SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 30 TO SCHEDULE 13D
Filed pursuant to Rule 13d-1 as promulgated under Section
13(d) of the Securities Exchange Act of 1934 by the Securities
and Exchange Commission. This amendment incorporates a
restatement of Schedule 13D as amended through Amendment
Number 29 and the following changes that have occurred since
the last filing:
Change in ownership of Company stock by the Woodward Stock
Plan portion of the Woodward Governor Company Member
Investment and Stock Ownership Plan.
Amendments to Exhibit A to reflect changes in Company
executive officers and directors and changes to the Plan
Administrative and Investment Committees.
Exhibit B is the Woodward Governor Company Member Investment
and Stock Ownership Plan as amended.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, $0.00875 par
value, of Woodward Governor Company (the "Company"), 5001
North Second Street, Rockford, Illinois 61111, 11,334,146
shares of which are outstanding as of November 13, 2002.
Information relating to executive officers of Woodward
Governor Company as of November 13, 2002 is included in
Exhibit A.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed with respect to the Woodward
Governor Company Member Investment and Stock Ownership Plan
(the "Plan"), 5001 North Second Street, Rockford, Illinois
61111, which is a profit sharing plan qualified under the
provisions of Section 401(a) of the Internal Revenue Code. The
assets of the Plan are held by the Woodward Governor Company
Profit Sharing Trust (the "Trust"), established by agreement
between the Company and Vanguard Fiduciary Trust Company (the
"Trustee"). The Plan has been in operation since 1952 and
neither the Plan nor the Trust has been convicted in any
criminal proceeding (excluding traffic violations or similar
misdemeanors), nor has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction
which would result in a judgment, decree, or final order
enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding
liability with respect to such laws.
The Woodward Stock Plan is incorporated as part of the Plan
and is an employee stock ownership plan under Section
4975(e)(7) of the Internal Revenue Code and Section 407(d)(6)
of ERISA.
Information as to members of the Investment Committee and
Administrative Committee of the Plan and as to executive
officers and directors of the Company is included in Exhibit A
hereto.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The sources of funds for the Plan are annual contributions by
the Company and earnings on or sales of the investments held
by the Trust.
ITEM 4. PURPOSE OF TRANSACTION.
From time to time, the Trust has purchased shares of the
Company's Common Stock ("Shares") in The Nasdaq Stock Market
and in private transactions (See Item 5). The Trust may
continue to effect purchases of Shares in The Nasdaq Stock
Market or in private transactions from time to time if and
when opportunities arise which permit the Trust to make such
purchases on terms which are deemed advisable.
Purchases of Shares by the Trust are made for investment. The
Plan and the Trust have provisions designed to enable the
participants in the Plan (or their representatives) to control
the voting of Shares held by the Trust and any sale, exchange,
or other disposition of such Shares (See Item 6). Purchases of
Shares by the Trust have the effect of increasing the
percentage of outstanding Shares controlled by the Company's
worker members (employees).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
At September 30, 2002, the Plan owned 1,693,817 Shares of
Common Stock. This represented 14.95 percent of the total
outstanding shares. In addition, there are shares held by
related parties. The Woodward Governor Company Charitable
Trust owned 128,536 shares (1.13%) at September 30, 2002.
Voting control of this stock is by an investment committee for
the Charitable Trust. Mr. Stephen P. Carter, Vice President,
Chief Financial Officer and Treasurer of the Company, is an
Investment Committee member for the Charitable Trust and is
also on the Invesment Committee of the Plan.
ITEM 6. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The Shares, like other securities owned by the Trust, are held
for the benefit of the worker member participants in the Plan
pursuant to the Woodward Governor
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Company Member Investment and Stock Ownership Plan adopted
September 30, 1952, as amended, and the related Woodward
Governor Company Profit Sharing Trust dated September 30,
1952, as amended. There are no other contracts, arrangments,
or understandings of the kind required to be disclosed by Item
6 of Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Investment Committee and Administrative Committee
members of the Woodward Governor Company Member Investment and
Stock Ownership Plan, Directors and Executive Officers of
Woodward Governor Company;
Exhibit B - Woodward Governor Company Member Investment and
Stock Ownership Plan, as amended;
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete, and correct.
Woodward Governor Company Profit Sharing Trust
/s/ Stephen P. Carter
-------------------------------------------
Stephen P. Carter
Vice President, Chief Financial Officer and Treasurer
Woodward Governor Company
Date: November 13, 2002
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EXHIBIT A
INVESTMENT COMMITTEE
The purchase of securities by the Plan is at the discretion of the Investment
Committee of the Plan. None of the Committee members has, during the past five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) nor has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction which would result in a
judgment, decree, or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding liability
with respect to such laws. All members are citizens of the United States.
Certain information as to the present members of the Investment Committee is as
follows [(a) name, (b) business address, (c) present employment and relationship
with Woodward Governor Company, (d) principal occupations for the past 5 years,
(e) shares of Company stock owned at date hereof]:
INVESTMENT COMMITTEE MEMBER
(a) Stephen P. Carter
(b) Woodward Governor Company
5001 North Second Street
Rockford, IL 61111
(c) Vice President, Chief Financial Officer and Treasurer
Woodward Governor Company
(d) Employed by Woodward Governor Company as Vice President, Chief
Financial Officer And Treasurer since January 1997.
(e) Shares: 90,047
INVESTMENT COMMITTEE MEMBER
(a) Jay Evans
(b) Amcore Financial, Inc.
501 Seventh Street
Rockford, IL 61104
(c) President and Chief Investment Officer
Amcore Capital Management, Inc.
Member of the Woodward Governor Company Investment Committee
Since June 22, 1994
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(d) Employed by Amcore Financial, Inc. as President and Chief Investment
Officer of Amcore Capital Management, Inc. since 1992.
(e) Shares: 0
ADMINISTRATIVE COMMITTEE
The Administrative Committee of the Plan has the power to direct the Trustee as
to the manner of exercising voting rights with respect to the Company stock held
by the Plan. Since the power of the Committee is limited to voting power, all
members disclaim beneficial ownership in the stock held by the Plan. As far as
the Company knows, none of the committee members has, during the past five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), nor has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction which would result in a
judgment, decree, or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding liability
with respect to such laws. All members are citizens of the United States and are
employed by Woodward Governor Company. Certain information as to the present
members of the Administrative Committee is as follows [(a) name, (b) shares of
Company stock owned at date hereof]:
ADMINISTRATIVE COMMITTEE MEMBERS
1. (a) Rick Holm
(b) 233 shares
2. (a) Jeff Huber
(b) 1,125 shares
3. (a) Steve Meyer
(b) 347 shares
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DIRECTORS AND EXECUTIVE OFFICERS
Without conceding that such information is required to be included in Schedule
13D, certain information as to the present executive officers and directors of
the Company is submitted. None of the executive officers and directors has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), nor has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction which
would result in a judgment, decree, or final order enjoining future violations
of, or prohibiting activities subject to, federal or state securities laws or
finding liability with respect to such laws. All executive officers and
directors are citizens of the United States. Certain information as to the
executive officers and directors is as follows [(a) name, (b) business address,
(c) present position, (d) principal occupations for the past 5 years, (e) shares
of Company stock owned at date hereof]:
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND DIRECTOR
(a) John A. Halbrook
(b) Woodward Governor Company
5001 North Second Street
Rockford, IL 61111
(c) Chairman of the Board, Chief Executive Officer and Director
Woodward Governor Company
(d) During the past five years, employed by Woodward Governor Company
in management positions.
(e) Shares: 288,210
PRESIDENT AND CHIEF OPERATING OFFICER
(a) Thomas A. Gendron
(b) Woodward Governor Company
1000 East Drake Street
Fort Collins, CO 80522
(c) President and Chief Operating Officer
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company in
management positions.
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(e) Shares: 51,644
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
(a) Stephen P. Carter (SEE INVESTMENT COMMITTEE)
VICE PRESIDENT
(a) Ronald E. Fulkrod
(b) Woodward Governor Company
1000 East Drake Street
Fort Collins, CO 80522
(c) Vice President
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company in
management positions.
(e) Shares: 42,678
VICE PRESIDENT
(a) C. Phillip Turner
(b) Woodward Governor Company
5001 North Second Street
Rockford, IL 61111
(c) Vice President - General Manager, Aircraft Engine Systems
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company in
management positions.
(e) Shares: 110,550
CORPORATE SECRETARY
(a) Carol J. Manning
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(b) Woodward Governor Company
5001 North Second Street
Rockford, IL 61111
(c) Corporate Secretary
Woodward Governor Company
(d) During the past five years, employed by the Woodward Governor Company as
Corporate Secretary.
(e) Shares: 8,375
DIRECTOR
(a) J. Grant Beadle
(b) P.O. Box 130 Macatawa, MI 49434
(c) Retired Chairman of the Board and Chief Executive Officer Union Special
Corporation
Director of Woodward Governor Company (May 1988 through present)
(d) Prior to retiring in May 1991, was Chairman of the Board and Chief
Executive Officer of Union Special Corporation.
(e) Shares: 6,956
DIRECTOR
(a) John D. Cohn
(b) Rockwell Automation
777 East Wisconsin Avenue, Suite 1400
Milwaukee, WI 53202
(c) Senior Vice President Strategic Development and Communications
Rockwell Automation
Director of Woodward Governor Company (July 2002 through present)
(d) During the past five years, employed by Rockwell Automation
in management positions.
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(e) Shares: 0
DIRECTOR
(a) Paul Donovan
(b) Wisconsin Energy Corporation
PO Box 2949
Milwaukee, WI 53201
(c) Senior Vice President and Chief Financial Officer
Wisconsin Energy Corporation
Director of Woodward Governor Company (November 2000 through present)
(d) From June 1988 through August 1999, employed by Sundstrand Corporation
as Executive Vice President and Chief Financial Officer.
(e) Shares: 2,502
DIRECTOR
(a) Lawrence E. Gloyd
(b) Clarcor, Inc.
6367 Sebring Way
Loves Park, IL 61111
(c) Chairman Emeritus and Retired Chairman and Chief Executive Officer
Clarcor, Inc.
Director of Woodward Governor Company (June 1994 through present)
(d) Prior to retiring in March 2000, was Chairman and Chief Executive Officer
of Clarcor, Inc.
(e) Shares: 7,492
DIRECTOR
(a) J. Peter Jeffrey
(b) 12035 Douglas Street
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Omaha, NE 68154
(c) Retired Vice President of Development
Father Flanagans Boy's Home
(d) Prior to retiring in December 1995, held an executive management
position with Father Flanagans Boy's Home.
(e) Shares: 7,524
DIRECTOR
(a) Michael H. Joyce
(b) Twin Disc, Incorporated
1328 Racine Street
Racine, WI 53403
(c) President and Chief Operating Officer
Twin Disc, Incorporated
Director of Woodward Governor Company (October 2000 through present)
(d) Employed by Twin Disc, Incorporated as President and Chief Operating
Officer since 1991.
(e) Shares: 3,792
DIRECTOR
(a) Rodney O'Neal
(b) Delphi Automotive Systems
5725 Delphi Drive
Troy, MI 48098
(c) Executive Vice President of Delphi Automotive Systems and
President of the Safety, Thermal & Electrical Architecture Sector
Director of Woodward Governor Company (April 1999 through present)
(d) During the past five years, employed by Delphi Automotive Systems
in management positions.
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(e) Shares: 5,553
DIRECTOR
(a) Mary L. Petrovich
(b) AxleTech International
Troy, MI
(c) Chief Executive Officer
AxleTech International
Director of Woodward Governor Company (July 2002 through present)
(d) Chief Executive Officer of AxleTech International from 2001 to present;
from 2000-2001 served as President of Dura Automotive - Driver
Controls; and from 1993-2000 held various management positions with
AlliedSignal.
(e) Shares: 0
DIRECTOR
(a) James R. Rulseh
(b) Modine Manufacturing Company
1500 DeKoven Avenue
Racine, WI 53402
(c) Group Vice President
Modine Manufacturing Company
Director of Woodward Governor Company (April 2002 through present)
(d) Group Vice President, Modine Manufacturing Company April 2001 to
present; Managing Director of Modine Europe from April 1998 through
April 2001; General Manager of Modine Manufacturing Company from
October 1994 through April 2001.
(e) Shares: 1,692
DIRECTOR
(a) Michael T. Yonker
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(b) P.O. Box 1193
Boca Grande, FL 33921
(c) Retired President and Chief Executive Officer
Portec, Inc.
Director of Woodward Governor Company (November 1993 through present)
(d) Prior to retiring in June 1998, was President and Chief Executive Officer
of Portec, Inc.
(e) Shares: 7,036
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EXHIBIT B
================================================================================
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(As Amended and Restated
Effective as of January 1, 1999)
================================================================================
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TABLE OF CONTENTS
Page
ARTICLE 1. GENERAL...................................................................................1
Section 1.1. History, Purpose and Effective Date...................................................1
Section 1.2. Defined Terms.........................................................................1
Section 1.3. Related Companies.....................................................................1
Section 1.4. Plan Administration, Trust Agreement..................................................2
Section 1.5. Plan Year.............................................................................2
Section 1.6. Applicable Laws.......................................................................2
Section 1.7. Gender and Number.....................................................................2
Section 1.8. Notices...............................................................................2
Section 1.9. Evidence..............................................................................3
Section 1.10. Action by the Company.................................................................3
Section 1.11. Reversion to the Company..............................................................3
Section 1.12. Prior Elections.......................................................................3
Section 1.13. Restrictions on Participant Election..................................................3
ARTICLE 2. PARTICIPATION.............................................................................3
Section 2.1. Participation.........................................................................3
Section 2.2. Participation Not Contract of Employment..............................................4
ARTICLE 3. SERVICE...................................................................................4
Section 3.1. Year of Service.......................................................................4
Section 3.2. Hour of Service.......................................................................5
Section 3.3. One-Year Break-in-Service.............................................................6
Section 3.4. Leased Worker Members.................................................................6
ARTICLE 4. PAYROLL DEFERRALS.........................................................................6
Section 4.1. Payroll Deferrals.....................................................................6
Section 4.2. Eligible Pay Adjustments and Payment of Payroll Deferrals.............................7
Section 4.3. Election to Vary, Suspend or Change Tax Treatment of Payroll Deferrals................7
Section 4.4. Treatment as Deferral Contribution....................................................7
ARTICLE 5. CONTRIBUTIONS.............................................................................7
Section 5.1. Payroll Deferral Contributions........................................................7
Section 5.2. Company Matching Contribution.........................................................8
ARTICLE 6. ROLLOVERS AND TRANSFERS FROM RELATED PLANS................................................8
Section 6.1. Rollover Contributions................................................................8
Section 6.2. Transfers from Other Plans............................................................8
Section 6.3. Interest in Plan......................................................................8
ARTICLE 7. PARTICIPANT ACCOUNTS......................................................................9
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ARTICLE 8. INVESTMENT FUNDS UNDER THE MEMBER INVESTMENT PLAN.........................................9
Section 8.1. Investment Accounts...................................................................9
Section 8.2. Investment Directions and Transfers Between Investment Funds..........................9
Section 8.3. Statement of Accounts.................................................................9
ARTICLE 9. WOODWARD GOVERNOR COMPANY STOCK COMPONENT................................................10
Section 9.1. Compliance with Code and ERISA.......................................................10
Section 9.2. Dividends on Allocated Company Stock.................................................10
Section 9.3. Acquisition Loans....................................................................10
Section 9.4. Transfer from the Woodward Governor Company Stock Component..........................11
Section 9.5. Fair Market Value....................................................................12
ARTICLE 10. LIMITATIONS ON COMPENSATION, CONTRIBUTIONS AND ALLOCATIONS...............................12
Section 10.1. Compensation.........................................................................12
Section 10.2. Limitations on Annual Additions......................................................13
Section 10.3. Combined Plan Limitation.............................................................14
Section 10.4. Reduction of Contribution Rates......................................................14
Section 10.5. Excess Annual Additions..............................................................14
Section 10.6. Limitations under Section 402(g) of the Code.........................................15
Section 10.7. Disposition of Excess Elective Deferrals.............................................15
Section 10.8. Limitations under Section 401(k)(3) of the Code......................................15
Section 10.9. Disposition of Excess Deferral Contributions.........................................16
Section 10.10 Highly Compensated Worker Member.....................................................16
Section 10.11 Limitations under Code Section 401(m)(2).............................................17
Section 10.12 Disposition of Excess Matching Contributions.........................................18
Section 10.13 Multiple Use of Alternative Limitation...............................................18
ARTICLE 11. PRE-TERMINATION WITHDRAWALS AND LOANS....................................................19
Section 11.1. Pre-Termination Withdrawals..........................................................19
Section 11.2. Hardship.............................................................................20
Section 11.3. Loans to Participants................................................................21
ARTICLE 12. DISTRIBUTION ON TERMINATION OR TRANSFER OF EMPLOYMENT....................................22
Section 12.1. Vesting of Account Balance...........................................................22
Section 12.2. Distribution Date....................................................................22
Section 12.3. Limits on Commencement and Duration of Distributions.................................22
Section 12.4. Form of Distribution on Termination of Employment....................................24
Section 12.5. Distributions to Persons under Disability............................................24
Section 12.6. Interests Not Transferable...........................................................25
Section 12.7. Absence of Guaranty..................................................................25
Section 12.8. Designation of Beneficiary...........................................................25
Section 12.9. Missing Recipient....................................................................26
Section 12.10. Put Option...........................................................................26
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Section 12.11. Direct Rollovers.....................................................................27
Section 12.12. Definitions..........................................................................27
ARTICLE 13. VOTING OF COMPANY STOCK..................................................................28
ARTICLE 14. THE ADMINISTRATIVE COMMITTEE.............................................................29
Section 14.1. Membership...........................................................................29
Section 14.2. Majority Action......................................................................30
Section 14.3. Rights, Powers and Duties............................................................30
Section 14.4. Application of Rules.................................................................31
Section 14.5. Remuneration and Expense.............................................................31
Section 14.6. Indemnification of the Committee.....................................................31
Section 14.7. Exercise of Committee's Duties.......................................................31
Section 14.8. Information to Be Furnished to Committee.............................................31
Section 14.9. Resignation or Removal of Committee Member...........................................31
Section 14.10 Appointment of Successor Committee Member............................................32
ARTICLE 15. THE INVESTMENT COMMITTEE.................................................................32
Section 15.1. Establishment of Investment Committee................................................32
Section 15.2. Majority Action......................................................................32
Section 15.3. Powers of the Investment Committee...................................................32
Section 15.4. Duties of the Investment Committee...................................................33
ARTICLE 16. FREQUENTLY USED DEFINITIONS..............................................................33
ARTICLE 17. AMENDMENT AND TERMINATION................................................................37
Section 17.1. Amendment............................................................................37
Section 17.2. Termination..........................................................................37
Section 17.3. Merger and Consolidation of Plan, Transfer of Plan Asset.............................37
Section 17.4. Notice of Amendment, Termination or Partial Termination..............................37
Section 17.5. Vesting and Distribution on Termination and Partial Termination......................37
Section 17.6. Limitation on Right to Amend.........................................................38
ARTICLE 18. TOP HEAVY STATUS.........................................................................38
Section 18.1. Application..........................................................................38
Section 18.2. Definitions..........................................................................38
Section 18.3. Affected Participant.................................................................38
Section 18.4. Top-Heavy............................................................................38
Section 18.5. Key Worker Member....................................................................39
Section 18.6. Compensation.........................................................................40
Section 18.7. Non-Key Worker Member................................................................40
Section 18.8. Aggregation Plan.....................................................................40
Section 18.9. Required Aggregation Plan............................................................41
Section 18.10. Permissive Aggregation Plan..........................................................41
Section 18.11. Minimum Contribution.................................................................41
Section 18.12. Aggregate Benefit Limit..............................................................41
SUPPLEMENT A TO THE WOODWARD GOVERNOR COMPANY MEMBER INVESTMENT AND STOCK
OWNERSHIP PLAN
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SUPPLEMENT B TO THE WOODWARD GOVERNOR COMPANY MEMBER INVESTMENT AND STOCK
OWNERSHIP PLAN
SUPPLEMENT C TO THE WOODWARD GOVERNOR COMPANY MEMBER INVESTMENT AND STOCK
OWNERSHIP PLAN
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WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1999)
(c)
GENERAL
a. HISTORY, PURPOSE AND EFFECTIVE DATE. The Woodward
Governor Company Member Investment and Stock Ownership Plan
(the "PLAN"), was first established by Woodward Governor
Company (the "COMPANY") effective as of September 30, 1952.
The Plan was most recently amended effective as of January
1, 1996, and was further amended by the First, Second and
Third Amendments to the Plan all effective as of January 1,
1997, The following is an amendment and restatement of the
Plan effective as of January 1, 1999 (the "EFFECTIVE DATE")
(unless otherwise indicated). The Plan consists of a profit
sharing plan and cash or deferred arrangement component
("MEMBER INVESTMENT COMPONENT") which is intended to qualify
under sections 401(a) and 401(k) of the Internal Revenue
Code of 1986, as amended (the "CODE") and an employee stock
ownership plan component ("WOODWARD GOVERNOR COMPANY STOCK
COMPONENT") which is intended to qualify under sections
401(a) and 4975(e)(7) of the Code. The assets of the
Woodward Governor Company Stock Component shall be invested
primarily in shares of common stock of the Company which
qualify as "employer securities" within the meaning of
section 409(1) of the Code. The purpose of the Plan is to
promote the mutual interests of the Company, its
shareholders, and its eligible Worker Members (i) by
providing such Worker Members with a systematic savings
program to supplement their retirement incomes, and an
opportunity to acquire an equity interest in the Company and
to exercise shareholder rights with respect thereto, (ii) by
causing the Plan to be a long-term investor in common stock
of the Company, and (iii) by providing the Company and its
eligible Worker Members with the tax benefits and other
benefits provided under applicable laws to employee stock
ownership plans. The provisions of the Plan as applied to
any group of Worker Members, with the consent of the
Company, may be modified or supplemented from time to time
by the adoption of one or more Supplements. Each such
Supplement shall form a part of the Plan as of the
Supplement's effective date. This amendment and restatement
of the Plan is applicable to all employees of the Company
(the "WORKER MEMBERS") who terminate employment on or after
the effective date. The rights of all other Worker Members
shall be governed by the terms of the Plan in effect at the
time of their termination of employment.
b. DEFINED TERMS. Definitions of capitalized terms
frequently used in the Plan are contained in Article 16 of
the Plan.
c. RELATED COMPANIES. The term "RELATED COMPANY" means
any corporation or trade or business during any period that
it is, along with the Company, a member of a controlled
group of corporations or a controlled group of trades or
businesses (as described in Code sections 414(b) and
414(c)), any organization which is part of an affiliated
service group under Code section 414(m), or any entity
required to be aggregated with the Company under Code
section 414(o)) and, if so designated by the Company, any
other corporation during any period that 50% or more of its
voting stock is owned directly or indirectly by the Company.
d. PLAN ADMINISTRATION, TRUST AGREEMENT. The authority
to administer the Plan shall continue to be vested in the
Company and the Administrative Committee ("COMMITTEE")
described in Article 14. The authority to control the
investment policies under the Plan shall be vested in the
Investment Committee described in Article 15. The Company
shall be the Administrator of the Plan, and shall have the
rights, duties and obligations of an "administrator" as that
term is defined in section 3(16)(A) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), of a "plan
administrator" as that term is defined in section 414(g) of
the Code and shall be the "named fiduciary" (as described in
section 402 of ERISA). Each of the Administrative Committee,
the Investment Committee and the Company shall have
discretionary authority to determine eligibility for
benefits or to construe the Plan's terms; PROVIDED, HOWEVER,
that the scope of each Committee's authority shall be
determined by the Company. All contributions made under the
Plan will be held, managed and controlled by one or more
trustees (the "TRUSTEE") acting under one or more trusts
(the "TRUST") which form a part of the Plan and, to the
extent provided by the Investment Committee, by one or more
investment managers. The terms of each Trust shall be set
forth in a Trust Agreement between the Trustee and the
Company. Copies of the Trust Agreement and the Plan are on
file at the principal offices of the Company, where they may
be examined by any Worker Member of the Company who is
eligible to participate in the Plan. The provisions of and
benefits under the Plan are subject to the terms and
provisions of the Trust Agreement.
e. PLAN YEAR. For periods prior to October 1, 1995, the
term "Plan Year" means the 12-month period beginning on each
October 1 and ending on each September 30. For periods after
September 30, 1995, the term "Plan Year" means the period
beginning on October 1, 1995 and ending on December 31,
1995, and thereafter, the 12-month period beginning on each
January 1 and ending on the following December 31.
f. APPLICABLE LAWS. The Plan shall be construed and
administered according to the internal laws of the State of
Illinois to the extent that such laws are not preempted by
the laws of the United States of America.
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g. GENDER AND NUMBER. Where the context admits, words
in any gender shall include all other genders, words in the
singular shall include the plural and the plural shall
include the singular.
h. NOTICES. Except as otherwise provided, any notice or
document required to be filed with any committee under the
Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to such committee, in care
of the Company either at its principal business offices or,
if filed in person, at the payroll, member benefits,
personnel or other office, as designated by the Company. Any
notice required under the Plan may be waived by the person
entitled to notice.
i. EVIDENCE. Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other
information which the person acting on it considers
pertinent and reliable, and signed, made or presented by the
proper parties.
j. ACTION BY THE COMPANY. Any action required or
permitted to be taken by the Company under the Plan shall be
by resolution of its Board of Directors or by a person or
persons authorized by resolution of its Board of Directors.
k. REVERSION TO THE COMPANY. Except as otherwise
specifically provided by the provisions of the Trust, no
part of the corpus or income of the Trust Fund shall revert
to the Company or be used for, or diverted to, purposes
other than for the exclusive benefit of Participants and
other persons entitled to benefits under the Plan.
l. PRIOR ELECTIONS. Except to the extent otherwise
provided, all elections and designations in effect under the
Plan immediately prior to the Effective Date shall continue
in effect thereafter until changed by the person making the
election.
m. RESTRICTIONS ON PARTICIPANT ELECTION. Any election
by a Participant under the Plan to vary or suspend Payroll
Deferrals or Profit Sharing Deferrals, to make transfers to
or from the Plan or any Investment Fund under the Plan or to
make a withdrawal or receive a loan or distribution shall be
subject to such limitations (and the effective date of the
elections shall be subject to such deferrals) as may be
reasonably required from time to time with respect to the
administration of the Plan.
(d)
PARTICIPATION
a. Participation. The "PARTICIPANTS" in the Plan shall
be as follows: (i) each Worker Member of the Company who was
a Participant under the Plan immediately prior to the
Effective Date; and (ii) each Worker Member,
-3-
including Worker Members hired on a part-time basis, shall
become a Participant in the Plan upon completion of thirty
days of service. If an individual is excluded from
participation in the Plan as an independent contractor, and
is later reclassified as an employee for wage and hour
purposes, such Worker Member shall be eligible as of the
date of the reclassification to become a Participant, upon
completion of the requirements of Article 2.
Notwithstanding the above, Worker Members employed as Recruits in the
Woodward Governor Company Recruit Program or as regular part-time workers in the
Irl C. Martin Academy of Industrial Science, and any Worker Members who reside
outside the United States and are not United States citizens shall not be
eligible to participate in the Plan unless otherwise permitted by the Company;
PROVIDED, HOWEVER, regular part-time workers in the Irl C. Martin Academy of
Industrial Science shall be eligible to authorize Payroll Deferrals and receive
Company Matching Contributions in accordance with Sections 4.1 and 5.2 of the
Plan.
Participation upon Reemployment. A Participant whose employment
terminates and who is subsequently reemployed shall re-enter the Plan as a
Participant on the date of his reemployment. In the event that a Worker Member
completes the eligibility requirements set forth in section 2.1 above, his
employment terminates prior to becoming a Participant and he is subsequently
reemployed, such Worker Member shall be deemed to have met the eligibility
requirements as of the date of his reemployment and shall become a Participant
on the date of his reemployment; PROVIDED, HOWEVER, that if he is reemployed
prior to the date he would have become a Participant if his employment had not
terminated, he shall become a Participant as of the date he would have become a
Participant if his employment had not terminated. Any other Worker Member whose
employment terminates and who is subsequently reemployed shall become a
Participant in accordance with the provisions of said section 2.1.
Notwithstanding the foregoing, a Worker Member who terminated service on or
before September 30, 1976 shall not receive credit for any prior service under
the Plan and shall be treated as a new Worker Member.
b. Participation Not Contract of Employment. The Plan
does not constitute a contract of employment, and
participation in the Plan will not give any Worker Member
the right to be retained in the employ of the Company or a
Related Company nor any right or claim to any benefit under
the terms of the Plan unless such right or claim is
specifically accrued under the terms of the Plan.
(e)
SERVICE
a. YEAR OF SERVICE. The term "YEAR OF SERVICE" means,
with respect to any Worker Member or Participant, any Plan
Year during which he completes at least 1,000 Hours of
Service (as defined in section 3.2 below); PROVIDED that the
twelve-consecutive-month period commencing on the date on
which the Worker Member first completes an Hour of Service
shall be deemed to be a Year of Service if he completes at
least 1,000 Hours of Service
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during such twelve-consecutive-month period. Notwithstanding
the above, a Worker Member in the Woodward Governor Company
Recruit Program shall receive credit for one Year of Service
if he completes at least 250 Hours of Service and not more
than 999 Hours of Service in each of four Plan Years. A
Worker Member who is a student in the Irl C. Martin Academy
of Industrial Science for a period of six months or more
during any Plan Year (or during his first twelve months of
employment and successive periods commencing on the
anniversary of the date he was hired) shall receive credit
for a Year of Service if he did not otherwise receive credit
during such period.
Notwithstanding any other provisions of this Section 3.1, a Worker
Member or Participant shall be credited with one year of Service for the Plan
Year ending December 31, 1995 if he shall have completed 1,000 hours of service
during the twelve-consecutive month period ending on December 31, 1995.
Effective October 1, 1999, Worker Members who are employed by the Company or a
Related Company outside of the United States and are transferred to employment
by the Company or a Related Company in the United States shall be credited with
service for all periods of such employment outside of the United States.
b. HOUR OF SERVICE. The term "HOUR OF SERVICE" means,
with respect to any Worker Member or Participant, each hour
for which he is paid or entitled to payment for the
performance of duties for the Company or a Related Company
or for which back pay, irrespective of mitigation of
damages, has been awarded to the Worker Member or
Participant or agreed to by the Company or a Related
Company, subject to the following:
i. A Worker Member or Participant shall be credited with 8
Hours of Service per day (to a maximum of 40 Hours of Service per
week) for any period during which he performs no duties for the
Company or a Related Company (irrespective of whether the employment
relationship has terminated) by reason of a vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence but for which he is directly or
indirectly paid or entitled to payment by the Company or a Related
Company; PROVIDED, HOWEVER, that a Worker Member or Participant shall
not be credited with more than 501 Hours of Service under this
paragraph (a) for any single continuous period during which he
performs no duties for the Company or a Related Company. Payments
considered for purposes of the foregoing sentence shall include
payments unrelated to the length of the period during which no duties
are performed but shall not include payments made solely as
reimbursement for medically related expenses or solely for the purpose
of complying with the applicable workmen's compensation, unemployment
compensation or disability insurance laws. For the purpose of
determining a Worker Member's Hours of Service, in the case of a
Worker Member who has a qualified military leave (as defined under the
Uniformed Services Employment and Reemployment Rights Act of 1994), in
no event shall such Worker Member be credited with less Hours of
Service than such Worker Member would be entitled to receive under
Code Section 414(u).
ii. Solely for purposes of determining whether a Worker
Member or Participant has incurred a One-Year Break-in-Service (as
defined in section 3.3), the
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Worker Member or Participant shall be credited, to the extent not
otherwise credited in accordance with the foregoing provisions of this
section 3.2, with 8 Hours of Service for each day (to a maximum of 40
Hours of Service for each calendar week) for any period during which a
Worker Member is absent from active employment with the Company or
Related Company by reason of the Worker Member's pregnancy, the birth
of a child of the Worker Member, or the placement of a child with the
Worker Member in connection with the Worker Member's adoption of such
child, and, in each case, the care of such child immediately after its
birth or placement; PROVIDED that in no event shall more than 501
Hours of Service be credited under this paragraph (b). Hours of
Service credited in accordance with the foregoing sentence shall be
credited for the Plan Year during which the absence begins to the
extent that such crediting would prevent the Worker Member from
incurring a One-Year Break-in-Service during that year and, in each
other case, shall be credited in the immediately following Plan Year.
iii. Solely for purposes of determining whether he has
incurred a One-Year Break-in-Service, a Worker Member or Participant
shall be credited, to the extent not credited in accordance with the
foregoing provisions of this section 3.2, with 8 Hours of Service per
day (to a maximum of 40 Hours of Service per week) that he is absent
from active employment with the Company or a Related Company by reason
of a leave of absence approved or granted by the Company or the
Related Company in accordance with rules uniformly applied by it.
c. ONE-YEAR BREAK-IN-SERVICE. The term "ONE-YEAR
BREAK-IN-SERVICE" means, with respect to any Worker Member
or Participant, any Plan Year during which he completes less
than 501 Hours of Service. Notwithstanding any other
provisions of the Plan, a Worker Member or Participant shall
not incur any One Year Break in Service during the period
beginning October 1, 1995 and ending December 31, 1995 if
the Worker Member or Participant completes more than 125
Hours of Service during such period, but will incur a One
Year Break in Service for that period if he completes less
than 125 Hours of Service during such period.
d. Leased Worker Members. If, pursuant to one or more
agreements between the Company or a Related Company and one
or more leasing organizations (within the meaning of section
414(n) of the Code); a person provides services to the
Company or Related Company, in a capacity other than as a
Worker Member, on a substantially full-time basis for a
period of at least one year, and such services are performed
under the primary direction and control of the Company or
Related Company, such person shall be a "LEASED WORKER
MEMBER." Leased Worker Members shall not be eligible to
participate in this Plan or in any other plan maintained by
the Company or Related Company which is qualified under
section 401(a) of the Code. A Leased Worker Member shall be
treated as if the services performed by him in such capacity
(including service performed during such initial one-year
period) were performed by him as a Worker Member of a
Related Company which has not adopted the Plan; PROVIDED,
HOWEVER, that no such service shall be credited:
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i. for any period during which less than 20% of the work
force of the Company and the Related Companies consists of Leased
Worker Members and the Leased Worker Member is a participant in a
money purchase pension plan maintained by the leasing organization
which (i) provides for a nonintegrated employer contribution of at
least 10 percent of compensation, (ii) provides for full and immediate
vesting, and (iii) covers all employees of the leasing organization
(beginning with the date they become employees), other than those
employees excluded under section 414(n)(5) of the Code; or
ii. for any other period unless the Leased Worker Member
provides satisfactory evidence to the Company or Related Company that
he meets all of the conditions of this section 3.4 and applicable law
required for treatment as a Leased Worker Member.
(f)
PAYROLL DEFERRALS
a. Payroll Deferrals. A Participant may authorize
deferrals for any payroll period of not less than 1% of his
Eligible Pay nor more than an amount as determined each Plan
Year by the Committee (in all cases in multiples of 1%).
Payroll Deferral authorizations may be made at such times
and in such manner as the Committee may determine. To the
extent that it is necessary or appropriate in order to
conform the operations of the Plan to the limitations set
forth in Article 10, uniform limitations on Payroll
Deferrals may be established from time to time, and, in
accordance with such limitations, any Payroll Deferral
authorized by a Participant may be reduced.
b. Eligible Pay Adjustments and Payment of Payroll
Deferrals. A Participant's Eligible Pay shall be reduced by
the amount, if any, of his Payroll Deferrals for that period
and the Company shall deposit that amount in the Plan in
accordance with section 5.1.
c. Election to Vary, Suspend or Change Tax Treatment of
Payroll Deferrals. Subject to such conditions, requirements
and limitations as may be established from time to time, a
Participant may elect to vary within the limits set forth in
section 4.1 or to suspend Payroll Deferrals. Any
modification or suspension of Payroll Deferrals shall be
effective the first day of the first full pay period
following the execution of such modification or on such
other date as may be selected by the Company.
Effective December 12, 1994, a Worker Member returning to active
employment with the Company from a qualified military leave (as defined under
the Uniformed Services Employment and Reemployment Rights Act of 1994), may file
a written election with the Plan Administrator authorizing the Company to make
deductions for each pay period from his Compensation for deposit with the
Trustee in the Participant's Payroll Deferral Account in an amount equal to the
contribution rate that he could have contributed under this Article 4 had the
Participant not been on a qualified military leave; provided, however, that this
amount shall be reduced by any
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contributions made under this Article 4 during such qualified military leave. To
make such contributions, a Participant must affirmatively make this qualified
military leave election on a form approved by the Plan Administrator for this
purpose and must make the contributions thereunder during the period beginning
with the pay period occurring on or immediately following his reemployment date
and ending on the earlier of five years or the period of the Participant's
qualified military service multiplied by three. Amounts contributed pursuant to
this Article shall be eligible for Company Matching Contributions in accordance
with Section 5.4
d. Treatment as Deferral Contribution. Payroll
Deferrals shall be treated as and collectively referred to
as either "DEFERRAL CONTRIBUTIONS" or "DEFERRALS."
(g)
CONTRIBUTIONS
a. Payroll Deferral Contributions. Subject to the
provisions of Article 10, as soon as practicable, the
Company shall deposit with the Trustee on behalf of each of
its Participants, an amount equal to the amount of the
Participant's Payroll Deferrals for each payroll period,
which amount shall be credited to the Member Investment
Component of the Plan in accordance with Article 8 below.
b. Company Matching Contribution. Subject to the
provisions of Article 10, as soon as practicable, and in no
event later than the time prescribed by law (including
extensions thereof) for filing the Company's Federal income
tax return for its taxable year, the Company shall deposit
with the Trustee on behalf of each of its Participants a
Company Matching Contribution equal to fifty percent (50%)
of the Participant's Payroll deferrals made pursuant to
Section 4.1 above (excluding Payroll Deferrals in excess of
six percent (6%) of the Participant's Eligible Pay). The
Company Matching Contribution shall be credited to the
Member Investment Component of the Plan in accordance with
Article 8 below and shall be invested in the same proportion
that the Participant's Payroll Deferrals are invested.
(h)
ROLLOVERS AND TRANSFERS FROM RELATED PLANS
a. ROLLOVER CONTRIBUTIONS. A Worker Member may make a
Rollover Contribution (as defined below) to the Plan. The
term "ROLLOVER CONTRIBUTION" means a rollover contribution
of a distribution which, under the applicable provisions of
the Code, is permitted to be rolled over to an eligible
retirement plan. In no event shall a Worker Member be
permitted to make a rollover contribution of any amounts
previously contributed to another plan by the Worker Member
on an after-tax basis or any amounts which were received by
the Worker Member from a qualified plan subject to sections
401(a)(11)
-8-
and 417 of the Code. Effective for rollovers presented to
the Plan on or after June 15, 1998, the term "ROLLOVER
CONTRIBUTION" also means a rollover contribution of a
distribution from an individual retirement account which
held assets consisting solely of distributions from one or
more plans that were qualified under Section 401(a) of the
Code and earnings thereon, and which meets the requirements
for a "conduit IRA". Such rollover contribution shall be
allocated to the Investment Funds under the Member
Investment Component in 10% multiples as the Worker Member
directs.
b. TRANSFERS FROM OTHER PLANS. Subject to the approval
of the Company, any Worker Member who becomes a Worker
Member of the Company by reason of a transfer from any
Related Company may elect to have the Plan accept a transfer
of his fully vested interest under any Related Plan (as
defined below), in accordance with the provisions of that
plan. Any such transferred amount shall be allocated to the
Investment Funds under the Member Investment Component as
the Worker Member directs. The term "RELATED PLAN" means any
defined contribution plan maintained by the Company or
Related Company, qualified under section 401(a) of the Code
and not subject to sections 401(a)(11) and 417 of the Code.
c. INTEREST IN PLAN. Upon such rollover or transfer by
a Worker Member who is otherwise eligible to participate in
the Plan, but who has not yet completed the participation
requirements of Article 2, the amount of his rollover or
transfer shall represent his sole interest in the Plan until
he becomes a Participant.
(i)
PARTICIPANT ACCOUNTS
All income, profits, recoveries, contributions, and any and all
monies, securities and properties of any kind at any time received or held by
the Trustee shall be held in a single Trust. For accounting purposes, the
Committee shall establish and maintain certain Accounts for each Participant, to
which shall be added the Participant's share of Matching Contributions and
Payroll Deferrals, together with all earnings thereon.
(j)
INVESTMENT FUNDS UNDER THE
MEMBER INVESTMENT PLAN
a. INVESTMENT ACCOUNTS. A Participant shall have the
right hereunder to direct the Trustees with respect to the
manner in which the Participant wishes to have his Accounts
invested. Subject to the restrictions set forth in section
8.2, a Participant may direct that investments be made in
such funds as the Committee shall make available for
investments by Participants. All
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charges and expenses incurred in connection with the
purchase and sale of investments for a fund shall be charged
to such fund.
Prior to the Effective Date, the Plan had Member Savings Accounts to
reflect voluntary after-tax contributions made prior to January 1, 1987. The
Plan also had a Loan and Withdrawal Fund (herein referred to as the "Loan Fund")
into which Participants may have elected to deposit a portion of their Deferral
Contributions. The Investment Committee was responsible for investing the assets
in the Loan Fund, with Woodward Governor Company Stock being among the
investments selected. At age 50, Participants had the option to transfer amounts
from the Loan Fund to the Member Investment Component.
b. INVESTMENT DIRECTIONS AND TRANSFERS BETWEEN
INVESTMENT FUNDS. Subject to the following provisions of
this section 8.2 and any requirements as may be established
from time to time, each Participant shall direct the
percentages (in multiples of 10%) of all contributions made
by him or on his behalf which are to be invested in each of
the investment funds, and may prospectively change any such
direction by telephone to Vanguard on any date the New York
Stock Exchange is open for business. Changes will be
effective the day of the telephone call if the call is
received prior to 3:00 p.m. Central Time. Calls received
after 3:00 p.m. Central Time will be effective the next day
the New York Stock Exchange is open for business. Such
change shall be limited to the investment choices described
in section 8.1, or any other choices as the Trustee at the
direction of the Investment Committee may from time to time
permit.
c. STATEMENT OF ACCOUNTS. As soon as practicable after
the last day of each Plan Year quarter, each Participant
shall receive a statement of his Account balances as of that
day.
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(k)
WOODWARD GOVERNOR COMPANY STOCK COMPONENT
a. COMPLIANCE WITH CODE AND ERISA. The Woodward
Governor Company Stock Component is intended to comply with
the requirement under section 4975(e)(7) of the Code and
section 407(d)(6) of ERISA. The purposes of the Woodward
Governor Company Stock Component are to enable Worker
Members to share in the growth and prosperity of the Company
and to provide such Worker Members with an additional
opportunity to accumulate capital for their future economic
security. Subject to Article 10 of the Plan, for each Fiscal
Year the Company shall contribute to the Woodward Governor
Company Stock Component on behalf of each ELIGIBLE
PARTICIPANT who has completed an Initial Period of Service
cash equal to, or Company Stock having an aggregate fair
market value on the last day of the Fiscal Year equal to,
five percent (5%) of each Participant's Eligible Wages or
such other amount as determined by the Board of Directors of
the Company. For the purpose of this section 9.1 an
"Eligible Participant" is any Participant who is employed on
the last day of the fiscal year of the Company that ends
within the applicable Plan Year and any Participant who
dies, retires or becomes disabled during the Plan Year. If
any portion of the Company's contribution to the Woodward
Governor Company Stock Component is in cash for purposes
other than discharging indebtedness in connection with an
Acquisition Loan (as described below), such cash shall be
applied as soon as practicable to the purchase of Company
Stock.
b. DIVIDENDS ON ALLOCATED COMPANY STOCK. All cash
dividends paid for Company Stock held in the Woodward
Governor Company Stock Component and allocated to
Participants shall be credited to such Participants' account
balances. Notwithstanding the preceding sentence, the
Trustee, if directed in writing by the Company, will pay, in
cash, any cash dividends on the Company Stock allocated, or
allocable to Participants. The Company's direction must
state whether the Trustee is to pay the cash dividend
distributions currently, or within the 90-day period
following the close of the Fiscal Year in which the Company
pays the dividends to the Trust.
c. ACQUISITION LOANS. An installment obligation
incurred by the Trustee in connection with the purchase of
Company Stock shall constitute an "Acquisition Loan". The
Investment Committee may direct the Trustee to incur
Acquisition Loans from time to time to finance the
acquisition of Company Stock for the Trust or to repay a
prior Acquisition Loan. Shares of Company Stock acquired by
the Trustee with the proceeds of an Acquisition Loan shall
be described as "Financed Shares." An Acquisition Loan shall
be for a specific term, shall bear a reasonable rate of
interest and shall not be payable on demand except in the
event of default. An Acquisition Loan may be secured by a
collateral pledge of the Financed Shares so acquired and any
other Plan assets which are a permissible security within
the provisions of
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Treas. Reg. Section 54.4975-7(b). Any pledge of Financed
Shares must provide for the release of shares so pledged on
a basis equal to the principal and interest paid by the
Trustee on the Acquisition Loan. The Financed Shares
released due to payment of Company Contributions must be
allocated to each Participant's Account by applying the
ratio that the Participant's Eligible Wages bears to the
total Eligible Wages of all Participants eligible to share
in the Woodward Governor Company Stock Component
Contribution for the Fiscal Year. Repayment of principal and
interest on any Acquisition Loan shall be made by the
Trustee only from Company contributions paid in cash to
enable the Trustee to repay such loan, and from earnings
attributable to such contributions. To the extent the
Trustee is so directed by the Company, cash dividends
received by the Trustee with respect to Financed Shares
shall be applied by the Trustee as soon as practicable
thereafter to make payments on such Acquisition Loan.
Financed Shares shall initially be credited to a "Loan
Suspense Account" and shall be transferred for allocation to
Participants only as payments of principal and interest on
the Acquisition Loan are made by the Trustee. The number of
Financed Shares to be released from the Loan Suspense
Account for allocation to Participants shall be based upon
the ratio that the payments of principal and interest (or,
if the requirements of Treas. Reg Section
54.4975-7(b)(8)(ii) are met, principal payments only) on the
Acquisition Loan bears to the total projected payments of
principal and interest (or, if the requirements of Treas.
Reg. Section 54.4975-7(b)(8)(ii) are met, principal payments
only) on the Acquisition Loan over the duration of the
Acquisition Loan repayment period. Any Financed Shares
released from the Loan Suspense Account by reason of
dividends paid with respect to Company Stock held in the
Loan Suspense Account shall be allocated in the same manner
as Financed Shares discussed above. Any Financed Shares
released from the Loan Suspense Account by reason of
dividends paid with respect to Company Stock allocated to
Participants' Woodward Governor Company Stock Component
Accounts shall be allocated among and credited to the
Woodward Governor Company Stock Component Accounts of
Participants, pro rata, according to the number of shares of
Company Stock held in such Accounts on the date the
dividends are paid.
d. TRANSFER FROM THE WOODWARD GOVERNOR COMPANY STOCK
COMPONENT. Notwithstanding any other provision of the Plan
to the contrary, a Qualified Participant (as defined below)
may make the elections as set forth in this section 9.4.
i. A Qualified Participant, during each of his Qualified
Election Periods (as defined below), may elect to transfer to the
Member Investment Plan up to 10 percent for each year the age of the
Participant exceeds forty-nine (49), times the sum of (i) his balance
in the Woodward Governor Company Stock Component as of the end of the
immediately preceding Plan Year and (ii) prior withdrawals, transfers
or distributions from his account in the Woodward Governor Company
Stock Component; PROVIDED, HOWEVER, that the portion of a
Participant's balance in the Woodward Governor Company Stock Component
that is subject to this election under this paragraph for any
Qualified
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Election Period shall be reduced by the portion of his Account balance
that was previously transferred pursuant to this section 9.4 and shall
also be reduced by the amount of Woodward Governor Company Stock
attributable to transfers from the Loan Fund. No more than 25% of such
amount eligible to be transferred may be transferred to the member
investment portion of the Plan in any single Fiscal Year, provided,
however, 50% shall be substituted for 25% beginning with the Fiscal
Year during which the Participant attains age 60. For purposes of this
subparagraph (a), in the case of transfers of Company Stock, only
whole shares may be transferred.
ii. Any election made in accordance with the provisions of
paragraph (a) next above with respect to any Qualified Election Period
shall be given effect not later than 90 days after the end of that
Qualified Election Period.
iii. For purposes of this subsection, the term "QUALIFIED
PARTICIPANT" means any Worker Member who has attained at least age 50.
iv. For purposes of this subsection, the "QUALIFIED
ELECTION PERIOD" shall end no later than the 90th day immediately
following the last day of the first Fiscal Year in which the
Participant becomes a Qualified Participant, and the 90th day
following each subsequent Fiscal Year.
v. Notwithstanding the above, at the end of the Fiscal
Year following attainment of age 50 and each subsequent Fiscal Year
thereafter, a Participant may transfer to the Member Investment Plan
one half or all of the Company Stock attributable to transfers from
the Loan Fund, which amount shall be invested in accordance with the
Participant's most recent investment election under Section 8.1. If a
Participant elects to transfer one half of the Company Stock
attributable to transfers from the Loan Fund, then any subsequent
transfer election must include the remainder of the Company Stock
attributable to transfers from the Loan Fund.
e. FAIR MARKET VALUE. For purposes of this Section 9,
the "FAIR MARKET VALUE" of a share of Company Stock, as of
any date, means the bid price of such share, as established
by the current price quoted by an independent dealer of such
stock on the most recent trading day for which records are
available.
(l)
LIMITATIONS ON COMPENSATION,
CONTRIBUTIONS AND ALLOCATIONS
a. COMPENSATION.except as otherwise specifically
provided, a Participant's "COMPENSATION" for purposes of
this Article 10 shall mean the sum of:
i. the compensation (as described in Treas. Reg. Section
1.415-2(d)(1)) paid to him during the Plan Year for personal services
actually rendered in the course of his employment with the Company or
a Section 415 Affiliate (as defined below), and other
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amounts that receive special tax treatment (as described in Treas.
Reg. Section 1.415-2(d)(2)); plus
ii. effective January 1, 1998 any Deferral Contributions
and any payroll reduction contributions made on his behalf for the
year to the Plan or a cafeteria plan within the meaning of section 125
of the Code.
"SECTION 415 AFFILIATE" means any trade or business (whether or not
incorporated) that is, along with the Company, a member of a controlled group of
corporations or trades or businesses within the meaning of sections 414(b) and
(c) of the Code, as modified by section 415(h) of the Code.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
compensation of each Worker Member taken into account under the Plan shall not
exceed $160,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue Code.
The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
b. LIMITATIONS ON ANNUAL ADDITIONS. Notwithstanding any
other provisions of the Plan to the contrary, a
Participant's Annual Additions (as defined below) for any
Plan Year shall not exceed an amount equal to the lesser of:
i. $30,000 (as adjusted under section 415(d) of the Code),
or
ii. 25 percent of the Participant's Compensation for that
Plan Year.
The term "ANNUAL ADDITIONS" means, with respect to any Participant for
the Plan Year, the sum of all contributions (including Deferral Contributions
but excluding Contributions related to a rollover or transfer as provided for in
Article 6 of the Plan) and all forfeitures allocated to his Accounts for that
Plan Year under this Plan and all Related Defined Contribution Plans, subject to
the following:
1. a Participant's Annual Additions with respect
to the Woodward Governor Company Stock Component or other employee
stock ownership plans shall be determined, subject to paragraphs
(ii) and (iii) below, solely on the basis of contributions thereto
and forfeitures, without regard to the value of Company Stock
released from the Loan Suspense Account and credited to the
Participant Accounts;
2. if no more than one third of the Company
Contributions to the Woodward Governor Company Stock Component and
any other Related Defined Contribution Plans which qualify as an
employee stock ownership plan (within the meaning of section
4975(e)(7) of the Code) which are deductible under
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section 404(a)(9) of the Code by reason of their application to make
payments on an Acquisition Loan are allocated to Highly Compensated
Worker Members (as defined in section 10.10), a Participant's Annual
Additions shall not include forfeitures of Company Stock acquired
with the proceeds of an Acquisition Loan or Company Contributions
which are deductible under section 404(a)(9)(B) of the Code by
reason of their application to the payment of interest on an
Acquisition Loan; and
3. for purposes of paragraph (i) above, the term
Annual Additions shall include any amount credited to an individual
medical account (as defined in section 415(1) of the Code) or a
separate account for post-retirement medical or life insurance
benefits (as described in section 419A(d) of the Code).
The term "RELATED DEFINED CONTRIBUTION PLAN" means any other defined
contribution plan (as defined in section 415(k) of the Code) maintained by the
Company or any other trade or business which, together with the Company, is a
member of a controlled group of corporations or a controlled group of trades or
businesses as described in sections 415(b) and (c) of the Code, as modified by
section 415(h) of the Code.
c. COMBINED PLAN LIMITATION. For Plan Years beginning
before January 1, 2000, if a Participant also participates
in any defined benefit plan (as defined in section 415(k) of
the Code) maintained by the Company or a Related Company,
the aggregate benefits payable to, or on account of, the
Participant under such plan together with this Plan shall be
determined in a manner consistent with section 415(e) of the
Code. The benefit provided for the Participant under the
defined benefit plan shall be adjusted to the extent
necessary so that the sum of the "defined benefit fraction"
and the "defined contribution fraction" (as such terms are
defined in section 415(e) of the Code and applicable
regulations thereunder) calculated with regard to such
Participant does not exceed 1.0. For purposes of this
section 10.3, all qualified defined benefit plans (whether
or not terminated) of the Company and Related Companies
shall be treated as one defined benefit plan.
d. REDUCTION OF CONTRIBUTION RATES. To conform the
operation of the Plan to sections 401(k)(3), 402(g) and
415(c) of the Code, any election of Payroll Deferrals made
by a Participant pursuant to subsection 4.1 or 4.2 may be
modified or revoked regardless of such Participant's prior
elections.
e. EXCESS ANNUAL ADDITIONS. If a Participant's Annual
Additions for any Plan Year would otherwise exceed the
limitations imposed by the foregoing provisions of section
10.2, the amount of the contributions and forfeitures which
would otherwise be credited to the Participant's Accounts
under this Plan and any Related Defined Contribution Plan
shall be reduced to the extent necessary to comply with such
limitations. To the extent permitted under a Related Defined
Contribution Plan, Annual Additions under this Plan shall be
reduced prior to any reduction under the Related Defined
Contribution Plan. Reductions under this Plan shall be made
in the following
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order: First, amounts attributable to Deferral Contributions
and earnings thereon shall be returned to the Participant to
the extent they would reduce the Excess Annual Additions;
next, amounts attributable to Company Matching Contributions
and earnings thereon shall be returned to the Company;
finally, amounts attributable to Company Contributions to
the Woodward Governor Company Stock Component shall be
reallocated to other Participants in the same proportions as
Company Contributions to the Woodward Governor Company Stock
Component are allocated for that year.
f. LIMITATIONS UNDER SECTION 402(g) OF THE CODE. In no
event shall the Deferral Contributions for a Participant
under the Plan (together with elective deferrals, as defined
in section 402(g)(3) of the Code, under any other
cash-or-deferred arrangement maintained by the Company or a
Related Company) for any taxable year exceed $10,000 or such
larger amount as may be permitted for that year under
section 402(g) of the Code.
g. DISPOSITION OF EXCESS ELECTIVE DEFERRALS. Any
Participant's Deferral Contributions in excess of the
adjusted $10,000 figure for a calendar year, and the
earnings or losses attributable thereto for the period from
the date of contribution through the date of distribution
shall be returned to the Participant no later than April
15th following the close of the calendar year in which such
excess Deferral Contributions were made.
h. LIMITATIONS UNDER SECTION 401(k)(3) OF THE CODE. For
any Plan Year, the difference between (a) the average of the
Deferral Percentages (as defined below) of each eligible
Worker Member who is Highly Compensated (as defined in
section 10.10), referred to hereinafter as the "HIGHLY
COMPENSATED GROUP DEFERRAL PERCENTAGE" and (b) the average
of the Deferral Percentages of each eligible Worker Member
who is not Highly Compensated, referred to hereinafter as
the "NON-HIGHLY COMPENSATED GROUP DEFERRAL PERCENTAGE", must
satisfy one of the following:
i. the Highly Compensated Group Deferral Percentage does
not exceed the Non-highly Compensated Group Deferral Percentage by
more than a factor of 1.25; or
ii. the Highly Compensated Group Deferral Percentage does
not exceed the Non-highly Compensated Group Deferral Percentage by
more than both 2 percentage points and a factor of 2.
"DEFERRAL PERCENTAGE" for any eligible Worker Member for a Plan Year
shall be determined by dividing the Deferral Contributions made on his behalf
for such year by his Compensation (as defined in section 10.1) for the year,
subject to the following special rules:
1. any Worker Member eligible to participate in
the Plan at any time during a Plan Year pursuant to section 2.1
shall be counted, regardless of whether any Deferral Contributions
are made on his behalf for the year;
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2. the Deferral Percentage for any Highly
Compensated Participant who is eligible to participate in the Plan
and who is also eligible to make other elective deferrals under one
or more other arrangements (described in section 401(k) of the Code)
maintained by the Company or a Related Company shall be determined
as if all such elective deferrals were made on his behalf under the
Plan;
3. for periods before January 1, 1997, for
purposes of determining the Deferral Percentage of a Highly
Compensated Participant who is a 5-percent owner of the Company or a
Related Company or one of the ten most highly-paid Worker Members of
the Company and all Related Companies, the Deferral Contributions
and Compensation of such Participant shall include the Deferral
Contributions and Compensation for the Plan Year of his family
members (as defined in section 414(q)(6) of the Code), and any such
family members shall be disregarded as separate Worker Members in
determining the Highly Compensated and Non-highly Compensated Group
Deferral Percentages;
4. in the event that this Plan satisfies the
requirements of section 401(k), 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this section 10.8 shall be applied
as if all such plans were a single plan; PROVIDED, HOWEVER, that
such plans may be aggregated in order to satisfy section 401(k) of
the Code only if they have the same Plan Year; and
5. in the case of any Participant who is not
Highly Compensated, Deferral Contributions (and elective deferrals
under any other plan of the Company or a Related Company) that
exceed the applicable limit under section 402(g) of the Code shall
not be counted in calculating such Participant's Deferral
Percentage.
Application of the provisions of this section 10.8 shall be made in
accordance with the requirements of section 401(k)(3) of the Code and the
regulations thereunder.
i. DISPOSITION OF EXCESS DEFERRAL CONTRIBUTIONS. In the
event that the Highly Compensated Group Deferral Percentage
for any Plan Year does not initially satisfy one of the
tests set forth in section 10.8, then for periods before
January 1, 1997, the amount of excess (hereinafter referred
to as Excess Contributions and determined by reducing the
Deferral Contributions on behalf of Highly Compensated
Participants in order of the Participants with the highest
Deferral Percentages), plus any income and minus any loss
allocable thereto, shall be distributed to Participants to
whose accounts Excess Contributions were allocated. The
income or loss allocable to Excess Contributions shall be
determined by the Committee in accordance with applicable
rules and regulations.
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Effective January 1, 1997, should the Plan Administrator decide to
distribute Participant's Deferral Contributions (within one year after the end
of the Plan Year to which they relate) to satisfy one of the above tests, such
distribution shall be made as follows: First, the Highly Compensated Worker
Member with the highest amount of Deferral Contributions shall receive
distributions sufficient to cause his amount of Deferral Contributions to equal
the amount of Deferral Contributions of the Highly Compensated Worker Member
with the next highest amount of Deferral Contributions. Second, this process
shall be repeated until one of the above tests is satisfied. Any distribution
made pursuant to this section shall include excess Deferral Contributions along
with any earnings or losses allocable thereto through the date of the
distribution.
j. HIGHLY COMPENSATED WORKER MEMBER. A Worker Member
shall be "Highly Compensated for any Plan Year if he:
i. was a 5 percent owner (as defined in Code Section
416(i)(1)) of the Company or a Related Company during the preceding
year;
ii. received Compensation (as defined in section 10.1) from
the Company and Related Companies for the preceding year in excess of
$80,000 (indexed for cost-of-living adjustments under section 415(d)
of the Code).
k. LIMITATIONS UNDER CODE SECTION 401(m)(2). For any
Plan Year, the difference between (a) the average of the
Contribution Percentages (as defined below) of each eligible
Worker Member who is Highly Compensated (as defined in
section 10.10), referred to hereinafter as the "Highly
Compensated Group Contribution Percentage" and (b) the
average of the Contribution Percentages of each eligible
Worker Member who is not Highly Compensated, referred to
hereinafter as the "Non-highly Compensated Group
Contribution Percentage", must satisfy one of the following:
i. the Highly Compensated Group Contribution Percentage
does not exceed the Non-highly Compensated Group Contribution
Percentage by more than a factor of 1.25; or
ii. the Highly Compensated Group Contribution Percentage
does not exceed the Non-highly Compensated Group Contribution
Percentage by more than both 2 percentage points and a factor of 2.
"Contribution Percentage" for any eligible Worker Member for a Plan
Year shall be determined by dividing the Company Matching Contributions
(described in section 5.2) made by or for him for such year by his Compensation
for the year, subject to the following special rules:
1. any Worker Member eligible to participate in
the Plan at any time during a Plan Year pursuant to section 2.1
shall be counted, regardless of whether any Company Matching
Contributions are made by or for him for the year;
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2. the Contribution Percentage for any Highly
Compensated Participant who is eligible to participate in the Plan
and who is also eligible to participate in one or more other
qualified plans maintained by a Company or a Related Company under
which matching contributions (within the meaning of Section 401(m)
of the Code) can be made by or for him shall be determined as if all
such contributions were made by or for him under the Plan;
3. solely for periods before January 1, 1997,
for purposes of determining the Contribution Percentage of a Highly
Compensated Participant who is a 5-percent owner of a Company or a
Related Company or one of the ten most highly-paid Worker Members of
all the Company and Related Companies, the Company Matching
Contributions and Compensation of such Participant shall include the
Company Matching Contributions and Compensation for the Plan Year of
his family members (as defined in Section 414(q)(6) of the Code),
and any such family members shall be disregarded as separate Worker
Members in determining the Highly Compensated and Non-Highly
Compensated Group Contribution Percentages; and
4. in the event that this Plan satisfies the
requirements of sections 401(m), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this section 10.11 shall be
applied as if all such plans were a single plan; PROVIDED, HOWEVER,
such plans may be aggregated in order to satisfy section 401(m) of
the Code only if they have the same Plan Year.
Application of the provisions of this section 10.11 shall be made in
accordance with the requirements of Section 401(m) of the Code and the
regulations thereunder.
i. DISPOSITION OF EXCESS MATCHING CONTRIBUTIONS. In the
event that the Highly Compensated Group Contribution
Percentage for any Plan Year does not initially satisfy one
of the tests set forth in section 10.11, the Committee,
notwithstanding any other provision of the Plan except
section 10.13, for periods before January 1, 1997 shall
distribute Company Matching Contributions (with income
allocable thereto, determined in accordance with Treas. Reg.
Section 1.401(m)-1(e)(3)(ii) utilizing the safe harbor
method for the period between the end of the Plan Year and
the date of distribution) to Highly Compensated Participants
by or for whom such contributions were made, starting with
the Participant with the highest Contribution Percentage and
continuing with the Participant with the next highest
Contribution Percentage (and so forth), under the leveling
method of Treas. Reg. Section 1.401(m)-1(e)(2). The
Committee shall make such distribution no later than the
close of the Plan Year following the Plan Year in which such
contributions were contributed.
Effective January 1, 1997, should the Plan Administrator distribute
Company Matching Contributions to satisfy one of the above tests, such
distributions shall be made as follows: First,
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the Company Matching Contributions of the Highly Compensated Worker Member with
the highest amount of Company Matching Contributions shall be distributed to the
extent necessary to cause his Contribution Percentage to equal the Contribution
Percentage of the Highly Compensated Worker Member with the next highest amount
of Company Matching Contributions. Second, this process shall be repeated until
one of the above tests is satisfied. Any distributions under this section shall
include excess Company Matching Contributions along with any earnings or losses
allocable thereto through the date of the reduction.
m. MULTIPLE USE OF ALTERNATIVE LIMITATION.
Notwithstanding the foregoing provisions of this Article 10,
if both the limitation in Section 10.8 and the limitation in
section 10.11 are exceeded for a Plan Year, the sum of the
Highly Compensated Group Deferral Percentage and the Highly
Compensated Group Contribution Percentage may not exceed:
i. 125% of the greater of the Non-highly Compensated Group
Deferral Percentage or the Non-highly Compensated Group Contribution
Percentage, plus
ii. the sum of 2 and the lesser of the Non-highly
Compensated Group Deferral Percentage or the Non-highly Compensated
Group Contribution Percentage, up to a maximum of 200% of the lesser
of such percentages.
If the foregoing combined limitation is exceeded, the leveling method
of correction prescribed in section 10.12 shall be continued until the combined
limitation set forth in this section 10.13 is satisfied.
(m)
PRE-TERMINATION WITHDRAWALS AND LOANS
a. PRE-TERMINATION WITHDRAWALS. Subject to the
Committee's approval, in accordance with the written
withdrawal policy, a Participant may elect to withdraw all
or any portion of the value of his interest in any
Investment Fund other than the account in the Woodward
Governor Company Stock Component which is credited to any
one or more of his Accounts, subject to the following:
i. A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions and any amount transferred from the
Loan Fund to the Member Investment Component after attaining age 65
(and for periods on or after October 1, 1999, after attaining age
59-1/2).
ii. A Participant may withdraw all or any portion of his
unwithdrawn Deferral Contributions, any amount transferred from the
Loan Fund to the Member Investment Component and any Rollover
Contributions which are necessary to meet a Hardship (as defined in
section 11.2).
iii. The portion of any Deferral Contribution or any amount
transferred from the Loan Fund to the Member Investment Component
which is attributable to
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earnings thereon accrued after September 30, 1989 may not be withdrawn
under this Section 11.
iv. No withdrawal may be made from a Participant's Woodward
Governor Company Stock Component Account.
v. Withdrawals can be made in accordance with any one or
more of the foregoing paragraphs, PROVIDED that no withdrawals may be
made by any Participant after the date on which his employment
terminates, except as provided in Section 12.4(d).
vi. Withdrawals from any Accounts shall occur as of the
date that authorized withdrawal instructions are received by Vanguard
from the Committee and shall be charged against the Participant's
balance under each investment fund as elected by the Participant.
vii. Conditions and limitations may be imposed by the
Committee, from time to time, with respect to the withdrawal of
amounts, including the imposition of minimum withdrawal amounts.
b. HARDSHIP. A withdrawal will be considered to be on
account of "Hardship" if it meets the following
requirements:
i. The withdrawal is requested because of an immediate and
heavy financial need of the Participant, and will be so deemed if the
Participant represents that the withdrawal is made on account of:
1. medical expenses incurred by the Participant,
the Participant's spouse or any dependent of the Participant (as
defined in section 152 of the Code);
2. the purchase (excluding mortgage payments) of
a principal residence of the Participant;
3. payment of tuition, related educational fees,
and room and board expenses, for the next 12 months of
post-secondary education for the Participant, the Participant's
spouse, children and dependents;
4. the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's residence; or
5. funeral expenses.
ii. The withdrawal must also be necessary to satisfy the
immediate and heavy financial need of the Participant. It will be
considered necessary if the Committee determines that the amount of
the distribution does not exceed the amount required to relieve the
financial need and if the need cannot be satisfied from other
resources that are
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reasonably available to the Participant. In making this determination,
the Committee may reasonably rely on the Participant's representation
that the need cannot be relieved:
1. through reimbursement or compensation by
insurance or otherwise;
2. by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not
itself constitute a hardship;
3. by ceasing to make Deferral Contributions (or
any contributions to any other plan of the Company or Related
Companies permitting deferral of compensation); or
4. by a loan pursuant to section 11.3 or by
borrowing from commercial sources on reasonable commercial terms, to
the extent that repayment of such obligation would not itself
constitute a hardship.
iii. The withdrawal must be made pursuant to a written
request to the Committee, which request shall include any
representation required by this section 11.2 and adequate proof
thereof.
c. LOANS TO PARTICIPANTS. A Participant may request a
loan from the Trust Fund, in accordance with the terms of a
written loan policy which is hereby incorporated as part of
the Plan, which shall include loan application guidelines,
subject to the following:
i. Except as provided in the following sentence, no loan
shall be made to a Participant if, after such loan, the sum of the
outstanding balances (including principal and interest) of all loans
made to him under this Plan and all other qualified retirement plans
maintained by the Company and the Related Companies would exceed the
lesser of $50,000 (adjusted as provided below) or one-half of the
amount which is vested in accordance with section 12.1. The foregoing
$50,000 limitation shall be adjusted by subtracting therefrom the
amount, if any, by which the highest outstanding loan balance of the
Participant at any time during the one-year period ending on the day
preceding the date of such loan exceeds such outstanding balance on
the date of the loan.
ii. Each loan to a Participant shall be made from the
investment funds under the Member Investment Component; and shall be
charged against each investment fund on a pro-rata basis. No loan may
be made from a Participant's Woodward Governor Company Stock Component
Account.
iii. Each loan shall be evidenced by a written note
providing for:
1. a reasonable repayment period of not less
than one year and not more than 5 years from the date of the loan
(10 years if such loan is used to acquire any dwelling unit which
within a reasonable time is to be used as the principal residence of
the Participant);
-22-
2. a reasonable rate of interest; and
3. such other terms and conditions as the
Committee shall determine.
iv. Payments of principal and interest to the Trustee with
respect to any loan or portion thereof shall be credited to each
investment fund in accordance with the Participant's investment
direction for future contributions. Any portion or all of the loan may
be prepaid at any time without penalty.
v. At the Committee's discretion, if the outstanding
balance of principal and interest on any loan is not paid at the
expiration of its term, such outstanding balance shall be treated as
distributed under the Plan but only to the extent such balance (or
portion thereof) is then distributable under the terms of the Plan.
vi. Each outstanding promissory note of a Participant shall
be canceled and the unpaid balance of the loan, together with any
accrued interest thereon, shall be treated as a distribution to or on
behalf of the Participant within 90 days after the date of his
termination of employment.
vii. In no event shall a loan be made to a Participant after
his employment with the Company terminates.
viii. A Participant may not have more than three loans
outstanding at any one time.
(n)
DISTRIBUTION ON TERMINATION
OR TRANSFER OF EMPLOYMENT
a. VESTING OF ACCOUNT BALANCE. All amounts credited to
a Participant's Account shall at all times be
nonforfeitable.
b. DISTRIBUTION DATE. Subject to the following
provisions of this subsection, the term "DISTRIBUTION DATE"
with respect to any Participant means the last day of the
month in which he attains age 65 years or, if later, in
which his termination of employment occurs. A Participant
(or his Beneficiary in the event of his death) may elect to
have his Distribution Date be the last day of the month,
provided proper forms have been completed in a timely
manner, which includes the earliest of:
i. the date as of which his employment with the Company
and the Related Companies terminates;
ii. the last day of the twelve consecutive-month period
beginning on the date on which he is laid off if he does not return to
active employment as a Worker Member prior to the last day of that
period; or
-23-
iii. the last day for which the Participant receives
disability pay stemming from his employment with the Company or a
Related Company if he is neither a Worker Member in active service or
on leave of absence on that date.
Notwithstanding the fact that a Participant has attained age 65 and
terminated employment, he may elect to defer his distribution and have his
Distribution Date be the last day of a month prior to April 1 of the calendar
year following the calendar year in which he attains age 70-1/2.
c. LIMITS ON COMMENCEMENT AND DURATION OF
DISTRIBUTIONS. The following distribution rules shall be
applied in accordance with sections 401(a)(9) and 401(a)(14)
of the Code and applicable regulations thereunder, including
the minimum distribution incidental benefit requirement of
Treas. Reg. Section 1.401(a)(9)-2, and shall supersede any
other provision of the Plan to the contrary:
i. unless the Participant elects otherwise pursuant to
section 12.2, in no event shall distribution commence later than 60
days after the close of the Plan Year in which the Participant attains
age 65 or, if later, in which his Distribution Date occurs.
ii. Notwithstanding any other provision herein to the
contrary, the Participant's Accounts shall be distributed no later
than his "Required Beginning Date," which is, for a "5% owner" (as
defined in Code Section 416), the April 1 of the calendar year
following the calendar year in which he attains age 70-1/2, or solely
in the case of a Participant who is not a "5% owner" (as defined in
Code Section 416), the April 1 of the later of the calendar year in
which the Participant reaches age 70-1/2 or the calendar year in which
the Participant retires.
iii. Distribution payments shall be made over the life of
the Participant or over the lives of such Participant and his
Beneficiary (or over a period not extending beyond the life expectancy
of such Participant or the life expectancy of such Participant and his
Beneficiary).
iv. If a Participant dies after distribution of his vested
interest in the Plan has begun, the remaining portion of such vested
interest, if any, shall be distributed to his Beneficiary at least as
rapidly as under the method of distribution used prior to the
Participant's death.
v. If a Participant dies before distribution of his vested
interest in the Plan has begun, distribution of such vested interest
to his Beneficiary shall be completed by December 31 of the calendar
year in which the fifth anniversary of the Participant's death occurs;
PROVIDED, HOWEVER, that this five-year rule shall not apply to an
individual designated as Beneficiary by the Participant or under the
specific terms of the Plan, if:
1. such vested interest will be distributed over
the life of such designated Beneficiary (or over a period not
extending beyond the life expectancy of such Beneficiary), and
-24-
2. such distribution to the Beneficiary begins
not later than December 31 of the calendar year following the
calendar year in which the Participant died or, if such Beneficiary
is the Participant's surviving spouse, not later than December 31 of
the calendar year following the calendar year in which the
Participant would have attained age 70-1/2.
vi. If the Participant's surviving spouse is his
Beneficiary and such spouse dies before the distributions to such
spouse begins, paragraph (e) shall be applied as if the surviving
spouse were the Participant.
vii. For purposes of paragraphs (d) and (e), distribution of
a Participant's vested interest in the Plan is considered to begin on
his Required Beginning Date; PROVIDED, HOWEVER, that distribution
irrevocably begun in the form of an annuity shall be considered to
begin on the date it actually commences.
viii. For purposes of this section 12.3, the life expectancy
of a Participant or a Beneficiary will be determined annually in
accordance with Tables V and VI of Treas. Reg. Section 1.72-9, and
will be recalculated.
d. FORM OF DISTRIBUTION ON TERMINATION OF EMPLOYMENT.
Except as otherwise provided under Supplement A to the Plan
for Worker Members whose accounts were transferred to the
Plan from the Thrift Plan of HSC Controls Inc. or the
Retirement Plan of HSC Controls Inc., the entire value of
all vested amounts credited to a Participant as of his
Distribution Date (together with any contributions made to
the Plan after his Distribution Date but attributable to
employment prior to that date) will be distributable to him
or, in the event of his death, to his Beneficiary in a lump
sum, subject to the following:
i. INSTALLMENTS. A Participant may elect to have his
benefits paid in approximately equal monthly, quarterly or annual
installments over a period not exceeding his life expectancy or, if
applicable, the joint life expectancies of the Participant and his
Beneficiary. Prior to receiving payment in the form of installments, a
Participant's outstanding loans under the Plan, together with any
accrued interest thereon, shall be treated as a distribution. Subject
to the provisions of section 12.3, a Participant may elect that, in
the event of his death, his benefits will be paid to his Beneficiary
or Beneficiaries in annual installments over the remaining period of
his original election. Each installment shall be charged pro-rata to
the Participant's Accounts unless otherwise elected by the
Participant.
ii. SMALL ACCOUNT BALANCES. Notwithstanding any other
provision of the Plan to the contrary, if a Participant's vested
Account balances are $5,000 or less, such balances shall be
distributed as soon as practicable after his termination of employment
in a lump sum payment.
iii. ASSETS DISTRIBUTABLE. Generally, subject to paragraph
(b) next above, all distributions from the Member Investment Plan
shall be determined by Vanguard
-25-
using the net asset values of the Participant's investment fund
accounts as of the date that authorized distribution directions are
received by Vanguard from the Committee, and shall be paid in cash.
Distributions attributable to amounts in the Woodward Governor Company
Stock Component shall be paid in Company Stock; PROVIDED, HOWEVER, a
Participant may elect to receive all or part of his distribution in
the form of cash; and PROVIDED, FURTHER, if a Participant elects to
receive installment payments, his distribution shall be in cash.
iv. POST-TERMINATION PARTIAL WITHDRAWAL AFTER AGE 55. A
Participant who has terminated employment and reached age 55 may
withdraw any portion of his Accounts under the Plan upon completion of
the appropriate forms provided by the Committee.
e. DISTRIBUTIONS TO PERSONS UNDER DISABILITY.
Notwithstanding the foregoing provisions of this Section 12,
in the event that a Participant or Beneficiary is declared
incompetent and a conservator or other person legally
charged with the care of his person or of his estate has
been appointed, the amount of any benefit to which such
Participant or Beneficiary is then entitled from the Trust
Fund shall be paid to such conservator or other person
legally charged with the care of his person or estate, and
such payment shall be deemed in full satisfaction of any
liability of the Plan to the Participant or Beneficiary.
f. INTERESTS NOT TRANSFERABLE. The interests of
Participants and their Beneficiaries under the Plan and
Trust Agreement are not subject to the claims of their
creditors and may not be voluntarily or involuntarily
assigned, alienated or encumbered, except in the case of
certain qualified domestic relations orders which relate to
the provision of child support, alimony or marital rights of
a spouse, child or other dependent and which meet such other
requirements as may be imposed by section 414(p) of the Code
or regulations issued thereunder. The Company shall
establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions
under domestic relations orders which are deemed to be
qualified orders. Such procedures shall be in writing and
shall comply with the provisions of section 414(p) of the
Code and regulations issued thereunder. Distributions to an
alternate payee (as defined under Section 414(p)(8) of the
Code) under a qualified domestic relations order are
permitted at any time, irrespective of whether the
Participant has attained his earliest retirement age (as
defined under Section 414(p)(4)(B) of the Code) under the
Plan. A distribution to an alternate payee prior to the
Participant's attainment of earliest retirement age is
available only if: (1) the order specifies distribution at
that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and
(2) the alternate payee consents to any distribution
occurring prior to the Participant's attainment of earliest
retirement age, if the present value of the alternate
payee's benefits under the Plan exceeds $5,000.
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g. ABSENCE OF GUARANTY. There is no guarantee, by any
person, that the Trust Fund will not suffer losses or
depreciation. The Company does not guarantee any payment to
any person. The liability of the Trustee to make any payment
is limited to the available assets of the Trust Fund.
h. DESIGNATION OF BENEFICIARY. Subject to the
provisions of section 12.7, each Participant, from time to
time, in writing, may designate any person or persons (who
may be designated contingently or successively) to whom his
benefits are to be paid if he dies before he receives all of
his benefits; PROVIDED, HOWEVER, that if a Participant is
married on the date of his death, any designation as
Beneficiary of a person other than his spouse shall be
effective only if:
i. his spouse acknowledges the effect of that designation
and consents to it and to the specific person or persons or class of
persons so designated in a writing in such form as may be established
from time to time, which writing is witnessed by a notary; or
ii. it is established to the satisfaction of an authorized
Plan representative that the consent required under paragraph (a) next
above cannot be obtained because there is no spouse, because the
spouse cannot be located or because of such other circumstances as the
Secretary of the Treasury may prescribe in regulations.
Beneficiary designation form will be effective only when the signed
form is filed while the Participant is alive and will cancel all Beneficiary
designation forms signed earlier. Except as otherwise specifically provided in
this Article 12, if a deceased Participant failed to designate a Beneficiary as
provided above, or if the designated Beneficiary of a deceased Participant dies
before him or before complete payment of the Participant's benefits, benefits
shall be paid to the Participant's surviving spouse or, if there is no surviving
spouse or if the Participant and the surviving spouse had been married for less
than one year, to the legal representative or representatives of the estate of
the last to die of the Participant and his Beneficiary. If there is any question
as to the right of any Beneficiary to receive a distribution under the Plan, a
representative of the Company may exercise discretion in a manner that permits
the Trustee to make payment to the legal representative of the Participant's
estate. The term "BENEFICIARY" as used in the Plan means the person or persons
to whom a deceased Participant's benefits are payable under this section 12.8.
i. MISSING RECIPIENT. Each Participant and each
Beneficiary must file in writing his post office address
from time to time and file in writing each change of post
office address. Any communication, statement or notice
addressed to a Participant or Beneficiary at his last known
post office address, or if no address is known then at the
Participant's last post office address as shown on the
Company's records, will be binding on the Participant and
his Beneficiary for all purposes of the Plan. The
Administrator will make a reasonable effort to find the
Participant, however, no person will be required to search
for or locate a Participant or Beneficiary. If a Participant
or Beneficiary entitled to benefits under the Plan fails to
claim such benefits and
-27-
it is not possible to reasonably find his whereabouts, such
benefits shall be forfeited and shall be used until
exhausted to reduce the Company contributions otherwise
required under Article 5 of the Company or Related Company
which last employed the Participant. If the location of the
Participant or Beneficiary is subsequently determined, such
forfeiture shall be restored by the Company and such
restoration shall not be treated as an Annual Addition for
purposes of Article 10.
j. PUT OPTION. Shares of Company Stock acquired by the
Trust shall be subject to a put option if the shares are not
readily tradable on an established securities market within
the meaning of section 409(h)(1)(B) of the Code when
distributed (or cease to be readily tradable on an
established securities market after distribution). The put
option shall be exercisable by the Participant or his
Beneficiary. The put option shall be exercisable during a
15-month period which begins on the date the shares subject
to the put option are distributed by the Plan. During this
period, the holder of the put option shall have the right to
cause the Company, by notifying it in writing, to purchase
such shares at their fair market value, as determined
pursuant to Section 9.5. The put option shall continue to
apply to shares of the Company Stock distributed by the Plan
even if the Woodward Governor Company Stock Component should
at any time cease to be an employee stock ownership plan
under section 4975(c)(7) of the Code. The Committee may give
the Trustee the option to assume the rights and obligations
of the Company, at the time the put option is exercised,
with respect to the repurchase of Company Stock.
If the entire value of all nonforfeitable amounts credited to a
Participant is distributed to the Participant within one taxable year, payment
of the price of the Company Stock purchased pursuant to an exercised put option
shall be made in no more than five substantially equal annual payments, and the
first installment shall be paid not later than thirty days after the Participant
exercises the put option. The Plan shall provide adequate security and pay a
reasonable rate of interest on amounts not paid after thirty days. If the entire
value of all nonforfeitable amounts credited to a Participant is not distributed
to the Participant within one taxable year, payment of the price of the Company
Stock purchased pursuant to an exercised put option shall be made in a single
sum not later than thirty days after the Participant exercises the put option.
k. DIRECT ROLLOVERS. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a
distributee's election under subsections 6.4 and 6.5, a
distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of
an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a
direct rollover.
l. DEFINITIONS. (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
-28-
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).
ii. 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.
iii. DISTRIBUTEE: A distributee includes a Worker Member or
former Worker Member. In addition, the Worker Member's or former
Worker Member's Surviving Spouse and the Worker Member's or former
Worker Member'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.
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iv. DIRECT ROLLOVER: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
(o)
VOTING OF COMPANY STOCK
Each Participant, or if applicable, his beneficiary, shall be entitled
to direct the Trustee as to the exercise of all voting rights attributable to
shares of Company Stock then allocated to such Participant's account in the
Woodward Governor Company Stock Component. All allocated Company Stock as to
which such instructions have been received (which may include an instruction to
abstain) shall be voted in accordance with such instructions. The Company and
the Trustee shall take all steps necessary to assure that Participants'
directions shall remain confidential. The Company shall furnish the Trustee and
each Participant with notices and information statements when voting rights are
to be exercised in a time and manner which comply with applicable law. However,
the Trustee shall vote any unallocated Company Stock in such manner as directed
by the Administrative Committee, unless the Trustee shall determine that to do
so would be inconsistent with the provisions of Title I of ERISA. For purposes
of instructing the Trustee as to the voting or tender of any unallocated Company
Stock, the Administrative Committee shall be deemed a named fiduciary of the
Plan as provided in section 403(a)(1) of ERISA. The Trustee shall vote any
allocated Company Stock as to which no voting instructions have been received in
the same proportion as allocated shares with respect to which it does receive
directions, unless the Trustee shall determine that to do so would be
inconsistent with the provisions of Title I of ERISA.
In the event of a tender or exchange offer (an "OFFER") for shares of
Company Stock, the Company, in conjunction with the Trustee, shall use its
reasonable best efforts to cause all Participants to be furnished with all
information as will be distributed to the stockholders of the Company in respect
to such Offer, and to be provided with forms by which the Participant may
confidentially instruct the Trustee, or revoke such instruction, to tender or
exchange shares of Company Stock allocated to his account, to the extent
permitted under the terms of such Offer. Upon timely receipt of such
instructions, the Trustee shall follow the directions of each Participant as to
the shares of Company Stock allocated to such Participant's account.
Instructions received by the Trustee from Participants in connection with an
Offer shall be held in strict confidence and, except as otherwise required by
law, shall not be divulged or released to any person, including officers and
Worker Members of the Company. The Company and the Trustee shall take all steps
necessary to assure that Participants' directions shall remain confidential. The
Trustee shall tender or exchange any unallocated Company Stock in such manner as
directed by the Administrative Committee, unless the Trustee shall determine
that to do so would be inconsistent with the provisions of Title I of ERISA. The
Trustee shall tender or exchange any allocated Company Stock as to which no
instructions are received in the same proportion as allocated shares with
respect to which it does receive directions, unless the Trustee shall determine
that to do so would be inconsistent with the provisions of Title I of ERISA.
(p)
THE ADMINISTRATIVE COMMITTEE
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a. MEMBERSHIP. The Company shall appoint two members of
the Administrative Committee (the "COMMITTEE") as referred
to in section 1.3, which shall number not less than six
members, from among the officers and other Worker Members of
the Company, designating one as chairman and the other as
assistant chairman of the Committee and defining their terms
of office. Additional members of the Committee shall be
elected by the actively employed Participants in the Plan
from those actively employed Participants with ten or more
Years of Service in the following manner:
i. Each facility in the United States (treating the
Rockford, Illinois facility and the Rockton, Illinois facility as a
single facility) shall elect two members to the Committee for each 500
Participants in the Plan or fraction thereof in the Plan as of the
beginning of the Fiscal Year; PROVIDED that a facility must have at
least 100 Participants in the Plan before it is eligible to elect any
Committee members.
ii. Members will be elected for a two-year term, half of
whom are to be elected each calendar year.
iii. The Candidates and Election Committee of the Company
will supervise the election and count the ballots.
iv. Forms will be distributed each November on which any
Participant with ten or more Years of Service may indicate a desire to
serve on the Committee. Names of all eligible Participants indicating
a willingness to serve on the Committee shall be certified to the
Human Resources Department as eligible for the nominating ballot by
the Candidates and Election Committee.
v. Nominating ballots will be distributed the first week
in December and must be returned to the Candidates and Election
Committee by the end of the second week in December. All Participants
with ten or more Years of Service are eligible for nomination.
vi. The Candidates and Election Committee shall certify as
nominated twice the number of Participants as there are positions to
be filled; and the number of Participants required to fill the slate
who receive the greatest number of votes on the nominating ballots
shall be nominated.
vii. The third week in December a final election ballot
shall be distributed to actively employed Participants and in order to
be considered the election ballots must be completed and returned to
the Candidates and Election Committee by the end of that week.
viii. The winning candidates shall be certified by the
Candidates and Election Committee to the personnel department and
their names posted on the bulletin board of each plant on or before
December 31.
1. Terms of office of elected members shall
begin on January 1.
-31-
ix. Elected members may not serve more than two consecutive
two-year terms, and a member who has served two such terms cannot
serve again until one full calendar year has elapsed from the end of
his last term.
b. MAJORITY ACTION. The Committee may act by vote at a
meeting, by telephone conference, or by written consent
without a meeting. Committee meetings shall be held at the
discretion of the chairman of the Committee. Only the
chairman of the Committee can call a Committee meeting,
authorize a telephone conference or authorize a written
consent without a meeting. Any matter may be handled by a
quorum of two Committee members, except that a quorum of a
majority of the Committee members is necessary to give
direction to the Trustee in voting of stock and to recommend
changes in the Plan to the Company. Any action taken by a
majority of the members of the Committee at a meeting at
which a quorum is present, or taken by written consent of a
majority of the Committee without a meeting, shall be
binding upon the Participants and their Beneficiaries. Any
action of the Committee shall be sufficiently evidenced if
certified thereto by any two members of the Committee.
c. RIGHTS, POWERS AND DUTIES. The Committee shall have
the maximum discretion as may be necessary to discharge its
responsibilities under the Plan, including the following
powers, rights and duties:
i. to adopt such rules of procedure and regulations as, in
its opinion, may be necessary for the proper and efficient
administration of the Plan and as are consistent with the provisions
of the Plan;
ii. to enforce the Plan in accordance with its terms and
with such rules and regulations as may be adopted by the Committee;
iii. to determine all questions arising under the Plan,
including questions relating to the eligibility, benefits and other
Plan rights of Participants and Beneficiaries and to remedy
ambiguities, inconsistencies or omissions;
iv. to maintain and keep adequate records concerning the
Plan and concerning its proceedings and acts in such form and detail
as the Committee may decide;
v. to direct all benefit payments under the Plan;
vi. to delegate to Worker Members of the Company and the
agents or counsel employed by the Committee such powers as the
Committee considers desirable;
vii. to appoint one of its members or any other Worker
Member to act as secretary of the Committee, and to authorize the
secretary so appointed to act for the Committee in all routine matters
connected with its responsibilities hereunder; and
-32-
viii. to recommend changes in the Plan to the Company. The
Board of Directors can accept or reject such recommendations at its
discretion.
d. APPLICATION OF RULES. In operating and administering
the Plan, the Committee shall apply all rules of procedure
and regulations adopted by it in a uniform and
nondiscriminatory manner.
e. REMUNERATION AND EXPENSE. No remuneration shall be
paid to any Committee member as such. However, the
reasonable expenses of a Committee member incurred in the
performance of Committee functions shall be reimbursed by
the Company.
f. INDEMNIFICATION OF THE COMMITTEE. The Committee and
the individual members thereof and any Worker Members to
whom the Committee has delegated responsibility in
accordance with paragraph 14.3(g) shall be indemnified by
the Company against any and all liabilities, losses, costs
and expenses (including legal fees and expenses) of
whatsoever kind and nature which may be imposed on, incurred
by or asserted against the Committee, its members or such
Worker Members by reason of the performance of a Committee
function if the Committee, such members or Worker Members
did not act dishonestly or in willful violation of the law
or regulation under which such liability, loss, cost or
expense arises.
g. EXERCISE OF COMMITTEE'S DUTIES. Notwithstanding any
other provisions of the Plan, the Committee shall discharge
its duties hereunder solely in the interests of the
Participants in the Plan and other persons entitled to
benefits thereunder, and
i. for the exclusive purpose of providing benefits to
Participants and other persons entitled to benefits thereunder; and
ii. with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
h. INFORMATION TO BE FURNISHED TO COMMITTEE. The
Company shall furnish the Committee such data and
information as may be appropriate. The records of the
Company as to a Participant's period of employment,
termination of employment and the reasons therefor, leave of
absence, reemployment and Eligible Pay and Eligible Wages
will be conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to
benefits under the Plan must furnish to the Committee such
evidence, data or information as the Committee considers
desirable to carry out the Plan.
i. RESIGNATION OR REMOVAL OF COMMITTEE MEMBER. A
Committee member may resign at any time by giving 30 days'
advance written notice to the Company, the Trustee and the
other Committee members. The Company
-33-
may remove a Committee member by giving 30 days advance
written notice to him, the Trustee and the other Committee
members.
j. APPOINTMENT OF SUCCESSOR COMMITTEE MEMBER. The
Company may fill any vacancy in the membership of the
Committee and shall give prompt written notice thereof to
the other Committee members and the Trustee. While there is
a vacancy in the membership of the Committee, the remaining
Committee members shall have the same powers as the full
Committee until the vacancy is filled.
(q)
THE INVESTMENT COMMITTEE
a. ESTABLISHMENT OF INVESTMENT COMMITTEE. The Company
shall appoint an Investment Committee of at least three
Members who shall be selected from among the officers,
directors, Worker Members or consultants of the Company. The
Investment Committee shall control the investment policy of
the Fund which is maintained by the Company for the purposes
of the Plan. The members of the Investment Committee shall
serve without remuneration and for so long as it is mutually
agreeable to them and to the Company. The members shall be
reimbursed for all expenses incurred by them in the
performance of their duties. Any member may resign by giving
his written resignation to the Company. The Company may
remove any member of the Investment Committee by so
notifying the member and the other members of the Investment
Committee in writing.
b. MAJORITY ACTION. Any action taken by the Investment
Committee shall be by a majority of the members thereof. The
Investment Committee may act by voting at a meeting or by
writing without a meeting. Any action of the Investment
Committee shall be sufficiently evidenced if it is certified
thereto by any member thereof or by the secretary.
c. POWERS OF THE INVESTMENT COMMITTEE. The Investment
Committee shall have the following powers:
i. To adopt such by-laws as it shall deem necessary for
the development of an efficient and sound investment program.
ii. To employ advisors (who may, but need not, be advisors
to the Company) with respect to investment, actuarial, legal,
accounting and other matters as it may deem necessary for the proper
exercise of its duties.
iii. To appoint one of its members, or any Worker Member of
the Company, to act as secretary of the Investment Committee. The
foregoing list of express powers is not intended to be either complete
or inclusive, and the Investment Committee shall have such additional
powers as it may reasonably deem to be necessary for the performance
of its duties under the Plan and Trust.
-34-
d. DUTIES OF THE INVESTMENT COMMITTEE. As a part of its
general duties in supervising the investment policy of a
Fund, the Investment Committee shall:
i. Review the investment portfolio constituting the Fund
at least annually.
ii. Give the Trustee specific directions in writing with
respect to investment, reinvestments and changing of investments, all
as set out in the Trust Agreement.
iii. The Investment Committee shall report annually to the
Company as to the investment performance of the Fund for the Plan Year
ending on such date.
iv. Provide the Company and the Administrative Committee
with such information, and at such times, as may be required by the
Company or as may be needed by the Administrative Committee to carry
out its duties.
v. Advise the Administrator with respect to any costs,
expenses, taxes or other charges (excluding any loss as a result of
the sale of assets) incurred solely by reason of a sale or purchase of
assets in order to properly reallocate assets between the separate
Funds established hereunder, and at the request of the Administrative
Committee, to advise the Administrative Committee with respect to the
proper apportionment of said costs, expenses, taxes or other charges,
so as to fairly reflect that portion attributable to the reallocation
of assets on behalf of each Participant.
(r)
FREQUENTLY USED DEFINITIONS
"ACCOUNT SHALL mean the separate account(s) maintained for a
Participant under the Plan.
"ACCOUNTING DATE" shall mean each day the New York Stock Exchange is
open for business.
"ACQUISITION LOAN" shall have the same meaning as is given to such
term in section 9.3.
"BENEFICIARY" shall mean a person described in section 12.8.
"CODE" shall have the same meaning as is given to such term in section
1.1.
"COMMITTEE" shall have the same meaning as is given to such term in
section 14.1.
"COMPANY" shall mean Woodward Governor Company.
"COMPANY MATCHING CONTRIBUTION" shall have the same meaning as given
to such term in section 5.2.
-35-
"COMPANY STOCK" shall mean shares of common stock of Woodward Governor
Company.
"DATE OF HIRE" shall mean the first day on which a Worker Member
renders an Hour of Service; PROVIDED, HOWEVER, that if a Worker Member shall in
any Fiscal Year terminate his service, which termination continues through the
close of said Fiscal Year, then it shall refer to the first day subsequent to
said Fiscal Year on which the Worker Member shall render an Hour of Service.
"DEFERRAL CONTRIBUTION" shall have the same meaning as given to such
term in section 5.3.
"DEFERRALS" shall have the same meaning as given to such term in
section 5.3.
"DISTRIBUTION DATE" shall have the same meaning as is given to such
term in section 12.2.
"EFFECTIVE DATE" shall have the same meaning as given to such term in
section 1.1.
"ELIGIBLE PAY" SHALL mean, for each payroll period, a Participant's
base wages, salary, overtime pay, shift premium, sick pay, holiday pay and
vacation pay. Eligible Pay taken into account for Plan Years after December 31,
1996 will not exceed $160,000, as adjusted by the Internal Revenue Service in
accordance with Code Section 401(a)(17). Effective for all Plan Years beginning
on or after January 1, 1997, the Eligible Pay of a Participant's spouse and
lineal descendants who have not attained age 19 by the close of the Plan Year
will NOT be included in the Participant's Eligible Pay in determining whether a
Participant's Eligible Pay is limited by the preceding sentence. If a
determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period and the denominator of which is 12.
"ELIGIBLE WAGES" shall mean the total straight time pay received
during any biweekly pay period, but not including straight time pay for hours
worked in excess of 80 hours in a biweekly pay period. Eligible Wages shall
exclude reimbursement of medical expenses, premiums on insurance policies,
cafeteria subsidies, sick pay, holiday pay, vacation pay and contributions to
any deferred compensation plan with the exception of contributions made relating
to Deferrals of Eligible Pay; PROVIDED that with regard to the Fiscal Year
during which a Participant commences participation, Eligible Wages shall include
only Eligible Wages paid by the Company from the date his participation in the
Plan commences. For purposes of the Plan, Eligible Wages for Plan Years after
December 31, 1996 will not exceed $160,000, as adjusted by the Internal Revenue
Service in accordance with Code Section 401(a)(17). Effective for all Plan Years
beginning on or after January 1, 1997, the Eligible Wages of a Participant's
spouse and lineal descendants who have not attained age 19 by the close of the
Plan Year will NOT be included in the Participant's Eligible Pay in determining
whether a Participant's Eligible Wages is limited by the preceding sentence. If
a determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period and the denominator of which is 12.
"ERISA" shall have the same meaning as is given to such term in
section 1.3.
-36-
"FINANCED SHARES" shall have the same meaning as is given to such term
in section 9.3.
"FISCAL YEAR" shall mean the Company's Fiscal Year, which is the 12
consecutive month period beginning on each October 1, and ending on each
September 30.
"HIGHLY COMPENSATED WORKER MEMBER" shall have the same meaning as
given to such term in section 10.10.
"HOUR OF SERVICE" shall have the same meaning as given to such term in
section 3.2.
"INITIAL PERIOD OF SERVICE" shall mean the completion of two 12 month
periods during which 1,000 Hours of Service are completed during each of such 12
month periods. The 12 month periods shall begin on the Worker Member's Date of
Hire and the first anniversary thereof; PROVIDED that if a Worker Member shall
not complete 1,000 Hours of Service in either of such 12 month periods
commencing on his Date of Hire, or anniversary thereof, all subsequent 12 month
periods shall be calculated based on the Plan Year, the first of which shall
commence in the 12 month period during which the Worker Member failed to
complete 1,000 Hours of Service. In the event of a Termination of Service after
completion of one 12 month period with 1,000 Hours of Service, but before
completion of an Initial Period of Service, the Worker Member shall receive
credit for the 12 month period so completed; and if he shall be reemployed as a
Worker Member, he shall commence the computation of his second period on his
most recent Date of Hire; PROVIDED that if he shall not complete 1,000 Hours of
Service in such 12 month period, his computation period shall be based on the
Plan Year the first of which shall commence next following this most recent Date
of Hire. A Worker Member in the Woodward Governor Company Recruit Program shall
receive credit for one such 12 month period if he shall complete at least 250
Hours of Service and not more than 999 Hours of Service in each of four Plan
Years. A Worker Member who is a student in the Irl C. Martin Academy of
Industrial Science for a period of six months or more during any Plan Year (or
during his first 12 months of employment and successive periods commencing on
the anniversary of his Date of Hire) shall receive credit for one such 12 month
period if he did not otherwise receive credit during such period.
"INVESTMENT COMMITTEE" shall have the same meaning as given to such
term in Article 15.
"LOAN FUND" shall have the same meaning as given to such term in
section 8.1.
"MEMBER SAVINGS ACCOUNT" shall have the same meaning as given to such
term in Section 8.1.
"NET PROFIT" shall mean the amount earned by the Company for each
Fiscal Year as certified by the independent auditor employed by the Company (in
accordance with generally accepted accounting principles consistently applied)
after deducting from the Company's gross earnings for such Fiscal Year all
costs, expenses and charges incurred by the Company, but before any deduction
for the following:
(1) Federal and state income taxes which are based on net rather
than gross income.
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(2) The provision for, or payment of, a liability in accordance
with applicable law, the effect of which is to adjust retroactively
profits realized in prior years.
(3) The Company's contribution under this Plan, the Woodward
Governor Company Retirement Income Plan and any other plan maintained
by the Company or a Related Company.
Net Profit shall be calculated before the cumulative effect of accounting
changes.
"NORMAL RETIREMENT AGE" shall mean age 65.
"PARTICIPANT" shall have the same meaning as given to such term in
section 2.1
"PAYROLL DEFERRAL" shall have the same meaning as given to such term
in section 4.1.
"PLAN" shall mean the Woodward Governor Company Deferred Profit
Sharing Plan, as amended and restated.
"PLAN YEAR" shall have the same meaning as is given to such term in
section 1.4.
"RELATED COMPANIES" shall have the same meaning as is given to such
term in section 1.2.
"RETIRED PARTICIPANTS" shall mean those Participants who retired on
account of reaching Normal Retirement Age, or reaching age 55 and completing ten
(10) full years of employment with the Company.
"ROLLOVER CONTRIBUTION" shall have the same meaning as given to such
term in section 6.1.
"TRUST" shall mean the separate Trust created under the Plan by and
between the Company and the Trustee.
"TRUSTEE" shall mean Vanguard Fiduciary Trust Company or any successor
thereto.
"VANGUARD" shall mean the Vanguard Group of Investment Companies.
"WORKER MEMBER" shall mean any employee of the Company, or any
successor thereto.
"YEAR OF SERVICE" shall have the same meaning as given to such term in
section 3.1.
(s)
AMENDMENT AND TERMINATION
a. AMENDMENT. While the Company expects and intends to
continue the Plan, the Company reserves the right to amend
the Plan at any time, PROVIDED, that no amendment shall
reduce a Participant's benefits to less than the amount he
would be entitled to receive if he had resigned from the
employ
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of all of the Company on the day of the amendment.
Notwithstanding this section 17.1, with respect to officers
of the Company who are subject to Article 16 of the
Securities Exchange Act of 1934, any provisions relating to
their participation in the Plan or the price, timing and
amount of contributions or allocations of Company Stock to
their Accounts may not be amended more frequently than once
every six months, other than to comply with any amendments
required under the Code, ERISA or any regulations and
rulings thereunder.
b. TERMINATION. The Plan will terminate as to all
Worker Members on any day specified by the Company. The Plan
will terminate as to the Company on the first to occur of
the following:
i. the date it is terminated by the Company;
ii. the date that the Company completely discontinues its
contributions under the Plan;
iii. the date that the Company is judicially declared
bankrupt or insolvent; or
iv. the dissolution, merger, consolidation or
reorganization of the Company, or the sale by the Company of all or
substantially all of its assets, except that, subject to the
provisions of section 17.3, in any such event arrangements may be made
whereby the Plan will be continued by any successor to the Company or
any purchaser of all or substantially all of the Company's assets, in
which case the successor or purchaser will be substituted for the
Company under the Plan.
c. MERGER AND CONSOLIDATION OF PLAN, TRANSFER OF PLAN
ASSET. In the case of any merger or consolidation with, or
transfer of assets and liabilities to, any other plan,
provisions shall be made so that each affected Participant
in the Plan on the date thereof (if the Plan then
terminated) would receive a benefit immediately after the
merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to
receive immediately prior to the merger, consolidation or
transfer if the Plan had then terminated.
d. NOTICE OF AMENDMENT, TERMINATION OR PARTIAL
TERMINATION. Affected Participants and Beneficiaries will be
notified of an amendment, termination or partial termination
of the Plan as required by law.
e. VESTING AND DISTRIBUTION ON TERMINATION AND PARTIAL
TERMINATION. On termination of the Plan in accordance with
section 17.2, on partial termination of the Plan by
operation of law, or in the event of a complete
discontinuance of Company contributions to the Plan, each
affected Participant's benefits will be nonforfeitable. If,
on termination or partial termination of the Plan, a
Participant remains in the employ of an Employer or a
Related Company, the amount of his benefits shall be
retained in the Trust
-39-
until after his termination or employment with all of the
Employers and Related Companies and shall be paid to him in
accordance with the provisions of Article 12. The benefits
payable to an affected Participant whose employment with all
of the Employers and Related Companies is terminated
coincident with the termination or partial termination of
the Plan (and the benefits payable to an affected
Participant on partial termination of the Plan) shall be
paid to him in accordance with the provisions of Article 12.
All appropriate accounting provisions of the Plan will
continue to apply until the benefits of all affected
Participants have been distributed to them.
f. LIMITATION ON RIGHT TO AMEND. No amendment shall be
made to this Plan which shall:
i. change the vesting schedule under the Plan if the
nonforfeitable percentage of the accrued benefit derived from Company
Contributions (determined as of the later of the date such amendment
is adopted or the date such amendment becomes effective) of any
Participant is less than such nonforfeitable percentage computed
without regard to such amendment; or
ii. reduce the accrued benefit of a Participant within the
meaning of Section 411(d)(6) of the Code, except to the extent
permitted under Section 412(c)(8) of the Code.
(t)
TOP HEAVY STATUS
a. APPLICATION. This Article 18 to Woodward Governor
Company Retirement Income Plan (the "Plan") shall be
applicable on and after the date on which the Plan becomes
Top-Heavy (as described in section 18.4).
b. DEFINITIONS. Unless the context clearly implies or
indicates the contrary, a word, term or phrase used or
defined in the Plan is similarly used or defined for
purposes of this Article 18.
c. AFFECTED PARTICIPANT. For purposes of this Article
18, the term "AFFECTED PARTICIPANT" means each Participant
who is employed by the Company or a Related Company during
any Plan Year for which the Plan is Top-Heavy.
d. TOP-HEAVY. The Plan shall be "TOP-HEAVY" for any
Plan Year if, as of the Determination Date for that year (as
described in paragraph (a) next below), the present value of
the benefits attributable to Key Worker Members (as defined
in section 18.5) under all Aggregation Plans (as defined in
section 18.8) exceeds 60% of the present value of all
benefits under such plans. The foregoing determination shall
be made in accordance with the provisions of section 416 of
the Code. Subject to the preceding sentence:
-40-
i. The Determination Date with respect to any plan for
purposes of determining Top-Heavy status for any plan year of that
plan shall be the last day of the preceding plan year or, in the case
of the first plan year of that plan, the last day of that year. The
present value of benefits as of any Determination Date shall be
determined as of the accounting date or valuation date coincident with
or next preceding the Determination Date. If the plan years of all
Aggregation Plans do not coincide, the Top-Heavy status of the Plan on
any Determination Date shall be determined by aggregating the present
value of Plan benefits on that date with the present value of the
benefits under each other Aggregation Plan determined as of the
Determination Date of such other Aggregation Plan which occurs in the
same calendar year as the Plan's Determination Date.
ii. Benefits under any Plan as of any Determination Date
shall include the amount of any distributions from that plan made
during the Plan Year which includes the Determination Date or during
any of the preceding four Plan Years, but shall not include any
amounts attributable to Worker Member contributions which are
deductible under section 219 of the Code, any amounts attributable to
Worker Member initiated rollovers or transfers made from a plan
maintained by an unrelated company, or, in case of a defined
contribution plan, any amounts attributable to contributions made
after the Determination Date unless such contributions are required by
section 412 of the Code or are made for the plan's first plan year.
iii. Benefits attributable to a Participant shall include
benefits paid or payable to a beneficiary of the Participant, but
shall not include benefits paid or payable to any Participant who has
not performed services for the Company or Related Company during any
of the five Plan Years ending on the applicable Determination Date.
iv. The accrued benefit of a Non-Key Worker Member shall be
determined under the method which is used for accrual purposes for all
plans of the Company and Related Companies; or, if there is not such
method, as if the benefit accrued not more rapidly than the slowest
accrual rate permitted under section 411(b)(1)(c) of the Code.
v. The present value of benefits under all defined benefit
plans shall be determined on the basis of a 6% per annum interest
factor and the 1984 Unisex Pension Mortality Table, with a one-year
setback.
e. KEY WORKER MEMBER. The term "KEY WORKER MEMBER"
means a Worker Member or deceased Worker Member (or
beneficiary of such deceased Worker Member) who is a Key
Worker Member within the meaning ascribed to that term by
section 416(i) of the Code. Subject to the preceding
sentence, the term Key Worker Member includes any Worker
Member or deceased Worker Member (or beneficiary of such
deceased Worker Member) who at any time during the plan year
which includes the Determination Date or during any of the
four preceding plan years was:
-41-
i. an officer of the Company or Related Company with
Compensation in excess of 50 percent of the amount in effect under
section 415(b)(1)(A) of the Code for the calendar year in which that
year ends; provided, however, that the maximum number of Worker
Members who shall be considered Key Worker Members under this
paragraph (a) shall be the lesser of 50 or 10% of the total number of
Worker Members of the Company and the Related Companies, disregarding
excludable Worker Members under section 414(q)(8) of the Code;
ii. one of the 10 employees owning the largest interests in
the Company or any Related Company (disregarding any ownership
interest which is less than 1/2 of one percent), excluding any Worker
Member for any plan year whose Compensation did not exceed the
applicable amount in effect under section 415(c)(1)(A) of the Code for
the calendar year in which that year ends;
iii. a 5% owner of the Company or of any Related Company; or
iv. a 1% owner of the Company or any Related Company having
Compensation in excess of $150,000.
f. COMPENSATION. The term "COMPENSATION" for purposes
of this Article 18 generally means compensation within the
meaning of section 415(c)(3) for that year. However, solely
for purposes of determining who is a Key Worker Member, the
term "COMPENSATION" means compensation as defined in section
414(q)(7) of the Code.
g. NON-KEY WORKER MEMBER. The term "NON-KEY WORKER
MEMBER" means any Worker Member (or beneficiary of a
deceased Worker Member) who is not a Key Worker Member.
h. AGGREGATION PLAN. The term "AGGREGATION PLAN" means
the Plan and each other retirement plan maintained by the
Company or Related Company, which is qualified under section
401(a) of the Code and which:
i. during the plan year which includes the applicable
Determination Date, or during any of the preceding four plan years,
includes a Key Worker Member as a participant;
ii. during the plan year which includes the applicable
Determination Date or, during any of the preceding four plan years,
enables the Plan or any plan in which a Key Worker Member participates
to meet the requirements of section 401(a)(4) or 410 of the Code; or
iii. at the election of the Company, would meet the
requirements of sections 401(a)(4) and 410 if it were considered
together with the Plan and all other plans described in paragraphs (a)
and (b) next above.
i. REQUIRED AGGREGATION PLAN. The term "REQUIRED
AGGREGATION PLAN" means a plan described in either paragraph
(a) or (b) of section 18.8.
-42-
j. Permissive Aggregation Plan. The term "Permissive
Aggregation Plan" means a plan described in paragraph (c) of
section 18.8.
k. MINIMUM CONTRIBUTION. For any Plan Year during which
the Plan is Top-Heavy, the minimum amount of Company
contributions allocated to the Accounts of each Affected
Participant who is employed by the Company or Related
Company on the last day of that year, who is not a Key
Worker Member and who is not entitled to a minimum benefit
for that year under any defined benefit Aggregation Plan
which is Top-Heavy shall, when expressed as a percentage of
the Affected Participant's Compensation, be equal to the
lesser of:
i. 3%; or
ii. the percentage at which Company contributions
(including Company contributions made pursuant to a cash or deferred
arrangement) are allocated to the Accounts of the Key Worker Member
for whom such percentage is greatest.
For purposes of the preceding sentence, compensation earned while a
member of a group of Worker Members to whom the Plan has not been extended shall
be disregarded. Paragraph (b) next above shall not be applicable for any Plan
Year if the Plan enables a defined benefit plan described in Section 18.8(a) or
18.8(b) to meet the requirements of section 401(a)(4) or 410 for that year.
Company contributions for any Plan Year during which the Plan is Top-Heavy shall
be allocated first to Non-Key Worker Members until the requirements of this
Section 18.11 have been met and, to the extent necessary to comply with the
provisions of this Section 18.11, additional contributions shall be required of
the Company
l. AGGREGATE BENEFIT LIMIT. For Plan Years before
January 1, 2000, for any Plan Year during which the Plan is
Top-Heavy, paragraphs (2)(B) and (3)(B) of section 415(e) of
the Code shall be applied by substituting "1.0" for "1.25".
EXECUTED at Rockford, Illinois this _____ day of ________________,
_____ to be effective as indicated herein.
WOODWARD GOVERNOR COMPANY
By:
-----------------------
Its:
----------------------
Attest:
-43-
SUPPLEMENT A
TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(For Worker Members whose accounts were transferred from
the Thrift Plan of HSC Controls Inc. or the Retirement Plan
of HSC Controls Inc. to the Plan)
With respect to Worker Members, whose accounts were transferred from the Thrift
Plan of HSC Controls Inc. or the Retirement Plan of HSC Controls Inc. to the
Plan, section 12.4 shall be revised as follows:
SECTION 12.4. FORM OF DISTRIBUTION ON TERMINATION OF EMPLOYMENT. The
entire value of all vested amounts credited to a Participant as of his
Distribution Date (together with any contributions made to the Plan after his
Distribution Date but attributable to employment prior to that date) will be
distributable to him in the form of a Joint and Survivor Annuity or
Preretirement Survivor Annuity; PROVIDED that if the Participant shall not be
married or if the Participant and his Spouse shall file a Waiver (as defined in
subparagraph 12.4(j)) the distribution may be made in such one or more of the
following forms:
(a) LUMP SUM. A Participant may elect to have his benefits paid
in one lump sum in cash.
(b) INSTALLMENTS. A Participant may elect to have his benefits
paid in approximately equal monthly, quarterly or annual installments
over a period not exceeding his life expectancy or, if applicable, the
joint life expectancies of the Participant and his Beneficiary. Prior
to receiving payment in the form of installments, a Participant's
outstanding loans under the Plan, together with any accrued interest
thereon, shall be treated as a distribution. Subject to the provisions
of section 12.3, a Participant may elect that, in the event of his
death, his benefits will be paid to his Beneficiary or Beneficiaries
in annual installments over the remaining period of his original
election. Each installment shall be charged pro-rata to the
Participant's Accounts unless otherwise elected by the Participant.
(c) SMALL ACCOUNT BALANCES. Notwithstanding any other provision
of the Plan to the contrary, if a Participant's vested Account
balances are $5,000 or less, such balances shall be distributed as
soon as practicable after his termination of employment in a lump sum
payment.
(d) ASSETS DISTRIBUTABLE. Generally, subject to paragraph (c)
next above, all distributions from the Member Investment Component
shall be determined by Vanguard using the net asset values of the
Participant's investment fund accounts as of the date that authorized
distribution directions are received by Vanguard from the Committee,
and shall be paid in cash. Distributions attributable to amounts in
the Woodward Governor Company Stock Component shall be paid in Company
Stock; PROVIDED, HOWEVER, a
A-1
Participant may elect to receive all or part of his distribution in
the form of cash; and PROVIDED, FURTHER, if a Participant elects to
receive installment payments, his distribution shall be in cash.
(e) With respect to the filing of a Waiver of the Joint and
Survivor Annuity, "ELECTION PERIOD" shall mean the period commencing
not less than ninety (90) days prior to the Annuity Starting Date (the
first day of the first period for which an amount is payable as an
annuity) and ending on the Annuity Starting Date; provided that if the
Participant shall not be notified of his right to file a Waiver (and
to receive Waiver Information) within the first seven (7) days of said
Election Period or if he shall properly request Waiver Information and
such is not supplied within seven (7) days of his request, the
Election Period shall not end (and shall be extended to the extent, if
any, that is necessary) prior to the ninetieth (90th) day following
the later of the date on which he receives such notice or the date on
which he receives the Waiver Information. With respect to the filing
of a Waiver of the Preretirement Survivor Annuity, "Election Period"
shall mean the period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ending on the date of the
Participant's death; PROVIDED, that if the Participant terminates
employment, the "Election Period" shall begin on the date of
termination of employment with respect to the amount of the
Participant's accounts on the Accounting Date coincident with or next
preceding the date of termination of employment.
(f) "JOINT AND SURVIVOR ANNUITY" shall mean an Annuity which
shall pay equal monthly installments to the Participant for life and
upon his death shall provide monthly payments for the life of the
Participant's Surviving Spouse in an amount equal to fifty percent
(50%) and not more than one hundred percent (100%) of the monthly
amount payable to the Participant under such Annuity during the joint
lives of the Participant and the Participant's Surviving Spouse.
(g) "PRERETIREMENT SURVIVOR ANNUITY" shall mean an annuity upon
the life of the Participant's Surviving Spouse that shall be purchased
with fifty percent (50%) of the balance of the Participant's accounts,
determined as of the Accounting Date coincident with or next preceding
the date of the Participant's death.
(h) "SPOUSE" shall mean the person to whom the Participant was
married (and from whom he was not divorced by decree of court) at the
time of reference, provided that the Committee may, but is not
required to, rely on the Participant's written statement as to the
existence and identity of a Spouse.
(i) "SURVIVING SPOUSE" shall mean a Spouse who was married to
the Participant for the twelve-month period immediately preceding the
earlier of the date of the Participant's death, or the Participant's
Annuity Starting Date and who is living on the day following the date
of the Participant's death.
(j) "WAIVER" shall mean the written election by both the
Participant and his Spouse; and which is filed with the Committee
during the Election Period and is not
A-2
revoked at the time of reference, not to receive his benefit in the
form of a Joint and Survivor Annuity or in the form of a Preretirement
Survivor Annuity; PROVIDED, that each Participant who has not been
married throughout the twelve (12) month period immediately preceding
his Annuity Starting Date shall be deemed to have filed such a written
election (and not have revoked it) within the Election Period. This
Waiver need not be executed by the Spouse if there is no Spouse or if
it is established to the Plan representative's satisfaction that the
Spouse cannot be located.
(k) "WAIVER INFORMATION" shall mean the written explanation from
the Committee to the Participant and his Spouse, prepared in
non-technical language, of the terms and conditions of the Joint and
Survivor Annuity and/or the Preretirement Survivor Annuity, the
financial effect of filing a Waiver upon the Participant's benefit and
the Spouse's rights to such benefit, the right to make, and the effect
of, the revocation of a Waiver if one has been filed and the rights of
the Participant's Spouse to the Joint and Survivor Annuity and the
Preretirement Survivor Annuity hereunder. Such Waiver Information with
respect to the Preretirement Survivor Annuity shall be provided by the
Committee to each Participant within the period beginning on the first
day of the Plan Year in which the Participant attains age 32 and
ending on the last day of the Plan Year in which the Participant
attains age 35.
(l) Notwithstanding any provision hereof to the contrary, each
Participant who shall have filed a Waiver may file a written
revocation of such Waiver with the Committee at any time prior to the
close of the Election Period, and may thereafter file a new Waiver
prior to the close of the Election Period in the same manner and to
the same extent as though no prior Waiver(s), or revocation(s) or
reelection(s) thereof, had been filed. Whenever there is reference in
this Plan to the filing of a Waiver, or a revocation or reelection
thereof, it shall be deemed to refer to the status of the Participant
with respect to such filing at the time of reference.
A-3
SUPPLEMENT B
TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(For Worker Members Who Are Employed By
Baker Electrical Products, Inc.)
Worker Members who are employed by Baker Electrical Products, Inc.
("BAKER"), a wholly owned subsidiary of the Company, will participate under the
Plan, effective as of August 1, 1998, subject to the following provisions which
supersede any contrary provisions of the Plan.
1. PARTICIPATION. Each Worker Member of Baker, including such Worker
Members hired on a part-time basis, will become a Participant in the Plan upon
completion of six months of service. Service prior to the date on which Baker
was acquired by the Company and prior to August 1, 1998 shall be credited for
purposes of participation in the Plan.
2 PAYROLL DEFERRALS. A Participant employed by Baker may authorize
deferrals for any payroll period of not less than 1% and not more than 13% of
his Eligible Pay.
3 MATCHING CONTRIBUTIONS. Subject to the provisions of Article 10,
and in its discretion, the Company may deposit with the Trustee on behalf of
each of the Participants employed by Baker a Company Matching Contribution equal
to twenty five percent (25%) of the Participant's Payroll Deferrals made
pursuant to Section 4.1 (excluding Payroll Deferrals in excess of four percent
(4%) of the Participant's Eligible Pay). Such Matching Contribution will be
deposited within 30 days after the last day of each calendar quarter (March 31,
June 30, September 30 and December 31). Matching Contributions will be made at
the discretion of the Company, based on the achievement of quarterly profit
objectives for Baker.
4. WOODWARD GOVERNOR COMPANY STOCK COMPONENT. Participants employed
by Baker are not eligible to receive an allocation under Article 9.
B-1
SUPPLEMENT C
TO THE WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
(For Worker Members Who Are Employed by the Former Fuel Systems Textron Inc.)
Worker Members who are employed by the wholly-owned subsidiary of the
Company formerly known as Fuel Systems Textron, Inc. prior to its acquisition
from Textron by the Company ("FST"), will participate under the Plan, effective
as of June 15, 1998, subject to the following provisions which supersede any
contrary provisions of the Plan.
1 PARTICIPATION. Each Worker Member of FST, including such Worker
Members hired on a part-time basis, will become a Participant in the Plan upon
completion of 30 days of service. Service prior to the date on which FST was
acquired by the Company shall be credited for purposes of participation in the
Plan.
2. PAYROLL DEFERRALS. A Participant employed by FST may authorize
deferrals for any payroll period of not less than 1% and not more than 13% of
his Eligible Pay. However, if a Participant is a Highly Compensated Worker
Member, authorized deferrals may not exceed 7% of Eligible Pay.
3. MATCHING CONTRIBUTIONS. Subject to the provisions of Article 10,
the Company will deposit with the Trustee on behalf of each of the Participants
employed by FST (other than Participants employed at the Greenville, South
Carolina facility) a Company Matching Contribution equal to fifty percent (50%)
of the Participant's Payroll Deferrals made pursuant to Section 4.1 (excluding
Payroll Deferrals in excess of ten percent (10%) of the Participant's Eligible
Pay). Participants employed by FST at the Greenville, South Carolina facility
will receive a matching contribution equal to one hundred percent (100%) of such
Participant's Payroll Deferrals, excluding Payroll Deferrals in excess of three
percent (3%) of the Participant's Eligible Pay.
4. WOODWARD GOVERNOR COMPANY STOCK COMPONENT. Participants employed
by FST are not eligible to receive an allocation under Article 9 of the Plan.
5. This Supplement C shall be effective through September 30, 1999.
As of October 1, 1999, all Worker Members who are employed by FST Woodward, Inc.
shall be covered under the Plan without regard to this Supplement C and all such
Worker Members shall be credited with service with Fuel Systems Textron, Inc.
A-2
AMENDMENT NO. 1 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, the Company has reserved the right to amend the Plan pursuant
to Article XVII of the Plan and has delegated the authority to amend the Plan to
certain officers of the Company; and
WHEREAS, the Company now desires to amend the Plan.
NOW, THEREFORE, the Plan is amended effective as of December 31, 1999,
as follows:
The first sentence of Section 10.3 is hereby amended by the deletion
of the phrase "For Plan Years beginning before January 1, 2000."
A-3
AMENDMENT NO. 2 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, the Company has reserved the right to amend the Plan pursuant
to Article XVII of the Plan and has delegated the authority to amend the Plan to
certain officers of the Company; and
WHEREAS, the Company now desires to amend the Plan.
NOW, THEREFORE, the Plan is amended effective as of January 1, 2000,
as follows:
The first complete sentence of Item 3 of Supplement B is hereby
amended in its entirety to read as follows:
"Subject to the provisions of Article 10, and in its discretion, the Company may
deposit with the Trustee on behalf of each of the Participants employed by Baker
a Company Matching Contribution equal to fifity percent (50%) of the
Participant's Payroll Deferrals made pursuant to Section 4.1 (excluding Payroll
Deferral in excess of six percent (6%) of the Participant's Eligible Pay)."
A-4
AMENDMENT NO. 3 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, under Article XVII of the Plan, the Company has reserved the
right to amend the Plan and has delegated the authority to amend the Plan to
certain officers of the Company; and
WHEREAS, the Company now desires to amend the Plan.
NOW, THEREFORE, the Plan is amended effective as of May 1, 2000, as
follows:
The following language is added to the end of Section 9.1:
"Notwithstanding anything to the contrary, for the purpose of this section 9.1,
an Eligible Participant shall include any "U.S. Transferred Employee" as that
term is defined in the Purchase Agreement between General Electric Company and
the Company dated April 19, 2000 (the "Purchase Agreement"). Subject to Article
10 of the Plan, such Eligible Participant shall receive a Company Stock
Component Contribution based on the Eligible Participant's Eligible Wages earned
for the period beginning on October 1, 1999 through the date the Eligible
Participant terminates employment with the Company (but no later than September
30, 2000)."
A-5
AMENDMENT NO. 4 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, under Article XVII of the Plan, the Company has reserved the
right to amend the Plan and has delegated the authority to amend the Plan to
certain officers of the Company;
WHEREAS, the Company now desires to amend the Plan to allow for
investment elections in 1% increments.
NOW, THEREFORE, the Plan is amended effective as of January 1, 2001 as
follows:
The first sentence of Section 8.2 is hereby amended to read as
follows:
"Subject to the following provisions of this Section
8.2 and any requirements as may be established from
time to time, each Participant shall direct the
percentages (in multiples of 1%) of all contributions
made by him or on his behalf which are to be invested
in each of the investment funds, and may prospectively
change any such direction by telephone to Vanguard on
any date the New York Stock Exchange is open for
business."
Except as amended hereby, the terms of the Plan remain in full force
and effect.
A-6
AMENDMENT NO. 5 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, the Company has reserved the right to amend the Plan pursuant
to Section 17 of the Plan and has delegated the authority to amend the Plan to
certain officers of the Company; and
WHEREAS, the Company now desires to amend the Plan.
NOW, THEREFORE, by virtue and in exercise of the power reserved to the
Company by subsection 17.1 of the Plan, the Plan is amended effective as of the
dates set forth below in the following particulars:
1. Effective January 1, 2001, by adding the following to the end of
subsection 10.1(b) of the Plan:
"and, effective January 1, 2001, any elective reductions in
remuneration for qualified transportation benefits within the
meaning of section 132(f) of the Code."
2. Effective December 31, 1999, by adding the following phrase at
the beginning of the first sentence of Section 10.3 of the Plan:
"For Plan Years beginning before January 1, 2000,"
3. Effective January 1, 1999, by adding the following sentence
immediately after the final sentence of subsection 12.12(a) of
the Plan:
"Notwithstanding the foregoing, effective January 1, 1999,
hardship withdrawals (to the extent applicable under the Plan)
are not considered eligible rollover distributions under the
Plan."
A-7
AMENDMENT NO. 6 TO THE
WOODWARD GOVERNOR COMPANY
MEMBER INVESTMENT AND STOCK OWNERSHIP PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Member Investment and Stock Ownership Plan (the
"Plan");
WHEREAS, the Company has reserved the right to amend the Plan pursuant
to Section 17 of the Plan and has delegated the authority to amend the Plan to
certain officers of the Company; and
WHEREAS, the Company now desires to amend the Plan.
NOW, THEREFORE, by virtue and in exercise of the power reserved to the
Company by subsection 17.1 of the Plan, the Plan is amended effective July 1,
2002 by replacing Article 14 with the following:
"ARTICLE 14. THE ADMINISTRATIVE COMMITTEE
Section 14.1 Membership. The Company shall appoint the Administrative
Committee (the "COMMITTEE") as referred to in subsection 1.4 of the
Plan to administer the Plan as provided under this Article 14. The
Company shall establish such procedures for administering the Plan and
shall allocate fiduciary responsibilities to others as it deems
suitable.
Section 14.2 Rights, Powers and Duties. The Committee shall have such
authority as may be necessary to discharge its responsibilities under
the Plan, including the following powers, rights and duties:
(a) to adopt such rules of procedure and regulations as, in its
opinion, may be necessary for the proper and efficient
administration of the Plan and as are consistent with the
provisions of the Plan;
(b) to enforce the Plan in accordance with its terms and with
such rules and regulations as may be adopted by the
Committee;
(c) to determine all questions arising under the Plan, including
questions relating to the eligibility, benefits and other
Plan rights of Participants and Beneficiaries and to remedy
ambiguities, inconsistencies or omissions;
(d) to maintain and keep adequate records concerning the Plan
and concerning its proceedings and acts in such form and
detail as the Committee may decide;
(e) to direct all benefit payments under the Plan;
A-8
(f) to delegate to Worker Members of the Company and the agents
or counsel employed by the Company such powers as the
Committee or Company considers desirable;
(g) to appoint one of its members or any other Worker Member to
act as secretary of the Committee, and to authorize the
secretary so appointed to act for the Committee in all
routine matters connected with its responsibilities
hereunder; and
(h) to recommend changes in the Plan to the Company. The Board
of Directors can accept or reject such recommendations at
its discretion.
Section 14.3 Application of Rules. In operating and administering the
Plan, the Committee shall apply all rules of procedure and regulations
adopted by it in a uniform and nondiscriminatory manner.
Section 14.4 Remuneration and Expenses. No remuneration shall be paid
to any Committee member as such. However, the reasonable expenses of a
Committee member incurred in the performance of Committee functions
shall be reimbursed by the Company.
Section 14.5 Indemnification of the Committee. The Committee and the
individual members thereof and any Worker Members to whom the
Committee has delegated responsibility in accordance with Section 14.2
shall be indemnified by the Company against any and all liabilities,
losses, costs and expenses (including legal fees and expenses) of
whatsoever kind and nature which may be imposed on, incurred by or
asserted against the Committee, its members or such Worker Members by
reason of the performance of a Committee function if the Committee,
such members or Worker Members did not act dishonestly or in willful
violation of the law or regulation under which such liability, loss,
cost or expense arises.
Section 14.6 Exercise of Committee's Duties. Notwithstanding any other
provisions of the Plan, the Committee shall discharge its duties
hereunder solely in the interests of the Participants in the Plan and
other persons entitled to benefits thereunder, and
(a) for the exclusive purpose of providing benefits to
Participants and other persons entitled to benefits
thereunder; and
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with
like aims.
Section 14.7 Information to Be Furnished to Committee. The Company
shall furnish the Committee such data and information as may be
appropriate.
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Section 14.8 Resignation or Removal of Committee Member. A Committee
member may resign at any time by giving 30 days' advance written
notice to the Company and the other Committee members. The Company may
remove a Committee member by giving advance written notice to him and
the other Committee members.
Section 14.9 Appointment of Successor Committee Members. The Company
may fill any vacancy in the membership of the Committee and shall give
prompt written notice thereof to the other Committee members. While
there is a vacancy in the membership of the Committee, the remaining
Committee members shall have the same powers as the full Committee
until the vacancy is filled."
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EXHIBITS TO SCHEDULE 13D
Exhibit A - Investment Committee and Administrative Commmittee
Members of the Woodward Governor Company Member
Investment and Stock Ownership Plan, Directors and
Executive Officers of Woodward Governor Company
Exhibit B - Woodward Governor Company Member Investment and
Stock Ownership Plan, as amended
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