-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DovdHlt8+hZa7ylmcp2RFQpnPxHgEgF9bLYC1wmUo1POMuvnCgHQqPr7knD4+Wql Rs8xqzYv8ERilgfZDRy71Q== 0000040834-97-000017.txt : 19970801 0000040834-97-000017.hdr.sgml : 19970801 ACCESSION NUMBER: 0000040834-97-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL SIGNAL CORP CENTRAL INDEX KEY: 0000040834 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 160445660 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00996 FILM NUMBER: 97648635 BUSINESS ADDRESS: STREET 1: ONE HIGH RIDGE PARK CITY: STAMFORD STATE: CT ZIP: 06904 BUSINESS PHONE: 2033578800 MAIL ADDRESS: STREET 1: P O BOX 10010 CITY: STAMFORD STATE: CT ZIP: 06904 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL RAILWAY SIGNAL CO DATE OF NAME CHANGE: 19710926 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1997 Commission file number 1-996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 GENERAL SIGNAL CORPORATION (Exact name of registrant as specified in its charter) New York 16-0445660 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) High Ridge Park, Box 10010, Stamford, Connecticut 06904-2010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 329-4100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X (Yes) (No) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $1.00 50,332,461 (Class) (Outstanding at July 25, 1997) GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION: Statement of Earnings - Three Months Ended June 30, 1997 and 1996 3 Statement of Earnings - Six Months Ended June 30, 1997 and 1996 4 Balance Sheet - As of June 30, 1997 and December 31, 1996 5 Condensed Statement of Cash Flow - Six Months Ended June 30, 1997 and 1996 6 Notes to Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II - OTHER INFORMATION 17 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Statement of Earnings (In millions, except per-share data) (Unaudited) Three Months Ended June 30, 1997 1996 Net sales $539.6 $515.0 --------- --------- Cost of sales 375.9 357.3 Selling, general and administrative expenses 101.7 99.4 --------- --------- 477.6 456.7 --------- --------- Operating earnings 62.0 58.3 Interest expense, net 4.6 5.6 ---------- --------- Earnings before income taxes 57.4 52.7 Income taxes 23.0 21.1 Net earnings $ 34.4 $ 31.6 ----------- ----------- Net earnings per share $ 0.68 $ 0.64 ----------- ----------- Dividends declared per share $ 0.255 $ 0.24 ----------- ----------- Average shares outstanding 50.3 49.7 ----------- ----------- See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Statement of Earnings (In millions, except per-share data) (Unaudited) Six Months Ended June 30, 1997 1996 Net sales $1,045.2 $996.7 ----------- ----------- Cost of sales 733.2 708.7 Selling, general and administrative expenses 206.1 201.4 Gain on disposition - - (20.8) ----------- ---------- 939.3 889.3 ----------- ---------- Operating earnings 105.9 107.4 Interest expense, net 8.0 12.4 ----------- ---------- Earnings before income taxes 97.9 95.0 Income taxes 39.2 38.0 ----------- ---------- Net earnings $58.7 $57.0 ----------- --------- Net earnings per share $1.15 $1.15 ----------- -------- Dividends declared per share $0.51 $0.48 ----------- ---------- Average shares outstanding 51.2 49.6 ----------- ---------- See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Balance Sheet (In millions) Unaudited) (Audited) June 30, December 31, Assets 1997 1996 Current assets: Cash and cash equivalents $ 24.3 $ 17.7 Accounts receivable, net 362.4 353.0 Inventories, net 242.6 240.6 Prepaid expenses and other current assets 22.4 24.7 Deferred income taxes 51.6 55.9 ----------- -------- Total current assets 703.3 691.9 Property, plant and equipment, net of accumulated 305.8 310.0 depreciation and amortization Intangibles, net of accumulated amortization 366.5 381.3 Other assets 174.3 167.8 ----------- --------- Total assets $1,549.9 $1,551.0 ----------- --------- Liabilities and Shareholders' Equity Current liabilities: Short-term borrowings and current maturities of long-term debt $ 9.1 $ 5.6 Accounts payable 180.9 187.3 Accrued expenses 193.3 214.6 Income taxes 28.0 31.7 ----------- --------- Total current liabilities 411.3 439.2 ----------- --------- Long-term debt, less current maturities 243.2 201.3 Accrued post-retirement and post-employment obligations 128.1 133.2 Deferred income taxes 28.1 17.3 Other liabilities 16.8 16.2 ----------- -------- Total long-term liabilities 416.2 368.0 ----------- -------- Shareholders' equity: Common stock 78.4 78.2 Additional paid-in capital 360.8 337.1 Retained earnings 700.2 667.4 Cumulative translation adjustments (5.5) (1.4) Common stock in treasury (411.5) (337.5) ----------- -------- Total shareholders' equity 722.4 743.8 ----------- -------- Total liabilities and shareholders' equity $1,549.9 $1,551.0 ----------- ---------- See accompanying notes to financial statements GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statement of Cash Flow (In millions) (Unaudited) Six Months Ended June 30, 1997 1996 CASH FLOW FROM OPERATING ACTIVITIES: Net earnings $ 58.7 $ 57.0 Adjustments to reconcile net earnings to net cash from operating activities: Gain on disposition - - (20.8) Asset write down and other charges - - 19.7 Deferred income taxes 14.8 15.7 Depreciation and amortization 35.6 34.9 Pension credits (6.5) (4.8) Other, net (1.1) 5.9 Changes in assets and liabilities, net of effects from acquisitions and divestitures (43.9) (19.2) ----------- -------- Net cash from operating activities 57.6 88.4 ----------- -------- CASH FLOW FROM INVESTING ACTIVITIES: Divestitures 7.3 71.6 Capital expenditures (26.3) (28.6) Other, net 1.5 0.6 ----------- -------- Net cash from investing activities (17.5) 43.6 ----------- -------- CASH FLOW FROM FINANCING ACTIVITIES: Net change in short and long-term borrowings 84.7 (102.2) Dividends paid (26.5) (23.9) Issuance of common stock 8.3 8.0 Purchase of common stock (100.0) (0.9) ----------- -------- Net cash from financing activities (33.5) (119.0) ----------- ------- Net change in cash and cash equivalents 6.6 13.0 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17.7 1.0 ----------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24.3 $ 14.0 ----------- -------- See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Notes to Financial Statements (Unaudited) 1. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments (consisting of normal, recurring items) necessary for the fair presentation of results for these interim periods. These results are based upon generally accepted accounting principles consistently applied with those used in the preparation of the company's 1996 Annual Report on Form 10-K. The results of operations for the six-month period ended June 30, 1997 are not necessarily indicative of the results of operations that may be expected for the full year. The financial information as of June 30, 1997 should be read in conjunction with the financial statements contained in the company's 1996 Annual Report on Form 10-K. 2. Certain reclassifications have been made to the 1996 financial statements to conform with the 1997 presentation. 3. Inventories June 30, December 31, 1997 1996 (In millions) Finished goods $ 82.1 $ 80.8 Work in process 65.3 63.2 Raw material and purchased parts 116.1 117.1 -------- -------- Total FIFO cost 263.5 261.1 Excess of FIFO cost over LIFO inventory value (20.9) (20.5) -------- --------- Net carrying value $ 242.6 $ 240.6 --------- ---------- 4. Property, Plant and Equipment June 30, December 31, 1997 1996 (In millions) Property, plant and equipment, $ 767.1 $ 747.3 at cost Accumulated depreciation and amortization (461.3) (437.3) --------- ---------- Property, plant and equipment, net $ 305.8 $ 310.0 --------- ---------- 5. Capital Stock June 30, December 31, 1997 1996 (In millions) Common stock: Shares authorized 150.0 150.0 Shares issued 64.9 64.6 Held in treasury (14.6) (13.2) 6. Business Segment Information Three Months Ended June 30, 1997 1996 Net sales: (In millions) Process Controls $193.7 $188.8 Electrical Controls 257.0 234.7 Industrial Technology 88.9 91.5 --------- ---------- $539.6 $515.0 --------- ---------- Operating earnings: Process Controls $ 28.3 $ 27.6 Electrical Controls 26.9 23.9 Industrial Technology 15.4 15.7 --------- ---------- Total operating earnings before unallocated expenses and interest 70.6 67.2 Net interest expense (4.6) (5.6) Unallocated expenses (8.6) (8.9) --------- ---------- Earnings before income taxes $ 57.4 $ 52.7 --------- ---------- Six Months Ended June 30, 1997 1996 (In millions) Net sales: Process Controls $368.4 $361.9 Electrical Controls 493.0 457.3 Industrial Technology 183.8 177.5 --------- ---------- $1,045.2 $996.7 --------- ---------- Operating earnings: Process Controls $45.4 $ 66.1 (a) Electrical Controls 45.6 34.4 (b) Industrial Technology 33.7 22.9 (c) --------- ---------- Total operating earnings before unallocated expenses and interest 124.7 123.4 Net interest expense (8.0) (12.4) Unallocated expenses (18.8) (16.0) --------- ---------- Earnings before income taxes $ 97.9 $ 95.0 --------- ---------- (a) Includes $20.8 of gain on disposition of Kinney Vacuum, and a charge of $4.0 for product warranty costs. (b) Includes an $11.1 charge related to plant closure costs, asset valuations and environmental costs. (c) Includes $4.6 charge for asset valuations. 7. Supplemental Information - Statement of Cash Flow Six Months Ended June 30, 1997 1996 Cash paid for: (In millions) Interest $ 8.4 $14.3 --------- ---------- Income taxes $ 22.7 $18.2 --------- --------- The company had the following non-cash financing activity: Conversion of convertible debt into common stock $ 39.3 $ - - 8. Repurchase of Shares In December 1996, the Board of Directors approved a stock buy-back program of up to $100.0 million to offset the shares issued in relation to the call for the redemption of the 5.75 percent convertible subordinated notes. These shares were purchased systematically in open market transactions. On April 17, 1997, the program was completed with the total of 2.5 million shares repurchased for $100.0 million (see note 12). 9. Medium Term Notes On April 7, 1997, the company sold $25.0 million 7.114 percent medium-term senior notes that are due on April 8, 2002. On April 18, 1997, the company sold an additional $25.0 million 7.00 percent medium-term senior notes that are due on October 18, 2000. The proceeds were used to pay down floating rate commercial paper. 10. Accounting Pronouncements In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share," which changes the methodology of calculating earnings per share. SFAS No. 128 requires the disclosure of diluted earnings per share regardless of its difference from basic earnings per share. The company plans to adopt SFAS No. 128 in December 1997. Early adoption is not permitted. Had the company adopted SFAS No. 128 as of June 30, 1997, the related per share disclosure for both basic and diluted earnings per share would have been: Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Basic $0.68 $0.64 $1.15 $1.15 Diluted 0.68 0.62 1.14 1.13 In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information". While the company is studying the application of the disclosure provisions, it does not expect either of these statements to materially affect its financial position or results of operations. 11. Joint Venture On June 30, 1997, the company and Emerson Electric Company, entered into an agreement in principle to form a joint venture combining Emerson's Appleton Electric division and the company's Electrical Group. Upon formation of the joint venture, Emerson would hold a majority interest in the entity and the company would account for its investment under the equity method of accounting. The company's Electrical Group accounts for approximately 15 percent of the company's consolidated net sales. 12. Sale of Pump Division On July 21, 1997 the company announced that it had entered into an agreement to sell substantially all of the assets of the General Signal Pump Group to Pentair, Inc. for approximately $200 million. Consummation of the sale is subject to the satisfaction of customary conditions including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Subject to closing adjustments, the company expects to record a gain on the transaction. The General Signal Pump Group accounts for approximately 10 percent of the company's consolidated sales. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in millions, except per-share data) Results of Operations - Second Quarter 1997 Compared With Second Quarter 1996 1997 1996 Reported Reported Change Net sales $539.6 $515.0 4.8% Gross profit 163.7 157.7 3.8% Margin percent 30.3% 30.6% Selling, general and administrative 101.7 99.4 2.3% expenses Percent of sales 18.8% 19.3% Operating earnings 62.0 58.3 6.3% Interest expense, net 4.6 5.6 (17.9%) Net earnings 34.4 31.6 8.9% Net earnings per share $0.68 $0.64 6.3% Net sales: Sales increased 4.8 percent over 1996 levels due primarily to higher volume in the Electrical Controls sector. International sales represented approximately 22 percent of total net sales in 1997 and 1996. Export sales were relatively flat with the second quarter of 1996. Foreign sales increased approximately 9 percent versus the same period last year primarily as a result of improvements of the company's Canadian and United Kingdom affiliates. Process Control sector sales were $193.7 in the second quarter of 1997 as compared to $188.8 in the same period in 1996. The increase was primarily the result of higher demand for industrial oven and laboratory freezer products. This increase was partially offset by lower sales volume of crystal growing furnaces as a result of a cyclical downturn in the semiconductor equipment market. Sales in the Electrical Controls sector increased 9.5 percent to $257.0 from $234.7 in the same period of last year. Sales increases were reported by all six operating units within the sector. The largest improvements were in the construction material, industrial electrical, treadmill motor and medium power transformer products. Industrial Technology sector sales decreased to $88.9 versus $91.5 in the same period in 1996. New networking product sales of the CD9000TM ESCON Director were offset by a decrease in sales associated with the discontinuance of a low margin original equipment manufacturer ("OEM") contract. In addition, worker strikes at North American automobile manufacturers stemmed the increased demand from North American automobile producers experienced in the first quarter of the year. Gross profit: Gross profit as a percentage of sales decreased to 30.3 percent from 30.6 percent in the second quarter of 1996. The decrease was due to higher sales of lower margin products and increased new product development costs partially offset by productivity improvements and material cost savings. Selling, general and administrative expenses: Selling, general and administrative expenses as a percentage of sales decreased to 18.8 percent compared to 19.3 percent in the second quarter of 1996. Second quarter 1997 selling, general and administrative expenses were positively impacted by a $1.9 insurance settlement in the Process Controls sector and the reversal of $0.8 of excess plant closure costs in the Electrical Controls sector. Included in selling, general and administrative expenses were pension credits of $2.9 in 1997 and $2.1 in 1996. Operating earnings: Operating earnings for the Process Controls sector increased 2.5 percent to $28.3 versus $27.6 in the same period in 1996. The increase was primarily driven by the higher volume in the oven and freezer business partially offset by lower volume in the crystal growing furnace business. Electrical Controls sector operating earnings increased 12.6 percent to $26.9, versus $23.9 in the same period in 1996. The increase was driven by higher sales at all six business units and productivity improvements in the electrical product and medium power transformers businesses. Industrial Technology sector operating earnings were relatively flat at $15.4 versus $15.7 in the same period in 1996. Higher margins on new telecommunication products offset lower sales volume. Unallocated expenses declined 3.4 percent to $8.6 in the second quarter of 1997 from $8.9 in the same period in 1996. 1996 unallocated expenses were positively impacted by the collection of a $1.3 previously written off receivable. Interest expense: Net interest expense decreased 17.9 percent to $4.6 versus $5.6 in the same period of 1996 due to the conversion of subordinated notes in late 1996 and early 1997 as well as lower average debt levels. Cash generated from operations and divestitures was used to pay down debt incurred in connection with acquisitions made in 1995. Net earnings: Net earnings were $34.4 or $0.68 per share in 1997 compared to $31.6 or $0.64 per share in 1996. The company's effective tax rate was 40.0 percent in both 1997 and 1996. Results of Operations - Six Months 1997 Compared With Six Months 1996 1997 1996 Reported Reported Change Net sales $1,045.2 $996.7 4.9% Gross profit 312.0 288.0 8.3% Selling, general and administrative 206.1 201.4 2.3% expenses Operating earnings 105.9 107.4 (1.4%) Interest expense, net 8.0 12.4 (35.5%) Net earnings 58.7 57.0 (3.0%) Net earnings per share $ 1.15 $ 1.15 - - To facilitate a more meaningful comparison of the results of operations for the first half of 1997 with the same period in 1996, the following items reported in the first half 1996 net earnings should be excluded. Gain on disposition: In January 1996, the company disposed of Kinney Vacuum Company, a unit previously included in the Process Controls sector, for $29.0 and recorded a pre-tax gain of $20.8. Included in the gain was a LIFO liquidation of approximately $1.1 and transaction costs of approximately $0.5. Product warranty: In March 1996, the company extended warranty service to certain products sold by the Process Controls sector which were not covered by warranty. The company recorded $4.0 to cover the cost of such repairs. Through June 30, 1997, payments made against this reserve were $3.5. It is anticipated that the remaining amount will be expended in 1997. Capitalized software: The company reviews on an ongoing basis the carrying amount of company assets. As part of this review, in the first quarter of 1996, the future market potential of capitalized software in the Industrial Technology sector was determined to be impaired. Accordingly the company wrote off $4.6 of such software. Factory closure and other: As part of the company's ongoing review of operations, the company decided in March 1996 to close a factory in the Electrical Controls sector and provided $4.7 primarily for lease termination costs, asset write-downs and severance. In connection with this review, the company identified property, plant and equipment that will not be utilized in future operations, and, therefore, recorded a $4.4 charge to write-off the assets. Environmental: During the first quarter of 1996, the company changed its estimate of environmental costs to be incurred at one of its facilities in the Electrical Controls sector. The change in estimate of $2.0 was a result of additional information received about the method and extent of remediation required. The following table summarizes the results of operations for the first half of 1997 and 1996 excluding the items discussed above. 1997 1996 Reported Adjusted Change Net sales $1,045.2 $996.7 4.9% Gross profit 312.0 301.0 3.7% Margin percent 29.9% 30.2% Selling, general and administrative 206.1 194.7 5.9% expenses Percent of sales 19.7% 19.5% Operating earnings 105.9 106.3 (0.4%) Interest expense, net 8.0 12.4 (35.5%) Net earnings 58.7 56.3 4.3% Net earnings per share $1.15 $1.14 0.9% Net sales: Sales in the first half of 1997 increased 4.9 percent over first half 1996 due primarily to increase in the Electrical Controls sector and higher first quarter sales in the telecommunication market. International sales in 1997 increased 7 percent over the same period of 1996 and represented approximately 23 percent of total net sales versus 22 percent in the same period of 1996. Export sales increased 3 percent over the first half of 1996. Foreign sales increased approximately 10 percent versus the same period last year primarily as a result of improvements of the company's Canadian and United Kingdom affiliates. Process Control sector sales were $368.4 in the first half of 1997 as compared to $361.9 in the same period in 1996. The small increase was primarily the result of higher industrial oven and laboratory product sales. The increases were partially offset by lower sales volume of crystal growing furnaces as a result of a cyclical downturn in the semiconductor equipment market in late 1996 and continuing into 1997. Sales in the Electrical Controls sector increased 7.8 percent to $493.0 from $457.3, as compared to the same period last year. Sales increases were reported by all six units within the sector. The largest improvements were in the construction material, industrial electrical, treadmill motor and medium power transformer products. Industrial Technology sector sales increased 3.5 percent to $183.8 versus $177.5 in the same period in 1996. New networking product sales of the CD9000TM ESCON Director product as well as new application sales of an existing networking monitoring product were the primary reasons for the increase. Increased demand from North American automotive production also contributed to the growth but was negatively impacted by North American automobile worker strikes in the second quarter of 1997. Gross profit: Gross profit as a percentage of sales decreased from 30.2 percent to 29.9 percent. The margin decrease was largely due to higher sales of lower margin products, higher labor, new product development and new information systems costs partially offset by productivity and material cost savings. Selling, general and administrative expenses: Selling, general and administrative expenses as a percentage of sales increased in the first half from 19.5 percent in 1996 to 19.7 percent in 1997. This increase resulted from higher marketing, sales commissions and information systems costs in the first quarter of 1997. 1997 selling, general and administrative expenses were positively impacted by a $1.9 insurance settlement in the Process Controls sector and the reversal of $0.8 of excess plant closure costs in the Electrical Controls sector. Included in selling, general and administrative expenses were pension credits of $6.5 in 1997 and $4.8 in 1996. Operating earnings: Process controls operating earnings decreased 7.9 percent to $45.4, versus $49.3 in the same period in 1996. The decline is primarily due to a shift in mix to lower margin products in the pump and coal feeder systems businesses and lower volume in the crystal growing furnace business. 1996 operating earnings of the Process Controls sector included $0.7 of environmental insurance recoveries. Electrical controls operating earnings were flat at $45.6, versus $45.5 in the same period in 1996. Included in 1997 operating earnings is approximately $0.6 of pre-tax gain on the sale of a product line for approximately $2.4. 1996 operating earnings of the Electrical Controls sector included $1.3 of environmental insurance recoveries. Industrial Technology sector operating earnings increased 22.5 percent to $33.7 versus $27.5 in the same period in 1996. The increase was due mainly to higher first quarter sales volume, a shift toward the higher margin CD9000TM ESCON Director product and productivity improvements in automotive product lines. Unallocated expenses increased to $18.8 in the first half of 1997 from $16.0 in the same period in 1996. 1996 unallocated expenses were positively impacted by the collection of a $1.3 previously written off receivable. The increase is primarily the result of higher expenses due to divested businesses and higher benefit cost accruals. Interest expense: Net interest expense decreased 35.5 percent to $8.0 versus $12.4 in the same period of 1996 due to the conversion of subordinated notes in late 1996 and early 1997 as well as lower average debt levels. Cash generated from operations and divestitures in 1996 was used to pay down debt incurred in connection with acquisitions made in 1995. Net earnings: Net earnings were $58.7 or $1.15 per share in 1997 compared to $56.3 or $1.14 per share in 1996. The company's effective tax rate was 40.0 percent in both 1997 and 1996. Financial Condition - June 30, 1997 Compared to December 31, 1996 The following summarizes the cash flow activity for the first six months of 1997 compared to the first six months of 1996. 1997 1996 Cash flow from operating activities $57.6 $88.4 Divestitures 7.3 71.6 Capital expenditures (26.3) (28.6) Other investing activities 1.5 0.6 Cash flow from investing activities (17.5) 43.6 Debt borrowings/(repayments) 84.7 (102.2) Dividends paid (26.5) (23.9) Purchase of common stock (100.0) (0.9) Issuance of common stock 8.3 8.0 Cash flow from financing activities (33.5) (119.0) Included in operating cash flow for 1997 and 1996 were expenditures of $3.4 and $13.5, respectively, related to previously divested operations and $3.7 and $3.3, respectively, for severance pay. Operating cash flow for the first half of 1997 decreased in comparison to first half of 1996 primarily due to higher accounts receivable balances resulting from the higher sales volume and lower accrued expenses due to the utilization of disposition and restructuring accruals as well as payment of other non-operating accruals. In December 1996, the Board of Directors approved a stock buy- back program of up to $100.0 to offset the dilutive impact of shares issued in connection with the convertible subordinated notes redemption. On April 17, 1997, the company concluded the buy-back program which resulted in the repurchase of approximately 2.5 million shares. On June 19, 1997, the Board of Directors approved a stock buy-back program of up to $150.0 subject to the consummation of the GS Pump business divestiture (see note 12). On June 30, 1997, the company entered into an agreement in principle to form a joint venture with Emerson's Appleton Electric division (see note 11). The company's contribution to the joint venture is not expected to significantly affect the company's liquidity. Total debt-to-total capitalization was 25.9 percent at June 30, 1997, up from 21.8 percent at year-end, due to higher long-term debt at the end of the second quarter. The debt level increased in the second quarter of 1997 in order to repurchase common shares to offset the impact of the converted debt. The company is well positioned to finance future working capital requirements and capital expenditures through current earnings and available credit facilities. On April 7, 1997, the company sold $25.0 million 7.114 percent medium-term senior notes that are due on April 8, 2002. On April 18, 1997, the company sold an additional $25.0 million 7.00 percent medium-term senior notes that are due on October 18, 2000. The proceeds were used to pay down floating rate commercial paper. Other Matters Since the company is a producer of capital goods and equipment, its results can vary with the relative strength of the economy. Demand for products in the Process Controls sector follows the demand for capital goods orders. The Electrical Controls sector depends upon several markets, principally the nonresidential construction and computer equipment industries. The Industrial Technology sector depends on several markets, primarily automotive, mass transportation, and telecommunications equipment. Mass transportation depends upon continued federal and local government spending, andtelecommunications is dependent upon continued research and development and the continued success of new products. While no one marketplace or industry has a significant impact on the company's operations or results, the inherent pace of technological changes presents certain risks that the company monitors carefully. Success within all of the company's businesses is dependent upon the timely introduction and acceptance of new products. Forward-looking Statements The company may from time to time make projections concerning future operations and earnings. The company's forward-looking statements are based on the company's current expectations, which are subject to a number of risks and uncertainties that could materially affect or reduce such operations and earnings. In addition to the general factors identified in "Other Matters" above, the primary factors that could specifically affect the company's expectations include the failure of: (1) order rates increasing as expected, (2) productivity improvements meeting or exceeding budget, and (3) new products under development being produced and accepted as anticipated. PART II: OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 10.1 364 Day Credit Agreement - Amendment No. 2 among General Signal Corporation and Various Commercial Banking Institutions, dated May 29, 1997. 10.2 Four Year Credit Agreement - Amendment No. 3 among General Signal Corporation and Various Commercial Banking Institutions, dated May 29, 1997. 10.3 General Signal Corporation Savings and Stock Ownership Plan as amended and restated July 1, 1997. 27.0 Financial Data Schedule (b) Reports on Form 8-K: The Registrant did not file any reports on Form 8-K during the quarter covered by this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GENERAL SIGNAL CORPORATION /s/ Raymond L. Arthur Raymond L. Arthur Vice President and Controller Chief Accounting Officer DATE: July 25, 1997 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GENERAL SIGNAL CORPORATION Raymond L. Arthur Vice President and Controller Chief Accounting Officer DATE: July 25, 1997 EX-10.1 2 364 Day Credit Agreement AMENDMENT NO. 2 THIS AMENDMENT NO. 2, (this "Amendment"), dated as of May 29, 1997, among GENERAL SIGNAL CORPORATION (the "Company") and the undersigned commercial banking institutions (herein collectively "Banks"). WITNESSETH: WHEREAS, the Company and the Banks are parties to a certain 364 Day Credit Agreement, dated as of June 1, 1995 as amended as of May 31, 1996 (the "364 Day Credit Agreement"); and WHEREAS, the parties desire to amend further certain terms of the 364 Day Credit Agreement; NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto hereby agree as follows: 1. Except as otherwise defined herein, the capitalized terms used herein shall have the meanings respectively ascribed to them in the 364 Day Credit Agreement. 2. Each Bank's Commitment shall be the amount set forth opposite its signature hereto, as such amount may be reduced or increased from time to time pursuant to Sections 1.1.6, 1.1.7 and 1.1.8 or Section 13.5 of the 364 Day Credit Agreement. 3. The "Revolver Expiration Date" is hereby amended to mean the earlier of May 28, 1998 or the date of termination in whole of the Commitments. All references to the "364 Day Credit Agreement" shall be deemed to refer to the 364 Day Credit Agreement as hereby amended. 4. The table in Section 3.1.8, Applicable Margin, is hereby deleted and replaced with the following: Public Debt Rating Eurodollar Margin CD Margin Level 1: AA-/Aa3 or higher .185% .310% Level 2: A-/A3 or higher, but less than Level 1 .200% .325% Level 3: BBB-/Baa3 or higher, but less than Level 2 .350% .475% Level 4: Less than BBB-/Baa3 .500% .625% 5. The table in Section 3.2, Facility Fee, is hereby deleted and replaced with the following: Public Debt Rating Facility Fee Percentage Level 1: AA-/Aa3 or higher .040 % Level 2: A-/A3 or higher, but less than Level 1 .060 % Level 3: BBB-/Baa3 or higher, but less than Level 2 .100% Level 4: Less than BBB-/Baa3 .150 % 6. Except as set forth in this Amendment, all terms and conditions of the 364 Day Agreement shall remain unchanged. IN WITNESS WHEREOF, the Company and each Bank have caused this Amendment to be executed, as of the day and year first above written, by one of its officers thereunto duly authorized. GENERAL SIGNAL CORPORATION By: Terry J. Mortimer ____________________________ Vice President and Treasurer One High Ridge Park Stamford, CT 06904 Attention: Treasurer Telecopier No.: (203) 329-4365 EX-10.2 3 Four Year Credit Agreement AMENDMENT NO. 3 THIS AMENDMENT NO.3 (this "Amendment"), dated as of May 29, 1997, among GENERAL SIGNAL CORPORATION (the "Company") and the undersigned commercial banking institutions (herein collectively "Banks"). WITNESSETH: WHEREAS, the Company and the Banks are parties to a certain Four Year Credit Agreement, dated as of January 12, 1994 as amended as of January 12, 1995 and May 31, 1996, (the "Four Year Credit Agreement"); and WHEREAS, the parties desire to further amend certain terms of the Four Year Credit Agreement. NOW, THEREFORE, in consideration of the agreements contained herein, the parties hereto hereby agree as follows: 1. Except as otherwise defined herein, the capitalized terms used herein shall have the meanings respectively ascribed to them in the Four Year Credit Agreement. 2. Each Bank's Commitment shall be the amount set forth opposite its signature hereto, as such amount may be reduced or increased from time to time pursuant to Sections 1.1.6, 1.1.7 and 1.1.8 or Section 13.5 of the Four Year Credit Agreement. 3. The term "Revolver Expiration Date" is hereby amended to mean the earlier of May 28, 2002 or the date of termination in whole of the Commitments. 4. The term "Agreement" is hereby amended to mean this "Five Year Credit Agreement" and all references to the "Five Year Credit Agreement" shall be deemed to refer to the Four Year Credit Agreement as hereby amended. 5. The table in Section 3.1.8, Applicable Margin, is hereby deleted and replaced with the following: Public Debt Rating Eurodollar Margin CD Margin Level 1: AA-/Aa3 or higher .165% .290% Level 2: A-/A3 or higher, but less than Level 1 .180% .305% Level 3: BBB-/Baa3 or higher, but less than Level 2 .300% .425% Level 4: Less than BBB-/Baa3 .400% .525% 6. The table in Section 3.2, Facility Fee, is hereby deleted and replaced with the following: Public Debt Rating Facility Fee Percentage Level 1: AA-/Aa3 or higher .060 % Level 2: A-/A3 or higher, but less than Level 1 .080 % Level 3: BBB-/Baa3 or higher, but less than Level 2 .150% Level 4: Less than BBB-/Baa3 .250 % 7. Except as set forth in this Amendment, all terms and conditions of the Four Year Credit Agreement shall remain unchanged. IN WITNESS WHEREOF, the Company and each Bank have caused this Amendment to be executed, as of the day and year first above written, by one of its officers thereunto duly authorized. GENERAL SIGNAL CORPORATION By: Terry J. Mortimer __________________________ Vice President and Treasurer One High Ridge Park Stamford, CT 06904 Attention: Treasurer Telecopier No.: (203) 329-4365 EX-10.3 4 GENERAL SIGNAL CORPORATION SAVINGS AND STOCK OWNERSHIP PLAN As Amended and Restated July 1, 1997 070397 TABLE OF CONTENTS ARTICLE PAGE I PURPOSE I-1 II DEFINITIONS II-1 III ELIGIBILITY AND MEMBERSHIP III-1 IV MEMBER ELECTED CONTRIBUTIONS IV-1 V EMPLOYER CONTRIBUTIONS V-1 VI MEMBERS' ACCOUNTS VI-1 VII INVESTMENT ELECTIONS VII-1 VIII VESTING VIII-1 IX IN SERVICE WITHDRAWALS IX-1 X DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT X-1 XI DISTRIBUTION OF EXCESS DEFERRALS XI-1 XII DISTRIBUTION OF EXCESS CONTRIBUTIONS XII-1 XIII DISTRIBUTION OF EXCESS AGGREGATE XIII-1 CONTRIBUTIONS XIV APPLICATION OF FORFEITURES XIV-1 XV TRUST XV-1 XVI ADMINISTRATION XVI-1 XVII APPROVAL BY THE INTERNAL REVENUE SERVICE XVII-1 XVIII GENERAL PROVISIONS XVIII-1 XIX AMENDMENT, TERMINATION AND MERGER XIX-1 XX TRANSFERS OF ACCOUNTS FROM OTHER PLANS XX-1 XXI TOP-HEAVY PROVISIONS XXI-1 ARTICLE I PURPOSE 1.1 The purpose of the General Signal Corporation Savings and Stock Ownership Plan is to encourage employees to make and continue careers with General Signal Corporation and its participating subsidiaries by pro- viding eligible employees with an efficient and con- venient way to save part of their income on a regular and long term tax-preferred basis, to strengthen their interest in the Company and its profitability by providing an opportunity to invest in the Common Stock of General Signal Corporation, and to provide a supplemental source of retirement income. 1.2 The Plan was established effective January 1, 1976, and was amended from time to time thereafter. The pro- visions of this restated Plan apply to all contributions made under the Plan with respect to all payrolls paid on or after this restatement. The provisions of the Plan as in effect from time to time prior to this restatement will continue to apply to all contributions made with respect to prior years, unless otherwise specifically provided. 1.3 The Plan as amended and restated and its related Trust are intended to qualify as a plan and trust which meet the requirements of Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code of 1986, as from time to time amended. ARTICLE II DEFINITIONS 2.1 When used in the Plan, the following terms, when capitalized, have the meanings set forth below: (a) "Accounts" means the separate accounts maintained by the Corporate Benefits Committee on behalf of each Member, pursuant to Section 6.1, to reflect the Member's interest in the Trust Fund. (b) "Act" means the Employee Retirement Income Security Act of 1974, as from time to time amended. (c) "Beneficiary" means the person or persons desig- nated by the Member or otherwise determined in accordance with Section 18.8. (d) "Corporate Benefits Committee" means the Corporate Benefits Committee appointed to administer the Plan in accordance with Article XVI. (e) "Board of Directors" means the Board of Directors of the Company. (f) "Code" means the Internal Revenue Code of 1986, as from time to time amended. References to specific sections of the Code are deemed to be references to any comparable section or sections of any future legislation that amends, supplements or supersedes such sections. (g) "Company" means General Signal Corporation, a New York Corporation. (h) "Compensation" means the amount which an Employee receives as salary from the Employer including management incentive compensation, sales incentives and commissions, overtime pay, vacation pay, holiday pay, night shift bonus, as reported for federal income tax purposes, and before any reduc- tion for Tax Deferred Contributions or for any salary deferred amounts not included in gross income pursuant to Section 125 of the Code, but excluding any payments under the Company's stock option plans or Long Term Incentive Compensation Plan, moving and living allowances, retainers, severance payments, any special payments made for services performed outside the Member's regular duties and other special payments. Effective January 1, 1994, Compensation for any calendar year shall be limited to $150,000 (or such larger amount as may be determined by the Internal Revenue Service). (i) "Continuous Employment" means the following: (1) Continuous Employment is the number of full years, completed months and days of service with the Controlled Group from the Employee's original date of hire to the Employee's severance from service date, including periods of layoff, leave of absence or other temporary breaks in service not in excess of 12 complete months. For this, an Employee's "original date of hire" is the date on which the person first performs an hour of service for which the person is entitled to payment for the performance of duties for an Employer or a member of the Controlled Group; an Employee's "severance from service date" is the earlier of the date on which the Employee quits, retires, is discharged, or dies, or the first anniversary of the first date of absence for any other reason (but only if the Employee returns to active employment within the authorized period of time). In determining whether an Employee has incurred a severance from service date, an absence from work for any period not in excess of 12-consecutive months which begins on or after January 1, 1985 (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 the adopting 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 treated as Continuous Employment for this purpose. (2) Continuous Employment will be preserved during the first 12 complete months following the last day of active employment, but not thereafter, and only if the Employee returns to active employment within the authorized period of time. (3) If an Employee is absent from the service of the Controlled Group because of service in the uniformed services of the United States and the person returns to service with the Controlled Group having applied to return while the person's reemployment rights were protected by law, the absence shall be included in the person's Continuous Employment. (j) "Controlled Group" means any company which is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) which also includes as a member the Employer; any trade or business under common control (as defined in Section 414(c) of the Code) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to regulations under Section 414 (o) of the Code. Notwithstanding the foregoing, for purposes of Section 6.3, the definitions in Sections 414(b) and (c) of the Code shall be modified by substituting the phrase "more than 50 percent" for the phrase "as least 80 percent" each place it appears in Section 1563(a)(1) of the Code. (k) "Disability" means a Member's physical or mental incapacity which continues for a period of 6 con- secutive months and would entitle the Member to benefits under the Member's Employer's disability plan, or for which disability benefits under the Social Security Act are payable. (l) "Effective Date" means January 1, 1976. (m) "Employee" means each person who is employed by an Employer but does not include: (i) a person who is neither a citizen nor a resident of the United States and who receives no earned income from any Employer which constitutes income from sources within the United States, (ii) any employee of an organization who becomes employed by an Employer as a result of the acquisition of that organization by the Employer, unless and until the Human Resources Officer otherwise determines (for purposes of this Plan, the date of the acquisition will be considered the employee's date of hire unless the Human Resources Officer determines otherwise), (iii) any person included in a unit of employees who are covered by a collective bargaining agreement which does not expressly provide for participation in this Plan, or (iv) a leased employee (as defined in Section 414(n) of the Code; provided, however, that if a leased employee becomes an Employee, prior service as a leased employee shall be recognized for eligibility and vesting purposes. (n) "Employer" means the Company or any of its subsidiaries or affiliates which may elect to par- ticipate in the Plan with the consent of the Human Resources Officer. (o) "Enrollment Date" means January 1, 1976, or the first day of any calendar quarter thereafter. (p) "Five percent owner" means with respect to a corporation, any person who owns (or is considered as owing within the meaning of section 318 of the code) more than 5% of the outstanding stock of the corporation, or stock possessing more than 5% of the total voting power of the corporation. (q) "Highly Compensated Employee" means for a Plan Year commencing on or after January 1, 1997, any employee of the Controlled Group (whether or not eligible for membership in the Plan) who (1) was a Five Percent Owner for such Plan Year or the prior Plan Year, or (2) for the preceding Plan Year received compensation (as defined in Section 414(q)(4) of the Code) in excess of $80,000, and, if the Employer so elects, was among the highest 20 percent of employees for the preceding Plan Year when ranked by such compensation paid for that year excluding, for purposes of determining the number of such employees, such employees as the Corporate Benefits Committee may determine on a consistent basis pursuant to Section 414(q) of the Code. The $80,000 dollar amount in the preceding sentence shall be adjusted from time to time for cost of living in accordance with Section 414(q) of the Code. Notwithstanding the foregoing, employees who are nonresident aliens and who receive no earned income from the Controlled Group which constitutes income from sources within the United States shall be disregarded for all purposes of this Section. The provisions of this Section shall be further subject to such additional requirements as shall be described in Section 414(q) of the Code and its applicable regulations, which shall override any aspects of this Section inconsistent therewith. (r) "Human Resources Officer" means the chief human resources officer of the Company. (s) "Investment Committee" means the Investment Committee provided for in Article XVI of this Plan. (t) "Investment Funds" means: (1) The "Company Stock Fund" which is a fund for the investment in Stock, and (2) Such other funds which may be established from time to time by the Investment Committee. (u) "Matching Contributions" means the contributions made by the Employers pursuant to Section 5.1. The portion of the Plan consisting of Matching Contributions made prior to July 1, 1997 (as adjusted for earnings and losses attributable thereto) constitutes an employee stock ownership plan as defined in Section 4975(e)(7) of the Code and a stock bonus plan as described in Section 401(a) of the Code. Such portion of this Plan is hereinafter referred to as the "ESOP". The assets of the ESOP shall be invested primarily in qualifying employer securities as defined by Section 4975(e)(8) of the Code. Other amounts invested in Stock may also be included in the ESOP portion of the Plan. (v) "Member" means an Employee who has satisfied the requirements for membership in the Plan specified in Article III. An individual will continue to be considered a Member until all Accounts maintained on the Member's behalf have been either distributed or forfeited. (w) "Member Elected Contributions" means the Tax Deferred Contributions and Taxed Contributions which a Member elects to have made under Article IV. (x) "Plan" means this General Signal Corporation Savings and Stock Ownership Plan as it may be amended from time to time. (y) "Plan Year" means (i) the calendar year beginning on the Effective Date and each calendar year there- after prior to January 1, 1989, (ii) the period January 1, 1989 through November 30, 1989 (iii) commencing December 1, 1989 the 12-month period commencing on each December 1 and ending on the succeeding November 30 until November 30, 1991, (iv) the period December 1, 1991 through December 31, 1991 and (v) commencing January 1, 1992, the calendar year, and each calendar year thereafter. (z) "Retirement" means the Member's termination of service for any reason with the Controlled Group on or after age fifty-five (55). (aa) "Stock" means the Common Stock, par value of $1.00 per share, of the Company. (bb) "Tax Deferred Contributions" means contributions made under Section 4.1 of this Plan at a Member's election pursuant to Section 401(k) of the Code and which, as to a Member, are considered tax deferred under Section 401(k) of the Code, but in an amount not to exceed $7,000 (as adjusted under Section 402(g) of the Code) or such greater amount which may be permitted to be contributed to the Plan on a tax deferred basis under a qualified cash or deferred arrangement under Section 401(k) of the Code. (cc) "Taxed Contributions" means Member contributions made under this Plan which do not qualify for deferral under Section 401(k) of the Code. (dd) "Trust Agreement" means the instrument or instruments executed between the Company and the Trustee or Trustees named therein which provides for the receiving, holding, investing, and disposing of the Trust Fund. (ee) "Trust Fund" means the assets of the Plan held by the Trustee or Trustees. (ff) "Trustee" means the trustee or trustees at any time acting under the Trust Agreement or Trust Agreements. (gg) "Valuation Date" means the last business day of any calendar quarter on which the New York Stock Exchange is open for trading. ARTICLE III ELIGIBILITY AND MEMBERSHIP 3.1 Eligibility. As of any Enrollment Date the individuals who are eligible to participate in this Plan and become Members are all those who: (a) are Employees and (b) are receiving Compensation. 3.2 Membership. An eligible Employee can become a Member on any Enrollment Date only if: (a) the person has elected to have either Tax Deferred Contributions or Taxed Contributions made to the Plan as specified in Article IV, (b) the person has signed the enrollment form prescribed by the Corporate Benefits Committee and filed it with the person's Employer on the first day of employment or subsequently at least fifteen (15) days prior to the Employee's applicable Enrollment Date, and (c) the person is still an Employee and receiving Compensation on the Enrollment Date. ARTICLE IV MEMBER ELECTED CONTRIBUTIONS 4.1 Tax Deferred Contributions. A Member, unless the person ceases to be an Employee, may elect to defer each pay period an amount equal to at least 1% but not more than 17% (only a whole percentage can be elected) of the Com- pensation which otherwise would have been paid to the Member during that period and have that amount contributed under the Plan on the Member's behalf by the Member's Employer as a Tax Deferred Contribution; provided, however, that, even though the amount is not equal to a full percentage of Compensation, a Member may elect to make aggregate Tax Deferred Contributions of $7,000 (as adjusted under the provisions of Section 402(g)(5) of the Code), or such greater amount which may be permitted to be contributed to the Plan on a tax deferred basis under a qualified cash or deferred arrangement under Section 401(k) of the Code, in any taxable year; and further provided that such Tax Deferred Contributions shall not exceed the amount permitted to be contributed under the provisions of Section 415(c) of the Code or under the actual deferral percentage test under Section 401(k) (3)(A)(ii) of the Code and the regulations thereunder. 4.2 Taxed Contributions. A Member may elect to make Taxed Contributions for each pay period by payroll deductions in an amount equal to any whole number percentage of the Member's Compensation not to exceed 10% of the Member's Compensation subject to a minimum of 1% for a Member who has not elected any Tax Deferred Contributions. In addition, a Member's election of Tax Deferred Contributions shall automatically be treated as an election of Taxed Contributions (subject to the 10% limitation on Taxed Contributions) to the extent additional Tax Deferred Contributions may not be made by reason of the limitation set forth in Section 2.1(bb). 4.3 Aggregate Limitation on Tax Deferred Contributions and Taxed Contributions. Notwithstanding the foregoing provisions of Section 4.1 and 4.2, the aggregate per- centage of Tax Deferred Contributions and Taxed Contri- butions may not exceed 17%. 4.4 Change in Contribution Rate. A Member may discontinue or change the Member's rate of Member Elected Contributions only as of an Enrollment Date by filing the appropriate notice with the Member's Employer at least 15 days prior to the applicable Enrollment Date. A Member may not have discontinued contributions made up, but may resume having contributions made as of any Enrollment Date by filing the enrollment election specified in Section 3.2. 4.5 Change in Employment Status. (a) A Member who ceases to be an Employee, but who remains in the employment of the Controlled Group, will have his or her Member Elected Contributions automatically discontinued as of the date of change of employment status. Such Member's Elected Contri- butions may be resumed on any Enrollment Date after the Member again becomes an Employee by filing the enrollment election specified in Section 3.2, but discontinued contributions cannot be made up. (b) No Member Elected Contributions will be made to the Plan for any period in which the Member is not receiving Compensation. 4.6 Payment of Member Elected Contributions to Trustee. As soon as practicable, but in no event later than 15 days after the last day of each month, the Employers will pay to the Trustee the amount of each Member's Elected Contributions for each payroll paid in the month. 4.7 Modification of Member Elected Contributions to Satisfy Code Requirements. (a) In order to satisfy the deferral percentage limitations imposed by Section 401(k)(3) of the Code or the actual contribution percentage limitation imposed by Section 401(m)(3) of the Code, the Corporate Benefits Committee may, at any time, in its sole discretion and without the prior consent of affected Members respectively limit the percentage of Tax Deferred Contributions and/or Taxed Contributions elected by either all Members or all Members who are Highly Compensated Employees. Such limitation will be imposed to the extent deemed necessary by the Corporate Benefits Committee. If any Member's Tax Deferred Contribution rate is limited pursuant to this Section or the limitation set forth in Section 2.1(bb), the rate at which the Member has elected to make Taxed Contributions may be considered increased to the extent that the Member's Tax Deferred Contribution rate has been decreased. A Member's Taxed Contributions for the Plan Year may not exceed 10% of the Member's Com- pensation for the Plan Year unless the Member is precluded by Section 6.3 from having any Tax Deferred Contributions made to the Plan, in which case the Member's Taxed Contributions will be limited to 13% of the Member's Compensation for the Plan Year (any refund to the Member to comply with this limitation will be made as soon as practicable after the end of the Plan Year). In no event, however, shall a Member's Taxed Contributions exceed 10% of the Member's aggregate Compensation for all of the Plan Years of the Member's participation in the Plan. (b) For purposes of determining whether the Plan satisfies the deferral percentage limitation imposed by Section 401(k)(3) of the Code, (1) the actual deferral percentage specified in Section 401(k)(3)(B) of the Code for each Member will be the ratio of the Tax Deferred Contribution allocated to the Member's Accounts for the Plan Year to the Member's compensation which meets the requirements of Section 414(s) of the Code and the regulations thereunder for the Plan Year, and (2) If an individual has not satisfied the eligibility requirements set forth in Section 3.1 of this Plan during any part of the Plan Year, Compensation received by such person during that period will not be included in determining the person's "actual deferral percentage" within the meaning of Section 401(k)(3)(B) of the Code. (c) All Member Elected Contributions are subject to the limitations imposed in Section 6.3. 4.8 Contributions During Period Of Military Leave. (a) Without regard to any limitations on contributions set forth in this Article IV, a Member who is credited with Continuous Employment under the provisions of Section 2.1(i)(3) because of a period of service in the uniformed services of the United States, may elect to contribute to the Plan the Tax Deferred Contributions and Taxed Contributions that could have been contributed to the Plan in accordance with the provisions of the Plan had the person remained continuously employed by the Employer throughout such period of absence ("make- up contributions"). The amount of make-up contributions shall be determined on the basis of the Member's Compensation in effect immediately prior to the period of absence, and the terms of the Plan at such time. Any Tax Deferred Contributions and Taxed Contributions so determined shall be limited as provided in the preceding Sections of this Article IV and Sections 5.5 and 6.3 with respect to the Plan Year or Years to which such contributions relate rather than the Plan Year in which payment is made. Any payment to the Plan described in this paragraph shall be made during the period, beginning with the date of reemployment or October 13, 1996, if later, whose duration is the lesser of three times the period of absence or five years. Earnings (or losses) on make-up contributions shall be credited commencing with the date the make-up contribution is made in accordance with the provisions of Article VI. (b) With respect to a Member who makes the election described in paragraph (a) above, the Employer shall make Matching Contributions on the make-up contributions in the amount described in the provisions of Sections 5.1, as in effect for the Plan Year to which such make-up contributions relate. Employer Matching Contributions shall be made during the period described in paragraph (a) above. Earnings (or losses) on Matching Contributions shall be credited commencing with the date the contributions are made in accordance with the provisions of Article VI. Any limitations on Matching Contributions described in Sections 5.1, 5.5 or 6.3 shall be applied with respect to the Plan Year or Years to which such contributions relate rather than the Plan Year or Years in which payment is made. (c) All contributions under this Section 4.8 are considered "annual additions," as defined in Section 415(c)(2) of the Code, and shall be limited in accordance with the provisions of Section 6.3 with respect to the Plan Year or Years to which such contributions relate rather than the Plan Year in which payment is made. ARTICLE V EMPLOYER CONTRIBUTIONS 5.1 Matching Contributions. On behalf of each Member in its employ who is having Tax Deferred Contributions made to this Plan pursuant to Section 4.1 or has contributed Tax Deferred Contributions on a year to date basis equal to 1% to 5% of the Member's Compensation for the entire Plan Year (or who would have had Tax Deferred Contributions made on the Member's behalf but for the limitations imposed in Sections 2.1 (bb) 4.1 or 6.3 of the Plan), as of any Enrollment Date, each Employer will make Matching Contributions to the Plan for each month, out of current or accumulated earnings and profits, equal to 100% of the first 3% of each such Member's Compensation and 50% of each of the next 2% (in whole percentages) of each such Member's Compensation; provided, however, that no Matching Contributions shall be made with respect to Compensation for any period during which a Member's right to make Member Elected Contributions is suspended by reason of a withdrawal of matched Taxed Contributions (see Section 9.3). The Matching Contributions are made expressly conditional on the Plan satisfying the provisions of Sections 4.1 and 5.5. If any portion of the Tax Deferred Contributions or Taxed Contributions to which the Matching Contributions relate is returned to the Member under Article XI or XII, the corresponding Matching Contribution shall be forfeited and if any amount of the Matching Contribution is deemed an excess aggregate contribution under Article XIII, such amount shall be forfeited or distributed in accordance with the provisions of that Section. 5.2 Profit Requirement. In the event that any Employer is prevented from making its share of such Contributions it would be required to make as provided above because it has neither current nor accumulated earnings and profits, or because its current or accumulated earnings and profits are insufficient to make the required contribution, then the required Contribution or that portion of it in excess of the Employer's current or accumulated earnings and profits, if any, which the Employer is so prevented from making will be made for the Employer by the other Employers who have current or accumulated earnings and profits. If more than one of the other Employers has current or accumulated earnings and profits, then each such Employer will be charged and pay that portion of the prevented Contribution which bears the same ratio to the total prevented Contributions as that Employer's current or accumulated earnings and profits (adjusted for its own Contribution deductible for the concurrent period without regard to its share of the said prevented Contribution) bears to the total current or accumulated earnings and profits of all Employers having such earnings and profits (adjusted to their Contributions deductible without regard to their share of the prevented Contribution); and, in making this determination, current accumulated earnings and profits for such period shall be computed as of the close of the concurrent period without diminution by reason of any dividends during the concurrent period, and current accumulated earnings and profits shall be computed as of the beginning of the concurrent period. Notwithstanding the above provisions of this paragraph, with respect to any period for which a consolidated federal income tax return is to be filed for all Employers, any required Contribution which an Employer may be prevented from making may be made for such Employer by any one or more of the other Employers on the above basis or any other basis that the Company may determine. The provisions of this paragraph will apply only to those Employers under the Plan which are Members of the "affiliated group" including the Company as the term "affiliated group" is defined in Section 1504(a) of the Code. 5.3 Payment to the Trustee. As soon as practicable after the end of each month, each Employer will pay or transfer to the Trustee the amount of its Matching Contributions for such month. 5.4 Plan Expenses. (a) The expenses applicable to each Investment Fund, including (i) investment management fees and (ii) all proper charges and disbursements incurred with respect to each Investment Fund (including brokerage fees, transfer taxes, consulting fees, and any other expenses related to each applicable Investment Fund) shall be paid out of the Trust Fund and allocated to and deducted from the Accounts of Members based on the Members' pro rata share of each applicable Investment Fund unless such expenses are paid directly by each Employer. (b) Except for expenses applicable to each Investment Fund (see Section 5.4(a)), all costs and expenses incurred in administering the Plan, including the fees and expenses of the Trustees and of counsel and other administrative expenses, shall be paid by each Employer. (c) Taxes, if any, on assets held by the Trustee or on any income derived therefrom, and which are payable by the Trustee, shall be paid out of the Trust Fund, and allocated to and deducted from the Accounts of Members based on the Members' pro rata share of all Investment Funds of the Trust Fund. 5.5 Limitations under Section 401(m) of the Code. In no event shall the Matching Contributions and Taxed Con- tributions exceed the limitations set forth in Section 401(m) of the Code and the regulations thereunder, including the multiple use of the alternative limitation under Section 401(m) (9) of the Code. ARTICLE VI MEMBERS' ACCOUNTS 6.1 Types of Accounts. In addition to the Accounts main- tained by the Corporate Benefits Committee with respect to Plan Years beginning on and after July 1, 1997, the Corporate Benefits Committee will establish and maintain on behalf of each Member: (a) A Tax Deferred Contribution Account, to be credited with the Member's Tax Deferred Contributions; (b) Taxed Contribution Accounts, to be credited with: (1) the Member's Taxed Contributions made prior to January 1, 1987, and (2) the Member's Taxed Contributions made after December 31, 1986; (c) A Rollover Account, to be credited with Transferred Assets pursuant to Article XX; (d) Matching Contribution Accounts, to be credited with: (1) the Matching Employer Contributions allocated to the Member prior to July 1, 1997, (2) the Matching Employer Contributions allocated to the Member after June 30, 1997, and (3) the Matching Employer Contributions allocated to the Member form a prior employer; (e) A Matured Stock Account, to be credited with Matching Contributions when they become non- forfeitable in accordance with Article VIII of this Plan or Article IX of the Plan as in effect prior to this restatement if the Member terminated employment prior to July 1, 1997. All amounts will be credited to a Member's Accounts as of a Valuation Date and in the appropriate Investment Fund, in accordance with the Member's investment election made pursuant to Article VII. 6.2 Valuation of Accounts. As of each Valuation Date, the Trustee will determine the net worth of the assets of each Investment Fund and report such value to the Investment Committee. In determining such net worth, the Trustee will evaluate the assets of each Investment Fund at their fair market value as of the Valuation Date and will deduct any liabilities or other amounts properly chargeable against each Investment Fund. The net worth of each Investment Fund will be allocated among the various Accounts of each Member in each Fund in the following manner: (a) The opening balance in each Account in each Fund will be determined by reducing the value of the Account as of the prior Valuation Date by any withdrawals or distributions made as of such prior Valuation Date; (b) The dollar amount of Member Elected Contributions and Matching Contributions due each Account since the prior Valuation Date will be determined (the "current quarter contributions"); and (c) The fair market value of each Fund on the Valuation Date as of which the determination is being made will be apportioned to each Member's Accounts in each Fund based on rate of return factors developed separately for the opening balances in all of the Accounts in the Fund and the current quarter contributions credited to all such Accounts. 6.3 Limitations Imposed Under Section 415 of the Code. (a) The provisions of this Section 6.3 supersede all other provisions of this Plan. (b) The total Account Addition of any Member for any calendar year may not exceed the lesser of: (1) $30,000, is adjusted pursuant to Section 415(d) of the Code, or set forth in Section 415(b)(1) of the Code as in effect for the applicable calendar year), or (2) 25% of the Member's total compensation for such calendar year. For this purpose, a Member's compensation is equal to the Member's Compensation, except for calendar years commencing prior to January 1, 1998, the Member's Tax Deferred Contributions and any salary deferral amounts which were included in gross income under Section 125 of the Code shall not be included in Compensation. (c) The term "Account Addition" means the sum of the following amounts allocated to a Member's Accounts for any calendar year: (1) The Matching Contributions, (2) the Member's Tax Deferred Contributions, (3) the Member's Taxed Contributions, (4) contributions allocated to any individual medical account (as defined in Section 415(1)(2) of the Code) which is part of a defined benefit plan maintained by the Employer, and (5) if the Member is a Key Employee (within the meaning of Section 21.2(c) hereof), amounts attributable to medical benefits allocated to an account established for such Member in accordance with Section 419A(d) of the Code. For purposes of this paragraph (c), any Taxed Deferred Contributions distributed under Article XII, and any Matching Contributions or Taxed Contributions distributed or forfeited under the provisions of Article XI, XII or XIII shall be included in the annual addition for the year allocated. (d) The Corporate Benefits Committee will apply the limitation set forth in this Section 6.3 by taking into account the Account Additions under any other qualified defined contribution plan maintained by the Controlled Group. With respect to calendar years commencing prior to January 1, 2000, if any Member also participates in any defined benefit plan maintained by the Controlled Group, the sum of a Member's defined benefit plan fraction for such year as defined in Section 415(e)(2) of the Code and such Member's defined contribution plan fraction for such year as defined in Section 415(e)(3) of the Code will not exceed 1.0. In the event the sum of such fractions would exceed l.0, the Member's retirement benefit under such defined benefit plan shall automatically be reduced by the amount required in order that the sum of such fractions shall not exceed l.0. (e) If amounts which would otherwise be allocated to a Member's Accounts must be reduced to satisfy para- graph (b), the reduction will be made in the following order, but only to the extent necessary: (1) The Member's unmatched Taxed Contributions shall be reduced to the extent necessary. The amount of the reduction shall be returned to the Member, together with any earnings on the contributions to be returned. (2) The Member's unmatched Tax Deferred Contributions shall be reduced to the extent necessary. The amount of the reduction shall be returned to the Member together with any earnings on the contributions to be returned. (3) The Member's matched Taxed Contributions and corresponding Matching Contributions shall be reduced to the extent necessary. The amount of the reduction attributable to the Member's matched Taxed Contributions shall be returned to the Member, together with any earnings on those contributions to be returned, and the amount attributable to the Matching Contributions shall be forfeited and used to reduce subsequent contributions payable by the Employer. (4) The Member's matched Tax Deferred Contributions and corresponding Matching Contributions shall be reduced to the extent necessary. The amount of the reduction attributable to the Member's matched Tax deferred Contributions shall be returned to the Member together with any earnings on those contributions to be returned, and the amount attributable to the Matching Contributions shall be forfeited and used to reduce subsequent contributions payable by the Employer. ARTICLE VII INVESTMENT ELECTIONS 7.1. Company Stock Fund. (a) Subject to Section 7.1(d), Matching Contributions made prior to July 1, 1997 shall be invested in Stock, but they may be invested in short term obligations of the United States government and other investments of a short-term nature, including commercial paper, pending investment in Stock. All Matching Contributions credited on or after July 1, 1997 shall be invested in the Investment Funds in the same proportions as selected by the Member for Member Elected Contributions. (b) Subject to Section 7.1(c), cash dividends and cash proceeds of any other distributions received on the Stock will be reinvested in the same manner. The shares of Stock from time to time required for the purposes of this Plan will be acquired by the Trustee by purchase in the open market, or, if directed by the Company, by contribution in kind or by purchase privately from the Company or any other person at a price per share equal to the closing price per share at which the shares of Common Stock of the Company were sold on the New York Stock Exchange on the last business day preceding the day of the purchase; it being understood that shares purchased from the Company may be either treasury shares or authorized but unissued shares, if the Company shall make such shares available for the purpose, and that the Trustee in its discretion may refrain from making purchases in the open market whenever in the light of current market conditions it deems such refraining to be in the best interests of the Members and beneficiaries in the Plan. (c) Notwithstanding the provisions of Section 7.1(b), the Investment Committee may, in its discretion, elect to have all cash dividends received on the Stock by the ESOP be distributed in cash to Members or their Beneficiaries, as the case may be. Such distribution shall be in an amount attributable to the shares of Stock held for each such Member or Beneficiary in such Member's or Beneficiary's Accounts, whether or not the Member is vested in such shares at the time of such payment. Distri- bution shall be made not later than 90 days after the close of the Plan Year in which the dividends are paid. All such dividends are nonforfeitable to the Member or Beneficiary when distributed even when they are paid with respect to shares of Stock in which the Member or Beneficiary has not attained a nonforfeitable interest as of the date of such distribution. (d) A Member may transfer part or all of the balance of the Member's Matching Contribution Account which represents the amount of the company matching contributions previously made to either the Best Power Technology, Inc. Retirement Investment Plan and Trust or the Retirement Savings Plan for Employees of Data Switch Corporation to another Investment Fund as of the last day of any calendar quarter on 15 days' notice of such transfer to the Corporate Benefits Committee. (e) A Member who shall have attained age 55 and shall have had at least five years of Continuous Employ- ment may transfer part or all of the balance of the Member's Matching Contribution Account (attributable to Matching Contributions made prior to July 1, 1997) in the Member's Company Stock Fund to another Investment Fund as of the last day of any calendar quarter on 15 days' notice of such transfer to the Corporate Benefits Committee. 7.2 Funds for Member Elected Contributions. (a) All Members' Elected Contributions will be invested in the Investment Funds selected by the Member in 10% increments, at the time the Member files the election specified in Section 3.2, from the Investment Funds which are made available from time to time by the Investment Committee for that purpose. All Members' Elected Contributions will be credited to their Accounts in the respective Investment Funds. All dividends, interest, gains and losses of each Investment Fund will be rein- vested in that Investment Fund and credited to the Member's Accounts as of the applicable Valuation Date. The Corporate Benefits Committee will from time to time inform the Members of the Investment Funds provided under the Trust and specify all rules governing the investment by Members in such Funds. (b) The making of an election of an Investment Fund is the sole responsibility of each Member. Neither the Trustee, the Investment Committee, the Corporate Benefits Committee, any Employer nor any of their officers, directors, or supervisors are authorized or permitted to advise a Member as to the election of any Investment Fund or Funds or the manner in which the Member's Accounts ought to be invested. (c) A Member may change the Member's investment election for future Member Elected Contributions as of the first day of any calendar quarter on 15 days' notice of such change to the Corporate Benefits Committee, which notice shall specify the new investment election. (d) A Member may transfer part or all of the balance in the Member's Accounts in any Investment Fund to one or more other Investment Funds as of the last day of any calendar quarter on 15 days' notice of such transfer to the Corporate Benefits Committee. 7.3 Distributions. (a) Withdrawals and distributions from the Trust Fund will be charged to the Member's Accounts in each Fund. The Corporate Benefits Committee may establish rules and regulations and accounting conventions to determine the particular Account and Fund to be charged in the case of a withdrawal or distribution of less than the entire balances in all of a Member's Accounts in all Funds. (b) The distributable amount in a Member's Account in each Fund will be determined on the basis of the value of such Account on the Valuation Date coin- cident with or next preceding the date on which the distribution is effected. (c) All withdrawals and distributions will be made in cash; provided, however, that, with respect to a distribution under Article IX or X, a Member may elect to have the Member's distribution paid in the form of Stock (with fractional shares to be paid in cash) to the extent of the Member's interest in the Company Stock Fund. ARTICLE VIII VESTING 8.1 Vesting. Each Member is at all times 100% vested the value of (a) the participant's Member Elected Contribution Accounts and (b) after July 1, 1997 the Member's Matching Contribution Account. A Member who terminated employment prior to July 1, 1997 and who elected not to receive a distribution from the Plan until after the Member"s rights become nonforfeitable will vest in the Member's Matching Contribution Account effective as of July 1, 1997. 8.2 Termination of Employment and Transfer Prior to Vesting. If a Member's employment with the Controlled Group terminated prior to July 1, 1997 and the Member is not reemployed before incurring five consecutive 1-year breaks in service (as defined in Section 10.3), the balance of the Member's Matching Contributions Account will be forfeited as of December 31 of the calendar year in which occurs the fifth such consecutive 1-year break in service and will be applied as provided in Section 14.1, unless the Member elected not to receive a distribution from the Plan until after the Member's rights become nonforfeitable. ARTICLE IX IN SERVICE WITHDRAWALS 9.1 Elections to Withdraw Funds and Payment. All withdrawal requests for Members who are actively employed must be made on the form prescribed by the Corporate Benefits Committee, specifying the amount to be withdrawn. Each Member will be entitled to four withdrawal requests per calendar year. All withdrawals will be made as of the Valuation Date which follows by at least 15 days the date on which the Corporate Benefits Committee receives notice of the withdrawal, but the Corporate Benefits Committee may, in its sole discretion, impose from time to time such other restrictions or conditions on withdrawals as it deems necessary to preserve the integrity of the Trust Fund. Payment to a Member will be made in a lump sum in cash as soon after the Valuation Date as practicable; provided, however, that a Member may elect to have the Member's distribution paid in the form of Stock (with fractional shares to be paid in cash) to the extent of the Member's interest in the Company Stock Fund. All in-service withdrawals will be paid pro rata from the Investment Funds of the Member. 9.2 Order of Withdrawals. All withdrawals by Members prior to termination of employment with the Controlled Group will be charged to a Member's Accounts in the order and under the conditions, if any, which follow: (a) First, to the Member's Taxed Contribution Account, (b) Second, to the Member's Matured Stock Account; pro- vided, however, that a Member who has not been a Member for at least 60 months prior to the effective date of a withdrawal may not withdraw amounts attributable to Matching Contributions made less than 24 months prior to the effective date of the withdrawal, (c) Third, to the Member's Tax Deferred Contribution Account if the withdrawal is after such Member has attained 59 1/2 without proof of hardship, and (d) Fourth, to the Member's Tax Deferred Contribution Account if the withdrawal is on account of hardship and is approved by the Corporate Benefits Committee; provided, however, that on and after January 1, 1989, only the amount of the Tax Deferred Contributions (but no earnings thereon) may be included in a hardship withdrawal. The Corporate Benefits Committee may authorize a hardship withdrawal only if (i) the Member certifies that the Member requires financial assistance to meet an immediate and heavy financial need and other resources are not reasonably available to meet the need incurred or to be incurred in the near future with respect to the Member's health or welfare or that of the Member's immediate family (such as for the purchase of a principal residence for the Member, medical expenses not covered by insurance, payment of tuition, and related educational fees and room and board expenses for post-secondary education for the Member, the Member's spouse or children or payment of amounts necessary to prevent the eviction of the employee from the Member's principal residence or foreclosure on the mortgage of the employee's principal residence), and (ii) the Member certifies to the precise amount required to satisfy the hard- ship. A Member shall furnish evidence of hardship satisfactory to the Corporate Benefits Committee which will be determined on a nondiscriminatory basis uniformly applicable to all Members similarly situated. A withdrawal may be authorized only to the extent necessary to satisfy the hardship. The Corporate Benefits Committee's decision shall be final and binding on the Member. 9.3 Withdrawal of Matched Taxed Contributions. If a Member withdraws any Taxed Contributions that are matched by the Employer and such Taxed Contributions have not been held by the Plan for at least two years, the Member's right to make Member Elected Contributions shall be suspended for a period of three months. 9.4 Additional Rules. The Corporate Benefits Committee may prescribe from time to time such additional rules with respect to withdrawals (including restricting a Member's right to make Member Elected Contributions) as it deems appropriate to further the purposes of the Plan, but no such rules will cause the forfeiture of vested Accounts. 9.5 Loans. Pursuant to rules and regulations established by the Corporate Benefits Committee, loans may be made pursuant to the Plan which shall be charged against a Member's Accounts. Such loans may not in the aggregate exceed the balance in such Accounts. In connection with such loans, the rules and regulations shall (a) provide for the securing of such loans by, among other things, the value of the Member's Accounts, (b) provide a reasonable rate of interest, (c) set forth the maximum loan term, (d) establish any minimum and maximum amounts, (e) provide a fixed repayment schedule (including payroll deductions), and (f) establish such other requirements as the Corporate Benefits Committee shall deem appropriate. Loans shall be available to all Members on a non-discriminatory basis with a maximum of two loans outstanding at any time. ARTICLE X DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT 10.1 Distributions on Account of Retirement, Disability or Death. Upon a Member's termination of service by reason of Retirement, Disability or upon a Member's death, there will be distributed to the Member (or in the case of the Member's death, to the Member's Beneficiary), in accordance with Section 10.4, the balance of the Member's Accounts determined as of the Valuation Date coincident with or next following such termination of service or death in accordance with Section 10.7. Such distribution shall commence as soon as practicable following such Valuation Date. 10.2 Other Distributions. When a Member terminates employ- ment with the Controlled Group on or after July 1, 1997 for reasons other than Retirement, death or Disability, the Member will receive a distribution of the value of all the Member's Accounts in a lump sum consisting of cash and/or whole shares of Corporation Common Stock credited to such Accounts as selected by the Member. If the amount credited to a Member's Accounts exceeds $3,500, the distribution will not be made prior to the Member's attainment of age 62 unless the Member consents to the distribution of the Member's Accounts. 10.3 Restoration of Forfeitures. If a Member forfeited the Member's unvested Matching Contribution Accounts by reason of a distribution prior to July 1, 1997, such a Member may restore account balances which are forfeited by repaying the amount distributed to the Member which caused the forfeiture. Repayment may be made at any time prior to the earlier of (i) December 31 of the fifth calendar year after the calendar year in which the distribution was made or (ii) the date on which the Member incurs the Member's fifth consecutive 1-year break in service commencing after the distribution. For purposes of the preceding sentence, a 1 - year break in service means a 12-consecutive month period beginning on the severance from service date and ending on each anniversary thereof, provided that during such 12- consecutive month period the Employee does not perform an hour of service for which the Member is paid or entitled to payment for the performance of duties for an Employer or a member of the Controlled Group. The amount of a Member's repaid distribution will be credited to the Member's Account as of the Enrollment Date which follows receipt by the Trustee of such repayment. The restoration of forfeited amounts will be effected as of such Enrollment Date by credit to the Member's Matching Contribution Account of Stock having a fair market value at the Enrollment Date equal to the fair market value at the date of forfeiture of the Stock forfeited by reason of the distribution. Repaid amounts will be invested in accordance with a new investment election filed by the Member with the Corporate Benefits Committee. A Member's restored Matching Contribution Account will be nonforfeitable immediately. The repayment of contributions and the restoration of forfeited amounts will not be considered in the Account Addition as defined in Section 6.3. 10.4 Methods of Payment. (a) Distributions from the Plan will be paid as follows: (i) Death. Any distribution of Accounts in the event of death of a Member will be made by a single payment to the Member's Beneficiary consisting of cash and Stock credited to the Member's Accounts unless the Member has elected an alternate method of payment pursuant to subsection 10.4(a)(v), in which event the Member's remaining interest in the Member's Accounts will be distributed in accordance with the method of payment being used as of the date of the Member's death. (ii) Disability Any distribution of Accounts in the event of Disability of a Member while in the service of the Controlled Group will be made by a single payment to the Member consisting of cash and Stock credited to the Member's Accounts. (iv) Termination of Service Prior to Age 55. Any distribution of Accounts on account of termination of service prior to age 55 pur- suant to Section 10.2 will be made by a single payment to the Member consisting of cash and Stock credited to the Member's Accounts. (v) Retirement. Any distribution of the Member's Tax Deferred and Taxed Contribution Accounts on account of Retirement as defined in Section 2.1(z) will be made, subject to subsection 10.4(b), in one of the following ways selected by the Member, provided, however, that if such Accounts total less than $10,000 the distribution will be made only in one lump sum: (1) in one lump sum; (2) in installments over a period not ex- ceeding ten years; or (3) in the form of a non-commutable and non- assignable annuity but only if a group annuity contract constitutes a part of the Trust Fund. Any such annuity shall be in such form that more than 50% of its actuarial value at its commencement date is attributable to payments to be made to the Member the himself, unless the annuity is payable for a period not extending beyond the life expectancy of the Member and the Member's spouse. Notwithstanding the foregoing, the annuity option pursuant to this Section 10.4(a)(v)(3) shall not be available in the case of a Member who has any loan outstanding pursuant to Section 9.5. No form of distribution permitted under this Section 10.4(a) shall provide for payments over a period exceeding (i) the life of the Member, (ii) the life expectancy of the Member, (iii) the joint lives of the Member and the Member's designated Beneficiary, or (iv) the joint life and last survivor expectancy of the Member and the Member's designated Beneficiary (redetermined annually if the Member's spouse is the Member's designated Beneficiary). (b) If the Member elects to receive an annuity pursuant to Section 10.4(a)(v)(3), then any distribution (except distribution in Stock) made to a Member who is married on the distribution date will be made in the form of a Qualified Joint and Survivor Annuity unless the Member elects otherwise in the manner described below. A Qualified Joint and Survivor Annuity is an annuity which (i) has an actuarial value equivalent to the amount of the Member's distribution (less the value of the Stock distributed) and (ii) provides for a distribution during the Member's life commencing on the date of the Member's Retirement, with the provision that after the Member's death (whether before or after commencement of benefit payments to the Member) distribution at a rate equal to 50% of the rate of the distribution during the Member's life (or which would have been made during the Member's life had payments commenced on the first day of the month next succeeding that in which the Member's death occurs) shall be paid during the life of, and to, the Member's spouse provided the Member's spouse survives the Member. A Member may elect by written notice to the Corporate Benefits Committee, at any time during the election period (and after having received from the Corporate Benefits Committee a written notice of the availability of such election and the avail- ability upon request of a written explanation of the effect of receiving a distribution in the form of a Qualified Joint and Survivor Annuity pursuant to this Section 10.4) to receive a distribution in the form of an annuity other than the Qualified Joint and Survivor Annuity, but only if the Member's spouse consents to such election in a writing that acknowledges the effect of such election and that is witnessed by a notary public or Plan representative. The election period will begin 90 days prior to the commencement of payment of a benefit which could be paid in the form of an annuity to the Member hereunder and will end on the date of commencement of payment of such benefits. If the Member requests during the election period a written explanation of the terms and conditions of the Qualified Joint and Survivor Annuity and the financial effect upon the Member's benefits (in terms of dollars per annuity payment) of making an election not to take the same, payment of benefits in any other form will be delayed until the 90th day after such written explanation is given, and the Member's request for such an explanation shall constitute an election that commencement of payment of benefits shall be so delayed. The Corporate Benefits Committee will notify each Member who elects to receive an annuity not later than 7 days after commencement of the election period of the Member's right to request the written explanation referred to above. The written explanation will in all cases be provided to the Member within 7 days after receipt of the Member's request therefor. The election in writing will be revocable until the election period has expired and shall clearly indicate the Member's election to receive the Member's benefit hereunder in a form other than that of a Qualified Joint and Survivor Annuity. 10.5 Withholding of Taxes. Income taxes will be withheld from distributions and withdrawals as required under applicable laws. 10.6 Restrictions on Cashouts. Unless a Member consents to the distribution of the Member's Accounts in accordance with the provisions of Section 10.1 or 10.2, as applicable, if the nonforfeitable amount credited to such Member's Accounts exceeds $3,500, the distribution shall not commence prior to the Member's attainment of age 62. 10.7 Elections for Distributions and Payment. All distribution requests by Members must be made on the form prescribed by the Corporate Benefits Committee. All distributions will be made as of the Valuation Date which follows by at least 15 days the date on which the Corporate Benefits Committee receives notice of the distribution. Payment to a Member will be made in a lump sum in cash as soon after the Valuation Date as practicable; provided, however, that a Member may elect to have the Member's distribution paid in the form of Stock (with fractional shares to be paid in cash) to the extent of the Member's interest in the Company Stock Fund. 10.8 Waiver Of Notice Period. Except as provided in the following sentences, if the value of the vested portion of a Member's Accounts exceeds $3,500, an election by the Member to receive a distribution shall not be valid unless the written election is made (a) after the Member has received the notice required under Section 1.411(a)- 11(c) of the Income Tax Regulations and (b) within a reasonable time before the effective date of the commencement of the distribution as prescribed by said regulations. If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less than 30 days after the notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that: (i) the Corporate Benefits Committee clearly informs the Member that the Member 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 (ii) the Member, after receiving the notice under Sections 411 and 417, affirmatively elects a distribution. If the distribution is one to which Sections 401(a)(11) and 417 of the Code do apply, a Member may, after receiving the notice required under Sections 411 and 417 of the Code, affirmatively elect to have the Member's benefit commence sooner than 30 days following the Member's receipt of the required notice, provided all of the following requirements are met: (i) the Corporate Benefits Committee clearly informs the Member that the Member has a period of at least 30 days after receiving the notice to decide when to have the Member's benefit begin and, if applicable, to choose a particular optional form of payment; (ii) the Member affirmatively elects a date for benefits to begin and, if applicable, an optional form of payment, after receiving the notice; (iii) the Member is permitted to revoke the Member's election until the later of the Member's benefit commencement date or seven days following the day the Member received the notice; (iv) the Member's benefit commencement date is after the date the notice is provided; and (v) payment does not commence less than seven days following the day after the notice is received by the Member. 10.9 Age 70" Required Distribution. Notwithstanding any provisions of the Plan to the contrary, if a Member is a Five Percent Owner, distribution of the Member's Accounts shall begin no later than the April 1 following the calendar year in which the Member attains age 70'. No minimum distribution payments will be made to a Member while in service under the provisions of Section 401(a)(9) of the Code on or after January 1, 1997 if the Member is not a Five Percent Owner and attains age 70' in 1996 or later. Such Member may, however, elect to receive in-service withdrawals in accordance with the provisions of Article IX while the Member remains in service. In the event a Member, other than Member who is a Five Percent Owner, was receiving minimum distribution payments while in service in accordance with the provisions of Section 401(a)(9) of the Code on December 31, 1996, the Member may elect to suspend payments due on and after April 1, 1997 while the Member remains in service in accordance with such uniform rules as the Corporate Benefits Committee shall adopt. 10.10 Distribution Limitation. Notwithstanding any other provision of this Article X, all distributions from this Plan shall conform to the regulations issued under Section 401(a)(9) of the Code, including the incidental death benefit provisions of Section 401(a)(9)(G) of the Code. Further, such regulations shall override any Plan provision that is inconsistent with Section 401(a)(9) of the Code. ARTICLE XI DISTRIBUTION OF EXCESS DEFERRALS 11.1 In General. Notwithstanding any other provision of the Plan, Excess Deferral Amounts and income allocable thereto shall be distributed no later than April 15, 1988, and each April 15 thereafter to Members who claim such Allocable Excess Deferral Amounts for the preceding calendar year. 11.2 Definitions. For purposes of this Article XI, "Excess Deferral Amount" shall mean the amount of Tax Deferred Contributions for a calendar year that the Member allocates to this Plan pursuant to the claim procedure set forth in Section 11.3. 11.3 Claims. The Member's claim shall be in writing, shall be submitted to the Corporate Benefits Committee no later than March 1; shall specify the Member's Excess Deferral Amount for the preceding calendar year; and shall be accompanied by the Member's written statement that if such amounts are not distributed, such Excess Deferral Amount, when added to amounts deferred under other plans or arrangements described in Sections 401(k), 408(k) or 403(b) of the Code, exceeds the limit imposed on the Member by Section 402(g) of the Code for the year in which the deferral occurred. 11.4 Maximum Distribution Amount. The Excess Deferral Amount distributed to a Member with respect to a calendar year shall be adjusted for income and, if there is a loss allocable to the Excess Deferral, shall in no event be less than the lesser of the Member's account under the Plan or the Member's Tax Deferred Contributions for the calendar year. To the extent the Excess Deferral Amount was matched by Matching Contributions, the Matching Contributions, adjusted for gains or losses, shall be forfeited. ARTICLE XII DISTRIBUTION OF EXCESS CONTRIBUTIONS 12.1 In General. Notwithstanding any other provision of the Plan, Excess Contributions and income allocable thereto shall be distributed no later than the last day of each Plan Year beginning after December 31, 1987, to Members on whose behalf such Excess Contributions were made for the preceding Plan Year. 12.2 Excess Contributions. For purposes of this Article XII, "Excess Contributions" shall mean the amount described in Section 401(k)(8)(B) of the Code. 12.3 Determination of Income. The income allocable to Excess Contributions shall be determined by multiplying income allocable to the Member's Tax Deferred Contributions for the Plan Year by a fraction, the numerator of which is the Excess Contribution on behalf of the Member for the preceding Plan Year and the denominator of which is the Member's account balance attributable to Tax Deferred Contributions on the last day of the preceding Plan Year. 12.4 Maximum Distribution Amount. The Excess Contributions which would otherwise be distributed to the Member shall be adjusted for income; shall be reduced, in accordance with regulations, by the amount of Tax Deferred Contributions distributed to the Member; shall, if there is a loss allocable to the Excess Contributions, in no event be less than the lesser of the Member's account under the Plan or the Member's Tax Deferred Contributions for the Plan Year. In the event the Excess Contributions were matched by Matching Contributions, those Matching Contributions, adjusted in gain or losses, shall be forfeited. ARTICLE XIII DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS 13.1 In General. Excess Aggregate Contributions and income allocable thereto shall be forfeited, if otherwise forfeitable under the terms of this Plan, or if not forfeitable, distributed no later than the last day of each Plan Year beginning after December 31, 1987, to Members to whose accounts Taxed Contributions or Matching Contributions were allocated for the preceding Plan Year. 13.2 Excess Aggregate Contributions. For purposes of this Article XIII, "Excess Aggregate Contributions" shall mean the amount described in Section 401(m)(6)(B) of the Code. 13.3 Determination of Income. The income allocable to Excess Aggregate Contributions shall be determined by multiplying the income allocable to the Member's Taxed Contributions and Matching Contributions for the Plan Year by a fraction, the numerator of which is the Excess Aggregate Contributions on behalf of the Member for the preceding Plan Year and the denominator of which is the sum of the Member's account balances attributable to Taxed Contributions and Matching Contributions on the last day of the preceding Plan Year. 13.4 Maximum Distribution Amount. The Excess Aggregate Contributions to be distributed to a Member shall be adjusted for income, and, if there is a loss allocable to the Excess Aggregate Contribution, shall in no event be less than the lesser of the Member's account under the Plan or the Member's Taxed Contributions and Matching Contributions for the Plan Year. 13.5 Accounting for Excess Aggregate Contributions. Excess Aggregate Contributions shall be distributed from the Member's Taxed Contribution Account, and forfeited if otherwise forfeitable under the terms of the Plan (or, if not forfeitable, distributed) from the Member's Matching Contribution account in proportion to the Member's Taxed Contributions and Matching Contributions for the Plan Year. 13.6 Allocation of Forfeitures. (a) Amounts forfeited by Highly Compensated Employees under this Article XIII shall be: (i) Treated as Account Additions under Section 6.3 and either; (ii) Applied to reduce employer contributions if forfeitures of Matching Contributions under the Plan are applied to reduce employer con- tributions; or (iii) Allocated, after all other forfeitures under the Plan, and subject to Section 13.6(b), to the same Members and in the same manner as such other forfeitures of Matching Contribu- tions, are allocated to other Members under the Plan. (b) Notwithstanding the foregoing, no forfeitures arising under this Article XIII shall be allocated to the account of any Highly Compensated Employee. ARTICLE XIV APPLICATION OF FORFEITURES 14.1 Any amount which is forfeited by a Member pursuant to Sections 8.2, 11.4, 12.4, 13.5 and 18.7 will be applied, as soon as practicable, to reduce Matching Contribu- tions. ARTICLE XV TRUST 15.1 Trustee. The Investment Committee will appoint the Trustee or Trustees under the Plan. The Company may, without reference to or action by any Employee, Member or Beneficiary or any other Employer, enter into a Trust Agreement or Agreements with the Trustee or Trustees and from time to time enter into further agreements with the Trustee or Trustees amending the Trust Agreement or Agreements. The Investment Committee may at any time remove the Trustee or Trustees and appoint a successor Trustee or Trustees. 15.2 Acquisition Loans. The Investment Committee may from time to time direct the Trustee to incur an Acquisition Loan (as hereinafter defined). An "Acquisition Loan" shall mean a loan to the Trust by a "party in interest" as defined in Section 3(14) of ERISA or a "disqualified person" as defined in Section 4975(e)(7) of the Code, or any other loan which is treated as involving an extension of credit to the Trust by such a "party in interest" or "disqualified person". Each Acquisition Loan must satisfy the requirements set forth in Treasury Regulation Section 54.4975-7(b). Except as provided herein or as otherwise required by applicable law, no security acquired with the proceeds of any Acquisition Loan by the ESOP may be subject to a put, call, or other option, or buy-sell or similar arrangement while held by and when distributed from the ESOP, whether or not the ESOP is then an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code. Any qualifying employer security, within the meaning of Code Section 4975(e)(8), which may be acquired with the proceeds of any Acquisition Loan by the ESOP, will be subject to a put option if it is not publicly traded or if it is subject to a trading limitation when distributed. The put option will be exercisable only by a Member, the Member's Beneficiary, or by a person to whom the security passes by reason of a Member's death. Under the put option the security may be put to the Member's Employer or to the Company. The put option shall remain in effect for 15 months following the date the security is distributed. If a security ceases to be publicly traded without restric- tion within 15 months after distribution, the Company will notify each security holder in writing within 10 days that the security will be subject to the put option exercisable for the remainder of the 15-month period and will explain the option terms in such notice. The period of the option shall be extended a day for each day the notice is given after the 10-day period expires. The put option shall be exercised by written notice to the Employer. The period during which a put option is exercisable does not include any time when a distributee is unable to exercise it because the party bound by the put option is prohibited from honoring it by applicable federal or state law. The price at which the option is exercisable is the value of the security, as determined under Section 54.4975-11(d)(5) of the Treasury Department Regulations. Securities put under this Section 15.2 to the Employer or to the Company shall be paid for in cash upon receipt by the Employer or the Company of a properly endorsed stock certificate representing ownership in the securities. No restrictions as to payment shall apply, except by applicable state law. The rights and protections set forth in this Section 15.2 shall be non-terminable. The provisions of Treasury Department Regulation Section 54.4975-11(c) shall apply with respect to any assets obtained by the ESOP with the proceeds of any loan made to the ESOP. 15.3 Special Provisions If Exempt Loan Is Incurred. Anything in the Plan or the ESOP to the contrary notwithstanding, if an Acquisition Loan is incurred, the following special provisions shall apply: (a) At the direction of the Investment Committee, any dividends on allocated or unallocated shares of Common Stock of the Company acquired by the ESOP with the proceeds of an Acquisition Loan shall be applied to pay principal and interest on the loan (except to the extent the amount of such dividends exceeds the remaining principal balance and interest on the loan). (b) The Company shall contribute to the Trust an amount which, when added to the dividends described in (a) above, is sufficient to make all required payments of principal and interest on the loan. Such contributions shall be made at such time or times as shall enable the Trustee to make required payments of principal and interest on the loan on a timely basis. (c) If dividends on shares of Common Stock of the Company allocated to the account of a Member are applied to the payment of principal or interest on an Acquisition Loan, shares of Common Stock of the Company with a value equal to the amount of such dividends shall be allocated to the Matching Contribution Account of such Member. All other shares of Common Stock of the Company released from encumbrance under an Acquisition Loan shall be treated as Matching Contributions pursuant to Section 5.1 in an amount equal to the value of such shares as of the date the allocation is made, and the Employer's obligation to make Matching Contri- butions pursuant to Section 5.1 shall be reduced by a corresponding amount. ARTICLE XVI ADMINISTRATION 16.1 Authority and Responsibility of the Board of Directors. The Board of Directors shall have the exclusive responsibility for: (a) the appointment of a Finance Committee of the Board, and its Chairman, which committee shall be responsible for such duties as shall be delegated to it in writing by the Board of Directors; (b) the appointment of a Personnel and Compensation Committee of the Board, and its Chairman, which Committee shall be responsible for such duties as shall be delegated to it in writing by the Board of Directors. In addition to the above, the Board of Directors shall have such powers, duties and responsibilities granted or imposed upon it elsewhere in the Plan. 16.2 Appointment of Corporate Benefits Committee. (a) The Plan Administrator shall be a Corporate Benefits Committee consisting of at least three (3) members who shall be appointed from time to time by the Personnel and Compensation Committee of the Board of Directors to serve at its pleasure. Members of the Corporate Benefits Committee may participate in the Plan provided they are otherwise eligible to do so. (b) The members of the Corporate Benefits Committee may appoint from their number such committees with such powers as they shall determine, may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment in their behalf, may employ such counsel, accountants, actuaries, and such clerical services as they may require in carrying out the provisions of the Plan and may appoint one or more designees (who need not be members of the Committee) to serve at the pleasure of the Committee and to exercise such of the powers of the Committee as the Committee may specify. (c) The Corporate Benefits Committee shall hold meetings upon such notice, at such time, and at such place as they may determine. (d) The Corporate Benefits Committee shall establish its own rules of procedure. 16.3 Powers and Duties of the Corporate Benefits Committee. Subject to the limitations of the Plan, the Corporate Benefits Committee shall be generally responsible for the administration, interpretation and compliance requirements under applicable laws pertaining to the Plan. To this end it shall, by way of illustration and not limitation: (a) be the named fiduciary for administration of the Plan; (b) meet periodically with respect to the responsibilities delegated to the Corporate Benefits Committee by the Board of Directors; (c) be responsible for and adopt a program for the administration of the Plan; (d) establish and maintained all Plan documents; (e) be responsible for reporting and disclosure as required by the Act; (f) delegate to the Human Resources Department (i) the responsibility for assuring compliance with the reporting and disclosure requirements of the Act other than those involving financial reporting or disclosure, and (ii) such other duties as it shall determine from time to time; (g) engage the Plan's administrative service providers and such other counselors and advisors as it shall deem necessary or advisable; (h) adopt a claims procedure for the Plan; (i) delegate its authority to perform any act hereunder, including those matters involving the exercise of discretion, to such members, subcommittees or agents as it shall require or deem advisable in discharging its responsibilities; (j) determine its own rules of procedure; (k) interpret all the terms of the Plan in its sole discretion, and the determination of the Corporate Benefits Committee as to the interpretation of the Plan or any disputed question shall be conclusive and final to the extent permitted by applicable law; (l) to decide all questions concerning the Plan and the eligibility of any Employee to participate in the Plan; (m) to compute the amount of benefits which shall be payable to any Member, retired Member, contingent annuitant, or beneficiary in accordance with the provision of the Plan, and to determine the person or persons to whom such benefits shall be paid; and (n) to authorize the payment of benefits. In addition to the above, the Corporate Benefits Committee shall have such powers, duties and responsibilities granted or imposed upon it elsewhere in the Plan. 16.4 Appointment of Investment Committee. (a) The Investment Committee shall be an investment committee consisting of at least three (3) members who shall be appointed from time to time by the Finance Committee of the Board. Members of the Investment Committee may participate in the Plan provided they are otherwise eligible to do so. (b) The members of the Investment Committee may appoint from their number such committees with such powers as they shall determine, may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment in their behalf, may employ such counsel, accountants, actuaries, and such clerical services as they may require in carrying out the provisions of the Plan, and may appoint one or more designees (who need not be members of the Committee) to serve at the pleasure of the Investment Committee and to exercise such of the powers of the Investment Committee as the Committee may specify. (c) The Investment Committee shall hold meetings upon such notice, at such time, and at such place as they may determine. (d) The Investment Committee shall establish its own rules of procedure. 16.5 Powers and Duties of Investment Committee. The Investment Committee shall generally be responsible for all assets of the Plan. To this end it shall, by way of illustration and not limitation: (a) be the named fiduciary for all assets of the Plan; (b) meet periodically with respect to the responsibilities delegated to the Investment Committee by the Board of Directors; (c) be responsible for monitoring the investment performance of Plan assets and ensuring compliance with applicable laws; (d) appoint or remove any Trustee, investment manager, or financial services provider, review all written reports of the trustees or investment managers and, where required, file objections to such reports; (e) meet directly, or through its authorized representatives, with the investment managers on a regular basis and review their investment performance; (f) engage the Plan's auditors, financial consultants and such other counselors and advisors as it shall deem necessary or advisable; (g) communicate to each Trustee or investment manager all requirements and objectives of the Plan which may be pertinent to the investment of Plan assets, establish investment standards and policies and communicate the same to the Trustee, investment managers or other funding agencies under the Plan; (h) delegate to the Treasury Department (i) the responsibility for assuring compliance with the financial reporting and disclosure requirements of ERISA, and (ii) such other duties as it shall determine from time to time; (i) approve any fees expenses paid from the Trust Fund; and (j) delegate its authority to perform any act hereunder, including those matters involving the exercise of discretion, to such members, subcommittees or agents as it shall require or deem advisable in discharging its responsibilities. In addition to the above, the Investment Committee shall have such powers, duties and responsibilities granted or imposed upon it elsewhere in the Plan. 16.6 Name Fiduciaries. For purposes of the Act, the Corporate Benefits Committee and its members and the Investment Committee and its members are designated as named fiduciaries with respect to the fiduciary matters for which they are responsible hereunder. The Corporate Benefits Committee, the Investment Committee and the Company may designate persons, including persons other than "named fiduciaries" as defined in Act "402(a)(2), to carry out its rights, powers, duties and responsibilities. Any member of the Corporate Benefits Committee or the Investment Committee, any subcommittee or agent to whom the Corporate Benefits Committee or the Investment Committee delegates any authority, and any other person or group of persons, may serve in more than one fiduciary capacity with respect to the Plan. An insurance company underwriting the Plan, or any administrative services provider administering the Plan, shall be the named fiduciary thereof with respect to the fiduciary matters for which it is responsible, as provided in the relevant contract, including the processing and reviewing of claims. 16.7 Uniform Administration. Whenever, in the administration of the Plan, any action by the Corporate Benefits Committee, the Investment Committee or an Employer is required, such action shall be uniform in nature as applied to all persons similarly situated. 16.8 Indemnification of Fiduciaries. To the maximum extent permitted by law, no member of the Corporate Benefits Committee or Investment Committee shall be personally liable by reason of any contract or other instrument executed by such member or on such member's behalf in his or her capacity as a member of said Committees nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Company's own assets), each member of the Corporate Benefits Committee, Investment Committee and each other officer, employee or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan, or to the management and control of the assets of the Plan, may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such person's own fraud or willful misconduct. Each of the Employer will pay such proportion of any claim and/or expense as the Company directs. This indemnification is not intended to relieve any member of the Corporate Benefits Committee or the Investment Committee from any liability he or she may have under the Act for breach of a fiduciary duty or otherwise under part 4 of Title I of the Act. 16.9 Compensation and Bonding. The members of the Corporate Benefits Committee and the Investment Committee shall not receive any special compensation for service in their capacities as members of the Corporate Benefits Committee and the Investment Committee but shall be reimbursed for any reasonable expenses incurred in connection therewith. No bond or other security (except as otherwise required by federal law) need be required of the Corporate Benefits Committee or the Investment Committee or any member thereof in any jurisdiction. 16.10 Reliance on Advisors. The Corporate Benefits Committee, the Investment Committee and the Company shall be entitled to rely upon the advise, opinions, reports, statements and certificates of counsel, consultants, accountants and other experts retained by them. 16.11 Claims and Appeal Procedure. If any claim for benefits under the Plan is wholly or partially denied, the Corporate Benefits Committee shall give written notice by registered or certified mail of such denial to the claimant within 90 days after receipt of the written claim by the Corporate Benefits Committee. Notice must be written in a manner calculated to be understood by the claimant, setting forth the specific reasons for such denial, specific reference to pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and an explanation of the Plan's claim review procedure. The Corporate Benefits Committee shall also advise the claimant that the claimant or the claimant's duly authorized representative may request a review by the Corporate Benefits Committee of the decision to deny the claim by filing with the Corporate Benefits Committee, within 65 days after such notice has been received by the claimant, a written request for such review. The claimant may review pertinent documents and submit issues and comments in writing within the same 65 day period. If such request is so filed, such review shall be made by the Committee within 60 days after receipt of such request, unless special circumstances (including, but not limited to, a need to hold a hearing) require an extension of time for processing, in which case a decision shall be rendered not later than 120 days after receipt of the request for review. The claimant shall be given written notice within such 60 day period of the decision resulting from such review, which shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision was based. ARTICLE XVII APPROVAL BY THE INTERNAL REVENUE SERVICE 17.1 The Company intends to secure a determination that the Plan is a qualified Plan under Section 401(a) and 401(k) of the Code, contributions to which are deductible by the Employers for Federal income tax purposes. All Matching Contributions and Tax Deferred Contri- butions made by the Employers are hereby expressly conditioned upon their deductibility under Section 404 of the Code and regulations issued thereunder, as amended from time to time, and if the deduction for any such Contributions is disallowed in whole or in part, then such Contributions (to the extent the deduction is disallowed) will be returned to the Employers upon direction of the Corporate Benefits Committee within one year after such disallowance. 17.2 Any modification or amendment of the Plan or the Trust Agreement may be made retroactively if necessary or appropriate to cause the Plan to qualify or maintain its qualification as a Plan and Trust meeting the requirements of applicable sections of the Internal Revenue Code and/or other Federal and State laws, as now in effect or hereafter amended or enacted or a determination to that effect. Any such modification or amendment, however, will not adversely affect any right or obligation of any Member theretofore accrued. ARTICLE XVIII GENERAL PROVISIONS 18.1 Member Statements. As soon as practicable following the end of each calendar quarter the Corporate Benefits Committee will furnish to each Member a statement setting forth the balance credited to each of the Member's Accounts in each Investment Fund as of the end of such calendar year. 18.2 Communications to the Corporate Benefits Committee. All elections, notices, designations and other communications to the Corporate Benefits Committee will be on the forms from time to time prescribed by the Corporate Benefits Committee, mailed or delivered to the Corporate Benefits Committee in care of the Member's Employer, and deemed to have been duly given upon receipt. 18.3 No Employment Rights. The establishment of this Plan will not be construed as conferring any legal rights upon any Employee or any other person for a continuation of employment, nor will it interfere with the rights of any Employer to discharge any Employee and/or to treat him or her without regard to the effect which such treatment might have upon him or her as a Member. 18.4 Members Assume Investment Risk. All benefits payable under the Plan will be paid or provided for solely from the Trust Fund and neither the Company nor any other Employer assumes any liability therefor. Each Member assumes all risk connected with any decrease in the market value of any assets held by the Trustee under the Plan. Neither the Trustee, the Corporate Benefits Committee, the Investment Committee nor any Employer in any way guarantees the Trust Fund against loss or depreciation, or the payment of any amount which may be or become due to any person from the Trust Fund. 18.5 Facility of Payment Provision. If any person to whom a payment is due hereunder is a minor or is determined by the Corporate Benefits Committee to be incompetent by reason of physical or mental disability, the Corporate Benefits Committee may cause the payments becoming due to such person to be made to another for the benefit of the minor or incompetent, without responsibility of any Employer, the Corporate Benefits Committee, or the Trustee to see to the application of such payment. Payments made pursuant to such power will operate as a complete discharge of all Employers, the Board, the Trustee and the Trust Fund. 18.6 Nonassignability of Benefits. No right or interest of any Member in the Plan is alienable, assignable or transferable, or, to the extent permitted by law, subject to any lien, in whole or in part, either directly or by operation of law, or otherwise, includ- ing, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other manner, and no right or interest of any Member in the Plan will be liable for, or be subject to, any obligation or liability of such Member. This Section 18.6 shall apply to the creation, assignment or recognition of a right to any benefit payable with respect to a Member pursuant to a domestic relations order, but shall not apply if the order is determined to be a qualified domestic relations order within the meaning of Section 414(p) of the Code. Notwithstanding any other provision of the Plan, benefits payable under the Plan shall be paid under the terms of any such qualified domestic relations order. 18.7 Prevention of Escheat. In the event any distribution mailed to a Member or the Beneficiary at the last known address remains unclaimed by the Member or the Member's Beneficiary as the case may be, for a period of 24 months and payment cannot be made alternatively to the estate of either and no surviving spouse, child, parent, brother or sister, or grandchild of the Member or Beneficiary are known to the Employer or the Trustee, or if known, cannot with reasonable diligence be located, the amount payable may be canceled on the records of the Plan and used to reduce Matching Contributions, except that if the Member or Beneficiary later notifies the Corporate Benefits Committee of the Member's whereabouts and requests the amount due the Member under the Plan, the amount will be paid in accordance with Article X. 18.8 Designation of Beneficiary. (a) Any Member may at any time and from time to time designate the Beneficiary to whom the amounts in the Member's Accounts will be delivered in the event of the Member's death. Any such designation will take precedence over any testamentary or other disposition. Such designation or any change or cancellation of such designation under this Plan will become effective only upon the receipt thereof as provided in Section 18.2, and will then relate back to the date of its execution; provided, however, that neither the Trustee, the Corporate Benefits Committee, nor the Employer will be liable by reason of any payment made before receipt of such designation, change, or cancellation to the Member's estate or to any Beneficiary previously designated. (b) Notwithstanding any other provision of the Plan to the contrary, a married Member who designates a Beneficiary other than the Member's spouse must obtain the written consent of such spouse, which consent acknowledges the effect of such designation and is witnessed by a notary public or Plan repre- sentative. (c) If no Beneficiary designation is effective pursuant to this Section 18.8, or if the Corporate Benefits Committee or the Trustee are in doubt as to the right of any claimant, or if the designated Beneficiary predeceases the Member, the amount in question may, in the discretion of the Corporate Benefits Committee, be paid directly to the estate of the Member, in which event the Trustee, the Employer, and the Corporate Benefits Committee will have no further responsibility or liability with respect thereto. (d) Upon receipt by the of evidence satisfactory to it of the death of a Member and of the existence and identity of the Beneficiary designated by the Member, the Trustee shall pay to such Beneficiary an amount equal to the balance of the Member's Accounts in accordance with the provisions of Article X. 18.9 Voting Rights. Before each annual or special meeting of stockholders of the Company, the Company will cause the Trustee to send to each Member a copy of the proxy solicitation material therefor, together with a form requesting confidential instructions to the Trustee on how to vote the shares of Stock allocated to the Member's Accounts. Upon receipt of such instructions in conformance with the proxy solicitation material, the Trustee will vote the shares of Stock as instructed. Instructions received from individual Members by the Trustee will be held in strictest confidence and will not be divulged or released to any person, including officers or employees of any Employer. The Trustee will vote the shares of Stock for which no instructions have been received in the same proportion as the shares for which instructions have been received. 18.10 Tender or Exchange Offer. Notwithstanding any other provision of this Plan or of the Trust Agreement, the Investment Committee shall be the sole named fiduciary with respect to the control and management of assets held in the Company Stock Fund and the Trustee shall have no authority or responsibility with respect to such control or management. If a tender or exchange offer is made for Stock, the Investment Committee shall determine whether, under the circumstances the terms of the offer are such that the provisions of the Plan and Trust Agreement requiring retention of Stock in the Company Stock Fund (other than to effect distributions or inter-account transfers under the Plan) can no longer be validly applied without violation of Section 404(a) of the Act. In making such determination the Investment Committee shall take into account the purpose of the Plan to invest Employer contributions and designated Member Elected Contributions in Stock. If the Investment Committee determines that such provisions can no longer be validly applied, such Committee may, in its sole discretion, direct a disposition of Stock pursuant to such offer. 18.11 Fractional Interests in Stock. Notwithstanding any other provision of this Plan, no distribution of a fractional interest in Stock held by the Trustee will be made to any Member or the Member's Beneficiary. All fractional interests in Stock otherwise distributable from Members' Accounts will be the amount in such fund on the Valuation Date coincident with or next succeeding the date the distribution is to be made and a sum equal thereto will be distributed in cash. Any distribution in cash based on an interest in a fractional share will be considered for all purposes hereof as a distribution of the fractional interest in the share. 18.12 Payment or Distribution to a Member. Any payment or distribution to a Member, or in case of the Member's death to the Member's Beneficiary, at the last known post office address of the distributee on file with the Corporate Benefits Committee, will constitute a complete acquittance and discharge to each member of the Corporate Benefits Committee, every Director, Officer, and employee of each Employer having an interest in the Trust Fund. 18.13 Service of Process. The Corporate Benefits Committee is designated as the agent of each Employer and of the Plan for service of process to commence any legal proceeding against an Employer or against the Plan, pertaining to this Plan or the determination of any rights hereunder. 18.14 Governing Law. The validity of the Plan or any of its provisions will be determined under, and it shall be construed and administered according to, the laws of the State of New York, except as may be required by any provision of the Act. 18.15 Direct Rollover of Eligible Rollover Distributions.. This Member's Section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Corporate Benefits Committee, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. For purposes of this Section, the following definitions apply. (a) Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (b) Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) Distributee: A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (d) Direct rollover: A direct rollover is payment by the Plan to the eligible retirement plan specified by the distributee. 18.16 Verti-Line Product Line of Aurora Pump. Active Employees of the Verti-Line product line of Aurora Pump on March 17, 1986 shall be 100% vested in the Matching Contributions as of March 17, 1986 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.17 Tapco International, Inc. Active Employees of Tapco International, Inc. on March 31, 1986 shall be 100% vested in the Matching Contributions as of March 31, 1986 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.18 Warren Communications, Littleton, Massachusetts. Active Employees of Warren Communications, Littleton, Massachusetts on August 15, 1986 shall be 100% vested in the Matching Contributions as of August 15, 1986 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plans. 18.19 GS Electric Motors, Inc. Active Employees of GS Electric Motors, Inc. involuntarily terminated as a result of the closing of the Racine facility on August 15, 1986 shall be 100% vested in the Matching Contributions as of August 15, 1986 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.20 Kieley & Mueller. Active Employees of Kieley & Mueller involuntarily terminated as a result of the closing of the Kieley & Mueller plant shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.21 Cardion Electronics, Inc. Active Employees of Cardion Electronics, Inc. on September 12, 1986 shall be 100% vested in the Matching Contributions as of September 12, 1986 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan or to elect a trust to trust transfer of their account balances to the "qualified" defined contribution plan of ISC Defense and Space Group. 18.22 Drytek, Inc. For employees of Drytek, Inc., as of January 1, 1987, former service with Drytek, Inc. shall be recognized as Continuous Employment for meeting the one-year service requirement for Matching Contributions. 18.23 Nelson Electric, Homer, Louisiana. Active Employees of Nelson Electric, Homer, Louisiana involuntarily terminated as a result of either the sale of the Marine Hardware Division on June 23, 1986 or the closing of the facility on April 10, 1987 shall be 100% vested in the Matching Contributions as of June 23, 1986 or April 10, 1987, respectively, and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.24 Cincinnati Time, Inc. Active Employees of Cincinnati Time, Inc. on May 2, 1987 shall be 100% vested in the Matching Contributions as of May 2, 1987 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.25 Nester Instruments Company. Active Employees of Nester Instruments Company involuntarily terminated as a result of the closing of the Nester Instruments Company on May 29, 1987 shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.26 Hydreco. Active Employees of Hydreco on September 11, 1987 shall be 100% vested in the Matching Contributions as of September 11, 1987 and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.27 Quali-Cast Corporation. Active Employees of Quali-Cast Corporation on September 19, 1987 shall be 100% vested in the Matching Contributions as of September 19, 1987 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.28 Anchor Electric. Active Employees of Anchor Electric on November 6, 1987 shall be 100% vested in the Matching Contributions as of November 6, 1987 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.29 BIF. Active Employees of BIF involuntarily terminated after December 1, 1987 as a result of the closing of the BIF facility at West Warwick, R.I. shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such time as they become entitled to them under the normal terms of such Plan. 18.30 Marsh Instrument Company. Active Employees of Marsh Instrument Company on March 17, 1988 shall be 100% vested in the Matching Contributions as of March 17, 1988 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.31 Nelson Electric, Marine Division. Active Employees of Nelson Electric, Marine Division on March 29, 1988 shall be 100% vested in the Matching Contributions as of March 29, 1988 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.32 Ultraglas. Active Employees of Ultraglas on January 22, 1988 shall be 100% vested in the Matching Contributions as of January 22, 1988 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.33 Ultratech Photomask. Active Employees of Ultratech Photomask on April 1, 1988 shall be 100% vested in the Matching Contributions as of April 1, 1988 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.34 Ceilcote Company, Inc. Active Employees of Ceilcote Company, Inc. on April 29, 1988 shall be 100% vested in the Matching Contributions as of April 29, 1988 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan or to elect a trust to trust transfer of their account balances to the Master Builders Savings Investment Plan. 18.35 Karkar Electronics. Active Employees of Karkar Electronics involuntarily terminated after June 10, 1988 as a result of the consolidation of Karkar Electronics into Tau-tron and Telecommunications Technology or terminated after October 1, 1988 shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.36 Accutel. Active Employees of Accutel involuntarily terminated after September 13, 1988 as a result of the announcement of the closing of Accutel shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.37 Northeast Electronics Division. Active Employees of the Concord, New Hampshire plant of Northeast Electronics Division terminated on and after October 28, 1988 as a result of the closing of the Concord, New Hampshire plant of Northeast Electronics Division shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.38 Camarillo Plan (Formerly BIF Accutel). Active Employees of the Camarillo plant involuntarily terminated after November 18, 1988 as a result of the closing of the Camarillo plant shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.39 Merrick Corporation. Active Employees of the Merrick Corporation involuntarily terminated after December 9, 1988 as a result of the closing of the Merrick office shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.40 Henschel. Active Employees of Henschel on May 12, 1989 shall be 100% vested in the Matching Contributions as of May 12, 1989 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.41 Rucker & Kolls. Active Employees of Rucker & Kolls on October 26, 1989 shall be 100% vested in the Matching Contributions as of October 26, 1989 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.42 Axel Electronics, Inc. Active Employees of Axel Electronics, Inc. on December 28, 1989 shall be 100% vested in the Matching Contributions as of December 28, 1989 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.43 Leeds & Northrup. Active Employees of Leeds & Northrup involuntarily terminated after February 28, 1990 as a result of the closing of the Irondale, Alabama facility shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits as such times as they become entitled to them under the normal terms of such Plan. 18.44 Aerotron. Active Employees of Aerotron on March 14, 1990 shall be 100% vested in the Matching Contributions as of March 14, 1990 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.45 Ultratech Stepper. Active Employees of Ultratech Stepper whose employment was terminated between May 1, 1990 and July 9, 1990 in connection with the proposed consolidation of the GCA and Ultratech organizations into the GCA/Ultratech unit or involuntarily terminated on and after July 9, 1990 in connection with the proposed sale of Ultratech Stepper to New Enterprise Associates, shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.46 Hevi-Duty, Puerto Rico. Active Employees of Hevi-Duty, Puerto Rico on May 17, 1990 shall be 100% vested in the Matching Contributions as of May 17, 1990 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.47 Leeds & Northrup. Active Employees of Leeds & Northrup involuntarily terminated after May 31, 1990 as a result of the closing of the Salt Lake City plant shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.48 GCA/Tropel. Active Employees of GCA/Tropel terminated on and after May 31, 1990 in connection with the transfer of its government business operation to Optimal Technology Incorporated of Rochester, New York shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.49 Kayex. Active Employees of Kayex involuntarily terminated after October 19, 1990 as a result of the closing the Spitfire facility shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.50 Semiconductor Systems. Active Employees of Semiconductor Systems on December 3, 1990 shall be 100% vested in the Matching Contributions as of December 3, 1990 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.51 General Railway Signal Company. Active Employees of General Railway Signal Company on March 11, 1991 shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.52 New York Air Brake Company. Active Employees of New York Air Brake Company involuntarily terminated on and after December 10, 1990 in connection with the sale of New York Air Brake Company and active employees of New York Air Brake Company on the date of sale, January 2, 1991, shall be 100% vested in the Matching Contributions as of either the date each such employee ceases to be employed or the date of sale, as applicable, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.53 GS Thinfilm. Active Employees of GS Thinfilm involuntarily terminated on and after October 26, 1990 in connection with the sale of GS Thinfilm and active employees of GS Thinfilm on the date of sale shall be 100% vested in the Matching Contributions as of either the date each such employee ceases to be employed or the date of sale, as applicable, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.54 Merrick Industries, Inc.. Active Employees of Merrick Industries, Inc. on September 27, 1991 shall be 100% vested in the Matching Contributions as of September 27, 1991 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.55 Alarm and Control Product Line of Telecommunications Technology. Active Employees of the Alarm and Control Product Line of Telecommunications Technology on January 8, 1992 shall be 100% vested in the Matching Contributions as of January 8, 1992 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.56 Telecommunications Technology. Employees of Telecommunications Technology who are actively at work on January 27, 1992 and who are involuntarily terminated on and after January 27, 1992 in connection with either the sale of Telecommunications Technology or the closing of the Telecommunications Technology facility shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.57 Center for Precision Machining of GCA. Active Employees of the Center for Precision Machining of GCA involuntarily terminated on and after March 31, 1992 in connection with the sale of the Center for Precision Machining of GCA and active employees of the Center for Precision Machining of GCA on the date of sale shall be 100% vested in the Matching Contributions as of either the date each such employee ceases to be employed or the date of sale, as applicable, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.58 Proportioneer Division of Lightnin. Active employees of the Proportioneer Division of Lightnin involuntarily terminated on and after April 13, 1992 in connection with the sale of the Proportioneer Division of Lightnin and active employees of the Proportioneer Division of Lightnin on the date of sale shall be 100% vested in the Matching Contributions as of either the date each such employee ceases to be employed or the date of sale, as applicable, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.59 Switching Products Division of Hevi-Duty/Nelson. Active employees of the Switching Products Division of Hevi-Duty/Nelson involuntarily terminated on and after April 13, 1992 in connection with the sale of the Switching Products Division of Hevi-Duty/Nelson and active employees of the Switching Products Division of Hevi-Duty/Nelson on the date of sale shall be 100% vested in the Matching Contributions as of either the date each such employee ceases to be employed or the date of sale, as applicable, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.60 Dynapower/Stratopower. Active employees of Dynapower/ Stratopower involuntarily terminated on and after April 21, 1992 in connection with the relocation of Dynapower/ Stratopower to Charleston, South Carolina shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed, and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.61 Ultratech Stepper Division. Active Employees of the Ultratech Stepper Division on March 5, 1993 shall be 100% vested in the Matching Contributions as of March 5, 1993 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.62 GCA Division and Tropel Division of General Signal Technology Corporation. Active Employees of the GCA Division and the Tropel Division involuntarily terminated on and after March 26, 1993 as a result of the suspension of the Andover, Massachusetts production operations shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.63 Electroglas Division. Active Employees of the Electroglas Division on June 30, 1993 shall be 100% vested in the Matching Contributions as of June 30, 1993 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.64 Drytek, Incorporated. Active Employees of Drytek, Incorporated on June 30, 1993 shall be 100% vested in the Matching Contributions as of June 30, 1993 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.65 DeZurik, La Grange, Georgia. Active Employees of DeZurik involuntarily terminated as a result of the closing of the DeZurik, La Grange, Georgia facility shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.66 Dielectric Communications. Active employees of Dielectric Communications involuntarily terminated after December 1, 1993 as a result of the closing of the Dielectric Communications facility at Voorhees, New Jersey shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.67 Lindberg / Revco. Active employees of the Blue M facility of Lindberg/Revco at Blue Island, Illinois involuntarily terminated as a result of the closing of the facility shall be 100% vested in the Matching Contributions as of the date each employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.68 Sola / Hevi-Duty. Active employees of the Sola/Hevi- Duty Lakeland, Florida plant involuntarily terminated in connection with closing of the plant on or after August 20, 1993, shall be 100% vested in the Matching Contributions as of the date of termination and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.69 GCA Tropel. Active employees of GCA Tropel involuntarily terminated in connection with the sale of GCA Tropel on April 22, 1994 shall be 100% vested in the Matching Contributions as of the date of sale and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.70 UNIVAL Product Line of DeZurik. Active employees of UNIVAL Product Line of DeZurik involuntarily terminated as a result of the transfer of the Tampa, Florida plant to the McMinnville, Tennessee plant after June 30, 1994 shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.71 Assembly Technologies. Active employees of Assembly Technologies on July 13, 1994 shall be 100% vested in the Matching Contributions as of July 13, 1994 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.72 Leeds & Northrup Company. Active employees of Max Systems, a product line of Leeds & Northrup Company, involuntarily terminated in connection with the sale of Max Systems shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.73 Telenex Corporation. Active exempt and non-exempt employees of Telenex Corporation involuntarily terminated in connection with the closing of the Springfield, Virginia plant shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.74 Leeds & Northrup Company. Active employees of Leeds & Northrup Company involuntarily terminated in connection with the sale of Leeds & Northrup Company shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.75 Telenex Corporation. Active employees of Telenex Corporation involuntarily terminated in connection with the closing of the AR Test Systems facility located at 7401 Boston Boulevard, Springfield, VA shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.76 Revco/Lindberg. Active employees of Revco/Lindberg involuntarily terminated in connection with the relocation of the Laboratory Furnaces Line from Watertown, WI to Asheville, NC shall be 100% vested in the Matching Contributions and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.77 Elk Grove Facility of Sola Electric. Active employees of Sola Electric involuntarily terminated after September 21, 1995 as a result of the closing of the Elk Grove facility shall be 100% vested in the Matching Contributions as of the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.78 Dynapower/Stratopower. Active employees of Dynapower/Stratopower involuntarily terminate on and after October 23, 1995 in connection with the sale of Dynapower/Stratopower shall be 100% vested in the Matching Contributions as the date each such employee ceases to be employed and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. 18.79 Kinney Vacuum Company. Active employees of the Kinney Vacuum Company on February 11, 1996 shall be 100% vested in the Matching Contributions as of February 11, 1996 and shall receive such benefits at such times as they become entitled to them under the normal terms of such Plan. ARTICLE XIX AMENDMENT, TERMINATION AND MERGER 19.1 The Company, by action of the Board of Directors, at any time or from time to time may amend or modify the Plan to any extent that it may deem advisable. The Human Resources Officer may adopt amendments to the Plan which it deems necessary or appropriate to comply with applicable laws or government regulations or which do not materially increase the annual cost of the Plan to the Employers. No such amendment shall: (1) increase the duties and responsibilities of the Trustee without its consent; (2) have the effect of revesting in any Employer the whole or any part of the principal or income of the Trust fund or of diverting any part of such principal or income to purposes other than for the exclusive benefit of the Members and their Beneficiaries; or (3) cause any reduction to any Member's Accounts. 19.2 The Company, by action of the Board of Directors, at any time may discontinue all Contributions under the Plan or terminate the Plan in its entirety. Each Employer may, by action of its Board of Directors, take similar action as to Members who are its employees. Upon complete discontinuance of contributions under the Plan or termination of the Plan as to any Members hereunder, the Accounts of such Members will become fully vested, and will not thereafter be subject to forfeiture. 19.3 No merger or consolidation with, or transfer of assets or liabilities to, any other plan shall occur unless each Member of the Plan would (if the Plan then termi- nated) receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit the Member would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated). ARTICLE XX TRANSFERS OF ACCOUNTS FROM OTHER PLANS 20.1 Purpose of this Article. The purpose of this Article is to specify the provisions governing Account balances that represent assets transferred to this Plan (the "Transferred Assets") from other defined contribution plans that are qualified under Section 401(a) of the Code and whose assets were exempt from tax under Section 501(a) of the Code (an "Other Plan"). For purposes of this Article, a distribution to an individual from an Other Plan which is transferred to this Plan by such individual in a transfer intended to qualify for tax-free rollover treatment pursuant to Section 402(a)(5) or 408(d)(3) of the Code shall be considered a transfer of assets from such Other Plan. 20.2 Approval of Transfers. The Corporate Benefits Committee, in its discretion, may approve from time to time the transfer of assets from an Other Plan, provided that the transfer satisfies the requirements of Section 19.3 of this Plan and does not adversely affect the tax qualified status of this Plan. If the Other Plan is not maintained by a member of the Controlled Group, the Corporate Benefits Committee must receive an affidavit from the trustee and plan administrator of the Other Plan to the effect that such Other Plan is qualified, its assets are exempt from federal income tax and the transfer will not adversely affect such status or, in the alternative, that the assets to be transferred constitute an "eligible rollover distribution" as defined in Section 402(c)(5)(E) of the Code; provided, however, that if the transfer to this Plan is intended to qualify as a tax-free rollover from an individual retirement account or annuity under Section 408(d)(3) of the Code, the Corporate Benefits Committee may instead require the individual requesting the transfer to supply such affidavits or other evidence as the Corporate Benefits Committee may deem appropriate to establish that the transfer will satisfy the requirements for such a tax- free rollover. The Corporate Benefits Committee, in its discretion, may require approval of the transaction by the Internal Revenue Service prior to accepting any such transfer. 20.3 Membership in the Plan. No assets may be transferred to this Plan from an Other Plan unless each individual who has an interest in the Transferred Assets is or was an employee of the Controlled Group. Each individual who has an interest in the Transferred Assets shall become a Member of this Plan with the following rights: (a) If the individual satisfies the requirements for membership specified in Article III, the individual will have all the rights of a Member; (b) If the individual has not satisfied the require- ments for membership specified in Article III, the individual will have the right of a Member only as to the Accounts maintained on the individual's behalf to account for the Transferred Assets (i.e., rights pertaining to investment, withdrawal and distribution of such Accounts). 20.4 Allocation of Transferred Assets. Each Member's interest in the Transferred Assets and any earnings thereon will be separately accounted for and allocated to the Member's Accounts as follows: (a) To the Member's Tax Deferred Contribution Account - All Transferred Assets representing (1) contributions that were made to an Other Plan maintained by a member of the Controlled Group and that were not includible in the Member's gross income under the Code in the year for which they were contributed or thereafter and (2) earnings on such contributions will be allocated to the Member's Tax Deferred Contribution Account; and (b) To the Member's Taxed Contribution Account - The balance of the Member's interest in the Trans- ferred Assets and all Transferred Assets from an Other Plan not maintained by a member of the Controlled Group will be allocated to the Member's Taxed Contribution Account. Transferred Assets allocated to an Account will be governed by all of the rules applicable to that Account. The allocation of Transferred Assets to the Member's Accounts will not be considered a Tax Deferred contribution for purposes of Section 4.6(b)(1) (regarding compliance with the deferral percentage limitations imposed by Section 401(k)(3)) nor an Account Addition for purposes of Section 6.3 (regarding the limitations imposed by Section 415 of the Code). Unless otherwise determined by the Corporate Benefits Committee, a distribution from a Member's Accounts will be deemed to be made first from Transferred Assets allocated to the Account. 20.5 Special Rule for Distributions at Termination of Employment Under Section 10.2. If a Member's Tax Deferred Contribution Account contains any Transferred Assets and the Member is entitled to a distribution from the Plan pursuant to Section 10.2, then, instead of the distribution elections specified in Section 10.2, a terminating Member may elect to receive the portion of the Member's Accounts representing the Transferred Assets, determined as of the Valuation Date which coincides with or immediately follows the date of the Member's termination of employment, and the payment of the balance of the Member's Accounts at a later date in accordance with Section 10.2. 20.6 Provisions of Other Plan Superseded. The provisions of this Plan will supersede the provisions of any Other Plan with respect to the Transferred Assets, except as may otherwise be required by Section 411 (2) (6) of the Code In particular, all beneficiary designations and other elections made under the Other Plan will be canceled effective as of the date such Other Plan assets are transferred to this Plan and made a part of the Trust Fund. Upon the Member's death, the amount in the Member's Accounts representing Transferred Assets will be paid to the Beneficiary designated under this Plan in accordance with Sections 10.1, 10.4(a)(i) and 18.8. ARTICLE XXI TOP-HEAVY PROVISIONS 21.1 Top-Heavy Determination. Notwithstanding any other provision of this Plan to the contrary, this Article XXI shall apply for any Plan Year if the Plan is a "Top-Heavy Plan" as defined herein. The Plan shall be a "Top-Heavy Plan" if, as of the Determination Date, the present value of the cumulative accrued benefits of Key Employees exceeds sixty percent (60%) of the present value of the cumulative accrued benefits under the Plan of all Employees (but excluding the value of the accrued benefits of the Non-Key Employees who were formerly Key Employees). In determining whether this Plan is a Top-Heavy Plan, the Company and all members of the Controlled Group shall be treated as a single employer. In addition, all plans that are part of the Aggregation Group shall be treated as a single plan. For purposes of the foregoing, the present value of an Employee's accrued benefit shall be equal to the sum of the amounts determined under the following paragraphs: (a) The sum of (i) the present value of an Employee's accrued benefits in each defined benefit plan which is included in the Aggregation Group deter- mined as of the most recent Valuation Date within the twelve (12) month period ending on the Deter- mination Date and as if the Employee had termi- nated service as of such Valuation Date and (ii) the aggregate distributions made with respect to such Employee during the five-year period ending on the Determination Date from all defined benefit plans included in the Aggregation Group and not reflected in the present value of the Member's accrued benefits as of the most recent Valuation Date; and (b) The sum of (i) the aggregate balance of the Member's accounts in all defined contribution plans which are part of the Aggregation Group as of the most recent Valuation Date within the twelve (12) month period ending on the Determination Date, (ii) any contributions allocated to such accounts after the Valuation Date and on or before the Determination Date and (iii) the aggregate distributions made with respect to such Employee during the five-year period ending on the Determination Date from all defined contribution plans which are part of the Aggregation Group and not reflected in the value of the Member's accounts as of the most recent Valuation Date. Solely for the purpose of determining if the Plan, or any other plan included in a required aggregation group of which this Plan is a part, is top - heavy (within the meaning of Section 416(g) of the Code) the accrued benefit of an Employee other than a key employee (within the meaning of Section 416(i)(1) of the Code) shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Controlled Group, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of Section 411(b)(1)(C) of the Code. Plan-to-plan transfers and rollovers shall be taken into account to the extent provided in the applicable Treasury Regulations. In addition, for purposes of paragraphs (a)(ii) and (b)(iii) above, distributions under a terminated plan which, if such plan had not terminated, would have been required to be included in an Aggregation Group, shall also be taken into account. 21.2 Top-Heavy Definitions. The following terms shall have the following meanings: (a) "Aggregation Group" means (i) Each stock bonus, pension, or profit sharing plan of the Company in which a Key Employee participates and which is intended to qualify under Section 401(a) of the Code; and (ii) Each other such stock bonus, pension or profit sharing plan of the Company which enables any plan in which a Key Employee participates to meet the requirements of Section 401(a)(4) or 410 of the Code; and (iii) Each other such stock bonus, pension or profit sharing plan of the Company which the Company designates as part of the Aggregation Group provided that the resulting group meets the requirements of Section 401(a) and 410 of the Code. (b) "Determination Date" means the last day of the preceding Plan Year, except that for the first plan year of any plan, the Determination Date shall be the last day of such plan year. (c) "Key Employee" means any Employee, former Employee, or the beneficiary under the Plan of a former Employee who, in the Plan Year containing the Determination Date, or any of the four pre- ceding Plan Years, is: (i) An officer of the Company having an annual compensation greater than 150% of the maxi- mum dollar limitation under Section 415(c)(1)(A) of the Code. Not more than fifty (50) Employees or, if lesser, the greater of three (3) Employees or ten per- cent (10%) of the Employees shall be con- sidered as officers for purposes of this paragraph. (ii) One of the ten (10) Employees owning (or considered as owning within the meaning of Section 318 of the Code) the largest interest in the Company and having an annual compensation greater than the maximum dollar limitation under Section 415(c)(1)(A) of the Code. (iii) A five-percent (5%) owner of the Company. (iv) A one-percent (1%) owner of the Company having an annual compensation of more than $150,000. An Employee's ownership interest in the Company shall be determined in accordance with Section 416(i) of the Code. (d) "Non-Key Employees" means any Employee, former Employee, or the beneficiary under the Plan of a former Employee who is not a Key Employee. (e) "Compensation" means compensation as defined in Section 415 of the Code. 21.3 Minimum Top-Heavy Contribution. If this Article XXI applies to the Plan for any Plan Year, the Company contribution to the Plan (excluding Tax Deferred Con- tributions and any Matching Contributions required to meet the provisions of Section 5.5.) and all other defined contribution plans included in the Aggregation Group for such Plan Year on behalf of each Non-Key Employee who is a Member of this Plan, whether or not such Non-Key Employee elects to make Tax Deferred Contributions to the Plan for such Plan Year, shall not in the aggregate be less than the lesser of (i) three percent (3%) of such Non-Key Employee's compensation, or (ii) the percentage of compensation contributed, or required to be contributed (including any Tax Deferred Contributions), by the Company in the aggregate to the Plan and all other defined contribution plans in the Aggregation Group for such Plan Year on behalf of the Key Employee for whom such percentage is the highest (disregarding for this purpose compensation of such Key Employee for such Plan Year in excess of the dollar limit in effect under Section 401(a) (17) of the Code for such year), multiplied by such Non-Key Employee's compensation. If the amount contributed in the aggregate on behalf of any Non-Key Employee under the Plan and all other defined contribution plans in the Aggregation Group would otherwise be less than the minimum contribution required by this Section 21.3, an additional contribution shall be made to such plan or plans as the Company shall designate so that the minimum contribution requirement set forth in this Section 21.3 is satisfied. This Section 21.3 shall not apply to any Non-Key Employee who is a participant in any defined benefit plan included in the Aggregation Group under which such Non-Key Employee receives the minimum benefit required by Section 416 of the Code and applicable Treasury Regulations. 21.4 Top-Heavy Vesting Requirements. (a) If this Article XXI applies to the Plan for any Plan Year, then notwithstanding the provisions of Section 8.1, a Member's nonforfeitable interest in the Member's Accounts attributable to Company contributions shall not be less than the appropriate percentage set forth below: Full Years of Continuous Nonforfeitable Employment Percentage Less than 2 0% 2 20 3 40 4 60 5 80 6 or more 100 (b) A Member's nonforfeitable interest in the Member's Accounts shall not be less than the greater of (i) the Member's nonforfeitable interest determined pursuant to Section 8.1 or (ii) the Member's nonforfeitable interest determined pursuant to this Section 21.4 as of the last day of the last Plan Year in which this Article XXI applies to the Plan. (c) If this Article XXI ceases to apply to the Plan, each Member having five or more full years of Continuous Employment (determined as of the first day of the Plan Year in which the Article XXI ceases to apply to the Plan) shall have the Member's nonforfeitable interest determined in accordance with the schedule contained in this Section 21.4 if such schedule results in a higher nonforfeitable interest than that determined under Section 8.1. 21.5 Top-Heavy Section 415 Limitation. If this Article XXI applies to the Plan for any Plan Year commencing prior to January 1, 2000, then the defined benefit plan fraction and defined contribution plan fraction applied under Section 6.3(d) shall be applied by substituting "1.0" for "1.25" in each place such number appears in Section 415(e) of the Code, unless the following requirements are met: (1) The defined benefit plan or plans of the Company in which each Non-Key Employee participates provides a benefit on the Member's behalf not less than the minimum benefit required under Section 416(b) of the Code and Treasury Regulations thereunder. (2) This Article XXI would not apply if "ninety percent (90%)" were substituted for "sixty percent (60%)" in each place such term appears in Section 21.1. This Section 21.5 shall not apply to any Member as long as there are (i) no Company contributions, forfeitures or voluntary contributions allocated to such Member under any defined contribution plan of the Company and (ii) no accruals for such Member under any defined benefit plan of the Company. EX-27 5
5 0000040834 GENERAL SIGNAL CORPORATION 1000 6-MOS DEC-31-1997 JUN-30-1997 24300 90 378300 15900 242600 703300 767100 461300 1549900 411300 243200 0 0 78400 644000 1549900 1045200 1045200 733200 939300 0 1764 8000 97900 39200 58700 0 0 0 58700 1.15 0
-----END PRIVACY-ENHANCED MESSAGE-----