<PAGE>
As filed with the Securities and Exchange Commission September 25, 1995
File No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
BURLINGTON NORTHERN SANTA FE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1804964
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
3800 CONTINENTAL PLAZA 76102
777 MAIN STREET (ZIP CODE)
FORT WORTH, TEXAS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(817) 333-2000
SANTA FE PACIFIC
RETIREMENT AND SAVINGS PLAN
(FULL TITLE OF THE PLAN)
JEFFREY R. MORELAND
SENIOR VICE PRESIDENT, LAW AND GENERAL COUNSEL
BURLINGTON NORTHERN SANTA FE CORPORATION
3800 CONTINENTAL PLAZA
777 MAIN STREET
FORT WORTH, TEXAS 76102
(817) 333-2000
(AGENT FOR SERVICE)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
Proposed Proposed
Maximum Maximum
Title of Securities to be Amount to be Offering Price Aggregate Amount of
Registered Registered Per Share* Offering Price* Registration Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 6,150,000
value....................... Shares $71.15625 $437,610,938 $150,901
=========================================================================================================
</TABLE>
* Estimated solely for the purpose of computing the registration fee on the
basis of the average of the high and low prices for the Common Stock as
reported on the New York Stock Exchange on September 22, 1995.
================================================================================
In addition, pursuant to Rule 416(c) of the Securities Act of 1933, this
registration also covers an indeterminate amount of interests to be offered or
sold pursuant to the employee benefit plan described herein.
<PAGE>
Part II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by Burlington
Northern Santa Fe Corporation (the "Company" or "Registrant"), with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference herein and shall be deemed to be a part hereof:
(a) The Company's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on December 22, 1994, including the
description of Common Stock contained therein.
(b) Post-effective Amendments Nos. 1, 2, 3 and 4 to the Company's
Registration Statement on Form S-4.
(c) Annual Report on Form 10-K for the year ended December 31, 1994 for
the Company's subsidiary, Santa Fe Pacific Corporation ("SFP"), as
amended by Form 10-K/A.
(d) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995
and June 30, 1995 for SFP.
(e) Annual Report on Form 10-K for the year ended December 31, 1994 for
the Company's wholly-owned subsidiary, Burlington Northern Inc.
("BNI").
(f) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995
and June 30, 1995 for BNI.
(g) Current Report on Form 8-K for SFP (date of earliest event reported,
January 18, 1995).
(h) Current Report on Form 8-K for SFP (date of earliest event reported,
January 24, 1995).
(i) Current Report on Form 8-K for SFP (date of earliest event reported,
February 21, 1995).
(j) Current Report on Form 8-K for SFP (date of earliest event reported,
March 7, 1995).
(k) Current Report on Form 8-K for SFP (date of earliest event reported,
April 19, 1995).
(l) Current Report on Form 8-K for SFP (date of earliest event reported,
May 31, 1995).
(m) Current Report on Form 8-K for BNI (date of earliest event reported,
January 19, 1995).
(n) Current Report on Form 8-K for BNI (date of earliest event reported,
January 24, 1995).
(o) Current Report on Form 8-K/A for BNI (date of earliest event reported,
January 24, 1995).
<PAGE>
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated herein by reference and shall be deemed 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.
Not applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that is in not exclusive of other
indemnification that may be granted by a corporation's charter, bylaws,
disinterested director vote, stockholder vote, agreement or otherwise.
Article X of the Bylaws of the Company requires indemnification to the full
extent permitted under Delaware law as from time to time in effect. Subject to
any liabilities imposed by Delaware law, the Bylaws provide an unconditional
right to indemnification for all expenses, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) actually and reasonably incurred by any person in connection
with any actual or threatened proceeding (including, to the extent permitted by
law, any derivative action) by reason of the fact that such person is or was
serving as a director or officer of the Company or, at the request of the
Company, of another corporation, partnership, joint venture, trust or other
enterprise, including an employee benefit plan. The Bylaws also provide that the
Company may, by action of its Board of Directors, provide indemnification to its
employees and agents with the same scope and effect as the foregoing
indemnification of directors and officers.
Officers and directors of the Company are covered by insurance which (with
certain exceptions and within certain limitations) indemnifies them against
losses and liabilities arising from any alleged "wrongful act" including any
alleged error or misstatement or misleading statement, or wrongful act or
omission or neglect or breach of duty.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit.
<PAGE>
Article VIII of the Certificate of Incorporation of the Company provides that
to the full extent that the Delaware General Corporation Law, as it now exists
or may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of the Company shall not be liable to the
Company or its stockholders from monetary damages for breach of fiduciary duty
as a director. Any amendment to or repeal ofsuch Article VIII shall not
adversely affect any right or protection of a director of the Company for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits.
ITEM 9. UNDERTAKINGS.
A. Rule 415 Offering.
-----------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference 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.
<PAGE>
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. Filings Incorporating Subsequent Exchange Act Documents
by Reference.
-------------------------------------------------------
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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Indemnification of Directors and Officers.
-----------------------------------------
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 provisions of the registrant's articles of
incorporation or by-laws or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the 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 Fort Worth, State of Texas, on September 22,
1995.
BURLINGTON NORTHERN SANTA FE CORPORATION
By /s/ Robert D. Krebs
---------------------------
Robert D. Krebs
President and
Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below authorizes any Authorized
Officer acting alone to execute in the name of such person and in the capacity
indicated below, and to file, any amendments to the Registration Statement which
any Authorized Officer deems necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933, as amended, and any rules, regulations,
and requirements of the Securities and Exchange Commission in respect thereof,
and to take any other action on behalf of such person which any Authorized
Officer deems necessary or desirable in connection herewith. The term
"Authorized Officer" as applied with respect to any action taken pursuant to
this authorization means (i) any person who is the Chief Executive Officer or a
Senior Vice President of the Registrant and (ii) any other officer of the
Registrant who shall be authorized by a person identified in clause (i) to act
as an Authorized Officer for purposes of this paragraph.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities stated below on the 22nd day of September 1995:
Signature Title
--------- -----
/s/ Gerald Grinstein Chairman of the Board and Director
- --------------------------------------
Gerald Grinstein
/s/ Robert D. Krebs President, Chief Executive Officer
- -------------------------------------- and Director
Robert D. Krebs
/s/ Denis E. Springer Senior Vice President and Chief
- -------------------------------------- Financial Officer
Denis E. Springer
/s/ Thomas N. Hund Vice President and Controller
- --------------------------------------
Thomas N. Hund
/s/ Joseph F. Alibrandi Director
- --------------------------------------
Joseph F. Alibrandi
/s/ Jack S. Blanton Director
- --------------------------------------
Jack S. Blanton
/s/ John J. Burns, Jr.
- -------------------------------------- Director
John J. Burns, Jr.
/s/ Daniel P. Davison Director
- --------------------------------------
Daniel P. Davison
/s/ George Deukmejian Director
- --------------------------------------
George Deukmejian
<PAGE>
/s/ Daniel J. Evans Director
- --------------------------------------
Daniel J. Evans
/s/ Barbara Jordan Director
- --------------------------------------
Barbara Jordan
/s/ Bill M. Lindig Director
- --------------------------------------
Bill M. Lindig
/s/ Ben F. Love Director
- --------------------------------------
Ben F. Love
/s/ Roy S. Roberts Director
- --------------------------------------
Roy S. Roberts
/s/ Marc J. Shapiro Director
- --------------------------------------
Marc J. Shapiro
/s/ Arnold R. Weber Director
- --------------------------------------
Arnold R. Weber
/s/ Robert H. West Director
- --------------------------------------
Robert H. West
/s/ J. Steven Whisler Director
- --------------------------------------
J. Steven Whisler
/s/ Edward E. Whitacre, Jr. Director
- --------------------------------------
Edward E. Whitacre, Jr.
/s/ Ronald B. Woodard Director
- --------------------------------------
Ronald B. Woodard
/s/ Michael B. Yanney Director
--------------------------------------
Michael B. Yanney
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Santa Fe
Pacific Retirement and Savings Plan has caused this registration statement to be
signed on its behalf by the undersigned Plan Administrator, thereunto duly
authorized, in the City of Schaumburg, State of Illinois, on the 22nd day of
September, 1995.
SANTA FE PACIFIC RETIREMENT AND SAVINGS PLAN
/s/ Dennis J. Cech
-------------------------------------
Dennis J. Cech
Chairman, Employee Benefits Committee
<PAGE>
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
<S> <C> <C>
4(a) Certificate of Incorporation of the Registrant (incorporated by
reference to the Company's Registration Statement on Form S-4, filed
December 22, 1994)
4(b) By-Laws of the Registrant (incorporated by reference to the
Company's Registration Statement on Form S-4, filed December 22, 1994)
4(c) Santa Fe Pacific Retirement and Savings Plan
5(b) Neither an opinion concerning the plan's compliance with the
requirements of ERISA nor an Internal Revenue Service ("IRS")
determination letter is required because the plan has been or will
be submitted to the IRS and the registrant undertakes that it will
make all changes required by the IRS to qualify the plan.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of Price Waterhouse LLP
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
(Restated To Incorporate
First Through Eighteenth
Amendments)
July 25, 1995
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 - ESTABLISHMENT OF THE PLAN
1.01 Adoption of the Plan 12
1.02 Amendment of Predecessor Plans 12
1.03 Assumption of Assets and
Liabilities of Predecessor
Plans 13
1.04 Internal Revenue Service Approval 13
ARTICLE 2 - DEFINITIONS
2.01 13
2.02 Actuarial Equivalent 13
2.03 Affiliated Company 13
2.04 Beneficiary 13
2.05 Board 14
2.06 Code 14
2.07 Company 14
2.08 Committee 14
2.09 Compensation 14
2.10 Contingent Annuitant 15
2.11 Covered Employment 15
2.12 ERISA 15
2.13 Leave of Absence 15
2.14 Participating Company 15
2.15 Plan Compensation 15
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
2.16 Plan Year 16
2.17 Salaried Employment 16
2.18 Trust 16
2.19 Trustee Transfer 16
2.20 16
ARTICLE 3 - PARTICIPATION
3.01 Continuing Participation 16
3.02 New Participation 16
ARTICLE 4 - SERVICE
4.01 Vesting Service 17
4.02 Benefit Service 18
4.03 Effect of Long-Term Disability
on Service 18
4.04 Rule of Parity 19
ARTICLE 5 - ACCRUED BENEFIT
5.01 Determination of Accrued Benefit 20
5.02 Social Security Pay Level 20
5.03 Railroad Retirement Pay Level 21
5.04 Railroad Benefit Service 21
5.05 Non-Railroad Benefit Service 21
5.06 Form of Accrued Benefit 21
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.07 Nonforfeitable Right to
Accrued Benefit 21
5.08 Nonduplication of Benefits 21
ARTICLE 6 - NORMAL RETIREMENT
6.01 Normal Retirement Date 22
6.02 Normal Retirement Benefit 22
6.03 Time of Payment 22
6.04 Benefit Supplement 22
ARTICLE 7 - EARLY RETIREMENT
7.01 Early Retirement Eligibility Date 23
7.02 Early Retirement Benefit 23
7.03 Early Retirement Reduction 23
7.04 Early Retirement Supplemental
Benefit 23
7.05 Benefit Supplement 24
ARTICLE 8 - VESTED RIGHTS
8.01 Eligibility for Benefits 24
8.02 Vested Right Benefit 25
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 9 - FORMS OF RETIREMENT BENEFITS
9.01 Basic Form 25
9.02 Optional Forms 25
9.03 Retirement Benefit Rounded to
Nearest Dollar 26
9.04 Procedure for Electing Optional
Forms 27
9.05 Effective Date of Forms of
Retirement Benefits 27
9.06 Information on Optional Forms 27
9.07 Single Sum Payment of Certain
Benefits 27
ARTICLE 10 - PRERETIREMENT SURVIVING SPOUSE BENEFIT
10.01 Surviving Spouse Benefit 28
10.02 Certain Deaths Prior to
January 1, 1985 29
ARTICLE 11 - SPECIAL PROVISIONS FOR MEMBERS OF
PREDECESSOR PLANS
11.01 Applicability 29
11.02 Refunds of Employee Contribu-
tions to SP Plan 29
11.03 Preretirement Death Benefit
for Former Member of SP Plan 30
11.04 Minimum Retirement Benefit 30
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
11.05 Retirement Benefits for
Employees Retiring Under
Predecessor Plans on and
After June 1, 1984 30
11.06 Retirement Benefits for
Certain Members of Predecessor
Plans 31
ARTICLE 12 - FUNDING OF THE PLAN
12.01 Establishment of the Trust 32
12.02 Contributions to the Trust 32
12.03 Purpose 32
12.04 Reversion to Participating
Companies 33
ARTICLE 13 - ADMINISTRATION
13.01 Administration Committee 34
13.02 Allocation of Responsibility
Among Fiduciaries 34
13.03 Administration Committee
Powers and Duties 34
13.04 Rules and Decisions 35
13.05 Claim Review Procedure 36
13.06 Notices 36
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 14 - LIMITATIONS ON BENEFITS
14.01 Limitation 37
ARTICLE 15 - TERMINATION AND DISTRIBUTION
15.01 Allocation and Distribution
on Termination 37
15.02 Temporary Restrictions on
Benefits for Certain
Participants 43
15.03 Exclusions from Temporary
Restrictions 44
15.04 Definitions Applicable to
Sections 15.02 and 15.03 44
15.05 Termination of Temporary
Restrictions 45
15.06 Termination Following Change
in Control 45
15.07 Elimination of Nonprotected
Benefits 46
ARTICLE 16 - MISCELLANEOUS PROVISIONS
16.01 Indemnification Provisions 47
16.02 Participation by Other
Affiliated Companies 47
16.03 Successor Company Continuance
of Participation 47
16.04 Amendment of Plan 48
16.05 Merger of Consolidation with
Another Plan 48
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
16.06 Participating Company With-
drawal from Plan 49
16.07 Nonassignability of Rights of
Participants 50
16.08 Payments to Minors or Disabled
Persons 50
16.09 Suspension of Benefits During
Certain Periods of Employment
or Reemployment 51
16.10 Participation by Employees of
the Toledo, Peoria & Western
Railroad Company 52
ARTICLE 17 - TOP-HEAVY LIMITATIONS
17.01 Definition of Top-Heavy Plan 52
17.02 Top-Heavy Plan Requirements 53
17.03 Definitions 55
17.04 Cessation of Top-Heavy
Requirements 55
SUPPLEMENT A
A-1 Purpose 57
A-2 Establishment of Offering
Periods and Eligible Groups 57
A-3 Eligibility for Special
Supplemental Benefits 57
A-4 Amount of Special Supplemental
Benefits 58
A-5 Form of Payment 58
A-6 Form of Offering Period and
Eligible Groups 59
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SUPPLEMENT B
B-1 Purpose, Use of Terms 60
B-2 Transfer of Assets and
Liabilities 60
B-3 Participating Company 60
B-4 Termination of Participation 60
B-5 Spinoff of Liabilities 60
B-6 Nonduplication of Benefits 62
B-7 Segregation of Assets 62
B-8 Separate Application After
Closing Date 63
B-9 Conflicts Between Plan and
This Supplement 63
SUPPLEMENT C
C-1 Purpose, Use of Terms 65
C-2 Transfer of Assets and
Liabilities 65
C-3 Participating Company 65
C-4 Transfer of Liabilities 65
C-5 Nonduplication of Benefits 67
C-6 Spinoff of Assets 67
C-7 Conflicts Between Plan and
This Supplement 70
Exhibit A 71
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SUPPLEMENT D
D-1 Purpose, Use of Terms 77
D-2 Participants Affected 77
D-3 Recognition of Service 77
D-4 Offset of GF Retirement Plan
Benefits 77
D-5 Plan Compensation 78
D-6 Conflicts 78
SUPPLEMENT E
E-1 Purpose, Use of Terms 79
E-2 Transfer of Assets and
Liabilities 79
E-3 Participating Company 79
E-4 Transfer of Liabilities 80
E-5 Nonduplication of Benefits 81
E-6 Spinoff of Assets 81
E-7 Conflicts Between Plan and
this Supplement 82
Exhibit A 83
</TABLE>
<PAGE>
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Page
----
SUPPLEMENT F
<S> <C> <C>
F-1 Purpose 89
F-2 Establishment of Offering
Periods and Eligible Groups 89
F-3 Eligibility for an Early
Retirement Window Benefit 89
F-4 Entitlement to a Voluntary
Termination Early Retirement
Window Benefit 90
F-5 Entitlement to an Involuntary
Termination Early Retirement
Window Benefit 91
F-6 Amount of Early Retirement
Window Benefit 92
F-7 Form of Payment 93
F-8 Form of Offering Periods and
Eligible Groups 93
Schedule A 95
</TABLE>
<PAGE>
SANTA FE PACIFIC
----------------
RETIREMENT PLAN
---------------
ARTICLE 1
---------
ESTABLISHMENT OF THE PLAN
-------------------------
1.01 Adoption of the Plan. The Santa Fe Pacific Retirement Plan described
herein (hereinafter called the "Plan") is adopted by Santa Fe Pacific
Corporation (hereinafter called the "Company") effective January 1,
1985 to provide retirement benefits for its eligible salaried
employees.
1.02 Amendment of Predecessor Plans. Effective January 1, 1985 the Plan
amends, replaces, and combines the following plans (hereinafter called
"Predecessor Plans"):
(a) the Santa Fe Retirement Plan as in effect on December 31, 1984
attached hereto as Exhibit I (hereinafter called the "SF Plan"),
and
(b) the Southern Pacific Retirement Plan as in effect on December 31,
1984 attached hereto as Exhibit II (hereinafter called the "SP
Plan").
Section 10.02 of the Plan is effective for both the Santa Fe Plan and
the Southern Pacific Plan on August 23, 1984. Article 14 of the Plan
amends Article 10 of the SF Plan effective January 1, 1984. Article 17
of the Plan is effective with regard to the SF Plan effective October
1, 1984.
The rights and benefits of each Participant on and after January 1,
1985 and of each person who retired under a Predecessor Plan on or
after both his early retirement date under the Predecessor Plan and
June 1, 1984 shall be determined under the Plan. The rights and
benefits of each other member or former member of the Predecessor Plans
who does not become a Participant on and after January 1, 1985 shall be
12
<PAGE>
determined under the provisions of the Predecessor Plan in which
he was a member in effect upon his termination of employment.
1.03 Assumption of Assets and Liabilities of Predecessor
Plans. Effective January 1, 1985 all assets and liabilities of the
Predecessor Plans shall be assumed by the Plan.
1.04 Internal Revenue Service Approval. The Plan and the
Trust established under the Plan are adopted subject to the approval of
the Internal Revenue Service. The Company may make any changes in the
Plan necessary to obtain Internal Revenue Service approval.
ARTICLE 2
---------
DEFINITIONS
-----------
2.01 As used in the Plan, the following terms have the meanings specified
below unless the context clearly indicates otherwise:
2.02 Actuarial Equivalent: equality in value of the aggregate amounts
expected to be received under different forms of payment, based upon
factors and actuarial tables as shown in Schedule A attached.
For employees who retired under the SF Plan prior to August 1, 1983,
the factors and actuarial tables in the SF Plan at the time of
retirement shall be used. For employees who retired under the SF Plan
between August 1, 1983 and December 31, 1984, the factors and actuarial
tables in the SF Plan as of August 1, 1983 or the factors in Schedule A
attached hereto shall be used, whichever produces the larger benefit.
2.03 Affiliated Company: the Company and any corporation more than 80
percent of the voting stock or 80 percent of all classes of stock of
which is held either directly or indirectly through subsidiaries by the
Company. Affiliated Company shall also mean any trade or business
under common control with an Affiliated Company within the meaning of
Section 414(c) of the Code.
13
<PAGE>
2.04 Beneficiary: any person or entity designated to receive any benefits
under the Plan in the event of the death of a Participant.
2.05 Board: the Board of Directors of the Company.
2.06 Code: the Internal Revenue Code of 1954 as amended from time to time.
2.07 Company: the Santa Fe Pacific Corporation.
2.08 Committee: the Administration Committee as defined in Article 13.
2.09 Compensation: the total basic salary payable to a Participant for
Salaried Employment, plus displacement or make-up allowances,
commissions and cash only bonuses payable for Salaried Employment other
than special or extraordinary bonuses payable upon a change of control
of Southern Pacific Transportation Company, and for employees of Santa
Fe Pacific Pipelines, Inc., overtime pay. A Participant's base salary
is the regular rate of pay specified for his position and does not
include automobile allowances, imputed income under any group term life
insurance program, moving expense or other reimbursements, fringe
benefits or similar items. Compensation includes any contributions
made under a salary reduction agreement to a qualified cash or deferred
arrangement, to a non-qualified salary deferral plan, or to a flexible
compensation program.
In addition to other applicable limitations which may be set forth in
the Plan and notwithstanding any other contrary provision of the Plan,
Compensation taken into account under the Plan shall not exceed
$150,000, as adjusted for changes in the cost of living, as provided in
Section 415(d) of the Code, for the purpose of calculating a
Participant's accrued benefit (including the right to any optional
benefit provided under the Plan) for any plan year commencing after
September 30, 1994. However the accrued benefit determined in
accordance with the preceding sentence shall not be less than the
accrued benefit determined on September 30, 1994, without regard to the
preceding sentence. For Plan Years commencing after September 30,
1989, and before September 30, 1994, Compensation taken into account
under the Plan shall not exceed $200,000, as adjusted for changes in
the cost of living, as provided in Section 415(d) of the Code, for the
purpose of calculating a Participant's accrued
14
<PAGE>
benefit (including the right to any optional benefit provided under the
Plan). However, the accrued benefit determined in accordance with the
preceding sentence shall not be less than the accrued benefit
determined on September 30, 1989, without regard to the preceding
sentence.
2.10 Contingent Annuitant: any person designated by a Participant to
receive, if the Participant dies after his retirement benefit has
commenced and if the Participant is survived by such person, part or
all of the retirement benefit payable to the Participant.
2.11 Covered Employment: Salaried Employment with a Participating Company.
2.12 ERISA: the Employee Retirement Income Security Act of 1974 as amended
from time to time.
2.13 Leave of Absence: any period during which a Participant, at the
direction of a Participating Company, is (i) on leave from his
employment, including but not limited to sick or disability leave, or
(ii) on a temporary layoff without pay, or (iii) in military service,
without compensation by an Affiliated Company, of the United States or
of any state thereof under any compulsory service law, or on active
duty in such forces in time of national or local emergency, provided
that he returns to Salaried Employment within the time prescribed by
law for the restoration of his service.
2.14 Participating Company: any Affiliated Company which elects to
participate in the Plan pursuant to Section 16.02.
2.15 Plan Compensation: a Participant's total Compensation during his
period of Salaried Employment, for the 60 consecutive months during the
10 year period immediately prior to the termination of his Salaried
Employment for which his total Compensation is the highest, divided by
60. For this purpose, any period of employment in a non-salaried
position shall be ignored in determining consecutive months. If a
Participant has not received Compensation for 60 consecutive months
during such 10 year period, his Plan Compensation shall equal the total
of his Compensation for the longest period of consecutive months during
such 10 year period divided by the total number of months of
Compensation so considered. For the purpose of calculating
Compensation for 60
15
<PAGE>
consecutive months, any fractional month shall be rounded to the
nearest whole month and shall be calculated at the rate of pay in
effect for such month. Compensation paid less frequently than once
every month and Compensation which is exchanged for an Exchange Grant
under the ATSF Incentive Compensation Bonus Stock Program or any
similar program maintained by an Affiliated Company shall be treated as
having been received and paid on a pro rata monthly basis over the
period for which it was earned.
2.16 Plan Year: the period beginning on October 1 and ending on September
30.
2.17 Salaried Employment: employment while permanently assigned to a
salaried position with an Affiliated Company.
2.18 Trust: any and all trust funds created by agreement between the
Company and a trustee, as from time to time amended.
2.19 Trustee Transfer: means a transfer from the Plan of an amount for the
benefit of the Participant to the trustee of an eligible retirement
plan within the meaning of Section 401(a)(31)(D) of the Code, provided
such plan provides for the receipt of such transfers.
2.20 Wherever used in this instrument, a masculine pronoun shall be deemed
to include the masculine and feminine genders, and a singular word
shall be deemed to include the singular and plural, in all cases where
the context so requires.
ARTICLE 3
---------
PARTICIPATION
-------------
3.01 Continuing Participation. Any person who was a member of a Predecessor
Plan on December 31, 1984 shall be a Participant of the Plan effective
January 1, 1985 if he is then in Covered Employment.
3.02 New Participation. Any person in Covered Employment on or after
January 1, 1985 shall become a Participant of the Plan on the latest
of:
16
<PAGE>
(a) the first anniversary of the date his employment commenced or any
October 1 thereafter provided that he had been compensated by an
Affiliated Company for at least 1,000 hours during the immediately
preceding 12 months, or
(b) his 21st birthday, or
(c) the date he enters into Covered Employment.
For purposes of determining eligibility to participate in the Plan
employment shall include service as a leased employee within the
meaning of Section 414(n)(2) of the Code. Notwithstanding the
foregoing, if leased employees constitute less than twenty percent of
the nonhighly compensated work force of the company and its Affiliated
Companies, within the meaning of Section 414(n)(5)(C)(ii) of the Code,
employment shall not include service as a leased employee who is
covered by a plan described in Section 414(n)(5) of the Code unless
otherwise provided by the terms of the Plan.
ARTICLE 4
---------
SERVICE
-------
4.01 Vesting Service. A Participant's Vesting Service shall be the sum of:
(a) his Vesting Service, if any, as of December 31, 1984 under the SF
Plan plus any additional Vesting Service that would have been
credited to him under such plan if Vesting Service under such Plan
had not been limited to service after age 22,
(b) his Years of Service, if any, as of December 31, 1984 under the SP
Plan,
(c) the number of calendar years after 1984 in which he is compensated
by an Affiliated Company and/or is on Leave of Absence for at
least 1,000 hours. For any month in which an employee has been
compensated or on Leave of Absence for one hour, he shall be
deemed to have been compensated for a minimum of 190 hours,
17
<PAGE>
(d) any period during which a Participant whose Covered Employment has
been terminated by an Affiliated Company is eligible to receive
severance benefits under a formal severance program sponsored by
an Affiliated Company.
Vesting Service shall include service as a leased employee within the
meaning of Section 414(n)(2) of the Code. Notwithstanding the
foregoing, if leased employees constitute less than twenty percent of
the nonhighly compensated work force of the company and its Affiliated
Companies, within the meaning of Section 414(n)(5)(C)(ii) of the Code,
employment shall not include service as a leased employee who is
covered by a plan described in Section 414(n)(5) of the Code unless
otherwise provided by the terms of the Plan.
4.02 Benefit Service. A participant's Benefit Service shall be the sum of:
(a) his Benefit Service, if any, as of December 31, 1984 under the SF
Plan,
(b) the sum of his Participation Service and his Non-Participation
Service, if any, as of December 31, 1984 under the SP Plan,
(c) 1/12 of the number of months after 1984 either during which he
receives Compensation for one or more days of Covered Employment
or during which he is on Leave of Absence for one or more days
immediately following a period of Covered Employment,
(d) 1/12 of the number of months of prior or intervening employment,
other than Covered Employment, by a Participating Company which
was not credited as Benefit Service under a Predecessor Plan,
provided that the Participant, subsequent to such prior or
intervening employment, has five consecutive years of Benefit
Service in Salaried Employment,
(e) any period during which a Participant whose Covered Employment has
been terminated by an Affiliated Company is eligible to receive
severance benefits under a formal severance program sponsored by
an Affiliated Company.
18
<PAGE>
4.03 Effect of Long-Term Disability on Service. If a Participant is
receiving benefits under a long-term disability plan maintained by a
Participating Company, he shall continue as a Participant and shall
continue to accrue Vesting Service and Benefit Service as if he had
continued in Covered Employment while receiving such disability
benefits. His Compensation, at the rate of his Compensation as of the
date of his disability, shall be deemed to continue while he is
receiving disability benefits.
4.04 Rule of Parity. Notwithstanding Sections 4.01 and 4.02 hereof, the
Plan shall disregard Vesting Service and Benefit Service in accordance
with the following provisions:
(a) The Plan shall not be required to take into account Vesting
Service earned by a Participant, whose Accrued Benefit under the
Plan is forfeitable, prior to the conclusion of a period of
consecutive one-year breaks in service if the number of
consecutive one-year breaks in service within such period equals
or exceeds the greater of (i) five (5); or (ii) the aggregate
number of years of Vesting Service earned by such Participant
before
such period.
(b) The Plan shall not be required to take into account Benefit
Service earned by a Participant prior to the conclusion of a
period of consecutive one-year breaks in service if such period
permits the Plan to disregard the Participant's Vesting Service as
provided in paragraph 4.04(a).
(c) For the purposes of this Section 4.04, a one-
year break in service means a calendar year within which the
Participant is compensated by an Affiliated Company and/or is on
Leave of Absence for not more than 500 hours; provided that a
Participant shall not have a one-year break in service for any
calendar year if (i) on the last day of the calendar year he is in
Salaried Employment; (ii) in the calendar year he commenced a
maternity/paternity absence or (iii) such calendar year follows
the calendar year described in (ii). For any month in which an
employee has been compensated or on Leave of Absence for one hour,
he shall be deemed to have been compensated for a minimum of 190
hours.
19
<PAGE>
(d) For the purposes of this Section 4.04, a maternity/paternity
absence means a paid or unpaid absence from employment commencing
on or after January 1, 1987 (including an unapproved Leave of
Absence) with an Affiliated Company (i) by reason of the pregnancy
of the Participant; (ii) by reason of the birth of a child of the
Participant; (iii) by reason of the placement of a child under age
18 with the Participant in connection with the adoption of the
child by the Participant (including a trial period prior to
adoption); and (iv) for purposes of caring for a child of the
Participant immediately following the birth or adoption of such
child by such Participant. The Participant must provide to the
satisfaction of the Committee or its agent that the absence meets
the above requirements and must supply information concerning the
length of the absence unless the Committee has access to relevant
information without the Participant submitting it.
(e) This Section 4.04 shall operate to disregard Vesting Service and
Benefit Service as of and after the date it is effective with
respect to any participant who meets the requirements of
paragraphs 4.04(a) or (b) either before, as of, or after such
date.
ARTICLE 5
---------
ACCRUED BENEFIT
---------------
5.01 Determination of Accrued Benefit. A Participant's Accrued Benefit,
payable monthly, shall be the following percentages multiplied by
portions of his Plan Compensation.
<TABLE>
<CAPTION>
Percentage per
Portion of Plan Year of
Compensation Benefit Service
--------------- ---------------
<S> <C>
Up to the Social 1.0%
Security Pay Level
Above the Social 1.6%
Security Pay Level
</TABLE>
20
<PAGE>
5.02 Social Security Pay Level. The Social Security Pay Level is 1/12 of
"Covered Compensation" as defined in Revenue Ruling 71-446 for an
individual attaining age 65 in the calendar year of a Participant's
termination of Salaried Employment. The annual "Covered Compensation"
amount shall be rounded to the nearest whole multiple of $600.
5.03 Railroad Retirement Pay Level. The Railroad Retirement Pay Level is
1/12 of the average over the 5 full calendar years immediately
preceding the Participant's termination of Salaried Employment of the
maximum amount of annual earnings on which Tier II benefits under the
Railroad Retirement Act are based.
5.04 Railroad Benefit Service. A Participant's Railroad Benefit Service is
the number of years of his Benefit Service during which he is covered
by the Railroad Retirement Act, up to a maximum of 40 years.
5.05 Tier II Offset. If a Participant has at least ten (10) years of
Railroad Benefit Service with the Company or any Affiliated Company,
his or her Accrued Benefit shall be reduced by a portion of his or her
Tier II benefits under the Railroad Retirement Act. Such portion shall
be an amount (not greater than his or her Tier II benefits under the
Railroad Retirement Act before any early retirement reduction factors
are applied) equal to 0.7% of his or her Plan Compensation up to his or
her Railroad Retirement Pay Level multiplied by his or her years of
Railroad Benefit Service.
5.06 Form of Accrued Benefit. The Accrued Benefit, as determined in this
Article 5, and the offset under Section 5.05, is the amount of
retirement benefit payable monthly commencing at a Participant's Normal
Retirement Date under the basic form described in Section 9.01(a) -- an
amount which is payable to a Participant for his lifetime with no
further payments to anyone else after the Participant's death. If a
Participant's retirement benefit is paid under any other form, his
retirement benefit will be reduced to the Actuarial Equivalent of his
Accrued Benefit.
5.07 Nonforfeitable Right to Accrued Benefit. A Participant shall have a
nonforfeitable right to his Accrued Benefit (payable under the
provisions of the Plan and subject to the Tier II offset provided under
Section 5.05) on the earlier of:
21
<PAGE>
(a) his completion of 5 years of Vesting Service, or
(b) his Normal Retirement Date.
5.08 Nonduplication of Benefits. If Benefit Service under this Plan
includes any period for which a Participant is entitled to receive a
benefit from another qualified defined benefit plan of an Affiliated
Company, then the benefit under this Plan shall be reduced by the
actuarial equivalent of the benefit payable under such other plan.
ARTICLE 6
---------
NORMAL RETIREMENT
-----------------
6.01 Normal Retirement Date. The Normal Retirement Date of a Participant is
his 65th birthday.
6.02 Normal Retirement Benefit. A Participant whose employment with an
Affiliated Company terminates on or after his Normal Retirement Date
shall receive his Accrued Benefit commencing on the date after such
termination of employment.
6.03 Time of Payment. Each Participant who is entitled to a retirement
benefit in accordance with the Plan shall be entitled to have his
retirement benefit commence no later than the 60th day after the close
of the Plan Year in which (i) the Participant attains age 65 or (ii)
the Participant's employment with an Affiliated Company is terminated,
whichever is later, but in no event shall the distribution of a
Participant's retirement benefit commence later than April 1 of the
calendar year in which the Participant attains age 70 1/2.
Notwithstanding anything in this Section 6.03 to the contrary, if the
amount of the payments required to commence on the date determined
under this Section cannot be ascertained or the person entitled thereto
cannot be located by such a date, a payment retroactive to such date
may be made no later than 60 days after the earliest date on which such
amount can be ascertained or such person located.
6.04 Benefit Supplement. If a Participant or surviving spouse attains or
would attain at least age 66 on or before December 31, 1992 and is
receiving a benefit on May 1, 1992 under this Article 6, the
Participant (or his surviving spouse) shall receive a benefit
22
<PAGE>
supplement in the amount of $10 per month for each full year of age
over 65 as of December 31, 1992 with a maximum benefit supplement of
$100.00 per month, calculated as of May 1, 1992. This benefit
supplement shall be paid in accordance with the method of payment used
in respect to the benefit provided under this Article 6.
ARTICLE 7
---------
EARLY RETIREMENT
----------------
7.01 Early Retirement Eligibility Date. The Early Retirement Eligibility
Date of a Participant is the first day following the later of (i) his
55th birthday and (ii) his completion of 10 years of Vesting Service,
but not later than his Normal Retirement Date.
7.02 Early Retirement Benefit. A Participant whose employment with an
Affiliated Company terminates on or after his Early Retirement
Eligibility Date and before his Normal Retirement Date shall be
entitled to receive, at the option of the Participant, either:
(a) his Accrued Benefit commencing on his Normal Retirement Date, or
(b) his Accrued Benefit reduced by the Participant's Early Retirement
Reduction commencing on any day elected by the Participant
following his Early Retirement Eligibility Date and preceding his
Normal Retirement Date.
7.03 Early Retirement Reduction. A Participant's Early Retirement Reduction
is based on the number of months that the commencement of his
retirement benefit precedes the month in which the earlier of the
following occurs:
(a) his Normal Retirement Date, or
(b) the later of his 62nd birthday or the date he would have completed
30 years of Benefit Service had he continued in employment.
23
<PAGE>
The Early Retirement Reduction is 1/360th for each such month prior to
his 60th birthday and 1/180th for each such month thereafter.
7.04 Early Retirement Supplemental Benefit. If the retirement benefit of a
Participant who retires on or after his Early Retirement Date, or of a
former Participant who receives a severance allowance under a formal
severance program sponsored by an Affiliated Company until he retires
on or after his Early Retirement Date, commences before the earliest
date on which he could receive a benefit under either the Railroad
Retirement Act or the Social Security Act, assuming he applied for and
did not voluntarily disqualify himself from receiving such benefit, he
shall be paid a temporary supplemental retirement benefit. Such
supplemental retirement benefit shall be paid for each month for which
he receives a retirement benefit until such earliest date or his 62nd
birthday, whichever occurs first. The amount of such supplemental
benefit shall be $15 per month multiplied by the Participant's Benefit
Service up to 20 years. The amount of such supplemental benefit shall
not be affected by nor subject to the form of the Participant's
retirement benefit under Article 9, any Early Retirement Reduction or
any reduction of a Participant's retirement benefit under Section
11.05.
7.05 Benefit Supplement. If a Participant or surviving spouse attains or
would attain at least age 66 on or before December 31, 1992 and is
receiving a benefit on May 1, 1992 under this Article 7, the
Participant (or his surviving spouse) shall receive a benefit
supplement in the amount of $10 per month for each full year of age
over 65 as of December 31, 1992 with a maximum benefit supplement of
$100.00 per month, calculated as of May 1, 1992. This benefit
supplement shall be paid in accordance with the method of payment used
in respect to the benefit provided under this Article 7.
ARTICLE 8
---------
VESTED RIGHTS
-------------
8.01 Eligibility for Benefit. A Participant whose employment with an
Affiliated Company terminates both:
24
<PAGE>
(a) prior to his 55th birthday, and
(b) on or after the date he has completed 5 years of Vesting Service,
or
(c) after his 55th birthday and prior to normal retirement date, and
(d) on and after the date he has completed 5 years but less than 10
years of Vesting Service.
shall be eligible for a Vested Right Benefit.
8.02 Vested Right Benefit. A Participant eligible for a Vested Right
Benefit shall receive, at his option, either:
(a) his Accrued Benefit commencing on the first day of the month
following his Normal Retirement Date, or
(b) if Participant has completed 10 years of Vesting Service, his
Accrued Benefit reduced by the Participant's Early Retirement
Reduction (as described in Section 7.03) commencing on the first
day of any month designated by the Participant following his 55th
birthday and preceding his Normal Retirement Date.
ARTICLE 9
---------
FORMS OF RETIREMENT BENEFITS
----------------------------
9.01 Basic Form. Unless a Participant elects otherwise, as prescribed in
Section 9.04, his retirement benefit shall be paid in the form and
amount described below:
(a) A Participant who is unmarried on the date his retirement benefit
commences shall receive a retirement benefit in the amount
described in Article 6, 7 or 8, whichever is applicable, payable
for his lifetime, with no further payments made after his death.
(b) A Participant who is married on the date his retirement benefit
commences shall receive a lower retirement benefit which is the
Actuarial Equivalent of the amount described in Article 6,
25
<PAGE>
7 or 8, whichever is applicable, payable for his lifetime, and,
upon his death, if he is survived by the spouse to whom he was
married on the date his retirement benefit commenced, 66-2/3% of
such lower retirement benefit shall be paid to such spouse for
such spouse's lifetime.
9.02 Optional Forms. A Participant may elect, as prescribed in Section
9.04, to receive a retirement benefit, in lieu of the basic form
described in paragraph 9.01, in one of the following optional forms:
(a) Option 1: the retirement benefit described in paragraph 9.01(a).
(b) Option 2: a lower retirement benefit than the amount described in
Article 6, 7 or 8, payable as long as the Participant is living
and, if the Participant dies before he has received a retirement
benefit for 120 months, payment of his retirement benefit will
continue to his Beneficiary for the balance of 120 months.
(c) Option 3: a lower retirement benefit than the amount described in
Article 6, 7 or 8, payable as long as either the Participant or
his Contingent Annuitant is living.
(d) Option 4: a lower retirement benefit than the amount described in
Article 6, 7 or 8, payable as long as the Participant is living
and half of such lower retirement benefit, payable after the death
of the Participant to the surviving Contingent Annuitant for his
lifetime.
(e) Option 5: a lower retirement benefit than the amount described in
Article 6, 7 or 8, payable as long as the Participant is living
and two-thirds of such lower retirement benefit, payable after the
death of the Participant to the surviving Contingent Annuitant for
his lifetime.
Anything in the foregoing to the contrary notwithstanding, no optional
form may be elected under which the Participant's retirement benefit is
less than 50% of the retirement benefit that would then be provided to
the Participant under Section 9.01(a). This limitation shall, however,
not be
26
<PAGE>
applicable under any optional form where the Participant's spouse is
the Contingent Annuitant.
Notwithstanding any other provision of the Plan, a Participant may not
elect any optional form which provides for payments over a period which
exceeds the life expectancy of the Participant or the joint and last
survivor life expectancy of the Participant and his spouse or
Contingent Annuitant.
9.03 Retirement Benefit Rounded to Nearest Dollar. Regardless of the form in
which a Participant's retirement benefit is paid, the amount of the
retirement benefit actually paid to the Participant and to any spouse
or Contingent Annuitant shall be rounded to the nearest whole dollar.
9.04 Procedure for Electing Optional Forms. Optional forms can become
effective only if elected in accordance with this Section 9.04. A
Participant may elect an optional form or revoke or change any prior
election of an optional form at any time provided that written notice
of such election, change or revocation is delivered to the Committee in
advance of the date on which payment of his retirement benefit
commences. If a Participant is married and wishes to elect Option 1 or
any other optional form under which his spouse is not his Contingent
Annuitant, he must submit to the Committee his spouse's written consent
to his election, executed and witnessed by a plan representative or a
notary not more than 90 days before the commencement of retirement
benefits.
9.05 Effective Date of Forms of Retirement Benefits. Any basic form or
optional form shall be effective only on the date the Participant's
retirement benefit commences.
9.06 Information On Optional Forms. No later than six months prior to a
Participant's Early Retirement Date, the Committee shall furnish the
Participant notification of the availability of an election of an
optional form, the circumstances under which it will be provided and
its financial effect on the Participant's retirement benefit.
9.07 Single Sum Payment of Certain Benefits. Notwithstanding any other
provision of the Plan to the contrary, in the event that a retirement
benefit payable to any person has a single sum present value of not
more than $3,500 as determined below, the
27
<PAGE>
Committee shall make a full payment of such retirement benefit as soon
as practicable following a Participant's termination of employment or
at the discretion of the Committee, on the date when such retirement
benefit would commence, in full satisfaction of any liability of the
Plan and the Trust to such person. Such single sum shall be based upon
the mortality table specified in Schedule A and the interest rates on
30-year Treasury Constant Maturities published monthly in Federal
Reserve Releases G.13 and H.15. The rate for the Plan Year shall be an
average of the daily rates for the month preceding the first day of the
Plan Year. In the event that a retirement benefit payable to any person
has a single sum present value of zero on the date of such person's
termination of employment with an Affiliated Company, such retirement
benefit shall be deemed to have been paid to such person.
With respect to any payment hereunder which is Two Hundred Dollars
($200.00) or over and constitutes an eligible rollover distribution
(within the meaning of Section 402(c)(4) of the Code), a Participant
may direct the Plan to have such payment paid in the form of a Trustee
Transfer, provided the Plan receives written notice of such direction
with specific instructions as to the eligible retirement plan as
defined in Section 401(a)(31)(D) of the Code to which the Trustee
Transfer is to be made on or prior to the applicable notice date for
payment.
ARTICLE 10
----------
PRERETIREMENT SURVIVING SPOUSE BENEFIT
--------------------------------------
10.01 Surviving Spouse Benefit. If a Participant, or a former Participant
who was credited with at least one hour of service on or after January
1, 1976, dies after he has completed 5 years of Vesting Service and
before his retirement benefit commences, and such Participant is
survived by his spouse, his spouse shall receive:
(a) if the Participant's death occurs before his Early Retirement
Eligibility Date, the retirement benefit the spouse would have
received if the Participant had terminated employment immediately
prior to his death,
28
<PAGE>
survived to his Early Retirement Eligibility Date (or such later
date as may be elected by the surviving spouse), elected to
commence his benefit under Option 4 designating his spouse as
Contingent Annuitant, and then died on the day after his benefit
payments commenced.
(b) if the Participant's death occurs on or after his Early Retirement
Eligibility Date, the retirement benefit the spouse would have
received if the Participant had retired immediately prior to his
death (assuming Section 7.01 permitted such early retirement) and
had elected Option 4.
Payments of the retirement benefit to the surviving spouse shall be
made for each month or partial month after the applicable date under
paragraph (a) or (b) above for the spouse's lifetime.
10.02 Certain Deaths Prior to January 1, 1985. Section 10.01(a) shall be
effective for deaths of any qualifying Participants or former
Participants under a Prior Plan which occurred after August 22, 1984
but before January 1, 1985; provided, however, that the amount of the
benefit to the surviving spouse shall be determined under the
applicable Prior Plan provisions.
ARTICLE 11
----------
SPECIAL PROVISIONS FOR MEMBERS OF PREDECESSOR PLANS
---------------------------------------------------
11.01 Applicability. Notwithstanding any other provision of the Plan, a
Participant who either was a member of a Predecessor Plan on December
31, 1984 or retired under a Predecessor Plan on or after June 1, 1984
shall be eligible for benefits as described in this Article 11 to the
extent that such Participant meets the requirements for such benefits
as described in this Article 11.
11.02 Refunds of Employee Contributions to SP Plan. Upon the death of a
Participant or former Participant who was a member of the SP Plan on
December 31, 1984 and who made contributions to the SP Plan prior to
August 1, 1968, the excess, if any, of:
29
<PAGE>
(a) such contributions plus interest paid at the rate of 5% compounded
annually commencing July 1, 1975 and ending on the last day of the
month in which such contributions are refunded, over
(b) the total retirement benefits, if any, received by the Participant
and his spouse or Contingent Annuitant.
(c) shall be paid to the Beneficiary of the last person to receive a
retirement benefit as a result of the Participant's participation
in the Plan or, in the event that no retirement benefit was paid,
to the Beneficiary of the Participant. If the termination of
employment of such a Participant occurs before he is entitled to a
Vested Right Benefit, his contributions with interest paid at the
rate of 5% compounded annually commencing July 1, 1975 and ending
on the first day of the month in which such contributions are
refunded shall be paid to him.
11.03 Preretirement Death Benefit for Former Member of SP Plan. If a
Participant who was a member of the SP Plan and who had completed 20
years of Benefit Service on December 31, 1984 dies prior to his Early
Retirement Date, his spouse shall receive a survivor's benefit not less
than the amount that would have been paid under the SP plan if the
member had died on December 31, 1984.
11.04 Minimum Retirement Benefit. In no event shall a Participant who was a
member of a Predecessor Plan receive a retirement benefit under the
Plan less than his accrued benefit as of December 31, 1984 under the
Predecessor Plan of which he was then a member, adjusted as provided in
the Predecessor Plan for commencement of payments before his Normal
Retirement Date or for forms of payment other than as described in
Section 9.01(a).
11.05 Retirement Benefits for Employees Retiring Under Predecessor Plans on
and After June 1, 1984. Any person who retired under a Predecessor Plan
on or after both June 1, 1984 and his early retirement eligibility date
under such plan, and any spouse or Contingent Annuitant of such person
who would be entitled to a retirement benefit upon the death of such
person under such Predecessor Plan, shall be entitled to receive, in
lieu of the retirement benefit he would otherwise receive on and after
January 1,
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1985 under the Predecessor Plan, a retirement benefit determined as if
the Plan had been in effect on and after June 1, 1984. If the
retirement benefit provided by the Plan is greater than the retirement
benefit provided by the Predecessor Plan, the retirement benefit from
the Plan shall be paid commencing January 1, 1985 in lieu of the
retirement benefit provided by the Predecessor Plan.
If such person is receiving a benefit from the Predecessor Plan that on
January 1, 1985 is greater than the benefit provided under this Plan,
but at some later date the benefit under the Predecessor Plan is
scheduled to be reduced by reason of application of the offset for
Social Security or Railroad Retirement benefits to an amount less than
the benefit under this Plan, then such Participant shall elect that his
benefit be determined either under the provisions of the Plan or under
the provisions of the Predecessor Plan. Such election shall be
irrevocable from the date made.
Any elections of optional forms of payment made under the Predecessor
Plan shall apply to the retirement benefit determined under the Plan
unless:
(a) within 90 days after having been notified that his retirement
benefit under the Plan is greater than the retirement benefit he
was receiving under the Predecessor Plan and of his right to elect
an optional form (subject to (b) and (c) below), the person who
retired under the Predecessor Plan elects an optional form,
(b) such optional form requires a greater reduction in his retirement
benefit than the form under which his retirement benefit under the
Predecessor Plan is paid, as determined from the factors in
Exhibit A attached hereto, and
(c) the person, if any, designated under the Predecessor Plan to
receive a benefit upon the retired person's death is the person
designated to receive a retirement benefit upon such retired
person's death under such optional form.
11.06 Retirement Benefits for Certain Members of Predecessor Plans. Any
Participant who was a member of a Predecessor Plan on December 31, 1984
and who on January 1, 1985 met either of the following requirements:
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(a) his age plus Benefit Service, both expressed in years and
completed months, equaled 80 or more years, or
(b) he had attained age 55 and completed 10 years of Benefit Service,
and who subsequently retires on or after this early retirement
eligibility date under the Predecessor Plan of which he was a member,
shall be entitled to receive upon retirement under the Plan the greater
of the retirement benefit provided by the Plan or the retirement
benefit that would have been provided by the Predecessor Plan of which
he was a member on December 31, 1984 if such plan had continued in
effect without change until his retirement. If such a Participant
would receive a benefit provided by the Predecessor Plan that is
initially larger than the benefit under the Plan, but which Predecessor
Plan benefit is at some later date scheduled to be reduced by reason of
application of the offset for Social Security or Railroad Retirement
benefits to an amount less than the benefit under the Plan, then such
Participant shall elect that his benefit be determined either under the
provisions of the Plan or under the provisions of the Predecessor Plan.
Such election shall be irrevocable once benefits have commenced under
the Plan.
ARTICLE 12
----------
FUNDING OF THE PLAN
-------------------
12.01 Establishment of the Trust. For the purpose of funding the Plan, the
Company has established the Santa Fe Pacific Master Retirement Trust
and may establish one or more additional or successor Trusts (all such
Trusts are sometimes referred to herein as the "Trust") through one or
more additional trust agreements between the Company and the Trustee
under each such trust agreement. As provided in the Santa Fe Pacific
Master Retirement Trust, and as shall be provided in each additional
Trust, the Investment Committee established under the Trust shall have
the responsibility for appointing and removing trustees, custodians and
investment managers under the Trust and allocating Plan assets among
trustees, custodians and
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investment managers under the Trust. All assets of the Plan shall be
held under the Trust.
12.02 Contributions to the Trust. The Participating Companies shall make
contributions to the Trust in such amounts and at such times as the
Company shall determine. The Company shall select a Plan actuary to
perform periodic actuarial valuations of the Plan and shall take into
account such actuarial valuations and recommended Plan funding in
determining the amount and timing of contributions to the Plan. No
contributions shall be required or permitted of Participants. As
required by law, forfeitures arising under the Plan for any reason
shall be applied to reduce the cost of the Plan, rather than to
increase the benefits otherwise payable to Participants.
12.03 Purpose. The Trust shall be administered for the exclusive purpose of
providing benefits to Participants, their spouses and Contingent
Annuitants and of defraying reasonable expenses of administering the
Plan. No person shall have any financial interest in or right to the
Trust or any part thereof, except as expressly provided by the Plan.
12.04 Reversion to Participating Companies. Contributions by Participating
Companies are conditional upon qualification of the Plan under Section
401(a) of the Code and are conditional upon the deductibility of such
contributions under Section 404 of the Code; however the Participating
Companies have no beneficial interest in the Trust and no part of the
Trust shall ever revert or be repaid to the Participating Companies,
directly or indirectly, except that a Participating Company shall upon
written request to the Committee have a right to recover:
(a) within one year of the date of payment of a contribution by such
Participating Company, any amount (less any losses attributable
thereto) contributed through a mistake of fact; and
(b) within one year of the date on which any deduction for a
contribution by such Participating Company under Section 404 of
the Code is disallowed, an amount equal to the amount disallowed
(less any losses attributable thereto); and
(c) within one year of the date the Internal Revenue Service initially
determines that the Plan, as
33
<PAGE>
applied to any Participating Company, does not meet the
requirements of a "qualified plan" under Section 401(a) of the
Code, an amount equal to the assets of the Plan attributable to
contributions made by such Participating Company.
In addition, upon termination of the Plan pursuant to Article 15, any assets
remaining in the Trust after all liabilities, benefit obligations and expenses
of the Plan have been fully satisfied shall be paid to the Company, subject to
the provisions of Section 15.06 hereof.
ARTICLE 13
----------
ADMINISTRATION
--------------
13.01 Administration Committee. The Administration Committee (sometimes
referred to as the "Committee") shall be a committee of at least three
persons appointed by the Board of Directors of the Company to serve as
Plan administrator. A member of the Administration Committee may be
removed by the Board at any time by written notice to him and the other
members of the Committee. A member of the Administration Committee may
resign at any time by giving ten days' prior written notice to the
Company and the other members of the Committee. The Board may fill any
vacancy in the membership of the Committee; provided, however, that if
a vacancy reduces the membership of the Committee to less than three,
such vacancy shall be filled as soon as practicable. The Board shall
give written notice thereof to the other members of the Committee.
Until any such vacancy is filled, the remaining members may exercise
all the powers, rights and duties conferred on the Committee.
13.02 Allocation of Responsibility Among Fiduciaries. The fiduciaries of
the Plan shall have such powers, duties, responsibilities and
obligations as are given them by law, the Plan and the trust
agreements. The trustees and any custodians and investment managers
appointed by the Investment Committee under the Trust shall have
responsibility for investment of Plan assets held under the Trust. It
is intended that each fiduciary shall be responsible for the proper
exercise of its own powers and shall not be responsible for any act or
failure to act of another fiduciary, except as provided by law.
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<PAGE>
13.03 Administration Committee Powers and Duties. The Committee shall have
such duties and powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder,
(b) to prescribe procedures to be followed by Participants or
beneficiaries in applying for benefits,
(c) to receive from Participating Companies and from Participants such
information as shall be necessary for the proper administration
of the Plan,
(d) to furnish to the Pension Committee of the Board at least annually
appropriate reports with respect to the administration and
operation of the Plan and to adopt such administrative and
technical amendments of the Plan (including amendments to retain
the tax qualified status of the Plan and comply with the
requirements of applicable law) as the Committee considers
necessary or desirable.
(e) to receive and review the periodic valuation of the Plan made by
the actuary,
(f) to appoint or employ individuals to assist in the administration
of the Plan and any other agents it considers advisable, including
legal and actuarial counsel, and to allocate or delegate to them
such powers, rights and duties as the Committee considers
necessary or advisable to properly carry out the administration of
the Plan; provided that any such allocation or delegation and the
acceptance thereof must be in writing.
The Committee, as Plan administrator, shall have no power to add to,
subtract from or modify any of the terms of the Plan, or to change or
add to any benefits provided by the Plan, or to waive or fail to apply
any requirements of eligibility for a benefit under the Plan.
Notwithstanding the foregoing, the Administration Committee shall have
the power to make
35
<PAGE>
administrative and technical amendments to the Plan, subject to the
limitations of Section 16.04 of the Plan.
13.04 Rules and Decisions. The Committee may adopt such rules as it deems
necessary, desirable, or appropriate. Committee rules and decisions
shall be applied in a uniform and non-discriminatory manner with
respect to similarly situated Participants and their Beneficiaries.
When making a determination or calculation, the Committee shall be
entitled to rely upon information furnished by a Participant,
beneficiary, the Company's legal and actuarial counsel or the trustees.
13.05 Claim Review Procedure.
(a) An individual who believes that he is entitled to receive a
retirement benefit under the Plan other than that initially
determined by the Committee may within 65 days after review and
denial of such claim:
(i) submit a written request for review to the Committee,
(ii) review pertinent documents, and
(iii) submit issues and comments in writing.
(b) The Committee shall notify the claimant of its decision on review
within 60 days after receipt of a request for review. Notice of
the decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated
to be understood by the claimant, and specific references to the
pertinent Plan provisions on which the decision is based.
(c) Participants, spouses and Contingent Annuitants shall not be
entitled to challenge the Committee's determinations in judicial
or administrative proceedings without first complying with the
procedures in this Article. The Committee's decision made
pursuant to this Section is intended to be final and binding on
Participants, beneficiaries and others.
13.06 Notices. All communications to a Participant, his spouse or Contingent
Annuitant or from any such
36
<PAGE>
person, shall be deemed to have been duly given when mailed by first-
class mail with postage prepaid and addressed to such person at the
address last appearing on the records of the Committee, or to the
Committee or its manager when mailed by first-class mail with postage
prepaid and addressed to such location as shall be specified upon forms
prescribed by the Committee for the giving of such communications.
ARTICLE 14
----------
LIMITATIONS ON BENEFITS
-----------------------
14.01 Limitation. Notwithstanding anything in the Plan to the contrary, the
Retirement Benefit payable with respect to a Participant under the Plan
for any calendar year shall not exceed the limitation imposed by
Section 415(b) of the Code including all transitional rules relating
thereto, as of the last day of the calendar year in which occurs the
day as of which the first payment under the Plan is due to be made to,
or on behalf of, the Participant.
Notwithstanding the foregoing, the Retirement Benefit payable with
respect to a Participant under the Plan may be further reduced to the
extent necessary to prevent disqualification of the Plan under Section
414(e) of the Code, including all transitional rules relating thereto,
which imposes additional limitations on the benefits payable to
Participants who are participating in one or more tax-qualified defined
benefit plans and one or more tax-qualified defined contribution plans
sponsored by the Employer. For purposes of this paragraph, all defined
benefit plans of the Employer and all Affiliated Companies, whether or
not terminated, shall be treated as one defined benefit plan, and all
defined contribution plans of the Employer and all Affiliated
Companies, whether or not terminated, shall be treated as one defined
contribution plan. The amount of any reduction under the Plan required
by this paragraph shall be limited to that which is necessary in order
to permit the highest possible contributions to such Participant's
account or accounts in any defined contribution plan or plans
maintained by the Employer.
37
<PAGE>
ARTICLE 15
----------
TERMINATION AND DISTRIBUTION
----------------------------
15.01 Allocation and Distribution on Termination. On termination or partial
termination of the Plan with respect to any or all Participating
Companies, the Committee will direct the allocation and distribution of
Plan assets allocable to Participants employed by each Participating
Company with respect to whom the Plan is terminated, to retired or
terminated Participants, and to spouses and Contingent Annuitants, to
the extent their benefits are attributable to employment with that
Participating Company. Upon complete discontinuance of contributions to
the Plan by any Participating Company that does not result in
termination or partial termination of the Plan, the Company shall have
discretion to grant a Vested Right Benefit under Article 8 of the Plan
to Participants employed by that Participating Company who are not
otherwise eligible for such a benefit. On termination or partial
termination of the Plan with respect to any or all Participating
Companies, the accrued benefits for all affected Participants at the
date of termination or partial termination shall become nonforfeitable
to the extent then funded. After payment of any expenses of
administration and liquidation allocable to such Plan assets, such Plan
assets remaining shall be allocated and distributed to such
Participants and other persons to provide their benefits accrued to the
date of Plan termination, to the extent of the sufficiency of the Plan
assets, in accordance with the following procedures.
(a) The Committee shall determine the proposed date of termination of
the Plan and at least sixty (60) days prior to such date shall
file a notice with all Participants and Beneficiaries and, if the
termination is a distress termination, to the Pension Benefit
Guaranty Corporation ("PBGC") advising that the Plan is to be
terminated as of such proposed date. A distress termination is a
termination which is (i) due to the liquidation or reorganization
in bankruptcy or insolvency proceedings involving each
contributing sponsor or (ii) required to enable payment of debts
while staying in business or to avoid unreasonably burdensome
pension costs caused by a declining workforce.
38
<PAGE>
As soon as practicable after the date on which the 60-day advance
notice of intent to terminate is provided to affected parties, the
Committee shall send a notice to the PBGC setting forth the
actuarial and other information required by ERISA Section 4041 and
the regulations thereunder.
No later than the date on which the foregoing information is
furnished to the PBGC, the Committee shall send a notice to each
Participant and Beneficiary which specifies the amount of such
person's benefit commitments (if any) as of the proposed
termination date and such other information as is required by
ERISA Section 4041 and the regulations promulgated thereunder
relating to the determination of such benefit commitments. The
Committee shall then allocate and instruct the Trustee to
distribute the assets of the Plan in accordance with subparagraph
(c) below, provided the PBGC has not issued a notice of
noncompliance and the Plan is sufficient for benefit commitments.
In the case of a distress termination, the procedures set forth in
subparagraph (c) below shall be followed only after the PBGC has
notified the Committee of its determination that the Plan is
sufficient for benefit commitments or that the Plan is sufficient
for guaranteed benefits. If, after the termination of the Plan
has commenced, the Committee determines that the Plan is unable
(or will be unable) to pay all benefit commitments, the Committee
shall notify the PBGC of such findings.
During the period beginning on the date on which the Committee
provides a notice of distress termination to the PBGC and ending
on the date on which the Committee receives notification from the
PBGC as to its determinations as to Plan sufficiency for
guaranteed benefits and benefit commitments, the Committee shall:
(1) refrain from distributing assets or taking any other actions
to carry out the proposed distress termination;
(2) pay benefits attributable to employer contributions (except
death benefits) only in the form of an annuity;
39
<PAGE>
(3) not use Plan assets to purchase irrevocable commitments to
provide benefits from an insurer; and
(4) continue to pay all benefit commitments under the Plan,
except that beginning on the proposed termination date, the
Committee shall limit the payment of Plan benefits to those
benefits guaranteed by the PBGC (under ERISA Section 4022) or
to which assets are required to be allocated under ERISA
Section 4044 but, in the event the Plan is later determined
not to have met the requirements of a distress termination,
any benefits not paid due to this limitation will be due and
payable immediately (with interest, at a reasonable rate, in
accordance with PBGC regulations).
The Committee shall also meet these requirements beginning on the
date on which the Committee or the PBGC makes a finding that the
Plan is unable, or will be unable, to pay all guaranteed benefits
under ERISA Section 4022.
(b) The Committee shall determine, for each class of distributees
specified in subparagraph (c) below, whether distribution shall be
by payment in cash, the maintenance of another or substituted
trust fund, by the purchase of insured annuities, or otherwise.
(c) The Committee shall allocate such assets as of the date of
termination of the Plan in the order of priority set forth below.
It shall be assumed that the amount required to provide any given
retirement benefit is equal to the actuarially determined single-
sum value of such retirement benefit, except that if the Committee
shall determine under subparagraph (b) above that the assets shall
be distributed by the purchase of insured annuities, the amount
required to provide any given retirement benefit shall be equal to
the single premium payable for such annuities.
(i) Allocation shall first be made in respect of (A) the
retirement benefit of each distributee receiving a retirement
benefit at the beginning of the three-year period ending with
the date of termination of the
40
<PAGE>
Plan in an amount required to provide the lesser of (1) the
retirement benefit paid to such distributee during the three-
year period ending on the date of termination of the Plan, or
(2) the lowest retirement benefit payable to such distributee
under the provisions of the Plan in effect during the five-
year period ending with the date of termination of the Plan,
and (B) the retirement benefit of each distributee which he
would have been receiving at the beginning of the three-year
period ending with the date of termination of the Plan if the
Participant with respect to whom the retirement benefit would
have been paid had retired prior to the beginning of such
three-year period and if the retirement benefit had commenced
at the beginning of such three-year period, in an amount
required to provide the lowest retirement benefit payable to
such distributee under the provisions of the Plan as in
effect during the five-year period ending with the date of
termination of the Plan. If the asset value to be distributed
is less than the aggregate of the amounts allocated, such
asset value shall be allocated pro rata among the
distributees described herein on the basis of the present
value of their retirement benefits described herein.
(ii) If there is any asset value remaining after the allocation
under subparagraph (c)(i), allocation shall be made in
respect of all other retirement benefits of distributees
under the Plan guaranteed by PBGC under ERISA. If the
remaining asset value to be distributed is less than the
aggregate of the amounts allocated under this subparagraph
(c) (ii), such asset value shall be allocated pro rata among
the distributees described herein on the basis of the present
value of such other retirement benefits under the Plan
guaranteed by PBGC.
(iii) If there is any asset value remaining after the allocations
above in subparagraphs (c)(i) and (ii), allocation shall be
made in respect of all other retirement benefits of
distributees which are nonforfeitable
41
<PAGE>
(excluding benefits that became nonforfeitable solely on
account of termination of the Plan). If the asset value to be
distributed is less than the aggregate of the amounts so
allocated, such asset value shall be allocated to provide
retirement benefits according to the following priority:
(A) such other retirement benefits of distributees in
amounts required to provide the retirement benefits
which would have been payable under the Plan as in
effect at the beginning of the five-year period ending
on the date of termination of the Plan. If the remaining
asset value to be distributed is less than the aggregate
of the amounts allocated under this subparagraph
(c)(iii)(A), such asset value shall be allocated pro
rata among the distributees described herein on the
basis of the present value of such other retirement
benefits under the Plan.
(B) if the assets available for distribution are greater
than the amounts allocated in subparagraph (c)(iii)
(A), the retirement benefits of distributees described
therein shall be determined on the basis of the Plan as
amended by the most recent Plan amendment effective
during such five-year period under which the assets
available for distribution are equal to or greater than
the amounts allocated in subparagraph (c)(iii)(A), and
any asset value remaining to be allocated under
subparagraph (c)(iii)(A) shall be allocated pro rata
among the distributees on the basis of the present value
of any additional retirement benefits under the Plan
resulting from the next succeeding Plan amendment
effective during such period.
(iv) If there is any asset value remaining after the allocations
under subparagraphs (c)(i), (ii) and (iii) above, allocation
shall be
42
<PAGE>
made in respect of all other retirement benefits of
distributees. If the asset value to be distributed is less
than the aggregate of the amounts allocated hereunder, such
asset value shall be allocated in the order of priority
described in subparagraphs (c)(iii)(A) and (B) above.
(v) If there is any asset value remaining after the allocations
under subparagraphs (c)(i) through (iv) above, and if all
liabilities of the Plan to Participants employed or formerly
employed by such Participating Company, including their
spouses and Contingent Annuitants, have been satisfied, such
asset value shall be allocated to the Company, provided,
however, that distribution to the Company would not
contravene any provision of law and subject, however, to the
provisions of Section 15.06 hereof.
(d) The Committee shall direct the trustee to distribute, in
accordance with the manner of distribution determined under
subparagraph (b) above, the amounts allocated under subparagraph
(c) above. The Committee shall notify the PBGC within 30 days
after the final distribution of assets is complete that all
benefit commitments have been provided for in accordance with
subparagraphs (b) and (c) above.
15.02 Temporary Restrictions on Benefits for Certain Participants. As
required by the Internal Revenue Service, notwithstanding any other
provisions of the Plan, if, at any time within ten years after a
Substantive Amendment Date, the Plan is terminated or the retirement
benefit of a Restricted Participant becomes payable, then the
retirement benefit of any Restricted Participant shall not exceed the
greater of:
(a) the amount that can be provided by the greatest of:
(i) the funds which would have been applied to provide benefits
for the Restricted Participant if the Plan had not been
amended on the Substantive Amendment Date and had continued
without change;
43
<PAGE>
(ii) $20,000; or
(iii) the sum of:
(A) the funds which would have been applied to provide a
retirement benefit for the Restricted Participant if the Plan
had been terminated on the day before the Substantive
Amendment Date, and
(B) an amount computed by multiplying the number of years from
the Substantive Amendment Date to the Determination Date by
20% of the first $50,000 of the Restricted Participant's
average annual compensation during the five-year period
preceding such date; or
(b) the maximum annual benefit guaranteed by the Pension Benefit
Guaranty Corporation (PBGC) under Section 4022(b)(3)(B) of ERISA.
If a Restricted Participant is also a Substantial Owner, the retirement
benefit above shall be multiplied by a fraction, the numerator of which
equals the number of years that he was both a Substantial Owner and an
active Participant and the denominator of which equals 30.
15.03 Exclusions from Temporary Restrictions. The limitations described in
Section 15.02 may be exceeded for the purpose of making current
retirement benefit payments to retired Restricted Participants provided
that:
(a) the contributions which may be used for any such retired
Restricted Participant in accordance with the restrictions
described in Section 15.02 are applied to provide a level amount
of retirement benefit not greater than the level amount of
retirement benefit under the basic form under Section 9.01(a), and
(b) the retirement benefit thus provided is supplemented by monthly
payments to the extent necessary to provide the full retirement
benefit under the basic form under Section 9.01(a), and
(c) such supplemental payments are made only if the aggregate of such
supplemental payments for all such retired Restricted Participants
does not
44
<PAGE>
exceed the aggregate Participating Company contributions already
made under the Plan in the year then current.
15.04 Definitions Applicable to Sections 15.02 and 15.03. The following
definitions shall apply to Sections 15.02 and 15.03:
(a) Restricted Participant is an individual who is among the 25
highest paid employees of the Company on the Substantive Amendment
Date, and whose anticipated annual retirement benefit payable from
Normal Retirement Date exceeds $1,500.
(b) Determination Date is the earlier of the effective date of the
Plan's termination or the date that the Restricted Participant's
retirement benefit becomes payable.
(c) Substantive Amendment Date is:
(i) January 1, 1985,
(ii) for Participants who were members of the SP Plan, January
1, 1976,
(iii) for Participants who were members of the SF Plan, October
1, 1979, and
(iv) the date of any amendment to the Plan which substantially
increases retirement benefits and which occurs after
January 1, 1985.
15.05 Termination of Temporary Restrictions. The limitations of Sections
15.02 and 15.03 shall automatically become inoperative and of no effect
upon issuance of a ruling by the Internal Revenue Service that they are
no longer required.
15.06 Termination Following Change in Control. Notwithstanding the
provisions of Section 15.01(c)(v) or 12.04 hereof or any other
provision of the Plan, in the event this Plan is terminated within
three years following a "change in control of the Company" (as
hereinafter defined), the assets of the Plan shall be applied in
accordance with the provisions of Section 15.01(c)(i), (ii), (iii) and
(iv) hereof to satisfy all fixed and contingent liabilities to
Participants and their beneficiaries. If, after satisfaction of
45
<PAGE>
such liabilities, there are assets remaining in the Plan, such
remainder shall first be applied to the extent permissible under
applicable law to the payment of retiree medical and retiree life
insurance payable to Participants and their beneficiaries, and any
assets still remaining shall be applied on a pro rata basis to increase
the benefits of such Participants and their beneficiaries, subject,
however, to the applicable legal limitations on benefits payable from
tax-qualified plans. Notwithstanding any other provision of this Plan
to the contrary, in no event shall any one or more transactions
contemplated by a certain agreement known as the Agreement and Plan of
Merger dated as of June 29, 1994 between Burlington Northern Inc. and
Santa Fe Pacific Corporation (referred to as the "Merger
Transactions"), or any events or transactions that form a part of, or
are in furtherance of, the Merger Transactions, or the execution of any
agreement in furtherance of the Merger Transactions, be treated as a
"Change in Control." For purposes hereof, a change in control of the
Company ("Change in Control") shall occur if (a) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act")) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act) of more
than fifty percent (50% of the then outstanding voting stock of the
Company, other than through a transaction arranged by, or consummated
with the prior approval of, its Board of Directors, or (b) during any
period of two consecutive years (not including any period prior to the
adoption of this provision), individuals who at the beginning of such
period constitute the Board of Directors (and any new director whose
election by the Board of Directors or whose nomination for election by
the Company's stockholders was approved by a vote of at least two-
thirds of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute
a majority thereof. Notwithstanding the provisions of Section 16.04
hereof, the foregoing provisions of this Paragraph may not be amended
following a Change in Control without the written consent of a majority
in both number and interest of the Participants who are actively
employed by the Company, both immediately prior to the Change in
Control and at the date of such amendment.
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<PAGE>
15.07 Elimination of Nonprotected Benefits. Notwithstanding any term or
provision of the Plan to the contrary and without further action by the
Board, all benefits or rights a Participant or Beneficiary may have
with respect to this Plan shall be eliminated and terminated
immediately prior to the date of termination of the Plan, or with
respect to affected Participants, Contingent Annuitants and
Beneficiaries, prior to the date of partial termination of the Plan,
except section 411(d) (6) of the Code protected benefits. In the event
of a transfer of assets and liabilities from this Plan to another plan,
as described in Section 16.05 hereof, this Section 15.07 shall apply
immediately prior to such transfer as if such transfer constituted a
termination of the Plan with respect to Participants, Contingent
Annuitants and Beneficiaries for whom assets and liabilities are
transferred.
ARTICLE 16
----------
MISCELLANEOUS PROVISIONS
------------------------
16.01 Indemnification Provisions. Each Participating Company shall indemnity
and hold harmless each member of its Board of Directors, the
Administration Committee, the Investment Committee and each of its
officers and employees from and against any and all liability, loss,
costs, charges, expenses, claims and demands of every kind and
character arising out of, or in any way resulting from, the acts,
omissions or conduct of any such person in the management, operation
and administration of the Plan and the Trust which any of them may
suffer, incur or sustain, except that no Participating Company shall
indemnify and hold harmless any such person who, with respect to such
acts, omissions or conduct, is guilty of willful misconduct or lack of
good faith. If a Participating Company is unable to provide the
indemnification described above, such indemnification may be provided
by another Participating Company. In addition, the Plan or any
Participating Company may purchase fiduciary liability insurance for
any Board of Directors of a Participating Company, for the
Administration Committee, the Investment Committee and its members and
for the officers and employees of any Participating Companies.
16.02 Participation by Other Affiliated Companies. Any Affiliated Company
may, with the consent of the Board,
47
<PAGE>
become a Participating Company in the Plan by (i) filing with the
Company a duly certified copy of the resolution of its Board of
Directors adopting the Plan, and (ii) executing and delivering such
instruments and taking such other action as may be necessary to put the
Plan into effect with respect to such Affiliated Company.
16.03 Successor Company Continuance of Participation. In the event any
Participating Company shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that another
corporation shall succeed to all or a portion of such Participating
Company's business, such successor corporation may, if an Affiliated
Company, be substituted for such Participating Company under the Plan
by adopting the Plan in its entirety. Contributions by any such
Participating Company shall be suspended from the effective date of
reorganization until the effective date of adoption of the Plan, if
any, by the Participating Company's successor corporation.
16.04 Amendment of Plan. The Company may at any time amend the Plan by
action of the Board, provided (a) that no such amendment may be made
which would deprive any Participant of any accrued benefit to which he
would otherwise be entitled on the effective date of such amendment and
(b) that no such amendment shall make it possible for any part of the
assets of the Plan to be used for, or diverted to, purposes other than
for the exclusive benefit of Participants entitled to benefits under
the Plan and payment of expenses of the Plan prior to the satisfaction
of all liabilities for benefits under the Plan. Notwithstanding the
provisions of the preceding sentence, but subject to the limitations of
(a) and (b) therein, the Administration Committee may adopt
administrative and technical amendments of the Plan. The amendment
shall apply to all Participants and all Participating Companies, unless
a Participating Company elects to withdraw from the Plan pursuant to
Section 16.06.
Notwithstanding any other provisions of this Plan, for a period of
three years following a Change in Control (as defined in Section 15.06
hereof), the provisions of this plan may not be amended in any manner
which would adversely affect in any way the computation or amount of or
the entitlement to retirement benefits hereunder including, but not
limited to, any adverse change in or to (a) the rate at which benefits
accrue or vest, (b) the compensation recognized hereunder, or
48
<PAGE>
(c) the optional forms of payment available to a Participant or
beneficiary hereunder, including the time of commencement of such
benefits and any actuarial factors used in connection therewith.
Notwithstanding any other provisions of this Section 16.04, the
foregoing provisions of this paragraph may not be amended following a
Change in Control without the written consent of a majority in both
number and interest of the Participants who are actively employed by
the Company, both immediately prior to the Change in Control and at the
date of such amendment.
16.05 Merger or Consolidation with Another Plan. A merger or consolidation
with, or transfer of assets or liabilities to, any other plan shall not
be effected unless the terms of such merger, consolidation or transfer
are such that each Participant, spouse or Contingent Annuitant would
(if the Plan then terminated) be entitled to a benefit immediately
after the merger, consolidation or transfer which is equal to or
greater than the benefit to which such Participant, spouse or
Contingent Annuitant would have been entitled immediately before the
merger, consolidation or transfer (if the Plan had then terminated).
Notwithstanding the preceding provisions of this Section 16.05 or any
other provision of this Plan, in the event of any merger or
consolidation of this Plan with another plan or any transfer of assets
or liabilities of this Plan to another plan which is effected within
three years following a Change in Control (as such term is defined in
Section 15.06 hereof), (a) the accrued benefit of each Participant who
is actively employed by the Company as of the effective date of such
merger, consolidation or transfer of assets or liabilities and with
respect to whom liability for the payment of benefits hereunder is
being merged or consolidated with or transferred to another plan shall
become fully vested; (b) the vested accrued benefit of each Participant
and beneficiary in the Plan shall be increased in accordance with
Section 15.06 hereof as if the Plan had terminated immediately prior to
any such merger, consolidation or transfer; and (c) prior to
consummation of any such merger, consolidation or transfer, the accrued
benefit (as increased hereunder, if applicable) of each Participant and
beneficiary with respect to whom liability for the payment of benefits
hereunder is being merged or consolidated with or transferred to
another plan shall be satisfied only by the purchase
49
<PAGE>
of a guaranteed annuity contract from a financially sound insurance
company which represents an irrevocable commitment to satisfy the
accrued benefit (as increased hereunder, if applicable) of such person.
Notwithstanding the provisions of Section 16.04 hereof, the foregoing
provisions of this paragraph may not be amended following a Change in
Control without the written consent of a majority in both number and
interest of the Participants who are actively employed by the Company
both immediately prior to the Change in Control and at the date of such
amendment.
16.06 Participating Company Withdrawal from Plan. The Company may withdraw
from the Plan at any time upon resolution of the Board and any
Participating Company other than the Company may withdraw from
participation in the Plan at any time by filing with the Company a duly
certified copy of a resolution of its Board of Directors calling for
withdrawal from the Plan, provided, however, that any Participating
Company shall give notice of its intent to withdraw to the other
Participating Companies and to the trustees of the Trust no later than
thirty days prior to the effective date of withdrawal.
16.07 Nonassignability of Rights of Participants. No right or interest of
any Participant, his spouse or Contingent Annuitant shall be assignable
or transferable in whole or in part, either directly or by operation of
law or otherwise, including, but in no way limited to, execution, levy,
garnishment, attachment, pledge or bankruptcy, and no right or interest
of any Participant shall be liable for or subject to any obligation or
liability of such Participant. The preceding sentence shall also apply
to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified domestic
relations order as defined in Section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985. If the benefit
payable to any alternate payee designated by a qualified domestic
relations order has a single sum present value of not more than $3,500,
then such benefit shall be paid in a single sum to such alternate
payee. Such single sum shall be computed in accordance with the
procedures specified in Section 9.07. Any benefits to which an
alternate payee may be entitled shall be paid or shall commence at the
time specified in the qualified domestic relations order, or if the
time for the payment or commencement of benefits is not specified in
such order,
50
<PAGE>
then any benefits to which the alternate payee is entitled shall be
paid in the form of an annuity for the life of the alternate payee
commencing as of the date when the Participant with respect to whom the
alternate payee's rights derive commences receiving benefits under the
Plan. The single sum present value of an annuity payable to an
alternate payee for the life of a Participant shall first be
determined, and then the amount of the monthly annuity for the life of
the alternate payee shall be determined. Such determinations shall be
made in accordance with the procedures specified in Section 9.07.
16.08 Payments to Minors or Disabled Persons. Any retirement benefit payable
to a person who is a minor or to a person who, in the opinion of the
Committee, is unable to manage his affairs by reason of illness or
mental incompetency may be made to or for the benefit of any such
person in such of the following ways as the Committee shall direct:
(a) directly to any such minor if, in the opinion of the Committee, he
is able to manage his affairs, (b) to the legal representative of any
such person, or (c) to a custodian under a Uniform Gifts to Minors Act
for any such minor. Any such payment shall fully discharge the Plan
with respect to liabilities for such retirement benefit. Neither the
Committee nor a trustee shall be responsible for use by any third party
of any retirement benefit paid to or for the benefit of a person
pursuant to this Section 16.08.
16.09 Suspension of Benefits During Certain Periods of Employment or
Reemployment. The Plan confers no right upon any Participant to
continue in employment. Employment or reemployment shall not include
services as an independent contractor.
(a) A Participant who (1) has not reached his Normal Retirement Date,
(2) has commenced receiving a retirement benefit under the Plan,
and (3) is reemployed by an Affiliated Company subsequent to the
time such retirement benefit commenced waives all rights to such
retirement benefit during the period of his reemployment.
(b) A Participant who (1) has reached his Normal Retirement Date, (2)
is eligible to receive or has commenced receiving a retirement
benefit under the Plan, and (3) is reemployed by or continues
employment with an Affiliated Company by completing 40 or more
compensated hours of service in any calendar month following his
Normal Retirement Date
51
<PAGE>
and subsequent to the time such retirement benefit commenced or
would have commenced had the Participant not remained in or
returned to employment waives all rights to such retirement
benefit during the period of the Participant's continued
employment or reemployment. If such a Participant continues
employment with an Affiliated Company by completing less than 40
compensated hours of service in any calendar month, his Covered
Employment shall be considered terminated for purposes of the
Plan. Any increase in retirement benefits payable upon termination
of such reemployment or continued employment shall be prospective
only.
(c) If the Participant is reemployed by a Participating Company after
distribution of his Accrued Benefit as described in Section 9.07,
he may elect to repay to the Trust, within two years after he is
reemployed, the full amount of such distribution with interest
compounded at 5% per annum. In the event the Participant repays
said amount, with interest, within two years after he is
reemployed, the Participant's Accrued Benefit shall be recomputed
by taking into account service upon which his Accrued Benefit upon
his termination of employment had been based. If the Participant
received a distribution at a time when he was less than 100%
vested (by reason of the application of Section 17.02(a)), the
repayment period described above shall not end earlier than the
end of a period of five consecutive one-year breaks in service (as
defined in Code Section 411(a)(6)(A)). If a person is deemed to
receive a distribution pursuant to the last sentence of Section
9.07, and such person is reemployed by a Participating Company
before the end of a period of five consecutive one-year breaks in
service (as defined in Section 411(a)(6)(A) of the Code), upon the
reemployment of such person, the person's Accrued Benefit shall be
restored to the amount of such person's Accrued Benefit on the
date of the deemed distribution.
16.10 Participation by Employees of the Toledo, Peoria & Western Railroad
Company. A Participant shall be credited for vesting purposes under
the Plan with employment with the Toledo, Peoria & Western Railroad
Company as if such employment had been with a Participating Company,
and each Participant shall be entitled to a benefit no less than one
which would have
52
<PAGE>
been provided under the Toledo, Peoria & Western Railroad Company
Pension Plan, as amended and restated ("TP&W Plan"), had it continued
in full force and effect independently of the Plan to the date of the
Participant's termination or retirement; provided that the average
monthly compensation and benefit service percentage used in determining
the benefit shall be no greater than the amount computed as of the
Participant's last day of participation in the TP&W Plan.
ARTICLE 17
----------
TOP-HEAVY LIMITATIONS
---------------------
17.01 Definition of Top-Heavy Plan. The Plan shall be top-heavy with respect
to a Plan Year if, as of the last day of the preceding Plan Year, the
present value of the Accrued Benefits for key employees exceeds 60% of
the present value of the Accrued Benefits for all employees, or if this
plan is required to be in an aggregation group which, for such Plan
Year, is a top-heavy group as provided in Section 416(g) of the Code.
For the purpose of determining such present values:
(a) The determination shall be made as of the most recent annual Plan
valuation date used to compute Plan costs for purposes of
compliance with the minimum funding standards of the Code.
(b) An interest assumption of 5% and a post-retirement mortality
assumption shall be used. No assumptions with respect to future
withdrawal or Compensation increases shall be used. Except to the
extent the Plan provides a non-proportional subsidy, the present
value of Accrued Benefits shall be determined on the assumption
that each Participant's retirement benefit will commence on the
later of his Normal Retirement Date or the (B) each other
qualified plan which enables any plan described in (A) to meet the
requirements of Section 401(a)(4) or Section 410 of the Code.
(ii) Permissive Aggregation Group. The Aggregation Group may include
any one or more other such plans of the Employer, provided that
after the inclusion of such other plan or plans the Aggregation
Group would continue to meet the requirements of Section
53
<PAGE>
401(a)(4) and Section 410 of the Code with such other plan or
plans taken into account.
17.02 Top-Heavy Plan Requirements. Notwithstanding any provision of the Plan
to the contrary but subject to the Participating Company's right to
terminate its participation in the Plan, the following provisions shall
apply with respect to any Plan Year in which the Plan is top-heavy:
(a) Minimum Vesting. A Participant who completes any portion of the
year of Vesting Service during such Plan Year shall be entitled to
receive all or a percentage of his Accrued Benefit, commencing on
the later of his Normal Retirement Date or the first day of the
month coinciding with or following his actual retirement, in
accordance with the following schedule:
The
Nonforfeitable
If the Percentage
Participant's of His Accrued
Years of Vesting Benefit
Service Are: Shall Be:
------------------------ --------------
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 but less than 6 years 80%
6 or more years 100%
(b) Minimum Benefit. The Accrued Benefit of each Participant who is
not a key employee shall be at least the lesser of 2% of the
Participant's compensation multiplied by his Benefit Service or 20% of
the Participant's compensation. For purposes of this subsection (b):
(i) a Participant shall be credited with all Vesting Service
except such service which:
(A) was completed in a Plan Year beginning before January 1,
1984; or
(B) commenced in a Plan Year when the Plan was not top-heavy;
or
(C) occurred before the adoption of the Plan including any
predecessor thereto;
54
<PAGE>
(ii) a Participant's compensation shall be his average monthly
compensation as defined in Section 14.04 for the period of
consecutive years of Vesting Service, not in excess of five,
which produce the highest average, disregarding any years of
Vesting Service after the most recent year in which the Plan
was top-heavy;
(iii) the term "Participant" means a Participant who completes a
full year of Vesting Service in a Plan Year in which the
Plan is top-heavy;
(iv) in the case of a Participant who remains employed beyond his
Normal Retirement Date, such minimum amount shall be
actuarially increased to reflect deferred commencement; and
(v) the provisions of Section 16.09 shall not apply to the
minimum benefit set forth in this subsection.
(c) Required Distributions. Payment of the nonforfeitable Accrued
Benefit of a key employee who is then employed by a Participating
Company shall commence in the later of the calendar year in which
he attains age 70-1/2 or the first calendar year in which the Plan
is top-heavy (subject to any election made prior to January 1,
1984 in accordance with the Plan as in effect prior to such date).
(d) Maximum Compensation. The annual Compensation of any employee
taken into account under the Plan for any purpose shall not exceed
$200,000 except as provided in Section 416(d) of the Code.
(e) Limitations on Benefits: The Defined Contribution Plan Fraction
and the Defined Benefit Plan Fraction, described in Sections
14.02(a) and (b), shall be computed by substituting the number 1.0
for the number 1.25 in Section 14.02(a)(ii)(A) and
14.02(b)(ii)(A). In addition, $41,500 shall be substituted for
$51,875 in Section 14.02(a)(iii)(B). The Committee may elect to
disregard the first sentence of this subparagraph if the present
value of the Accrued Benefits for key employees does not exceed
90% of the present value of the Accrued Benefits for all
Employees.
55
<PAGE>
If this election is made, the Minimum Benefit described in
subsection (b) shall be computed by increasing the percentage
described therein by one percentage point (up to a maximum of ten
percentage points) for each year of Benefit Service.
17.03 Definitions. For purposes of this Article, a "key employee" is an
employee described in Section 416(i)(1) of the Code or his beneficiary.
17.04 Cessation of Top-Heavy Requirements.
(a) Once the Plan has been top-heavy but is no longer top-heavy, this
Article 17 shall be inapplicable except as provided in this
Section 17.04.
(b) The Accrued Benefit of each Participant shall be the greater of
(i) the amount determined pursuant to Section 5.01 or (ii) the
minimum benefit determined pursuant to Section 17.02(b) as of the
last day of the Plan Year in which the Plan was top-heavy;
provided, that such minimum benefit shall be actuarially
increased, if applicable, to reflect commencement of benefit
payments after the Participant's Normal Retirement Date.
(c) The vesting schedule set forth in Section 17.02(a) shall continue
to apply to a Participant who had 5 or more years of Vesting
Service as of the last day on which the Plan was top-heavy.
(d) The nonforfeitable Accrued Benefit of any Participant, as
constituted as of the last day on which the Plan was top-heavy,
shall not be reduced.
56
<PAGE>
SUPPLEMENT A
------------
TO
--
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
A-1 Purpose. The purpose of this Supplement A is to provide certain special
supplemental benefits to certain Participants in order to facilitate any
force reductions which are considered desirable by the Company or a
Participating Company from time to time due to special circumstances.
A-2 Establishment of Offering Periods and Eligible Groups. The offering periods
and eligible groups of Participants for the special supplemental benefits
provided under this Supplement shall be in the form as set forth in
Paragraph A-6 below. Notwithstanding the provisions of Section 16.04 of the
Plan, the Chairman of the Board of Directors and Chief Executive Officer of
the Company shall in his discretion by written notice to the Secretary of
the Company and the Administration Committee amend Paragraph A-6 of this
Supplement (but not in a manner to conflict with the eligibility
requirements of Paragraph A-3) to establish the offering period or periods
for the special supplemental benefits provided under this Supplement and
define the non-discriminatory group of eligible Participants in accordance
with applicable law which shall constitute the eligible group for each such
offering period. Notwithstanding any provision in Supplement A to the
contrary, the Chairman shall also have the discretion to determine whether
inactive employees shall be eligible to participate and shall make such
designation in the form set forth in Paragraph A-6. However, no offering
period may exceed three months in duration or commence after December 31,
1990.
A-3 Eligibility for Special Supplemental Benefits. Each Participant who during
an applicable offering period (i) is both in Covered Employment and a member
of an eligible group of Participants, (ii) has attained age 55 years and
completed 10 or more years of Vesting Service (and thus is eligible for
Early Retirement under Article 7 of the Plan), and (iii) either elects
within the time period established by the Administration Committee early
retirement with his retirement benefits commencing during or as of the end
of that offering period or is voluntarily or involuntarily terminated from
employment with the Company and all Affiliated Companies during such
offering period and commences his retirement benefit during or as of the end
of such offering period shall be eligible for the special supplemental
benefits under this Supplement. The benefits under this Supplement represent
a limited offering only during the offering periods described herein and
only to those then eligible Participants, and no
57
<PAGE>
additional benefits are available under this Supplement to other
Participants or at other times.
A-4 Amount of Special Supplemental Benefits. Each eligible Participant
under this Supplement shall be entitled to the following special
supplemental benefit from the Plan in addition to his Early Retirement
Benefit and Early Retirement Supplemental Benefit under Article 7 or his
alternative early retirement benefits under Section 11.06 of the Plan:
(a) The Early Retirement Reduction under Section 7.03 of the Plan
shall not apply in the calculation of the Participant's Early
Retirement Benefit under Article 7 of the Plan.
(b) If the Participant has attained his early retirement eligibility
date under the Predecessor Plan of which he was a member, for the
purpose of determining the retirement benefit under Section 11.06
of the Plan that would have been provided by such Predecessor
Plan, no reduction in benefit amount shall apply on account of
retirement before the Participant's Normal Retirement Date,
notwithstanding the provisions of such Predecessor Plan.
The additional benefit provided under this Supplement shall be the
amount, if any, by which the Participant's Early Retirement.
Benefit determined in accordance with the provisions of this Supplement
exceeds the Participant's Early Retirement Benefit determined in
accordance with the provisions of the Plan without regard to this
Supplement.
A-5 Form of Payment. The additional benefit determined under Paragraph 4 of
this Supplement represents the amount of additional benefit that is payable
under the life annuity form of payment described in Section 9.01(a) of the
Plan commencing on the date of the Participant's termination of employment
with the Company and all Affiliated Companies. However, the benefits under
this Supplement shall be payable in the same form of payment and subject to
the same election and consent requirements as the Participant's regular
benefits, as determined under Article 9, and shall be subject to the same
adjustment factor for such form of payment, if applicable.
58
<PAGE>
A-6 Form of Offering Periods and Eligible Groups. The special supplemental
benefits provided under this Supplement shall be available only during the
following offering periods and only to the following eligible groups of
Participants in the form set forth below:
<TABLE>
<CAPTION>
During the Offering The Eligible Group of
Period of From: Participants Shall Be:
--------------------- ---------------------------
<S> <C>
1. __________ 19__ to All _______________________
__________ 19__ . salaried employees of
Company in Covered
Employment in its
---------------------------
Department at
---------------------------
Location.
</TABLE>
59
<PAGE>
SUPPLEMENT B
------------
TO
--
THE SANTA FE PACIFIC RETIREMENT PLAN
------------------------------------
B-1. Purpose, Use of Terms. The purpose of this Supplement B is to set
forth the special provisions which apply to persons who are present or
former employees of Southern Pacific Transportation Company ("SPT") or
those subsidiaries in which SPT directly or indirectly owns or is
entitled to vote 80% or more of the outstanding stock ("Subsidiaries")
on the date of Closing ("Closing Date") of the purchase of the stock of
SPT by SPTC Holding, Inc. pursuant to the Share Purchase Agreement
between Santa Fe Pacific Corporation, Southern Pacific Company, Rio
Grande Industries, Inc. and SPTC Holding, Inc. dated December 24, 1987
("Share Purchase Agreement"), and eligible beneficiaries of such
persons.
B-2. Transfer of Assets and Liabilities. As of the Closing Date,
liabilities of the SPT Class determined in accordance with paragraph B-
5 shall be transferred from the Plan to the Rio Grande Industries, Inc.
Pension Plan, as amended by Appendix A thereto ("Rio Grande Plan") and
the assets of the SPT Fund determined in accordance with paragraph B-7
(in cash or kind as determined by the Investment Committee) shall be
transferred from the Trust to the trust for the Rio Grande Plan.
B-3. Participating Company. On and after the Closing Date, SPT and its
Subsidiaries will no longer be Participating Companies in the Plan.
B-4. Termination of Participation. As of the Closing Date, each person for
whom liabilities and assets have been segregated and transferred to the
Rio Grande Plan shall cease to be a Participant or Beneficiary in the
Plan, shall have no Accrued Benefit or Service under this Plan, and
shall have no right to any benefits from the Plan.
B-5. Spinoff of Liabilities. As of the Closing Date, the liabilities, fixed
or contingent, of the Plan (including subsidies, death benefits and
optional forms of benefit payment) shall be separated for the following
two classes of individuals in accordance with (i) the terms and
provisions of the Share Purchase Agreement, including Exhibit 13.2
thereto and the Memorandum of Agreement Regarding Spinoff of Santa Fe
Southern Pacific Corporation Retirement Plan Assets, (ii) the
procedures for allocation of liabilities set forth in Article 15
(disregarding section 15.07 to the extent such benefits
60
<PAGE>
are provided under the Rio Grande Plan), as if the Plan were to be
terminated as of the Closing Date, (iii) the requirements of Section
401(a) (12) and 414 (1) of the Code and Section 208 of ERISA:
(a) the "SFP Class" (herein referred to as such) to which all such
liabilities shall be allocated as of the Closing Date for or on
behalf of the following persons:
1. any person in Covered Employment with the SFP Group as of the
Closing Date;
2. any person whose last Covered Employment prior to the Closing
Date was with the SFP Group (excluding persons in paragraphs
(a) (1) and (b) (1) hereof);
3. any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (a) (1)
and (2) hereof (whether or not such benefit is being paid);
and
(b) the "SPT Class" (herein referred to as such) to which all such
liabilities shall be allocated as of the Closing Date for the
following persons:
1. any person in Covered Employment with the SPT Group as of the
Closing Date;
2. any person whose last Covered Employment prior to the Closing
Date was with the SPT Group (excluding persons in paragraphs
(a) (1) and (b) (1) hereof); and
3. any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (b) (1)
and (2) hereof (whether or not such benefit is being paid).
For purposes hereof and the Plan, the terms "SFP Group" and "SPT
Group" shall have the following meanings:
(a) "SFP Group" shall mean the Participating Companies other than the
SPT Group; and
(b) "SPT Group" shall mean SPT and each Participating Company for
which SPT is the common parent, directly or indirectly.
61
<PAGE>
For purposes of determining the present value of the liabilities
to be allocated hereunder, the Committee shall be entitled to rely
upon calculations and assumptions employed by an actuarial firm
selected by the Committee.
B-6. Nonduplication of Benefits. As of and after the Closing Date:
(a) To the extent liabilities have been allocated to the SPT Class in
accordance with B-5, Benefit Service attributable to such
liabilities shall not be recognized by or created a benefit or
liability with respect to the assets segregated in B-7 to the SFP
Fund; and
(b) To the extent liabilities have been allocated to the SFP Class in
accordance with B-5, such Benefit Service shall not be recognized
by or created a benefit or liability with respect to the assets
segregated in B-7 to the SPT Fund.
B-7. Segregation of Assets. As of the Closing Date, the assets of the Trust
shall be segregated into the following two separate funds:
(a) the "SFP Fund" (herein referred to as such) which shall consist of
all assets (actual and accrued) of the Trust as of such date other
than the assets allocated to the SPT Fund; and
(b) the "SPT Fund" (herein referred to as such) to which shall be
allocated and transferred assets, in accordance with Sections
401(a)(12)and 414(1) of the Code and Section 208 of ERISA, equal
to the present value of liabilities allocated as of such date
determined in accordance with B-5 to the SPT Class but only on
behalf of any person who as of such date is an active or disabled,
vested terminated (including a nonvested terminated Participant
who will become vested under a formal severance program if
terminated before such date) or retired Participant or the
Beneficiary or Contingent Annuitant (including an eligible spouse)
of such person. On and after Closing Date and until the assets in
the SPT fund have been delivered to the Successor Trustee
("Delivery Date"), the present value amount determined as of
Closing Date shall be adjusted as follows to determine the final
amount to be transferred on the Delivery Date:
62
<PAGE>
(i) The present value will be increased for interest for the
period of time between the Closing Date and the Delivery
Date, using the Bond Rate on the Closing Date described
below;
(ii) The present value will be decreased for any benefit payments
(plus interest from payment date to Delivery Date using the
Bond Rate on the Closing Date) made after Closing Date from
the SPT Fund;
(iii) The present value will be decreased for any interim delivery
of assets from the SPT Fund to the Successor Trustee prior to
the Delivery Date (plus interest from the interim date of
delivery of such assets to the Delivery Date using the Bond
Rate on the Closing Date);
(iv) After adjustment for (1), (ii) and (iii) above, the present
value will be further adjusted to reflect any changes in the
Bond Rate from Closing Date to the day which is 30 days prior
to the Delivery Date by multiplying the present value by a
factor of (0.922) /E/, where the exponent "E" is equal to 100
times the Bond Rate 30 days prior to the Delivery Date, minus
the Bond Rate at Closing Date.
For purposes hereof, the term "Bond Rate" means the interest
discount rates based on the yield rate for a 30-year Treasury Bond
(as published in the Federal Reserve Statistical Release H.15
(519)).
As of the Closing Date the Investment Committee shall direct the
Trustee of the Trust to Segregate and hold within such Trust
assets in accordance with the above.
B-8. Separate Application After Closing Date. Notwithstanding any term or
provision of the Plan to the contrary, as of and after the Closing Date
the SPT Class shall be deemed covered by the Rio Grande Plan and not
this Plan and liabilities which have been allocated to the SPT class in
accordance with B-5 and assets segregated to the SFP Fund in accordance
with B-7 shall be deemed to be liabilities of and assets, respectively,
of the Rio Grande Plan.
B-9. Conflicts Between Plan and this Supplement. This Supplement B together
with the Plan comprises the Plan with respect to Participants and
Beneficiaries covered by this Supplement. In the event of any
inconsistencies
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between the provisions of the Plan and this Supplement, the terms and
provisions of this Supplement shall supersede the other provisions of
the Plan to the extent necessary to eliminate such inconsistency.
64
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SUPPLEMENT C
------------
TO
--
THE SANTA FE PACIFIC RETIREMENT PLAN
------------------------------------
C-1. Purpose, Use of Terms. The purpose of this Supplement C is to set
forth the special provisions which apply to persons who are present or
former employees of Santa Fe Energy Resources, Inc. or those
subsidiaries in which it directly or indirectly owns 80% or more of the
value of outstanding stock (as determined under Section 414(e) of the
Code) or is entitled to vote 80% or more of the outstanding stock
("Resources Group") as of the last business day of the month ("Transfer
Date") in which occurs the date of distribution by the Company of its
interest in the Resources Group to shareholders of the Company as of a
record date to be established and to provide for a transfer of assets
and liabilities with respect to such persons.
C-2. Transfer of Assets and Liabilities. As of the Transfer Date,
liabilities or obligations of the Plan with respect to the Resource
Class, determined in accordance with paragraph C-4, shall be
transferred from the Plan to the defined benefit plan designated by
Resources ("Resources Plan") and the assets of the Resources Fund
determined in accordance with paragraph C-6 (in cash or kind as
determined by the Investment Committee) shall be transferred from the
Trust to the trust established to fund the Resources Plan ("Resources
Trust").
C-3. Participating Company. Notwithstanding any provision of the Plan to
the contrary, the distribution by the Company of its interest in the
Resources Group to its shareholders as of a designated record date
("Distribution Date") will not constitute a termination of employment
nor a partial termination of the Plan; however, on and after the
Distribution Date, no member of the Resources Group will be a
Participating Company in the Plan, and except as provided in the
Memorandum, all members of the Resources Class will cease accruing
under the Plan any additional benefit, subsidy, supplement, right or
Service under Article 4 of the Plan beyond that which had been accrued
as of the Distribution Date.
C-4. Transfer of Liabilities. As of the Transfer Date, the liabilities or
obligations, fixed or contingent, of the Plan (including subsidies,
supplements, death benefits, optional forms of benefits payment and
rights or features whether or not protected under Section 411(d)(6) of
the Code) ("Accrued Benefits") shall be separated for the
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following two classes of individuals in accordance with (i) the terms
and provisions of the Spinoff Agreement between Santa Fe Pacific
Corporation and Santa Fe Energy Resources, Inc., and the Memorandum of
Agreement Regarding Pension Asset Transfer from SFP Retirement Plan
Assets, (ii) the procedures for allocation of liabilities set forth in
Article 15 (disregarding section 15.07, provided and only to the extent
such benefits are made available under the Resources Plan), as if the
Plan were to be terminated as of the Transfer Date, (iii) the
requirements of Section 401(a)(12) and 414(1) of the Code and Section
208 or ERISA:
(a) the "SFP Class" (herein referred to as such) to which Accrued
Benefits shall be allocated as of the Transfer Date for or on
behalf of the following persons and shall remain liabilities or
obligations of the Plan:
(1) any person who is employed with the SFP Group as of the
Transfer Date;
(2) any person whose last Covered Employment prior to the
Transfer Date was with the SFP Group (excluding persons in
paragraph (a)(1) and (b)(1) hereof);
(3) any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (a)(1)
and (2) hereof (whether or not such benefit is being paid);
and
(b) the "Resources Class" (herein referred to as such) to which
Accrued Benefits shall be allocated as of the Transfer Date for
the following persons and shall be transferred to the Resources
Plan:
(1) any person who is employed with the Resources Group as of the
Transfer Date;
(2) any person whose last Covered Employment prior to the
Transfer Date was with the Resources Group (excluding persons
in paragraphs (a)(1) and (b)(1) hereof); and
(3) any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (b)(1)
and (2) hereof (whether or not such benefit is being paid).
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<PAGE>
(c) For purposes hereof and the Plan, the term "SFP Group" shall mean
the Company and each Affiliated Company as of the Transfer Date.
C-5. Nonduplication of Benefits. As of and after the Transfer Date:
(a) To the extent Accrued Benefits have been allocated to the
Resources Class and transferred to the Resources Plan in
accordance with C-4, Benefit Service used to calculate such
Accrued Benefits shall not be recognized by or create Accrued
Benefits with respect to the assets segregated in C-6 to the SFP
Fund nor shall such persons participate in or have any right to
assets in the SFP Fund; and
(b) To the extent Accrued Benefits have been allocated to the SFP
Class in accordance with C-4, Benefit Service used to calculate
such Accrued Benefits shall not be recognized by or create Accrued
Benefits with respect to the assets segregated in C-6 to the
Resources Fund nor shall such persons participate in or have any
right to assets in the Resources Fund.
C-6. Spinoff of Assets. As of the Transfer Date, the assets of the Trust
shall consist of two separate funds in accordance with the Memorandum:
(a) the "SFP Fund" (herein referred to as such) which shall consist of
all assets (actual and accrued) of the Trust as of the Transfer
Date and all income, losses or gains on assets held in the Trust
on and after the Transfer Date other than the assets transferred
to the Resources Fund as provided in paragraphs (b) and (c) below;
and
(b) the "Resources Fund" (herein referred to as such) which shall be
an amount equal to the sum of (1) and (2) which sum shall be
adjusted in paragraph (c) below:
(1) is an amount determined by adjusting the Accumulated Benefit
Obligation ("ABO"), established as of the October 1, 1989
valuation of the Plan (using the assumptions specified in
paragraph (d) below), for all vested members of the Resources
Class, including a nonvested terminated Participant who will
become vested under a formal
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<PAGE>
severance program if terminated before the Distribution Date
or the Beneficiary or Contingent Annuitant (including an
eligible spouse) of any such persons, to reflect the
estimated changes in the ABO from October 1, 1989 to the
Transfer Date. The adjustment shall include the following:
(i) Increase ABO by 9% per annum interest factor (using
simple interest for any fraction of a year);
(ii) Increase ABO by the present value of estimated increases
in Accrued Benefits during this period (based on the
appropriate actuarial normal cost using regular
actuarial assumptions); and
(III) Decrease ABO by benefit payments made during this
period with interest from the date of such payment to
the Transfer Date.
(2) is an amount equal to the product of (i) and (ii) where:
(i) is equal to 80% of a fraction, the numerator of which
is equal to the amount determined in paragraph (b)(1)
above as of the Transfer Date and the denominator of
which is equal to an amount determined by adjusting the
ABO established as of the October 1, 1989 valuation of
the Plan for all participants and Beneficiaries or
Contingent Annuitants as of the Transfer Date,
including those persons for whom an ABO was calculated
in paragraph (b)(1), to reflect the estimated changes
in the ABO from October 1, 1989 to the Transfer Date in
the same manner as provided in paragraphs (b)(1)(i),
(ii) and (iii); and
(ii) is equal to the excess of an amount equal to the fair
market value of the assets of the Trust as of the
Transfer Date, as determined by the trustee for such
Trust over an amount determined by adjusting the ABO,
established as of the October 1, 1989 valuation date of
the
68
<PAGE>
Plan for all Participants and Beneficiaries as of the
Transfer Date, including those persons for whom an ABO
was calculated in paragraph (b)(1), to reflect the
estimated changes in the ABO from October 1, 1989 to
the Transfer Date in the same manner as provided in
paragraphs (b)(1)(i), (ii) and (iii).
(c) On and after the Transfer Date and until the assets of the
Resources Fund have all been finally delivered to the trustee
for the Resources Trust ("Delivery Date"), the amount
determined in paragraph (b) above shall be adjusted as
follows to determine the final amount to be transferred on
the Delivery Date:
(i) Such amount will be increased for Interest for the
period of time between the Transfer Date and the
Delivery Date;
(ii) Such amount will be decreased for any benefit payments
(plus Interest from payment date to Delivery Date)
made after the Transfer Date;
(iii) Such amount will be decreased for any interim delivery
of assets to the trustee for the Resources Trust prior
to the Delivery Date (plus Interest from the interim
date of delivery of such assets to the Delivery Date);
For purposes of this paragraph (c), the term "Interest" means
nine percent (9%) simple interest per annum for any fraction
of a year and compound interest for any twelve (12) month
periods; provided, however, with respect to any assets not
delivered within twelve (12) months of the Transfer Date due
to the failure of the Resources Group to comply with Section
III(c) of the Memorandum, the interest rate with respect to
those assets shall be lowered by 1% for every succeeding
twelve (12) month period or if due to the failure of the
Company to complete the required valuations in a timely
manner, the interest rate shall be increased by 1% for each
succeeding twelve (12) month period.
69
<PAGE>
For purposes of determining the ABO hereunder, the Committee
shall be entitled to rely upon calculations employed by an
actuarial firm selected by the Committee.
(d) The following assumptions and methods will be used in the
calculation of the ABO:
10/01/89 VALUE
--------------
(1) ABO for Covered Persons $ 18,936,361
Total ABO $418,189,602
(2) These ABO values will be adjusted from October 1, 1989 to
the Transfer Date in the following manner:
(a) Increase both ABOs by 9% per annum interest factor
(using simple interest for any fraction of a year);
(b) Increase both ABOs by the following amounts each month
accumulated with 9% interest for the appropriate number
of months to the Transfer Date:
INCREASE IN ABO
FOR EACH MONTH
---------------
Covered Persons $ 65,722
All SFP Plan Participants
and Beneficiaries $726,769
(c) Decrease both ABOs by benefit payments made during
this period, with interest from the date of such
payment to the Transfer Date.
C-7. Conflicts Between Plan and This Supplement. This Supplement C together
with the Plan comprises the Plan with respect to Participants and
Beneficiaries covered by this Supplement. In the event of any
inconsistencies between the provisions of the Plan and this Supplement,
the terms and provisions of this Supplement shall supersede the other
provisions of the Plan to the extent necessary to eliminate such
inconsistency.
70
<PAGE>
EXHIBIT A
---------
10/29/90
MEMORANDUM OF AGREEMENT
REGARDING PENSION ASSET TRANSFER FROM
SFP RETIREMENT PLAN
I. BACKGROUND
Santa Fe Pacific Corporation, a Delaware corporation ("SFP"), is currently
contemplating a series of corporate transactions in which the stock of certain
of its second-tier subsidiaries will be distributed by SFP to its shareholders,
including the stock of Santa Fe Energy Resources, Inc., a Delaware corporation
("Resources", which shall also include its subsidiaries and predecessors and
successors wherever appropriate in the context used in this Agreement).
Resources is currently a publicly traded corporation with approximately 18.3% of
its shares outstanding and 81.7% of its shares retained by SFP. SFP
contemplates the distribution of its remaining interest in Resources to its
shareholders.
Effective with such distribution, Resources will no longer be a member of the
SFP controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code"), the date Resources
ceases to be such a member of the SFP controlled group being the "Distribution
Date". Resources wishes to withdraw from the Santa Fe Pacific Retirement Plan
("SFP Plan") and establish a defined benefit pension plan for its employees
("Resources Pension Plan"). Resources further wishes to assume the liabilities
under the SFP Plan attributable to those persons who as of the Transfer Date (as
defined below) are active, disabled, vested terminated, non-vested terminated
(if terminated pursuant to a formal severance program and who become vested as
part of a severance program) or retired employees of Resources and their
eligible beneficiaries or alternate payees pursuant to a qualified domestic
relations order (collectively, "Covered Persons"), and in exchange for this
assumption of liabilities, SFP agrees to cause the trustee for the SFP Plan to
transfer appropriate assets from the SFP Master Retirement Trust ("SFP Trust")
to the trust established by Resources to fund the Resources Pension Plan
("Resources Trust").
This Memorandum of Agreement is for the purpose of (i) setting forth the rights
and obligations of the parties in respect to the transfer of assets and
liabilities from the SFP Plan to the Resources Pension Plan and (ii) setting
forth the procedures to be used in calculating the amount to be transferred from
the SFP Trust to the Resources Trust. The transfer of assets and liabilities
from the SFP Plan to the Resources Pension Plan shall, for all purposes, be
deemed effective as of the Transfer Date, which shall be the last business day
of the month in which the Distribution Date occurs and Resources ceases to be a
member of
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the SFP controlled group for purposes of Section 414 of the Code. This
Memorandum of Agreement shall be void and have no force or effect if the
distribution of Resources stock contemplated by this Agreement does not occur.
II. OBLIGATIONS OF RESOURCES
(a) Resources agrees to establish the Resources Pension Plan and the
Resources Trust both in accordance with the requirements of
Sections 401(a) and 501(a) of the Code, effective as of the
Distribution Date (or such other date as may be mutually agreed to
by the parties), on the terms and conditions specified herein, and
such other terms and conditions which are not inconsistent
herewith.
(b) Resources agrees to cause the Resources Pension Plan to assume all
liability and obligation for the provision of all Accrued Benefits
(as hereinafter defined) under the SFP Plan to the Covered Persons
and on the same terms and conditions as such Accrued Benefits were
provided to the Covered Persons under the SFP Plan as of the
Transfer Date. For purposes of this Agreement, active employees
of Resources means persons actively rendering services to
Resources and includes persons who are on an authorized leave of
absence (whether or not paid), disability leave with reemployment
rights, vacation or other absence where such person has a right to
return to active employment with Resources. A person is disabled,
terminated or retired from Resources if on the last day he was an
active employee covered by the SFP Plan, he or she was an employee
of Resources.
For purposes of this Agreement, "Accrued Benefits" shall mean all pension and
death benefits, early retirement benefits, disability benefits, subsidies, and
supplements, rights or features, whether or not a "protected benefit", within
the meaning of Section 411(d)(6) of the Code, accrued as of the Transfer Date.
(c) Resources agrees that, on and after the Distribution Date, SFP and
its affiliates shall not have any liability, obligation or
responsibility with respect to the maintenance of the Resources
Pension Plan and Resources Trust and the administration and
payment of benefits to Covered Persons and that on and after the
Transfer Date, SFP and its affiliates shall not have any
liability, obligation or responsibility with
72
<PAGE>
respect to the Accrued Benefits of the Covered Persons.
(d) Resources agrees to withdraw on the Distribution Date from
participation under the SFP Plan and no Covered Person shall
accrue any additional benefit thereunder on and after the
Distribution Date.
(e) Resources agrees that it will adopt such amendments to the
Resources Pension Plan and Resources Trust, including retroactive
amendments within the remedial amendment period, as defined by
Section 401(b) of the Code and regulations or other authority
thereunder, as is required to establish the tax qualified status
of the Resources Pension Plan and to maintain such status through
the Funding Date, including such provisions, if any, in the
Resources Pension Plan necessary to recognize any benefit formula
change retroactively adopted by the SFP Plan in order to comply
with the Tax Reform Act of 1986; provided, however, SFP agrees
that it shall make no amendments to the SFP Plan that materially
alter the Accrued Benefits thereunder for one or more classes of
participants that is effective on or before the Transfer Date,
except any such amendments required by law.
III. OBLIGATIONS OF SFP
(a) As soon as practicable following the receipt of documents by SFP
as described below, SFP will direct the trustee of the SFP Trust
to effectuate a transfer of cash to the Resources Trust in an
amount equal to the sum of (1) the Present Value of the Accrued
Benefits ("ABO") for the Covered Persons as of the Transfer Date
(as determined under Paragraph IV) and (2) 80% of the applicable
percentage of Excess Assets in the SFP Plan as of the Transfer
Date. For purposes of this Agreement, the "applicable percentage"
shall be determined by calculating the ABO as of the Transfer Date
of the Covered Persons divided by the ABO as of the Transfer Date
in the SFP Plan for all SFP Plan participants and beneficiaries
("Total ABO") (as determined under Paragraph IV). The "Excess
Assets" shall be an amount equal to the fair market value of all
assets of the SFP Plan, (as determined and certified by the
trustee of the SFP Plan's Trust) as of the Transfer Date, less an
amount equal to the Total ABO in the SFP Plan as of the Transfer
Date. In no event shall the amount
73
<PAGE>
transferred to the Resources Trust be less than that required by
Section 414(1) of the Code.
(b) The amount of assets to be transferred as of the Transfer Date
pursuant to Paragraph III(a) shall be increased for interest for
the period between the Transfer Date and the date the actual
transfer of funds occurs ("Funding Date"), and decreased by any
benefit payments to Covered Persons or other expense charges
properly allocable to such funds or interim transfers to the
Resources Trust (plus interest from the date of such payment until
completion of the transfer contemplated in Paragraph III(a)). The
interest rate for purposes of Paragraph III(b) shall be nine
percent (9%) simple interest per annum for any fraction of a year
and compound interest for any twelve (12) month periods; provided,
however, if the transfer shall not be consummated by delivery of
all required amounts within twelve (12) months of the Transfer
Date (i) if due to Resources' failure to comply with Section
III(c) hereof, the interest rate shall be lowered by one percent
(1%) for every succeeding twelve (12) month period, or (ii) if due
to the failure of SFP's actuary to complete all required
valuations in a timely manner, the interest rate shall be
increased by one percent (1%) for every succeeding twelve (12)
month period.
(c) SFP and Resources will cooperate in the filing of all documents in
connection with the transfer of assets and liabilities described
herein, and, notwithstanding anything contained herein to the
contrary, the transfer shall not be effectuated until after (i)
receipt by SFP of written evidence of the adoption by Resource of
the Resources Pension Plan and Resources Trust which assumes such
liabilities transferred thereto, in accordance with the terms of
this Agreement, (ii) receipt by SFP of a copy of the favorable
determination letter issued by the Internal Revenue Services
("IRS") with respect to the Resources Pension Plan and Resources
Trust to qualify under the Code, unless, in lieu thereof, an
opinion of counsel satisfactory to SFP that the Resources Pension
Plan and Resources Trust are qualified under 401(a) of the Code is
provided.
(d) As to Covered Persons who are or enter into pay status prior to or
after the Distribution Date but prior to the Funding Date, SFP
shall cause the Trustee of the SFP Trust to pay such benefits or
74
<PAGE>
make an interim transfer to the Resources Trust for that purpose.
(e) SFP shall transfer to Resources all original records in its
possession relating to Covered Persons and, further, SFP agrees to
provide reasonable assistance to Resources in connection with the
administration of the Resources Pension Plan and to cooperate and
provide access to all other appropriate records if information in
the possession or control of SFP is necessary to any governmental
investigation or any claims made by any governmental agency,
participant, beneficiary or alternate payee against the Resources
Pension Plan. Resources shall maintain the confidentiality of
such records and shall obtain SFP's written approval prior to
disclosure to any third party, other than a Covered Person.
(f) SFP agrees that, on and after the Distribution Date and prior to
the Transfer Date, Resources and its affiliates shall not have any
liability, obligation or responsibility with respect to or arising
under the SFP Plan and SFP Trust, other than with respect to the
ABO of the Covered Persons. SFP further agrees that, on and after
the Transfer Date, Resources and its affiliates shall not have any
liability, obligation or responsibility with respect to or arising
under the SFP Plan and SFP Trust.
IV. CALCULATION OF ABOS
The ABO on the Transfer Date and the Total ABO on such date shall each
be deemed to be the amounts determined by the sum of the following:
10/01/89 VALUE
--------------
(1) ABO for Covered Persons $ 18,936,361
Total ABO $418,189,602
(2) These ABO values will be adjusted from October 1, 1989 to the
Transfer Date in the following manner:
(a) Increase both ABOs by 9% per annum interest factor (using
simple interest for any fraction of a year);
(b) Increase by ABOs by the following amounts each month
accumulated with 9% interest for the
75
<PAGE>
appropriate number of months to the Transfer Date:
INCREASE IN ABO
---------------
FOR EACH MONTH
--------------
Covered Persons $65,722
All SFP Plan Participants
and Beneficiaries $726,769
(c) Decrease both ABOs by benefit payments made during this
period, with interest from the date of such payment to the
Transfer Date.
(d) SFP shall cause the actuary for the SFP Plan to provide such
data to the actuary for the Resources Pension Plan as is
reasonably required to verify that the determination of the
Present Value of Accrued Benefits have been made in
accordance with this Agreement.
V. RESOLUTION OF DISPUTES
In the event that questions arise under this Agreement, the parties hereto shall
attempt to resolve such differences through consultation of their respective
actuaries, Hewitt/Houston and TPF&C/Chicago. If the parties are unable to reach
agreement with respect to any item, the issue as to which the parties are unable
to agree shall be submitted to arbitration.
VI. EXECUTION OF FURTHER AGREEMENTS AND DIRECTIONS TO SFP TRUSTEE
At such time as the parties have agreed upon the amount to be transferred, the
parties shall enter into any appropriate written agreement as to the amount to
be transferred and shall executive such additional documents and provide such
additional information as may be appropriate to order to accomplish the transfer
of funds from the SFP Trust to the Resources Trust.
76
<PAGE>
SUPPLEMENT D
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TO
--
THE SANTA FE PACIFIC RETIREMENT PLAN
------------------------------------
D-1. Purpose, Use of Terms. The purpose of this Supplement D is to set
forth the special provisions which apply to a Participant to whom
service credit is given pursuant to the Asset Exchange Agreement, dated
January 25, 1993, between Hanson Natural Resources Company ("HNRC") and
Cerrillos Land Company, Santa Fe Pacific Coal Corporation, Santa Fe
Pacific Mining, Inc., Western Rock Products, Inc., Santa Fe Minerals
Corporation, Santa Fe Pacific Capital, Inc., SFP Minerals Corporation,
Hospah Coal Company, Gallo Wash Coal Company, and Santa Fe Pacific
Minerals Corporation (the "Agreement").
D-2. Participants Affected. A Participant shall be affected by this
Supplement D if such person is an "HNRC Employee Hired by SF," as
described in the Agreement, and in Salaried Employment with a
Participating Company. In this Supplement, such person shall be
referred to as a "GF Participant."
D-3. Recognition of Service. All of a GF Participant's service recognized as
of the "Closing Date" (as described therein) under the GF Retirement
Plan, as described in the Agreement:
(a) for purposes of eligibility to participate, shall be recognized as
of the Closing Date as hours compensated by an Affiliated Company
in Article 3;
(b) for purposes of determining the nonforfeitability of an Accrued
Benefit or eligibility for an Early Retirement Benefit, shall be
recognized as of the Closing Date as hours compensated by an
Affiliated Company for calculating Vesting Service in this Plan;
and
(c) for purposes of calculating the amount of accrued benefit of such
GF Participant, shall be recognized as of the Closing Date as
Covered Employment for calculating Benefit Service in this Plan.
D-4. Offset of GF Retirement Plan Benefits. Before calculating the Normal
Retirement Benefit or Early Retirement Benefit of a GF Participant
under the Plan, his Accrued Benefit shall be calculated as follows:
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<PAGE>
(a) his or her Accrued Benefit payable only in the form of a single
life annuity at the later of his or her Normal Retirement Date or
termination of employment with an Affiliated Company shall be
determined under Article 5;
(b) the Administration Committee shall ascertain the amount payable to
such GF Participant under the "GF Retirement Plan" (as described
in the Agreement) (including any qualified domestic relation
orders) in the form of a single life annuity at the later of his
or her Normal Retirement Date or termination of employment with an
Affiliated Company; and
(c) the Administration Committee shall subtract from the amount
determined in (a) the amount ascertained in (b), whether or not
such amount in (b) is actually paid in such form or on such date.
Such remainder shall, for purposes of this Plan, constitute the
Accrued Benefit for such GF Participant based upon the appropriate
factors being taken into consideration on the date of calculation.
D-5. Plan Compensation. The salary history of a GF Participant prior to the
Closing Date shall be taken into consideration as Compensation under
this Plan for purposes of computing such GF Participant's Plan
Compensation on and after the Closing Date.
D-6. Conflicts. This Supplement D, together with the Plan, comprises the
Plan with respect to GF Participants covered by this Supplement. In
the event of any inconsistencies between the provisions of the Plan and
this Supplement, the terms and provisions of this Supplement shall
supersede the other provisions of the Plan to the extent necessary to
eliminate such inconsistency.
78
<PAGE>
SUPPLEMENT E
------------
T0
--
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
E-1. Purpose, Use of Terms. The purpose of this Supplement E is to set
forth the special provisions which apply to persons who are present or
former employees of Santa Fe Pacific Gold Corporation ("Gold") or those
former or current subsidiaries in which it directly or indirectly owns
80% or more of the value of outstanding stock (as determined under
Section 414 of the Code) or is entitled to vote 80% or more of the
outstanding stock ("Gold Group"). As of the date ("Distribution Date")
on which occurs the distribution by the Company of its interest in the
Gold Group to shareholders of the Company, the Gold Group will cease to
be a member of the controlled group of corporations (within the meaning
of Section 414 of the Code) of which the Company is a member and will
withdraw from the Plan.
E-2. Transfer of Assets and Liabilities. As of the last day of the month in
which the Distribution Date occurs, unless the Distribution Date is the
last day of the month in which case as of the last day of the calendar
month next following the month in which the Distribution Date occurs,
(the "Transfer Date"), liabilities or obligations of the Plan with
respect to the Gold Class, determined in accordance with paragraph E-4,
shall be transferred from the Plan to the defined benefit plan
designated by Gold ("Gold Plan") and the assets of the Gold Fund
determined in accordance with paragraph E-6 (in cash or kind as
determined by the Investment Committee) shall be transferred from the
Trust to the trust established to fund the Gold Plan ("Gold Trust").
E-3. Participating Company. Notwithstanding any provision of the Plan to
the contrary, the distribution by the Company of its interest in the
Gold Group to its shareholders as of the Distribution Date will not
constitute a termination of employment nor a partial termination of the
Plan; however, on and after the Distribution Date, no member of the
Gold Group will be a Participating Company in the Plan, and except as
provided in the attached Memorandum of Agreement Regarding Pension
Asset Transfer from SFP Retirement Plan ("Memorandum"), all members of
the Gold Class will cease accruing under the Plan any additional
benefit, subsidy, supplement, right or Service under Article 4 of the
Plan beyond the month in which the Distribution Date occurs.
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<PAGE>
E-4. Transfer of Liabilities. As of the Transfer Date, the liabilities or
obligations, fixed or contingent, of the Plan (including subsidies,
supplements, death benefits, optional forms of benefit payment and
rights or features whether or not protected under Section 411(d)(6) of
the Code) ("Accrued Benefits") shall be separated for the following two
classes of individuals in accordance with (i) the terms and provisions
of the Memorandum (ii) the procedures for allocation of liabilities set
forth in Article 15 (disregarding section 15.07, provided and only to
the extent such benefits are made available under the Gold Plan), as if
the Plan were to be terminated as of the Transfer Date, and (iii) the
requirements of Section 401(a)(12) and 414(1) of the Code and Section
208 of ERISA:
(a) the "SFP Class" (herein referred to as such) to which Accrued
Benefits shall be allocated as of the Transfer Date (excluding any
Accrued Benefits allocated under paragraph (b) hereof) for or on
behalf of the following persons and shall remain liabilities or
obligations of the Plan:
1. any person who is employed with the SFP Group as of or after
the Transfer Date;
2. any person with a vested accrued benefit whose last Covered
Employment prior to the Transfer Date was with the SFP Group;
3. any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (a)(1)
and (2) hereof (whether or not such benefit is being paid);
and
4. any person with a non-vested accrued benefit who terminated
employment, who was last employed by the SFP Group or Gold
Group on or before the Transfer Date and for whom benefit
service has not been disregarded under Section 4.04 of the
Plan.
(b) the "Gold Class" (herein referred to as such) to which Accrued
Benefits shall be allocated as of the Transfer Date (excluding any
Accrued Benefits allocated under paragraph (a) hereof) for the
following persons and shall be transferred to the Gold Plan:
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<PAGE>
1. any person who is employed with the Gold Group as of or after
the Transfer Date;
2. any person with a vested accrued benefit whose last Covered
Employment prior to the Transfer Date was with the Gold
Group; and
3. any Beneficiary or Contingent Annuitant (including an
eligible spouse) of a person described in paragraphs (b)(1)
and (2) hereof (whether or not such benefit is being paid).
(c) For purposes hereof and the Plan, the term "SFP Group" shall mean
the Company and each Affiliated Company as of the Transfer Date.
E-5. Nonduplication of Benefits. As of and after the Transfer Date:
(a) To the extent Accrued Benefits have been allocated to the Gold
Class and transferred to the Gold Plan in accordance with E-4,
Benefit Service used to calculate such Accrued Benefits shall not
be recognized by or create Accrued Benefits with respect to the
assets segregated in E-6 to the SFP Fund nor shall such persons
participate in or have any right to assets in the SFP Fund; and
(b) To the extent Accrued Benefits have been allocated to the SFP
Class in accordance with E-4, Benefit Service used to calculate
such Accrued Benefits shall not be recognized by or create Accrued
Benefits with respect to the assets segregated in E-6 to the Gold
Fund nor shall such persons participate in or have any right to
assets in the Gold Fund.
E-6. Spinoff of Assets. As of the Transfer Date, the assets of the Trust
shall consist of two separate funds in accordance with the Memorandum:
(a) the "SFP Fund" (herein referred to as such) which shall consist of
all assets (actual and accrued) of the Trust as of the Transfer
Date and all income, losses or gains on assets held in the Trust
on and after the Transfer Date other than the assets transferred
to the Gold Fund as provided in paragraphs (b) and (c) below; and
(b) the "Gold Fund" (herein referred to as such) which shall be an
amount determined by the Memorandum
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<PAGE>
which sum shall be adjusted in the manner determined in the
Memorandum until assets are actually delivered to the Gold Trust
on December 31, 1994, or as soon as practicable thereafter:
(i) Such amount will be increased for Interest for the period of
time between the Transfer Date and the Delivery Date;
(ii) Such amount will be decreased for any benefit payments (plus
Interest from payment date to Delivery Date) made after the
Transfer Date;
(iii) Such amount will be decreased for any interim delivery of
assets to the trustee for the Gold Trust prior to the
Delivery Date (plus Interest from the interim date of
delivery of such assets to the Delivery Date);
(c) For purposes of this paragraph (c), the term "Interest" means that
simple interest per annum for any fraction of a year and compound
interest for any twelve (12) months periods as specified in the
Memorandum; provided, however, with respect to any assets not
delivered within six months of the Transfer Date due to the
failure of the Gold Group to comply with the Memorandum, the
interest rate with respect to those assets shall be as specified
in the Memorandum.
E-7. Conflicts Between Plan and this Supplement. This Supplement E together
with the Plan comprises the Plan with respect to Participants and
Beneficiaries covered by this Supplement. In the event of any
inconsistencies between the provisions of the Plan and this Supplement,
the terms and provisions of this Supplement shall supersede the other
provisions of the Plan to the extent necessary to eliminate such
inconsistency.
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<PAGE>
EXHIBIT A
---------
MEMORANDUM OF AGREEMENT
REGARDING PENSION ASSET TRANSFER FROM
SFP RETIREMENT PLAN
I. BACKGROUND
Santa Fe Pacific Corporation, a Delaware corporation ("SFP") is currently
contemplating a corporate transaction in which the stock of Santa Fe Pacific
Gold Corporation ("Gold") (which shall also include its subsidiaries and
predecessors and successors wherever appropriate in the context used in this
Agreement) will be distributed by SFP to its shareholders. Gold is currently a
publicly traded corporation with approximately 14.5% of its shares outstanding
and 85.5% of its shares retained by SFP. SFP plans the distribution of its
remaining interest in Gold to its shareholders.
Effective with such distribution, Gold will no longer be a member of the SFP
controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code"), the date Gold ceases to
be such a member of the SFP controlled group being the "Distribution Date."
Gold wishes to withdraw from the Santa Fe Pacific Retirement Plan ("SFP Plan")
and establish a defined benefit pension plan for its employees ("Gold Pension
Plan"). Gold further wishes to assume the liabilities under the SFP Plan
attributable to those persons who as of the Transfer Date (as defined below) are
active, disabled, vested terminated, non-vested terminated (if terminated
pursuant to a formal severance program and who becomes vested as part of a
severance program) or retired employees of Gold and their eligible beneficiaries
or alternate payees pursuant to a qualified domestic relations order
(collectively, "Covered Persons"), and in exchange for this assumption of
liabilities, SFP agrees to cause the trustee for the SFP Plan to transfer
appropriate assets from the SFP Master Retirement Trust ("SFP Trust") to the
trust established by Gold to fund the Gold Pension Plan ("Gold Trust").
This Memorandum of Agreement is for the purpose of (i) setting forth the rights
and obligations of the parties in respect to the transfer of assets and
liabilities from the SFP Plan to the Gold Pension Plan and (ii) setting forth
the procedures to be used in calculating the amount to be transferred from the
SFP Trust to the Gold Trust. The transfer of assets and liabilities from the
SFP Plan to the Gold Pension Plan shall, for all purposes, be deemed effective
as of the Transfer Date, which shall be the last business day of the month in
which the Distribution Date occurs, unless the Distribution Date is the last day
of the month, in which case as of the last day of the calendar month next
following the month in which the Distribution Date occurs and Gold ceases to
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<PAGE>
be a member of the SFP controlled group for purposes of Section 414 of the Code.
This Memorandum of Agreement shall be void and have no force or effect if the
distribution of Gold stock contemplated by this Agreement does not occur.
II. OBLIGATIONS OF GOLD
(a) Gold agrees to establish the Gold Pension Plan and the Gold Trust
both in accordance with the requirements of Section 401(a) and
501(a) of the Code, effective as of the Distribution Date (or such
other date as may be mutually agreed to by the parties), on the
terms and conditions specified herein, and such other terms and
conditions which are not inconsistent herewith.
(b) Gold agrees to cause the Gold Pension Plan to assume all liability
and obligation for the provision of all Accrued Benefits (as
hereinafter defined) under the SFP Plan to the Covered Persons and
on the same terms and conditions as such Accrued Benefits were
provided to the Covered Persons under the SFP Plan as of the
Transfer Date. For purposes of this Agreement, active employees
of Gold means persons actively rendering services to Gold and
includes persons who are on an authorized leave of absence
(whether or not paid), disability leave with reemployment rights,
vacation or other absence where such person has a right to return
to active employment with Gold. A person is disabled, terminated
or retired from Gold if on the last day he was an active employee
covered by the SFP Plan, he or she was an employee of Gold.
For purposes of this Agreement, "Accrued Benefits" shall mean all pension and
death benefits, early retirement benefits, disability benefits, subsidies, and
supplements, rights or features, whether or not a "protected benefit," within
the meaning of Section 411(d)(6) of the Code, accrued under the SFP Plan formula
as of the Transfer Date.
(c) Gold agrees that, on and after the Distribution Date, SFP and its
affiliates shall not have any liability, obligation or
responsibility with respect to the maintenance of the Gold Pension
Plan and Gold Trust and the administration and payment of benefits
to Covered Persons and that on and after the Transfer Date, SFP
and its affiliates shall not have any liability, obligation or
responsibility with respect to the Accrued Benefits of the Covered
Persons.
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<PAGE>
(d) Gold agrees to withdraw on the Distribution Date from
participation under the SFP Plan and no Covered Person shall
accrue any additional benefit thereunder on and after the
Distribution Date.
(e) Gold agrees that it will adopt such amendments to the Gold Pension
Plan and Gold Trust, including retroactive amendments within the
remedial amendment period, as defined by Section 401(b) of the
Code and regulations or other authority thereunder, as is required
to establish the tax qualified status of the Gold Pension Plan and
to maintain such status through the Funding Date, including such
provisions, if any, in the Gold Pension Plan necessary to
recognize such benefit formula change retroactively adopted by the
SFP Plan in order to comply with the Tax Reform Act of 1986;
provided, however, SFP agrees that it shall make no amendments to
the SFP Plan that materially alter the Accrued Benefits thereunder
for one or more classes of participants that is effective on or
before the Transfer Date, except any such amendments required by
law.
III. OBLIGATIONS OF SFP
(a) As soon as practicable following the receipt of documents by SFP
as described below, SFP will direct the trustee of the SFP Trust
to effectuate a transfer of cash to the Gold Trust in an amount
equal to the sum of (1) the Accumulated Benefit Obligation ("ABO")
for the Covered Persons as of the Transfer Date (as determined
under Paragraph IV) and (2) 100% of the applicable percentage of
Excess Assets in the SFP Plan as of the Transfer Date less such
amounts attributable to the additional ABO incurred on June 25,
1993 relating to Hanson Natural Resources Company ("HNRC")
employees. For purposes of this Agreement, the "applicable
percentage" shall be determined by calculating the ABO of the
Covered Persons as of the Transfer Date less the additional ABO
incurred on 6/25/93 relating to HNRC employees with the result
divided by the ABO in the SFP Plan for all SFP Plan participants
and beneficiaries as of the Transfer Date ("Total ABO") (as
determined under Paragraph IV). The "Excess Assets" shall be an
amount equal to the fair market value of all assets of the SFP
Plan, (as determined and certified by the trustee of the SFP
Plan's Trust) as of the Transfer Date, less an amount equal to the
Total
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<PAGE>
ABO in the SFP Plan as of the Transfer Date. In no event shall the
amount transferred to the Gold Trust be less than that required by
Section 414(1) of the Code.
(b) The amount of assets to be transferred as of the Transfer Date
pursuant to Paragraph III(a) shall be increased for interest for
the period between the Transfer Date and the date the actual
transfer of funds occurs ("Funding Date"), and decreased by any
benefit payments to Covered Persons or other expense charges
properly allocable to such funds or interim transfers to the Gold
Trust (plus interest from the date of such payment until
completion of the transfer contemplated in Paragraph III(a)). The
interest rate for purposes of Paragraph III(b) shall be the rate
used by SFP to determine the Projected Benefit Obligation for the
10/1/94 SFP Plan valuation ("Applicable Discount Rate") as simple
interest per annum for any fraction of a year and compound
interest for any twelve (12) month periods; provided, however, if
the transfer shall not be consummated by delivery of all required
amounts within twelve (12) months of the Transfer Date (i) if due
to Gold's failure to comply with Section III(c) hereof, the
interest rate shall be lowered by one percent (1%) for every
succeeding twelve (12) month period, or (ii) if due to the failure
of SFP's actuary to complete all required valuations in a timely
manner, the interest rate shall be increased by one percent (1%)
for every succeeding twelve (12) month period.
(c) SFP and Gold will cooperate in the filing of all documents
required in connection with the transfer of assets and liabilities
described herein, and, notwithstanding anything contained herein
to the contrary, the transfer shall not be effectuated until after
(i) receipt by SFP of written evidence of the adoption by Gold of
the Gold Pension Plan and Gold Trust which assumes such
liabilities transferred thereto, in accordance with the terms of
this Agreement, (ii) receipt by SFP of a copy of the favorable
determination letter issued by the Internal Revenue Service
("IRS") with respect to the Gold Pension Plan and Gold Trust to
qualify under the Code, unless, in lieu thereof, an opinion of
counsel satisfactory to SFP that the Gold Pension Plan and Gold
Trust are qualified under 401(a) of the Code is provided.
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<PAGE>
(d) As to Covered Persons who are or enter into pay status prior to or
after the Distribution Date but prior to the Funding Date, SFP
shall cause the Trustee of the SFP Trust to pay such benefits or
make an interim transfer to the Gold Trust for that purpose.
(e) SFP shall transfer to Gold all original records in its possession
relating to Covered Persons and, further, SFP agrees to provide
reasonable assistance to Gold in connection with the
administration of the Gold Pension Plan and to cooperate and
provide access to all other appropriate records if information in
the possession or control of SFP is necessary to any governmental
investigation or any claims made by any governmental agency,
participant, beneficiary or alternate payee against the Gold
Pension Plan. Gold shall maintain the confidentiality of such
records and shall obtain SFP's written approval prior to
disclosure to any third party, other than a Covered Person.
(f) SFP agrees that, on and after the Distribution Date and prior to
the Transfer Date, Gold and its affiliates shall not have any
liability, obligation or responsibility with respect to or arising
under the SFP Plan and SFP Trust, other than with respect to the
ABO of the Covered Persons. SFP further agrees that, on and after
the Transfer Date, Gold and its affiliates shall not have any
liability, obligation or responsibility with respect to or arising
under the SFP Plan and SFP Trust.
IV. CALCULATION OF ABOS
The ABO on the Transfer Date and the Total ABO on such date shall each
be deemed to be the amounts determined by the sum of (a) and (b) below:
(a) The ABO for Covered Persons and Total ABO as of 10/1/94 valuation
using such assumptions used in the SFP Plan valuation and if the
Distribution Date is after September 30, 1994, the estimated
increase in ABO from October 1, 1994 to the Transfer Date using
1/12 of the annual unit credit service cost for each month in
which additional service is accrued by Covered Persons.
(b) The adjustment in each ABO from October 1, 1994 to the Transfer
Date shall be made in the following manner:
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<PAGE>
(1) The increase in each ABO by per annum interest factor based
upon the Applicable Discount Rate (using simple interest for
any fraction of a year); and
(2) Decrease both ABOs by benefit payments made during this
period, with interest from the date of such payment to the
Transfer Date.
(c) SFP shall cause the actuary for the SFP Plan to provide such data
to the actuary for the Gold Pension Plan as is reasonably required
to verify that the determination of the Accumulated Benefit
Obligations have been made in accordance with this Agreement.
V. RESOLUTION OF DISPUTES
In the event that questions arise under this Agreement, the parties hereto shall
attempt to resolve such differences through consultation of their respective
actuaries. If the parties are unable to reach agreement with respect to any
item, the issue as to which the parties are unable to agree shall be submitted
to arbitration.
VI. EXECUTION OF FURTHER AGREEMENTS AND DIRECTIONS TO SFP TRUSTEE
At such time as the parties have agreed upon the amount to be transferred, the
parties shall enter into an appropriate written agreement as to the amount to be
transferred and shall execute such additional documents and provide such
additional information as may be appropriate to order to accomplish the transfer
of funds from the SFP Trust to the Gold Trust.
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<PAGE>
SUPPLEMENT F
------------
T0
--
SANTA FE PACIFIC RETIREMENT PLAN
--------------------------------
F-1. Purpose. The purpose of this Supplement F is to provide early
retirement window benefits to certain Participants in order to
facilitate any work force reductions which are considered desirable by
the Company or a Participating Company from time to time due to special
circumstances.
F-2. Establishment of Offering Periods and Eligible Groups. The voluntary
or involuntary offering periods and eligible groups of Participants for
an early retirement window benefit provided under this Supplement shall
be as described in Paragraph F-8 below. Notwithstanding the provisions
of Section 16.04 of this Plan, the Chairman of the Board of Directors
and Chief Executive Officer of the Company shall, in his or her
discretion by written notice to the Secretary of the Company and the
Administration Committee, amend Paragraph F-8 of this Supplement (but
not in a manner to conflict with the eligibility requirements of
Paragraph F-3) to establish the offering period or periods for an early
retirement window benefit provided under this Supplement; indicate
whether such offering period covers only voluntary or involuntary
termination of employment and, if involuntary, describe which types of
involuntary termination of employment will qualify for an early
retirement window benefit; and define the group of eligible
Participants which shall constitute the eligible group for each such
offering period. However, no offering period may exceed twelve months
in duration or commence after December 31, 1997.
F-3. Eligibility for an Early Retirement Window Benefit. Each Participant,
who during an applicable offering period (i) is in Covered Employment,
(ii) is a member of an eligible group of Participants with respect to
such offering period, and (iii) has attained a status under at least
one of the formulas in the following table which qualifies them to be
eligible for an early retirement window benefit, shall be eligible for
an early retirement window benefit.
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<PAGE>
| ================================================== |
| Status of Participant as of the last date of the |
| Offering Period in order to qualify. |
| -------------------------------------------------- |
| (1) A Participant whose age and Vesting |
| Service, when added together, total seventy |
| (70) or more years. |
| -------------------------------------------------- |
| (2) A Participant who has attained at least age |
| fifty-five (55) and earned at least ten |
| (10) years of Vesting Service. |
| ================================================== |
The early retirement window benefit under this Supplement represents a
limited, temporary offering only during the applicable offering period
described herein and only to those then eligible Participants, and no
benefits are available under this Supplement to other non-qualifying
Participants or to qualifying Participants at times other than
indicated in Paragraph F-8.
F-4. Entitlement to a Voluntary Termination Early Retirement Window Benefit.
With respect to a voluntary termination offering period, a Participant
who is eligible for an early retirement window benefit under Paragraph
F-3 will be entitled to an early retirement window benefit determined
in Paragraph F-6 if he or she satisfies each of the following
requirements.
(1) The Participant delivers (A) a signed and notarized notice of his
or her termination of employment date ("Termination Date") to the
Participating Company at least ten business days prior to such
Termination Date and (B) a signed and notarized waiver agreement
as may be required by subparagraph F-4(3) hereof and the
Committee.
(2) The Participant voluntarily terminates his or her employment with
an Affiliated Company (other than a transfer of employment to
another Affiliated Company) on a Termination Date no later than
the last day of the offering period unless extended at the
discretion of the Company.
(3) The waiver agreement a Participant delivers under subparagraph
F-4(1) hereof shall (a) specifically waive any and all rights and
claims the Participant may have to benefits under this Plan, other
than the early retirement window benefit, the Age Discrimination
in Employment Act ("ACT"), or any other rights or claims which the
Participant may have against any Affiliated Company under contract
or applicable law, and (B) be a valid enforceable waiver under
this Plan, such Act, contract or
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<PAGE>
applicable law against the Participant and his representatives,
heirs and assigns. Failure of a waiver agreement to be validly
enforceable against a Participant shall result in retroactive
nullification of such Participant's entitlement to an early
retirement window benefit and any monthly early retirement window
benefit paid to such Participant in excess ("Excess Payment') of
what he or she would have bene entitled to receive under this Plan
(disregarding the application of this Supplement) shall be
immediately due and payable to the Trust without further notice.
In the event a Participant shall contest the validity of such
wavier agreement, the early retirement window benefit shall be
reduced by an amount equal to the Excess Payment until the matter
is settled or finally resolved by judicial decree or arbitration.
If the waiver agreement is determined to have been valid and
enforceable, such suspended amounts will be paid to such
Participant in a single sum payment without interest or mortality
consideration.
F-5. Entitlement to an Involuntary Termination Early Retirement Window
Benefit. With respect to an involuntary termination offering period, a
Participant who is eligible for an early retirement window benefit
under Paragraph F-3 will be entitled to an early retirement window
benefit determined under Paragraph F-6 if he or she satisfies each of
the following requirements:
(1) The Participant is involuntarily terminated from employment with
an Affiliated Company no later than the last day of the offering
period unless the termination date is extended at the discretion
of the Company;
(2) The reason for such Participant's involuntary termination of
employment is one of the permissible reasons set forth in
Paragraph F-8 which is applicable to the Participant's eligible
group; and
(3) The Participant deliver, within forty-five business days of being
notified of his or her termination of employment by an authorized
employee of a Participating Company, a signed and notarized waiver
agreement to the Participating Company which (A) specifically
waives any and all rights and claims the Participant may have to
benefits under this Plan, other than the early retirement window
benefit, the Act, or any other rights or claims which the
Participant may have against any
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<PAGE>
Affiliated Company under contract or applicable law, and (B) shall
be a valid, enforceable waiver under this Plan, such Act, contract
or applicable law against the Participant and his representatives,
heirs and assigns. Failure of a waiver agreement to be validly
enforceable against a Participant shall result in retroactive
nullification of such Participant's entitlement to an early
retirement window benefit and any monthly early retirement window
benefit paid to such Participant in excess ("Excess Payment") of
what he or she would have been entitled to receive under this Plan
(disregarding an early retirement window benefit available under
this Supplement) shall be immediately due and payable to the Trust
without further notice. In the event a participant shall contest
the validity of such waiver agreement, the early retirement window
benefit shall be reduced by an amount equal to the Excess Payment
until the matter is settled or finally resolved by judicial decree
or arbitration. If the waiver agreement is determined to have been
valid and enforceable, such suspended amounts will be paid to such
Participant in a single sum payment without interest or mortality
consideration.
F-6 Amount of Early Retirement Window Benefit. Each eligible Participant
who is entitled to an early retirement window benefit under this
Supplement shall have his or her Normal Retirement Benefit, Early
Retirement Benefit or Vested Retirement Benefit (generically referred
to as a "Retirement Benefit"), whichever is applicable to such
Participant after application of the following, recalculated in
accordance with the following adjustments:
(1) The Participant's Railroad Benefit Service shall be increased by
four (4) years, provided no such increase will result in the
Participant's total Benefit Service exceeding a maximum of forty
(40) years; and provided further, the four (4) year increase will
not apply for purposes of determining a Participant's eligibility
for Tier II benefits under the Railroad Retirement Act as provided
in Section 5.05 of this Plan.
(2) The Participant's age shall be increased by four (4) years for the
sole purpose of determining the nature (after application of
subparagraph (3) hereof) of his or her Retirement Benefit (e.g.,
Normal, Early or Vested) and the number of months of Early
Retirement Reduction factors to be applied
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<PAGE>
for early payment to his or her Retirement Benefit, if any.
(3) The Participant's Years of Vesting Service shall be increased by
four (4) years.
(4) The monthly Early Retirement Reduction factor to be applied for
early payment of the Early Retirement Benefit or Vested Retirement
Benefit, if applicable, under Section 7.03 of this Plan shall be
changed to .167% or 1/6% per month.
(5) The eligibility of a Participant for the Early Retirement
Supplemental Benefit under Section 7.04 of this Plan shall be
determined after application of subparagraphs (2) and (3) hereof,
provided however, the four (4) years added under subparagraph (2)
hereof to the Participant's age shall be disregarded for purposes
of determining when payments of the Early Retirement Supplemental
Benefit will cease.
(6) None of the above shall apply to any Predecessor Plan benefit
formula applicable to this Plan.
(7) Notwithstanding any provision of the Plan to the contrary,
Participants who receive a Vested Retirement Benefit pursuant to
Supplement F shall receive the Early Retirement Supplemental
Benefit described in Section 7.04.
(8) Notwithstanding any provision of the Plan to the contrary, a
Participant who receives a retirement benefit pursuant to
Supplement F shall not receive vesting or benefit service under
Section 4.01(d) and 4.02(e), respectively.
F-7 Form of Payment: The early retirement window benefit determined under
Paragraph F-6 of this Supplement represents the amount of benefit that
is payable under the life annuity form of payment described in Section
9.01(a) of this Plan commencing on the first day of the month on or
after the date of the Participant's termination of employment with the
Company and all Affiliated Companies. However, the early retirement
window benefits under this Supplement shall be payable in the same form
of payment and subject to the same election and consent requirements as
the Participant's benefits determined without regard to this
Supplement, as determined under Article 9, and shall be subject to the
same adjustment factor for such form of payment, if applicable.
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<PAGE>
F-8 Form of Offering Periods and Eligible Groups. The early retirement
window benefit provided under this Supplement shall be available only
during the following offering periods and only to the following
eligible groups of Participants.
During the Involuntary The Eligible Group of
Offering Period from: Participants shall be:
---------------------- ----------------------
__________________ 19__ to All __________________
__________________ 19__ salaried employees of
______________________
Reason for Involuntary Company in Covered
Termination of Employment Employment in its
_________________________ ______________________
_________________________ Department at
_________________________ ______________________
Location
_________________________________________________________
During the Voluntary The Eligible Group of
Offering Period from: Participants shall be:
---------------------- ----------------------
__________________ 19__ to All __________________
__________________ 19__ salaried employees of
______________________
Company in Covered
Employment in its
______________________
Department at
______________________
Location
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<PAGE>
SCHEDULE A
----------
OPTION FACTORS
--------------
For benefits payable under optional forms of payment, the following factors
shall be used for determining actuarial equivalence. The factors shall be
multiplied by the benefit payable on a life-only annuity basis, and the
resulting benefit amount represents the actuarial equivalent benefit payable on
the specified form of payment.
<TABLE>
<CAPTION>
Adjustments to Base Factor For Each Year Participant's Age:
-----------------------------------------------------------
Is Less Than Is More Than
Form of Payment Factor Is Less Than 65 Is More Than 65 Beneficiary's Age Beneficiary's Age
--------------- ------ --------------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Certain and life option
with certain period of:
10 years .920 +.005 -.005 None None
Contingent annuitant
option, with the
following percentage
continued to the
beneficiary:
50% .900 +.004 -.004 +.004 -.004
66-2/3% .870 +.005 -.005 +.005 -.005
100% .815 +.006 -.006 +.006 -.006
</TABLE>
If required, factors for certain periods or contingent benefit percentages other
than those shown above may be determined by interpolating between the factors
shown. In no case may any factors exceed 0.999.
Unless the Plan specifically states otherwise, actuarial equivalence for any
other purpose under the Plan shall be based on the following assumptions.
. Interest discount rate: 8% per annum
. Mortality table: The Mortality Table specified in IRS Revenue Ruling
95-6 or such Mortality Table as is promulgated to specifically
supersede such Table.
This Schedule A contains factors for a variety of options, not all of which may
be available to a participant under the terms of the plan. In all cases, the
provisions of the plan document shall control eligibility for any form of
benefit.
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<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Burlington Northern Santa Fe Corporation of our report dated
December 22, 1994 on our audit of the balance sheet of BNSF Corporation (now
known as Burlington Northern Santa Fe Corporation) as of December 22, 1994.
COOPERS & LYBRAND L.L.P.
Fort Worth, Texas
September 21, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Burlington Northern Santa Fe Corporation of our report dated January
16, 1995, on our audits of the consolidated financial statements and financial
statement schedule of Burlington Northern Inc. and Subsidiaries as of December
31, 1994 and 1993, and for the years ended December 31, 1994, 1993 and 1992.
COOPERS & LYBRAND L.L.P.
Fort Worth, Texas
September 21, 1995
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Burlington Northern Santa Fe Corporation of (a) our
report dated February 21, 1995, which appears on page 19 of the 1994 Annual
Report of Santa Fe Pacific Corporation, which is incorporated by reference in
Santa Fe Pacific Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994; and (b) our report dated June 23, 1995, included in Exhibit
99(a) of Santa Fe Pacific Corporation's Annual Report on Form 10-K/A relating to
the Santa Fe Pacific Retirement and Savings Plan for Salaried Employees.
Price Waterhouse LLP
Kansas City, Missouri
September 22, 1995
