable and also provided that under such
circumstances at his option, the surviving beneficiary may
elect to have benefits commence prior to the date on which
the Member's annuity would have become payable on an
appropriately reduced actuarial basis.
Option 2: A reduced Retirement Annuity commencing at or
after the Member's retirement payable during his life, with
the provision that after his death an allowance of one-half
the rate of his reduced allowance shall be continued during
the life of, and it shall be paid to, the person, other
than his spouse for whom this is the normal form of benefit
provided in Section 4f.(1) above, nominated by him by
written designation duly acknowledged and filed with the
Retirement Committee at the time such election is made,
provided that if the Member dies after retirement but prior
to the date his benefit becomes payable, his surviving
beneficiary will nevertheless be entitled to receive such a
lifetime annuity beginning at the date that the Member's
annuity would have become payable and also provided that
under such circumstances, at his option, the surviving
beneficiary may elect to have benefits commence prior to
the date on which the Member's annuity would have become
payable on an appropriately reduced actuarial basis.
Option 3: A retirement benefit in a single lump sum that
shall be the actuarial equivalent of the benefit which
would otherwise be payable to him, provided that such
benefit must be elected by the Member prior to the date of
his retirement.
(3) A Member may, at the time he elects one of the options
described above, name a second person, who, in the event
the first named person shall die before the commencement of
the annuity to the Member, shall acquire all the rights
which the first named person would otherwise have had.
(4) Optional benefit payments shall commence at the end of
the month following the month in which the last payment to
the deceased annuitant was made.
(5) Where a Member is entitled to or elects to receive a
reduced retirement annuity commencing after the Member's
retirement under which an allowance would have been paid to
such Member's spouse or other beneficiary after the
Member's death, and, prior to the date his benefit becomes
payable,
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the Member elects any other form of benefit, then
and in that event the benefit so payable on his account
shall be reduced actuarially to reflect any cost
attributable to the benefit earlier so provided to his
spouse or other beneficiary as the case may be.
(6) (a) Notwithstanding any provision in the Plan to the
contrary, if a Member, whether or not a "5-percent owner"
(within the meaning of Section 416(i) of the Code), who had
not attained age 70-1/2 prior to January 1, 1988, is still
in the employ of an Employer as of the April 1st following
the calendar year in which he attained age 70-1/2,
distribution of the Member's benefit under the Plan shall
be made or must commence by such April 1st.
Notwithstanding anything to the contrary in the first
paragraph of this Section 4f.(6)(a), the distribution of a
Member's benefit who is not a 5-percent owner, who attained
age 70-1/2 prior to January 1, 1988, and is still in the
employ of an Employer as of the April 1 next following the
calendar year in which he attains age 70-1/2, shall be made
or must commence by the later of the April 1 next following
the calendar year in which he reaches age 70-1/2 or
retires. If a Member who had attained age 70-1/2 prior to
January 1, 1988 is still in the employ of an Employer as of
the April 1st following the calendar year in which he
attained age 70-1/2 and is a 5-percent owner, distribution
of the Member's benefits under the Plan must commence by
the later of (i) such April 1st or (ii) the earlier of the
April 1st of the calendar year (A) with or within which
ends the Plan Year in which he becomes a 5-percent owner or
(B) in which he retires. A Member who is a 5-percent owner
will be subject to the above distribution rights if he is a
5-percent owner at any time during the Plan Year ending
with or within the calendar year in which he attains age 66-
1/2 or any later Plan Year.
(b) The amount of the minimum distributions required under
this Section 4f.(6) shall be no less than the minimum
amounts required under section 401(a)(9) of the Code and
the Treasury Regulations issued thereunder based upon the
annually adjusted life expectancy of an unmarried Member or
the annually adjusted joint life expectancy of a married
Member and his spouse, and shall be payable no less
frequently than annually. After the initial benefit
payment has been made, the amount of the succeeding benefit
payments must be made by the end of each of the next
following calendar years. As of each following January 1
the Member's benefit shall be adjusted to reflect any
additional benefits accrued as of the immediately preceding
December 31 and any additional accruals for any twelve
consecutive month period shall be offset
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(but not below zero) by the actuarial value (determined in
accordance with applicable law) of benefits received by the
Member for such period.
(c) The minimum distribution payable to a Member will be
distributed to him, at his election, either:
(I) as a single payment, or
(II) over a period of time extending over the life of
the Member or over the lives of the Member and his spouse
(or designated beneficiary) or over a period not extending
beyond the life expectancy of the Member or the life
expectancy of the Member and his spouse (or designated
beneficiary).
(d) With respect to minimum distributions payable to a
spouse of a Member, the following distribution limitations
shall apply:
(I) Where distribution has commenced to the Member prior
to his death, distribution to the surviving spouse shall be
over a period that is no longer than the period under which
the Member was receiving benefits;
(II) Where distribution has not commenced to the
Member at the time of his death, distribution to the
surviving spouse shall begin no later than the date upon
which the Member would have attained age 70 1/2, and shall
be payable over the life of the surviving spouse or over a
period not extending beyond the life expectancy of the
surviving spouse. (If the surviving spouse dies before
distribution of her benefit commences, the limitations
applicable to the distribution of any benefit remaining
payable under the Plan shall be determined hereunder as if
the surviving spouse were the Member.)
(e) With respect to minimum distributions payable to a
designated beneficiary of a Member (other than the spouse),
the following distribution limitations shall apply:
(I) Where distribution has commenced to the Member prior
to his death, distribution to the designated beneficiary
shall be over a period that is no longer than the period
under which the Member was receiving benefits;
(II) Where distribution has not commenced to the Member at
the time of his death, distribution to the designated
beneficiary shall begin no later than one year after the
date of the Member's death, or such later date as may be
permitted by Treasury Regulations, and shall be payable
over the life of the
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designated beneficiary or over a period not extending
beyond the life expectancy of the designated beneficiary.
(f) In all other cases where minimum distributions have
not commenced to the Member at the time of his death, no
benefit remaining payable under the Plan shall be
distributed over a period that exceeds five years after the
Member's death.
g. Adjustment For Federal Old Age Benefits: If a Member
who is eligible for a Retirement Annuity under Section 4a.,
b., or d. of the Plan retires before his Federal Old Age
Benefit is payable, he may, at any time or from time to
time, elect to have the retirement benefit otherwise
payable after retirement to him for his lifetime under the
normal form of benefit, or under an optional benefit
payment, whichever is applicable, actuarially adjusted to
provide, so far as practicable, a constant total retirement
income inclusive of the estimated Federal Old Age Benefit,
both before and after the Federal benefit is scheduled to
begin.
h. Benefits To Surviving Spouse: In the event a Member
dies, after having become vested under the Plan, leaving a
surviving spouse to whom the Member was legally married for
one year or more prior to his death, an annuity at one-half
the rate of the annuity which the Member would have been
entitled to receive under Section 4f.(1) had he retired and
commenced receipt of benefits as of the first of the month
following the date of his death, if the Member was eligible
for retirement at the time of his death, or an annuity at
one-half the rate of the annuity which the Member would
have been entitled to receive under Section 4f.(1) had he
retired and commenced receipt of benefits on the date he
first would have been eligible to do so, if the Member was
not eligible for retirement at the time of his death, shall
be paid to such spouse, commencing at the end of the month
following the month in which the Member would have attained
his normal retirement date or earlier if the spouse so
elects, but not earlier than the date the Member first
would have reached age 55, as the case may be, for the life
of such spouse.
i. (1) All annuities shall be payable in monthly
installments; provided that any annuity which has an
actuarially computed present value at the time of
termination of service which is less than $3,500 shall be
paid in a lump sum of equivalent actuarial value. If the
present value of the Member's benefit at the time of any
distribution exceeds $3,500, the present value of the
Member's benefit at any subsequent time will be deemed to
exceed $3,500. Monthly installment payments shall commence
at the end of the month in which
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retirement occurs and continue until death. Full payment
will be made for the month in which death occurs.
(2) Each Member, or any person to whom a Retirement
Annuity, Vested Annuity or other benefit under this Plan is
payable, shall be responsible for providing the Retirement
Committee with any changes in his current address. If any
person to whom a Retirement Annuity, Vested Annuity or
other benefit under this Plan is payable shall not have
provided evidence satisfactory to the Retirement Committee
of his continued life and address for a period of two years
after or during which such annuity or other benefit is
payable, the Retirement Committee shall send by registered
mail a notice addressed to such person at his last address
known to the Committee describing the annuity or other
benefit payable to him and stating that unless he
communicates with the Committee within 30 days from the
date of such notice, the Retirement Committee may suspend
payments of the annuity or other benefit to such person
while it causes an investigation to be made as to the
continued life and address of such person.
(3) If any person to whom a benefit is payable hereunder
is an infant, or if the Retirement Committee determines
that any person to whom a Retirement Annuity or other
benefit is payable is incompetent by reason of physical or
mental disability, the Committee shall have power to cause
the payments becoming due to such person to be made to
another for his benefit without responsibility of the
Committee or the Trustee to see to the application of such
payments. Payments made pursuant to such power shall
operate as a complete discharge of the Annuity Trust Fund,
the Trustee and the Retirement Committee.
(4) Notwithstanding the other provisions of this Section,
a Member who retires or becomes entitled to a Vested
Annuity shall receive an annuity computed as provided for
under the provisions of the Plan in effect on the date of
his termination of service or retirement, except that: (a)
effective for payments made under Section 4a., b., or d. of
the Plan, the Retirement Annuity of a Member who was
eligible for normal or late retirement under the Pfizer
Plan prior to January 1, 1990, shall be increased by the
greater of the increase attributable to paragraph (b) below
or 10%, provided that any increase attributable to this
paragraph (a) shall be a minimum of $35 per month for any
eligible Member who at retirement had either (i) completed
at least 25 years of Creditable Service, or (ii) attained
his normal retirement date and completed at least 10 years
of Creditable Service; and (b) except for those Members who
on and after January 1, 1994 elect a retirement benefit in
a single lump sum as
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described in Option 3 under Section 4f.(2) hereof, any
change in the years used in calculating Career Earnings
under Section 1e.(1) of the Plan that would
improve the benefits payable to a Member who had retired
prior to the effective date of such change or changes,
shall be applied to calculate the Career Earnings of such
Member.
j. Limitation on Benefits: The annual benefit shall be
defined and adjusted as provided in section 415(b)(2) of
the Code and no annual annuity shall be payable in excess
of (A) the lesser of the maximum dollar amount permitted by
section 415(b)(1)(A) of the Code, or (B) 100% of the
average earnings of the Member for the three consecutive
calendar years which yield the highest average during which
the Member was an active participant in the Plan, subject
to the following conditions:
(1) An annual benefit which is provided in a form other
than a straight life annuity or a joint and survivor
annuity described in section 417(b) of the Code shall be
adjusted to an equivalent benefit in the form of a straight
life annuity on the basis of reasonable actuarial
assumptions permitted under the Code and an interest rate
assumption equal to the greater of 5% or the interest rate
used by the Plan to convert such straight life annuity into
such other form of benefit;
(2) If an annual benefit begins before a Member's Social
Security Retirement Age, but on or after age 62, the
otherwise applicable dollar limitation shall be adjusted as
follows: (a) if a Member's Social Security Retirement Age
is 65, and benefits commence on or after age 62, the dollar
limitation is reduced by 5/9 of one percent for each month
by which the Member's annual retirement benefit begins
before the month in which the Member attains age 65, and
(b) if a Member's Social Security Retirement Age is greater
than age 65, and benefits begin on or after age 62, the
dollar limitation is reduced by 5/9 of one percent for each
of the first 36 months and 5/12 of one percent for each
additional month (up to 24 months) by which the Member's
annual retirement benefit begins before the month in which
the Member attains his Social Security Retirement Age.
(3) If an annual retirement benefit begins before a Member
attains age 62, the otherwise applicable dollar limitation
shall be adjusted to the actuarial equivalent of a benefit
commencing at age 62 using an interest rate assumption
equal to the greater of 5% or the interest rate used by the
Plan.
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(4) If an annual benefit begins after a Member's Social
Security Retirement Age, the otherwise applicable dollar
limitation shall be adjusted so that it is the actuarial
equivalent of an annual benefit commencing at his Social
Security Retirement Age using an interest rate assumption
equal to the lesser of 5% or the interest rate used by the
Plan;
(5) An annual benefit which is attributable all or in part
to employee contributions or rollover contributions (as
defined in section 402(c), 403(a)(4) or 408(d)(3) of the
Code) shall be reduced so that it will be the equivalent of
an annual benefit derived solely from employer
contributions; and
(6) If any Member has completed (1) fewer than 10 years of
participation in a defined benefit plan, the dollar
limitation under Section 4j.(A) otherwise applicable to him
shall be reduced by multiplying it by a fraction, the
numerator of which is his years of participation in the
Plan as of the close of the limitation year and the
denominator of which is 10, and/or (2) fewer than 10 years
of Creditable Service with the Employer, the limitations
under Sections 4j.(A), 4j.(B) and 4j.(7) otherwise
applicable to him shall be reduced by multiplying it by a
fraction, the numerator of which is his years of Creditable
Service as of the close of the limitation year and the
denominator of which is 10.
(7) Notwithstanding the foregoing, if the Participant has
never participated in any defined contribution plans, his
annual benefit shall be not less than $10,000 or such
proportional amount thereof as shall be applicable because
fewer than 10 years of Creditable Service have been
completed.
(8) Effective as of January 1 of each calendar year, the
maximum annual dollar amount referred to in Section 4j.(A)
shall increase to the maximum annual dollar amount as
determined by the Secretary of the Treasury for such
calendar year pursuant to section 415(d)(1)(A) of the Code.
Notwithstanding Section 4i.(4), such increased maximum
dollar amount shall also be applicable to Members who have
retired under Section 4a., b., or d. of the Plan regardless
of whether they have actually begun to receive such
benefits.
(9) With respect to a Member who was a participant in the
Pfizer Plan before October 3, 1973, in lieu of the
foregoing the maximum computed under this subsection shall
be the annuity payable under the Pfizer Plan provision in
effect as of October 2, 1973 based upon (a) his aggregate
creditable earnings
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on such date plus (b) his rate of earnings under the
Pfizer Plan in effect as of such date times his years of
creditable service after such date.
(10) Notwithstanding the foregoing, in the case of an
Employee who participates in this Plan and in the Company's
Savings and Investment Plan or any other defined
contribution plan maintained by an Employer, the sum of the
defined benefit plan fraction and the defined contribution
plan fraction for any year shall not exceed 1. In the
event the sum of such fractions exceeds 1, the Retirement
Committee shall reduce the benefit provided under this Plan
in order that none of the Plans shall be disqualified under
the Code. For purposes of applying the limitations of this
Section, the following rules shall apply:
(I) The term "defined benefit plan fraction" shall mean
the annual pension payable under this Plan, over the
maximum pension payable under subsections 5(a) through (f)
hereunder increased pursuant to section 415(e)(2)(B) of the
Code; provided, however, that the defined benefit plan
fraction with respect to a Member whose pension is
described in Section 4j.(9) hereof shall never be deemed to
exceed 1.
(II) The term "defined contribution plan fraction"
shall mean the actual aggregate annual additions, as
hereinafter defined, to the defined contribution plan
determined as of the close of the year, over the aggregate
of the maximum annual additions which could have been made
for each year of the Member's service had such annual
additions been limited each such year in accordance with
the restrictions imposed by section 415 of the Code (or
such greater amount prescribed under Regulations issued by
the Secretary of the Treasury pursuant to the provisions of
section 415(d) of the Code to take into account increases
in the cost of living).
(III) The term "annual addition" shall mean for any year
the sum of Employer Matching Contributions, Member
Contributions, Qualified Deferred Earnings Contributions
and forfeitures under the Company's Savings and Investment
Plan.
(IV) The dollar limitation prescribed under Section
4j.(A) hereof shall not apply and shall not be used in
computing the denominator of the defined benefit plan
fraction under Section 4j.(10)(I) in the case of any Member
who was a Member in the Pfizer Plan on December 31, 1982
and whose annual benefit accrued under the Plan as of such
date determined in accordance with section 415(b)(2) of the
Code, exceeds such limitation. In lieu thereof, the
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Member's annual accrued benefit as of December 31, 1982
shall be the applicable dollar limitation.
(V) The term "Social Security Retirement Age" means the
social security retirement age as defined under section
415(b)(8) of the Code which shall mean age 65 in the case
of a Member attaining age 62 before January 1, 2000 (i.e.,
born before January 1, 1938), age 66 for a Member attaining
age 62 after December 31, 1999, and before January 1, 2017
(i.e., born after December 31, 1937, but before January 1,
1955), and age 67 for a Member attaining age 62 after
December 31, 2016 (i.e., born after December 31, 1954).
(VI) The term "limitation year" shall mean the
calendar year.
(10) The limitation of this Section with respect to
any Member who at any time has participated in any other
defined benefit plan, or in more than one defined
contribution plan, maintained by an employer or by a
corporation which is a member of a controlled group of
corporations, within the meaning of section 1563(a),
determined without regard to section 1563(a)(4) and
(e)(3)(C), and section 415(h) of the Code, of which an
Employer is a member, shall apply as if the total benefits
payable under all defined benefit plans in which the Member
has been a participant were payable from one plan, and as
if the total annual additions made to all defined
contribution plans in which the Member has been a
participant were made to one plan.
k. (1) The benefits provided under this Plan shall be
reduced in the case of any Member or beneficiary under
uniform rules adopted by the Committee, by the amount of
any benefits payable to such Member or beneficiary under
any other qualified non-government pension plan or program
or any retirement or pension benefits payable to him under
the laws of any foreign government, to the extent that the
benefits payable under such other plan or program are based
on service which is included in Prior Service, Membership
Service or Special Service, hereunder, and are not
attributable to contributions made to such other plan or
program by the Member.
(2) The benefits provided under this Plan shall be
reduced, under uniform rules adopted by the Retirement
Committee, in the case of any Member reemployed by an
Employer to avoid duplication of any benefits previously
paid by this Plan to such Member after a prior termination
of service, provided that in no event shall any benefits
provided under this Plan be payable during any period of
reemployment. Such reduction shall not apply to the extent
that the Member shall, upon reemployment, repay to the
Trustee any amount received
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from the Trust with interest thereon compounded annually,
at the rate to be determined by the Retirement Committee
from the date or dates of receipt of such benefits to the date
of repayment to the Trust.
(3) Whenever the amount of a benefit under this Plan is to
be determined by an actuarial procedure, the following
interest rate and mortality assumptions will be used. In
the case of annuity forms of benefit payments, the interest
rate assumption shall be 7 1/2% per annum and the mortality
assumption shall be based upon the latest Unisex Mortality
Table prepared by the Plan=s actuary and adopted by the
Retirement Committee. In the case of the lump sum form of
payment, (i) for Members who Retire prior to July 1, 1995,
the interest rate assumption shall be the Pension Benefit
Guaranty Corporation discount rate for immediate annuities
for the month three months prior to the month in which the
Member Retires, and the mortality assumption shall be based
upon the Mortality Tables specified by the Pension Benefit
Guaranty Corporation with a unisex blend of 85% male and
15% female; and (ii) for Members who Retire on or after
July 1, 1995, the interest rate assumption shall be the
annual rate of interest on 30-year Treasury securities as
specified by the Commissioner of the Internal Revenue
Service for the full calendar month four months prior to
the month in which the Member Retires, and the mortality
assumption shall be based upon the mortality table
prescribed under Section 417(e)(3)(A)(ii)(I) of the Code as
in effect on the date on which the Member Retires.
l. Qualified Domestic Relations Order: Notwithstanding
anything in the Plan to the contrary, the payment of any
benefit to which a Member may be entitled under this
Section 4 shall be subject to a qualified domestic
relations order within the meaning of section 414(p) of the
Code.
m. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Retirement
Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. In the
event that the provisions of this Section 4m. or any part
thereof cease to be required by law as a result of
subsequent legislation or otherwise, this Section 4m. or
applicable part thereof shall be ineffective without
necessity of further amendment of the Plan.
(1) The term "eligible rollover distribution" shall mean
any distribution of all or any portion of the balance to
the credit of the distributee, except that an
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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 exclusion for net unrealized appreciation with
respect to employer securities).
(2) The term "eligible retirement plan" shall mean 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.
(3) The term "distributee" shall mean an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
(4) The term "direct rollover" shall mean a payment by the
Plan to the eligible retirement plan specified by the
distributee.
SECTION 5
Contributions
All of the Retirement Annuity payments provided under this
Plan shall be financed entirely by means of contributions
made by the Company and Associate Companies, subject to
conditions set forth under Sections 9 and 12.
a. Service Contributions: Subject to the future
financial needs and condition of the business as determined
by its Board of Directors and Section 6a, (i) it is the
intention of the Company to continue the Plan and, within
the
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time allowed by law for filing of its Federal income
tax return for each fiscal year, to make regular
contributions each year in such amounts as are necessary to
maintain the Plan on a sound actuarial basis, and to meet
minimum funding standards prescribed by any applicable law
and (ii) upon transfer from Special Service to service with
an Employer, appropriate contributions shall be made with
respect to each Employee so transferred to provide the
benefits for such Special Service.
b. Actuarial Calculations: The Company shall adopt from
time to time, service and mortality tables and the rates of
interest to be used in actuarial calculations required in
connection with the Plan. As an aid to the Company in
adopting such tables the actuary designated by the Company
shall from time to time submit recommendations to the
Company as to possible changes affecting such tables. The
actuary shall, in addition, make annual valuations of the
contingent assets and liabilities of the Plan and establish
the rate of Company contributions payable to the Plan.
c. Continuation of Plan: Anything herein to the contrary
notwithstanding, the continuation of this Plan and the
payment of contributions are not assumed as contractual
obligations of the Company or any other Employer.
SECTION 6
Funding the Plan
a. Trust Fund: All contributions made by an Employer to
provide the benefits under this Plan shall be paid into the
Annuity Trust Fund. Notwithstanding anything herein to the
contrary, any contribution by the Company to the Annuity
Trust Fund is conditioned upon the deductibility of the
contribution by the Company under the Code and, to the
extent any such deduction is disallowed, the Company shall,
within one year following the disallowance of the
deduction, demand repayment of such disallowed contribution
and the Trustee shall return such contribution within one
year following the disallowance. Earnings of the Plan
attributable to the excess contribution may not be returned
to the Company, but any losses attributable thereto must
reduce the amount so returned. The Annuity Trust Fund will
be held and invested as described in the Trust Agreement, a
brief description of the provisions of which is given in
Section 7 hereof. No part of the Annuity Trust Fund may be
used for, or diverted to, purposes other than for the
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exclusive benefit of Employees or their beneficiaries, nor
may any part of the Annuity Trust Fund be remitted to the
Company, except as otherwise permitted under ERISA,
provided, however, that the reasonable expenses of the
Trustee in the administration of this trust as well as fees
and other charges incurred for investment counseling and
for actuarial services and expenses of the Retirement
Committee and the Plan Assets Committee will be paid out of
the Annuity Trust Fund.
b. Annuities: Notwithstanding anything herein to the
contrary, the Retirement Committee or the Plan Assets
Committee may provide for the funding of the payment of any
benefits prescribed by the Plan through the purchase of
immediate or deferred annuities, as the case may be, from
any governmental agency or insurance company or companies,
approved by the Company.
SECTION 7
Administration of the Trust Fund - The Trust Agreement
The Company has entered into a trust agreement with State
Street Bank and Trust Company (the "Trust Agreement"),
providing for the administration of the Annuity Trust Fund
by that bank as Trustee thereof, which includes provisions
with respect to the powers and authority of the Trustee (in
its discretion and/or as directed by an investment adviser
appointed by the Plan Assets Committee) as to the
investment and reinvestment of the Annuity Trust Fund and
the income therefrom and provisions with respect to the
administration of the Annuity Trust Fund, the limitations
on the liability of the Trustee, authority of the Company
to settle the accounts of the Trustee and of the Retirement
Committee on behalf of all persons having any interest in
the Annuity Trust Fund, and from time to time, to appoint a
substitute, successor or additional Trustees, and that,
with respect to any payments to or for the benefit of any
employee or beneficiary under this Plan, the Trustee shall
follow the directions of the Retirement Committee. The
Trust Agreement further provides that the Company shall
have the right, from time to time, to modify or amend the
Trust Agreement in whole or in part, provided that no such
amendment shall divert any part of the Annuity Trust Fund
to purposes other than the exclusive benefit of Employees
or their beneficiaries; provided, however, that the
reasonable expenses of the Trustee in the administration of
this trust as well as fees and other charges incurred for
investment counseling (including
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any investment adviser) and for actuarial services and
expenses of the Retirement Committee and of the Plan Assets
Committee will be paid out of the Annuity Trust Fund. The
Trust Agreement shall be deemed to form a part of this Plan,
and any and all rights or benefits which may accrue to any
person under this Plan shall be subject to all the terms and
provisions of said Trust Agreement.
SECTION 8
Committees
a. (1) Retirement Committee: This Plan is administered
by a Retirement Committee consisting of at least three
persons appointed by the Board of Directors of the Company.
Members of the Retirement Committee may resign at any time
upon due notice in writing. The Board of Directors of the
Company may remove any Retirement Committee Members and
appoint others in their places. The Retirement Committee
may act by a majority of its members.
(2) The Retirement Committee shall be the Plan
Administrator and shall have fiduciary responsibility under
the Employee Retirement Income Security Act of 1974, as
amended, for the general operation of the Plan, except that
the Retirement Committee shall have no responsibility for
or control over the investment of the Plan assets, other
than the authority to provide for the purchase of annuities
pursuant to Section 6b. of the Plan and to give written
directions to the Trustee or Investment Advisor with
respect to the liquidity requirements of the Plan. The
Retirement Committee may appoint or employ, and compensate
such persons as it deems necessary to render advice with
respect to any responsibility of the Retirement Committee
under the Plan. The Retirement Committee may allocate to
any one or more of its members any responsibility it may
have under the Plan and may designate any other person or
persons to carry out any responsibility of the Retirement
Committee under the Plan, other than its authority
described above with respect to the retention of cash and
the purchase of annuities. Any person may serve in more
than one fiduciary capacity with respect to the Plan.
(3) Duties:
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(a) The Retirement Committee will determine the names of
Annuitants and joint Annuitants and the amounts that are
payable to them from the Annuity Trust Fund in accordance
with the provisions of this Plan.
(b) The Retirement Committee shall keep in convenient form
such data as shall be necessary for actuarial valuations of
the contingent assets and liabilities of the Plan and for
checking the experience thereof.
(c) The Retirement Committee shall determine the manner in
which the funds of the Plan shall be dispensed including
the form of voucher or waiver to be used in making
disbursements and the due notification of persons
authorized to approve and sign the same.
(d) The Retirement Committee shall determine whether a
judgment, decree or order, including approval of a property
settlement agreement, made pursuant to a state domestic
relations law, including a community property law, that
relates to the provision of child support, alimony
payments, or marital property rights of a spouse, former
spouse, child, or other dependent of the Member is a
qualified domestic relations order within the meaning of
section 414(p) of the Code, and shall give the required
notices and segregate any amounts that may be subject to
such order if it is a qualified domestic relations order,
and shall administer the distributions required by any such
qualified domestic relations order.
(4) Administration of Plan: The Retirement Committee is
authorized to make such rules and regulations as may be
necessary to carry out the provisions of the Plan and will
determine any questions arising in the administration,
interpretation and application of the Plan, which
determination shall be conclusive and binding on all
parties. The Retirement Committee is also authorized to
provide for accelerated vesting and to purchase or arrange
for payment of an appropriate annuity or any other form of
payment or to permit the immediate distribution of Plan
benefits in those cases involving groups of Employees
involuntarily terminated, including, but not limited to,
cases involving groups of Employees who involuntarily cease
to render Creditable Service due to a liquidation, sale, or
other means of terminating the parent-subsidiary or
controlled group relationship with an Employer or the sale
or other transfer to a third party of all or substantially
all of the assets used by the Employer in a trade or
business conducted by the Employer, when the Retirement
Committee determines that such action is appropriate to
prevent inequities with respect to such Employees, and the
determination of the Committee in such matters shall be
conclusive and binding on all parties. Further, the
Retirement Committee, upon the written request of the
Company's
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Vice President-Human Resources, is authorized,
with respect to a Member of the Plan who has five or more
years of Creditable Service and who is transferred to the
purchaser of a portion of the Company's operations,
effective the day after the closing date of the sale, to
grant additional Creditable Service and additional credit
for age under the Plan, in each case up to one percent for
each year of Creditable Service, and to advance the date
through which a Member's Earnings are calculated pursuant
to Section 1i. hereof, so as to prevent hardship with
respect to his participation in said purchaser's pension
plan. The Retirement Committee is also authorized to
waive, either in whole or in part, the percentage
reductions for early commencement of retirement benefits
set forth in Section 4d. in those cases where groups of
Employees have terminated employment either as a result of
a reduction in the work force or for similar economic
reasons, and the determination of the Retirement Committee
shall be conclusive and binding on all parties. The
Retirement Committee is also authorized to adopt such rules
and regulations as it may consider necessary or desirable
for the conduct of its affairs and the transaction of its
business, including, but not limited to, the power on the
part of the Retirement Committee to act without formally
convening and to provide that action of the Retirement
Committee may be expressed by written instrument signed by
a majority of its members. It shall elect a Secretary, who
need not of necessity be a member of the Retirement
Committee, who shall record the minutes of its proceedings
and shall perform such other duties as may from time to
time be assigned to him. The Retirement Committee may
retain legal counsel (who may be counsel for the Company)
when and if it be found necessary to do so and may also
employ such other assistants, clerical or otherwise, as may
be requisite, and expend such monies as may be requisite in
their work. All of these expenses of the Retirement
Committee and the reasonable expenses of the Trustee in the
administration of the trust as well as for actuarial
services will be paid out of the Annuity Trust Fund. In
exercising such powers and authorities, the Retirement
Committee shall at all times exercise good faith, apply
standards of uniform application and refrain from arbitrary
action.
b. (1) Plan Assets Committee: A Plan Assets Committee
consisting of at least three persons appointed by the Board
of Directors of the Company shall have exclusive authority
and fiduciary responsibility under the Employee Retirement
Income Security Act of 1974, as amended, (i) to appoint and
remove investment advisers, if any, under the Plan and the
Trust Agreement, (ii) to direct the segregation of assets
of the Annuity Trust Fund into an investment adviser
account or accounts at any time, and from time to time to
add to or withdraw assets from such investment adviser
account or
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accounts as it deems desirable or appropriate
and also to direct the Company's contribution or any
portion thereof into any of the accounts maintained under
the trust, (iii) to direct the Trustee to enter into an
agreement or agreements with an insurance company or
companies designated by the Plan Assets Committee as
provided in the Trust Agreement, (iv) to establish
investment guidelines for areas other than those set forth
above and, within such guidelines, to direct the Trustee to
purchase and sell securities or to enter into one or more
agreements with one or more companies, partnerships or
joint ventures and to transfer assets of the Annuity Trust
Fund to such entities for purposes of investment therein;
provided however, that, except as expressly set forth
above, the Plan Assets Committee shall have no
responsibility for or control over the investment of the
Plan assets held in the Annuity Trust Fund established
hereunder. In addition, the Plan Assets Committee shall
receive the reports and recommendations of the actuary
designated by the Company under Section 5b. hereof
concerning actuarial assumptions to be adopted on subjects
including, but not limited to, Employee turnover, rate of
mortality, disability rate, ages at actual retirement, rate
of pay increases, investment income and size of participant
group, and make such recommendations and determinations
based upon such reports and recommendations as it may deem
necessary or appropriate. The Plan Assets Committee may
appoint or employ such persons as it deems necessary to
render advice with respect to any responsibility of the
Plan Assets Committee under the Plan. The Plan Assets
Committee may allocate to any one or more of its members
any responsibility that it may have under the Plan and may
designate any other person or persons to carry out any
responsibility of the Plan Assets Committee under the Plan.
Any person may serve in more than one fiduciary capacity
with respect to the Plan. Members of the Plan Assets
Committee may resign at any time upon due notice in
writing. The Board of Directors of the Company may remove
any Plan Assets Committee members and appoint others in
their places. The Plan Assets Committee may act by a
majority of its members.
(2) The Plan Assets Committee is authorized to make such
rules and regulations as may be necessary to carry out its
duties under the Plan. The Plan Assets Committee is also
authorized to adopt such rules and regulations as it may
consider necessary or desirable for the conduct of its
affairs and the transaction of its business, including, but
not limited to, the power on the part of the Plan Assets
Committee to act without formally convening and to provide
that action of the Plan Assets Committee may be expressed
by written instrument signed by a majority of its members.
It shall elect a Secretary, who need not of necessity be a
member of the Plan Assets Committee, who shall record the
minutes of its proceedings and shall perform such other
duties as
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may from time to time be assigned to him. The
Plan Assets Committee may retain legal counsel (who may be
counsel for the Company) when and if it be found necessary
to do so and may also employ such other assistants,
clerical or otherwise, as may be requisite, and expend such
monies as may be requisite in their work. All of these
expenses of the Plan Assets Committee as well as expenses
for investment counseling will be paid out of the Annuity
Trust Fund.
c. To the extent permitted by law, the Retirement
Committee, the Plan Assets Committee, the Boards of
Directors of the Employers, and the Employers and their
respective officers shall not be liable for the directions,
actions or omissions of any agent, legal or other counsel,
accountant or any other expert who has agreed to the
performance of administrative duties in connection with the
Plan or Trust. The Committees, the Boards of Directors of
the Employers, and the Employers and their respective
officers shall be entitled to rely upon all certificates,
reports, data, statistics, analyses and opinions which may
be made by such experts and shall be fully protected in
respect to any action taken or suffered by them in good
faith reliance upon any such certificates, reports, data,
statistics, analyses or opinions; all action so taken or
suffered shall be conclusive upon each of them and upon all
persons having or claiming to have any interest in or under
the Plan.
d. Indemnification: Each member of the Retirement
Committee and each member of the Plan Assets Committee
shall be indemnified by the Company against all costs and
expenses (including counsel fees but excluding any amount
representing a settlement unless such settlement be
approved by the Board of Directors of the Company)
reasonably incurred by or imposed upon him, in connection
with or resulting from any action, suit or proceeding, to
which he may be made a party by reason of his being or
having been a member of the Retirement Committee or the
Plan Assets Committee, as applicable (whether or not he
continues to be a member of such Committee at the time when
such cost or expense is incurred or imposed), to the full
extent permitted by law. The foregoing rights of
indemnification shall not be exclusive of other rights to
which any member of the Retirement Committee or the Plan
Assets Committee may be entitled as a matter of law.
SECTION 9
Amendments and Changes in Plan and Coverage
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The Company reserves the right in its sole and absolute
discretion, through its Board of Directors in accordance
with its established rules of procedure, at any time to
modify, suspend or discontinue this Plan or the Annuity
Trust Fund in whole or in part and to change the Trustee or
the funding method.
The Retirement Committee may make administrative changes to
the Plan so as to conform with or take advantage of
governmental requirements, statutes or regulations.
SECTION 10
Non-Alienation of Benefits
No benefit payable under the provisions of the Plan shall
be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and
any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be void;
nor shall any such benefits be in any manner liable for or
subject to the debts, contracts, liabilities, engagements
or torts of any Member or beneficiary except as
specifically provided in the Plan, or by a qualified
domestic relations order within the meaning of section
414(p) of the Code, or by any other applicable law.
SECTION 11
Associate Companies
a. Adoption of Plan: Any corporation or affiliate, with
the consent of the Company, by taking appropriate corporate
action may become an Associate Company and secure the
benefits of this Plan for its employees by adopting this
Plan as its Retirement Annuity Plan and by executing the
Trust Agreement. As a condition to such corporation or
affiliate becoming an Associate Company, the Company may
require such corporation to modify or
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amend any pension plan which such corporation or affiliate
may then have so as to conform to the provisions of this Plan,
or to limit Prior Service, as defined in Section 3, to service
rendered for such corporation on and after a date to be
determined by the Company. The Associate Company shall
thereafter promptly deliver to the Trustee a certified copy of
the resolutions or other documents evidencing its adoption of
this Plan and also a written instrument showing the consent
by the Company to such adoption.
b. Employee Transfers: Any Employee who is transferred
from one Employer under this Plan to another Employer under
this Plan shall receive upon retirement a Retirement
Annuity based on his Creditable Service with all such
Employers.
c. Withdrawal: The Company may upon thirty (30) days
written notice request an Associate Company to withdraw
from the Plan and upon the expiration of such thirty (30)
day period, unless such Associate Company has taken the
appropriate corporate action to accomplish such withdrawal,
such Associate Company shall be deemed to have withdrawn
from the Plan and the provisions of Section 12 shall apply.
The Retirement Committee shall give written notice to the
Trustee of any such withdrawal.
SECTION 12
Withdrawal from Plan
Any Employer may withdraw from the Plan by giving the
Retirement Committee thirty (30) days written notice of its
intention to withdraw. In the event any Employer withdraws
from the Plan, the Retirement Committee shall thereupon
determine, on the basis of actuarial valuation, that
portion of the Annuity Trust Fund held on account of the
Employees of such Employer not yet retired. The Retirement
Committee in its discretion shall direct the Trustee either
(1) to continue to hold such assets under this Plan on the
date of such withdrawals; or (2) to deliver such assets to
such trustee or trustees as shall be selected by such
withdrawing Employer; or (3) to use such assets to purchase
an appropriate retirement annuity for each Employee of such
withdrawing Employer who was a Member on the date of such
withdrawal.
SECTION 13
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Termination of Plan
a. Application of Funds: Upon complete or partial
termination of the Plan, in accordance with the established
rules of procedure of the Employer, the rights of all
affected Members to affected benefits accrued to the date
of such termination, to the extent then funded, shall be
non-forfeitable. If the Plan is terminated by an Employer
for any reason, the funds in the trust shall be used and
applied by the Retirement Committee, after expenses,
exclusively for the benefit of Members and Annuitants at
the time of termination in accordance with the formula set
forth below by either purchasing or arranging for payment
of an appropriate annuity or any other form of payment
approved by the Retirement Committee, and for no other
purpose, and when so used and applied the trust shall
finally cease and be at an end. The funds shall be
allocated for distribution in the following order:
(1) In the case of a benefit, payable as an annuity to a
Member or beneficiary, which was in pay status as of the
beginning of the three-year period ending on the
termination date of the Plan, to each such benefit, based
on the provisions of the Plan (as in effect under the
five-year period ending on such date) under which such
benefit would be the least.
(2) In the case of a benefit, payable as an annuity to a
Member or beneficiary, which would have been in pay status
as of the beginning of such three-year period if the Member
had retired prior to the beginning of the three-year period
and if his benefits had commenced (in the normal form of
annuity under the Plan) as of the beginning of such period,
to each such benefit based on the provisions of the Plan
(as in effect during the five-year period ending on such
date) under which such benefit would be the least.
(3) To all other benefits, if any, of individuals under
the Plan subject to the Pension Benefit Guaranty
Corporation insurance guarantee and to any additional
benefits to a substantial owner, as that term is defined in
Section 4022(b)(6)(A) of the Employee Retirement Income
Security Act of 1974, which would be subject to the
guarantee but for their "substantial owner" status.
(4) To all other non-forfeitable benefits under the Plan
and, if the assets are not sufficient to cover all such
remaining non-forfeitable benefits, then to the benefits
resulting from the Plan as in effect five years prior to
the date of termination, and if assets remain after
satisfaction of such benefits, then
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to each increase in benefits resulting from amendments during
the last five years in the order in which those amendments
occurred.
(5) To all other benefits under the Plan.
(6) In the event that there remain additional funds
available for distribution after the funds have been
distributed as provided in said paragraphs (1), (2), (3),
(4) and (5) above, any other provisions of this Plan
notwithstanding, any funds, remaining as a result of
actuarial error may be reclaimed by the Employer. Any of
such funds remaining, but not as a result of actuarial
error, and/or any of such funds remaining as a result of
actuarial error, but not reclaimed by the Employer, shall
be distributed in such a manner that all the Annuitants and
Members included in paragraphs (1), (2), (3), (4) and (5)
above shall receive an additional amount determined by
multiplying the total value of these remaining assets in
the Annuity Trust Fund by a percentage computed by dividing
the value as of the date of termination of such Annuitant's
remaining benefits or such Member's benefits, as the case
may be, by the total value as of the date of termination of
the remaining benefits, or the benefits of all such
Annuitants or Members under the Plan, as the case may be.
b. The provisions of this Section 13b. shall apply (a) in
the event the Plan is terminated, to any Member who is a
highly compensated employee or highly compensated former
employee (as defined in section 414(q) of the Code) of an
Employer and (b) in any other event, to any Member who is
one of the twenty-five highest compensated Employees or
former Employees of an Employer for a Plan Year.
Notwithstanding the foregoing, for each Plan Year the
Employer may elect to determine the status of highly
compensated employees under the simplified snapshot method
described in Internal Revenue Service Revenue Procedure 93-
42 or, to the extent permitted by Treasury Regulations, on
a calendar year basis. The amount of the annual payments
under the Plan to any Member to whom this Section 13b.
applies shall not exceed an amount equal to the payments
that would be made under the Plan during the Plan Year on
behalf of the Member under a single life annuity which is
the actuarial equivalent to the sum of all of the Member's
accrued benefits under the Plan.
c. The provisions of Subsection b. of Section 13 shall
not apply if (a) the value of the benefits which would be
payable under the Plan to a Member described in Subsection
b. of Section 13 is less than one percent of the value of
the current liabilities (as defined in section 412(1)(7) of
the Code) under the
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Plan or (b) the value of the Plan's assets equals or exceeds,
immediately after payment of a benefit under the Plan to such
a Member, one hundred ten percent of the value of the current
liabilities under the Plan.
d. Notwithstanding the preceding provisions of Subsection
b. of Section 13, in the event the Plan is terminated, the
restrictions contained in such Subsection shall not be
applicable if the benefits payable under the Plan to any
Member who is a highly compensated employee or a highly
compensated former Employee are limited to benefits which
are nondiscriminatory under section 401(a)(4) of the Code.
e. Change in Law: In the event that it should
subsequently be determined by statute, court decision,
administrative ruling or otherwise, that the provisions of
Subsection b. of Section 13 are no longer necessary to
qualify the Plan under the Code, such provisions shall be
ineffective without the necessity of further amendment of
the Plan.
SECTION 14
Plan Mergers and Consolidations
In the event of any merger or consolidation of the Plan
with, or transfer in whole or in part of the assets and
liabilities of the Annuity Trust Fund to another trust fund
held under any other plan of deferred compensation
maintained or to be established for the benefit of all or
some of the Members of this Plan, the assets of the Annuity
Trust Fund applicable to such Members shall be transferred
to the other trust fund only if:
a. Each Member would, if either this Plan or the other
plan were to terminate at such time, receive a benefit
immediately after the merger, consolidation or transfer
which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger,
consolidation or transfer if this Plan had then terminated;
b. The Employer and any new or successor employer of the
affected Members shall authorize such transfer of assets;
and
c. Such new or successor employer shall assume all
liabilities with respect to such Members' inclusion in the
new employer's plan.
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SECTION 15
Claims Procedure
Any request by a Member or any other person for any benefit
alleged to be due under the Plan shall be known as a
"Claim" and the Member or such other person making a Claim
shall be known as a "Claimant."
A Claim shall be filed when a written statement has been
made by the Claimant or his authorized representative and
delivered to the Vice President-Human Resources, Minerals
Technologies Inc., 405 Lexington Avenue, New York, New York
10174-1901. This statement shall include a general
description of the benefit which the Claimant believes is
due and the reasons that the Claimant believes such benefit
to be due, to the extent this is within the knowledge of
the Claimant. It shall not be necessary for the Claimant
to cite any particular Section or Sections of the Plan, but
only to set out the facts known to him which he believes
constitute a basis for a Claim.
Within 90 days of the receipt of the Claim by the Plan, the
Vice President-Human Resources shall (i) notify the
Claimant that the Claim has been approved, (ii) notify the
Claimant that the Claim has been partially approved and
partially denied, or (iii) notify the Claimant that the
Claim has been denied. Notice of the decision shall be in
writing and shall be delivered to the Claimant either
personally or by first-class mail. Special circumstances
may require an extension of time for processing the claim.
In such event, written notice of the extension shall be
furnished to the Claimant prior to the termination of the
initial 90 day period but in no event shall the extension
exceed a period of 90 days from the end of such initial
period. The notice shall indicate the special
circumstances requiring an extension of time and the date
by which the Plan expects to render the final decision.
In the event a Claim is denied in whole or in part, the
notice of denial shall set forth (i) the specific reason or
reasons for the denial, (ii) specific reference to the
pertinent Plan provisions on which the denial is based,
(iii) a description of any additional material or
information necessary for the Claimant to perfect the Claim
and an explanation of why such material or information is
necessary, and (iv) an explanation of the Plan's claims
review procedure.
Within 60 days of the receipt of a notice of denial of a
Claim in whole or in part, a Claimant or his duly
authorized representative (i) may request a review upon
written application to the Retirement Committee, (ii) may
review
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<PAGE>
documents pertinent to the Claim, and (iii) may
submit issues and comments in writing to the Retirement
Committee. Notice shall be deemed to be received when
delivered if delivered personally pursuant to the foregoing
provisions of this Section or three days after it has been
deposited post-paid in a depository maintained by the U.S.
Post Office addressed to Claimant at the address designated
by him or her in the Claim or if Claimant has moved at the
last known address shown for Claimant on the Employer's
records.
It shall be the duty of the Retirement Committee to review
a Claim for which a request for review has been made and to
render a decision not later than 60 days after receipt of a
request for review; provided, however, that if special
circumstances require an extension of time for processing,
a decision shall be rendered no later than 120 days after
receipt of a request for review. Written notice of any
such extension shall be furnished to the Claimant within 60
days after receipt of request for review. The decision
shall be in writing and shall include the specific reasons
for the decision and specific references to the pertinent
Plan provisions on which the decision is based. The
decision shall be delivered to the Claimant either
personally or by first-class mail. If the decision on
review is not furnished within such time, the Claim shall
be deemed denied on review.
SECTION 16
Top-Heavy Rule
a. Notwithstanding any provision in the Plan to the
contrary, if the Plan is determined by the Retirement
Committee to be top-heavy, as that term is defined in
section 416 of the Code, in any calendar year, then for
that calendar year the vesting schedule and minimum benefit
rules, as set forth below, shall be applicable.
Determination of whether the Plan is top-heavy shall be
made in accordance with section 416(g)(2)(B) of the Code.
b. Definitions solely applicable to this Section 16.
(1) "Compensation" shall mean the amount reportable by an
Employer for Federal income tax purposes as wages paid to
the Member for such period.
(2) "Determination Date," the date for determining whether
the Plan is top-heavy, shall be the December 31 of the
preceding year.
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<PAGE>
(3) "Key Employee" shall have the same meaning as in
section 416(i)(1) of the Code.
(4) "Non-Key Employee" shall mean an employee other than a
Key Employee as defined in subsection b.(3) above.
(5) "Testing Period" shall mean the period of consecutive
years, not exceeding five (5), during which a Member had
the greatest aggregate compensation from his Employer, but
not including years in which this Plan was determined not
to be top-heavy.
(6) "Valuation Date," for minimum funding purposes, shall
be a date within the twelve-month period ending on the
Determination Date, regardless of whether a valuation for
minimum funding purposes is performed in that year.
c. For the purpose of determining whether this Plan is
top-heavy, this Plan and the Company's Savings and
Investment Plan shall be aggregated, as provided in section
416(g)(2)(A) of the Code.
d. Vesting Schedule: Employees shall acquire a vested
interest in an annuity under the Plan in accordance with
the following schedule:
20% of the accrued benefit under Section 4a. after two (2)
Anniversary Years of Creditable Service; 40% of the
accrued benefit under Section 4a. after three (3)
Anniversary Years of Creditable Service; 60% of the accrued
benefit under Section 4a. after four (4) Anniversary Years
of Creditable Service; 80% of the accrued benefit under
Section 4a. after five (5) Anniversary Years of Creditable
Service; and 100% of the accrued benefit under Section 4a.
after six (6) Anniversary Years of Creditable Service.
e. Minimum Benefit Rule: A Non-Key Employee's benefit
shall not be less than the lesser of: 2% of his average
compensation during the testing period, not exceeding the
compensation limitation under section 416(d) of the Code
and applicable regulations, multiplied by those years of
service with his Employer in which this Plan is determined
to be top-heavy or 20% of his average compensation during
the Testing Period; provided, however, that any minimum
benefit provided under this Section 16 shall be offset by
the actuarial equivalent of the value of the Employer's
contributions to the Company's Savings and Investment Plan
on the Non-Key Employee's behalf. Such
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<PAGE>
actuarial equivalent shall be calculated using the Pension
Benefit Guaranty Corporation immediate annuity lump sum factor,
with male and female factors equally weighted, in effect
three (3) months prior to termination of employment. All
accruals derived from Employer contributions, whether or
not attributable to years in which the Plan is top-heavy,
may be used in determining whether the minimum accrued
benefit requirements for a Non-Key Employee has been
satisfied.
f. If the Plan becomes subject to the adjustments
pursuant to section 416(h) of the Code, the defined benefit
plan fraction described in section 415(e)(2) of the Code
and the defined contribution plan fraction described in
section 415(e)(3) of the Code shall be applied by
substituting 1.0 for 1.25 in the denominator of each
fraction.
g. If the Plan becomes top-heavy and in a subsequent year
ceases to be top-heavy, the vesting schedule under Section
16d. shall revert to the vesting schedule under Section 4c.
of the Plan provided, however, that any Employee who has
completed at least three (3) or more years of Creditable
Service at the time the Plan ceases to be top-heavy and who
had at least one (1) Hour of Service while the Plan was a
top-heavy plan, shall be entitled to elect, within a
reasonable period (such period to be determined by the
Retirement Committee when relevant but in no event no
earlier than 60 days following the latest of (i) the date
upon which the reversion to the prior vesting schedule
became effective, or (ii) the day the Employee is issued
written notice by the Retirement Committee that the prior
schedule is applicable), whether the
vesting schedule in Section 16d. or in Section 4c. is
applicable to his benefit.
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<PAGE>
SCHEDULE A
Groups or classes eligible for participation in the
Retirement Annuity Plan (except in each case employees
covered by a collective bargaining agreement that does not
provide for coverage of such employees under the Plan if
there is evidence that retirement benefits were the subject
of good faith bargaining):
1. All employees in the service of Minerals Technologies
Inc.
2. All employees in the service of the following
Associate Companies:
Barretts Minerals Inc.
Specialty Minerals Inc.
MINTEQ International Inc.
<PAGE>
SCHEDULE B - Vested Benefit Table
The following table sets forth the percentages which will
apply at the ages indicated in the computation of vested
benefits:
1. Effective on or after January 1, 1994 -
Age That Annuity Percentage of
Payments Commence Vested Annuity
----------------- --------------
65+ 100%
64 94
63 88
62 82
61 76
60 70
59 64
58 58
57 52
56 46
55 40
2. Effective prior to January 1, 1994 -
Age That Annuity Percentage of
Payments Commence Vested Annuity
----------------- --------------
65+ 100%
64 96
63 92
62 88
61 84
60 80
59 76
58 72
57 68
56 64
55 60
54 53
52 51
50 56
52 48
44 40
<PAGE>
SCHEDULE C
Early Retirement Table
The following table sets forth the percentages which will
apply at the ages indicated in the computation of early
retirement benefits:
Age Percentage
- --------------------------------------------
65.......................................100
64........................................96
63........................................92
62........................................88
61........................................84
60........................................80
59........................................76
58........................................72
57........................................68
56........................................64
55........................................60
<PAGE>
SCHEDULE D
Alternate Early Retirement Table
The following table sets forth the percentages which will
apply at the ages indicated in the computation of early
retirement benefits:
Age Service Percentage
- --------------------------------------------------
64 26 100
63 27 100
62 28 100
61 29 100
60 30 100
59 31 96
58 32 92
57 33 88
56 34 84
55 35 80
54 36 76
53 37 72
MINERALS TECHNOLOGIES INC. NONFUNDED
SUPPLEMENTAL RETIREMENT PLAN
----------------------------
1. Minerals Technologies Inc. (the "Company") shall make payments
supplementing the amounts payable under the Minerals Technologies Inc.
Retirement Annuity Plan (the "Retirement Annuity Plan") to employees who
retire under the Retirement Annuity Plan and to terminated employees who at
the time of their termination were entitled to receive benefits, including
deferred vested benefits, under the Retirement Annuity Plan (hereafter,
"employees") and whose benefits under the Retirement Annuity Plan in either
case are limited, by reason of Section 415 and Section 401(a)(17) of the
Internal Revenue Code, to amounts less than would be payable under the
provisions of said Plan if calculated without reference to the limitations
imposed by Section 415 and Section 401(a)(17) of the Internal Revenue Code.
2. To the extent practicable, such supplemental payments by the Company
shall, in the case of each such employee, be substantially equal to the
difference between the benefits payable under the Retirement Annuity Plan and
the benefits that would be payable under the provisions of the Retirement
Annuity Plan if calculated without reference to the limitations imposed by
Section 415 and Section 401(a)(17) of the Internal Revenue Code. For the
purpose only of computing benefits that would otherwise be payable under the
Retirement Annuity Plan to an employee, any income deferred by the employee
pursuant to the Minerals Technologies Inc. Nonfunded Deferred Compensation and
Supplemental Savings Plan shall be added to the employee's Career Earnings, as
determined under the Retirement Annuity Plan, in the year of such deferral.
3. (a) Lump-sum Payment. An employee eligible for retirement under the
Retirement Annuity Plan and entitled to benefits under this plan shall receive
his or her payment in a single lump sum, as early as administratively
practicable in the January of the calendar year next following his or her
termination of employment, unless he or she elects to receive payment in equal
annual installments under paragraph (b) below, or to receive a "same-year
payment" under paragraph (c) below.
(b) Installment Payments. An employee eligible for retirement
under the Retirement Annuity Plan or his or her beneficiary may receive
payments in equal annual installments over a period of up to ten years, as
determined by the employee, if (i) the employee elects to do so, or modifies a
previous election in order to do so, at least ninety days prior to his or her
retirement under the Retirement Annuity Plan, and (ii) as of the first business
day of the January following such employee's retirement or death, the benefit to
which he or she is entitled under this plan is at least $100,000. No payments
under this paragraph (b) shall be made prior to the employee's next taxable year
following termination of employment. All such future payments shall be made as
<PAGE>
early as administratively practicable in such January and each succeeding
January, in accordance with the Company's procedures, until all installments
have been paid.
(c) Same-year Payment. An employee eligible for retirement under the
Retirement Annuity Plan who wishes to receive, or for his or her beneficiary to
receive, a payment in the year of the employee's termination must elect to do so
no later than October 1 of the year preceding the employee's scheduled
retirement date. Any such payment will be in a lump-sum, made as soon after the
date of the employee's retirement as is administratively practicable.
(d) Non-retirement Eligible Employees. An employee who is not
eligible for retirement under the Retirement Annuity Plan and who terminates
employment with the Company shall be paid the full amount due him or her in a
lump-sum in the January of the calendar year next following the later of (i) his
or her termination of employment or (ii) the date of his or her fifty-fifth
birthday. If the employee is deceased at the time such payment becomes due, it
will be made to his or her beneficiary.
(e) Valuation. (i) Benefits paid as same-year payments will be
valued as of the date of retirement, or the next business day if the date of
retirement is not a business day. (ii) Other benefits shall be valued as of
the first business day of the January following the date of termination of
employment, in accordance with the administrative procedures of the Company.
4. An employee's right to supplemental payments hereunder may not be
assigned. If an employee does assign such right, the Company may disregard such
assignment and discharge its obligation by making payment as though no such
assignment had been made. Notwithstanding the above, an employee may elect, or
may modify an election previously made, to name a beneficiary to whom in the
event of the employee's death the Company shall make such lump sum payment or,
if applicable, annual installment payments. If the employee fails to elect a
beneficiary then the estate of the employee shall be considered his or her
beneficiary hereunder.
5. This Minerals Technologies Inc. Nonfunded Supplemental Retirement Plan
shall be governed and construed in accordance with the laws of the state of
Delaware.
(January 1999)
<PAGE>
MINERALS TECHNOLOGIES INC.
SAVINGS AND INVESTMENT PLAN
(As amended and restated effective as of
April 22, 1999, with certain earlier effective dates)
TABLE OF CONTENTS
-----------------
Page
I. PURPOSES 1
II. DEFINITIONS 1
III. EFFECTIVE DATE 7
IV. ELIGIBILITY 7
V. PARTICIPATION 8
VI. CONTRIBUTIONS 8
VII. INVESTMENT OF FUNDS 18
VIII. CREDITS TO MEMBERS' ACCOUNTS 23
IX. SUSPENSION OF CONTRIBUTIONS 23
X. WITHDRAWALS 24
-ii-
<PAGE>
XI. SETTLEMENT UPON TERMINATION OF EMPLOYMENT 27
XII. SAVINGS AND INVESTMENT PLAN COMMITTEE 34
XIII. TRUST AGREEMENT 36
XIV. ASSOCIATE COMPANIES 36
XV. VOTING RIGHTS 37
XVI. ADMINISTRATIVE COSTS 39
XVII. NON-ALIENATION OF BENEFITS 39
XVIII. NOTICE 39
XIX. INVESTMENTS 40
XX. TREASURY APPROVAL 40
XXI. MISCELLANEOUS 40
XXII. TERMINATION, AMENDMENT OR
SUSPENSION OF THE PLAN 42
XXIII. PLAN MERGERS AND CONSOLIDATIONS 43
XXIV. CLAIMS PROCEDURE 43
XXV. TOP-HEAVY RULE 44
XXVI. LOAN PROVISIONS 46
SCHEDULE A 49
-iii-
<PAGE>
MINERALS TECHNOLOGIES INC.
SAVINGS AND INVESTMENT PLAN
(As amended and restated effective as of
April 22, 1999, with certain earlier effective dates)
I. PURPOSES
The purposes of this Plan are to foster thrift on
the part of the eligible employees by affording them the
opportunity to make regular savings and investments through
payroll deductions in order to provide the opportunity for
additional security at retirement, and also to provide them
with a proprietary interest in the continued growth and
prosperity of the Company. As an incentive, the Company
will match a portion of such savings by regular
contributions as provided in the Plan.
II. DEFINITIONS
Wherever used in this Plan:
A. "Account" means the aggregate interest of a
Member in the Plan.
B. "After-Tax Contributions" means contributions
made by a Member pursuant to Section VI.A. hereof.
C. "Anniversary Year" means (1) the twelve (12)
month period following the date on which an Employee begins
his employment with an Employer, as well as successive
twelve (12) month periods thereafter or (2) in the case of
a Member who has incurred one (1) or more One-Year Breaks
in Service, the twelve (12) month period following the date
on which such Member recommences employment with an
Employer after the most recent One-Year Break in Service,
as well as successive twelve (12) month periods thereafter.
D. "Associate Company" means any corporation of
which Minerals Technologies Inc. owns directly or
indirectly at least 80% of the issued and outstanding
shares of stock, which, with the consent of the Company,
adopts this Plan pursuant to the provisions of Section XIV.
hereof, and when action is required to be
<PAGE>
taken hereunder by an Associate Company such action shall
be authorized by its Executive Committee or its Board of
Directors.
E. "Business Day" means each day of each Plan
Year on which the New York Stock Exchange is open for the
transaction of business.
F. "Code" means the Internal Revenue Code of
1986, as from time to time amended.
G. "Committee" means the Savings and Investment
Plan Committee hereinafter provided for in Section XII.
hereof.
H. "Company" means Minerals Technologies Inc., a
Delaware corporation, and any successor corporation, and
when action is required to be taken hereunder by the
Company, such action shall be authorized by the Executive
Committee or the Board of Directors of the Company.
I. "Creditable Service" shall mean each
Anniversary Year in which an Employee completes at least
1,000 Hours of Service. A transfer from one Employer to
another shall not constitute a break in Creditable Service
or a termination of employment with any Employer for the
purposes hereof. "Creditable Service" shall include any
service credited to a Member under the Pfizer Savings and
Investment Plan (the "Pfizer 401(k) Plan") for a Member who
was employed by the Company or any of its subsidiaries on
the closing date under the Reorganization Agreement dated
as of September 28, 1992, between Pfizer Inc. and the
Company and who was an active participant in the Pfizer
401(k) Plan immediately prior to such date.
J. "Employee" means a person who is employed in
the service of an Employer within the United States of
America or any of its territories or possessions, or who is
a United States citizen employed in the service of an
Employer outside the continental limits of the United
States of America, except a person who is included in a
unit of employees covered by a collective bargaining
agreement that does not provide for coverage of such person
under the Plan if there is evidence that retirement
benefits were the subject of good faith bargaining. A
person who is a United States citizen or a Participating
Resident Alien and who is employed outside the continental
limits of the United States of America in the service of a
foreign subsidiary (including foreign subsidiaries of such
foreign subsidiary) of the Company shall be considered, for
all purposes of this Plan, as employed in the service of
the
<PAGE> -2-
Company, if (1) the Company has entered into an agreement
under section 3121(l) of the Code which applies to the
foreign subsidiary of which such person is an employee, and
(2) contributions under a funded plan of deferred
compensation, whether or not a plan described in section
401(a), 403(a), or 405(a) of the Code, are not provided by
any other person with respect to the remuneration paid to
such individual by the foreign subsidiary.
K. "Employer" means the Company or any Associate
Company. For purposes of sections 410 and 411 of the Code,
"Employer" also shall mean any corporation or other trade
or business that is treated under the first sentence of
section 414(b) or under section 414(c) of the Code as
constituting the same "employer" as the Company or an
Associate Company, with respect to any period of such
affiliated status.
L. "Employer Matching Contributions" means
contributions made by an Employer pursuant to Section VI.B.
hereof.
M. "Hours of Service" means all hours for which
an Employee is directly or indirectly paid, or entitled to
payment (including back pay for periods for which such
awards pertain), by an Employer (or any company which is a
member of the same controlled group of corporations, within
the meaning of section 1563(a) of the Code as the Employer
or any trade or business whether or not incorporated which
is under common control of an Employer as determined under
regulations prescribed under section 414 of the Code at the
time of such service) for the performance of duties, or for
reasons other than the performance of duties, such as
vacation, injury, accident, sickness, short-term disability
or authorized leave of absence. In the case of a payment
which is made or due on account of a period during which an
Employee performs no duties, Hours of Service will be
determined in accordance with the appropriate Department of
Labor regulations (section 2530.200b-2(b) and (c)). Solely
for the purpose of determining whether a One-Year Break in
Service has occurred, an Hour of Service shall include each
Hour of Service which otherwise would have been
<PAGE> -3-
credited to an Employee but for a period of absence from
work which commences by reason of the pregnancy of the
Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with
the adoption of such child by the Employee or the caring
for such child by the Employee immediately following such
birth or placement. The Hours of Service credited for such
leave shall be credited in the Plan Year in which such
leave begins if such crediting is necessary to prevent a
One-Year Break in Service in the Plan Year, otherwise such
Hours of Service shall be credited in the immediately
following Plan Year.
N. "Leased Employee" means any person performing
services for an Employer as a leased employee pursuant to
an agreement with a leasing organization who shall for
purposes of the Plan continue to be an employee of such
leasing organization, and not of an Employer,
notwithstanding amendments to the Code which require that
such person may have to be counted as an employee of the
Employer in order to perform certain plan qualification
tests as contained therein.
O. "Member" means an Employee who participates
in the Plan in accordance with the provisions of Section V.
hereof, or a retiree who has elected a deferred
distribution under Section XI.A.2. hereof.
P. "Member Contributions" means the After-Tax
Contributions and Qualified Deferred Earnings Contributions
made to the Plan pursuant to Section VI.A. hereof.
Q. "One-Year Break in Service" means an
Anniversary Year during which an Employee does not complete
more than 500 Hours of Service.
R. "Participating Resident Alien" means a person
who is not a United States citizen but (1) has previously
been employed as a lawful resident alien in the service of
an Employer within the United States of America, (2) was a
Member of the Plan during such employment, (3) is currently
employed at a location outside both the person's country of
citizenship and the continental limits of the United States
of America, and (4) continues to maintain his eligibility
for employment as a lawful resident alien within the United
States of America.
S. "Plan" means this Minerals Technologies Inc.
Savings and Investment Plan, as it may be amended from time
to time.
<PAGE> -4-
T. "Plan Year" means (1) the period beginning
April 1, 1993 and ending December 31, 1993, and (2) each
twelve (12) month period thereafter commencing on January 1
and ending on December 31 while the Plan is in effect.
U. "Qualified Deferred Earnings Contributions"
means the contributions made on behalf of a Member under
section 401(k) of the Code and the applicable Treasury
Regulations thereunder pursuant to Section VI.A. hereof.
V. "Regular Earnings" means for any Plan Year
the sum of (1) the regular base pay and bonuses received by
a Member, as established by an Employer, plus the Member's
overtime pay, premium pay, and call-in/call-back pay, but
excluding Christmas gifts, allowances, contest awards,
remuneration received in the form of salary continuance or
lump sum severance by a Member while no longer providing
services to an Employer and other similar payments and (2)
any amount which is contributed by a Member's Employer on
behalf of the Member pursuant to a salary reduction
agreement and which is not includible in gross income under
sections 125, 402(e)(3), 402(h) or 403(b) of the Code.
With respect to each Plan Year commencing after December
31, 1988 and prior to January 1, 1994, a Member's Regular
Earnings shall not include any amounts in excess of
$200,000 (as adjusted by the Secretary of the Treasury, or
his delegate, at the same time and in the same manner as
under section 415(d) of the Code to reflect cost of living
increases).
In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other provision
of the Plan to the contrary, for Plan Years beginning on or
after January 1, 1994, the Regular Earnings of each
Employee taken into account under the Plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost-of-living in
accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding twelve (12) months,
over which Regular Earnings is determined (determination
period) beginning in such calendar year. If a
determination period consists of fewer than twelve (12)
months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the
denominator of which is twelve (12).
For Plan Years beginning on or after January 1,
1994, any reference in this Plan to the limitation under
section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
<PAGE> -5-
If Regular Earnings for any prior determination
period is taken into account in determining an Employee's
contributions in the current Plan Year, the Regular
Earnings for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for
determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is $150,000.
Furthermore, for Plan Years beginning prior to
January 1, 1997, in determining Regular Earnings, the rules
of section 414(q)(6) of the Code shall apply, except that
in applying such rules, the term "family" shall include
only the spouse of the Employee and any lineal descendants
of the Employee who have not attained age 19 before the
close of the calendar year.
W. "Rollover Contributions" means the cash
rollover contributions made by a Member in respect of
distributions from other employee plans pursuant to section
402(c) of the Code.
X. "Temporary Employee" means any Employee whose
employment at time of hire is limited in time to a period
of less than six (6) months.
Y. "Trustee" means the Trustee hereinafter
provided for in Section XIII. hereof.
Z. "Value Determination Date" means the last
Business Day in each calendar month, or more frequently
as the Committee may so determine, as of which the Committee
shall determine the value of each Fund established pursuant
to Section VII. hereof.
AA. "Vested" means to have acquired, in
accordance with the express provisions of the Plan, a
nonforfeitable interest in all or part of an Employer's
contributions hereunder, which becomes payable as provided
in the Plan.
BB. Wherever used in this Plan, the masculine or
neuter pronoun shall include the feminine pronoun, and the
singular includes the plural.
<PAGE> -6-
III. EFFECTIVE DATE
Subject to the provisions of Section XX. hereof, the
effective date of the Plan is April 1, 1993. The Plan as
in effect prior to the effective date of any amendment will
continue to apply to those who terminated employment prior
to such date except as otherwise provided by the Plan or
under applicable law.
IV. ELIGIBILITY
Effective June 7, 1999, all Employees are eligible to
become Members of this Plan from and after the date of their
commencing employment with an Employer referred to in
Schedule A (a "Schedule A Employer"). Notwithstanding the
foregoing, a Temporary Employee who begins employment with
a Schedule A Employer on or after June 7, 1999, shall
not become eligible to become a Member until the first day
of the payroll period following his completion of 1,000
Hours of Service. No Leased Employee will be eligible to
be a Member.
V. PARTICIPATION
Participation in the Plan shall be entirely
voluntary. An Employee who is eligible to become a Member
may become a Member on the first day of any payroll
<PAGE> -7-
period following or coincident with the date on which he
becomes eligible in accordance with Section IV. hereof, by
authorizing and directing his Employer in accordance with
rules and procedures approved by the Committee to (i) make
payroll deductions and (ii) to invest such payroll
deductions as hereinafter provided, or with the approval of
the Company, as a result of a plan-to-plan transfer to the
Plan for the account of said Employee in accordance with
Section VI.C. hereof. Such authorizations and directions
shall continue in effect unless or until the Member
suspends, withdraws, or modifies them, as hereinafter
provided, or until termination of employment or of the
Plan.
VI. CONTRIBUTIONS
A. Member Contributions
A Member may elect in accordance with rules
and procedures approved by the Committee, to contribute in
each pay period, by payroll deduction, an amount equal to
from 2% to 15%, inclusive, in whole percents of his after-tax
Regular Earnings for said period, or a lesser amount in
accordance with rules and procedures approved by the
Committee (which rules and procedures may be applied
uniformly, or solely to any Member who is a "highly
compensated employee," as defined below) hereinafter
referred to as "After-Tax Contributions." A Member may
elect under section 401(k) of the Code and the applicable
Treasury Regulations thereunder, in accordance with rules
and procedures approved by the Committee, to defer receipt
of from 2% to 15%, inclusive, in whole percents of his
Regular Earnings, or a lesser amount in accordance with
rules and procedures established by the Committee (which
rules and procedures may be applied uniformly, or solely to
any Member who is a "highly compensated employee," as
defined below) and to have such deferred earnings,
hereinafter referred to as "Qualified Deferred Earnings
Contributions," contributed to the Plan by his Employer on
his behalf. The total contribution under this Section VI.
shall in no event exceed 15% of the Member's Regular
Earnings.
Notwithstanding the foregoing, under no
circumstances shall an election by a Member be given effect
(a) to the extent that the Member's Qualified Deferred
Earnings Contributions exceed $7,000 (or such greater
amount as may from time to time be approved for purposes of
section 402(g)(1) of the Code) for a Plan Year, or (b) to
the extent that an election by a Member who is a "highly
compensated employee," as hereinafter defined, might cause
the Plan to fail to meet the discrimination standards set
forth in section 401(k)(3) of the Code. In this regard,
the actual deferral percentage of the Qualified Deferred
Earnings Contributions on behalf
<PAGE> -8-
of Members who are highly compensated employees for any
Plan Year must either be (a) not more than such percentage
for all other Members for such Plan Year multiplied by
1.25, or (b) not more than two (2) percentage points
greater than such percentage for all other Members for such
Plan Year and not more than such percentage for all other
Members for such Plan Year multiplied by two (2).
An Employee shall be considered to be a
highly compensated employee if he performs service for an
Employer during the determination year and if during the
look-back year he: (i) received compensation from an
Employer in excess of $75,000 (as adjusted pursuant to
section 415(d) of the Code); (ii) received compensation
from an Employer in excess of $50,000 (as adjusted pursuant
to section 415(d) of the Code) and was a member of the top-paid
group for such year; or (iii) was an officer of an
Employer and received compensation during such year that is
greater than 50% of the dollar limitation in effect under
section 415(b)(1)(A) of the Code for such year. The term
"highly compensated employee" also includes: (I) Employees
who are both described in the preceding sentence if the
term "determination year" is substituted for the term
"look-back year" and the Employee is one of the one hundred
(100) Employees who received the most compensation from an
Employer during the determination year, and (ii) Employees
who are a 5-percent owner (as defined in section 416(i)(1)
of the Code) of an Employer at any time during the look-back
year or determination year. If no officer has
satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a
highly compensated employee. Notwithstanding the
foregoing, for each Plan Year the Company may elect to
determine the status of highly compensated employees under
the simplified snapshot method described in Internal
Revenue Service Revenue Procedure 93-42 or, to the extent
permitted by Treasury Regulations, on a calendar year
basis.
For purposes of this Section VI.A., the
"determination year" means the Plan Year and the "look-back
year" means the twelve (12) month period immediately
preceding the determination year. A former Employee shall
be treated as a "highly compensated employee" if such
Employee separated from service (or was deemed to have
separated) prior to the determination year, performs no
service for an Employer during the determination year, and
was a highly compensated employee for either the separation
year or any determination year ending on or after the
Employee's fifty-fifth (55th) birthday.
If, for Plan Years beginning prior to January
1, 1997, an Employee is, during a determination year or a
look-back year, a family member of either a 5-
<PAGE> -9-
percent owner who is an active or former Employee or a
highly compensated employee who is one of the ten (10) most
highly compensated Employees ranked on the basis of
compensation paid by an Employer during such year, then the
family member and the 5-percent owner or the top ten highly
compensated employee shall be aggregated. In such case,
the family member and 5-percent owner or top ten highly
compensated employee shall be treated as a single Employee
receiving compensation and Plan contributions or benefits
equal to the sum of such compensation and contributions or
benefits of the family member and 5-percent owner or top
ten highly compensated employee. For purposes of this
Section VI.A., family member includes the spouse, lineal
ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a highly
compensated employee, including the determination of the
number and identity of Employees in the top-paid group, the
top one hundred (100) Employees, the number of Employees
treated as officers and the compensation that is
considered, shall be made in accordance with section 414(q)
of the Code and the regulations thereunder.
Election of the amount of After-Tax
Contributions and Qualified Deferred Earnings Contributions
by a Member shall be made upon enrollment in the Plan in
the manner hereinbefore provided, and a Member may change
his election at any time in accordance with rules and
procedures approved by the Committee, such election to be
effective upon the first day of the next succeeding payroll
period. A Member who is a "highly compensated employee"
shall be required to revise his election either to defer an
amount of his Regular Earnings and/or to contribute a
portion of his Regular Earnings, in conformity with rules
and procedures approved by the Committee, to enable the
Plan to meet the non-discrimination tests set forth in the
Code and the applicable Treasury Regulations thereunder.
In the event that the limits described in
section 401(k) of the Code and the applicable Treasury
Regulations thereunder are inadvertently exceeded, the
following provisions shall apply:
(a) The amount of Qualified Deferred Earnings
Contributions which may be made on behalf
of some or all "highly compensated
employees" shall be reduced by reducing
to the extent necessary the highest
percentage rates elected by the "highly
compensated employees."
(b) Qualified Deferred Earnings Contributions
subject to reduction under this paragraph
("excess contributions"), together with
income, and excluding any losses,
attributable to the excess contributions,
determined in accordance with paragraph
(c),shall be returned to the applicable
Employers and paid by such Employers to
the affected Members before the close of
the Plan Year following the Plan Year in
which the excess contributions were made,
and to the extent practicable within 2
1/2 months of the close of the Plan Year
in which the excess contributions were
made. The Account of any affected Member
shall be adjusted accordingly, and the
Committee shall take, and instruct the
appropriate Employers to take, such other
action as shall be necessary or appropriate
to effectuate such distribution. If the
Committee adopts appropriate rules in
accordance with regulations issued by the
Secretary of the Treasury, the Member may
elect, in lieu of a return of the excess
contributions, to contribute the excess
contributions to the Plan as After-Tax
Contributions for the Plan Year in which
the excess contributions were made, subject
to the limitations of Section VI.E. hereof.
The Member's election shall be made within
2 1/2 months of the close of the Plan Year
in which the excess contributions were made,
or within such shorter period as the
Committee may prescribe. In the absence of
a timely election by the Member, the
Committee shall return his excess
contributions as provided in this paragraph
(b).
(c) The amount of income attributable to the
excess contributions shall be determined
by multiplying the total income on the
Member's Qualified Deferred Earnings
Contributions for the Plan Year in which
the excess contributions were made by a
fraction, the numerator of which is the
amount of excess contributions for that
Plan Year and the denominator of which is
the total value of the Member's Qualified
Deferred Earnings Contributions as of the
first Business Day of the Plan Year plus the
Member's Qualified Deferred Earnings
Contributions for the Plan Year. Income for
the period between the end of the applicable
Plan Year and the date of the corrective
distribution shall be disregarded.
<PAGE> -11-
Member Contributions shall be remitted to the
Trustee within thirty (30) days after the end of the
calendar month in which the contributions are deducted, and
shall be made in cash; provided, however, that all or any
portion of any such contribution to Fund V, as defined in
Section VII.A. hereof, in the discretion of the Committee,
may be retained and added to the Company's capital funds,
and there may be delivered to the Trustee treasury stock or
authorized but previously unissued stock of the Company, of
a value equal to the amount so retained. Notwithstanding
the foregoing, Member Contributions shall be remitted to
the Trustee in accordance with the requirements of
Department of Labor Regulations section 2510.3-102. The
value of any such stock shall be the closing price of the
stock on the New York Stock Exchange on the applicable
Value Determination Date. After-Tax Contributions and
Qualified Deferred Earnings Contributions and the earnings
thereon shall be nonforfeitable.
B. Employer Matching Contributions
1. Each Employer shall contribute on a
bi-weekly basis and allocate to the Account of each of its
employees who are Members an amount equal to the percent
indicated below of the contributions made by each such
Member as After-Tax Contributions, or contributed to the
Plan by the Employer on behalf of each such Member as
Qualified Deferred Earnings Contributions up to 6% of such
Member's Regular Earnings, determined before any reduction
for Qualified Deferred Earnings Contributions, hereinafter
referred to as "Employer Matching Contributions":
Contributions by or on Employer Matching
Behalf of a Member Contributions
---------------------- -----------------
First 2% 100%
Next 4% 50%
Employer Matching Contributions shall be remitted to the
Trustee within thirty (30) days after the end of each
calendar month, and shall be made in cash; provided,
however, that all or any portion of any such contribution
to the Company Common Stock Fund (Fund M), as defined in
Section VII.B. hereof, may be retained and added to the
Company's capital funds, and there may be delivered to the
Trustee treasury stock or authorized but previously
unissued stock of the Company, of a value equal to the
amount so retained. The value of any such stock
contributed by an Employer shall be the closing price of
the stock on the New York Stock Exchange on the applicable
Value Determination Date. Employer Matching Contributions
and the earnings thereon shall be nonforfeitable.
<PAGE> -12-
2. At the discretion of the Company, Employer
Matching Contributions in any Plan Year may be increased to
an amount not to exceed 100% in the aggregate of Member
Contributions or contributions made on behalf of Members as
Qualified Deferred Earnings Contributions. The additional
Employer Matching Contributions, if any, provided for in
this Section VI.B.2. shall be allocated to the Account of
each Member in the same manner as provided in Section
VI.B.1. hereof.
3. Notwithstanding anything hereinabove to the
contrary, in the case of all Employer Matching
Contributions hereunder, the amount of contributions in a
Plan Year shall in no event exceed the amount allowable
under the Code and applicable Treasury Regulations
thereunder to the Employer making the contributions as a
deduction for contributions paid to this Plan.
Notwithstanding any provisions to the contrary, any
contribution by the Company is conditioned upon the
deductibility of the contribution by the Company under the
Code and, to the extent any such deduction is disallowed,
the Company shall, within one (1) year following the
disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Company, but
any losses attributable thereto must reduce the amount so
returned.
C. Plan-to-Plan Transfers
Assets transferred to the Plan from (i) a
pension or profit sharing plan maintained by an Employer as
a result of an amendment, termination, merger, or
consolidation of said plan or (ii) the Pfizer 401(k) Plan
shall constitute a plan-to-plan transfer. For the purpose
of this Plan, amounts attributable to a plan-to-plan
transfer shall be treated as employee contributions or as
employer contributions for all purposes of the Plan,
including Sections VI.A. and XXVI. hereof, in accordance
with the treatment afforded such assets in the transferor
plan, except that such assets may be invested, at the
election of the affected Employee in the Funds described in
Section VII.A. hereof in accordance with the provisions of
Section VII.A. hereof, notwithstanding the fact that they
represented employer contributions in the prior plan. An
Employee shall be vested in assets in his Account hereunder
as a result of a plan-to-plan transfer to at least the same
extent as the Employee was vested in such monies under the
terms of the transferee plan. Employees affected by this
Section VI.C. shall be deemed to be Members of the Plan
with respect to such Accounts whether or not they are
otherwise eligible to be Members of the Plan pursuant to
the other provisions of the Plan.
<PAGE> -13-
D. Rollover Contributions
Commencing April 1, 1997, the Committee in
its sole discretion, exercised in a uniform and
nondiscriminatory manner, may permit an Employee who has
satisfied the requirements of Section V. hereof to make a
Rollover Contribution to the Plan by delivering, or causing
to be delivered, the cash which constitutes such Rollover
Contribution to the Trustee in accordance with rules and
procedures approved by the Committee. The Employee shall
allocate the investment of his Rollover Contribution among
the Funds described in Section VII.A. hereof in accordance
with rules and procedures approved by the Committee.
Notwithstanding any provision to the contrary, under no
circumstances shall any funds attributable to any
Employee's Rollover Contribution be used in any way as the
basis for the allocation of any Employer Matching
Contributions pursuant to Section VI.B. hereof or
forfeitures pursuant to Section VI.E. hereof.
E. Maximum Additions
Notwithstanding anything contained herein to
the contrary, the total annual additions, as hereinafter
defined, made to the Account of a Member shall not exceed
the lesser of: $30,000 (or, if greater, 25% of the defined
benefit dollar limitation in effect under section
415(b)(1)(A) of the Code), or 25% of compensation (as
defined in section 415(c)(3) of the Code), subject to the
following:
(1) If such annual additions exceed the
foregoing limitation, any contributions made by the
Member, which cause the excess, shall be returned to
the Member. If, after returning such contributions to
the Member, an excess still exists, such excess shall
be reallocated to eligible Members as a forfeiture and
credited to the Accounts of such Members on the basis
of their respective Account balances. If, after
reallocating such excess as forfeitures among all
eligible Members, the annual addition still exceeds
the applicable limitation for each and every Member,
such excess as still remains shall be held unallocated
in a suspense account for the limitation year and
allocated and reallocated in the next limitation year
before any employer or employee contributions which
would constitute annual additions under section 415 of
the Code and the Treasury Regulations thereunder may
be made to the Plan for that limitation year.
<PAGE> -14-
(2) Notwithstanding the foregoing, in the case
of an Employee who participates in this Plan and in
the Company's Retirement Annuity Plan or any other
defined benefit plan or defined contribution plan
maintained by an Employer, the sum of the defined
contribution plan fraction and the defined benefit
plan fraction for any year shall not exceed one (1).
In the event the sum of such fractions exceeds one
(1), the Committee responsible for the administration
of the defined benefit plan shall reduce the pension
provided under the defined benefit plan in order that
none of the plans shall be disqualified under the
Code. For purposes of applying the limitations of
this Section VI.E., the following rules shall apply:
(a) The term "defined contribution plan fraction"
shall mean the actual aggregate annual
additions, as hereinafter defined, to this
Plan determined as of the close of the year,
over the aggregate of the maximum annual
additions which could have been made for each
year of the Member's service had such annual
additions been limited each such year in
accordance with the restrictions imposed by
section 415 of the Code (or such greater
amount prescribed under regulations issued by
the Secretary of the Treasury pursuant to the
provisions of section 415(d) of the Code to
take into account increases in the cost of
living).
(b) The term "defined benefit plan fraction" shall
mean the projected annual pension payable
under the defined benefit plan, over the
maximum projected annual pension payable under
such plan increased pursuant to section
415(e)(2)(B) of the Code.
(c) The term "limitation year" shall mean the
calendar year.
(3) The term "annual addition" shall mean the sum
of Employer Matching Contributions, After-Tax
Contributions, Qualified Deferred Earnings
Contributions and forfeitures. The term "annual
addition" shall not include plan-to-plan transfers
or, effective April 1, 1997, Rollover Contributions.
(4) The limitations of this Section VI.E.
with respect to any Member who at any time has
participated in any other defined contribution plan,
or in more than one (1) defined benefit plan,
maintained by a corporation which is a member of the
controlled group of corporations (within the meaning
<PAGE> -15-
of section 1563(a), determined without regard to
section 1563(a)(4) and (e)(3)(C), and section 415(h)
of the Code) of which his Employer is a member, shall
apply as if the total benefits payable under all
defined benefit plans in which the Member has been a
participant were payable from one (1) plan, and as if
the total annual additions, made to all defined
contribution plans in which the member has been a
participant, were made to one (1) plan.
F. Limitations on After-Tax Contributions
and Employer Matching Contributions
Notwithstanding the foregoing, the following rules
and limitations shall apply to After-Tax Contributions and
Employer Matching Contributions:
With respect to each Plan Year, the spread between
the "contribution percentage" (within the meaning of
section 401(m)(3) of the Code and the Treasury Regulations
thereunder) for highly compensated employees (as defined in
Section VI.A. hereof) shall not exceed the "contribution
percentage" of the remaining Employees required to be
considered under section 401(m)(2) of the Code and the
Treasury Regulations thereunder, by an amount that would
cause the Plan to fail to meet the anti-discrimination
requirements set forth in section 401(m) of the Code.
If after the close of any Plan Year, the Committee
shall determine that the spread between the "contribution
percentage" for (A) "highly compensated employees," and (B)
the remaining Employees required to be considered under
section 401(m)(2) of the Code and the Treasury Regulations
thereunder, for the Plan Year then ended is such that the
Plan would fail to meet the anti-discrimination
requirements set forth in section 401(m) of the Code, the
following provisions shall apply:
(1) The amount of After-Tax Contributions and
Employer Matching Contributions which may be made on
behalf of some or all highly compensated employees in
the Plan Year shall be reduced by reducing to the extent
necessary the highest percentage rates elected by the
highly compensated employees.
(2) Any After-Tax Contributions and Employer Matching
Contributions subject to reduction under this paragraph
("excess aggregate contributions"), together with income
attributable to the excess aggregate contributions,
determined in accordance with paragraph (4), shall be
reduced in the following order of priority:
<PAGE> -16-
(A) After-Tax Contributions, to the extent of
the excess aggregate contributions, together with
the income, and excluding any losses, attributable
to those contributions, shall be returned to the
Member's Employer and paid by such Employer to the
affected Members, and then, if necessary,
(B) Employer Matching Contributions, together
with the income attributable to those contributions,
shall be forfeited and applied to reduce subsequent
Employer Matching Contributions.
(3) Any repayment or forfeiture of excess aggregate
contributions shall be made before the close of the Plan
Year following the Plan Year for which those
contributions were made, and to the extent practicable
within 2 1/2 months of the close of the Plan Year in
which the contributions were made. The After-Tax
Contributions and Employer Matching Contributions of
any affected Member shall be adjusted accordingly, and
the Committee shall take, and instruct the Employer to
take, such other action as shall be necessary or
appropriate to effectuate such distribution or
forfeiture.
(4) The amount of income attributable to the excess
aggregate contributions shall be determined by
multiplying the total income on the Member's Account
attributable to After-Tax Contributions and Employer
Matching Contributions for the Plan Year in which the
excess aggregate contributions were made by a fraction,
the numerator of which is the amount of excess aggregate
contributions for that Plan Year and the denominator of
which is, the total value of the Member's Account
attributable to After-Tax Contributions and Employer
Matching Contributions as of the first Business Day of
that Plan Year plus the Member's After-Tax Contributions
and Employer Matching Contributions for the Plan Year.
Income for the period between the end of the applicable
Plan Year and the date of the corrective distribution
shall be disregarded.
If any highly compensated employee is a member of
another qualified plan of an Employer under which deferred
cash contributions or matching contributions are made on
behalf of the highly compensated employee or under which
the highly compensated employee makes after-tax
contributions, the Committee shall implement rules, which
shall be uniformly applicable to all employees similarly
<PAGE> -17-
situated, to take into account all such contributions under
all such plans in applying the limitations of this Section
VI.F.
VII. INVESTMENT OF FUNDS
A. Member Contributions
Each Member may elect upon enrollment, and
thereafter at intervals of at least three (3) months'
duration and, commencing May 12, 1997, at any time, by
direction in accordance with rules and procedures approved
by the Committee, that his future After-Tax Contributions
and Qualified Deferred Earnings Contributions shall be
invested in one (1) or more of the following Funds:
Fund I - FIXED INCOME FUND - A fund, valued at
book, invested and re-invested directly or through one
(1) or more collective investment vehicles primarily in
obligations of a short term nature, including but not
limited to savings accounts, savings and loan accounts,
time deposits, certificates of deposit, savings
certificates, short term securities issued or guaranteed
by the United States of America or any agency or
instrumentality thereof, and corporate obligations or
participations therein (but excluding specifically any
separately managed account obligations of the Company or
an Associate Company), although the same may not be
legal investments for trustees under the laws applicable
thereto, to be selected and held by the Trustee in its
sole discretion; or invested and re-invested in whole or
in part in one (1) or more investment contracts with one
(1) or more insurance companies or other financial
institutions as directed from time to time by the
Committee, or in a collective investment vehicle
investing in such contracts selected by the Committee.
Fund II - BALANCED FUND - A balanced fund
invested and re-invested in, at the discretion of the
Trustee, common stocks and bonds, the stock component of
which invests in the Trustee's Flagship Fund which is
comprised of five hundred (500) common stocks and
closely tracks the S&P 500 Index and the bond component
of which invests in the Trustee's Bond Market Fund which
consists primarily of a portfolio of U.S. Treasury,
Agency, and investment grade corporate and mortgage-
backed securities representative of the broad bond
market and uses the Lehman Brothers Aggregate Bond Index
as a benchmark, although the same may not be legal
<PAGE> -18-
investments for trustees under the laws applicable
thereto. The Trustee will maintain the Fund in a static
mix of approximately 60% in common stocks and 40% in
fixed income instruments, rebalanced monthly with cash
flows. Effective May 1, 1997, the Balanced Fund shall
be replaced by the Life Solutions Balanced Growth Fund,
such fund to be known as the BALANCED GROWTH FUND. The
net value of all assets in the Balanced Fund as of the
close of business on April 30, 1997 shall be transferred
to the Balanced Growth Fund on May 1, 1997. The
Balanced Growth Fund is a balanced fund invested and
re-invested by the fund's investment manager in
commingled U.S. and international stock funds and in
commingled bond funds. The fund's investment manager
actively manages the Balanced Growth Fund and employs
a systematic evaluation process to determine asset
allocations. Under normal market conditions the
Balanced Growth Fund average asset mix would be
approximately 50% in U.S. equity funds, 10% in
international equity funds and 40% in U.S. bond funds.
The investment manager may adjust the total allocation
to stock or bond funds by plus/minus 20% based on
economic or market conditions and liquidity needs.
Fund III - S&P 500 INDEX FUND - A fund invested and
re-invested in corporate common stocks either in
separate accounts (excluding specifically common stocks
of the Company or an Associate Company) or in commingled
equity funds, such as a stock index fund, which may
include a proportionate share of common stocks of the
Company or an Associate Company, although the same may
not be legal investments for trustees under the laws
applicable thereto, to be selected by the Trustee or an
investment manager, in its sole discretion, or, in the
case of the commingled equity fund, selected by the
Committee, in its sole discretion, and held by the
Trustee and managed by the Trustee or an investment
manager.
Fund IV - GENERAL EQUITY FUND - A fund invested and
re-invested by the Trustee or an investment manager
directly or through one or more collective investment
vehicles in selected common stocks identified based on
fundamental valuation measures and anticipated changes
in earnings estimates, although the same may not be
legal investments for trustees under the laws applicable
thereto. The Trustee shall use selected criteria to
construct portfolios that have strong value and growth
biases. A typical portfolio will consist of
approximately one hundred (100) securities.
<PAGE> -19-
Fund V - COMPANY STOCK FUND - A fund invested and
re-invested in Minerals Technologies Inc. common stock,
although such may not be a legal investment for trustees
under the laws applicable thereto. The Trustee shall
make purchases of such stock in the open market or from
the Company if treasury stock or authorized but unissued
stock is made available by the Company for such
purchase. If such stock is purchased from the Company,
its price shall be the closing price of the stock on the
New York Stock Exchange on the day of purchase. The
Trustee may also purchase such stock from private
sources at a cost not in excess of that at which such
stock is available on the market.
Fund VI - INTERNATIONAL FUND (Effective May 12,
1997) - A fund invested and re-invested by the
investment manager in non-U.S. equity investments. The
fund is actively managed by use of a systematic approach
to analyze the suitability of investments in individual
countries, stocks and markets and the degree of currency
exposure with respect to investments in the portfolio.
The active management of the International Fund includes
both the management of the equity investments in the
fund and the management of the risk associated with
possible fluctuations in the value of currencies.
A Member shall also have the right, at intervals
of at least three (3) months' duration and, commencing May
12, 1997, at any time, as the Committee may by uniform
rules permit, to direct that any portion of his Account
invested in any of the foregoing Funds be transferred to
any other of the above Funds. Such direction to transfer
shall be effective as of the first Value Determination Date
following receipt of the Member's direction by the
Committee's appointed agent.
Commencing May 12, 1997, a Member shall also have
the right, at any time, as the Committee may by uniform
rules permit, to direct that a portion of his Account
invested in any of the foregoing Funds be transferred to
the following Fund VII:
Fund VII - MUTUAL FUND WINDOW (Effective May 12,
1997) - A fund administered by the Trustee and its
agents employed as securities brokers in which a Member
can invest in certain self-managed investments. The
investments expected to be available under the Mutual
Fund Window are certain mutual funds as specified by the
Committee. The Account of each Member who invests in the
Mutual Fund Window shall be reduced by any brokerage
fees and commissions payable on their individual
transactions in the
<PAGE> -20-
Mutual Fund Window and by any monthly access fee.
The Committee and the Trustee are authorized to sell
assets held in the Member's Account for the purpose
of paying the commissions and fees described herein.
Notwithstanding the foregoing, (i) a Member's
investment in Fund VII will be limited to 50% of the
difference between the Member's total Account value and the
value of such Member's Account attributable to Employer
Matching Contributions and earnings thereon, (ii) the
minimum amount that may be transferred into Fund VII at any
time is $1,000 and (iii) no amounts invested in Fund I may
be directly transferred to Fund VII and no amounts invested
in Fund I may be indirectly transferred to Fund VII by
first transferring the amounts in Fund I to some other Fund
(or Funds) unless such amounts remain invested in the
intervening Fund (or Funds) for at least three (3) months.
Amounts transferred between Fund VII and Funds II
through VI and the Pfizer Common Stock Fund, as defined in
Section VII.E. hereof, or amounts transferred between the
mutual funds within Fund VII may not be transferred
directly; the Member must first instruct the Committee or
its agent, in accordance with rules and procedures approved
by the Committee, to sell his interest in the funds which
he wishes to transfer. If such an instruction to sell is
properly made on or prior to 4:00 p.m. Eastern Standard
Time, the sale will be completed at the end of the next
Business Day; if such an instruction is made after 4:00
p.m. Eastern Standard Time, the sale will be completed at
the end of the second Business Day following the date of
the instruction. The Trustee will place the proceeds of
such sale in a short-term investment fund, designed to
produce a money market rate of return, within Fund VII.
Such proceeds will remain in such fund until the Member
further instructs the Committee or its agent to transfer
all or a portion of such proceeds into one or more of the
other funds. For purposes of transferring such amounts
between Fund VII and Funds II through VI and the Pfizer
Common Stock Fund, or between the mutual funds in Fund VII,
the Member may not transfer amounts attributable to the
sale of his interest in a fund until the settlement date of
such sale, which is normally three (3) Business Days
following the sale of an interest in Fund VII, and one (1)
Business Day following the sale of an interest in Funds II
through VI and the Pfizer Common Stock Fund. The crediting
of earnings within the short-term investment fund will not
begin until after such settlement date.
A charge in an amount to be established by the
Committee, but not to exceed 1% of the value of the amount
being transferred, to cover all or part of the
administrative cost thereof, may be deducted for such
transfers.
<PAGE> -21-
B. Employer Matching Contributions
Employer Matching Contributions shall be invested
in a separate unsegregated fund consisting solely, except
as provided in Section VII.D. hereof, of Minerals
Technologies Inc. common stock (hereinafter known as the
Company Common Stock Fund (Fund M)). When such
contributions are in cash, the Trustee shall make purchases
of such stock in the open market or from the Company if
treasury stock or authorized but unissued stock is made
available by the Company for such purchases. If such stock
is purchased from the Company, its price shall be the
average of the highest and lowest prices at which the stock
was traded on the New York Stock Exchange on the day of
purchase or, if not so traded, the average of the closing bid
and asked price thereof on such Exchange on the day of
purchase.
The Trustee may also purchase such stock from private sources
at a cost not in excess of that at which such stock could be
purchased from the Company as provided herein.
C. Investment of Income Received
Subject to Section VII.D. hereof, interest, cash
dividends, stock dividends and capital gains shall be held
or invested and re-invested by the Trustee in the same Fund
from which they were derived.
D. Cash Balances
Nothing provided herein shall prevent the Trustee
or an investment manager appointed by the Committee from
maintaining any portion of the above Funds of the Trust
Fund in cash or in short-term obligations of the United
States Government or agencies thereof or in other types of
short-term investments, including commercial paper (other
than obligations of the Company or its affiliates), as it
may from time to time deem to be in the best interests of
the Plan or Trust Fund; provided, however, that cash
balances (including any interim investment thereof) shall
not be maintained in Fund V or the Pfizer Common Stock Fund
except to the extent that such balances are in anticipation
of cash distributions from such Funds or are maintained,
with respect to Fund V, not to disrupt the non-discretionary
purchasing program of the Trustee required by
the Plan.
E. Pfizer Common Stock Fund
Amounts transferred to the Plan from Fund P of
the Pfizer 401(k) Plan shall be invested in the Pfizer
Common Stock Fund and shall remain in such Fund until such
time as they are transferred to one or more of the Funds
described in
<PAGE> -22-
Section VII.A. hereof pursuant to a Member's election in
accordance with rules and procedures approved by the
Committee or distributed pursuant to Section X., Section
XI. or Section XXVI. hereof. The Pfizer Common Stock Fund
is an unsegregated fund invested and re-invested solely,
except as provided in Section VII.D. hereof, in Pfizer
Inc. common stock, although such may not be a legal
investment for trustees under the laws applicable thereto.
No amounts contributed under the Plan may be invested in,
or transferred from another Fund into, the Pfizer Common
Stock Fund.
VIII. CREDITS TO MEMBERS' ACCOUNTS
The Committee shall maintain in an equitable manner,
a separate Account for each Member, in which it shall keep
a separate record of such Member's balance in each Fund
attributable to all contributions made by or for the
Member. Each Member shall receive periodically, but at
least once each year, a statement setting forth the status
of his Account.
IX. SUSPENSION OF CONTRIBUTIONS
A Member may suspend his Member Contributions at any
time by direction to his Employer in accordance with rules
and procedures approved by the Committee, to be effective
as of the next succeeding payroll period. During such
suspension, no contributions will be made by his Employer
on behalf of such Member. Such Member shall also be ineligible
to recommence contributions until the first day of the calendar
month following six (6) months of additional service as an
Employee from the date upon which his contributions were first
suspended. A Member who is on military leave of absence may
elect to continue his contributions under this Plan. A Member
who has been laid off for lack of work or who is on other
leave of absence will be deemed to have suspended his
contributions until such time as he is restored to the regular
service of his Employer, at which time he may immediately
recommence contributions under the Plan.
X. WITHDRAWALS
Subject to the limitations imposed under Sections
VI.C. and X.B. hereof restricting assets transferred to the
Plan and the withdrawal of Qualified Deferred Earnings
Contributions until the earliest of the Member's
retirement, death, disability, separation from service,
hardship or attainment of age 59 1/2, respectively, a
<PAGE> -23-
Member may, in accordance with rules and procedures
approved by the Committee, request a withdrawal of all or
any part of the value of his Account, as of the Value
Determination Date coincident with or next following the
date such withdrawal is requested in accordance with rules
and procedures approved by the Committee, upon the
following conditions, provided that, a Member who has
attained age 59 1/2 who withdraws the full value of his
Account may, in accordance with rules and procedures
approved by the Committee, elect to receive a lump sum
distribution (i) in Minerals Technologies Inc. common stock
equal in value to all or any part of his share in Fund V
and his share, if any, in the Company Common Stock Fund
(Fund M), (ii) in Pfizer Inc. common stock equal in value
to all or any part of his share in the Pfizer Common Stock
Fund, and (iii) in cash equal in amount to his share in
Funds I, II, III, IV, VI and VII, as applicable, and his
remaining share in Fund V, the Pfizer Common Stock Fund
and/or the Company Common Stock Fund (Fund M).
Notwithstanding anything in this Section X. to the
contrary, effective January 1, 1997, a Member subject to
Section 16 of the Securities Exchange Act of 1934, as
amended (an "Insider"), may not elect to make a withdrawal
from his Account (other than a withdrawal in connection
with his termination of service) within six (6) months of
the date of an election to increase his interest in (I)
Fund V (whether by direction of future After-Tax
Contributions or Qualified Deferred Earnings Contributions
or by transfer of amounts into Fund V from other Funds
pursuant to Section VII.A.) or (II) an investment in
Minerals Technologies Inc. common stock under another plan
of the Company, to the extent such a withdrawal results in
a withdrawal of amounts invested by the Insider in Fund V.
A. Withdrawal - Other Than of Qualified Deferred
Earnings Contributions
Except as stated above, a Member shall be entitled
to withdraw in cash at any time up to the full value of his
Account not attributable to Qualified Deferred Earnings
Contributions, plus the cash value, if any, of the balance
of his Account invested in the Company Common Stock Fund
(Fund M); provided, however, that an Employee shall be
entitled to withdraw in cash at any time an amount equal to
all or any part of his Account attributable to Employer
Matching Contributions only if (i) such contributions have
been held under the Plan for at least two (2) years from
the date of contribution, or (ii) if the Employee would be
entitled to make a hardship withdrawal of such Employer
Matching Contributions under the hardship withdrawal
standards of Section X.B. hereof, or (iii) at least five
(5) years have elapsed since the Employee enrolled in the
Plan or the Pfizer 401(k) Plan.
<PAGE> -24-
B. Withdrawal - Qualified Deferred Earnings
Contributions
Except as stated in the second paragraph of this
Section X., a Member shall be entitled to make a hardship
withdrawal of his Qualified Deferred Earnings Contributions
and the amount, if any, in the Pfizer Common Stock Fund
attributable to his elective deferrals under section 402(g)
of the Code and of the appreciation thereon earned prior to
January 1, 1989, up to the amount needed to satisfy the
hardship, provided the Member first makes a full withdrawal
under Section X.A. hereof and satisfies the Committee as to
the existence of such hardship pursuant to the requirements
set forth in Section X.B. hereof.
Qualified Deferred Earnings Contributions and the
appreciation, if any, thereon may not be withdrawn by or
distributed to a Member until the earliest of the Member's
retirement, death, disability, separation from service,
hardship or attainment of age 59 1/2. A withdrawal is
considered a withdrawal due to hardship (a "hardship
withdrawal") if it is on account of: (i) an immediate and
heavy financial need of the Member, and (ii) the withdrawal
is necessary to satisfy such financial need. The Committee
may determine that a withdrawal shall be considered a
hardship withdrawal if it is requested on account of:
(a) unreimbursed medical expenses described in
section 213(d) of the Code incurred by the Member, his
spouse or dependents (as defined in section 152 of the
Code) or expenses necessary for such persons to obtain
medical care described in section 213(d) of the Code,
(b) tuition and related educational fees for the
next twelve (12) months of post-secondary education for
the Member, his spouse, child or dependent,
(c) the purchase of the Member's principal
residence (excluding mortgage payments),
(d) payments to prevent eviction from, or
foreclosure on the mortgage for, the Member's
principal residence, or
(e) such other needs as shall be officially
recognized by the Internal Revenue Service as giving
rise to an immediate and heavy financial need for
purposes of section 401(k) of the Code.
<PAGE> -25-
A hardship withdrawal shall be deemed to be
necessary to satisfy an immediate and heavy financial need
for a Member if:
(i) the withdrawal does not exceed the amount of
the Member's immediate and heavy financial need,
including any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably
anticipated to result from the withdrawal,
(ii) the Member has received all distributions,
exclusive of hardship withdrawals, and all non-taxable
loans available under each qualified plan maintained by
an Employer in which the Member participates,
(iii) the Member's Qualified Deferred Earnings
Contributions under the Plan and any other
contributions thereby under any other qualified or
non-qualified plan of deferred compensation maintained
by an Employer in which the Member participates are
suspended for the twelve (12) month period commencing
on the date immediately following receipt of the
hardship withdrawal, and
(iv) the Member may not have Qualified Deferred
Earnings Contributions made on his behalf under the
Plan and any other qualified or non-qualified plan
of deferred compensation maintained by an Employer
in which the Member participates for the calendar
year immediately following the calendar year of the
hardship withdrawal in excess of the dollar limitation
on Qualified Deferred Earnings Contributions referred
to in Section VI.A. hereof for such next following
calendar year reduced by the amount of the Member's
Qualified Deferred Earnings Contributions for the
calendar year in which the hardship withdrawal was
made.
In no event may the amount of a hardship
withdrawal exceed the amount necessary to satisfy the
Member's financial need, taking into account the extent
such need may be satisfied through the use of other
resources reasonably available to the Member. To
demonstrate such necessity, the Member must certify to the
Committee that the financial need cannot be satisfied:
(1) Through reimbursement or compensation by
insurance or otherwise,
<PAGE> -26-
(2) By reasonable liquidation of the Member's
assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need,
(3) By cessation of Qualified Deferred Earnings
Contributions under the Plan, or
(4) By distributions or nontaxable (at the time
of the loan) loans from plans maintained by the Company
or any other employer, or by borrowing from commercial
sources on reasonable commercial terms.
For purposes of the above, the Member's resources shall be
deemed to include the assets of his spouse and minor
children that are reasonably available to the Member.
Except as provided in this Section X., a hardship
withdrawal to a Member shall not affect such Member's
eligibility to continue to participate in the Plan, nor
shall it affect the non-withdrawn balance of such Member's
Account or his rights and privileges with respect thereto.
XI. SETTLEMENT UPON TERMINATION OF EMPLOYMENT
Upon termination of employment, a Member, or in case
of death, his designated beneficiary, which in the case of
a married Member shall be the Member's spouse, unless, with
the consent of the spouse, another beneficiary has been
designated, or, if there is no spouse or other designated
beneficiary, the Member's legal representative, shall be
entitled to the value of his Account, commencing as soon as
practicable thereafter, but in no event later than one year
following his termination of employment or death, as
applicable, upon the following conditions:
A. Termination of Employment
1. Forms of Benefit. A Member terminating
employment, or in the case of a disabled Member terminating
employment, his legal representative if one has been
appointed, shall settle his Account by selecting, in
accordance with rules and procedures approved by the
Committee, one of the following methods:
(a) in a lump sum distribution in cash equal to
the full value of his Account invested in the Funds
described in Section VII. hereof, as applicable,
<PAGE> -27-
(b) in a lump sum distribution in (i) Minerals
Technologies Inc. common stock equal in value to all
or any part of the Member's share in Fund V and the
Company Common Stock Fund (Fund M), if any, plus (ii)
Pfizer Inc. common stock equal in value to all or any
part of the Member's share in the Pfizer Common Stock
Fund, if any, plus (iii) cash equal in amount to the
Member's share in Funds I, II, III, IV, VI and VII, as
applicable, and his remaining share in Fund V, the
Company Common Stock Fund (Fund M) and the Pfizer
Common Stock Fund, if any,
(c) with respect to that portion of the Member's
Account, if any, equal to the net value of such
Member's Account as of March 31, 1997, in distributions
in ten (10) substantially equal annual installments in
cash equal to the full value of his Account invested in
the Funds described in Section VII. hereof, as
applicable, and the remaining portion of the Member's
Account payable pursuant to paragraph (a) above, or
(d) with respect to that portion of the Member's
Account, if any, equal to the net value of such
Member's Account as of March 31, 1997, in distributions
in ten (10) substantially equal annual installments in
(i) Minerals Technologies Inc. common stock equal in
value to all or any part of the Member's share in Fund
V and the Company Common Stock Fund (Fund M), if any,
plus (ii) Pfizer Inc. common stock equal in value to
all or any part of the Member's share in the Pfizer
Common Stock Fund, if any, plus (iii) cash equal in
amount to the Member's share in Funds I, II, III, IV,
VI and VII, as applicable, and his remaining share in
Fund V, the Company Common Stock Fund (Fund M) and the
Pfizer Common Stock Fund, if any, and the remaining
portion of the Member's Account payable pursuant to
paragraph (b) above.
Notwithstanding the above, a Member who
terminates employment prior to age 65, other than by
disability, may only elect to settle his Account in
accordance with Sections XI.A.1.(a) or (b) hereof.
Regardless of the form of payment, all
distributions shall comply with section 401(a)(9) of the
Code and the Treasury Regulations thereunder, including the
minimum distribution incidental death benefit requirement
of section 401(a)(9)(G) of the Code and the Treasury
Regulations thereunder, and such provisions shall override
any Plan provisions otherwise inconsistent therewith.
<PAGE> -28-
2. Accounts Left in the Plan After
Termination. Notwithstanding the foregoing, if a Member
who has a balance of at least $3,500 in his Account
terminates employment without having made a selection of
the form of his benefit in accordance with rules and
procedures approved by the Committee, his Account will
remain in the Plan until he makes a total withdrawal of his
Account, reaches age 65, becomes disabled, or dies,
whichever first occurs, at which time settlement will be
made in a lump sum distribution in cash or, if so selected,
in cash and/or stock, in accordance with Section XI.A.1.(b)
hereof, equal to the full value of his Account, determined
as of the Value Determination Date immediately following or
coincident with the date such distribution is requested in
accordance with rules and procedures approved by the
Committee or the date of distribution, if earlier, less the
applicable withholding tax. Such Account may be totally
withdrawn or may be transferred among Funds in accordance
with the terms of the Plan, prior to such distribution.
Also, only one (1) partial withdrawal will be permitted
with respect to such an Account following termination of
employment.
3. Installment Distributions (Applicable to
the Portion of the Member's Account, if any, equal to the
March 31, 1997 Account balance). The initial installment
distribution of a Member's Account pursuant to Sections
XI.A.1.(c) and (d) hereof shall be equal to the value of
the applicable portion of such Account as of the Value
Determination Date immediately following or coincident with
the date such distribution is requested in accordance with
rules and procedures approved by the Committee, divided by
the total number of installment distributions to be made.
Subsequent installment distributions shall be equal to the
value of such Account as of the Value Determination Date on
the date of distribution, divided by the remaining number
of installment distributions. For the purpose of
determining the value of any Company or Pfizer Inc. common
stock distributed hereunder, such value shall be the
closing price of the stock on the New York Stock Exchange
on such Value Determination Date.
4. Delayed Distribution of Account.
Notwithstanding anything to the contrary in the Plan,
effective January 1, 1989, the benefit of each Member will
be distributed or commence to be distributed to him in
accordance with section 401(a)(9) of the Code, the Treasury
regulations thereunder and other official guidance issued
thereunder. In no event shall distribution commence later
than the earlier of (i) sixty (60) days following the later
of the end of the Plan Year in which the Member attains age
65 or terminates employment, or (ii) the April 1st
following the calendar year in which the Member attains age
70 1/2, whether or not he has terminated; provided,
however, that if a Member is not a 5% owner and shall have
attained age 70 1/2 before January 1, 1988, his benefit
shall be distributed or commence
<PAGE> -29-
to be distributed not later than the April 1 following the
calendar year in which he retires. A Member who attained
age 70 1/2 in 1988, who did not retire as of January 1,
1989, and who is not a 5% owner shall not be required to
commence payment until April 1, 1990. However, a
terminating Member may, subject to Section XI.C. hereof,
have payment of his benefit commence at a date which shall
be not more than thirteen (13) months following
termination, except that no such election shall be
permitted which defers commencement beyond the April 1st
following the calendar year in which the Member attains age
70 1/2. Notwithstanding Section XI.A.3. hereof, in
determining the value of the Account of a Member making
such an election, the Value Determination Date immediately
following or coincident with the date such withdrawal is
requested in accordance with rules and procedures approved
by the Committee shall be used.
B. Death
In the event of a Member's death, his designated
beneficiary, which in the case of a married Member shall be
the Member's spouse unless with the consent of the spouse
another beneficiary has been designated, or, if there is no
spouse or other designated beneficiary, his legal
representative, shall receive as soon as practicable
thereafter, but in no event later than one (1) year
following the Member's death, in cash the full value of the
Member's Account, based upon both his share in the Funds
described in Section VII. hereof, as applicable, or, in
lieu of such cash payment such beneficiary or
representative may select settlement of the Member's
Account in accordance with the alternative available under
Section XI.A.1.(b) hereof to a Member upon terminating
employment, provided that an irrevocable selection in
writing of such settlement is received by the Committee not
more than six (6) months following such death. Where
payment has commenced to a Member prior to his death,
payment to his spouse or his designated beneficiary shall
be over a period that is no longer than the period under
which the Member was receiving benefits.
Where distribution has not commenced to the
Member at the time of his death, payments to the spouse of
a Member shall commence no later than the date on which the
Member would have attained age 70 1/2, and distribution to
the designated beneficiary of a Member shall commence no
later than one (1) year following the date of the Member's
death. In no event shall payment be made over a period
extending beyond the life expectancy of the spouse or the
designated beneficiary. In all cases where distribution
has not commenced to the Member at the time of his death,
and the Member's designated beneficiary is not the Member's
spouse, the full value of the Member's Account shall be
distributed within five (5) years after the death of the
<PAGE> -30-
Member. If the spouse dies before distribution of the
benefit commences, the limitations applicable to the
distribution of any benefit remaining payable under the
Plan shall be determined hereunder as if the spouse were a
Member.
In determining the net value of a Member's
Account hereunder, the applicable Value Determination Date
shall be the date of distribution. For the purpose of
determining the value of Company or Pfizer common stock,
such value shall be the closing price of the stock on the
New York Stock Exchange on the applicable Value
Determination Date.
C. Form of Distributions
Notwithstanding anything in this Plan to the
contrary, in the event that the value of the Member's
Account is less than or equal to $3,500 at the Value
Determination Date immediately following or coincident with
termination of employment, such value shall be immediately
paid in a lump sum in accordance with Section XI.A.1.(b)
hereof. Notwithstanding the foregoing, if the value of the
Member's Account exceeds $3,500 and becomes distributable
to him on an immediate lump sum basis prior to his
attaining age 65, no such distribution shall be made to him
unless he consents to such distribution, in accordance with
rules and procedures approved by the Committee, no more
than ninety (90) days and no less than thirty (30) days
prior to the anticipated date of the Member's distribution,
as required by section 1.411(a)-11(c) of the Treasury
Regulations. If the value of the Member's Account at the
time of any distribution exceeds $3,500, the value of the
Member's Account at any subsequent time will be deemed to
exceed $3,500. If a distribution is one to which sections
401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than thirty (30) days after
the notice required under section 1.411(a)-11(c) of the
Treasury Regulations is given, provided that:
(i) the Committee clearly informs the Member that
the Member has a right to a period of at least thirty
(30) days after receiving the notice to consider the
decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(ii) the Member, after receiving the notice,
affirmatively elects a distribution.
<PAGE> -31-
D. Rollover Distributions
Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's
election under this Section XI., effective January 1, 1993,
a distributee may elect, at the time and in accordance with
rules and procedures approved by the Committee, to have any
portion of an eligible rollover distribution paid directly
to an eligible retirement plan specified by the distributee
in a direct rollover.
An eligible rollover distribution is a
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 (10) 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).
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.
A distributee is an Employee or former Employee.
In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of
the Code, are distributees with regard to the interest of
the spouse or former spouse. A direct rollover is a
payment by the Plan to the eligible retirement plan
specified by the distributee.
In the event that the provisions of this Section
XI.D. or any part thereof cease to be required by law as a
result of subsequent legislation or otherwise, this Section
XI.D. or applicable part thereof shall be ineffective
without necessity of further amendment of the Plan.
<PAGE> -32-
E. Qualified Domestic Relations Order
Notwithstanding anything in the Plan to the
contrary, the payment of any benefit to which a Member may
be entitled under this Section XI. shall be subject to a
qualified domestic relations order determined by the
Committee to be within the meaning of section 414(p) of the
Code.
F. Limitation on Distribution of Qualified Deferred
Earnings Contributions
Qualified Deferred Earnings Contributions and any
income allocable to such amounts, shall not be
distributable earlier than the Member's termination of
employment, death or hardship distribution. Such amounts
may also be distributed, pursuant to section 401(k)(10) of
the Code and solely in the form of a "lump sum
distribution," as defined in section 401(k)(10)(B)(ii) of
the Code, upon:
(a) termination of the Plan without the establish-
ment or maintenance of another defined contribution
plan (other than an "employee stock ownership plan,"
as defined in section 4975(e)(7) of the Code) by the
Company,
(b) the disposition by the Company of at least 85%
of the assets used by the Company in a trade or
business thereof, to a corporation not required after
such disposition to be aggregated with the Company
pursuant to section 414(b), (c), (m) or (o) of the
Code, where the Company continues to maintain the Plan
after such disposition, and solely with respect to
Employees who, subsequent to such disposition,
continue employment with the corporation acquiring
such assets, or
(c) the disposition by the Company of the Company's
interest in a subsidiary, to an entity not required
after such disposition to be aggregated with the
Company pursuant to section 414(b), (c), (m) or (o) of
the Code, where the Company continues to maintain the
Plan after such disposition, and solely with respect
to Employees who, subsequent to such disposition,
continue employment with such subsidiary.
<PAGE> -33-
XII. SAVINGS AND INVESTMENT PLAN COMMITTEE
A. This Plan shall be administered by a Savings and
Investment Plan Committee consisting of at least three (3)
persons, who may be Members of the Plan, appointed by the
Board of Directors of the Company. Members of the
Committee shall serve at the pleasure of the Board of
Directors of the Company, and may resign at any time upon
due notice in writing. The Committee shall act by a
majority of its members, and the Secretary thereof shall
certify its actions to the Trustee.
B. (1) The Committee shall be the Plan Administrator
and shall have fiduciary responsibility under the Employee
Retirement Income Security Act of 1974, as amended, for the
general operation of the Plan, and the exclusive authority
and responsibility (i) to appoint and remove or select
investment managers, if any, the Trustee or any successor
Trustee under the Plan and the Trust Agreement and pooled
investment vehicles and investment advisers thereof, (ii)
to direct the segregation of all or a portion of the assets
of the Plan Trust into an investment manager account or
accounts at any time and from time to time and to add or to
withdraw assets from such investment manager account or
accounts as it deems desirable or appropriate, (iii) to
direct the Trustee to enter into a group annuity contract
or contracts, in such form and on such terms as may be
approved by the Committee to provide for annuity
settlements under the Plan, and (iv) to direct the Trustee
to enter into one (1) or more investment contracts with one
or more insurance companies or financial institutions as
provided in Section VII.A. hereof and in the Trust
Agreement; provided, however, that, except as expressly set
forth above, the Committee shall have no responsibility for
or control over the investment of the Plan assets held in
the Funds established hereunder. The Committee may appoint
or employ, and compensate such persons as it deems
necessary to render advice with respect to any
responsibility of the Committee under the Plan. The
Committee may allocate to any one (1) or more of its
members any responsibility that it may have under the Plan
and may designate any other person or persons to carry out
any responsibility of the Committee under the Plan. Any
person may serve in more than one fiduciary capacity with
respect to the Plan.
(2) The Committee shall determine whether a
judgment, decree, or order, including approval of a
property settlement agreement, made pursuant to a state
domestic relations law, including a community property law,
that relates to the provision of child support, alimony
payments, or marital property rights of a spouse, former
spouse, child, or other dependent of the Member is a
qualified domestic relations order within the meaning of
section 414(p) of the Code, and shall give the
<PAGE> -34-
required notices and segregate any amounts that may be
subject to such order if it is a qualified domestic
relations order, and shall administer the distributions
required by any such qualified domestic relations order.
(3) The Committee is authorized to make such
uniform rules as may be necessary to carry out the
provisions of the Plan and shall determine, in its sole
discretion, any questions arising in the administration,
interpretation and application of the Plan, which
determination shall be conclusive and binding on all
parties. In exercising such powers and authorities, the
Committee shall at all times exercise good faith, apply
standards of uniform application, and refrain from
arbitrary action. The Committee is also authorized to
adopt such uniform rules as it may consider necessary or
desirable for the conduct of its affairs and the
transaction of its business, including, but not limited to,
the power on the part of the Committee to act without
formally convening and to provide that action of the
Committee may be expressed by written instruments signed by
a majority of its members. It shall elect a Secretary, who
need not be a member of the Committee, who shall record the
minutes of its proceedings and shall perform such other
duties as may from time to time be assigned to him. The
Committee may retain legal counsel (who may be the General
Counsel of the Company) when and if it be found necessary
or convenient to do so, and may also employ such other
assistants, clerical or otherwise, as may be needed, and
expend such monies as may be required for the proper
performance of its work. Such costs and expenses shall be
borne by the Company in accordance with the provisions of
this Section XII.
(4) To the extent permitted by law, the Committee,
the Boards of Directors of the Employers, and the Employers
and their respective officers shall not be liable for the
directions, actions or omissions of any agent, legal or
other counsel, accountant or any other expert who has
agreed to the performance of administrative duties in
connection with the Plan or Trust. The Committee, the
Boards of Directors of the Employers, and the Employers and
their respective officers shall be entitled to rely upon
all certificates, reports, data, statistics, analyses and
opinions which may be made by such experts and shall be
fully protected in respect to any action taken or suffered
by them in good faith reliance upon any such certificates,
reports, data, statistics, analyses or opinions; all
actions so taken or suffered shall be conclusive upon each
of them and upon all persons having or claiming to have any
interest in or under the Plan.
C. Each member of the Committee shall be
indemnified by the Company against all costs and expenses
(including counsel fees but excluding any
<PAGE> -35-
amount representing a settlement unless such settlement be
approved by the Company) reasonably incurred by or imposed
upon him in connection with or resulting from any action,
suit or proceeding to which he may be made a party by
reason of his being or having been a member of the
Committee (whether or not he continues to be a member of
the Committee at the time when such cost or expense is
incurred or imposed), to the full extent of the law. The
foregoing rights of indemnification shall not be exclusive
of other rights to which any member of the Committee may be
entitled as a matter of law, contract or otherwise.
XIII. TRUST AGREEMENT
The Company shall enter into a written Trust
Agreement with a trustee of its choice, to become effective
upon the date this Plan becomes effective, providing for
the administration of the Funds established hereunder. The
Trust Agreement shall provide that all of the Funds will be
held, managed, invested and re-invested and distributed
thereunder in accordance with its provisions and the
provisions of the Plan. The Trust Agreement shall provide
that it may be amended in whole or in part by the Company
at any time or from time to time and in any manner, except
that no part of the Trust Fund, either by reason of any
amendment, or otherwise, shall ever be used for or diverted
to purposes other than for the exclusive benefit of Members
and their beneficiaries and the payment of administrative
expenses. The Trust Agreement shall be deemed to form a
part of the Plan, and any and all rights or benefits which
may accrue to any person under this Plan shall be subject
to all the terms and provisions of the Trust Agreement.
XIV. ASSOCIATE COMPANIES
1. Any corporation of which the Company owns
directly or indirectly 80% of the issued and outstanding
shares of stock, with the consent of the Company, by taking
appropriate corporate action may become an Associate
Company and secure the benefits of this Plan for its
employees by adopting this Plan as its Plan, by becoming
party to the Trust Agreement, and by taking such other
actions as the Company shall consider necessary or
desirable to accomplish that purpose. The Company may,
upon thirty (30) days' written notice, request an Associate
Company
<PAGE> -36-
to withdraw from the Plan, and upon the expiration of such
thirty (30) day period, unless such Associate Company has
taken appropriate corporate action to accomplish such
withdrawal, such Associate Company shall be deemed to have
withdrawn from the Plan. Accounts of the Members of such
Associate Company shall be vested and settled in the manner
provided in Section XXII.C. hereof.
2. Any Associate Company may at any time segregate
from further participation in the Trust under the Trust
Agreement. Such Associate Company shall file with the
Trustee a document evidencing its segregation from the
Trust Fund and its continuance of a Trust in accordance
with the provisions of the Trust Agreement as though such
Associate Company were the sole creator thereof. In such
event, the Trustee shall deliver to itself as Trustee of
such trust such part of the Trust Fund as may be determined
by the Committee to constitute the appropriate share of the
Trust Fund then held in respect of the Members of such
Associate Company. Such former Associate Company may
thereafter exercise in respect of such Trust Agreement all
the rights and powers reserved to the Company and to the
Committee under the provisions of the Trust Agreement.
In a similar manner, the appropriate share of the
Trust Fund determined by the Committee to be then held in
respect of Members in any division, plant, location or
other identifiable group or unit of the Company or an
Associate Company may be segregated, and the Trustee shall
hold such segregated assets in the same manner and for the
same purpose as provided above in the event of segregation
of an Associate Company, and the Company or any successor
owner of the segregated unit shall have the rights and
powers hereinabove provided for a segregated Associate
Company.
XV. VOTING RIGHTS
A. The Trustee shall have the sole and exclusive
right to vote any securities held in Funds I, II, III, IV,
VI and VII, in its discretion. With respect to
Minerals Technologies Inc. common stock held in Fund V
and the Company Common Stock Fund (Fund M), each Member
shall be entitled to give voting instructions to the
Trustee with respect to his interest, if any, in such
stock. Each Member's interest in Minerals Technologies
Inc. common stock shall be computed by multiplying the
total number of shares held by the Trustee on
<PAGE> -37-
the applicable shareholder record date by the ratio of the
value of Fund V and the Company Common Stock Fund (Fund M),
if any, credited to such Member (as of the most recent
Value Determination Date prior to the shareholder record
date for which the Committee has completed its
determination of the value of such Funds and delivered the
results of such determination to the Trustee, but in no
event shall such Value Determination Date be more than
sixty (60) days prior to the shareholder record date) to
the total value of all Minerals Technologies Inc. common
stock credited to all Members as of such Value
Determination Date, excluding the value of such stock
allocated to Members whose accounts have been distributed
prior to the shareholder record date. Written notice of
any meeting of the Company, the proxy statement and a
request for voting instructions will be mailed by the
Company to each Member having an interest in Fund V and/or
the Company Common Stock Fund (Fund M), except those
Members having only a fractional interest in a common share
of the Company. The Trustee shall vote shares and
fractional shares of such Company common stock in
accordance with the written direction of each Member with
respect to his interest, if any, provided such direction is
received by the Trustee at least three (3) days before the
date set for the meeting at which such Company common stock
is to be voted. Shares and fractional shares of Company
common stock with respect to which no such direction shall
be timely given, shall be voted in the same ratio, to the
nearest whole vote, as the shares with respect to which
instructions were received from Members.
B. PFIZER INC. COMMON STOCK. With respect to Pfizer
Inc. common stock held in the Pfizer Inc. Common Stock Fund,
effective March 1, 1999, each Member shall be entitled to give
voting instructions to the Trustee with respect to his interest,
if any, in such stock. Each Member's interest in Pfizer Inc.
common stock shall be computed by multiplying the total number of
shares held by the Trustee on the applicable shareholder record
date by the ratio of the value of the Pfizer Inc. Common Stock
Fund, if any, credited to such Member (as of the most recent Value
Determination Date prior to the shareholder record date for which
the Committee has completed its determination of the value of such
Funds and delivered the results of such determination to the
Trustee, but in no event shall such Value Determination Date be
more than sixty (60) days prior to the shareholder record date) to
the total value of all Pfizer Inc. common stock credited to all
Members as of such Value Determination Date, excluding the value
of such stock allocated to Members whose accounts have been
distributed prior to the shareholder record date. Written notice
of any meeting of Pfizer Inc., the proxy statement and a request
for voting instructions will be mailed by the Trustee to each
Member having an interest in the Pfizer Inc. Common Stock Fund,
except those Members having only a fractional interest in a common
share of Pfizer Inc. The Trustee shall vote shares and fractional
shares of such Pfizer Inc. common stock in accordance with the
written direction of each Member with respect to his interest, if
any, provided such direction is received by the Trustee at least
three days before the date set for the meeting at which such
Pfizer Inc. common stock is to be voted. Shares and fractional
shares of Pfizer Inc. common stock with respect to which no such
direction shall be timely given, shall be voted in the same ratio,
to the nearest whole vote, as the shares with respect to which
instructions were received from Members.
C. In the event of a tender or exchange offer for
Company common stock or Pfizer Inc. common stock , each
Member shall determine whether his shares shall be tendered or
exchanged by notifying the Trustee in writing on a form to be
supplied by the Company or the Trustee in the case of Pfizer Inc.
common stock. In connection with any such tender or exchange
offer, the Company or the Trustee shall notify each affected
Member of such tender or exchange offer and distribute such
information as is distributed to shareholders in connection
therewith. Such determination shall be held in confidence by
the Trustee. Shares and fractional shares of Company common
stock or Pfizer Inc. common stock with respect to which no
direction shall be given shall be voted by the Trustee on the
assumption that the Member does not wish to have his shares
tendered or exchanged.
<PAGE> -38-
XVI. ADMINISTRATIVE COSTS
Subject to the provisions of Section VII.A. hereof
pertaining to charges to Member Accounts for certain
investment transactions, all costs and expenses of
administering the Plan (except certain expenses with
respect to the processing of loan applications and with
respect to the Mutual Fund Window which shall be borne by
such Member and except for the fees and charges of the
investment managers which shall be charged against the
applicable investment fund) shall be borne by the Company,
and until so paid shall represent a lien in favor of the
Trustee, or investment manager, as applicable, against each
respective Fund.
XVII. NON-ALIENATION OF BENEFITS
No benefit payable under the provisions of the Plan
shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge,
and any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be void;
nor shall benefits be in any manner liable for or subject
to the debts, contracts, liabilities, engagements or torts
of any Member or beneficiary except as specifically
provided in the Plan, or by a qualified domestic relations
order within the meaning of section 414(p) of the Code, or
by any other applicable law.
XVIII. NOTICE
Whenever an Employer, the Committee or the Trustee is
required to take action pursuant to a request or direction
from an eligible Employee or a Member participating in the
Plan, such request or direction must be given at such time
and in the form prescribed by the Employer, the Committee
or the Trustee, as applicable.
<PAGE> -39-
XIX. INVESTMENTS
Each Member shall assume all risk in connection with
any decrease in the market value of any investment in the
respective Funds in which he participates, including Fund
V, the Company Common Stock Fund (Fund M) and the Pfizer
Common Stock Fund, if any, and such Funds shall be the sole
source of all payments to be made under the Plan.
Neither the Company, any Associate Company, the
Committee or the Trustee, nor any officer or employee of
any of them, is authorized to advise a Member as to the
manner in which his contributions to the Plan should be
invested. The election of the Fund or Funds in which a
Member participates is his sole responsibility, and the
fact that designated Funds are available to Members for
investment or that limitations may be established with
respect to maximum investments in one or more Funds shall
not be construed as a recommendation for or against the
investment of a Member's contributions hereunder in any of
such Funds.
XX. TREASURY APPROVAL
This Plan and the contributions thereto shall be
conditional upon a determination by the Internal Revenue
Service that the Plan meets the applicable requirements of
section 401(a) of the Code and that the Trust is exempt
under section 501(a) of the Code. Contributions made to
the Plan are conditioned upon their deductibility under the
Code.
XXI. MISCELLANEOUS
A. The provisions of the Plan shall be construed,
regulated and administered according to the laws of the
State of New York, except to the extent superseded by any
controlling Federal statute.
B. If any Member, former Member, or beneficiary, in
the judgement of the Committee, is legally, physically or
mentally incapable of personally receiving and receipting
for any payment due hereunder payment may be made to the
guardian or other legal representative of such Member,
former Member or beneficiary or to such other person or
institution who, in the opinion of the Committee, is then
<PAGE> -40-
maintaining or has custody of such Member, former Member or
beneficiary. Such payments shall constitute a full
discharge with respect to such payments.
C. Nothing contained herein or in the Trust
Agreement shall entitle any Member, former Member,
beneficiary or any other person to the right or privilege
of examining or having access to the books or records of
the Company, any Associate Company, the Committee or the
Trustee; nor shall any such person have any right, legal or
equitable, against the Company or an Associate Company, or
any director, officer, employee, agent or representative
thereof, or against the Committee or the Trustee, except as
expressly provided herein.
D. The Committee shall be fully protected in respect
to any action taken or suffered by them in good faith in
reliance upon the advice or opinion of any actuary,
accountant, legal counsel, appraiser, or physician, and all
action so taken or suffered shall be conclusive upon all
Members, former Members, beneficiaries, heirs,
distributees, personal representatives and any other person
claiming under the Plan.
E. Participation in the Plan shall not be construed
as conferring any legal rights upon any Member for a
continuation of employment nor shall it interfere with the
rights of the Company or any Associate Company to terminate
any Member and to treat him without regard to the effect
which such treatment might have upon him as a Member.
F. Notwithstanding any other provision of the Plan
to the contrary, an Insider (as defined in Section X.
hereof) may not elect to (i) increase his interest in Fund
V (whether by direction of future After-Tax or Qualified
Deferred Earnings Contributions or by transfer of amounts
into Fund V from other Funds pursuant to Section VII.A.
hereof) within six (6) months of an election to decrease
his interest in Fund V (or in an investment in Minerals
Technologies Inc. common stock under another plan of the
Company), or (ii) decrease his interest, if any, in Fund V
(whether by direction of future After-Tax Contributions or
Qualified Deferred Earnings Contributions or by transfer of
amounts out of Fund V to other Funds pursuant to Section
VII.A. hereof) within six (6) months of an election to
increase his interest in Fund V (or in an investment in
Mineral Technologies Inc. common stock under another plan
of the Company), or (iii) increase his interest in Fund V
(whether by direction of future After-Tax Contributions or
Qualified Deferred Earnings Contributions or by transfer of
amounts into Fund V from other Funds pursuant to Section
VII.A. hereof) within six (6) months of (I) a cash
withdrawal from his Account (other than a cash withdrawal
in connection with such Insider's termination of
employment) to the extent that such withdrawal results in a
withdrawal of an amount invested in Fund V, or (II) a
withdrawal from any other plan maintained by the Company
(other than a cash withdrawal in connection with such
Insider's termination
<PAGE> -41-
of employment) to the extent that such withdrawal
constitutes a withdrawal of Mineral Technologies Inc.
common stock. To the extent any provision of the Plan or
action of the Plan administrators involving an Insider is
deemed not to comply with an applicable condition of Rule
16b-3, it shall be deemed null and void as to such Insider,
to the extent permitted by law and deemed advisable by the
Plan administrators.
XXII. TERMINATION, AMENDMENT OR SUSPENSION OF THE PLAN
A. The Company expects to continue the Plan
indefinitely but reserves the right to amend, suspend or
discontinue it in whole or in part at any time and in its
sole and absolute discretion of its Board of Directors in
accordance with its established rules of procedure. Such
amendments or modifications may be retroactive if necessary
or appropriate to qualify or maintain the Plan or Trust as
a Plan or Trust meeting the requirements of section 401 of
the Code, to secure and maintain the tax exemption of the
Trust under section 501 of the Code, and in order that the
contributions to the Plan be deductible under section
404(a) of the Code or any other applicable provisions of
the Code and Treasury Regulations issued thereunder.
B. In the event of suspension of the Plan, all
provisions of the Plan shall continue in effect during such
period of suspension, except Sections V., VI., and those
provisions of Section X. hereof which permit resumption of
contributions. Upon continuous suspension of the Plan for
a period of three (3) years, the Plan shall terminate.
C. In the event of termination of the Plan in whole
or in part or upon the complete discontinuance of
contributions, Accounts of affected Members shall be
settled and distributed under the provisions of Section
XI.A. hereof as though the termination of employment had
occurred on the date of such termination or discontinuance;
provided, however, that the amount distributed to affected
Member's and beneficiaries shall be the net value of the
Member's Account determined as of the Value Determination
Date on the date of distribution.
<PAGE> -42-
D. The Committee may make administrative changes to
the Plan so as to conform with or take advantage of
governmental requirements, statutes or regulations.
XXIII. PLAN MERGERS AND CONSOLIDATIONS
In the event of any merger or consolidation of the
Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund
held under any other plan of deferred compensation
maintained or to be established for the benefit of all or
some of the Members of this Plan, the assets of the Trust
Fund applicable to such Members shall be transferred to the
other trust fund only if:
(1) each Member would, if either this Plan or the
other plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal
to or greater than the benefit he would have been entitled
to receive immediately before the merger, consolidation or
transfer if this Plan had then terminated; and
(2) the Employer and any new or successor employer
of the affected Members shall authorize such transfer of
assets.
XXIV. CLAIMS PROCEDURE
Any request by a Member or any other person for any
benefit alleged to be due under the Plan shall be known as
a "Claim" and the Member or other person making a Claim
shall be known as a "Claimant."
A Claim shall be filed when a written statement has
been made by the Claimant or the Claimant's authorized
representative and delivered to the Vice President - Human
Resources, Minerals Technologies Inc., 405 Lexington
Avenue, New York, New York 10174-1901. This statement
shall include a general description of the benefit which
the Claimant believes is due and the reasons the Claimant
believes such benefit is due, to the extent this is within
the knowledge of the Claimant. It shall not be necessary
for the Claimant to cite any particular Section or Sections
of the Plan, but only to set out the facts known to him
which he believes constitute a basis for a Claim.
<PAGE> -43-
Within ninety (90) days of the receipt of the Claim
by the Plan, the Vice President - Human Resources shall (i)
notify the Claimant that the Claim has been approved, (ii)
notify the Claimant that the Claim has been partially
approved and partially denied, or (iii) notify the Claimant
that the Claim has been denied. Notice of the decision
shall be in writing and shall be delivered to the Claimant
either personally or by first-class mail. Special
circumstances may require an extension of time for
processing the Claim. In no event shall such extension
exceed a period of ninety (90) days from the end of the
initial ninety (90) day period.
In the event a Claim is denied in whole or in part,
the notice of denial shall set forth (i) the specific
reason or reasons for the denial, (ii) specific reference
to the pertinent Plan provisions on which the denial is
based, (iii) a description of any additional material or
information necessary for the Claimant to perfect the Claim
and an explanation of why such material or information is
necessary, and (iv) an explanation of the Plan's claim
review procedure.
Within sixty (60) days of the receipt of a notice of
denial of a Claim in whole or in part, a Claimant or his
duly authorized representative (i) may request a review
upon written application to the Committee, (ii) may review
documents pertinent to the Claim, and (iii) may submit
issues and comments in writing to the Committee. Notice
shall be deemed to be received when delivered if delivered
personally pursuant to the foregoing provisions of this
Section XXIV. or three (3) days after it has been deposited
post-paid in a depository maintained by the U.S. Post
Office addressed to Claimant at the address designated by
him in the Claim or if Claimant has moved at the last
address shown for Claimant on Employer's records.
It shall be the duty of the Committee to review a
Claim for which a request for review has been made and to
render a decision not later than one hundred twenty (120)
days after receipt of a request for review. The decision
shall be in writing and shall include the specific reasons
for the decision and specific references to the pertinent
Plan provisions on which the decision is based. The
decision shall be delivered to the Claimant either
personally or by first-class mail.
XXV. TOP-HEAVY RULE
A. Notwithstanding any provision in the Plan to the
contrary, if the Plan is determined by the Committee to be
top-heavy, as that term is defined in section 416 of the
Code, in any calendar year, then for that calendar year the
<PAGE> -44-
minimum benefit rule, as set forth below, shall be
applicable. Determination of whether the Plan is top-heavy
shall be made in accordance with the definition of "top
heavy group" as set forth in Section XXV.B.7. hereof.
B. Definitions solely applicable to this
Section XXV.
1. "Compensation" shall mean the amount reportable
by the Employer for federal income tax purposes
as wages paid to the Member for such period.
2. "Determination Date" the date for determining
whether the Plan is top-heavy, shall be the
December 31 of the preceding year.
3. "Key Employee" shall have the same meaning as in
section 416(i)(1) of the Code.
4. "Non-Key Employee" shall mean an employee other
than a Key Employee as defined in Section
XXV.B.3. hereof.
5. "Valuation Date," for minimum funding purposes,
shall be a date within the twelve (12) month
period ending on the Determination Date,
regardless of whether a valuation for minimum
funding purposes is performed in that year.
6. "Aggregation group" shall mean (I) each plan
of the Employer in which a Key Employee is a
participant and (II) each other plan of the
Employer which enables any plan described in
(I) above to meet the nondiscrimination tests
and minimum participation rules of sections
401(a)(4) and 410 of the Code.
7. "Top heavy group" shall mean any aggregation
group for which the sum (as of the determination
date) of (I) the present value of the cumulative
accrued benefits for key employees under all
defined benefit plans included in such group,
and (II) the aggregate of the accounts of key
employees under all defined contribution plans
included in such group, exceeds 60% of a similar
sum determined for all employees.
<PAGE> -45-
C. For the purpose of determining whether this Plan
is top-heavy, this Plan and the Company's Retirement
Annuity Plan shall be considered an aggregation group, as
defined in Section XXV.B.6. hereof.
D. Minimum Benefit solely applicable to this
Section XXV.
No Employer Contributions in addition to those made
under Section VI. hereof shall be credited to the Account
of a Non-Key Employee who is a Member of the Plan, if this
Plan becomes top-heavy. However, in such event, the
actuarial equivalent of the value of all Employer Matching
Contributions under this Plan whether or not attributable
to years in which the Plan is top-heavy, shall be applied
as an offset against the minimum annual benefit provided
under Section 16 of the Company's Retirement Annuity Plan.
E. If the Plan becomes subject to the adjustments
pursuant to section 416(h) of the Code, the defined benefit
plan fraction described in section 415(e)(2)(B) of the Code
and the defined contribution fraction described in section
415(e)(3)(B) of the Code shall be applied by substituting
1.0 for 1.25 in the denominator of each fraction.
XXVI. LOAN PROVISIONS
Upon the request of a Member in active service and
in accordance with rules and procedures approved by the
Committee, the Committee shall direct the Trustee to lend
to the Member an amount not in excess of the lesser of (i)
$50,000, reduced by the excess, if any, of the highest
outstanding balance of any other such loans to such Member
during the previous twelve (12) months, over the
outstanding balance of loans from the Plan on the date on
which such loan is made, or (ii) one-half (1/2) of the
balance of such Member's Account, determined as of the most
recent Value Determination Date. In no event shall any
loan be made pursuant to this Section XXVI. in an amount
less than $1,000, nor shall more than two loans be made to
any Member in any calendar year. The terms of any loan
granted under this Section XXVI. shall be evidenced by a
promissory note signed by the Member. Each loan made
hereunder shall be an investment of the Member's Account
over which such Member has exercised investment control and
any such loan shall be made first from the Member's Qualified
Deferred Earnings Contributions and the earnings thereon until
they are exhausted, then from his Employer Matching
Contributions and the earnings thereon until they are
exhausted and finally from his After-Tax Contributions and
the earnings thereon.
<PAGE> -46-
Except as otherwise provided in this Section XXVI.,
the terms of any loan granted by the Committee shall be
arrived at by mutual agreement between the Member and the
Committee; provided, however, that the term of any loan in
no event shall exceed five (5) years from the day on which
the loan is granted. Notwithstanding the foregoing, loans
used to acquire any dwelling unit which is to be used
(determined at the time the loan is made) as the principal
residence of the Member may be for a term in excess of five
(5) years. Repayment of the loan shall be made in
accordance with a definite repayment schedule as selected
by the Member in accordance with the foregoing provisions
of this Section XXVI., provided that payment is made in
substantially level amounts, no less frequently than
quarterly. Those payments, together with the attendant
interest payments, will be credited to the Member's Account
and shall be invested in the Funds, in accordance with the
Member's then effective investment election, except to the
extent that the source of the loan was Employer Matching
Contributions (Fund M-the Company Common Stock Fund), in
which case payments shall be credited to that Fund. If a
Member fails to pay an installment of his loan such loan
will be in default as of the date which is ninety (90) days
after the date such installment was first due in accordance
with the repayment schedule as originally selected by the
Member. Upon default, the outstanding loan will be deemed
a distribution from the Plan. Notwithstanding any other
provision of this Section XXVI. to the contrary, any Member
who defaults on a loan from the Plan shall not again be
eligible for a loan hereunder.
Any loan granted by the Committee shall be
adequately secured by collateral of sufficient value to
secure repayment of the principal balance of the loan, plus
interest. The collateral may consist of a portion of the
Member's interest in his Account, but in no event may more
than one-half (1/2) of the Member's interest in his Account
be used as collateral for a loan. As additional security
for the loan repayment, the Committee shall require the
Member to authorize, in writing, the Company to withhold
from payments of his salary the amount necessary to
discharge the loan. In such case, the Company shall then
remit the withheld amounts to the Trustee, and the Trustee
shall apply the remittances in reduction of the outstanding
obligation of the Member under the loan. If any amount
remains outstanding as an obligation of the Member under
the loan when a distribution is to be made from his Account
under the Plan, including a distribution on account of
termination of employment, then, notwithstanding any
provision of the Plan to the contrary, the balance of his
Account shall be reduced to the extent necessary to
discharge the obligation and such action shall be
considered a distribution from the Plan.
<PAGE> -47-
All loans shall bear a rate of interest commensurate
with the interest rates charged by persons in the business
of lending money for loans which would be made under
similar circumstances, as determined by the Committee,
which rate will remain in effect for the term of the loan.
Each loan applicant shall receive a statement clearly
setting forth the charges involved in the loan transaction,
including the dollar amount and effective annual interest
rate.
Notwithstanding anything in this Section XXVI. to
the contrary, a Member may, at any time and in his sole
discretion, repay in full the outstanding amount of any
loan previously granted under this Section XXVI. Only one
(1) loan may be outstanding at any time.
Notwithstanding the foregoing, a Member who has an
outstanding loan and is absent from employment as a result
of a qualified leave of absence may elect, in accordance
with rules and procedures approved by the Committee, to
suspend payments of principal and interest on his loan for
a period not to exceed one (1) year. Any such suspension
will neither change the total amount of principal and
interest due under the original term of the loan nor change
the term of the loan as originally selected by the Member.
Upon the expiration of the approved period of suspension of
payments, installment payments will resume under a revised
repayment schedule based on the outstanding principal and
interest and the remaining term of the loan.
To the extent required by law and in accordance with
rules and procedures approved by the Committee, loans shall
be made on a reasonable equivalent basis to any beneficiary
or former Member (i) who maintains an Account balance under
the Plan and (ii) who is still a party-in-interest (within
the meaning of section 3(14) of ERISA) with respect to the
Plan.
The costs of administering this loan program shall
be borne by the borrowing Members.
<PAGE> -48-
Schedule A
Groups or Classes eligible for participation in the
Savings and Investment Plan (except in each case employees
covered by a collective bargaining agreement that does not
provide for coverage of such employees under the Plan if
there is evidence that retirement benefits were the subject
of good faith bargaining):
1. All employees in the service of Minerals
Technologies Inc.
2. All employees in the service of the following
Associate Companies:
Barretts Minerals Inc.
Specialty Minerals Inc.
MINTEQ International Inc.
<PAGE> -49-
MINERALS TECHNOLOGIES INC. NONFUNDED DEFERRED
COMPENSATION AND SUPPLEMENTAL SAVINGS PLAN
------------------------------------------
1. Each Member of the Minerals Technologies Inc. Savings and Investment
Plan (the "Savings and Investment Plan") who is or will be prevented, because of
the restrictions of Section 415 and Section 401(a)(17) of the Internal Revenue
Code of 1986, as amended from time to time (the "Internal Revenue Code"), from
contributing on a pre-tax or post-tax basis to the Savings and Investment Plan
up to six per cent (6%) of annual Regular Earnings or, if greater, the
percentage of Regular Earnings permitted to Members of the Savings and
Investment Plan who are "highly compensated," as that term is defined under
Section 414(q) of the Internal Revenue Code, may elect on or before the last day
of any calendar year to defer, beginning with the following calendar year,
payment of up to the greater of (a) six per cent (6%) or (b) that percentage of
his or her future Regular Earnings, in whole percents, that he or she would
otherwise have been able to so contribute on a before-tax basis to the Savings
and Investment Plan, until he or she ceases to be a Member of the Savings and
Investment Plan; provided, however, that the amount so deferred plus the amount
contributed under the Savings and Investment Plan shall not exceed the greater
of (a) six per cent (6%) or (b) that percentage, of his or her future Regular
Earnings, in whole percents, that he or she would otherwise have been able to so
contribute on a before-tax basis to the Savings and Investment Plan. At the
election of the affected Member, this deferral shall be credited to his or her
account with the Company in the dollar amount of the deferred Regular Earnings
or as the number of units (calculated to the nearest thousandth of a unit)
produced by dividing the dollar amount of Regular Earnings deferred by the
closing market price of the Company's Common Stock as reported on the
Consolidated Tape of the New York Stock Exchange on the last business day of the
month in which the payment of such Regular Earnings would otherwise have been
made. Company matching contributions and forfeitures shall be held in the
general funds of the Company and shall be credited to the affected Member's
account in the form of units only, calculated as described above.
If the restrictions of Section 415 and Section 401(a)(17) of the Internal
Revenue Code prevent a Member of the Savings and Investment Plan from receiving
any Company matching contributions or employee forfeitures under the Savings and
Investment Plan, any amount that would have been contributed on that Member's
behalf to the Savings and Investment Plan by the Company as a matching
contribution and any amount that would have been credited to that Member by way
of forfeitures, if it were not for such restrictions, shall be credited to the
affected Member hereunder. Company matching contributions and/or forfeitures
shall be held in the general funds of the Company and shall be credited to the
affected Member's account in the form of units only.
Any election by a Member of the Savings and Investment Plan to defer a
percentage of his or her Regular Earnings as provided for above, shall be made
by written
-1-
<PAGE>
notice directed to the Vice President-Organization and Human Resources of the
Company. Any such election may be terminated, or may be modified as to the
amount of deferral (in whole percents of Regular Earnings only) or as to the
form of deferral (whether dollars or units) with regard to future Regular
Earnings, commencing with the following calendar year, upon written notice
directed to the Vice President-Organization and Human Resources of the Company
on or before the last day of the calendar year preceding the calendar year in
which such Regular Earnings would otherwise be payable. Changing the form of
deferral (whether dollars or units) of amounts previously deferred may be done
as of the last business day of any calendar month, by notice in writing to the
Vice President-Organization and Human Resources of the Company before such date.
2. All Regular Earnings deferred by a Member hereunder and all Company
matching contributions and forfeitures shall be held in the general funds of the
Company for the account of the Member. The dollar amounts in the Member's
account shall be credited with interest at a rate equal to the rate of return on
Fund I of the Savings and Investment Plan for the corresponding period. The
units in the Member's account shall be marked to market monthly. In addition,
whenever a dividend is declared on the Company's Common Stock, the number of
units in the Member's account shall be increased by the result of the following
calculations: (i) the number of units in said account multiplied by any cash
dividend declared by the Company on its Common Stock, divided by the closing
market price of such Common Stock on the related dividend record date; and/or
(ii) the number of units in said account multiplied by any stock dividend
declared by the Company on a share of its Common Stock. In the event of any
change in the number of outstanding shares of the Common Stock of the Company
including a stock split or splits, other than a stock dividend as provided
above, an appropriate adjustment shall be made in the number of units credited
to said account.
3. (a) Lump-sum Payment. A Member eligible for benefits under this
plan shall receive his or her payment in a single lump sum, as early as
administratively practicable in the January of the calendar year next following
his or her termination of employment, unless he or she elects to receive payment
in equal annual installments under paragraph (b) below, or to receive a "same-
year payment" under paragraph (c) below.
(b) Installment Payments. A Member taking retirement under the
Retirement Annuity Plan, or his or her beneficiary, may receive payments in
equal annual installments over a period of up to ten years, as determined by the
employee, if (i) the Member elects to do so, or modifies a previous election in
order to do so, at least ninety days prior to his or her retirement and (ii) as
of the first business day of the January following such Member's retirement or
death, the benefit to which he or she is entitled under this plan is at least
$100,000. No payments under this paragraph (b) shall be made prior to the
Member's next taxable year following retirement. All such future payments shall
be made as early as administratively practicable in the January following
retirement
-2-
<PAGE>
and each succeeding January, in accordance with the Company's procedures, until
all installments have been paid.
(c) Same-year Payment. A Member eligible for retirement under the
Retirement Annuity Plan who wishes to receive, or for his or her beneficiary to
receive, a payment in the year of the Member's termination must elect to do so
no later than October 1 of the year preceding his or her scheduled retirement
date. Any such payment will be in a lump-sum, made as soon after the date of
the Member's retirement as is administratively practicable.
(e) Valuation. (i) To the extent that a Member's account has
been credited with units calculated as provided in paragraph 2, the amount
payable to the Member shall be determined by multiplying the number of such
units by the closing market price of the Company's stock as reported on the
Consolidated Tape of the New York Stock Exchange on the first business day of
the January following termination of employment; interest on dollars in the
employee's account will be credited with interest to the same date. (ii)
Benefits paid as same-year payments will be valued as of the date of retirement,
or the next business day if the date of retirement is not a business day. (iii)
Other benefits shall be valued as of the first business day of the January
following the date of termination of employment, in accordance with the
administrative procedures of the Company.
4. A Member who is entitled to receive benefits hereunder who dies prior
to terminating employment or who terminates his or her employment because he or
she becomes disabled shall be paid all such benefits in a single lump sum as
soon as reasonably practicable following such death or termination, without
regard to any prior election made under paragraph 3, above. If a Member who
elects to receive annual installment payments dies after such annual payments
have begun, the balance of such annual payments shall be made to his or her
designated beneficiary or beneficiaries under the Savings and Investment Plan,
or to his or her estate if no beneficiary or beneficiaries are named under the
Savings and Investment Plan or if the named beneficiary or beneficiaries have
predeceased him. If a Member wishes to designate a different beneficiary or
beneficiaries than are provided for by the method set forth above, he or she may
do so by written notice to the Vice President-Organization and Human Resources
of the Company. At any time, and from time to time, any such designation may be
changed or cancelled by the such Member without the consent of any beneficiary.
Any such designation, change or cancellation must be by written notice delivered
to the Vice President-Organization and Human Resources of the Company and shall
not be effective until received by the Vice President-Organization and Human
Resources of the Company. If an affected Member designates more than one
beneficiary, any payments to such beneficiaries shall be made in equal shares
unless the affected Member has designated otherwise.
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<PAGE>
5. A Member's election to defer receipt of a portion of his or her
Regular Earnings shall continue until he or she ceases to be a Member of the
Savings and Investment Plan unless he or she earlier terminates such election
with respect to future compensation by written notice delivered to the Vice
President-Organization and Human Resources of the Company. Any such notice
shall become effective as of the end of the calendar year in which such notice
is received by the Vice President-Organization and Human Resources. Amounts
credited to the account of an affected Member prior to the effective date of
such notice shall not be affected thereby and shall be paid to him or her in
accordance with paragraph 1, paragraph 3 or paragraph 4, as appropriate.
6. The right of a Member to any amounts credited to him or her hereunder
shall not be subject to assignment. If a Member does assign his or her right to
any amounts credited to his or her account, the Company may disregard such
assignment and discharge its obligation hereunder by making payment as though no
such assignment had been made.
7. Unless indicated to the contrary by the context in which used herein,
all capitalized terms shall have the meanings assigned to them in the Savings
and Investment Plan.
8. This Minerals Technologies Inc. Nonfunded Deferred Compensation and
Supplemental Savings Plan shall be governed and construed in accordance with the
laws of the state of Delaware.
(January 1999)
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<PAGE>
STOCK AND INCENTIVE PLAN
of
MINERALS TECHNOLOGIES INC.
(as amended and restated as of January 28,1999)
1. PURPOSE
The purpose of this Stock and Incentive Plan (the "Plan") is
to furnish a material incentive to employees and directors of
Minerals Technologies Inc. (the "Company") and its subsidiaries by
making available to them the benefits of a larger Common Stock
ownership in the Company through stock options and otherwise. It is
believed that these increased incentives will encourage the
continued service of employees and directors and stimulate their
efforts towards the continued success of the Company and its
subsidiaries, as well as assist in the recruitment of new employees
and directors.
2. ADMINISTRATION
Except to the extent otherwise provided in Section 4, the Plan
shall be administered by the Compensation and Nominating Committee
of the Board of Directors of the Company. The Compensation and
Nominating Committee is authorized, subject to the provisions of
the Plan, to promulgate such rules and regulations, and to delegate
to the Corporate Management Committee such administrative
authority, as it deems necessary for the proper administration of
the Plan, and to make such determinations and to take all action in
connection therewith or in relation to the Plan as it deems
necessary or advisable. The Compensation and Nominating Committee
shall consist of two or more members of the Board of Directors,
each of whom shall be a Non-Employee Director within the meaning of
Rule 16b-3 under the Securities and Exchange Act of 1934, as
amended (the "Act"), and an outside director within the meaning of
Section 162(m) of the Internal Revenue Code. It is intended that
benefits under the Plan not be subject to the limitation on
deductibility imposed by such Section 162(m), and that the Plan be
exempt under such Rule 16b-3. No member of the Compensation and
Nominating Committee shall be eligible to receive any award or
benefit under the Plan, except as provided for herein.
3. TOTAL NUMBER OF SHARES
Subject to the provisions of Section 6(g), the maximum amount
of Common Stock which may be issued under the Plan is 4,500,000
shares, with shares issued prior to the 1995 and 1998 amendments of
the Plan being included in the computation of such total. No
participant shall be granted (i) options which would result in such
participant receiving more than 750,000 shares of the total number
of shares authorized, (ii) options, SAR's or any combination
thereof with respect to more than 500,000 shares of Common Stock
during any period of twelve calendar months, (iii) any option,
stock award or performance unit award which would result in
ownership by such participant of more than ten percent of the stock
of the Company within the meaning of Section 422(b)(6) of the
Internal Revenue
<PAGE>
Code of 1986, as amended (the "Internal Revenue Code"), or (iv)
any incentive stock option, as defined in Section 422(b) of
the Internal Revenue Code, granted after December 31, 1986,
which would result in such participant receiving a grant of
incentive stock options for Common Stock that would have an
aggregate fair market value in excess of $100,000, determined as of
the time that the option is granted, that would be exercisable for
the first time by such participant during any calendar year.
4. PARTICIPATION IN PLAN
All employees and directors of the Company and its
subsidiaries shall be eligible to participate in this Plan. From
time to time, the Compensation and Nominating Committee shall
determine those employees who shall be granted options under the
Plan, the number of shares of Common Stock to be optioned to each
such employee, and whether such options shall be "incentive stock
options" (as defined in Section 422 of the Internal Revenue Code),
or non-qualified stock options. The Compensation and Nominating
Committee shall determine the individual employees who shall be
granted stock appreciation rights under the Plan pursuant to
Section 7; who shall be awarded shares under the Plan pursuant to
Section 8, as well as the number of shares of Common Stock to be so
awarded, and the restrictions, if any, to be placed thereon; who
shall be granted performance unit awards under the Plan pursuant to
Section 9; and who shall be granted tandem awards under the Plan
pursuant to Section 10. The foregoing notwithstanding, the
Corporate Management Committee of the Company is authorized to
grant options to employees under the Plan, provided that it shall
grant no more than 20,000 options in the aggregate in any calendar
year, that it shall grant no more than 1,500 options to any
employee in any calendar year, and that it shall not grant any
options to any employee who is an officer of the Company. Grants
of options to Non-Employee Directors shall be made only as follows:
At any time that the Compensation and Nominating Committee grants
across-the-board options to employees, Non-Employee Directors shall
also be granted options, using the same ratio of number of options
granted to amount of compensation as is used in determining options
granted to employees in the across-the-board option grant. For
this purpose, the Non-Employee Director's compensation in the prior
year shall be used, with any units included in such compensation
valued as of the date of their award.
5. TERM OF PLAN
This Plan will become effective as of the date it is approved
by the majority of votes cast at a duly held meeting of the holders
of Common Stock. No option with respect to shares authorized in or
prior to 1992 under this Plan shall be granted pursuant to this
Plan after December 31, 2001. No option with respect to shares
authorized in or prior to 1995 under this Plan shall be granted
pursuant to this Plan after December 31, 2004. No option with
respect to shares authorized in or prior to 1998 under this Plan
shall be granted pursuant to this Plan after December 31, 2007.
6. TERMS AND CONDITIONS OF OPTIONS
All options under the Plan shall be subject to the following
terms and conditions:
<PAGE>
(a) OPTION PRICE. The option price per share shall be
not less than the fair market value of the Common Stock on the date
the option is granted, as determined by the Compensation and
Nominating Committee in accordance with applicable provisions of
the Internal Revenue Code and Treasury Department rulings and
regulations thereunder.
(b) NUMBER OF SHARES. The option shall state the number
of shares of Common Stock covered thereby.
(c) PAYMENT. At the time of the exercise of the option,
the option price shall be payable in cash and/or, if the option so
provides, in shares of Common Stock valued at the market price at
the time the option is exercised. The Compensation and Nominating
Committee may in its discretion require or permit payroll
deductions or other suitable means to enable optionees to
accumulate sufficient funds to exercise their options and pay the
option price.
(d) TERM OF OPTION.
(i) An incentive stock option shall
provide that it shall not be exercisable after the expiration of
ten years from the date such option is granted.
(ii) A non-qualified stock option may be
exercisable for a period greater than ten years if so provided in
the terms of the option.
(e) EXERCISE OF OPTION.
(i) No option may be exercised during the
first year of its term or such longer period as may be specified in
the option; provided, however, in the event of a "change of
control" of the Company, as that term is defined in Section 12(a),
the Compensation and Nominating Committee may in its discretion
make any options that are not yet exercisable immediately
exercisable; and provided, further, that the Compensation and
Nominating Committee may in its discretion make any options that
are held by an employee or director at the time of such employee's
or director's retirement immediately exercisable. Thereafter, an
optionee, subject to the terms of the option, may exercise the
option in whole at any time or in part from time to time by giving
written notice thereof addressed to the Treasurer of the Company,
specifying the number of shares to be purchased and accompanied by
payment of the option price therefor. Notwithstanding anything in
this Plan to the contrary, no stock option granted to an employee
subject to Section 16 of the Act may be transferred or exercised
prior to the expiration of six months from the date of grant of
such stock option.
(ii) Only the optionee may exercise the option
during his or her lifetime. In the event of death, the person
designated in the optionee's will, or in the absence of such
designation, the legal representative of an optionee, or if a legal
representative of the optionee has not been appointed, the
optionee's surviving spouse, may in like manner exercise the
option, provided the same was exercisable by the optionee at the
time of his or
<PAGE>
her death, but such privilege shall expire, subject
to Section 6(d) and 6(f) (iii) hereof, one year after the death of
the optionee; provided, however, in any event that if the option is
not exercised by the last day in which it is exercisable, the
option shall be exercised and the proceeds paid to the deceased
optionee's estate.
(f) TERMINATION OF OPTION. The option, to the extent not
exercised, shall terminate upon its expiration as set forth in
Section 6(d) hereof, upon exercise of a related appreciation right
as set forth in Section 7(d) hereof, upon breach by the optionee of
any provision of the option, or when the optionee ceases to be an
employee or director for any reason, including retirement,
whichever event shall first occur; however, if the option so
provides, the Compensation and Nominating Committee in its
discretion may permit the optionee to exercise the option for
reasons of hardship up to twelve months after termination, assuming
that the option was otherwise exercisable; further except that,
subject to Section 6(d) hereof (i) the optionee, if his or her
employment or service as a director is terminated as a result of a
disability, and provided the option was exercisable at the time of
termination of employment or service as a director, may elect to
exercise the option, subject to Section 6(e) hereof, within twelve
months after the date of termination, (ii) in the event of his or
her death while an employee or director, the option shall terminate
as provided in Section 6(e) hereof, and (iii) notwithstanding
subsections (i) and (ii) above, if the option so provides, in the
event that the optionee has retired or, in the case of an employee,
is eligible for retirement under Section 4a., 4b. or 4d. of the
Company's Retirement Annuity Plan, as the same may be amended from
time to time, or under any pension or retirement plan maintained by
the Company or any of its subsidiaries, the optionee, or in the
event of death, the person designated in the optionee's will, or in
the absence of such designation, the legal representative of such
optionee, or if a legal representative of the optionee has not been
appointed, the optionee's surviving spouse, may elect to exercise
the option at any time until such option expires by its terms;
provided, however, if the option is not exercised by the last day
in which it is exercisable, the option shall be exercised and the
proceeds paid to the deceased optionee's estate. Any subsequent
reemployment of the optionee by the Company, or election or
reelection to the Company's Board of Directors, shall not affect
such optionee's right to exercise the option as provided in
subsection (iii) hereof.
(g) RECAPITALIZATION. In the event of any change in the
number or kind of outstanding shares of Common Stock by reason of a
recapitalization, merger, consolidation, reorganization,
separation, liquidation, stock split, stock dividend, combination
of shares or any other change in the corporate structure or shares
of stock of the Company, the Compensation and Nominating Committee
will make an appropriate adjustment, in accordance with applicable
provisions of the Internal Revenue Code and Treasury Department
rulings and regulations thereunder, in the number and kind of
shares for which options may thereafter be granted both in the
aggregate and as to each optionee, as well as in the number and
kind of shares subject to options theretofore granted and the
option price payable upon exercise of such options.
(h) TRANSFERABILITY. Unless designated as a Transferable
Stock Option, the stock option shall provide that it will not be
transferable by the optionee other than by will or the
<PAGE>
laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in Section 414(p) of the
Internal Revenue Code and Section 206(d)(3) of the Employee
Retirement Income Security Act of 1974, as amended. The
Compensation and Nominating Committee may in its discretion
designate a stock option to be a Transferable Stock Option.
A Transferable Stock Option may be transferred by the optionee
to his or her spouse, children or grandchildren, or to one or
more trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners;
provided that any such transfer must be without consideration
of any kind; and provided further that any stock option so
transferred will continue to be subject to the same terms
and conditions as were applicable to such stock option prior to the
transfer. Any Transferable Stock Option must be embodied in a
separate Option Agreement which must be approved by the
Compensation and Nominating Committee. The Compensation and
Nominating Committee may in its discretion amend any outstanding
stock option to convert such outstanding option into a Transferable
Stock Option.
(i) APPLICABLE LAW. The option shall contain a provision
that it may not be exercised at a time when the exercise thereof or
the issuance of shares thereunder would constitute a violation of
any federal or state law or the listing requirements of the New
York Stock Exchange for such shares.
(j) INCORPORATION BY REFERENCE. The option shall contain
a provision that all the applicable terms and conditions of the
Plan are incorporated by reference therein.
(k) TANDEM AWARD. Any option constituting a part of a
tandem award authorized by Section 10 hereof shall be subject to
the terms and conditions of such award.
(l) OTHER PROVISIONS. The option shall contain such
provisions as the Compensation and Nominating Committee shall deem
advisable consistent with the terms of this Plan. In addition, the
stock options shall contain such other provisions as may be
necessary to meet the requirements of the Internal Revenue Code and
the Treasury Department rulings and regulations issued thereunder
with respect to stock options.
7. STOCK APPRECIATION RIGHTS
The Compensation and Nominating Committee may, in its
discretion, grant stock appreciation rights to the holder of any
non-qualified stock option granted by the Company. Such
appreciation rights shall be subject to such terms and conditions
consistent with this Plan as the Compensation and Nominating
Committee shall impose from time to time, including the following:
(a) An appreciation right may be made part of any such
option at the time of its grant or at any time thereafter prior to
its expiration;
(b) Upon exercise of an appreciation right the holder
shall be entitled to receive:
(i) a number of shares of Common Stock
determined by dividing:
<PAGE>
(1) the number of shares which
the optionee selects, not to exceed the total number of shares that
the optionee is eligible to purchase as of the exercise date under
the related option, multiplied by the amount, if any, by which the
fair market value of a share of Common Stock on the exercise date
exceeds the option price provided in the related option, by
(2) the fair market value of a
share of Common Stock on the exercise date; provided, however, that
the total number of shares which may be received pursuant to the
exercise of an appreciation right shall not exceed the total number
of shares subject to the related option;
or
(ii) if so provided in the award, (1) payment
of cash equal to the aggregate fair market value on the date of
such exercise of the number of shares of Common Stock determined
under clause (i); or (2) in part cash and in part shares;
all as determined by the Compensation and Nominating Committee in
its sole discretion;
(c) No fractional share or cash in lieu thereof will be
issued upon the exercise of any such right; and
(d) Exercise of an appreciation right, in whole or in
part, shall exhaust and terminate the related option with respect
to the number of shares used in the calculation under subsection
(b)(i)(1) of this Section 7 in determining the number of shares
issued upon such exercise of the appreciation right (or which would
have been issued but for any cash payment). Upon such exercise of
an appreciation right, the number of shares subject to reallocation
under Section 13 shall be equal to the difference between the
number of shares used in the calculation under subsection (b)(i)(1)
of this Section 7 and the number of shares issued to the optionee
pursuant to such exercise (or which would have been issued but for
any cash payment).
(e) Any election by a person subject to Section 16 of
the Act to exercise an appreciation right for cash, as well as the
exercise by such person of an appreciation right for cash, shall be
made during the period beginning on the third business day
following the date of release of quarterly or annual summary
statements of sales and earnings and ending on the twelfth business
day following such date.
(f) An appreciation right awarded to a person subject
to Section 16 of the Act shall not be exercisable during the first
six months of its term.
8. STOCK AWARDS
Stock awards will consist of shares of Common Stock issued to
participating employees as additional compensation for their
services. Stock awards shall be subject to
<PAGE>
the provisions of Section 3, this Section 8, Section 11(a) and (c)
and, during the period in which the restrictions or the Company's
right of reacquisition hereinafter referred to are in effect,
Section 11(b). Each stock award to a participant shall provide (i)
that the shares subject to such award may not be transferred or
otherwise disposed of by the participant prior to the expiration
of a period or periods specified therein, which shall not occur
earlier than one year following the date of the award (except
that the award may permit the earlier lapse of such restriction
in the event of the participant's death or disability or
retirement pursuant to any pension or retirement plan maintained
by the Company or any of its subsidiaries), and (ii) that the
Company shall have the right to reacquire such shares upon
termination of the participant's employment with the Company
while such restriction is in effect, such reacquisition to be
upon the terms and conditions provided in the award. Stock awards
shall also be subject to such other terms and conditions, not
inconsistent herewith, as the Compensation and Nominating
Committee determines to be appropriate.
9. PERFORMANCE UNIT AWARDS
Performance unit awards will consist of performance units
credited to participating employees. Each award shall specify the
initial value of each performance unit, such value to be determined
by reference to the book or market value of the Common Stock or to
the Company's earnings or such other criteria related to the
Company's performance as the Compensation and Nominating Committee
may deem appropriate. The award shall be payable in cash and/or
Common Stock as the Compensation and Nominating Committee shall
determine in its sole discretion.
Subject to the provisions of this Section 9 and of Section 11,
the Compensation and Nominating Committee shall have exclusive
authority to determine additional terms and conditions of each
performance unit award. Such terms and conditions may include,
without limitation, provisions under which:
(1) On the payment date prescribed in the award a
participant shall become entitled to receive the full value of each
such unit on such date, or such other amount as such award may
specify;
(2) Each unit may accrue earnings determined by
reference to earnings per share or dividends paid per share on the
Common Stock, or to the prime or another specified lending rate, or
to other criteria specified in the award and payable at such time
or times as may be specified therein;
(3) The right of a participant to receive payments in
respect of a performance unit may be made subject in whole or in
part to the Company's attainment of earnings or other objectives
specified in the award; and
(4) The determination of all relevant valuation and
other data pertaining to the award shall be in the sole judgment of
the Compensation and Nominating Committee. Without limitation of
the foregoing, in the event that an amount payable in respect of an
award is based in whole or in part on the Company's earnings or the
book value of the
<PAGE>
Common Stock, the Compensation and Nominating Committee may make
such adjustments to the publicly reported amounts of the Company's
consolidated earnings or of such book value as it deems appropriate
for changes in accounting practices or principles, for material
acquisitions or dispositions of stock or property, for
recapitalizations or reorganizations or for any other events with
respect to which the Compensation and Nominating Committee
determines such an adjustment to be appropriate in order
to avoid distortion in the operation of the Plan.
Each award shall be evidenced by a written instrument which
shall set forth the number of performance units covered thereby,
the initial dollar value of each such unit, the terms and
conditions, if any, under which such value may change prior to the
vesting of the unit, the terms and conditions under which each such
unit will vest and such other matters as the Compensation and
Nominating Committee in its sole discretion may deem appropriate.
The Compensation and Nominating Committee may from time to time
establish such rules as it deems appropriate regarding the manner
and timing of payments of amounts due in respect of vested units.
No performance unit award shall provide for the vesting in a
participating employee of any performance unit covered thereby
prior to the expiration of a period of one year after the date of
the award, except that the award may provide for such vesting in
the event of death or disability or retirement of the employee
pursuant to a pension or retirement plan maintained by the Company
or one of its subsidiaries prior to the expiration of such period.
Each award shall provide that prior to the vesting of the units
covered thereby they shall be subject to forfeiture (a) upon the
termination of the recipient's employment with the Company, (b) as
contemplated by Section 10 hereof, if such award is part of a
tandem award, and (c) as may otherwise be specified in the award.
No participant shall be entitled to receive in respect of a
performance unit payments of amounts exceeding twice the original
value established for such unit.
The maximum dollar value of performance units which may be
initially awarded to participants may not exceed 1,500,000
"Reference Units" in the aggregate for all participants, and 50,000
Reference Units for any one participant. For purposes of this
paragraph:
(1) A "Reference Unit" shall be the equivalent of the
greater of (a) the fair market value of one share of Common Stock
on the date as of which a particular award of performance units is
made, or (b) the book value of a share of such Common Stock as at
the end of the last completed fiscal year of the Company prior to
such award date plus the cash dividends paid per share on such
stock during such fiscal year; and
(2) Crediting of an award of performance units shall
exhaust and terminate a number of Reference Units equal to the
number obtained by dividing the credited dollar value of such
performance units by the greater of the amounts referred to in
subclauses (a) and (b) of clause (1) above, and except as provided
in the following sentence, such terminated Reference Units shall
not be utilized for subsequent awards.
<PAGE>
In the event that an award of performance units is forfeited
or for any other reason the cash amount or the value of the shares
of Common Stock (as determined by the Compensation and Nominating
Committee in its sole judgment) ultimately delivered to a
participant in payment for an award of performance units (other
than amounts paid to the participant as earnings on the performance
units) is less than the Reference Units originally exhausted and
terminated upon the crediting of such award, a number of Reference
Units equal to the dollar amount of such shortfall divided by the
value originally assigned to such Reference Units shall be restored
and become available for subsequent awards under the Plan.
Nothing contained herein shall be deemed to limit the right of
the Company's Board of Directors or a duly appointed committee
thereof to authorize the payment or award of compensation other
than in stock to any employee otherwise than pursuant to the Plan,
regardless of the fact that a particular form of compensation may
be the same as or similar to that which the Compensation and
Nominating Committee may pay or award to participants under this
Section 9.
If any person awarded performance units under the Plan is
subject to Section 16 of the Act, he shall be required to retain
any securities distributed pursuant to the award for six months
following date of grant of the award.
10. TANDEM AWARDS
The Compensation and Nominating Committee may, in its
discretion, grant tandem awards to participating employees. A
tandem award shall consist of a right of election by the employee
among two or more of the following: (A) a non- qualified option,
which may include a stock appreciation right with respect thereto,
(B) a performance unit award, and (C) a stock award. Subject to the
provisions of Section 11, such right of election shall be upon such
terms and conditions as the Compensation and Nominating Committee
may specify in the tandem award, which shall include the following:
(a) The number of shares of Common Stock covered by the
option, the number of shares covered by the stock award and the
number of performance units covered by the performance unit award;
(b) Provisions establishing the number of shares and
performance units which will remain subject to each portion of the
tandem award upon the exercise of the right of election in whole or
in part; and
(c) The date on which the right of election shall
terminate unless earlier exercised or terminated pursuant to the
terms of the tandem award.
11. CONDITIONS APPLICABLE TO ALL AWARDS
<PAGE>
(a) RECAPITALIZATION. In the event of any change in the
number or kind of outstanding shares of Common Stock by reason of a
recapitalization, merger, consolidation, reorganization,
separation, liquidation, stock split, stock dividend, combination
of shares or any other change in the corporate structure or shares
of stock of the Company, the Compensation and Nominating Committee
will make such adjustments as it shall determine to be appropriate,
in the number and kind of shares and performance units subject to
Sections 8, 9 and 10 and the maximum dollar value of performance
units subject to Sections 9 and 10.
(b) TRANSFERABILITY. Each award to a participant under
Section 7, 8, 9 or 10 shall provide that neither the award nor any
right or interest of a participant therein shall be transferable by
the participant other than by will or the laws of descent and
distribution, and that such award shall be exercisable, during the
participant's lifetime, only by him; provided that a Stock
Appreciation Right awarded under Section 7 in conjunction with a
Transferable Stock Option may be transferred only together with,
and subject to the same conditions as, the corresponding
Transferable Stock Option.
(c) LEAVE OF ABSENCE. If approved by the Compensation
and Nominating Committee, an employee's or director's absence or
leave because of military or governmental service, disability, or
other reason shall not be considered an interruption of employment
for any purpose of this Plan.
12. DEFINITIONS
(a) CHANGE OF CONTROL. The term "Change of Control"
shall mean the occurrence of any of the following events: (i) at
any time during any two-year period, at least a majority of the
Company's Board of Directors shall cease to consist of "Continuing
Directors" (meaning directors of the Company who either were
directors at the beginning of such two-year period or who
subsequently became directors and whose election, or nomination for
election by the Company's stockholders, was approved by a majority
of the then Continuing Directors); or (ii) any "person" or "group"
(as determined for purposes of Section 13(d)(3) of the Act, except
any majority-owned subsidiary of the Company or any employee
benefit plan of the Company or any trust or investment manager
thereunder, shall have acquired "beneficial ownership" (as
determined for purposes of Rule 13d-3 under the Act) of shares of
Common Stock having 15% or more of the voting power of all
outstanding shares of capital stock of the Company, unless such
acquisition is approved by a majority of the directors of the
Company in office immediately preceding such acquisition; or (iii)
a merger or consolidation occurs to which the Company is a party,
whether or not the Company is the surviving corporation, in which
outstanding shares of Common Stock are converted into
shares of another company (other than a conversion into shares of
voting common stock of the successor corporation or a holding
company thereof representing 80% of the voting power of all capital
stock thereof outstanding immediately after the merger or
consolidation) or other securities (of either the Company or
another company) or cash or other property; or (iv) the sale of
all, or substantially all, of the Company's assets occurs; or (v)
the stockholders of the Company approve a plan of complete
liquidation of the Company.
<PAGE>
(b) COMMON STOCK. The term "Common Stock" shall mean the
$0.10 par value Common Stock of the Company.
(c) CORPORATE MANAGEMENT COMMITTEE. The term "Corporate
Management Committee" shall mean the committee consisting of the
following officers of the Company: the Chairman and Chief Executive
Officer, the Vice President in charge of the Minerals business, the
Vice President in charge of the Refractories business, the Vice
President and General Counsel, the Vice President - Finance, and
the Vice President - Organization and Human Resources.
(d) SUBSIDIARY. The term "subsidiary" shall mean a
subsidiary corporation of the Company as defined in Section 424(f)
of the Internal Revenue Code.
13. REALLOCATION OF UNUSED SHARES
Any shares which are not purchased or awarded under an option,
performance unit award or right of election which has terminated or
lapsed, either by its terms or pursuant to the exercise, in whole
or in part, of an award or right granted under the Plan, or shares
which are reacquired by the Company pursuant to Section 8 hereof,
may be used for the further grant of options.
14. USE OF PROCEEDS
The proceeds received by the Company from the sale of Common
Stock under the Plan shall be added to the general funds of the
Company and shall be used for such corporate purposes as the Board
of Directors shall direct.
15. AMENDMENT AND REVOCATION
The Board of Directors shall have the right to alter, amend or
revoke the Plan or any part thereof at any time and from time to
time, provided, however, that without the consent of the
participants affected no change may be made in any option or award
theretofore granted, which will impair the rights of participants
under outstanding options or awards; and provided further, that the
Board of Directors may not, without the approval of the holders of
a majority of the outstanding Common Stock, make any alteration or
amendment to the Plan which materially increases the benefits
accruing to participants under the Plan; increases the maximum
number of shares of Common Stock which may be issued under the Plan
or the number of shares of such stock which may be issued to any
one participant, extends the term of the Plan or of options
granted thereunder, reduces the option price below that now
provided for in the Plan, or changes the conditions of exercise
of options specified in Sections 6(e) and 6(f). The Compensation
and Nominating Committee may make non-substantive administrative
changes to the Plan so as to conform with or take advantage of
governmental requirements, statutes or regulations.
NONFUNDED DEFERRED COMPENSATION AND UNIT AWARD PLAN FOR
NON-EMPLOYEE DIRECTORS
1. Each director who is not an employee of Minerals Technologies Inc.
(the "Company") or of any of its subsidiaries may elect on or before the last
day of any calendar month to have payment of (a) all or a specified part of all
fees payable to such director for services as a director during the following
calendar month and thereafter and/or (b) all or a specified part of all
dividends and other distributions payable on stock held by such director under
the Minerals Technologies Inc. Restricted Stock Plan for Non-Employee Directors
(hereinafter such dividends and other distributions are collectively referred to
as "dividends") deferred until such director ceases to be a director of the
Company. Any such election shall be made by written notice directed to the
Secretary of the Company. Any such election may be terminated, or may be
modified as to amount of deferral or form of deferral (whether dollars or
units), with regard to fees and/or dividends to be paid during the following
calendar month and thereafter upon written notice directed to the Secretary of
the Company on or before the last day of the calendar month preceding the
calendar month in which such fees and/or dividends would otherwise be payable.
Modifying the form of deferral of fees and/or dividends previously deferred may
be done as of the first day of any calendar month by giving written instructions
to the Secretary of the Company before such date. No more than two
modifications of the form of deferral, whether as to fees and/or dividends
previously deferred or as to fees and/or dividends to be paid, may be made in
any calendar year. The Awarded Units, as described in paragraph 2, shall not be
affected by any such election.
2. "An award consisting of 400 units shall be made to each director
upon joining the Board. Each director who continues in office on the date of
any annual meeting of stockholders shall be awarded 400 units, effective as of
such date. An award of 50 units per year in equal quarterly amounts shall be
made to each director who serves as a member of a committee of the Board. In
addition, an award consisting of 15 units shall be made to each director upon
commencement of service as chair of a committee of the Board, and each director
who continues as chair of a committee on the date of any annual meeting of
stockholders shall be awarded 15 units, effective as of such date. An award
consisting of 25 units shall be made to each director who serves as chair of a
meeting of a committee of the Board, and an award of 15 units shall be made to
each Board member, other than the chair, who attends a meeting of a committee of
the Board."
3. A general ledger account (the "Deferred Directors Fees Account") shall
be set up on the Company's books and shall reflect the market value of the fees
and/or dividends deferred by each director and of the Awarded Units awarded to
him/her pursuant to paragraph 2. As fees and/or dividends are deferred by each
director, they shall be credited to the Deferred Directors Fees Account. At
the director's election, such credit shall be in the form of either (a) the
dollar amount of the fees and/or dividends deferred or (b) a number of units,
calculated to the nearest thousandth of a unit, determined by dividing the
dollar amount of fees and/or dividends deferred by the closing market price of
the Company's Common Stock as reported on the Consolidated Tape of the New York
Stock Exchange on the last business day prior to the date such fees and/or
dividends would otherwise have been paid. Dollar balances in a director's
account shall be credited with interest at a rate equal to the rate of return
for Fund I in the Minerals Technologies Inc. Savings and Investment Plan,
compounded monthly. Units in a director's account, whether Awarded Units or
deferred fee or dividend units pursuant to clause (b) above, or dividends
thereon, shall be marked to market monthly. In the case of Awarded Units,
the director's account shall be credited with the number of units
so awarded on the date specified in paragraph 2. Whenever a dividend is
declared, the number of units in the director's account shall be increased by
the result of the following calculations: (i) the number of units in the
director's account multiplied by any cash dividend declared by the Company on a
share of its Common Stock, divided by the closing market price of such Common
Stock on the related dividend record date; and/or (ii) the number of units in
the director's account multiplied by any stock dividend declared by the Company
on a share of its Common Stock. Solely as to the Awarded Units, a director may
elect to receive in cash the value of any cash dividend declared by the Company
on a share of its Common Stock in lieu of having his/her account credited as
specified above. Any such election shall be made, and may also be terminated,
by written notice directed to the Secretary of the Company prior to the calendar
month of the payment date for the dividend. In the event of any change in the
number or kind of outstanding shares of Common Stock of the Company including a
stock split or splits, other than a stock dividend as provided above, an
appropriate adjustment shall be made in the number of units credited to the
director's account.
4. At least one year before a director ceases to be a director of the
Company, such director may elect, or may modify an election previously made, to
receive payment of his/her interest in the Deferred Directors Fees Account in a
lump sum or in annual installments, and may elect to have such payment or
payments made either in (a) the year in which the electing director ceases to
be a director of the Company, or (b) the year following such director's
termination as a director. In the absence of an election, such payments will
begin with the first month of the year following the director's termination and
will be made in five annual installments. In the event a director ceases to be
a director of the Company within one year of such director's most recent
exercise, or modification of, the election provided for herein, then any
previous election made by such director shall be deemed to remain in effect.
With respect to all units in the Deferred Directors Fees Account, whether
they be Awarded Units credited pursuant to paragraph 2, units representing fees
calculated as provided in paragraph 3, or units representing dividends, the
amount payable to the director in each instance shall be determined by
multiplying the number of units by the closing market price of the Company's
Common Stock on the last business day prior to the date for payment.
Where the director receives the balance of his/her account in Annual
Installments of Deferred Compensation, the first Annual Installment of Deferred
Compensation shall be a fraction of the value of the balance of the deferred
compensation and Awarded Units credited to the director's account either by
way of interest or units calculated under paragraph 3 hereof, as the case may
be, on the date of such payment, the numerator of which is one (1) and the
denominator of which is the total number of installments remaining to be
paid at that time. Each subsequent Annual Installment shall be calculated
in the same manner except that the denominator shall be reduced by the
number of Annual Installments which have been previously paid.
5. If a director should die before full payment of all amounts credited
to his/her account, such amounts shall be paid to his/her designated beneficiary
or beneficiaries or to his/her estate in a single sum payment to be made as soon
as practicable after his/her death. A director may designate one or more
beneficiaries (which may be an entity other than a natural person) to receive
any payments to be made upon the director's death. At any time, and from time
to time, any such designation may be changed or canceled by the director without
the consent of any beneficiary. Any such designation, change or cancellation
must be by written notice filed with the Secretary of the Company and shall not
be effective until received by the Secretary. If a director designates more
than one beneficiary, any payments to such beneficiaries shall be made in equal
shares unless the director has designated otherwise. If no beneficiary has been
named by the director, or the designated beneficiaries have predeceased such
director, the beneficiary shall be the executor or administrator of the
director's estate.
6. A director's election to defer fees shall continue until a director
ceases to be a director unless such director earlier terminates such election
with respect to future fees by written notice delivered to the Secretary of the
Company. Any such notice shall become effective as of the end of the calendar
month in which such notice is received by the Secretary. Amounts credited to
the account of a director prior to the effective date of such notice shall not
be affected thereby and shall be paid to the director in accordance with
paragraph 4 (or paragraph 5 in the event of his death) above. The Awarded Units
shall not be affected by any such election.
7. The right of a director to any fees or Awarded Units credited to
his/her account shall not be subject to assignment by such director. If a
director does assign his right to any fees or Awarded Units credited to his/her
account, the Company may disregard such assignment and discharge its obligation
hereunder by making payment as though no such assignment had been made.
8. In no event shall any payment of fees deferred pursuant to the Plan or
of Awarded Units be made with the Company's Common stock.
(February 1998)
EXHIBIT 15
ACCOUNTANTS' ACKNOWLEDGMENT
The Board of Directors
Minerals Technologies Inc.:
Re: Registration Statement Nos. 33-59080, 33-65268, 33-96558 and 333-
62739
With respect to the subject registration statements, we acknowledge
our awareness of the use therein of our report dated April 30, 1999,
related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report
is not considered a part of a registration statement prepared or certified
by an accountant or a report prepared or certified by an accountant within
the meaning of sections 7 and 11 of the Act.
Very truly yours,
KPMG LLP
New York, New York
May 7, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements of Minerals Technologies Inc.,
and is qualified in its entirety by reference to such condensed consolidated
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-28-1999
<CASH> 16,223
<SECURITIES> 0
<RECEIVABLES> 116,171
<ALLOWANCES> 0
<INVENTORY> 59,093
<CURRENT-ASSETS> 206,748
<PP&E> 904,359
<DEPRECIATION> 390,352
<TOTAL-ASSETS> 748,713
<CURRENT-LIABILITIES> 104,149
<BONDS> 88,090
0
0
<COMMON> 2,556
<OTHER-SE> 625,303
<TOTAL-LIABILITY-AND-EQUITY> 748,713
<SALES> 148,576
<TOTAL-REVENUES> 148,576
<CGS> 103,227
<TOTAL-COSTS> 103,227
<OTHER-EXPENSES> 5,952
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19,761
<INCOME-TAX> 6,228
<INCOME-CONTINUING> 13,731
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,731
<EPS-PRIMARY> 0.63<F1>
<EPS-DILUTED> 0.62
<FN>
<F1>(EPS-PRIMARY) DENOTES BASIC EPS
</FN>
</TABLE>
