As filed with the Securities and Exchange Commission on January 3, 1997
File No. 333-
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)
2650 LOU MENK DRIVE
FORT WORTH, TEXAS 76131
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(817) 333-2000
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
(FULL TITLE OF THE PLAN)
JEFFREY R. MORELAND
1700 EAST GOLF ROAD
SCHAUMBURG, ILLINOIS 60173-5860
(847) 995-6805
(AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Share* Offerering Price* Fee
Common Stock, 3,000,000
$.01 par value Shares $85.4375 $256,312,500 $77,670.45
* 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 January 2, 1997.
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, are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, as amended;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
(c) The Company's Current Reports on Form 8-K dated February 13,
1996, April 11, 1996, June 4, 1996, June 19, 1996 and October 22,
1996; and
(c) The description of the common stock, $.01 par value per share, of
the Company (the "Common Stock") contained in the section entitled
"Certain Additional Information Concerning Holdings" from the
Prospectus dated January 13, 1995, included as part of the
Registration Statement on Form S-4 (Nos. 33-56183, 33-57069) of
Burlington Northern Inc and the Registrant.
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, as amended,
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.
The Company is incorporated under the laws of the State of Delaware. The
General Corporation Law of the State of Delaware (the "Delaware Statute")
provides for indemnification of directors, officers, and employees in certain
situations. The Delaware Statute, by its terms, expressly permits
indemnification where such a person acted in good faith and in a manner such
person reasonably believed to be in, or not opposed to, the corporation's best
interests, and, in a criminal action, if such person had no reasonable cause
to believe that his or her conduct was unlawful. In the case of a claim by a
third party (i.e., a party other than the corporation), the Delaware Statute
expressly permits indemnification for expenses, judgments, settlement
payments, and other costs. In the case of a claim by or in the right of the
corporation (including stockholder derivative suits), the Delaware Statute
expressly provides for indemnification for expenses only, and not for amounts
paid in judgment or settlement of such actions. Moreover, a corporation
cannot, under the Delaware Statute, provide for indemnification against
expenses in the case of an action by or in the right of the corporation if the
person seeking indemnification is adjudged liable to the
<PAGE>
corporation, unless the indemnification is ordered by a court. The Delaware
Statute also permits advancement of expenses to directors and officers upon
receipt of an undertaking by such director or officer to repay all amounts
advanced if it shall ultimately be determined that he or she is not entitled
to be indemnified by the corporation. In addition, the Delaware Statute
specifically provides that its terms shall not be deemed exclusive of any
other right to indemnification to which a director, officer, or employee may
be entitled under any by-law, agreement, or vote of stockholders or
disinterested directors.
The By-Laws of the Company provide that the Company shall indemnify and
hold harmless, to the full extent permitted by law, any person made, or
threatened to be made, a party to an action, suit, or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
he or she is or was a director or officer of the Company, or served or serves
as a director, officer, employee, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan, at the request of the Company.
The Company also maintains directors' and officers' liability insurance
which purports to insure the Company against certain costs of indemnification
which may be incurred by the Company pursuant to the foregoing provisions, and
to insure directors and officers of the Company against certain liabilities
incurred by them in the discharge of their function as such officers and
directors, except for liabilities resulting from their own malfeasance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits which is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
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; provided that, notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
<PAGE>
(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 (i) and (ii) above 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.
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.
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.
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
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 Village of Schaumburg, State of Illinois, on
December 30, 1996.
BURLINGTON NORTHERN SANTA FE CORPORATION
By /S/ Jeffery R. Moreland
Jeffrey R. Moreland
Senior Vice President-Law and General Counsel
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby 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 this 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
Registrant's Chairman, President, or Senior Vice President-Law and General
Counsel at the time such action shall be taken and (ii) any other officer of
the Registrant or of a wholly-owned subsidiary of the Registrant who shall be
authorized by any 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 by the following persons in the
capacities indicated and on the 30th day of December, 1996.
/S/ Robert D. Krebs
Robert D. Krebs,
President and Chief Executive Officer
(Principal Executive Officer) and Director
/S/ Denis E. Springer
Denis E. Springer,
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
/S/ Thomas N. Hund
Thomas N. Hund,
Vice President and Controller
(Principal Accounting Officer)
/S/ Joseph F. Alibrandi
Joseph F. Alibrandi, Director
/S/ Jack S. Blanton
Jack S. Blanton, Director
John J. Burns, Jr., Director
/S/ Daniel P. Davison
Daniel P. Davison, Director and Chairman
/S/ George Deukmejian
George Deukmejian, Director
/S/ Daniel J. Evans
Daniel J. Evans, Director
/S/ Bill M. Lindig
Bill M. Lindig, Director
/S/ Ben F. Love
Ben F. Love, Director
/S/ Roy S. Roberts
Roy S. Roberts, Director
/S/ Marc J. Shapiro
Marc J. Shapiro, Director
/S/ Arnold R. Weber
Arnold R. Weber, Director
/S/ Robert H. West
Robert H. West, Director
/S/ J. Steven Whisler
J. Steven Whisler, Director
/S/ Edward E. Whitacre
Edward E. Whitacre, Jr., Director
Ronald B. Woodard, Director
/S/ Michael B. Yanney
Michael B. Yanney, Director
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Burlington Northern Santa Fe Investment and Retirement Plan has caused this
registration statement to be signed on its behalf by the undersigned Plan
Administrator, thereunto duly authorized, in the Village of Schaumburg, State
of Illinois, on the 30th day of December, 1996.
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
By /S/ James B. Dagnon
Name: James B. Dagnon
Title: Senior Vice President - Employee Relations
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document
3.1 Amended and Restated Certificate of Incorporation of the Registrant.
Incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1995.
3.2 By-Laws of the Registrant. Incorporated by reference to Exhibit 3.2
to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995.
5.2 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.
10 Burlington Northern Santa Fe Investment and Retirement Plan.
23.1 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included with signature page to the registration
statement).
BURLINGTON NORTHERN SANTA FE
INVESTMENT AND RETIREMENT PLAN
<PAGE>
BURLINGTON NORTHERN SANTA FE INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS
Section Page
ARTICLE 1 - ESTABLISHMENT OF THE PLAN
1.1 Adoption of Plan 1
1.2 Amendment of Predecessor Plans 1
1.3 Assumption of Assets and Liabilities of Predecessor Plans 1
1.4 Internal Revenue Service Approval 1
1.5 Special Rule For Pipeline Employees 1
ARTICLE 2 - DEFINITIONS
2.1 Accounts 2
2.2 Affiliated Company 2
2.3 Average Contribution Percentage 2
2.4 Beneficiary 2
2.5 Code 2
2.6 Company 2
2.7 Compensation 3
2.8 Deferred Contributions 3
2.9 Deferred Contributions Account 3
2.10 Employee 3
2.11 Employer 3
2.12 Employer Contributions 3
2.13 Employer Contributions Account 3
2.14 ERISA 4
2.15 ESOP Account 4
2.16 Flex Account 4
2.17 IRA Account 4
2.18 Named Fiduciary 4
2.19 Highly Compensated Employee 4
2.20 Normal Retirement Date 4
2.21 Participant 5
2.22 Participant Contributions 5
2.23 Participant Contributions Account 5
2.24 Participation Service 5
2.25 Participating Company 5
- i -
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS - Continued
Section Page
ARTICLE 2 - DEFINITIONS (Continued)
2.26 Plan 5
2.27 Plan Administrator 5
2.28 Plan Year 5
2.29 Qualified Joint And Survivor Annuity 5
2.30 Rollover Account 5
2.31 Total Disability 5
2.32 Trustee 5
2.33 Trustee Transfer Account 6
2.34 Valuation Date 6
2.35 Vesting Service 6
2.36 Number and Gender 6
ARTICLE 3 - EMPLOYEES ENTITLED TO PARTICIPATE
3.1 Date Of Eligibility 7
3.2 Termination Of Employment 7
3.3 Participation Requirements 7
ARTICLE 4 - CONTRIBUTIONS
4.1 Investing Contributions 8
4.2 Contribution Elections 8
4.3 Elections 8
4.4 Highly Compensated Employee Limit 8
4.5 Employer Contributions 10
4.6 Participant Contributions By Payroll Deductions 10
4.7 Suspension of Contributions and Changes in
Contribution Rates 10
4.8 Resumption Of Contributions 11
4.9 Administrative Costs 11
4.10 Transfer of Accounts To and From Other Plans 11
4.11 Correction of Excess Contributions 11
4.12 Maximum Contributions 12
- ii -
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS - Continued
Section Page
ARTICLE 5 - INVESTMENT OF CONTRIBUTIONS
5.1 Investment Choices 13
5.2 Investment Elections 14
5.3 Investment Election Limitation 14
5.4 Valuation of Accounts 14
5.5 Interfund Transfers 15
5.6 Tender or Exchange Offer 15
ARTICLE 6 - VESTING
6.1 Vested Interest 16
6.2 Employee Transfers 16
6.3 Nonforfeitable Rights 17
ARTICLE 7 - WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
7.1 Participant Contributions Account Withdrawals 18
7.2 Age 59 1/2 Withdrawals 18
7.3 Hardship Withdrawals 18
7.4 Outstanding Loans 20
ARTICLE 8 - DISTRIBUTIONS OTHER THAN WITHDRAWALS
8.1 Distribution Elections 22
8.2 Death of a Participant 23
8.3 Missing Participants 24
8.4 Failure To Make an Election 24
8.5 Payment Unable To Be Distributed 24
8.6 Notification Of Annuity Options 25
8.7 Request For Annuity Options 25
8.8 Valuation Of Accounts 25
8.9 Notices Of Distribution 25
- iii -
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS - Continued
Section Page
ARTICLE 9 - FORFEITURES
9.1 Forfeiture Of Employer Contributions Account 27
ARTICLE 10 - ADMINISTRATION
10.1 Plan Administrator 28
10.2 Administrative Powers 28
10.3 Information To Participants 28
10.4 Direction To Trustee 29
10.5 Requests To Trustee 29
10.6 Employment Of Advisors And Staff 29
10.7 Fiduciary Duties 29
10.8 Indemnification 29
ARTICLE 11 - AMENDMENTS
11.1 Plan Amendments 30
ARTICLE 12 - TERMINATION OF PLAN
12.1 Termination Of Plan By Participating Company 31
12.2 Vesting Rights 31
12.3 Pro Rata Distribution Of Forfeitures 31
12.4 Partial Termination 31
ARTICLE 13 - MISCELLANEOUS PROVISIONS
13.1 Interpretation Of Plan Provisions 32
13.2 Prohibition On Reversion 32
13.3 Adoption of Plan By Affiliated Company 32
- iv -
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS - Continued
Section Page
ARTICLE 13 - MISCELLANEOUS PROVISIONS (Continued)
13.4 Alienation Of Benefits 32
13.5 Qualified Domestic Relations Orders 32
13.6 Appeals 33
13.7 Availability Of Plan Document 33
13.8 Incapacitated Persons 33
13.9 Legal Rights of Participants 33
13.10 Final Judgments 34
13.11 Plan Provisions Held Illegal or Invalid 34
13.12 Illinois Law ` 34
13.13 Intent 34
13.14 Uniformed Services Employment and Reemployment
Rights Act 35
13.15 Application of Compensation Limitation 35
13.16 Telephonic and Electronic Transmissions
Treated as Signed Writings 35
ARTICLE 14 - TOP-HEAVY RULES
14.1 Top-Heavy Rules 36
14.2 Definition Of Top-Heavy 37
14.3 Key Employees 37
14.4 Additional Top-Heavy Rules 37
ARTICLE 15 - LOANS
15.1 Loan Applications 39
15.2 Loan Requirements 39
15.3 Repayment Of Plan Loans 40
15.4 Loan Application Approval 40
15.5 Borrowing Sequence 41
15.6 Funding Of Loans 41
15.7 Loan Repayments 41
15.8 Loan Security 41
- v -
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
TABLE OF CONTENTS - Continued and Concluded
Section Page
ARTICLE 15 - LOANS (Continued)
15.9 Repayment While On Leave Of Absence Or While
Disabled 41
15.10 Default 41
15.11 Former Participants 42
15.12 General Requirements 42
ARTICLE 16 - ROLLOVERS AND TRANSFERS
16.1 Rollovers 43
16.2 Trustee Transfers From Other Qualified Plans 43
16.3 Trustee Transfer To Other Qualified Plans 43
16.4 Definitions 43
- vi -
<PAGE>
BURLINGTON NORTHERN INVESTMENT AND RETIREMENT PLAN
ARTICLE 1 - ESTABLISHMENT OF THE PLAN
1.1 Adoption of Plan. The Burlington Northern Santa Fe Investment and
Retirement Plan described herein (hereinafter called the "Plan") is adopted
by Burlington Northern Santa Fe Corporation (hereinafter called the
"Company") effective January 1, 1997, to provide benefits to eligible
salaried employees of the Company and its Affiliated Companies.
1.2 Amendment of Predecessor Plans. Effective January 1, 1997, the
Plan amends, replaces, and combines the following plans (hereinafter called
"Predecessor Plans"):
(a) The Santa Fe Pacific Retirement and Savings Plan as in effect on
December 31, 1996, attached hereto as Exhibit I (hereinafter called the "SFP
Plan"), and
(b) the Burlington Northern Inc. Thrift and Profit Sharing Plan I as
in effect on December 31, 1996, attached hereto as Exhibit II (hereinafter
called the "BNI Plan").
The benefits with respect to each person who is a Participant on and
after January 1, 1997, shall be determined under the Plan. The benefits of
each other participant or former participant in the Predecessor Plans who
does not become a Participant on and after January 1, 1997, shall be
determined under the provisions of the Predecessor Plan in which he was a
participant in effect at the time of his termination of employment, and such
benefits shall be payable under the Plan. As of January 1, 1997, the Plan
has been adopted by all Affiliated Companies which had adopted a Predecessor
Plan.
1.3 Assumption of Assets and Liabilities of Predecessor Plans.
Effective January 1, 1997, all assets and liabilities of the Predecessor
Plans shall be assumed by the Plan.
1.4 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.
1.5 Special Rule For Pipeline Employees. Participants who are Employees
of Santa Fe Pacific Pipelines, Inc. shall be governed by the provisions of
the SFP Plan as it existed prior to January 1, 1997, until January 31, 1997.
<PAGE>
ARTICLE 2 -DEFINITIONS
When used in this Plan, the following terms shall have the meanings set
forth below unless a different meaning is plainly required by the context.
2.1 "Accounts" shall mean a Participant's Deferred Contributions
Account, Employer Contributions Account, Participant Contributions Account,
Rollover Account, Trustee Transfer Account, ESOP Account, IRA Account, and
Flex Account, if any.
2.2 "Affiliated Company" shall mean every corporation (including the
Company) which is a member of a controlled group of corporations (within the
meaning of Section 414(b) of the Code), which includes 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. For purposes of Section 4.12, the modification of Sections 414(b)
and 414(c) of the Code by Section 415(b) of the Code is incorporated.
2.3 "Average Contribution Percentage" means, for Highly Compensated
Employees for a Plan Year, the average of the ratios for each Highly
Compensated Employee of:
(a) the amount of Deferred Contributions (or the total of Employee
Contributions plus Company Contributions) actually payable to the Trustee
under the Plan on behalf of each such Highly Compensated Employee for such
Plan Year, to
(b) such Highly Compensated Employee's Compensation for such Plan
Year.
Average Contribution Percentage means, for Employees other than Highly
Compensated Employees for a Plan Year, the average of the ratios for each
Employee other than a Highly Compensated Employee of:
(a) the amount of Deferred Contributions (or the total of Employee
Contributions plus Company Contributions) actually payable to the Trustee
under the Plan on behalf of each such Employee other than a Highly
Compensated Employee for the prior Plan Year, to
(b) such Employee's Compensation for such prior Plan Year.
2.4 "Beneficiary" shall mean any individual, trust or other recipient
named by a Participant to receive benefits payable hereunder upon his
death, or the spouse, children or estate of the Participant, all as
provided in Section 8.2 hereof.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Company" shall mean Burlington Northern Santa Fe Corporation.
<PAGE>
2.7 "Compensation" shall mean the total of salary, wages (including cash
bonuses, bonuses which are exchanged for an Exchange Grant under the BNSF
Incentive Compensation Bonus Stock Program or any similar program
maintained by an Affiliated Company and bonuses which are deferred under
the BNSF Senior Management Stock Deferral Plan) and any deferrals made
under this Plan and any cafeteria plan which meets the requirements of
Section 125 of the Code, excluding overtime, severance benefits, payments
while on a leave of absence other than for short-term illness, unused
vacation pay, business expense reimbursements, relocation benefits and
geographic differentials, any income realized for federal tax purposes as
a result of group life insurance or other employee benefit plans, the
grant of stock or the grant or exercise of an option to acquire stock,
payments made under any company Long-Term Disability Plan paid to a
Participant by a Participating Company, and amounts deferred under a
non-qualified salary deferral plan (other than bonuses which are deferred
under the BNSF Senior Management Stock Deferral Plan), provided, however,
that, with respect to former participants in the SFP Plan, bonuses which
are earned prior to 1997 shall not be considered to be Compensation.
Notwithstanding anything in the preceding sentence to the contrary, the
amount deemed to be "Compensation" with respect to any particular
Participant shall not in any event exceed $150,000 during any Plan Year.
The $150,000 limitation is subject to cost-of-living adjustments made by
the Secretary of the Treasury or his delegate.
2.8 "Deferred Contributions" shall mean Contributions made on behalf of
a Participant pursuant his election pursuant to Section 4.2(a) hereof.
2.9 "Deferred Contributions Account" shall mean that portion of a
Participant's interest in this Plan which is attributable to his Deferred
Contributions Account in the SFP Plan as of December 31, 1996, his Basic
Contributions to the BNI Plan as of December 31, 1996, and Deferred
Contributions made on his behalf hereunder pursuant to Section 4.2(a)
hereof.
2.10 "Employee" shall mean any person, other than a non-resident alien,
regularly assigned pursuant to the employment records of the Employer (as
determined by it in its discretion) to a salaried position not subject to
a collective agreement. In no event shall a leased employee (as defined
in Section 414(n)(2) of the Code or a person the Employer has categorized
as an independent contractor be considered an Employee.
2.11 "Employer" shall mean a Participating Company, or any successor
organization which shall assume the obligations of this Plan with respect
to its Employees.
2.12 "Employer Contributions" shall mean Contributions made by the
Employer to the Accounts of Participants pursuant to Section 4.5 hereof.
2.13 "Employer Contributions Account" shall mean that portion of a
Participant's interest in this Plan which is attributable to his Employer
Contributions Account in the SFP Plan as of December 31, 1996, his
Matching Company Contributions to the BNI Plan as of December 31, 1996,
<PAGE>
and Employer Contributions made on his behalf hereunder pursuant to
Section 4.5 hereof.
2.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
2.15 "ESOP Account" shall mean a Participant's interest in the Plan
attributable to his ESOP Rollover Account in the BNI Plan as of December
31, 1996, and his TRASOP Account in the SFP Plan as of December 31, 1996.
2.16 "Flex Account" shall mean a Participant's interest in the Plan
attributable to Flex Contributions made to the BNI Plan as of December 31,
1996.
2.17 "IRA Account" shall mean a Participant's interest in the Plan
attributable to his IRA Account in the BNI Plan as of December 31, 1996.
2.18 "Named Fiduciary" shall mean the Plan Administrator.
2.19 "Highly Compensated Employee" means an Employee who
(a) at any time during the current Plan Year or the preceding Plan
Year was a 5-percent owner (as defined in Section 416(i)(1) of the Code), or
(b) during the preceding Plan Year had compensation (as defined in
Section 414(q)(4) of the Code) from the Employer in excess of $80,000 (as
adjusted from time to time in accordance with Section 414(q)(1) of the Code),
and, if the Company elects the application of this clause for such preceding
year, was in the group of the top 20% of employees when ranked on the basis
of such compensation for such preceding year.
For purposes of this section,
(a) a former Employee shall also be treated as a Highly Compensated
Employee if such former Employee was a Highly Compensated Employee when such
Employee terminated employment or such Employee was a Highly Compensated
Employee at any time after attaining age 55, and
(b) an Employee who performs no service for the company during a Plan
Year (for example, an employee who is on an authorized leave of absence
throughout the Plan Year) shall be treated as having terminated employment in
the Plan Year in which he last performed services for the Company.
2.20 "Normal Retirement Date" shall be a Participant's 65th birthday.
<PAGE>
2.21 "Participant" shall mean a Participant in a Predecessor Plan on
December 31, 1996, and an Employee who meets the eligibility requirements
set forth in Article III hereof and who has taken all of the steps
required by said Article III.
2.22 "Participant Contributions" shall mean Contributions made by
Participants pursuant to Section 4.2(b) hereof.
2.23 "Participant Contributions Account" shall mean that portion of a
Participant's interest in this Plan which is attributable to his
Participant Contributions Account in the SFP Plan as of December 31,
1996, his after-tax Basic and Supplemental Contributions to the BNI Plan
as of December 31, 1996, and Participant Contributions made hereunder
pursuant to Section 4.2(b) hereof.
2.24 "Participation Service" means the completion of thirty days
compensated service in a salaried position determined from the Employee's
date of hire. Compensated service shall include any hours the Employee
is on a leave of absence granted by the Participating or Affiliated
Company with or without pay and shall include back pay, irrespective of
mitigation or damages, awarded or agreed to be paid to him by a
Participating or Affiliated Company.
2.25 "Participating Company" shall mean every corporation which is an
Affiliated Company which has adopted this plan pursuant to Article 13.
2.26 "Plan" shall mean the Burlington Northern Santa Fe Investment and
Retirement Plan set forth in and by this document and all subsequent
amendments thereto.
2.27 "Plan Administrator" shall mean the Employee Benefits Committee
which shall be a committee of at least three persons appointed by the
Chief Executive Officer of the Company to serve as Plan Administrator.
2.28 "Plan Year" shall be a period of the calendar year.
2.29 "Qualified Joint and Survivor Annuity" shall mean an annuity for
the life of the Participant with a survivor annuity for the life of his
spouse which is neither (i) less than one-half, nor (ii) greater than,
the amount of the annuity payable for the joint lives of the Participant
and his spouse.
2.30 "Rollover Account" shall mean a Participant's interest in the Plan
attributable to Rollover Contributions to the Plan or a Predecessor Plan.
2.31 "Total Disability" shall mean a Participant's eligibility for benefits
under the Burlington Northern Santa Fe Long Term Disability Plan.
2.32 "Trustee" shall mean the trustee under any trust agreement
established between the Company and the Trustee for the purpose of
implementing the Plan, or a legal reserve life insurance company
<PAGE>
organized or incorporated under the laws of any one of the United States
of America and duly licensed in the jurisdiction specified in Section
11.2, whichever is applicable. Whenever the term Trustee in this Plan
refers to a life insurance company, contributions shall be held and
invested pursuant to a group annuity contract where required by law, and
the insurer shall not be subject to the rules and requirements generally
applicable to trustees of qualified plans.
2.33 "Trustee Transfer Account" shall means a Participant's interest in
the Plan attributable to Trustee Transfers to the Plan or a Predecessor
Plan.
2.34 "Valuation Date" shall mean each business day on which the New York
Stock Exchange is open for business, which shall be used hereunder for
purposes of determining account values.
2.35 "Vesting Service" shall mean the number of Plan Years in which the
Employee is compensated for at least 1,000 hours of work by the Employer
or any Affiliated Company in any capacity. In determining whether or not
the 1,000 hour requirement has been met, an Employee will be credited
with 190 hours for any month in which he receives compensation for one or
more hours. Compensated hours shall include any hour the Employee is on
a leave of absence granted by the Participating or Affiliated Company
with or without pay and shall also include back pay, irrespective of
mitigation of damages, awarded or agreed to be paid to him by a
Participating or Affiliated Company, computed in conformity with the
Employee's basis of compensation at the time to which the award or
agreement pertains.
2.36 Number and Gender. The singular form of any word shall include the
plural and the masculine gender shall include the feminine wherever
necessary for the proper interpretation of this Plan.
<PAGE>
ARTICLE 3 -EMPLOYEES ENTITLED TO PARTICIPATE
3.1 Date of Eligibility. Each Employee of a Participating Company
shall be eligible to become a Participant as of the first day of any month
after having completed his Participation Service.
3.2 Termination of Employment. In the event any Employee's employment
with a Participating Company is terminated after the Employee has become
eligible to participate, and such Employee is thereafter rehired, he shall be
eligible for participation as of his date of rehire.
3.3 Participation Requirements. To become a Participant, an Employee
must meet the above requirements of this Article and, if required by the Plan
Administrator, execute and deliver to the Participating Company, in
accordance with procedures established by each Participating Company and the
Plan Administrator, a written election to participate indicating his desire
to have a portion of his Compensation contributed to the Plan as Deferred
Contributions or his desire to make Participant Contributions to the Plan.
He must specify his chosen rate of Contributions and authorize the
Participating Company to make regular payroll deductions of any Participant
Contributions. In addition, the Employee must make an investment election as
described in Article V hereof. No Employee shall become a Participant until
he has met the above requirements. Elections shall be processed by the
Participating Companies, in accordance with procedures established by each
Participating Company, including the use of electronic or telephonic means of
transmission, as soon as reasonably practicable after their receipt, but will
always be effective on the first day of a month.
<PAGE>
ARTICLE 4 -CONTRIBUTIONS
4.1 Investing Contributions. For the purpose of investing contributions
under this Plan, the Company shall establish one or more trusts or enter
into one or more group annuity contracts with one or more insurers, or may
establish a combination of one or more trusts or insurance contracts. The
Company shall have the responsibility for selecting the Trustees hereunder
and may select the investment Funds to be offered or may establish
additional or substitute other funds for the investment of Participant
contributions and other assets held in the Plan.
4.2 Contribution Elections. Each Employee who is eligible to
participate in the Plan may elect to
(a) have his Compensation reduced by a whole percentage and have the
amount by which his Compensation is reduced contributed to the Plan by his
Employer on his behalf as Deferred Contributions, and
(b) contribute a whole percentage of his Compensation to the Plan as
Participant Contributions,
provided that the total amount of Deferred Contributions plus Participant
Contributions may not exceed 12 percent of a Participant's Compensation. To
the extent permitted by the Plan Administrator, separate elections may be
made with respect to Compensation which is paid annually under an incentive
compensation plan of a Participating Company and all other Compensation.
4.3 Elections. All elections shall apply to Compensation to be received
after the election becomes effective. Any eligible Employee who fails to
properly complete an election in a timely manner shall be deemed to have
elected to have all of his Compensation included in his regular paycheck.
4.4 Highly Compensated Employee Limit. Notwithstanding any other
provisions of the Plan to the contrary, the Deferred Contributions to the
Plan on behalf of Highly Compensated Employees shall be limited to the extent
necessary to ensure that the Average Contribution Percentage for Highly
Compensated Employees for any Plan Year bears a relationship to the Average
Contribution Percentage for all other eligible Employees for the prior Plan
Year that meets either of the tests set forth below in accordance with the
applicable regulations under Section 401(k) of the Code which are hereby
incorporated by reference.
Similarly the total of Participant Contributions plus Employer
Contributions to the Plan on behalf of each Highly Compensated Employee shall
be limited to the extent necessary to ensure that the Average Contribution
Percentage for Highly Compensated Employees for any Plan Year bears such a
relationship to the Average Contribution Percentage for all other eligible
Employees for the prior Plan Year that meets either of the tests set forth
<PAGE>
below in accordance with the applicable regulations under Section 401(m) of
the Code which are hereby incorporated by reference.
(a) The Average Contribution Percentage for the group of Highly
Compensated Employees is not more than the Average Contribution Percentage of
all other eligible Employees multiplied by 1.25; or
(b) The excess of the Average Contribution Percentage for the group
of Highly Compensated Employees over that of all other eligible Employees is
not more than two percentage points, and the Average Contribution Percentage
for the group of Highly Compensated Employees is not more than the Average
Contribution Percentage of all other eligible Employees multiplied by 2.
The greater of (a) or (b) is illustrated in the table below:
If the Average Contribution Percentage Then the Maximum Average Contribution
of Employees Other Than Highly Percentage of Highly Compensated
Compensated Employees is Employees (the Limitation Percentage) is
1% 2.0%
2% 4.0%
3% 5.0%
4% 6.0%
5% 7.0%
6% 8.0%
7% 9.0%
8% 10.0%
9% 11.0%
10% 12.0% (Section 4.2 limit)
11% 12.0% (Section 4.2 limit)
12% 12.0% (Section 4.2 limit)
The applicable restrictions on the multiple use of the alternative
limitation under (b) above shall apply in accordance with the regulations
under Section 401(m)(9)(A) of the Code to appropriately limit the applicable
maximum percentages for Highly Compensated Employees.
If the Plan Administrator determines that the limitations set forth in
this section would be exceeded for the Plan Year, then the Plan Administrator
may prospectively reduce to the Limitation Percentage described in the
foregoing table the percentage amount of Deferred Contributions (or the total
percentage amount of Participating Contributions plus Employer Contributions)
of each Highly Compensated Employee whose Deferred Contribution percentage is
more than the Limitation Percentage (or whose Participant Contribution plus
Employer Contribution percentage gives rise to a percentage in excess of the
Limitation Percentage). The Plan Administrator shall have the authority to
establish a lower Limitation Percentage if, in the discretion of the Plan
<PAGE>
Administrator, this would be beneficial to the Plan by ensuring compliance
with the safe-harbor provisions of Sections 401(k)(3)(A) and 401(m)(2) of the
Code. The reduced percentage for each such Highly Compensated Employee shall
be substituted for his actual elected percentages and shall represent the
percentage of his Compensation that shall be paid into the Plan on his
behalf. The amount of any reduction which is necessary shall be included in
the Participant's regular paycheck or, in the case of Deferred Contributions
and at the election of the Participant, contributed to the Plan as
Participant Contributions.
4.5 Employer Contributions. To the extent that year-to-date net income
or retained income of the Company and its Affiliated Companies is sufficient,
the Participating Companies shall make Employer Contributions to the Trustee
without interest with respect to their Participants or former Participants
who have Accounts in the Plan when such contributions are made. The amount
of the Employer Contribution to be made with respect to any Participant shall
be equal to 50% of the Deferred Contributions up to 6 percent of Compensation
actually made hereunder.
To the extent that year-to-date net income or retained income of the
Company and its Affiliated Companies is sufficient, a Participating Company
may make additional Employer Contributions to the Trustee if, in the sole
judgment of the Participating Company, financial and other objectives of the
Participating Company are met. Such additional Employer Contributions shall
be made without interest after the close of the Plan Year to which such
objectives relate with respect to Participants or former Participants who
have Accounts in the Plan when such contributions are made. The amount of
such additional Employer Contribution to be made with respect to Participants
shall be equal to a uniform percentage, not to exceed 30%, of the Deferred
Contributions up to 6 percent of Compensation actually made hereunder.
In the event year-to-date net income or retained income of the Company
and its Affiliated Companies is insufficient to fund all Employer
Contributions relating to Participants of all Participating Companies at a
100% level, no Employer Contributions shall be made by any Participating
Company.
4.6 Participant Contributions By Payroll Deductions. Participant
Contributions shall be made by means of payroll deductions, and the amounts
so deducted shall be paid no less frequently than monthly or as soon as
reasonably practicable without interest to the Trustee by the Participating
Companies and shall be credited to the Participant's Participant
Contributions Account.
4.7 Suspension of Contributions and Changes in Contribution Rates. A
Participant may elect to suspend his Contributions or change his rate or
rates of Contributions on any day, but a change shall not be effective more
frequently than twice in a calendar month. A Participant's election to
suspend or change his rate of Contributions must be made in accordance with
procedures established by the Plan Administrator. Such election shall be
processed in accordance with such procedures as shall be established by the
Plan Administrator but not less frequently than twice per month.
<PAGE>
4.8 Resumption of Contributions. If the Participant elects to suspend
all of his Contributions, he may elect to resume Contributions subject to the
limitations contained in Section 4.12 of this Article. The election to
resume contributions must be made in accordance with procedures established
by the Plan Administrator and shall be processed as soon as reasonably
practical.
4.9 Administrative Costs. The Company shall require the Participating
Companies to make additional contributions hereunder sufficient to defray the
expenses of administering this Plan, including any expense charges or fees of
the Trustee other than Trustee charges or expenses attributable to the
operating of the Funds described in Section 5.1.
4.10 Transfer of Accounts To and From Other Plans. Subject to such
limitations as the Plan Administrator may impose, Participants may transfer
accounts in the Plan to a Plan maintained by an Affiliated Company which
includes a qualified cash or deferred arrangement under Section 401(k) of the
Code, provided that such transfer shall occur only so long as the transfer to
such other plan meets the requirements of Section 401(a) of the Code.
Subject to such limitations as the Plan Administrator may impose,
Participants may transfer accounts in a Plan maintained by an Affiliated
Company which includes a qualified cash or deferred arrangement under Section
401(k) of the Code to the Plan provided that such transfer shall occur only
so long as the transfer from such other plan meets the requirements of
Section 401(a) of the Code.
4.11 Correction of Excess Contributions. Notwithstanding any other
provision of the Plan, contributions in excess of the limits of Section
401(k)(3) or Section 401(m)(2) of the Code, plus any income and minus any
loss allocable thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose accounts such excess contributions
(including excess aggregate Employer and Participant Contributions) were
allocated for the preceding Plan Year. Such distributions shall be made to
Highly Compensated Employees on the basis of the amount of contributions by,
or on behalf of, each of such Highly Compensated Employees in accordance with
Treasury Regulations.
No Employer Contributions shall be made with respect to an excess
contribution (including an excess aggregate Employer and Participant
contribution) or excess deferral distributed to a Participant. Earnings
attributable to excess deferrals shall be calculated in accordance with IRS
safe harbor provisions. Employer Contributions (and any earnings thereon)
attributable to excess deferrals shall, if not distributed in satisfying Code
Section 401(m) nondiscrimination limitations, be forfeited.
Excess contributions may be treated as an amount distributed to the
Participant and then contributed by the Participant to the Plan as
Participant Contributions. Such recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements as Deferred
Contributions. Amounts may not be recharacterized to the extent that such
amount in combination with other contributions made by or on behalf of that
Participant would exceed any stated limit under the Plan. Recharacterization
<PAGE>
must occur no later than two and one-half months after the last day of the
Plan Year in which such excess contributions occurred.
4.12 Maximum Contributions. Notwithstanding anything contained herein
to the contrary, the Deferred Contributions made to a Participant's Deferred
Contributions Account plus any amount that a Participant elects to defer
under any other qualified cash or deferred arrangement for any Plan Year
shall not exceed $7,000, and the total Contributions made and forfeitures
allocated to the Employer, Participant and Deferred Contributions Accounts of
a Participant for any Plan Year shall not exceed the lessor of $30,000, or
25% of the Participant's compensation as defined in Section 415(c)(3) of the
Code. The $7,000 and $30,000 limitations are subject to cost-of-living
adjustments made by the Secretary of the Treasury or his delegate.
Notwithstanding the foregoing, contributions with respect to any
Participant may be further reduced to the extent necessary, as determined by
the Committee, to prevent disqualification of the Plan under Section 415 of
the Code, which imposes additional limitations on the benefits payable to
Participants who also may be participating in another tax-qualified pension,
profit-sharing, savings or stock bonus plan maintained by the Employer or an
Affiliated Company.
For purposes of this limitation, all defined benefit plans of the
Employer and all Affiliated Companies, whether or not terminated, are to be
treated as one defined benefit plan and all defined contribution plans of the
Employer and all Affiliated Companies, whether or not terminated, are to be
treated as one defined contribution plan. The Plan Administrator may decide,
in its sole discretion, under which of said Plans such a Participant's
benefits are to be limited and, if it is under this Plan, shall advise
affected Participants of any additional limitations on their annual
contributions required by this paragraph. The Plan Administrator may elect
to compute the defined contribution fraction for years ending after December
31, 1982, by using the special transitional rule set forth in Section
415(e)(6) of the Code.
<PAGE>
ARTICLE 5 -INVESTMENT OF CONTRIBUTIONS
5.1 Investment Choices. Each Participant shall direct the investment of
his contributions or interest in the Fund by written direction or other
means established by the Plan Administrator, within the investment options
and administrative policies made available by the Plan Administrator and
in accordance with Section 5.2. The continued availability of the
investment funds offered cannot be assumed on the same terms as may apply
from time to time. Each such investment shall be made by the Trustee
subject to the following restrictions and provisions:
(a) Any portion of an investment fund may be maintained in cash at
the discretion of the Trustee pending its permanent investment or
distribution.
(b) The Plan Administrator shall obtain descriptions of the
investment choices available for the purpose of informing Participants with
respect thereto. The selection of investment choices is the sole
responsibility of each Participant, and no employee or representative of the
Company or any Participating Company is authorized to make any recommendation
on investment choices.
(c) Dividends and other distributions received in respect to an
investment choice, shall be reinvested in such investment choice and each
such Participant's account shall be credited with a proportionate number of
shares as determined by the Trustee.
(d) Any such segregated account shall share only in the investment
income, gains and losses generated by the investments directed for such
account.
(e) The Trustee shall not be obligated to make a directed investment
which would, in the sole discretion of the Trustee, require an investment by
the Trustee of more than the amount which is credited, or to be credited to
the account of the Participant.
(f) This Plan is intended to comply with the requirements of Section
404(c) of ERISA. Pursuant to Section 404(c), (i) the account for the
Participant directing investments shall bear all losses from such an
investment and the Trustee, Plan Administrator, and Company shall be free of
any liability arising from such investments, and (ii) the Trustee shall
comply with and carry out such directions without being liable or responsible
in any way for any losses or unfavorable results arising therefrom.
(g) With respect to any investment fund other than the Company Common
Stock fund, the Trustee will exercise voting, tendering and similar rights
appurtenant to a Participant or beneficiary's investment in such investment
fund in its discretion.
(h) With respect to the fund invested exclusively in Company Common
Stock ("Company Stock Account") (other than cash awaiting investment), the
Trustee will vote (and exercise similar rights, other than the right to
tender) shares of Company Common Stock attributable to each Participant's
Account in accordance with the directions of each Participant or beneficiary.
If a Participant or beneficiary fails to properly give directions to the
Trustee within the appropriate time period, the Trustee will vote (or
<PAGE>
exercise the similar rights with respect to) the shares in the same
proportion as it votes (or exercise rights with respect to) shares as to
which directions have been received.
(i) The Plan Administrator shall have the discretion to administer
company stock funds in conjunction with company stock funds maintained in
other qualified employee benefit plans sponsored by the Company or an
Affiliated Company.
5.2 Investment Elections. Prior to the date the Employee becomes a
Participant hereunder, he must make an investment election which will
apply to the investment of all of his contributions and Accounts.
Separate investment elections with respect to Deferred Contributions,
Participant Contributions, Employer Contributions or different Accounts
may not be made. If a Participant wishes to utilize more than one Fund,
he shall notify the Trustee in accordance with procedures established by
the Plan Administrator as to the percentage of his contributions and
Accounts to be invested in each Fund. Such percentage must either be 1%
or a whole percentage.
5.3 Investment Election Limitation. A Participant may elect to change
his investment election with respect to contributions to be made hereunder
at any time. Such election must be made in accordance with procedures
established by the Plan Administrator and shall be processed as soon as
reasonably practicable after receipt.
5.4 Valuation of Accounts. The value of a Participant's Accounts in a
Fund will be accounted for using the unit method of accounting unless the
Plan Administrator elects to use share accounting for one or more funds.
When a Participant elects to invest contributions or Accounts into one of
the investment Funds, the number of shares credited to the Participant's
Account as of the applicable Valuation Date will be equal to the
Participant's contributions or any amount to be invested whether by
intra-plan transfer, direct Rollover or Trustee Transfer to be invested in
the investment fund divided by the price per share of the shares purchased
plus fees and expenses for that Valuation Date by the investment fund. If
a Participant elects to transfer the investment of a Participant's
Accounts out of one of the investment Funds, the amount transferred out of
the respective investment Fund will be equal to the number of shares in
that Participant's Account that are to be transferred, distributed or to
be withdrawn, as of the Valuation Date that the authorized directions are
received by the Trustee from the Plan Administrator, multiplied by the
closing price per share of the shares sold for that Valuation Date on the
New York Stock Exchange Composite Transactions Report. Dividends paid on
any shares in one of the investment Funds are allocated on an accrual
basis based upon the dividend's record date and are reinvested in the
Fund. Notwithstanding the foregoing, in the event of an extraordinary
level of Participant transaction activity or to satisfy Plan
administrative requirements as may be determined in the discretion of the
<PAGE>
Administration Committee, the unit value for Participant transactions may
be determined by the sale or purchase prices of transactions executed on
one or more days following receipt of a Participant's direction and based
upon the execution prices realized by the Fund.
5.5 Interfund Transfers. A Participant may elect at any time to
transfer a whole percentage or a specified whole dollar amount of the
value of his Accounts from one Fund to another. Separate elections to
transfer the Participant's separate Accounts may not be made. The
Participant's election to transfer must be made in accordance with
procedures and restrictions established by the Plan Administrator. Such
election shall be processed as soon as reasonably practicable after its
receipt.
5.6 Tender or Exchange Offer. Each present or former Participant (or,
in the event of his death, his Beneficiary) shall have the right, to the
extent of the number of shares of Company Stock allocated to his Company
Stock Account, to instruct the Trustee in writing as to the manner in
which to respond to a tender offer or exchange offer with respect to
shares of Company Stock. The Plan Administrator shall use its best
efforts timely to distribute or cause to be distributed to each present or
former Participant (or Beneficiary thereof) such information as will be
distributed to stockholders of the Company in connection with any such
tender offer or exchange offer. Upon timely receipt of such instructions,
the Trustee shall respond as instructed with respect to shares of such
stock. The instructions received by the Trustee from Participants shall
be held by the Trustee in confidence and shall not be divulged or released
to any person, including officers or employees of the Company or any
Affiliated Company. If the Trustee shall not receive timely instructions
from a Participant (or Beneficiary thereof) as to the manner in which to
respond to such tender offer or exchange offer, such Participant (or
Beneficiary) shall be deemed to have instructed the Trustee not to tender
or exchange the Company Stock allocated to his Company Stock Account, and
the Trustee shall not tender or exchange any such Company Stock.
Unallocated shares of Company Stock shall be tendered or exchanged in the
same proportion as are shares with respect to which Participants (or
Beneficiaries thereof) have the right of direction.
<PAGE>
ARTICLE 6 - VESTING
6.1 Vested Interest. A Participant's interest in his Accounts shall be
fully vested at all times, except that the interest of a Participant
(other than a former participant in the BNI Plan with at least 3 Years of
Vesting Service as of January 1, 1997) in his Employer Contributions
Account attributable to Employer Contributions made after January 1, 1997,
shall become fully vested at the earliest of the following dates:
(a) The date of the Participant's death while employed by an
Affiliated Company.
(b) The date the Participant incurs Total Disability while employed
by an Affiliated Company.
(c) The Participant's Normal Retirement Date.
(d) The date the Participant actually retires or terminates at a time
when eligible to retire from active service with any and all Participating or
Affiliated Companies pursuant to the terms of any qualified retirement plan
maintained by his Employer.
(e) The date of termination of this Plan or the date of complete
cessation of Employer Contributions hereunder.
Prior to the date that the Participant's interest in his Employer
Contributions Account becomes fully vested in accordance with this Section
6.1, the Participant shall have a vested interest with respect to amounts
attributable to Employer Contributions made after January 1, 1997, in
accordance with the following schedule.
Number of Years of Vesting Service Vested Percentage
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
6.2 Employee Transfers. In the event a Participant transfers from a
Participating Company to a Non-Participating but Affiliated Company, or from
a salaried position to a non-salaried position with an Affiliated Company,
the Participant shall have a vested interest in his Employer Contributions
Account determined as if the Participant had remained an employee of a
Participating Company. Further, in the event that a Participant transfers
from a salaried position to a non-salaried position with an Affiliated
Company, the Participant may, within sixty days of satisfying the
participation requirements of a qualified plan maintained by that Affiliated
Company, elect to transfer his accounts to such plan provided the transfer to
such other qualified plan meets the requirements of Sections 401(a) and 414
of the Code.
<PAGE>
6.3 Nonforfeitable Rights. No amendment to the vesting provisions or
merger of another plan into this Plan shall deprive a Participant of his
nonforfeitable right accrued under this Plan or any other plan to the date of
any such amendment or merger.
In the event of an amendment to the Plan or the merger of another plan
into this Plan which directly or indirectly affects the computation of a
Participant's nonforfeitable percentage under this Plan or another plan, each
Participant with at least 5 years of service with an Affiliated Company may
irrevocably elect to have his nonforfeitable percentage computed under this
Plan without regard to such amendment or merger.
Such election may be made in writing to the Plan Administrator any time
after the adoption of any such amendment or merger, provided, however, that
the election period shall end no earlier than the latest of 60 days following
the date the amendment or merger is adopted or effective or the date the
Participant is given written notification of the amendment or merger by the
Company or Plan Administrator.
<PAGE>
ARTICLE 7 -WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
7.1 Participant Contributions Account Withdrawals. A Participant may at
any time, but not more frequently than once in a calendar month and only
if he has not taken a loan under Article 15 in the same month, elect to
withdraw all or a specified portion of the value of his Participant
Contributions Account, less the amount subject to an outstanding loan.
Such election must be made in accordance with procedures established by
the Plan Administrator and shall be processed as soon as reasonably
practicable and based upon the Valuation Date as of which authorized
directions are received by the Trustee from the Plan Administrator. The
amount shall be withdrawn on a pro rata basis from all Funds.
If a Participant is married and wishes to make a withdrawal under this
section, he must submit to the Plan administrator his spouse's written
consent to such distribution, executed and witnessed by a notary public
not more than 90 days prior to the distribution.
7.2 Age 59 1/2 Withdrawals. A Participant who has attained age 59 1/2
may at any time, but not more frequently than once in a calendar month and
only if he has not taken a loan under Article 15 in the same month, elect
to withdraw all or a specified portion of the value of his Flex Account
(if any), his ESOP Account (if any), his IRA Account (if any), his Trustee
Transfer Account (if any), his Rollover Account (if any), his vested
Employer Contributions Account and his Deferred Contributions Account,
less the amount subject to an outstanding loan, provided, however, that no
such withdrawal shall be permitted unless the Participant Contribution
Account is then or has been previously completely withdrawn by the
Participant and, that withdrawals shall come from each of the Accounts in
the order stated above until each account is completely withdrawn before
proceeding to the next account. Such election must be made in accordance
with procedures established by the Plan Administrator and shall be
processed as soon as reasonably practicable and based upon the Valuation
Date as of which authorized directions are received by the Trustee from
the Plan Administrator. The amount shall be withdrawn on a pro rata basis
from all Funds.
If a Participant is married and wishes to make a withdrawal under this
section, he must submit to the Plan administrator his spouse's written
consent to such distribution, executed and witnessed by a notary public
not more than 90 days prior to the distribution.
7.3 Hardship Withdrawals. A Participant who has not attained age 59 1/2
may at any time, but not more frequently than once a month and only if he
has not taken a loan under Article 15 in the same month, request to
withdraw an amount equal to his Flex Account (if any), his ESOP Account
(if any), his IRA Account (if any), his Trustee Transfer Account (if any),
his Rollover Account (if any), his vested Employer Contributions Account
and his Deferred Contributions Account, less the amount subject to an
outstanding loan, provided, however, that no such withdrawal shall be
permitted unless the Participant Contributions Account is then or has been
previously completely withdrawn by the Participant and, that withdrawals
shall come from each of the Accounts in the order stated above until each
account is completely withdrawn before proceeding to the next account.
<PAGE>
Amounts representing income which are credited to a Participant's Deferred
Contributions Account after December 31, 1988, may not be withdrawn.
The Participant's request to withdraw under this Section 7.3 must be made
in writing to the Plan Administrator. The basis for the Plan Administrator
consenting to or refusing to consent to the Participant's request shall be
that of demonstrated hardship. For purposes of this section a hardship
exists only if there is an immediate and heavy financial need of the
Participant and a withdrawal under this section is necessary to satisfy such
financial need.
The determination of whether a Participant has an immediate and heavy
financial need is to be made on the basis of all relevant facts and
circumstances. A financial need shall not fail to qualify as immediate and
heavy merely because such need was reasonably foreseeable or voluntarily
incurred by the Participant.
A withdrawal request will be deemed to be made on account of an immediate
and heavy financial need of the Participant only if the request is on account
of:
(a) Expenses for medical care described in Section 213(d) of the Code
previously incurred by the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Section 152 of the Code) or
necessary for these persons to obtain medical care described in Section
213(d);
(b) Costs directly related to the purchase of a principal residence
for a Participant (excluding mortgage payments);
(c) Payment of tuition, related educational fees and room and board
expenses for the next 12 months of post-secondary education for the
Participant, or the Participant's spouse, children, or dependents (as defined
in Section 152 of the Code); or
(d) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage on the Participant's
principal residence;
(e) Other definitions of deemed immediate and heavy financial needs
promulgated by the Commissioner of Internal Revenue through the publication
of revenue rulings, notices, and other documents of general applicability.
A withdrawal will not be treated as necessary to satisfy an immediate and
heavy financial need of a Participant unless all of the following
requirements are satisfied:
(a) the Participant states in writing that the distribution is not in
excess of the amount of the immediate and heavy financial need of the
Participant. The amount of an immediate and heavy financial need may include
any amounts necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution utilizing
such tax rates and procedures as established by the Plan Administrator.
<PAGE>
(b) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the loan) loans
currently available under all plans maintained by the Employer.
(c) The Participant may not elect Deferred Contributions or elective
contributions under any other plan maintained by the Employer for the
Participant's taxable year immediately following the taxable year of the
hardship withdrawal in excess of the applicable limit under Section 402(g) of
the Code for such next taxable year less the amount of such Participant's
Deferred Contributions for the taxable year of the hardship withdrawal.
(d) The Participant's Deferred Contributions and Participant
Contributions will be suspended for 12 months after receipt of the hardship
withdrawal, and the Participant is prohibited from making elective
contributions and employee contributions to all other plans maintained by the
Employer for 12 months after receipt of the hardship distribution. For this
purpose the phrase "all other plans maintained by the Employer" means all
qualified and nonqualified plans of deferred compensation maintained by the
Employer. The phrase includes a stock option, stock purchase, or similar
plan, or a cash or deferred arrangement that is part of a cafeteria plan
within the meaning of Section 125 of the Code. However, it does not include
the mandatory employee contribution portion of a defined benefit plan. It
also does not include a health or welfare benefit plan, including one that is
part of a cafeteria plan within the meaning of Section 125 of the Code.
The Plan Administrator may accept the written statement of the
Participant as to his financial resources unless it has reason to believe the
statement is in error. No withdrawal from a Participant's Deferred
Contributions Account shall be permitted unless a complete withdrawal of the
Participant's other Accounts is insufficient to defray the hardship expense.
Each such withdrawal shall be processed as soon as reasonably practicable
and will be given effect as of the Valuation Date that authorized directions
are received by the Trustee from the Plan Administrator. Such withdrawal
shall be made on a pro rata basis from all Funds.
If a Participant is married and wishes to make a withdrawal under this
section, he must submit to the Plan administrator his spouse's written
consent to such distribution, executed and witnessed by a notary public not
more than 90 days prior to the distribution.
7.4 Outstanding Loans. Amounts withdrawn by a Participant may not be
returned to the Plan. If a Participant has an outstanding Loan pursuant to
Article 15, no withdrawal shall be permitted which would reduce the
Participant's vested interest in his Accounts below the outstanding principal
balance of the loan plus any interest to be accrued with respect to such
loan.
<PAGE>
ARTICLE 8 -DISTRIBUTIONS OTHER THAN WITHDRAWALS
8.1 Distribution Elections. Upon the termination of a Participant's
employment with any and all Participating Companies, the Participant shall
be entitled to a distribution of the value of his vested Accounts. Such
distribution shall occur or commence as of the Valuation Date coincident
with or next following the Participant's Normal Retirement Date and
without interest from such date, unless the Participant makes an election
pursuant to the following sentence.
A terminated Participant may elect to receive or commence receiving a
distribution at any time prior to Normal Retirement Date upon application
to the Plan Administrator in accordance with such procedures and standards
as it may establish. Such distribution shall occur or commence as of the
Valuation Date coincident with or next following the date the Trustee
receives from the Company or Plan Administrator such written notice of
distribution as shall be required by the Trustee.
If a Participant continues in the employ of any Participating Company
beyond his Normal Retirement Date, distribution of his Accounts shall be
deferred until his actual retirement and shall be made or shall commence
to be made as soon as reasonably practicable after the Valuation Date
coincident with or next following the date of the Participant's actual
retirement or the date of submission of forms requesting such distribution
and without interest from such Valuation Date. In no event shall a
distribution commence later than April 1 of the calendar year following
the later of either (a) the year in which the Participant attains age 70
1/2 or, (b) the calendar year in which the employee retires. An election
of any method or methods of payment made by a Participant may be revoked
by the Participant and a subsequent election made at any time prior to the
30th day preceding the Participant's annuity starting date. Any election
or revocation of a previous election must be made in writing and submitted
to the Plan Administrator.
Payment of a Participant's benefits shall be (a) in a lump sum in cash or
in whole shares of Company Stock under the Company Stock Fund, (b) as an
immediate annuity purchased under the group annuity contract or contracts,
(c) in substantially equal installments payable either quarterly or
annually or (d) in a combination of such methods of payment.
The Plan Administrator shall establish procedures by which the
Participant may obtain from the Trustee descriptions of the forms of
immediate annuity available for the purpose of informing Participants
thereof at least 90 days prior to the earliest date their annuity may
commence. The forms of immediate annuity available shall always include a
Qualified Joint and Survivor Annuity.
The Participant shall select the method or methods of payment of benefits
from those available, provided, however, no method of payment providing
for a guaranteed number of payments may be selected which would assure
payments beyond the actuarial life expectancy of the Participant and his
spouse determined on a joint and survivorship basis and further provided
that the present value of any payments to be made to a Participant shall
be not less than 50 percent of the present value of the total payments to
be made to the Participant and his Beneficiaries.
<PAGE>
If a Participant is married and wishes to elect an annuity other than a
Qualified Joint and Survivor Annuity, he must submit to the Plan
administrator his spouse's written consent to such distribution, executed
and witnessed by a notary public not more than 90 days prior to the
commencement of the distribution.
Notwithstanding the foregoing provisions of this section, if, upon the
termination of a Participant's employment with any and all Participating
Companies the value of the Participant's Accounts does not exceed $3,500,
the payment of the Participant's benefits shall be in a single sum, in
cash, as soon as practicable after the close of the Plan Year in which
such termination of employment takes place, provided, however, that the
participant may elect to receive the distribution of his benefits as soon
as reasonably practicable after the Valuation Date next following the date
the Trustee receives from the Company such written notice of distribution
as shall be required by the Trustee.
Notwithstanding any provision herein to the contrary, but subject to the
requirements of ERISA and the Code, any distribution hereunder shall be
subject to the terms and conditions of any investment contract or
arrangement established with respect to the investment of Plan Assets.
8.2 Death of a Participant. Upon the death of a Participant prior to
the termination of his employment with an Affiliated Company, a
distribution of the deceased Participant's account shall be made to his
designated Beneficiary. Upon the death of a Participant after termination
of his employment with an Affiliated Company, a distribution of the vested
portion of the deceased Participant's account, if any, shall be made to
his designated Beneficiary unless the Participant shall have elected to
receive an annuity in accordance with Section 8.1 and the first monthly
payment of such an annuity shall have become due and payable to the
Participant. Any death benefits payable upon the death of a Participant
after the date such an annuity was due to commence shall be as provided in
the particular form of annuity which was payable to the Participant. The
Participant shall have the unrestricted right to designate the Beneficiary
to receive the death benefits to which he is entitled hereunder, and to
change any such designation. Each such designation for death benefits
shall be evidenced by a written instrument filed with the Plan
Administrator and signed by the Participant. If a Participant is married
and wishes to designate a beneficiary other than his spouse, he must
submit his spouse's written consent, executed and witnessed by a plan
representative or a notary public. If no such designation is on file with
the Plan Administrator at the time of the death of the Participant, or if
for any reason such designation is defective, then the Participant's
spouse, if living, his children, if living, or his estate, in that order
of preference, shall be conclusively deemed to be the Beneficiary
designated to receive such benefit. Payment of the death benefits shall
be in any method or methods described in Section 8.1 of this Article as
shall be chosen by the Beneficiary. Payment of such death benefits shall
be made or shall commence to be made as soon as practicable after the
Valuation Date next following the date the Trustee shall have been
informed of the Participant's death.
<PAGE>
8.3 Missing Participant. If benefits remain to be paid to a
Participant at a time when the Plan Administrator is unable to locate the
Participant or his Beneficiary, the Plan Administrator shall cause the
Participant's benefits to be distributed or paid to the person or persons
who can be located in the following priority:
(a) in the event of a missing Participant, benefits will be
distributed to the Participant's Beneficiary;
(b) in the event the Participant and all Beneficiaries are missing,
benefits will be distributed to the Participant's spouse;
(c) after unsuccessful attempts have been made by the Plan
Administrator to locate persons described in the priority categories set
forth above, the benefits of the Participant or of any Beneficiary will be
disposed of in any manner permitted by law which the Plan Administrator
considers to be fair and equitable.
A substitute beneficiary will not be determined under this Section with
respect to a missing Participant or missing Beneficiary unless the
Participant or Beneficiary, as the case may be, has failed to claim the
Participant's account balances or notify the Plan Administrator of his
whereabouts within three years after the Plan Administrator notifies such
Participant or Beneficiary of his entitlement to benefits at his last post
office address filed with the Plan Administrator.
8.4 Failure To Make an Election. If a Participant fails to make an
election during an election period, such Participant shall be deemed to have
elected a Qualified Joint and Survivor Annuity. An election period shall
commence on the date the Participant receives the information required in
accordance with Section 8.6 and shall end on the Participant's annuity
starting date or, if later, 30 days after such required information is
provided (unless the participant waives such 30 day requirement and
distribution commences more than 7 days after the information is provided).
8.5 Payment Unable To Be Distributed. If the amount of a payment or
distribution required to commence on a date determined under this article
cannot be ascertained by such date, or if it is not possible to make such
payment or distribution on such date because the Plan Administrator has been
unable to locate the Participant after making reasonable efforts to do so, a
payment or distribution retroactive to such date may be made no later than 60
days after the earliest date on which the amount of such payment or
distribution can be ascertained under the Plan or the date on which the
Participant is located (whichever is applicable).
<PAGE>
8.6 Notification Of Annuity Options. The Plan Administrator shall
furnish the following information to the Participant on or about a date that
is nine months prior to such Participant's Normal Retirement Date:
(a) a description or explanation, written in non-technical language,
of the forms of annuity available under this Plan including the Joint and
Survivor Annuity as well as a general explanation of the relative financial
effects of the election of any form of annuity,
(b) the circumstances under which the Joint and Survivor Annuity will
be provided unless an election to receive some other method of payment is
made,
(c) the information described in subparagraphs (a) and (b) above
shall include a statement informing Participants of the availability of
additional information and how such information may be obtained.
8.7 Request For Annuity Options. A Participant to whom Section 8.6
applies may make a written request to the Plan Administrator for an
explanation of the terms and conditions of the Qualified Joint and
Survivor Annuity and the specific financial effects of any election
available to the Participant in accordance with Section 8.1. The Plan
Administrator shall then furnish to such Participant a written
explanation, in non-technical language, of the specific financial effects
of a benefit election in terms of dollars per annuity payment based on the
value of the Participant's Accounts as of the most recent Valuation Date
for which such data is available. This explanation shall be personally
delivered or mailed (first class mail, postage prepaid) within 30 days
from the date of the Participant's request. The Plan Administrator need
comply with only one such request made by or with respect to a particular
Participant.
8.8 Valuation Of Accounts. With respect to the Participant's annuity
starting date, distributions made in accordance with this Article shall be
based on the value of the Participant's Accounts as of the Valuation Date
next following the date the Plan Administrator receives such written
notification, or, if later, the date specified in such written
notification, plus any Elective Contributions, Employer Contributions or
Participant Contributions which have been made to this Plan since such
Valuation Date.
8.9 Notices Of Distribution. If any distribution under this Plan is one
to which Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(a) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable a particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively elects
a distribution.
<PAGE>
ARTICLE 9 -FORFEITURES
9.1 Forfeiture Of Employer Contributions Account. A Participant shall
forfeit the value of that portion of his Employer Contributions Account in
which he was not vested at the date of his termination of employment
determined as of the Valuation Date coincident with or next following the
date of payment of the nonforfeitable percentage (including a percentage of
zero) of his Employer Contributions Account ("Distribution Date") in an
amount which bears the same ratio to the amount of the Participant's Employer
Contributions Account which is forfeitable as such payment bears to the
amount of the Participant's Employer Contributions Account which is
nonforfeitable. Thereafter, if such person is rehired as an Employee prior
to a period of five consecutive Plan Years, beginning with the Plan Year in
which the Participant's employment is terminated, during which the
Participant is not employed by an Affiliated Company on the last day of each
such Plan Year, he shall be entitled to make repayment to the Plan of the
aggregate amount of his Employer Contributions Account distributed to him, on
all Distribution Dates at any time before such employee incurs such five-year
period. Upon making repayment in a single payment of the fair market value
of the aggregate Employer Contributions Account distributed to him, the
amount repaid shall be credited to the Participant's Employer Contributions
Account and the fair market value, as of the Distribution Date, of the
Employer Contributions Account which was forfeited shall be reinstated to
such Account. Forfeitures shall serve to reduce Employer Contributions to
the Plan. Any amounts required to restore a Participant's Employer
Contributions Account under this Section 9.1 shall be charged against the
Plan's unallocated forfeitures, and if insufficient, be made up from
additional Employer contributions.
If the Employee makes the above-described repayment, such repayment shall
be considered to be an "investment in the contract" for purposes of Sections
72(c)(1)(A), 72(f) and 402(e)(4)(D)(i) of the Code in relation to amounts
reinstated in his Employer Contributions Account on account of the repayment.
For purposes of the preceding paragraphs, any Plan Year in which a
Participant is absent from work on the last day of the Plan Year, (i) by
reason of the pregnancy of the Employee, (ii) by reason of the birth of a
child of the Employee, (iii) by reason of the placement of a child with the
Employee in connection with adoption of such child by such Employee, or (iv)
for purposes of caring for such child for a period beginning immediately
following such birth or placement, shall be disregarded. Any amounts
forfeited by Participants shall be used to offset future Employer
Contributions under this Plan except as otherwise provided in this Section
9.1 or in Section 12.3 hereof.
<PAGE>
ARTICLE 10 -ADMINISTRATION
10.1 Plan Administrator. The Plan shall be administered by the Plan
Administrator which shall also be the Named Fiduciary. The Plan
Administrator may delegate from time to time ministerial duties to the
chief Human Resources officer of the Company. From time to time, the
Chairman of the Plan Administrator shall certify to the Trustee, the
person or persons designated by the Plan Administrator to give
notifications, instructions or advice to the Trustee. The Plan
Administrator shall be entitled to rely upon certificates of or
communications from a Participating Company or from the Trustee as to
information pertinent to any calculation or determination under the Plan.
10.2 Administrative Powers. The Plan Administrator shall have full
power and discretionary authority, within the limits provided by the
Plan, to administer, construe and interpret the Plan, to decide all
questions of eligibility, and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
(a) To determine all questions arising concerning the construction
and interpretation of the Plan and in its administration, including, but not
by way of limitation, the determination of the rights or eligibility under
the Plan of Employees and Participants and their Beneficiaries;
(b) To adopt such rules and regulations as it may deem reasonably
necessary for the proper and efficient administration of the Plan consistent
with its purposes, including rules and regulations with regard to
implementing Participant elections and requests by means other than in
writing;
(c) To enforce the Plan, in accordance with its terms; and
(d) To do all other acts, in its judgment necessary or desirable,
for the proper and advantageous administration of the Plan.
The Plan Administrator shall act with or without a meeting by the vote or
concurrence of a majority of its members; but no member of the Plan
Administrator who is a Participant shall take part in any Plan Administrator
action or any matter that has particular reference to his own interest
hereunder. The Plan Administrator shall administer this Plan and discharge
its responsibilities hereunder in a uniform and nondiscriminatory manner as
to all Participants.
10.3 Information To Participants. The Plan Administrator shall see that
books of account are kept which shall show all receipts and disbursements and
a complete record of the operation of the Plan, including records of the
accounts of individual Participants. At least once in each year, the Plan
Administrator shall cause to be furnished to each Participant a statement
indicating on the basis of the latest available information the status of the
Participant's Account.
<PAGE>
10.4 Direction To Trustee. The Plan Administrator will direct the
Trustee to make investments under the contract or contracts in accordance
with the investment selections made by the Participants pursuant to Article V
hereof.
10.5 Requests To Trustee. In any case where the provisions of this Plan
require the consent or approval by the Plan Administrator of an election or
request made by an Employee, Participant or Beneficiary in order to make such
election or request effective, the Plan Administrator shall act on such
election or request as promptly as shall be reasonable in the circumstances.
In any case where action by the Trustee is necessary in order to make
operative an effective election or request made by an Employee Participant or
Beneficiary, it shall be the responsibility of the Plan Administrator to
transmit such election or request to the Trustee in writing and as promptly
as shall be reasonable in the circumstances. The Trustee shall not be
obliged to take action with respect to any particular election or request
unless the Trustee shall have received the election or request in such form
and detail as shall reasonably be required by the Trustee.
10.6 Employment Of Advisors and Staff. The Plan Administrator may
employ accountants, legal counsel, consultants, and any other persons or
organizations it deems necessary or proper to assist it in the performance of
its duties under the Plan.
10.7 Fiduciary Duties. The Plan Administrator shall discharge its
duties solely in the interest of the Participants and Beneficiaries and for
the exclusive purpose of providing benefits to Participants and their
Beneficiaries. They shall discharge their duties with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with the like aims.
10.8 Indemnification. Except as provided by law, the Participating
Companies, its directors, officers, employees and agents and the Plan
Administrator, or any of them, shall not incur any personal liability for the
breach of any responsibility, obligation or duty in connection with any act
done or omitted to be done in good faith in the management and administration
of the Plan and the investment and handling of the accounts and shall be
indemnified and held harmless by the Participating Companies from and against
any such personal liability including all expenses reasonably incurred in its
or their defense in case the Participating Companies fail to provide such
defense.
<PAGE>
ARTICLE 11 -AMENDMENTS
11.1 Plan Amendments. This Plan may be amended at any time and from
time to time by the Chief Executive Officer of the Company or resolution
of the Board of Directors of the Company; however, the Chief Executive
Officer of the Company may not amend the Plan in any manner which would
increase the level of Participating Company contributions. The Plan, as
amended, shall apply to the Participants and Participating Companies,
unless a Participating Company elects to withdraw from the Plan. Such
power of amendment shall under no circumstances include the right to
reinvest or otherwise transfer any interest in or to the accounts, or any
income therefrom, to any Participating Company; nor shall the power of
amendment include the right, in any way or to any extent, to divest any
Participant of the interest in his accounts to which he would be entitled
if he had terminated his service immediately before such amendment;
provided further that the rights, duties or responsibilities of the
Trustee shall not be substantially changed without its written consent.
Neither shall such power of amendment be exercised in any way which would
or could give to any Participant or Beneficiary any right or thing of
exchangeable value in advance of the receipt of distributions hereunder.
There shall be no merger or consolidation of part or all of the Plan
with, or any transfer of part or all of its assets or liabilities to, any
other plan or trust ("Other Plan") unless, pursuant to the terms of such
merger, consolidation or transfer, each Participant and Beneficiary in
the Plan whose interests are so merged, consolidated or transferred into,
with, or to the Other Plan would (if the Other Plan were then terminated)
receive a benefit immediately after such merger, consolidation or
transfer which would be equal to or greater than the benefit he would
have been entitled to receive immediately before such merger,
consolidation or transfer (if the Plan were then terminated).
Notwithstanding the foregoing provisions of this Section, this Plan may
be amended in any manner whatsoever, with prospective or retroactive
effect, for the purpose of qualifying it under, or complying with, any
provision of the Code or ERISA.
<PAGE>
ARTICLE 12 -TERMINATION OF PLAN
12.1 Termination Of Plan By Participating Company. This Plan may be
terminated as to all Participating Companies on any date specified by the
Company upon 10 days' advance written notice of the termination to the
Plan Administrator and the Participating Companies. This Plan may be
terminated at any time as to any particular Participating Company, for
the following reasons:
(a) The Participating Company voluntarily terminates this Plan;
(b) The final and total discontinuance of Participating Company
contributions hereunder;
(c) The legal dissolution, merger, consolidation or reorganization of
the Participating Company;
(d) The filing of a petition in bankruptcy; or
(e) The date that Participating Company ceases to qualify as a
subsidiary or related company. Notwithstanding the foregoing, if any of the
events described above should occur but some or all of the Participants
employed by a Participating Company are transferred to another Participating
Company coincident with or immediately after the occurrence of such event,
the Plan as applied to those Participants will automatically continue in
effect without a termination thereof.
12.2 Vesting Rights. Except as provided for in Article 9 hereof, each
Participant and the Beneficiary of each deceased Participant shall be
vested with all rights to any funds in his accounts as of the date of
such termination, and such funds shall be distributed to such persons
within a reasonable time.
12.3 Pro Rata Distribution Of Forfeitures. Any forfeitures which shall
have occurred in accordance with Section 9.1 hereof prior to the
termination of this Plan but which shall not have been applied to reduce
Employer Contributions hereunder shall be distributed pro rata to those
Participants who were Employees of the Participating Company or Companies
on the effective date of the termination of this Plan.
12.4 Partial Termination. In the event of a partial termination of this
Plan, the provisions of this Article 12 shall apply to each Participant
and Beneficiary of each deceased Participant affected by the partial
termination.
<PAGE>
ARTICLE 13 -MISCELLANEOUS PROVISIONS
13.1 Interpretation of Plan Provisions. This Plan is created for the
exclusive benefit of Employees of the Participating Companies and their
Beneficiaries. If any provision of this Plan is subject to more than one
interpretation, then among those interpretations which are possible, that
one shall always be given to this Plan and each and every one of its
provisions which will be consistent with this Plan being a qualified plan
within the meaning of Section 401 of the Code and ERISA, or as they may
be amended or replaced by any sections of the federal law of like intent
and purpose.
13.2 Prohibition On Reversion. Except as provided by the terms of
Article 11 hereof, no funds contributed hereunder or any assets of this
Plan shall ever revert to, or be used or enjoyed by, any Participating
Company or any successor of any Participating Company, nor shall any such
funds or assets ever be used other than for the benefit of the
Participants or the Beneficiaries of such Participants.
13.3 Adoption Of Plan By Affiliated Company. Any Affiliated Company
may, with the consent of the Chief Executive Officer, become a
Participating Company in the Plan by filing a duly certified copy of the
resolution of its Board of Directors adopting the Plan and 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.
13.4 Alienation Of Benefits. No right or interest of any Participant of
the Plan 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 in the Plan shall
be liable for or subject to any obligation or liability of such
Participant, including claims for alimony or the support of any
Participant's spouse.
13.5 Qualified Domestic Relations Orders. Notwithstanding any other
provisions of this plan, an alternate payee under a qualified domestic
relations order ("QDRO") as determined in accordance with Section 206 or
ERISA shall be entitled, within 180 days from the date the Alternate
Payee receives written notification that the Company has made such a
determination, to elect to receive any benefits to which the Alternate
Payee is entitled payable in accordance with the distribution provisions
set forth in Article 8 of this Plan in full satisfaction of any liability
of the Plan to such person. The Plan may retain the Participant's
account balance in full upon receipt of notice of a pending QDRO until
the final order is submitted or eighteen months has elapsed, whichever is
earlier. In the event an Alternate Payee receives an interest in
Participant's Accounts pursuant to Section 206 or ERISA, and does not,
within 180 days of notification of this interest, elect to receive a
distribution, the benefits awarded the Alternate Payee, valued as of the
Valuation Date coincident with or next following the date specified in
the court order for division of the Participant's account, the Alternate
Payee may direct the investment of such account in the same manner as any
participant, but may not borrow from the account. If a QDRO specifies
that an Alternate Payee is entitled to any portion of a Participant's
account which has an outstanding loan balance, all outstanding loans
shall continue to be held in the Participant's accounts and shall not be
divided between the Participant and Alternate Payee.
<PAGE>
Earnings on the benefits awarded the Alternate Payee by the court order
shall accrue between the date specified for division of the Participant's
account and the date the Alternate Payee's account is opened, only to the
extent provided in the court order. Payment of the benefits from the
Alternate Payee's account shall be made or shall commence to be made as
established by court order or if not so specified, as of the Valuation
Date coincident with or next following the Participant's Normal
Retirement Date or actual retirement date, whichever is later. An
Alternate Payee may make an election pursuant to Article 7 of the Plan.
13.6 Appeals. Any person claiming entitlement to benefits in an amount
other than that received shall have the right after review and denial, in
whole or in part, of such claim by the chief Human Resources officer of
the Company to a review of such denial by the Plan Administrator. Such
review shall be initiated by the written request therefore by such person
filed with the Plan Administrator within 60 days after receipt by the
person of the denial by the chief Human Resources officer of the Company.
The written request shall state the nature of the claim, the facts in
support thereof and the amount claimed, and may include a demand for a
personal hearing before the Plan Administrator as well as for reasonable
access to the pertinent data upon which denial of the claim by the chief
Human Resources officer of the Company was based, which demands shall not
be unreasonably denied. The Plan Administrator shall conduct its review
of the claim within 60 days after receipt of the written request of such
person and furnish, within such time, to the claimant written notice of
its decision, including therein specific reasons and references to
pertinent Plan provisions upon which decision is based.
13.7 Availability of Plan Document. Copies of the Plan and any
amendments thereto will be on file at the principal office of each
Employer where they may be examined by any Participant or any other
person entitled to benefits under the Plan.
13.8 Incapacitated Persons. If any person entitled to benefits under
the Plan is under a legal disability or, in the Plan Administrator's
opinion, is incapacitated in any way so as to be unable to manage his or
her financial affairs, the Plan Administrator may direct the payment of
such benefits to such person's legal representative or to a relative or
friend of such person or such person's benefit, or the Plan Administrator
may direct the application of such benefits for the benefit of such
person in any manner which the Plan Administrator may select that is
permitted by federal law and is consistent with the Plan. Any payments
made in accordance with the foregoing provisions of this section shall be
a full and complete discharge of any liability for such payments.
13.9 Legal Rights Of Participants. None of the establishment of the
Plan, any modification thereof, the creation of any fund or account, or
the payment of any benefits shall be construed as giving to any
Participant or other person any legal or equitable right against the
<PAGE>
Employers, the Plan Administrator or any Trustee except as provided
herein. Under no circumstances shall the maintenance of this Plan
constitute a contract of employment or shall the terms of employment of
any Participant be modified or in any way affected hereby. Accordingly,
participation in the Plan will not give any Participant a right to be
retained in the employ of any Employer. Neither the Plan Administrator
nor any Employer in any way guarantees any assets of the Plan from loss
or depreciation or any payment to any person. The liability of the Plan
Administrator or any Employer as to any payment or distribution of
benefits under the Plan is limited to the available assets of the trust
fund.
13.10 Final Judgments. In any action or proceeding regarding any Plan
assets, any Plan benefits or the administration of the Plan, employees or
former employees of the Employers, their beneficiaries and any other
persons claiming to have an interest in the Plan shall not be necessary
parties and shall not be entitled to any notice of process. Any final
judgment which is not appealed or appealable and which may be entered in
any such action or proceeding shall be binding and conclusive on the
parties hereto and on all persons having or claiming to have any interest
in the Plan. To the extent permitted by law, if a legal action is begun
against the Plan Administrator, an Employer, or any Trustee by or on
behalf of any person and such action results adversely to such persons,
or if a legal action arises because of conflicting claims to a
Participant's or other person's benefit, the cost of the Employers, the
Plan Administrator, or the Trustee of defending the action will be
charged to the sums, if any, which were involved in the action or were
payable to the Participant or the other person concerned. Acceptance of
participation in the Plan shall constitute a release of the Company and
the Plan Administrator, any trustee and their agents from any and all
liability and obligation not involving willful misconduct or gross
neglect to the extent permitted by applicable law. Notwithstanding any
other provisions of the Plan, if the Plan Administrator is required by a
final court order to distribute the benefits of a Participant other than
in a manner required under the Plan, then the Plan Administrator shall
cause the Participant's benefits to be distributed in a manner consistent
with such final court order. The Plan Administrator shall not be
required to comply with the requirements of a final court order in any
action in which the Plan Administrator, a Trustee, the Plan or the trust
was not a party.
13.11 Plan Provisions Held Illegal or Invalid. If any provisions of the
Plan shall be held illegal or invalid for any reason, such illegality
shall not affect the remaining provisions of the Plan, and the Plan shall
be construed and enforced as if such illegal and invalid provisions had
never been set forth in the Plan.
13.12 Illinois Law. This Plan shall be construed and regulated and its
validity and effect and the rights hereunder of all parties interested
shall at all times be determined, and this Plan shall be administered, in
accordance with the laws of the State of Illinois, subject, however, to
applicable provisions of any federal law.
13.13 Intent. The Participating Companies intend that this Plan, as
amended from time to time, shall constitute a qualified plan under the
provisions of Sections 401(a) and (k) of the Code. The Participating
Companies intend that this Plan shall continue to be maintained by them
<PAGE>
for the above purposes indefinitely, subject, however, to the rights
reserved to amend and terminate the Plan as set forth herein. Nothing
contained in this Plan shall be construed as disqualifying any Employee
of any Participating Company from any benefits under any other plan or
program to which such Employee would be entitled in the absence of this
Plan.
13.14 Uniformed Services Employment and Reemployment Rights Act.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credits with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Code. Accordingly, Participants who are absent from employment due
to service which is protected under the Uniformed Services Employment and
Reemployment Rights Act and who are reemployed may make Deferred
Contributions, and the Employers will make Employer Contributions on
behalf of such Participants in accordance with such section of the Code.
13.15 Application of Compensation Limitation. In the event the
Compensation of a Participant for a Plan year would exceed the maximum
limitation on Compensation set forth in Section 2.7, the Compensation
which will be taken into account under the plan with respect to each
payment of Compensation during such year shall be (i) first, an amount
equal to seven times any Deferred Contributions made with respect to each
payment of Compensation, to the extent of such Compensation, and (ii)
next, with respect to each portion of any payment of Compensation which
exceeds the amounts taken into account under (i) above, the full amount
of such excess commencing with the first such payment in such year until
the total amount taken into account for the Plan Year equals the maximum
limitation amount for such year.
13.16 Telephonic and Electronic Transmissions Treated as Signed
Writings. To the extent any election, direction, response, consent,
designation or other action of a Participant, Beneficiary or other person
under the Plan is permitted to be made by telephonic voice response or
other telephonic or electronic transmission, such action by or on behalf
of the Participant, Beneficiary or other person shall be considered an
action by writing signed by the Participant, Beneficiary or other person
for all purposes of the Plan.
<PAGE>
ARTICLE 14 -TOP HEAVY RULES
14.1 Top-Heavy Rules. If the Plan is or ever becomes "top-heavy" as
determined under Section 14.2, the following special rules shall apply.
(a) If the Plan is top-heavy for a Plan Year, each Participant who is
an Employee on the last day of the Plan Year shall receive an allocation of
Employer Contributions and forfeitures equal to the product of
(1) the Participant's compensation while an active Participant
during the Plan Year, and
(2) the lesser of 3% or the ratio of Employer Contributions plus
Deferred Contributions to compensation with respect to the key employee (as
defined in Section 14.3) whose ratio is highest for the year.
For purposes of this Section, including the determination of a
Participant's allocation of Employer Contributions under Section 4.7 if this
Section applies, compensation shall mean the total amount of wages, tips and
other compensation shown on an Employee's Form W-2 for the Year, provided,
however, that compensation in excess of $150,000 shall be disregarded. The
$150,000 limitation is subject to cost-of-living adjustments made by the
Secretary of the Treasury or his delegate.
All non-key Employees who are Participants in the Plan and who have
not separated from service by the end of the Plan Year shall receive an
allocation pursuant to this subsection.
A non-key Employee shall not fail to receive an allocation pursuant
to this subsection because he fails to elect Deferred Contributions or
Employee Contributions for the Year.
Notwithstanding any other provisions of the Plan, a non-key Employee
shall not forfeit any allocations made pursuant to this subsection because of
a withdrawal of Deferred Contributions or Employee Contributions.
If a Participant also participates in a defined benefit plan
maintained by the Employer or an Affiliated Company which is top-heavy, the
minimum allocation percentage specified in this subsection shall be increased
to 5% of compensation. This sentence shall not apply to the extent that the
Participant participates in any other plan or plans of the Employer or an
Affiliated Company which provide that the defined benefit minimum allocation
or benefit applicable to top-heavy plans will be provided by such other plan
or plans.
<PAGE>
(b) All Employer-provided benefits shall become fully vested upon
completion of three Plan Years during which the Participant completes 1,000
hours of work (determined in accordance with Section 2.20), and a person who
is not already a Participant shall become a Participant upon the later of:
(1) the first day he meets all the eligibility requirements of
Section 3.1, or
(2) the third anniversary of his first day of work for the
Employer or an Affiliated Company.
(c) Notwithstanding any provision in the Plan to the contrary,
distributions to a key Employee must commence no later than April 1 of the
Plan Year following the Plan Year in which he attains age 70 1/2.
14.2 Definition Of Top-Heavy. This Plan is "top heavy" for a Plan Year,
if, as of the last day of the preceding Plan Year, the amount credited to
the Accounts of Key Employees (as defined in Section 14.3) exceeds 60% of
the amount credited to the Accounts of all Participants (except former
key Employees). Notwithstanding the foregoing, the Plan shall be top
heavy if, as of the determination date described above, it is included in
an "aggregation group" which is a "top heavy group," as those terms are
defined in Section 416(g)(2) of the Code. For purposes of determining
whether this Plan is top heavy, the aggregate distributions (without
interest thereon) made under the Plan to a Participant during the 5-year
period ending on the determination date shall be taken into account if
the Participant's account or benefit is otherwise taken in account in
determining whether the Plan is top heavy.
14.3 Key Employees. A Participant shall be a "key Employee" if, during
the Plan Year in question or any of the four preceding Plan Years, he is:
(1) an officer of the Employer (but no more than fifty Employees or,
if less, the greater of three Employees or ten percent of all Employees)
shall be taken into account, as specified by the Plan Administrator;
(2) one of the ten Employees owning (or considered as owning within
the meaning of Section 318 of the Code) the largest interest in the Employer;
(3) a five percent owner of the Employer; or
(4) a one percent or more owner of the Employer having an annual
compensation from the Employer of more than $150,000.
14.4 Additional Top-Heavy Rules. If the Plan is top-heavy for a Plan
Year, then the Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction, described in Sections 415(e)(2) and 415(e)(3) of the Code,
shall be computed by substituting the number 1.0 for the number 1.25. In
addition, $41,500 shall be substituted for $51,875 for purposes of
<PAGE>
Section 415(e)(6)(B)(1) of the Code. The Employer may elect to disregard
the preceding sentence if, as of the last day of the preceding Plan Year,
the amount credited to the Accounts of key Employees does not exceed 90%
of the amount credited to the Accounts of all Participants (except former
key Employees). If the Employer makes the election described in the
preceding sentence, the minimum allocation percentage specified in
subsection (a) shall be increased to 4% of compensation for all
Participants and 7 1/2% for Participants who also participate in a
defined benefit plan maintained by the Employer or an Affiliated Company
which is top-heavy.
<PAGE>
ARTICLE 15 - LOANS
15.1 Loan Applications. A Participant may borrow from the Plan, subject
to the following provisions of this Article 15 and to such additional
standards as the Plan Administrator may adopt, by making prior
application to the Plan Administrator. A Participant seeking a loan
hereunder must submit a application (hereinafter referred to as the
"completed application") which shall (i) specify the terms pursuant to
which the loan is requested to be made, including the requested effective
date, (ii) authorize the repayment of the loan through payroll
deductions, (iii) provide such information and documentation as the Plan
Administrator shall require, (iv) include a promissory note, duly
executed by the Participant, granting a security interest in his or her
entire interest in the Plan to secure the loan, (v) consent to a
distribution for tax purposes equal to the amount of loan principal and
interest then owing in the event of a default in the repayment of the
loan, and (vi) authorize the payment from his Accounts of reasonable loan
processing fees.
15.2 Loan Requirements. Any loan to a Participant shall be subject to
the following requirements:
(a) The loan when combined with all other Plan loans outstanding may
not exceed the lesser of (i) $50,000 or (ii) 50 percent of the value of the
Participant's vested interest in his Accounts, including the vested portion
of the Employer Contributions Account. For purposes of this Section 15.2,
the value of a Participant's vested interest shall be determined as of the
last Valuation Date with respect to which such interest or balance has been
calculated at the time that the loan application is submitted. The maximum
loan amount of $50,000 otherwise available to a Participant is reduced by the
excess, if any, of the highest outstanding balance of Plan loans to the
Participant during the one-year period ending on the day before the loan is
made over the outstanding balance of loans from the Plan on the date when the
loan is made.
(b) The loan must be at least $1,000.
(c) The loan shall provide for a fixed rate of interest for the
entire term of the loan. The applicable interest rate for Plan loans shall
be the current estimated blended fixed interest rate for Fixed Investment
Fund or the Prime Rate published in the Wall Street Journal at the beginning
of the current calendar quarter plus 1%, whichever is higher, provided that
the Plan Administrator may in its discretion establish a different method of
establishing the interest rate consistent with the provisions of Section
4975(d)(1) of the Code and other applicable legal requirements.
(d) The loan may be for any term of months not to exceed 60 months.
(e) Notwithstanding the 60 month limit in Section 15.2(d), any loan
used to acquire or construct any dwelling unit which, within a reasonable
time, is to be used as the principal residence of the Participant may be for
any term of months not to exceed 180 months.
<PAGE>
(f) The term of any loan shall not extend beyond the date on which
the Participant attains age 70.
(g) The Plan Administrator shall establish standards in accordance
with ERISA and the Code and such rules as it deems necessary which shall be
uniformly applicable to all Participants similarly situated and shall govern
the Plan Administrator's approval or disapproval of completed applications.
The terms for each loan shall be set solely in accordance with this Section
and such standards adopted by the Plan Administrator in accordance with
Section 15.4. Such standards may prescribe minimum repayment periods, a
maximum and minimum loan amount (within the limitations specified above), and
shall require spousal consent for loans to married Participants and other
relevant factors.
(h) No Participant shall have more than two Plan loans outstanding at
any time, and no more than one loan may be taken in a calendar month.
(i) Except as otherwise provided by the Plan Administrator, a
Participant may not take a loan in the same month in which a withdrawal
request is submitted or a distribution made.
15.3 Repayment Of Plan Loans. A Promissory Note shall be required for a
loan as set forth below.
(a) Each loan shall be evidenced by a promissory note executed by the
Participant and payable to the Trustee, due and payable in full not later
than the earliest of: (i) a fixed maturity date meeting the requirements of
Section 15.2(d) or (e) above; (ii) the Participant's death; or (iii) the time
which the Participant ceases to be an Employee.
(b) The promissory note shall provide for the payment of equal
monthly installments of principal and interest on the unpaid balance of
principal at the fixed annual rate set forth in Section 15.2(c) on the date
the note is executed. The note shall further provide that the monthly
payments shall be through semi-monthly payroll deductions.
(c) The promissory note shall evidence such additional terms as are
required by this Section 15.2 or by the Plan Administrator.
15.4 Loan Application Approval. The Plan Administrator or its delegate
shall, in accordance with its established standards, review and approve
or disapprove a completed application as soon as practicable after its
receipt thereof, and shall promptly notify the applying Participant of
such approval or disapproval.
<PAGE>
15.5 Borrowing Sequence. A Participant shall first borrow from his
available Participant Contributions Account. If the Participant's
Participant Contributions Account is not sufficient to fund the loan, the
Participant shall next borrow from his Flex Account (if any), his ESOP
Account (if any), his IRA Account (if any), his Trustee Transfer Account
(if any), his Rollover Account (if any), his vested Employer
Contributions Account and his Deferred Contributions Account, and the
loan shall come from each of the Accounts in the order stated above until
each account is withdrawn before proceeding to the next account. A
Participant may borrow from any Fund or pro rata across all funds.
15.6 Funding Of Loans. Each loan shall be made only from the Accounts
of the borrowing Participant and shall be treated as an investment of the
Participant's Accounts from which the Participant's loan was funded.
15.7 Loan Repayments. Each loan to a Participant shall be repaid in
level monthly amounts over a period meeting the requirements of Section
15.2 hereof. The monthly installments must be paid through automatic
semi-monthly payroll deductions, except as provided by the Plan
Administrator. Loans may be prepaid in whole or part at any time. All
loan repayments made through payroll deductions shall be transmitted by
the Participating Company to the Trustee as soon as practicable after
such amounts are withheld. Each loan repayment of principal and interest
will be allocated to the Participant's Accounts based upon elections made
pursuant to Article 5. Loan repayments will be suspended under this Plan
as permitted under Section 414(u)(4) of the Code.
15.8 Loan Security. The repayment of any loan under the Plan shall be
secured by 50% of the Participant's entire interest in the Plan.
15.9 Repayment While On Leave Of Absence Or While Disabled. If a
Participant with an outstanding loan takes an authorized leave of absence
or incurs a temporary disability so that regular installment payments
cannot be made by means of payroll deductions, the Participant will be
required to make regular monthly payments of principal and interest at
the time and place established by the Plan Administrator.
15.10 Default. If at any time prior to the full repayment of a loan to
a Participant under the Plan, the Participant should cease to be a
Participant by reason of his or her retirement, death, severance from
employment or the Plan should terminate, or any event of default
otherwise occurs under the documents evidencing the loan, the unpaid
balance owed by the Participant on the loan shall be due and payable in
full immediately without notice or demand. If the Participant does not
repay the full amount of the unpaid balance within the time established
by the Plan Administrator, which shall not extend beyond the end of the
calendar quarter following the calendar quarter when the required loan
repayment was due, no Employee Contributions or Deferred Contributions
shall be made to the Participant's Accounts and the Plan Administrator
may take whatever steps it deems necessary to collect the unpaid balance
of the loan plus any accrued interest. The amount of the distribution
otherwise payable to the Participant or the amount of the Participant's
vested interest in his Accounts, (or, in the case of his death, to his
Beneficiary) shall be reduced by the amount of outstanding principal and
<PAGE>
interest on the loan at the time of such distribution and applied in
satisfaction of the Participant's loan obligations. To the extent that
the reduction in the amount of the distribution or the reduction in the
Participant's vested interest is sufficient to discharge the
Participant's total outstanding liability under the loan, such reduction
shall constitute a complete discharge of all liability of the Participant
to the Plan for the loan. In the event that the reduction in this
Section 14.11 is not sufficient to fully discharge the Participant's
obligation under the loan, the Participant, his heirs, successors and
assigns shall be liable for the payment of the remaining amounts due
under the loan and such Participant, his heirs, successors or assigns
shall make payment upon notice by the Plan Administrator.
15.11 Former Participants. For purposes of this Article 15, the term
"Participant" shall include a former Participant who remains an employee
of the Company or an Affiliated Company.
15.12 General Requirements. Notwithstanding anything to the contrary
contained herein, each loan shall be made only in accordance with the
regulations and rulings of the Internal Revenue Service and other
applicable state or federal laws. The Plan Administrator shall act in
its sole discretion to ascertain whether the requirement of such laws,
regulations, and rulings have been met.
<PAGE>
ARTICLE 16 - ROLLOVERS AND TRANSFERS
16.1 Rollovers. The Plan Administrator is authorized to accept a
Rollover Contribution that exceeds $200 from an Employee in cash, even if
he or she is not yet a Participant. The Employee shall furnish
satisfactory evidence that the amount is eligible for rollover treatment.
A Rollover Contribution must be paid to the Plan Administrator in cash
within sixty (60) days after the date received by the Employee from a
qualified plan. Such amounts shall be posted to the Employee's Rollover
Account by the Plan Administrator as of the date received by the Plan
Administrator.
If it is later determined that an amount transferred pursuant to the
above paragraph did not in fact qualify as a Rollover Contribution, the
balance credited to the Employee's Rollover Account shall immediately be
(1) segregated from all other Plan assets, (2) treated as a non-qualified
trust established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying rollover shall be
deemed never to have been a part of the Plan.
16.2 Trustee Transfers From Other Qualified Plans. The Plan may receive
assets in cash or in king that exceeds $200 from another qualified plan.
The Trustee may refuse the receipt of any transfer if;
(a) the Plan Administrator finds the in-kind assets unacceptable,
(b) instructions for posting amounts to Participants' Accounts are
incomplete,
(c) any amounts are not exempted by Section 401(a)(11)(B) of the Code
from the annuity requirements of Section 417 of the Code, or
(d) any amounts include benefits protected by Section 411(d)(6) of
the Code which would not be preserved under applicable Plan provisions.
Such amounts shall be posted to the appropriate Accounts of Participants
as of the date received by the Plan Administrator.
16.3 Trustee Transfer To Other Qualified Plans. With respect to any
payment hereunder which constitutes an eligible rollover distribution in
excess of $200 (within the meaning of Section 402(c)(4) of the Code), a
Participant (or Beneficiary) may direct the Plan Administrator to have such
payment paid in the form of a single Trustee Transfer, provided the Plan
Administrator 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.
16.4 Definitions. For purposes of this Article, the following terms
shall apply:
<PAGE>
"Rollover Contributions" means a rollover contribution as described in
Section 402(c) of the Code (or its predecessor).
"Trustee Transfer" means (a) a transfer to the Trustee of an amount by
the trustee of a retirement plan qualified for tax-favored treatment under
Section 401(a) of the Code or by the trustee of a trust forming part of such
a plan, which plan provides for such transfer; or (b) a transfer from the
Plan Administrator of an amount for the benefit of a Participant to the
custodian of an eligible retirement plan within the meaning of Section
402(c)(8)(B) of the Code, provided such plan provides for the receipt of such
transfers.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Burlington Northern Santa Fe Corporation on Form S-8 of our report dated
February 15, 1996 on our audits of the consolidated financial statements and
financial statement schedule of Burlington Northern Santa Fe Corporation as
of December 31, 1995 and 1994, and for the years ended December 31, 1995,
1994 and 1993, which report is incorporated by reference in the Burlington
Northern Santa Fe Corporation Annual Report on Form 10-K for the year ended
December 31, 1995.
COOPERS & LYBRAND L.L.P.
Fort Worth, Texas
January 3, 1997
