<PAGE> 1
Registration No. 33-
_____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
BADGER METER, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0143280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
(Address of principal executive offices) (Zip Code)
Badger Meter Employee Savings and Stock Ownership Plan
(Full title of the plan)
Deirdre C. Elliott
Badger Meter, Inc.
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
(414) 355-0400
(Name, address and telephone number, including area
code, of agent for service)
__________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of Amount Proposed Maximum Proposed Maximum
Securities to be to be Offering Price Aggregate Offering Amount of
Registered Registered Per Share* Price* Registration Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$1.00 par value 100,000 shares $ 25.50 $ 2,550,000 $ 879.32
==========================================================================================================
</TABLE>
* Estimated pursuant to Rule 457(c) and (h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee based upon the
market value of the shares of Common Stock as determined by the average of
the high and low prices of the Common Stock on the American Stock Exchange
on August 25, 1995.
_________________________________
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified in
Part I are not required to be filed with the Securities and Exchange Commission
(the "Commission") as part of this Form S-8 Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by Badger Meter,
Inc. (the "Company") or the Badger Meter Employee Savings and Stock Ownership
Plan (the "Plan") are hereby incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1994, which includes audited financial statements as of and
for the year ended December 31, 1994.
(b) All other reports filed by the Company or the Plan
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since December 31, 1994.
(c) The description of the Common Stock, par value $1.00 per
share, of the Company included in Registration Statement No. 0-2596 on Form
8-A, dated July 26, 1971, as amended by Form 8, dated January 8, 1987, and any
amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of filing of this Registration Statement and prior to such time as the
Company files a post-effective amendment to the Registration Statement which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities being offered hereby will be passed
on for the Company by Foley & Lardner, Milwaukee, Wisconsin. Edwin P. Wiley, a
partner in the firm of Foley & Lardner, is a director of the Company. As of
August 15, 1995, Foley & Lardner attorneys who participated in the preparation
of this Registration Statement, together with Mr. Wiley, beneficially owned
3,200 shares of the Company's Common Stock.
-2-
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Wisconsin Business Corporation Law and the
Company's Restated By-laws, as amended, directors and officers of the Company
are entitled to mandatory indemnification from the Company against certain
liabilities and expenses (i) to the extent such officers or directors are
successful in the defense of a proceeding and (ii) in proceedings in which the
director or officer is not successful in defense thereof, unless (in the latter
case only) it is determined that the director or officer breached or failed to
perform his duties to the Company and such breach or failure constituted: (a)
a willful failure to deal fairly with the Company or its shareholders in
connection with a matter in which the director or officer had a material
conflict of interest; (b) a violation of the criminal law unless the director
or officer has reasonable cause to believe his or her conduct was lawful or had
no reasonable cause to believe his or her conduct was unlawful; (c) a
transaction from which the director or officer derived an improper personal
profit; or (d) willful misconduct. It should be noted that the Wisconsin
Business Corporation Law specifically states that it is the public policy of
Wisconsin to require or permit indemnification in connection with a proceeding
involving securities regulation, as described therein, to the extent required
or permitted as described above. Additionally, under the Wisconsin Business
Corporation Law, directors of the Company are not subject to personal liability
to the Company, its shareholders or any person asserting rights on behalf
thereof for certain breaches or failures to perform any duty resulting solely
from their status as directors except in circumstances paralleling those in
subparagraphs (a) through (d) outlined above.
The indemnification provided by the Wisconsin Business Corporation
Law and the Company's Restated By-laws is not exclusive of any other rights to
which a director or officer may be entitled.
Expenses for the defense of any action for which indemnification
may be available may be advanced by the Company under certain circumstances.
The Company maintains a liability insurance policy for its
directors and officers as permitted by Wisconsin law which may extend to, among
other things, liability arising under the Securities Act of 1933, as amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following exhibits have been filed (except where otherwise
indicated) as part of this Registration Statement:
(4.1) Badger Meter Employee Savings and Stock Ownership Plan,
as amended to date
(4.2) Restated Articles of Incorporation of Badger Meter, Inc.
[Incorporated by reference from Exhibit 4.3 to the
Company's Registration Statement on Form S-8 (Registration
No. 33-65618)]
(5.0) Opinion of Foley & Lardner
(23.1) Consent of Ernst & Young LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit (5.0)
hereto)
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<PAGE> 4
(24.1) Power of Attorney relating to subsequent amendments
(included on the signature page of this Registration
Statement)
The Registrant hereby represents that it has received a favorable
determination from the Internal Revenue Service that the Plan, as amended,
continues to be qualified under Section 401 of the Internal Revenue Code of
1986, as amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Milwaukee, State of
Wisconsin, on August 18, 1995.
BADGER METER, INC.
BY: /s/ Deirdre C. Elliott
---------------------------
Deirdre C. Elliott
Vice President-Corporate
Counsel and Secretary
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each person whose signature appears
below constitutes and appoints James L. Forbes and Deirdre C. Elliott, and
each of them individually, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or either of them, or their or his or her substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
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<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James O. Wright Chairman of the
- --------------------- Board of Directors August 18, 1995
James O. Wright
/s/ James L. Forbes President, Chief
- --------------------- Executive Officer
James L. Forbes and Director August 18, 1995
/s/ Robert M. Hoffer Director August 18, 1995
- ---------------------
Robert M. Hoffer
/s/ Charles F. James, Jr. Director August 18, 1995
- ------------------------------
Charles F. James, Jr.
/s/ Donald J. Schuenke Director August 18, 1995
- ------------------------------
Donald J. Schuenke
/s/ Warren R. Stumpe Director August 18, 1995
- ---------------------
Warren R. Stumpe
/s/ Edwin P. Wiley Director August 18, 1995
- ------------------------------
Edwin P. Wiley
/s/ James O. Wright, Jr. Director August 18, 1995
- ------------------------------
James O. Wright, Jr.
/s/ Deirdre C. Elliott Vice President-
- ------------------------------ Corporate Counsel
Deirdre C. Elliott and Secretary August 18, 1995
/s/ William J. Shinners Vice President-
- ------------------------------ Controller August 18, 1995
William J. Shinners
</TABLE>
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<PAGE> 7
The Plan. Pursuant to the requirements of the Securities Act of
1933, the Badger Meter, Inc. Employee Benefits Administration Committee, which
administers the Plan, has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Milwaukee, State of Wisconsin, on August 18, 1995.
BADGER METER EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
By: /s/ Ronald H. Dix
---------------------------
Ronald H. Dix
By: /s/ Deirdre C. Elliott
---------------------------
Deirdre C. Elliott
By: /s/ William J. Shinners
---------------------------
William J. Shinners
The foregoing persons are all of the
members of the Badger Meter,
Inc. Employee Benefits
Administration Committee,
which is the administrator of
the Badger Meter Employee
Savings and Stock Ownership Plan
-7-
<PAGE> 8
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
- ----------- -------
(4.1) Badger Meter Employee Savings and Stock Ownership Plan,
as amended to date
(4.2) Restated Articles of Incorporation of Badger Meter, Inc.
[Incorporated by reference from Exhibit 4.3 to the
Company's Registration Statement on Form S-8
(Registration No. 33-65618)]
(5.0) Opinion of Foley & Lardner
(23.1) Consent of Ernst & Young LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit (5.0)
hereto)
(24.1) Power of Attorney relating to subsequent amendments
(included on the signature page of this Registration
Statement)
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<PAGE> 1
EXHIBIT 4.1
BADGER METER
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
(AMENDED THROUGH DECEMBER, 1994)
<PAGE> 2
BADGER METER
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
Table of Contents
<TABLE>
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Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . . . . . 4
Section 2.01. Eligibility to Participate in Savings Feature . . . . . . . . . . . . . . 4
Section 2.02. Eligibility to Participate in ESOP Feature . . . . . . . . . . . . . . . 4
Section 2.03. Status of Leased Employees . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III PARTICIPANT DEPOSITS AND EMPLOYER
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.01. Participants' Deposits . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.02. Employer Matching Contributions . . . . . . . . . . . . . . . . . . . . . 5
Section 3.03. Other Employer Contributions . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.04. Suspense Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.05. Maximum Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.06. Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV PARTICIPANT ACCOUNTS; INVESTMENT OF
ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.01. Establishment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.02. Investment of Savings Accounts . . . . . . . . . . . . . . . . . . . . . 8
Section 4.03. Investment of Employer Contributions Accounts . . . . . . . . . . . . . . 8
Section 4.04. ESOP Diversification Election . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.05. Valuation of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.06. Allocations to Other Employer Contributions Accounts . . . . . . . . . . 9
Section 4.07. Dividends on Company Stock . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V VESTING AND FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.01. Calculation of Vesting Service . . . . . . . . . . . . . . . . . . . . . 9
Section 5.02. Effect of Breaks-in-Service . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.03. Vesting in Savings Accounts . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.04. Vesting in Employer Contributions Accounts . . . . . . . . . . . . . . . 9
Section 5.05. Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.01. Distribution Upon Termination of Employment . . . . . . . . . . . . . . . 10
Section 6.02. Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.03. Distribution Upon Attainment of Age 70 1/2 . . . . . . . . . . . . . . . 11
Section 6.04. Time and Form of Distributions . . . . . . . . . . . . . . . . . . . . . 11
Section 6.05. Special ESOP Distribution Rules . . . . . . . . . . . . . . . . . . . . . 11
Section 6.06. Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII WITHDRAWAL AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.01. Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.02. Loans to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.03. Withdrawal from Savings Accounts After Age 50 . . . . . . . . . . . . . . 13
ARTICLE VIII PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.01. Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.02. Organization and Procedure . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.03. Delegation of Authority and Responsibility . . . . . . . . . . . . . . . 14
Section 8.04. Use of Professional Services . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.05. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.06. Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.07. Agent for Service of Process . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.08. Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
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<TABLE>
<S> <C> <C>
ARTICLE IX TRUSTEE AND TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.01. Trustee Removal and/or Resignation and Successors . . . . . . . . . . . . 15
Section 9.02. Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.03. Investment of the Trust Fund . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.04. Trustee's General Powers . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 9.05. Payments from the Trust Fund . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.06. General Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.07. Contributions to the Plan . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.08. Reliance on Written Communications . . . . . . . . . . . . . . . . . . . 16
Section 9.09. Trustee Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.10. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9.11. Trustee Litigation and Indemnification . . . . . . . . . . . . . . . . . 16
Section 9.12. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE X AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 17
Section 10.01. Amendment and Termination . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11.01. Plan is Voluntary . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11.02. Non-Guarantee of Employment . . . . . . . . . . . . . . . . . . . . . . 17
Section 11.03. Rights to Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11.04. Non-Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.06. Facility of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.07. Board Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.08. Mergers, Consolidations and Transfer of Plan Assets . . . . . . . . . . 18
Section 11.09. Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.10. Unclaimed Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11.11. Voting Rights to Company Stock . . . . . . . . . . . . . . . . . . . . . 18
Section 11.12. Tender Offers for Company Stock . . . . . . . . . . . . . . . . . . . . 18
Section 11.13. Retroactive Effective Dates . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XII TOP-HEAVY PLAN PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12.01. Effect of Top-Heavy Status . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12.02. Additional Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 12.03. Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.04. Minimum Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 12.05. Maximum Benefit Limits . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XIII TRUSTEE ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 13.01. Trustee Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<PAGE> 4
BADGER METER
EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
THIS TRUST AGREEMENT, by and between BADGER METER, INC., a Wisconsin
corporation (hereinafter called "Company"), and Marshall and Ilsley Trust
Company, a Wisconsin banking corporation (hereinafter called "Trustee"):
W I T N E S S E T H :
WHEREAS, the Company heretofore established the Badger Meter Savings
Plan, the Badger Meter Payroll-Based Employee Stock Ownership Plan and the
Badger Meter Employee Stock Ownership Plan (the "Prior Plans"), and wishes to
consolidate said plans in a single plan which offers eligible employees an
opportunity and an incentive to provide financial security for themselves and
their families through savings and investment on a tax-advantaged basis and
will help ensure the Company's growth and success by promoting a broader and
more economical means for employees to own Company Stock; and
WHEREAS, the Company by appropriate corporate action has authorized the
continuation of the Prior Plans previously adopted through the Badger Meter
Employee Savings and Stock Ownership Plan as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Company and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.01. Definitions. For purposes of the Plan, unless the
context clearly or necessarily indicates the contrary, the following words and
phrases shall have the meanings set forth in the definitions below:
(a) "Accounts" shall mean the separate accounts to be maintained
under the Plan for each Participant as provided in Section 4.01.
(b) "Administrator" shall mean the committee appointed pursuant to
Section 8.01.
(c) "Beneficiary" shall mean the person, trust and/or other entity
entitled to receive benefits hereunder in the event of the Participant's death
as provided in Section 6.02.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Break-in-Service" shall mean the period of time elapsing
between the date on which a Participant incurs a Severance from Service and the
date, if any, on which he is next credited with an Hour of Service, provided
that the term shall not include any such period which is less than 12 full
consecutive calendar months in duration.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(g) "Company" shall mean Badger Meter, Inc., a Wisconsin
corporation, and any successors or assigns thereto.
(h) "Company Stock" shall mean the common stock of the Company.
(i) "Company Stock Fund" shall mean an unsegregated fund to be
invested in Company Stock, which may, pending such permanent investment, or
otherwise at the direction of the Investment Committee, be temporarily invested
in short-term interest-bearing securities.
(j) "Compensation" shall mean a Participant's total salary or
wages from the Company for a Plan Year, as reflected in the Participant's Form
W-2 (or its successors) before deductions, including overtime, bonuses and
including any salary reductions pursuant to an arrangement described in Code
Section 125 or 401(k), but excluding contributions on behalf of the Participant
under any other employee benefit plan (as defined by ERISA), and excluding any
other form of remuneration and/or expense reimbursement, all as determined by
the Administrator in a uniform and non-discriminatory manner. The maximum
annual compensation taken into account hereunder for purposes of calculating
any Participant's accrued benefit (including the right to any optional benefit)
and for purposes of applying the nondiscrimination rules under Code Section
401(a)(4), 401(a)(5) and 401(1), and the nondiscrimination rule in the average
benefits percentage test under Code Section 410(b)(2), shall be such amount
permitted pursuant to Code Section 401(a)(17). For purposes of calculating this
maximum for any 5% owner or Highly Compensated Employee who is in the group of
10 employees paid the greatest compensation during the year, pursuant to Code
Section 414(q)(6), the compensation of a spouse or a lineal descendant under
age 19 before the end of the Plan Year shall be treated as if paid to the
employee.
(k) "Deposits" shall mean amounts contributed under the Plan by or
at the direction of Participants pursuant to Section 3.01, which contributions
are made by the Company in lieu of payment of an equal amount directly to the
Participant.
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(l) "Disability" shall mean either (i) a disability with respect
to which the Participant is eligible to receive payments under the Company's
long-term disability income program, or (ii) if the Participant is not so
eligible, the inability of the Participant to engage in his current or any
reasonably related occupation available with the Company by reason of a
physical or mental disability which has continuously existed for a 6-month
period.
(m) "Effective Date" shall mean January 1, 1991.
(n) "Employee" shall mean any person who is a common law employee
of the Company, except that the term shall not include (i) any temporary or
supplemental employee, (ii) any person who is included in a unit of employees
covered by a collective bargaining agreement unless such agreement provides for
application of all or a portion of the Plan to the employees in such unit, or
(iii) any nonresident alien who receives no earned income from the Company
which constitutes income from sources within the United States. For purposes
of the Plan, a person shall be considered a "temporary or supplemental
employee" if he is employed during a period of peak activity in a position that
is not expected to be continuous or of long duration.
(o) "Employer" shall mean the Company and each other corporation
or unincorporated business in a controlled group of corporations, a group of
trades or businesses under common control or an affiliated service group
(within the meaning of Section 414(b), (c) or (m) of the Code) which includes
the Company.
(p) "Employer Contributions" shall mean both Employer Matching
Contributions and Other Employer Contributions hereunder.
(q) "Employer Matching Contributions" shall mean amounts
contributed by the Company pursuant to Section 3.02, including Company matching
contributions to the Badger Meter Savings Plan for years prior to 1991.
(r) "Employment Commencement Date" shall mean the first day for
which an Employee is credited with an Hour of Service, provided that, as to any
Employee whose Vesting Service for any period of employment has been cancelled
pursuant to Section 5.02(a) on account of a Break-in-Service (or would have
been cancelled pursuant to such Section had the Plan been in effect at the time
of such Break-in-Service), the term shall mean the first day following such
Break-in-Service for which the Employee is credited with an Hour of Service.
(s) "Entry Date" shall mean the first day of each calendar quarter.
(t) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as from time to time amended.
(u) "ESOP Feature" shall mean the portion of the Plan consisting
of Participants' Account balances derived from Employer Matching Contributions
and Other Employer Contributions, (including any such contributions to the
Prior Plans which were transferred to this Plan as of the Effective Date), and
amounts that may be held in a Suspense Account from time to time.
(v) "Exempt Loan" shall mean a loan or other extension of credit
described in Section 4975(d)(3) of the Code which meets the requirements of
Income Tax Regulation Section 54.4975-7(b)(1)(iii).
(w) "Highly Compensated Employee" shall mean an individual
described in Section 414(q) of the Code. To the extent required by the Code, a
"family member" (within the meaning of Section 414(q)(6) of the Code) of a
Highly Compensated Employee shall not be considered a separate employee, and
the compensation paid to and contributions on behalf of such family member
shall be treated as if paid to the Highly Compensated Employee.
(x) "Hour of Service" shall mean an hour for which an Employee is
paid or entitled to payment for the performance of duties for an Employer.
(y) "Investment Committee" shall mean the Benefit Plans Investment
Committee of the Board, as established and appointed by the Board from time to
time.
(z) "Investment Fund" shall mean an unsegregated fund established
at the direction of the Investment Committee pursuant to Section 9.02 and
invested in securities, insurance contracts or other property of such type and
general characteristics as the Investment Committee shall determine.
(aa) "Investment Manager" shall mean any person, insurance company
or corporation appointed by the Company to direct the investment and
reinvestment of all or any portion of the assets held by the Trustee under the
Trust.
(bb) "Normal Retirement Date" shall mean the later of (i) the date
on which the Participant attains age 65 or (ii) the earlier of (A) the fifth
anniversary of the date on which the Participant commenced participation in the
Plan or a Prior Plan, or (B) the date on which the Participant has a fully
vested interest in his Accounts hereunder. Notwithstanding the foregoing, with
respect to any person whose Employment Commencement Date was on or before
January 1, 1989, the term shall mean the date on which he attains age 65.
(cc) "Other Employer Contributions" shall mean Employer
Contributions other than Employer Matching Contributions, made to the Trust
pursuant to Section 3.03.
(dd) "Participant" shall mean an Employee who is eligible to and
has elected to make Deposits hereunder as provided in Sections 2.01 and 3.01,
or who has satisfied the eligibility requirements for participation in the ESOP
Feature as provided in Section 2.02.
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<PAGE> 6
The term shall include any individual who was a Participant in a Prior Plan
immediately prior to the Effective Date. An individual who has become a
Participant shall continue as a Participant until all of his interests hereunder
have been distributed pursuant to the Plan.
(ee) "Plan" shall mean the Badger Meter Employee Savings and Stock
Ownership Plan as set forth herein and as the same may be amended from time to
time.
(ff) "Plan Year" shall mean a twelve-month period beginning on
January 1 of each year and ending December 31 of the same year.
(gg) "Prior Plan" shall mean the Badger Meter Savings Plan, the
Badger Meter Employee Stock Ownership Plan and/or the Badger Meter Payroll
Based Employee Stock Ownership Plan.
(hh) "Savings Feature" shall mean the portion of the Plan
consisting of Account balances derived from Participants' Deposits, including
Deposits under the Badger Meter Savings Plan for years prior to 1991.
(ii) "Severance from Service" shall mean the earlier to occur of
(i) the date during a Participant's service with the
Employers on which he quits, retires, is terminated
or dies, whichever occurs first; or
(ii) the first anniversary of the date a Participant
commences a continuous absence from service with the
Employers for any other reason, such as military
service, layoff, vacation, authorized leave of
absence, et cetera; provided, however, that in the
case of a Participant who is absent from service with
the Employers as a consequence of his performing
military service in the armed forces of the United
States of America or of any state thereof under
circumstances entitling him to veterans'
re-employment rights pursuant to federal statute, the
first anniversary of the commencement of such absence
shall not constitute a Severance from Service
hereunder if, but only if, he returns to the service
of an Employer within the applicable time limit and
under the other conditions prescribed by such statute
for his exercise of such re-employment rights; and
provided further that, for purposes of the Plan, "an
authorized leave of absence" means an absence from
active service with an Employer which it authorized
pursuant to uniform rules consistently applied in
like circumstances for its personnel who are
similarly situated in respect to such Participant.
(jj) "Suspense Account" means the separate account maintained by
the Trustee to hold Company Stock acquired with the proceeds of an Exempt Loan
prior to its release pursuant to Section 3.04.
(kk) "Trust Fund" shall mean the Company Stock and other property
which shall be held from time to time by the Trustee in trust under the terms
of this Agreement.
(ll) "Trustee" shall mean Marshall and Ilsley Trust Company, or any
successor or successors thereto designated pursuant to Section 9.01.
(mm) "Valuation Date" shall mean the last day of each calendar
quarter.
(nn) "Vesting Service" shall mean service with an Employer that is
counted in determining the Participant's vested and nonforfeitable interest
under the Plan, as determined under Section 5.01.
Section 1.02. Construction. (a) Words used herein in the masculine
gender shall include the feminine and words used herein in the singular shall
include the plural in all cases where such would apply. The words "hereof",
"herein", "hereunder" and other similar compounds of the word "here" shall
refer to the entire Plan, not to a particular article or section hereof.
Headings of articles, sections and subsections are for convenience of reference
only; they constitute no part of the Plan and are not to be considered in the
construction hereof. All references to statutory sections shall include the
section so identified as amended from time to time or any other statute of
similar import.
(b) The Plan is intended to be a qualified plan meeting the
requirements of Code Section 401(a). The Savings Feature is intended to be a
"qualified cash or deferred arrangement" meeting the requirements of Code
Section 401(k) and to qualify as a profit sharing plan under Code Section
401(a). The ESOP Feature is intended to qualify as a stock bonus plan under
Code Section 401(a) and as an employee stock ownership plan qualifying under
Code Section 4975(e)(7) and ERISA Section 407(d)(6), and includes a matching
contribution feature which is intended to satisfy the requirements of Code
Section 401(m). The Savings Feature and the ESOP Feature are both intended to
be part of a single plan for purposes of ERISA and the Code, and shall be
interpreted so as to comply with the applicable requirements thereof, where
such requirements are not clearly contrary to the express terms hereof. In all
other respects, the Plan shall be construed and its validity determined
according to the laws of the State of Wisconsin to the extent such laws are not
preempted by applicable requirements of federal law. In case any provision of
this Agreement and/or the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining provisions of this
Agreement and/or the Plan, and this Agreement and/or the Plan shall be
construed and enforced as if said illegal or invalid provisions had never been
included herein. As provided in Section 8.01, the Administrator shall have the
ultimate authority to interpret the terms of the Plan, but the Trustee shall be
indemnified for following such interpretations and resulting directions in
accordance with Section 9.11
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<PAGE> 7
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.01. Eligibility to Participate in Savings Feature. Any
person who was a participant in the Badger Meter Savings Plan immediately prior
to the Effective Date shall automatically be a Participant in the Savings
Feature. Any other Employee shall be eligible to participate in the Savings
Feature of the Plan as of the January 1 next following his Employment
Commencement Date. Effective April 1, 1995, Employees shall be eligible to
participate on the earliest of the January 1, April 1, July 1 or October 1 next
following their Employment Commencement Date. However, an Employee who is a
member of a unit of employees covered by a collective bargaining agreement
shall be eligible to make Deposits hereunder only if, and so long as, such
agreement specifically provides that members of the unit will be eligible for
participation in the Plan's Savings Feature. In order to participate in the
Savings Feature, an eligible Employee must give timely written notice to the
Administrator authorizing the Company to make Deposits on the Participant's
behalf pursuant to Section 3.01.
Section 2.02. Eligibility to Participate in ESOP Feature. (a)
Employer Matching Contributions. Each Employee who is a Participant in the
Savings Feature shall be eligible to participate in the ESOP Feature and be
entitled to share in Employer Matching Contributions as provided in Section
4.01.
(b) Other Employer Contributions. Any Employee who was a
participant in either the Badger Meter Employee Stock Ownership Plan or the
Badger Meter Payroll-Based Employee Stock Ownership Plan immediately prior to
the Effective Date shall automatically be a participant in the ESOP Feature.
Any other Employee shall become a participant in the ESOP Feature and shall be
entitled to share in Other Employer Contributions as provided in Section 3.03,
effective as of the January 1 next following his Employment Commencement Date,
or, if later, January 1 of the Plan Year in which he first becomes an Employee.
However, an Employee who is a member of a unit of employees covered by a
collective bargaining agreement shall be eligible to share in Other Employer
Contributions as provided in Section 3.03 only if, and so long as, such
agreement specifically provides that members of such unit shall be eligible to
share in Other Employer Contributions hereunder.
Section 2.03. Status of Leased Employees. A person who is a "leased
employee" within the meaning of Code Section 414(n) or (o) shall not be
eligible to participate in the Plan, but in the event such a person was
participating or subsequently becomes eligible to participate herein, credit
shall be given for the person's service as a leased employee of any Employer
toward completion of the Plan's eligibility and vesting requirements.
ARTICLE III
PARTICIPANT DEPOSITS AND
EMPLOYER CONTRIBUTIONS
Section 3.01. Participants' Deposits. (a) Subject to the limitations
described in Section 3.05, any Employee who is eligible to participate in the
Plan's Savings Feature may elect to have the Company contribute any whole
percentage of his Compensation, to a maximum of 15%, as Deposits hereunder, in
lieu of paying such amounts as current cash compensation. Such election shall
be effective as of the Entry Date next following the date on which the Employee
shall have given timely written notice of his election to the Administrator.
However, the maximum Deposits hereunder for any Participant in any calendar
year shall be $7,000 (adjusted for cost of living increases pursuant to Code
Section 402(g)(5)). From time to time, but not less frequently than monthly,
the Company shall remit Participants' Deposits to the Trustee. The Savings
Account of each Participant shall be credited with the amounts of his Deposits
as such amounts are received by the Trustee.
(b) A Participant may elect to change the rate of his Deposits on
timely notice as of any Entry Date. In addition, on timely notice, a
Participant may elect to suspend all of his Deposits, effective reasonably soon
after such notice is given. A Participant's Deposits shall be automatically
suspended as provided in Section 7.01 if he makes a hardship withdrawal
hereunder, and during any period in which he is not employed by the Company in
a position in which he is eligible to participate in the Plan's Savings
Feature, as determined under Section 2.01. A Participant whose Deposits are
suspended may resume making Deposits on timely notice:
(i) in the case of a voluntary suspension, as of any Entry Date
which is not less than three months after the effective date
of the suspension;
(ii) in the case of a suspension resulting from transfer to a
position in which he is not eligible to participate in the
Plan's Savings Feature, as of any Entry Date coincident with
or next following his resumption of employment in an eligible
position; or
(iii) in the case of a suspension resulting from a hardship
withdrawal, as of any Entry Date which is at least 12 months
after the withdrawal.
Except as provided in this subsection, a Participant's election to make
Deposits at a specified rate shall remain in effect for successive periods of
time.
(c) The Administrator shall, from time to time, establish a
maximum deferred amount respecting Participant Deposits. Such maximum deferred
amount may vary during each payroll period and for each Participant. If a
Participant shall designate any
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<PAGE> 8
amount or rate of Deposits in excess of the applicable maximum deferred amount
established for his Deposits, such designation shall not be invalid, but shall
be effective to designate a rate of Deposits equal to the applicable maximum
deferred amount. Without limiting the generality of the foregoing, the maximum
rate of Deposits for a Participant who is a Highly Compensated Employee shall
be established so that the average rate (expressed as a percentage of
"compensation" as defined in Code Section 414(s)) of such Deposits by Highly
Compensated Employees does not exceed the greater of:
(i) a rate equal to 1.25 times the average rate of
Deposits by all other eligible Employees for the
Plan Year; or
(ii) a rate equal to the lesser of (A) the average rate of
Deposits for all other eligible Employees for the
Plan Year multiplied by 2.0, or (B) the average rate
of Deposits for all other eligible Employees plus 2%,
or such other limit as may be prescribed by the
Secretary of the Treasury to prevent the multiple use
of this alternative limitation.
It is the intent and purpose of this Section 3.01(c) that the Administrator
shall have and exercise complete discretion in establishing the maximum
deferred amount for any Participant for any Plan Year, in order to assure
compliance with Code Sections 401(k), 402(g)(5) and 415 and any other
applicable provisions of the Code. Further, in the event Participants eligible
to make Deposits include both employees who are represented for collective
bargaining purposes and those who are not, the foregoing test shall be applied
separately to Participants who are not represented for collective bargaining
and to each collective bargaining unit, rather than to all Participants as one
group.
(d) In the event that, despite the limitations described above,
the Deposits for a Participant in any Plan Year exceed the limit on Deposits
for such Participant determined under Code Section 401(k) or 402(g), then the
Administrator shall direct the Trustee to distribute to any such Participant an
amount equal to the excess of such Deposits over the amount that such
Participant should have been permitted to contribute, plus income, if any,
attributable to such excess. Such distributions shall be made, to the extent
possible, within two and one-half months after the end of the Plan Year, but,
in any event, not later than the last day of the subsequent Plan Year.
Similarly, if a Participant gives timely notice to the Administrator that the
total of his elective deferrals (within the meaning of Code Section 401(g)(3))
for his taxable year exceeded the limit described in such Code Section for his
taxable year and of the amount of such excess attributable to the Plan, the
Administrator may direct that such excess, together with any income
attributable to such excess, shall be distributed to the Participant on or
before the first April 15 following the end of the Participant's taxable year.
Section 3.02. Employer Matching Contributions. (a) For each Plan
Year, the Account of each Participant who is eligible to receive an Employer
Matching Contribution shall be credited with Employer Matching Contributions
equal to such percentage as the Board in its sole discretion may determine for
such Plan Year, of the Participant's Deposits for the Plan Year to the extent
such Deposits do not exceed such percentage of the Participant's Compensation
for the Plan Year as the Board in its sole discretion may determine for such
Plan Year. Employer Matching Contributions shall be derived from the following
sources, in the order of priority indicated:
(i) Amounts forfeited from Participants' Employer
Matching Contributions Accounts during the Plan Year
pursuant to Section 5.05;
(ii) Company Stock released from the Suspense Account
during the Plan Year pursuant to Section 3.04; and
(iii) To the extent the amounts available under (i) and
(ii) for any Plan Year are not sufficient, the
Company shall contribute the additional amounts
necessary to provide for the Employer Matching
Contributions called for by this Section. Such
contributions may be made either in the form of cash
or Company Stock or a combination thereof and shall
be made on or before the due date, including
extensions of the Company's tax return for the Plan
Year.
The value of Employer Matching Contributions derived from forfeitures and/or
releases from the Suspense Account under (i) or (ii) above shall be determined
as of the last day of the Plan Year. Any other Employer Matching Contributions
shall be the amount of cash or the value of Company Stock contributed by the
Company as of the date of the contribution.
(b) The Participants eligible to share in Employer Matching
Contributions for any Plan Year shall be (i) those Participants who are
employed by an Employer on the last day of the Plan Year, and (ii) Participants
whose Severance from Service occurred during the Plan Year on or after the
Participant's Normal Retirement Date or attainment of age 55 with five years of
Vesting Service or on account of Retirement, death or Disability. Participants
whose Severance from Service occurred during the Plan Year for any reason other
than those listed in (ii) above shall not be eligible to share in Employer
Matching Contributions. A Participant who is on temporary layoff for a period
not exceeding one year shall not be deemed to have incurred a Severance from
Service for purposes of this Section.
(c) Notwithstanding subsection 3.02(a) above, the average rate
(expressed as a percentage of "compensation" as defined in Code Section 414(s))
of Employer Matching Contributions for any Plan Year for Employees who are
Highly Compensated Employees for such Plan Year shall not exceed the greater
of:
(i) a rate equal to 1.25 times the average rate of
Employer Contributions for all other eligible
Employees for the Plan Year; or
(ii) a rate equal to the lesser of (A) the average rate of
Employer Contributions for the Plan Year for all
other eligible Employees multiplied by 2.0, (B) the
average rate of Employer Contributions for the Plan
Year for all other eligible Employees plus 2% or (C)
such other limit as may be prescribed by the
Secretary of the Treasury to prevent the multiple use
of this alternative limitation.
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<PAGE> 9
It is the intent and purpose of this subsection 3.02(c) that the Administrator
shall have and exercise complete discretion in establishing the maximum rate of
Employer Matching Contributions for any Participant for any Plan Year, in order
to assure compliance with the limitations imposed by Sections 401(m) and 415 of
the Code and other applicable provisions of such Code. Accordingly, no
Employer Matching Contribution shall be made or allocated to the Account of any
Participant if such contribution would cause such limitations to be exceeded.
Further, in the event Participants eligible to make Deposits include both
employees who are represented for collective bargaining purposes and those who
are not, the foregoing test shall be applied separately to Participants who are
not represented for collective bargaining and to each collective bargaining
unit, rather than to all Participants as one group.
Section 3.03. Other Employer Contributions. (a) Amounts released
from the Suspense Account pursuant to Section 3.04 for any Plan Year, to the
extent not utilized as Employer Matching Contributions for such Plan Year
pursuant to subsection 3.02(a), shall constitute Other Employer Contributions
for such Plan Year. The Company shall also make such additional Other Employer
Contributions for each Plan Year as may be determined by the Board, in its sole
discretion, provided that Other Employer Contributions for any Plan Year shall
not exceed (i) the amount that can be allocated to Participants' Accounts
hereunder (after giving effect to the limitations described in Section 3.05),
or (ii) the maximum amount deductible for federal income tax purposes for such
Plan Year. Other Employer Contributions for each Plan Year shall be paid to
the Trustee no later than the due date (including extensions) for filing the
Company's federal income tax return for the taxable year ending with or within
such Plan Year, and may be made in the form of either cash or Company Stock or
a combination thereof. Subject to the limitations described in Section 3.05,
Other Employer Contributions and forfeitures from Other Employer Contributions
Accounts for any Plan Year shall be allocated in equal amounts among the
Accounts of Participants eligible to share in such Contributions.
(b) The Participants eligible to share in Other Employer
Contributions for any Plan Year shall be (i) those Participants who are
Employees on the last day of the Plan Year, (ii) Participants whose Severance
from Service occurred during the Plan Year on or after the Participant's Normal
Retirement Date or attainment of age 55 with five years of Vesting Service or
on account of death or Disability, provided that Employees in a unit of
employees covered by a collective bargaining agreement shall not be eligible to
share in Other Employer Contributions unless such agreement specifically
provides that members of such unit shall be eligible to share in Other Employer
Contributions hereunder. Participants whose Severance from Service occurred
during the Plan Year for any reason other than those listed in (ii) above or
who have transferred to an ineligible status during the Plan Year, shall not be
eligible to share in Other Employer Contributions for the Plan Year. A
Participant who is on temporary layoff for a period not exceeding one year
shall not be deemed to have incurred a Severance from Service for purposes of
this Section.
Section 3.04. Suspense Account. (a) To the extent the Plan has
acquired shares of Company Stock with the proceeds of an Exempt Loan, all such
shares shall be held in a Suspense Account pending their release and allocation
to the Accounts of Participants as payments are made under the Exempt Loan.
(b) Repayment of principal and payment of interest under any such
Exempt Loan shall be made as follows:
(i) Cash dividends on Company Stock in the Suspense
Account and earnings thereon shall be applied to
principal and/or interest obligations under the
Exempt Loan, unless the Administrator shall direct
otherwise; and
(ii) To the extent the amounts available under (i) above
are not sufficient, the Company shall make cash
contributions in such amounts and at such times as
are needed to provide the Trustee with cash
sufficient to pay any currently maturing obligations
under an Exempt Loan.
(c) The number of shares of Company Stock to be released from the
Suspense Account for each Plan Year shall be determined as follows:
(i) If (A) the Exempt Loan provides for annual payment of
principal and interest at a cumulative rate that is
not less rapid at any time than level annual payments
of such amounts for 10 years, and (B) the interest
included in any payment on the Exempt Loan is
disregarded only to the extent that it would be
determined to be interest under standard loan
amortization tables, then the number of shares to be
released from the Suspense Account each year shall be
equal to the number of shares held immediately before
the release multiplied by a fraction, the numerator
of which is the amount of the principal payment(s) on
the Exempt Loan for the Plan Year and the denominator
of which is the sum of the numerator plus the
principal remaining unpaid at the end of the Plan
Year; provided that this clause shall not be
applicable from the time that, by reason of renewal,
extension or refinancing, the sum of the unexpired
duration of the Exempt Loan, the renewal period, the
extension period, and the duration of the new Exempt
Loan exceeds 10 years.
(ii) If (i) above is not applicable, the number of shares
to be released from the Suspense Account shall be the
number of shares held in the Suspense Account
immediately prior to the release for the Plan Year
multiplied by a fraction, the numerator of which is
the amount of principal and interest on the Exempt
Loan paid for the Plan Year and the denominator of
which is the sum of principal and interest on the
Exempt Loan paid for the Plan Year and the principal
and interest on the Exempt Loan to be paid for all
future Plan Years. If the interest rate under the
Exempt Loan is variable, the interest to be paid in
future Plan Years shall be computed by using the
interest rate in effect as of the end of the Plan
Year.
(d) Shares of Company Stock that are released from the Suspense
Account for each year shall be allocated, as of the last day of the Plan Year,
as follows:
(i) first, to satisfy the Employer Matching Contribution
obligation for the Plan Year pursuant to Section
3.02; and
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<PAGE> 10
(ii) if any amount remains after the allocation provided
in (i), such remainder shall be allocated as Other
Employer Contributions under Section 3.03.
Section 3.05. Maximum Annual Additions. (a) Notwithstanding the
other provisions of this Plan, annual additions to the account of any
Participant for a Plan Year (also the "limitation year") shall not exceed the
lesser of:
(i) $30,000 as adjusted pursuant to Section 415(c)(1)(A)
and (d)(1); or
(ii) 25% of the Participant's total compensation (as
defined in subsection (c) of Section 415 of the Code)
from the Employers for such Plan Year.
(b) The term "annual additions" as used in this Section shall mean
the sum for the Plan Year of (i) Employer Contributions, (ii) forfeitures,
(iii) Deposits or other employee contributions and (iv) amounts described in
Section 415(c)(2) and 419A(d)(2) of the Code, credited to the Participant's
Account provided that, for any Plan Year in which no more than one-third of the
Employer Contributions used to repay an Exempt Loan are allocated to Highly
Compensated Employees, forfeitures of Company Stock acquired with the proceeds
of an Exempt Loan and contributions applied to interest on an Exempt Loan shall
not constitute annual additions.
(c) If a Participant also participates in another qualified
defined contribution plan maintained by an Employer, then the sum of his annual
additions under this Plan and under such other plan shall not exceed the
limitations described in subsection (a) of this Section. Further, if a
Participant also participates in a defined benefit pension plan maintained by
an Employer, the sum of (1) and (2) below may not exceed 1.0:
(1) the sum of the projected annual benefit of the
Participant under all defined benefit pension plans of the Employers
determined as of the close of the Plan Year, divided by the lesser of
(i) the product of 1.25 multiplied by the dollar limitation in effect
under Section 415(b)(1)(A) of the Code for such year, or (ii) the
product of 1.4 multiplied by the amount which may be taken into
account under Section 415(b)(1)(B) of the Internal Revenue Code with
respect to such Participant for such year; and
(2) the sum of the annual additions to the Participant's
account under all defined contribution plans of the Employers as of
the close of the Plan Year and for all prior Plan Years, divided by
the sum of the lesser of (i) or (ii) for such year and for each prior
year of service with the Employers (regardless of whether any such
defined contribution plan was in existence during those years), where
(i) is the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the code for such year, and (ii)
is the product of 1.4 multiplied by the amount which may be taken into
account under Section 415(c)(1)(B) of the Code (or Section 415(c)(7)
or (8) of such Code, if applicable) with respect to such individual
under such plan for such year; provided, however, that the
Administrator may elect that the amount taken into account for each
Participant for all years ending before January 1, 1983, under (i) and
(ii) above shall be determined pursuant to the special transition rule
provided in such Section 415(e)(6) of the Code.
(d) In the event that, after the application of all limitations
and reductions in the Participant's benefits under any defined benefit pension
plan and any limitations imposed by the Administrator pursuant to Sections
3.01(c) and 3.02(c), the rules set forth in subsection (a) or (b) of this
Section would otherwise be violated with respect to any Participant, then such
Participant's annual additions under this Plan for the Plan Year shall be
automatically reduced as follows:
(i) The amount allocated to his Other Employer
Contributions Account pursuant to Section 3.03 shall
be reduced and allocated pursuant to Section 3.03 to
the Other Employer Contributions Accounts of other
Participants eligible to share in such Contributions
for the Plan Year to the extent such additional
allocations do not result in violation of this
Section.
(ii) In the event that the application of (i) above is not
sufficient to eliminate the violation, there shall be
deducted from the Participant's Accounts such portion
of his Deposits and Employer Matching Contributions
for the Plan Year as shall be necessary to eliminate
the violation. Employer Contributions and Deposits
deducted from a Participant's Accounts shall be
forfeited and shall be applied as provided in Section
5.05.
Notwithstanding the foregoing, if as a result of the allocation of forfeitures,
an error in estimating a Participant's Compensation for the Plan Year, or such
other facts and circumstances as may be prescribed by the Commissioner of
Internal Revenue, the Deposits or Employer Contributions, or both, actually
allocated to a Participant exceed the limits described in this Section, such
excess shall be used to reduce Deposits and Employer Contributions under the
Plan for the next Plan Year and succeeding Plan Years, as necessary, for such
Participant. To the extent such excess amounts are not so reduced, the
Participant shall not be entitled to receive such excess. If a Participant has
such an excess annual addition but is not covered by the Plan as of the end of
the Plan Year for which the excess arose or as of any succeeding Plan Year
prior to the Plan Year in which such excess is fully eliminated, then such
excess shall be held in a suspense account for that Plan Year and allocated or
reallocated in the next and succeeding Plan Years to all Participants then
entitled to share in Other Employer Contributions or Employer Matching
Contributions, subject, however, to the limitations of this Section. Amounts
allocated to this suspense account shall not be credited with income or loss.
If an amount remains in this suspense account at the time the Plan terminates
and all Plan assets have been distributed to Participants, then such amount
shall be returned to the Company.
(e) The Administrator shall have broad authority to coordinate
with the plan administrator of other plans maintained by the Employers in
relation to the limits imposed by this Section, and to implement reductions of
allocations and reallocations necessary to maintain all of such plans in
accordance with the requirements of applicable law.
7
<PAGE> 11
Section 3.06. Rollovers. An Employee shall be entitled to rollover to
the Plan amounts derived from a qualifying distribution from another
tax-qualified pension, profit sharing or stock bonus plan. No such rollover
shall be accepted unless it is paid over in cash or check to the Trustee within
60 days after it is received by the Employee. No amount shall be accepted for
rollover unless the Employee certifies in writing to the Administrator that, to
the best knowledge of the Employee, (i) the plan from which the monies were
derived was a tax-qualified retirement plan at the time of the distribution,
and (ii) the distribution constituted a total distribution from such other plan
within the meaning of Code Section 402(a)(5)(E)(i). Such amounts shall be
allocated to the Employee's Savings Account and shall be administered for all
purposes of the Plan as if attributable to Deposits hereunder.
ARTICLE IV
PARTICIPANT ACCOUNTS;
INVESTMENT OF ACCOUNTS
Section 4.01. Establishment of Accounts. Each Participant shall have
one or more Accounts established for him. Such Accounts shall consist of:
(i) A Savings Account for interests derived from his
Deposits hereunder or under the Badger Meter Savings
Plan prior to the Effective Date;
(ii) An Employer Matching Contributions Account for
interests derived from Employer Matching
Contributions hereunder or under the Badger Meter
Savings Plan prior to the Effective Date; and
(iii) An Other Employer Contributions Account for his
interests derived from Other Employer Contributions
hereunder or from allocations under the Badger Meter
Employee Stock Ownership Plan and Badger Meter
Payroll Based Employee Stock Ownership Plan prior to
the Effective Date.
To the extent necessary or appropriate to provide for the proper administration
of the Plan, the Accounts of Participants shall include separate balances for
interests invested in each Investment Fund, for interests derived from
different sources of contributions, and for such other purposes as the
Administrator shall determine. As soon as practicable following the end of
each Plan Year, each Participant shall be provided with a statement reflecting
the status of his Accounts.
Section 4.02. Investment of Savings Accounts. (a) On timely notice,
each Participant shall direct the Administrator to invest his Deposits in one
or more of the Investment Funds then available for such purpose, in accordance
with rules of uniform and nondiscriminatory application established by the Plan
Administrator. An election under this subsection may be changed as of any
Entry Date, but shall remain in effect for successive Plan Years unless changed
on timely notice.
(b) A Participant may on timely notice elect to reallocate his
Savings Account among the Investment Funds as of any Entry Date. A Participant
who elects to make such a reallocation shall elect to have all of his interests
in his Savings Account immediately prior to the Entry Date allocated to one or
more of the Investment Funds in accordance with rules of uniform and
nondiscriminatory application established by the Plan Administrator.
(c) In the event that a Participant shall fail to direct the
investment of Deposits subject to his direction or fail to replace any
directions which may have been suspended or revoked, then such Deposits shall
be invested on the Participant's behalf in an Investment Fund consisting
primarily of assets bearing a fixed or guaranteed rate of return designated by
the Administrator for that purpose.
(d) In the absence of further action by the Directors to the
contrary, not more than 25% of a Participant's Savings Account (measured as of
the date of the investment) may be invested in the Company Stock Fund.
Section 4.03. Investment of Employer Contributions Accounts. Subject
to the Participant's rights to diversify under Section 4.04, a Participant's
Employer Matching Contributions Account and his Other Employer Contributions
Account shall be invested exclusively in the Company Stock Fund. However,
separate subaccounts shall be maintained for the portions of the Company Stock
Fund actually invested in Company Stock from time to time and for the portion
thereof that is held in short term interest bearing securities and income
thereon.
Section 4.04. ESOP Diversification Election. Each Participant who has
attained age 55 and completed at least 10 years of participation under the Plan
(including participation in any Prior Plan) shall be permitted to direct the
Trustee, in accordance with a procedure adopted by the Administrator, as to the
investment of 25% of the value of the Participant's Employer Matching
Contributions Account and his Other Employer Contributions Account (to the
extent not previously diversified in accordance with this Section). This
diversification election shall continue for six Plan Years, beginning with the
Plan Year in which the Participant attains age 55 or completes 10 years of
participation, whichever shall last occur (the "qualified election period"). A
Participant's election shall be in writing, shall be made within 90 days after
the last day of each Plan Year during the Participant's qualified election
period and shall be effective no later than 180 days after the close of the
Plan Year to which the direction applies. Within 90 days after the close of
the last Plan Year in the Participant's qualified election period, a qualified
Participant shall be permitted to direct the investment of an amount not to
exceed 50% of the value of his Employer Matching Contributions Account and his
Other Employer Contributions Account (to the extent not previously diversified
in accordance with this Section). The Plan shall distribute that portion of
the Participant's Employer Matching Contributions Account and his Other
Employer Contributions Account subject to the election within 90 days after the
last day of the period during which the election can be made. In lieu of
distribution, the Administrator may adopt a written procedure that is uniformly
applicable to all qualified Participants and under which each qualified
Participant may direct the Administrator to transfer that portion of the
Participant's
8
<PAGE> 12
Other Employer Contributions Account subject to the election to other
Investment Funds under this Plan or another tax-qualified retirement plan
maintained by the Company which accepts such transfers and permits Participants
to direct investments within at least three investment options (exclusive of
any Company Stock options). Any such transfer shall be made no later than 90
days after the last day of the period during which the Participant's election
can be made. The portions of a Participant's Employer Matching Contributions
Account and his Other Employer Contributions Account that are subject to the
elections above shall be determined in accordance with Code Section 401(a)(28).
Section 4.05. Valuation of Accounts. As of each Valuation Date, the
Accounts of each Participant (including his Employer Matching Contributions
Account and Other Employer Contributions Account, to the extent not invested in
shares of Company Stock) shall be adjusted to reflect the effect of income,
collected and accrued, realized and unrealized gains and losses, expenses and
all other transactions during the preceding quarter with respect to the
applicable Investment Funds.
Section 4.06. Allocations to Other Employer Contributions Accounts.
The Other Employer Contributions Account and Employer Matching Contributions
Account maintained for each eligible Participant shall be credited annually, as
of the last day of each Plan Year, with his allocable share of (i) Company
Stock (including fractional shares) purchased and paid for with Employer
Contributions for the Plan Year, contributed in kind to the Trust or released
from the Suspense Account; (ii) forfeitures allocable to his Other Employer
Contributions Account and Employer Matching Contributions Account; and (iii)
dividends on Company Stock allocable to his Other Employer Contributions
Account and Employer Matching Contributions Account, pending distribution
pursuant to Section 4.07.
Section 4.07. Dividends on Company Stock. (a) Cash dividends
received on shares of Company Stock allocated to Participants' Accounts shall
be allocated to their respective Accounts, pending distribution pursuant to
subsection (b) of this Section. Cash dividends received on shares of Company
Stock in the Suspense Account shall be applied as provided in Section 3.04.
Stock dividends received on Company Stock shall be credited to the Account to
which the Company Stock was allocated.
(b) Notwithstanding any provision herein to the contrary, cash
dividends received by the Trust on shares of Company Stock allocated to
Participants' Accounts shall be paid currently in cash to such Participants.
All such dividends received during a Plan Year shall be paid out annually
pursuant to this Section not later than 90 days after the close of such Plan
Year.
ARTICLE V
VESTING AND FORFEITURES
Section 5.01. Calculation of Vesting Service. Each Participant shall,
subject to the Break-in-Service rules of Section 5.02, be credited with Vesting
Service, calculated in years and daily fractions thereof equal to the
following:
(a) the period of time commencing with his Employment
Commencement Date (whether before or after the Effective Date) and ending on
the date of a Severance from Service which is immediately followed by a
Break-in-Service;
plus
(b) each subsequent period of time commencing on the date on
which he first performs an Hour of Service following a Break-in-Service and
ending on the date of his next subsequent Severance from Service.
Section 5.02. Effect of Breaks-in-Service. (a) The Vesting Service
of a Participant who at the time he incurs a Break-in-Service has a vested
right to any benefits derived from Employer Contributions hereunder shall not
be subject to cancellation. In any other case, the Vesting Service of a
Participant who incurs a Break-in-Service which equals or exceeds 72
consecutive months in duration shall be cancelled and disregarded for all
purposes of the Plan.
(b) Any former Participant who has incurred a Break-in-Service and
is subsequently re-employed by an Employer following the cancellation of his
Vesting Service under subsection (a) of this Section shall be treated for all
purposes of the Plan as if he had not previously been employed by an Employer.
(c) In the case of a Participant who is re-employed by an Employer
following a Break-in-Service of less than 72 consecutive months in duration,
any benefits forfeited as a result of such Break-in-Service pursuant to Section
5.05 shall be reinstated. In any other case, forfeited benefits shall not be
reinstated.
Section 5.03. Vesting in Savings Accounts. A Participant's interests
in his Savings Account shall at all times be fully vested and nonforfeitable.
Section 5.04. Vesting in Employer Contributions Accounts. (a) A
Participant's interest in his Employer Matching Contributions Account and his
Other Employer Contributions Account shall be fully vested and nonforfeitable
upon the occurrence of any of the following events prior to his Severance from
Service:
(i) the Participant's Normal Retirement Date;
(ii) death; or
(iii) Disability.
9
<PAGE> 13
In addition, a Participant's interest in the balance in his Other Employer
Contributions Account derived from his participation in the Badger Meter
Payroll-Based Employee Stock Ownership Plan shall at all times be fully vested
and nonforfeitable.
(b) Except as provided in subsection (a), a Participant's interest
in his Employer Matching Contributions Account shall be vested and
nonforfeitable to the extent determined from the following table:
<TABLE>
<CAPTION>
Vested Percentage
Years of of Employer Matching
Vesting Service Contributions Account
- --------------- ---------------------
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
</TABLE>
(c) Except as provided in subsection (a), a Participant's interest in
his Other Employer Contributions Account shall be vested and nonforfeitable to
the extent determined from the following table:
<TABLE>
<CAPTION>
Vested Percentage
Years of of Other Employer
Vesting Service Contributions Account
--------------- ---------------------
<S> <C>
Less than 5 0%
5 or more 100%
</TABLE>
Notwithstanding the foregoing, the Other Employer Contributions Account of a
Participant whose Employment Commencement Date preceded January 1, 1989 shall
be vested and nonforfeitable to the extent determined from the following table:
<TABLE>
<CAPTION>
Vested Percentage
Years of of Other Employer
Vesting Service Contributions Account
--------------- ---------------------
<S> <C>
Less than 2 0%
2 20%
3 30%
4 40%
5 or more 100%
</TABLE>
Section 5.05. Forfeitures. (a) Following a Participant's Severance from
Service, the balances in the Participant's Accounts which are not vested shall
be maintained in the Participant's Accounts unless and until (i) the
Participant incurs a Period of Severance of at least 72 consecutive months in
duration, or (ii) the Participant receives distribution of the vested portion
of all of his Accounts. Such portion shall continue to be invested in the
Company Stock Fund. If either of the events described above occurs, such
amounts shall be forfeited. The portion of the forfeiture derived from the
Participant's Employer Matching Contributions Account shall be applied to
reduce Employer Matching Contributions otherwise required under Section 3.02
for the Plan Year in which the forfeiture occurred. The portion of the
forfeiture which is derived from Other Employer Contributions shall be
allocated among the Other Employer Contributions Accounts of eligible
Participants for the Plan Year in which the forfeiture occurred, as provided in
Section 3.03.
(b) If a Participant whose Accounts have been forfeited in whole or in
part returns to employment before the duration of his Period of Severance
exceeds 72 consecutive months, then the amounts forfeited pursuant to this
Section shall be reinstated to the Participant's Employer Matching
Contributions Account and/or his Other Employer Contributions Account out of
forfeitures for the Plan Year in which such re-employment occurs, or, if such
forfeitures are not sufficient, out of additional Employer Contributions.
Reinstated forfeitures shall be treated as if they were Employer Matching
Contributions and/or Other Employer Contributions made on the day when
restored. Reinstated forfeitures shall be separately accounted for within the
Participant's Employer Matching Contributions or Other Employer Contributions
Account, according to whichever of these Accounts gave rise to the forfeiture,
and invested in the Company Stock Fund. Company Stock acquired with the
proceeds of an Exempt Loan shall be forfeited only after all other assets in a
Participant's Account have been forfeited.
ARTICLE VI
DISTRIBUTION OF BENEFITS
Section 6.01. Distribution Upon Termination of Employment. A
Participant's vested and nonforfeitable interests in all of his Accounts shall
be distributable to the Participant upon his Severance from Service for any
reason. Distribution shall be made at the time and in the manner specified in
Section 6.04.
10
<PAGE> 14
Section 6.02. Death. (a) Upon a Participant's death, whether before or
after Severance from Service and whether before or after commencement of
payment of benefits, the vested portion of the remaining amounts in all of his
Accounts shall be payable to the Participant's Beneficiary at the time and in
the manner specified in Section 6.04.
(b) A Participant may designate any person, trust and/or other entity as
his Beneficiary. Any such designation shall be in writing and filed with the
Administrator on the form and in the manner prescribed by the Administrator,
and may be revoked or changed by the Participant at any time by a written
instrument filed with the Administrator prior to his death. Notwithstanding
the foregoing, in the event that the Participant has a spouse at the time of
his death, such spouse shall be the Participant's Beneficiary unless (i) such
spouse has consented in writing to the Participant's designation of a different
Beneficiary, (ii) such consent acknowledges the effect of such election and is
witnessed by a plan representative appointed by the Administrator or by a
notary public, and (iii) the Participant is survived by a Beneficiary
designated as such as described above. In the event the Participant is not
married at the time of his death and is not survived by a properly designated
Beneficiary, the Participant's estate shall be the Beneficiary.
Section 6.03. Distribution Upon Attainment of Age 70 1/2. In the event a
Participant has attained age 70 1/2, but has not retired, distribution of his
Accounts shall be made in the manner specified in Section 6.04 on or before
April 1 of the calendar year which next follows his attainment of such age, and
any additional amounts accumulated in his Accounts after such distribution
shall be distributed on or before the next succeeding April 1.
Section 6.04. Time and Form of Distributions. (a) Time. A
Participant's vested interest in his Accounts shall be distributed to him as
soon as practicable following the end of the Plan Year in which his Severance
from Service occurs. Any amounts credited to his Accounts after such
distribution shall, to the extent vested, be distributed as soon as practicable
after the Valuation Date which next follows the date on which such amounts are
credited to his Accounts. Notwithstanding the foregoing, if the value of the
Participant's vested interests exceeds $3,500, distribution shall be made at
the time prescribed above only if the Participant consents thereto. If the
Participant fails to consent within a reasonable time, he shall be deemed to
have elected to defer distribution of his Accounts, and distribution shall be
made as of any subsequent Valuation Date elected by the Participant upon timely
notice, but not later than April 1 of the Plan Year following the Plan Year in
which the Participant attains age 70 1/2; provided that distribution shall in
all events be completed not later than five years after the date of the
Participant's death. In the event that distribution is deferred as provided in
the preceding sentence, the Participant's Savings Account shall be transferred,
as of the last day of the Plan Year in which the Participant's Severance from
Service occurred, to an Investment Fund investing primarily in fixed income
securities designated by the Investment Committee for that purpose, and shall
continue to share in the earnings, gains and losses of such Fund until
distribution has been completed. In any event, distribution shall commence not
later than 60 days after the latest of the close of the Plan Year in which (i)
the Participant attains age 65, or (ii) the Participant actually retires,
unless the Participant elects to defer the distribution.
(b) Form. Except in the case of a Participant who has attained his
Normal Retirement Date, all Distributions hereunder shall be made in the form
of a single lump sum payment of the Participant's entire vested interested in
his Accounts. A Participant who has attained his Normal Retirement Date may
elect to receive distribution either in a single lump sum payment or in the
form of annual installment payments over a period not exceeding sixteen (16)
years, in which case the amount of each annual installment shall be determined
by multiplying the balance in the Participant's Accounts at the end of the
preceding Plan Year by a fraction, the numerator of which is one and the
denominator of which is the period of years initially elected minus the number
of previous annual installment payments. A Participant who has elected to
receive distribution in the form of installment payments may at any time elect
to accelerate the remaining installments and receive a single lump sum payment
of the balances then remaining in his Accounts.
Distribution of the Participant's Savings Account shall be made in the
form of cash. Distribution of the Participant's Employer Matching
Contributions Account and his Other Employer Contributions Account shall be
made either in cash or in whole shares of Company Stock or a combination
thereof, as determined by the Administrator; provided that, if the
Administrator elects to distribute any portion of such Accounts in cash, the
Participant shall be given the opportunity to elect, within a reasonable time,
to receive distribution out of such portion in the form of full shares of
Company Stock and cash equivalent to the value of any fractional shares
allocated to such Accounts. Any shares of Company Stock in a Participant's
Account to be paid in cash will be valued at the closing composite quotation
price of Company Stock as of the trading date next preceding the date of
distribution.
(c) Notwithstanding the foregoing, in the event that at the time any
distribution becomes due hereunder, the Company's Articles of Incorporation or
bylaws restrict the ownership of substantially all outstanding Company
securities to employees or to a trust described in Section 401(a) of the Code,
Participants shall not be entitled to exercise the election described in
subsection (b) of this Section to receive distribution in the form of Company
Stock.
Section 6.05. Special ESOP Distribution Rules. (a) Date of
Distribution. Notwithstanding anything to the contrary in Section 6.04,
Company Stock acquired after December 31, 1986 with the proceeds of an Exempt
Loan shall be distributed in accordance with the following requirements:
(i) if the distribution is due to the Participant's retirement on or
after his Normal Retirement Date, Disability or death, and unless
the Participant elects otherwise, distribution must commence within
one year after the last day of the Plan Year next following such
retirement or death, except as provided in (iii) below;
(ii) if the distribution is for any reason other than the Participant's
retirement on or after his Normal Retirement Date, Disability or
death, and unless the Participant elects otherwise, distribution
must commence by the end of the fifth Plan Year after the last day
of the Plan Year next following the Participant's Severance from
Service, except as provided in (iii) below; provided, that this
paragraph (ii) shall not apply if the Participant is re-employed by
an Employer prior to end of such fifth Plan Year; and
11
<PAGE> 15
(iii) subject to the provisions of Section 6.04(b), distribution of such
Company Stock may, notwithstanding (i) and (ii) above, be postponed
until the Exempt Loan has been fully repaid.
(b) Except as provided in subsection (a) above, distributions of Company
Stock acquired with the proceeds of an Exempt Loan shall be made at the time
and in the manner specified in Section 6.04.
Section 6.06. Direct Rollovers. This Section deals with Employees' and
Beneficiaries' rights to distribution in the form of a direct rollover.
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Plan, a distributee may
elect, at the time and in the manner prescribed 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.
(b) Definitions. For purposes of this Section, the following definitions
apply:
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(3) Distributee: A distributee includes 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) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
ARTICLE VII
WITHDRAWAL AND LOANS
Section 7.01. Hardship Withdrawals. (a) Prior to his Severance from
Service, on a showing by the Participant of an immediate and heavy financial
need that cannot be met from other resources that are reasonably available to
the Participant, a Participant shall be permitted, on timely notice, to make a
withdrawal of an amount not exceeding the lesser of (i) the amount needed to
satisfy such need, or (ii) 100% of all balances in the Participant's Savings
Account, less any earnings credited to his Savings Account after January 1,
1989.
(b) For purposes of this Section, "an immediate and heavy financial need"
shall be deemed to exist if the distribution is on account of:
(i) Medical expense incurred by the Participant, the Participant's
spouse, or any dependent of the Participant;
(ii) Purchase of the principal residence of the Participant;
(iii) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his or her
spouse, children or dependents;
(iv) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage on the
Participant's principal residence; or
(v) Other events provided for in rulings, notices or other documents
published by the Commissioner of Internal Revenue under Code
Section 401(k).
(c) A withdrawal under this Section shall be permitted only if the
Participant has first exercised all of his rights to borrow or make a
withdrawal under this Plan or any other Employer plan. In addition, (i) the
Deposits of any Participant who makes a withdrawal under this Section shall be
automatically suspended for a period of 12 months following such withdrawal,
and (ii) the amount which such a Participant may contribute as Deposits for the
Plan Year following such withdrawal shall not exceed the amount described in
the next to last sentence of Section 3.01(a) hereof, reduced by the amount of
such Participant's actual Deposits for the Plan Year in which the withdrawal
occurred.
12
<PAGE> 16
(d) Distributions pursuant to this Section shall be made as soon as
administratively feasible after the withdrawal is approved.
Section 7.02. Loans to Participants. (a) Upon written application, any
Participant may elect to borrow from his Savings Account and/or the vested
portions of his Employer Matching Contributions Account and his Other Employer
Contributions Account. The amount of any loan hereunder shall not be less than
$1,000, nor more than $50,000 reduced by the highest aggregate balance of loans
outstanding during the 12-month period ending on the date the loan is made.
The aggregate principal amount of all loans outstanding on the date a loan is
made shall not exceed the amount or portion of the Participant's total vested
Account balances determined from the following table:
<TABLE>
<CAPTION>
Amount of Total Vested
Account Balances Maximum Loan
---------------------- ------------
<S> <C>
At least $2,000 but 50% of such balances
less than $100,000
$100,000 or more $50,000
</TABLE>
(b) All loans shall be considered investments of the borrowing
Participant's Account, and, in accordance with Department of Labor Regulation
Section 2550.408b-1, interest shall be charged thereon at a rate that is
commensurate with interest rates charged on similar commercial loans, as
determined by the Administrator from time to time. Every loan applicant shall
receive a clear statement of the charges involved in each loan transaction.
This statement shall include the dollar amount and annual interest rate of the
finance charge. Any such loan or loans shall be repaid by the Participant by
means of payroll deduction. No loan shall be for a period of more than five
years. Except in the case of a Participant who is a "party in interest" with
respect to the Plan (within the meaning of ERISA Section 3(14)), a Participant
must be actively employed on the date a loan is made.
(c) Amounts loaned to a Participant pursuant to this Section shall not
share in allocations of investment fund earnings under Section 4.05, but shall
be treated as a segregated account for the sole benefit of the Participant,
which account shall serve as security for the loan repayment. In the event that
the Participant does not repay the loan in accordance with the terms and
conditions thereof, or fails to cure any default within a reasonable time after
receiving notice thereof, the Administrator may direct that the Participant's
segregated loan account shall be charged for the total amount of the loan or
any part thereof (including accrued interest) with such amount being treated as
a distribution of that portion of the Participant's Accounts; provided that
such direction shall not occur at a time or in a manner when such a
distribution would violate applicable provisions of the Code or ERISA.
(d) Amounts borrowed pursuant to this Section shall be drawn from the
Participant's vested Account balances in the following order of priority:
Savings Account, Employer Matching Contributions Account and Other Employer
Contributions Account. Principal payments shall be restored to the various
Accounts from which the loan was drawn in the following order of priority:
Other Employer Contributions Account, Employer Matching Contributions Account
and Savings Account. Notwithstanding Sections 7.01 and 7.03 hereof, a
Participant shall not be entitled to make any withdrawal hereunder to the
extent such withdrawal requires distribution of Savings Account balances then
outstanding in the form of loans. However, following a Participant's Severance
from Service, the notes evidencing outstanding loans may be distributed to the
Participant or his Beneficiary in full satisfaction of any remaining
indebtedness to the Plan.
(e) The Administrator may impose such rules, requirements or restrictions
relating to loans under this Section as it shall determine to be necessary or
appropriate, including, without limitation, requirements as to the execution of
loan documents and/or payroll deduction authorizations, and the assessment of
application and processing fees against the borrower's Accounts. The loan
program provided for in this Section shall be administered by the Administrator
in accordance with Section 408(b)(1) of ERISA.
Section 7.03. Withdrawal from Savings Accounts After Age 59 1/2. Once
during employment with the Employers, a Participant who has attained the age of
59 1/2, may elect on timely notice to withdraw any part of all of the balances
credited to his Savings Account. Distribution pursuant to this Section shall
occur as soon as administratively feasible after the Valuation Date which next
follows the date on which such election is made.
ARTICLE VIII
PLAN ADMINISTRATION
Section 8.01. Administrator. There shall be a committee consisting of
not less than three persons appointed by and serving at the pleasure of the
Board which shall act as the Administrator hereunder. Members of the committee
may, but need not, be officers, employees or directors of an Employer. The
committee shall be the "administrator" of the Plan for all purposes of ERISA,
and to the extent such responsibility is not specifically allocated otherwise
hereunder, shall have the exclusive responsibility for the administration and
operation of the Plan and shall have the power to take any action necessary or
appropriate to carry out such responsibilities. The duties and authority of
the Administrator shall include, but not be limited to, the following:
(i) to prescribe and require the use of appropriate forms;
(ii) to formulate and issue rules and regulations, including without
limitation rules relating to the timely notice required for
various elections by Participants hereunder;
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(iii) to prepare and file reports, notices and any other documents
relating to the Plan which may be required by law;
(iv) to construe, interpret and apply the provisions of the Plans,
including, without limitation, the power to determine who is
eligible to participate and the amount of each Participant's
Vesting Service;
(v) to make appropriate determinations or calculations;
(vi) to authorize and direct benefit payments;
(vii) to establish procedures for the establishment and maintenance of
Participants' Accounts as provided herein;
(viii) to authorize and direct the Trustee to enter into an Acquisition
Loan arrangement under such terms and conditions as the
Administrator shall determine; and
(ix) to authorize and direct the Trustee to acquire, hold and dispose
of Company Stock, in writing, and to designate the price in the
case of a purchase, sale or exchange.
All findings of fact, determinations, constructions, interpretations and
decisions of the Administrator shall be conclusive and binding on all parties,
unless arbitrary and capricious.
Section 8.02. Organization and Procedure. The Administrator shall have a
chairman, a secretary, and such other officers as may be deemed appropriate.
Action on any matter shall be taken on the vote of at least a majority of all
members of the Administrator at any meeting or upon unanimous written consent
of all members without a meeting. Minutes of meetings shall be kept and all
major actions of the Administrator shall be recorded in such minutes or other
appropriate written form. The Administrator may adopt such bylaws, procedures
and operating rules as they may deem appropriate.
Section 8.03. Delegation of Authority and Responsibility. (a) The
Administrator may delegate to any one or more of its members the authority to
execute documents on behalf of the Administrator and to represent the
Administrator in any matters or dealings involving the Administrator. Any such
delegation of authority shall be set forth in writing.
(b) The Administrator may delegate certain of its powers to a person
employed by an Employer under such terms and conditions as may be specified by
the Administrator. Any such delegation of powers shall be set forth in
writing.
(c) Employees of an Employer who are not members of the Administrator or
persons to whom powers are delegated under (b) above, may perform such duties
and functions relating to the Plan as the Administrator shall direct and
supervise. It is expressly provided, however, that the Administrator shall
retain full and exclusive authority and responsibility for and respecting any
such activities by other employees, and nothing contained in this subsection
8.03(c) shall be construed to confer upon any such employee any discretionary
authority or control respecting the administration or operation of the Plan.
Section 8.04. Use of Professional Services. The Administrator may obtain
the services of such attorneys, actuaries, accountants or other persons they
deem appropriate, any of whom may be the same persons who are providing
services to an Employer. In any case in which the Administrator utilizes such
services, it shall retain exclusive discretionary authority and control
respecting the administration and operation of the Plan.
Section 8.05. Fees and Expenses. Committee members who are employees of
an Employer shall serve without compensation but shall be reimbursed for all
reasonable expenses incurred in their capacity as committee members. No
employee members of the Administrator or persons performing services pursuant
to Section 8.03 shall receive greater than reasonable compensation for their
services and expenses. All compensation for such services and expenses shall
be paid entirely by the Company.
Section 8.06. Claims Procedure. (a) Any Participant or Beneficiary
under this Plan who believes he is entitled to benefits under the Plan in an
amount greater than he is receiving may file, or have his duly authorized
representative file, a claim with the Administrator under this Section. Any
such claim shall be filed in writing stating the nature of the claim, the facts
supporting the claim, the amount claimed and the name and address of the
claimant. The Administrator shall designate one or more persons (who may or
may not be members of the Administrator) to consider the claim and answer it in
writing stating whether the claim is granted or denied. If the claim is denied
in whole or in part, the claimant shall be furnished with a written notice of
such denial containing (i) the specific reasons for the denial, (ii) a specific
reference to the Plan provisions on which the denial is based, (iii) a
description of any additional material or information which it is necessary for
the claimant to submit and an explanation of why such material or information
is necessary, and (iv) an explanation of the Plan's appeal procedure.
(b) If a claimant wishes to appeal the denial of his claim, the claimant
or his duly authorized representative shall file a written notice of appeal
with the Administrator. In order that the Administrator may expeditiously
decide such appeal, the written notice of appeal should contain (i) a statement
of the ground(s) for the appeal, (ii) a specific reference to the Plan
provisions on which the appeal is based, (iii) a statement of the arguments and
authority (if any) supporting each ground for appeal, and (iv) any other
pertinent documents or comments which the appellant desires to submit in
support of his appeal. The Administrator shall decide the appellant's appeal
within 60 days of its receipt of the appeal. The Administrator's written
decision shall contain the reasons for the decision and reference to the Plan
provisions on which the decision is based. A copy of the Committee's decision
shall be mailed promptly to the claimant.
Section 8.07. Agent for Service of Process. The Vice President - Finance
of the Company is hereby designated as the agent for service of process with
respect to all matters pertaining to the Plan.
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Section 8.08. Communications. All requests, claims, appeals, elections
and other communications to the Administrator shall be in writing and shall be
made by transmitting the same via the U. S. Mail, certified, return receipt
requested, addressed as follows:
Badger Meter, Inc.
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
Attn: Administrator,
Badger Meter Employee Savings
and Stock Ownership Plan
ARTICLE IX
TRUSTEE AND TRUST FUND
Section 9.01. Trustee Removal and/or Resignation and Successors. The
Trustee may be removed by the Board at any time, with or without cause, upon 30
days' written notice. The Trustee may resign at any time upon 30 days' written
notice to the Company and to the Administrator. Upon such removal or
resignation of the Trustee, the Board shall appoint or designate a successor
trustee or trustees, and the Trustee shall assign and transfer and pay over to
such successor trustee or trustees, the Company Stock, monies, and other
property then constituting the Trust Fund. The successor trustee or trustees
shall be such person or persons, trust company, bank, or other appropriate
financial institution appointed as such from time to time by the Board and
serving at the pleasure of the Board.
Section 9.02. Investment Funds. The Trust Fund shall consist of the
Company Stock Fund and such other Investment Funds as shall be established and
maintained hereunder at the direction of the Investment Committee. The
Investment Committee shall establish two or more Investment Funds and shall
advise the Trustee in writing of the types of investments to be made by such
Investment Fund. At least one of such Investment Funds shall be invested
primarily in insurance contracts or other securities having a fixed principal
amount and a fixed or guaranteed minimum rate of return. The Investment
Committee may direct that any such Investment Fund will be invested in one or
more insurance contracts or regulated investment companies selected by the
Investment Committee or may appoint one or more Investment Managers to direct
the investment of any Investment Fund.
Section 9.03. Investment of the Trust Fund. (a) Subject to
Participants' elections under Section 4.02, the Trust Fund, including all of
the Investment Funds shall be invested and reinvested without distinction
between principal and income in any property, real, personal or mixed or share
or part thereof, or part interest therein, including but not limited to common
stocks, preferred stocks, bonds, notes, debentures, mortgages, equipment trust
certificates, investment trust certificates, mutual funds, common trust funds,
and any form of insurance contract. To the extent and for the time that any
assets of the Trust Fund are invested in a common, pooled or collective fund
maintained by a bank or other financial institution (which may include any such
fund established or maintained by the Trustee or an Investment Manager), any
instrument governing such fund shall be deemed to be incorporated in and made a
part of this Agreement as fully and to all intents and purposes as if set forth
herein at length. The Trustee may hold all or any part of the Trust Fund in
cash, and shall not be liable for interest on monies so held. Except as
required by ERISA, such investments and reinvestments shall not be restricted
to those of the character authorized for fiduciaries under any present or
future laws or administrative regulations or pursuant to any rule of court, nor
shall any investments be limited in amount or type in relation to the amount or
type of investments of the Trust Fund as a whole.
(b) Subject to the directions of the Investment Committee as provided in
Section 9.02, any investments or reinvestments shall be made by the Trustee in
its sole discretion. For the time, in the manner, and to the extent that
control has been asserted by the Investment Committee as so provided, the
Trustee shall be charged with responsibility only to execute with reasonable
diligence and care the directions of the Investment Committee or Investment
Manager appointed by such Committee. In the event that an Investment Manager
shall have been appointed to direct the investments of any portion of the Trust
Fund, custody of all or a part of such portion may, at such Investment
Manager's direction, be transferred to a bank, trust company or insurance
company (which may be the Investment Manager or an affiliate thereof) in its
capacity as trustee of a common or collective trust fund, in which case such
bank or trust company shall have the sole responsibility for the custody and
safekeeping of such portion of the Trust Fund.
(c) The Administrator may direct the Trustee to incur an Exempt Loan from
time to time to finance the acquisition of Company Stock for the Trust or to
repay a prior Exempt Loan. An installment obligation incurred in connection
with the purchase of Company Stock shall constitute an Exempt Loan. An Exempt
Loan shall be for a specific term, shall bear a reasonable rate of interest and
shall not be payable on demand except in the event of default. An Exempt Loan
may be secured by a collateral pledge of the Company Stock acquired with the
proceeds of the Exempt Loan. No other assets of the Trust Fund may be pledged
as collateral for an Exempt Loan, and no lender shall have recourse against the
Trust Fund other than the Company Stock acquired with the proceeds of the
Exempt Loan remaining in the Suspense Account from time to time. Any pledge of
Company Stock shall provide for the release of shares so pledged on a pro-rata
basis (as provided in Section 3.04) as principal or principal and interest on
the Exempt Loan is paid, and such Company Stock shall be allocated to
Participants' Accounts.
(d) It is intended that substantially all Employer Contributions and the
earnings thereon will be invested in the Company Stock Fund.
Section 9.04. Trustee's General Powers. In addition to any powers or
authority otherwise granted to the Trustee under this Agreement, the Trustee is
authorized and empowered:
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(a) to act as custodian of the Company Stock and all other assets in the
Trust Fund;
(b) to sell, exchange, convey, transfer or dispose of, or to grant
options with respect to, any asset in the Trust Fund, other than Company Stock,
and to apply the proceeds of any such transaction in any manner consistent with
the purposes of the Trust Fund;
(c) to make, execute, acknowledge and deliver any and all assignments,
documents of transfer or conveyance and any and all other instruments or
documents that may be necessary or appropriate to carry out the powers herein
granted;
(d) to cause any asset in the Trust Fund to be registered in, or
transferred to, its name as Trustee or the name of its nominee or nominees or
to retain same unregistered or in form permitting transferability by delivery,
but the books and records of the Trustee shall at all times show that all such
assets are part of the Trust Fund;
(e) to exercise any option, right or privilege appurtenant to or
respecting any asset of the Trust Fund or any contract with an insurance
company, including the right to vote in person or by proxy as to any security
in the Trust Fund, except that Company Stock shall be voted only in accordance
with Section 11.11;
(f) to employ such legal, accounting and other assistants as it may deem
necessary for administering the Trust Fund, which assistants may be those
consulted by the Company, the Administrator and/or the Plan;
(g) to enforce, compromise or settle, or abstain from same, in its
discretion, any right, obligation or claim, whether asserted by or against the
Trustee, and in general to protect in any way the interests of the Trust Fund;
(h) to do all other acts which the Trustee may deem necessary or proper
and to exercise any and all powers of the Trustee upon such terms and
conditions as it deems to be for the best interests of the Trust Fund.
Section 9.05. Payments from the Trust Fund. The Trustee shall make
payments from the Trust Fund to such persons, and in such manner and amounts as
may be specified in written directions to the Trustee from the Administrator.
Should any such payment be unclaimed, the Trustee shall notify the
Administrator thereof, and shall dispose of same in accordance with the
Administrator's further directions.
Section 9.06. General Duties. In addition to any duty or responsibility
otherwise imposed on the Trustee by law or this Agreement, the Trustee shall:
(a) Furnish such information with respect to the Trust Fund, including
valuation thereof, as the Administrator may reasonably request.
(b) Maintain accurate and detailed accounts of all investments, receipts,
disbursements and all other transactions affecting all or any portion of the
Trust Fund. All accounts, books and records relating to such transactions
shall be open to inspection and audit at any time during business hours by any
person designated by the Company or the Administrator.
(c) Within 60 days following the last day of each Plan Year, or following
the close of such other annual period as may be agreed upon between the Trustee
and the Company, and within 60 days after the removal or resignation of the
Trustee, the Trustee shall file with the Company a written report setting forth
all investments, receipts and disbursements, and other transactions effected by
it during such period or to the date of such removal or resignation, as the
case may be, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales,
and showing all cash, securities and other property held at the end of such
period.
(d) Vote shares of Company Stock held in the Trust Fund in accordance
with Section 11.11.
(e) Tender shares of Company Stock pursuant to a tender offer for such
shares in accordance with the directions of Participants pursuant to Section
11.12.
Section 9.07. Contributions to the Plan. The Trustee shall have no duty
or authority to inquire into the accuracy or sufficiency of any contribution,
or its source, or to take any action to compel the Company to contribute to the
trust.
Section 9.08. Reliance on Written Communications. The Trustee shall be
fully protected in relying upon any written notice, certification or other
document or writing received from the Administrator and believed by it to be
genuine and shall be under no duty to make any investigation or inquiry as to
statements contained in any such notice, certification or other document or
writing, and may accept the same as conclusive.
Section 9.09. Trustee Fees and Expenses. The Trustee shall be entitled
to reimbursement of expenses properly incurred in the performance of its duties
hereunder and such reasonable compensation as shall be mutually agreed upon
with the Company. Such compensation and expenses shall be paid from the Trust
Fund unless the Company elects to pay them.
Section 9.10. Payment of Taxes. The Trustee shall pay from the Trust
Fund all taxes of any and all kinds what-soever that may be levied or assessed
under existing or future laws upon, or in respect of, the Trust Fund or its
income.
Section 9.11. Trustee Litigation and Indemnification. (a) The Trustee
shall have the power to commence or defend suits or legal or administrative
proceedings and, with the consent of the Administrator, to settle, compromise
or submit to arbitration, any claims, debts or damages due or owing to or from
the Trust Fund; provided, however, that the Trustee shall not be required to
institute suit or maintain
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<PAGE> 20
any litigation unless the Trust Fund holds sufficient funds for this purpose or
unless it has been indemnified to its satisfaction for its counsel fees, costs,
disbursements and all other expenses and liabilities to which it may be
subjected by such suit; provided, further, that the Trustee may utilize the
proceeds of any contract to meet expenses incurred in enforcing payment of such
contract.
(b) The Company agrees, directly from its own assets, to indemnify and
hold harmless the Trustee against all claims, liabilities, damages, expenses
(including reasonable counsel fees) or other charges incurred by or asserted
against the Trustee as a direct or indirect result of acting or refraining from
acting pursuant to any directions pursuant to the terms of the Plan, or
refraining from acting in the absence of any required directions, from the
Company, the Administrator, the Investment Committee, any Investment Manager,
or any person or committee authorized to act on behalf thereof. As a condition
of eligibility for such indemnification, however, the Trustee shall provide
prompt written notice of such claim to the Company and the Administrator and
consult with each regarding any response to such claim. Prompt written notice
means notice within 30 days of the date the Trustee has knowledge. Any expense
incurred by the Trustee before such notice is given shall not be reimbursed.
Section 9.12. Limitation of Liability. Except for such liability as is
imposed by ERISA, neither the Trustee, the Employers nor the Administrator
shall be liable for the making, retention or sale of any investments, nor for
any loss to or diminution of the Trust Fund, unless due to its own negligence,
misconduct or lack of good faith.
ARTICLE X
AMENDMENT AND TERMINATION
Section 10.01. Amendment and Termination. While it is intended that the
Plan shall continue in effect indefinitely, the Board may from time to time
modify, alter or amend the Plan or the Trust. The Board may at any time order
the temporary suspension or complete discontinuance of Employer Contributions
or may terminate the Plan, provided, however, that
(i) No such action shall make it possible for any part of the Trust
assets (except such part as is used for the payment of expenses)
to be used for or diverted to any purpose other than for the
exclusive benefit of Participants or their Beneficiaries and the
defraying of the reasonable expenses of administering and winding
up the Plan,
(ii) No such action shall adversely affect the rights or interests of
Participants theretofore vested under the Plan,
(iii) In the event of termination of the Plan or complete
discontinuance of Employer Contributions hereunder, all rights
and interests of Participants not theretofore vested shall become
vested as of the date of such termination or complete
discontinuance. In the event of a partial termination of the
Plan, the rights and interests of the Participants affected
thereby shall become vested as of the date of such partial
termination.
However, nothing herein shall be construed to prevent any modification,
alteration or amendment of the Plan or of the Trust which is required in order
to comply with the provision of any law or regulation relating to the
establishment or maintenance of this Plan and Trust, including but not limited
to the establishment and maintenance of the Plan or Trust as a qualified
employee plan or trust under the Code, even though such modification,
alteration, or amendment if made retroactively, adversely affects the rights or
interests of a Participant under the Plan.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Plan is Voluntary. Although it is intended that the Plan
and contributions hereunder shall be continued, the Plan is entirely voluntary
on the part of the Company and its continuance and payment of contributions
hereunder are not assumed as contractual obligations of the Company, and the
Company does not guarantee or promise to pay or to cause to be paid any of the
benefits provided by the Plan. The Company specifically reserves the right, in
its sole discretion, to modify, reduce, suspend, in whole or in part, at any
time or from time to time and for any period or periods of time, or to
discontinue at any time, contributions under the Plan.
Section 11.02. Non-Guarantee of Employment. Nothing contained in this
Plan shall be construed as a contract of employment between an Employer and a
Participant, to be consideration or inducement for the employment of any
Participant or Employee, to create a right of any Participant to be continued
in the employment of his Employer, or as a limitation of the right of an
Employer to discharge any Participant with or without cause.
Section 11.03. Rights to Trust Assets. (a) No Participant or any other
person shall have any right to, or interest in, any part of the Trust Fund upon
termination of his employment or otherwise, except as provided from time to
time under this Plan, and then only to the extent of the amounts due and
payable to such person out of the assets of the Trust Fund. All payments as
provided for in this Plan shall be made solely out of the assets of the Trust
Fund and neither the Employers, the Trustee, nor any member of the
Administrator shall be liable therefor in any manner.
(b) In the event that the Internal Revenue Service denies a deduction for
any Employer Contribution hereto, or if the Administrator determines that a
contribution has been made as the result of a good faith mistake of fact, then
the Administrator may direct that any non-deductible Employer Contribution or
any other contribution made as the result of a mistake of fact shall be
refunded to the Company or Participant in accordance with applicable provisions
of ERISA.
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Section 11.04. Non-Alienation. Except as may be otherwise provided
herein, no right or interest of any Participant or Beneficiary in the Plan and
the Trust Fund shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, attachment,
garnishment, execution, levy, bankruptcy, or any other disposition of any kind,
either voluntary or involuntary, prior to actual receipt of payment by the
person entitled to such right or interest under the provisions hereof, and any
such disposition or attempted disposition shall be void. Notwithstanding the
foregoing, the Trustee shall recognize a qualified domestic relations order
with respect to child support, alimony payments or marital property rights if
the Administrator determines that such order meets the applicable requirements
of Code Section 414(p). If any such order so directs, a lump sum distribution
of benefits to an "alternate payee" may be made at a time when such
distribution could not be made to the Participant hereunder. The Administrator
shall establish written procedures concerning notification of interested
parties and the determination of the validity of such orders.
Section 11.05. Indemnification. The Company shall indemnify each member
of the Administrator and the Board and hold each of them harmless from the
consequences of his acts or conduct in his official capacity, if he acted in
good faith and in a manner he reasonably believed to be solely in the best
interests of the Participants and their beneficiaries, and with respect to any
criminal action or proceeding had no reasonable cause to believe his conduct
was unlawful. Such indemnification shall cover any and all attorneys' fees and
expenses, judgments, fines and amounts paid in settlement, but only to the
extent that such amounts are not paid to such person(s) under the Company's
fiduciary insurance policy, if any, and to the extent that such amounts are
actually and reasonably incurred by such person(s).
Section 11.06. Facility of Payment. If the Administrator shall determine
that a Participant entitled to a distribution hereunder, or his Beneficiary, is
incapable of caring for his own affairs, because of illness or otherwise, it
may direct that any distribution from such Participant's account may be made,
in such shares as it shall determine, to the spouse, child, parent or other
blood relative of such Participant, or his Beneficiary, or any of them, or to
such other person or persons as the Administrator may determine, until such
date as it shall determine that such incapacity no longer exists. The
Administrator shall be under no obligation to see to the proper application of
the distributions so made to such person or persons and any such distribution
shall be a complete discharge of any liability under the Plan to such
Participant, or his Beneficiary, to the extent of such distribution.
Section 11.07. Board Action. Any action which is required or permitted
to be taken by the Board under the Plan may be taken by the Executive Committee
of the Board or any other authorized committee of the Board.
Section 11.08. Mergers, Consolidations and Transfer of Plan Assets. In
the case of any merger or consolidation with, or transfer of assets or
liabilities to or from any other plan, each Participant in the Plan must be
entitled (if the Plan then terminates) to 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 the Plan had then terminated).
Section 11.09. Fiduciaries. Any person may serve in more than one
fiduciary capacity with respect to the Plan. Any fiduciary hereunder, as an
individual, may employ such legal, actuarial, accounting or other assistant, he
may deem necessary to fulfill his obligations hereunder, which assistants may
be those consulted by any Employer, the Trustee, the Plan or other fiduciaries.
Section 11.10. Unclaimed Benefits. In the event that any person who is
entitled to benefits hereunder cannot be located despite reasonable and
diligent efforts to do so, then such person's benefits shall be automatically
forfeited as of the last day of the Plan Year next following the year in which
such benefits became payable and shall be applied as provided in Section 5.05;
provided, however, in the event that such person subsequently makes a claim for
such forfeited benefits, they shall be reinstated.
Section 11.11. Voting Rights to Company Stock. Voting rights with
respect to Company Stock held by the Trustee for Participants and Beneficiaries
as to which the Trustee receives written instructions from such Participants
and Beneficiaries shall (a) be voted by the Trustee as directed by the
Participants and Beneficiaries, or (b) not be voted if so directed by any
Participant or Beneficiary. At the time of the mailing to stockholders of the
notice of any stockholders' meeting of the Company, the Company, in conjunction
with the Trustee, shall use its reasonable best efforts to cause to be
delivered to each Participant and Beneficiary such notices and informational
statements as are furnished to the Company's stockholders in respect of the
exercise of voting rights, together with forms by which the Participant or
Beneficiary may confidentially instruct the Trustee, or revoke such
instruction, with respect to the voting of shares of Company Stock allocated to
his Accounts. Upon timely receipt of directions, the Trustee shall vote or not
vote the Company Stock allocated to a Participant's or Beneficiary's Account on
each matter as directed by the Participant or Beneficiary. The Trustee shall
vote or not vote all Company Stock that is not allocated to a Participant's or
Beneficiary's Account (e.g., shares held in the Suspense Account) and all
Company Stock allocated to a Participant's or Beneficiary's Account which is
not voted by the Participant or Beneficiary because the Participant or
Beneficiary has not directed (or not timely directed) the Trustee as to the
manner in which such Company Stock is to be voted, as directed by the
Administrator; provided that, if the Administrator fails to give the Trustee
any instructions, the Trustee shall vote or not vote such shares of Company
Stock in the same proportion as those shares of Company Stock for which the
Trustee has received instructions from Participants and Beneficiaries, unless
the Trustee determines that such action would clearly not be in the best
interests of Participants and Beneficiaries. Notwithstanding the preceding
sentence, shares of Company Stock derived from contributions to the Badger
Meter Payroll Based Employee Stock Ownership Plan and with respect to which the
Trustee does not receive timely instructions from the Participant or
Beneficiary shall not be voted. All such voting rights instructions and
directions received by the Trustee from a Participant shall be held in
confidence by the Trustee and shall not be divulged or released to any person,
including directors, officers and employees of the Company.
Section 11.12. Tender Offers for Company Stock. Notwithstanding any
provisions of the Plan or this Agreement, if there is a tender offer for, or a
request or invitation for tenders of, shares of Company Stock held by the
Trustee for Participants or Beneficiaries, the Committee (a) shall furnish to
the Trustee, who shall then furnish to each Participant or Beneficiary, prompt
notice of any such tender offer for, or request or invitation for tenders of,
such shares of Company Stock and (b) the Trustee shall request from each
Participant or Beneficiary instructions as to the tendering of such shares of
Company Stock allocated to the Participant's or Beneficiary's Accounts. The
Trustee shall tender only such shares of Company Stock for which the Trustee
has received (within the time specified in the notification)
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tender instructions. With respect to shares of Company Stock which are held in
the Suspense Account or otherwise not allocated to a Participant's or
Beneficiary's Account, the Trustee shall tender such shares of Company Stock in
the same proportion as the number of such shares of Company Stock for which
instructions to tender are received bears to the total number of such shares of
Company Stock for which instructions from Participants or Beneficiaries could
have been received. The Trustee shall not tender all other shares of the
Company Stock. All such tender instructions received by the Trustee from a
Participant or Beneficiary shall be held in confidence by the Trustee and shall
not be divulged or released to any person, including directors, officers and
employees of the Company.
Section 11.13. Retroactive Effective Dates. The Plan set forth herein is
a continuation of the Prior Plans effective as of January 1, 1991. The Prior
Plans were intended to satisfy the requirements for qualification under Code
Section 401(a), including certain changes in such requirements resulting from
the Tax Reform Act of 1986, the Revenue Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1987, the Technical and
Miscellaneous Revenue Act of 1989 and certain other regulatory changes under
the Code and ERISA, some of which changes require amendments to the Prior
Plans, effective as of various dates in 1987, 1988 and 1989. Accordingly, the
following provisions of this Plan shall be treated as if included in the Prior
Plans, to the extent applicable to the Prior Plan, as of the dates indicated.
(a) The following provisions shall apply retroactively from and after
January 1, 1987:
(i) Leased employees in Section 2.03;
(ii) Annual addition limitations in Section 3.05;
(iii) Loans in Section 7.02;
(iv) Top-heavy rules in Article XII.
(b) The following provisions shall apply retroactively from and after
January 1, 1989:
(i) The $200,000 limit on considered compensation in Section
1.01(j);
(ii) The age 70 1/2 distribution requirement in Section 6.04;
(iii) Limitations on Deposits and Employer Matching Contributions
pursuant to Sections 3.01 and 3.02, respectively;
(iv) Vesting and forfeiture rules under Sections 5.04 and 5.05;
(v) Hardship withdrawal rules under Section 7.01; and
(vi) Special employee stock ownership plan rules in Sections
4.04 and 6.05.
ARTICLE XII
TOP-HEAVY PLAN PROVISIONS
Section 12.01. Effect of Top-Heavy Status. The Plan shall be a
"Top-Heavy Plan" for any Plan Year commencing after December 31, 1983, if
either of the following conditions applies:
(i) The Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not
part of any Required Aggregation Group or Permissive Aggregation
Group having a Top-Heavy Ratio of less than 60%.
(ii) The Plan is part of a Required Aggregation Group having a
Top-Heavy Ratio which exceeds 60% and is not part of a Permissive
Aggregation Group having a Top-Heavy Ratio of less than 60%.
If the Plan is a Top-Heavy Plan in any Plan Year, the provisions of Sections
12.03 through 12.05 shall supersede any conflicting provisions of the Plan.
Section 12.02. Additional Definitions. Solely for purposes of this
Article, the following terms shall have the meanings set forth below:
(a) "Key Employee" means any employee or former employee (and the
beneficiary of such employee) whose status as an officer or owner of the Plan
sponsor makes him a "key employee" as determined in accordance with Code
Section 416(i)(1) and the regulations thereunder.
(b) "Determination Date" means the last day of the preceding Plan Year.
(c) "Top-Heavy Ratio" means a fraction, the numerator of which is the sum
of account balances under any defined contribution plans for all Key Employees
and the present value of accrued benefits under any defined benefit plans for
all Key Employees, and the denominator of which is the sum of the account
balances under any defined contribution plans for all Participants and the
present value of accrued benefits under any defined benefit plans for all
Participants, excluding the account balances and accrued benefits of all
19
<PAGE> 23
Participants who have not performed services for the Employers during the
preceding 5-year period. Both the numerator and denominator of the Top-Heavy
Ratio shall be adjusted for any distribution of an account balance or an
accrued benefit made in the 5-year period ending on the Determination Date and
any contribution due but unpaid as of the Determination Date. For purposes of
the preceding sentence, (i) the value of account balances and the present value
of accrued benefits shall be determined as of the most recent Valuation Date
that falls within or ends with the 12-month period ending on the Determination
Date, and (ii) the account balances and accrued benefits of a Participant who
is not a Key Employee but who was a Key Employee in a prior year shall be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Code Section 416 and the regulations thereunder. Deductible
employee contributions will not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year. The present value of accrued benefits
shall be determined pursuant to Code Section 416(g) using a 5% interest
assumption and the UP-1984 Mortality Table.
(d) "Permissive Aggregation Group" means the Required Aggregation Group
of plans plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(e) "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates, and (ii) any other
qualified plan of the Employer which enables a plan described in (i) to meet
the requirements of Code Sections 401(a)(4) and 410.
(f) "Valuation Date" means (i) in the case of a defined contribution
plan, the Determination Date, and (ii) in the case of a defined benefit plan,
the date as of which funding calculations are generally made within the
12-month period ending on the Determination Date.
(g) "Employer" means the employer or employers whose employees are
covered by this Plan and any other employer which must be aggregated with any
such employer under Code Section 414(b), (c) and (m).
Section 12.03. Vesting. If the Plan is a Top-Heavy Plan in any Plan
Year, the vesting schedule shall automatically be amended for any Participant
employed on the first day of such year or thereafter so that the vested
percentage for employer-derived benefits is equal to the greater of the vesting
provided under other provisions of the Plan or the following schedule:
<TABLE>
<CAPTION>
Nonforfeitable
Years of Service Percentage
---------------- ---------------
<S> <C>
1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
where "years of service" means the years credited for vesting purposes under
the Plan or, if greater, the years required to be counted under Code Section
411 and applicable regulations thereto. If the Plan thereafter ceases to be a
Top-Heavy Plan for any Plan Year, the vesting schedule above shall be
disregarded and the original schedule applied, except with respect to any
Participant with 3 or more years of service and except that no Participant's
vested percentage as of the end of the prior year shall be decreased. Any
non-vested Participant who acquires a vested interest in the employer-derived
benefit by operation of the amended vesting schedule shall not be subject
thereafter to a cancellation of service. Notwithstanding anything in this
Section to the contrary, the amendment of the vesting schedule pursuant to this
subsection shall not affect the calculation of benefit amounts or the
determination of benefit commencement dates hereunder.
Section 12.04. Minimum Benefits. For any year in which the Plan is a
Top-Heavy Plan, each Participant who is not a Key Employee shall receive
allocations of Company contributions and forfeitures under this Plan and any
other defined contribution plan maintained by the Employers at least equal to
5% of compensation (as defined in Code Section 415) for such year, or, if less,
the percentage of compensation allocated on behalf of the Key Employee for whom
such percentage was the highest for the Plan Year; provided, however, that if
the Participant is also covered by a defined benefit plan, such Employee will
only be entitled to the defined benefit plan minimum.
Section 12.05. Maximum Benefit Limits. If the Employer maintains a
defined benefit plan and a defined contribution plan which both cover one or
more of the same Key Employees, and if such plans are Top-Heavy, then the
limitation stated in a separate provision of this Plan with respect to the Code
Section 415(e) maximum benefit limitations shall be amended to refer to a 1.0
adjustment on the dollar limitation rather than a 1.25 adjustment. This
provision shall not apply if the Top-Heavy Ratio is less than 90% and if the
minimum benefit requirements referred to in Section 12.04 are met when the
defined benefit minimum is changed from 2% to 3%, and 20% is changed to an
amount not greater than 30% which equals 20% plus 1% for each year this is a
Top-Heavy Plan.
ARTICLE XIII
TRUSTEE ACCEPTANCE
Section 13.01. Trustee Acceptance. The Trustee accepts the Trust hereby
established and agrees to be bound by all of the terms of this Agreement.
20
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and attested in duplicate originals as of this 30th day of December,
1990.
BADGER METER, INC.
By /s/ Ronald H. Dix
------------------------------
Vice President
Attest /s/ R. Robert Howard
---------------------------
Secretary
[CORPORATE SEAL]
MARSHALL AND ILSLEY TRUST COMPANY
By /s/ Linda Heck
-------------------------------
Trust Officer
Attest /s/ Walter Lecocq
---------------------------
Vice President
21
<PAGE> 1
EXHIBIT 5.0
FOLEY & LARDNER
Firstar Center
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
August 28, 1995
Badger Meter, Inc.
4545 West Brown Deer Road
Milwaukee, Wisconsin 53223
Ladies and Gentlemen:
We have acted as counsel for Badger Meter, Inc., a Wisconsin corporation
(the "Company"), in connection with the preparation of a Form S-8 Registration
Statement (the "Registration Statement") to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to 100,000 shares of the Company's Common
Stock, $1 par value (the "Common Stock"), and interests in the Savings (or
401(k)) Feature of the Badger Meter Employee Savings and Stock Ownership Plan,
as amended to date (the "Plan"), which may be issued or acquired with
participant's own funds pursuant to the Savings (or 401(k)) Feature of the
Plan.
We have examined: (a) the Plan; (b) the Registration Statement; (c) the
Company's Restated Articles of Incorporation and Restated By-laws, as amended
to date; (d) copies of resolutions of the Company's Board of Directors relating
to the Plan and the issuance of securities thereunder; and (e) such other
proceedings, documents and records as we deemed necessary to enable us to
render this opinion. In connection with approval of the amendments to the
Savings (or 401(k)) Feature of the Plan to allow participants to use their own
funds to acquire shares of Common Stock, this opinion assumes the consideration
to be received by the Company upon the issuance of shares of Common Stock
pursuant to the Plan has been deemed adequate by the Company's Board of
Directors in accordance with the provisions of the Wisconsin Business
Corporation Law.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the laws of the
State of Wisconsin.
2. It is presently contemplated that the shares of Common Stock to be
acquired with the participant's own funds by the Savings (or 401(k)) Feature of
the Plan will either be purchased in the open market or purchased directly from
the Company or other private sources. To the extent the shares of Common Stock
acquired with the participant's own funds by the Savings (or 401(k)) Feature of
the Plan constitute shares issued by and purchased directly from the Company,
such shares of Common Stock, when issues pursuant to the applicable terms and
conditions fo the Plan, and as contemplated in the Registration Statement, will
be validly issued, fully paid and nonassessable, except as otherwise provided
by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law.
Edwin P. Wiley, a partner in the firm of Foley & Lardner, is a director of
the Company.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to our firm therein. In giving our consent, we
do not admit that we are "experts" within the meaning of Section 11 of the
Securities Act or within the category of persons whose consent is required by
Section 7 of the Securities Act.
Very truly yours,
FOLEY & LARDNER
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Badger Meter Employee Savings and Stock Ownership
Plan of our reports dated February 3, 1995, with respect to the consolidated
financial statements of Badger Meter, Inc., incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1994, and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
Milwaukee, Wisconsin ERNST & YOUNG LLP
August 28, 1995.
