-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DVDFACZwsZG1IPIH5wp5O3cDFH+2x4VXr42JpALQ/Ijiaq2UQ0AgVhz8OdGlmqLu bZzeucod2GLk91pczHsaAA== 0000950131-00-002172.txt : 20000331 0000950131-00-002172.hdr.sgml : 20000331 ACCESSION NUMBER: 0000950131-00-002172 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FMC CORP CENTRAL INDEX KEY: 0000037785 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 940479804 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-02376 FILM NUMBER: 583971 BUSINESS ADDRESS: STREET 1: 200 E RANDOLPH DR CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3128616000 FORMER COMPANY: FORMER CONFORMED NAME: BEAN SPRAY PUMP CO DATE OF NAME CHANGE: 19670706 FORMER COMPANY: FORMER CONFORMED NAME: FOOD MACHINERY & CHEMICAL CORP DATE OF NAME CHANGE: 19670706 10-K405 1 FORM 10-K405 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission file number 1-2376 FMC CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-0479804 - ------------------------------- -------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 200 East Randolph Drive, Chicago, Illinois 60601 - ------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 312/861-6000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered - ------------------- ------------------- Common Stock, $0.10 par value New York Stock Exchange Chicago Stock Exchange Pacific Stock Exchange Preferred Share Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ] INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X] THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT AS OF MARCH 8, 2000, WAS $1,503,160,875, THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, $0.10 PAR VALUE, OUTSTANDING AS OF THAT DATE WAS 31,194,000. DOCUMENTS INCORPORATED BY REFERENCE ----------------------------------- DOCUMENT FORM 10-K REFERENCE - -------- ------------------- Portions of 1999 Annual Report Part I, Item 1; Part to Stockholders II; and Part IV, Items 14(a)(1) and (2) Portions of Proxy Statement for Part III 2000 Annual Meeting of Stockholders ================================================================================ Page 2 PART I FMC Corporation was incorporated in 1928 under Delaware law and has its principal executive offices at 200 East Randolph Drive, Chicago, Illinois 60601. As used in this report, except where otherwise stated or indicated by the context, "FMC", "the company" or "the Registrant" means FMC Corporation and its consolidated subsidiaries and their predecessors. The company is one of the world's leading producers of machinery and chemicals for industry and agriculture. The company employs 15,609 people at 97 manufacturing facilities and mines in 26 countries. The company operates in five principal industry segments: Energy Systems; Food and Transportation Systems; Agricultural Products; Specialty Chemicals; and Industrial Chemicals. The Energy Systems businesses supply drilling, engineering, metering and subsea products systems and related services to the oil and gas exploration industry. Food and Transportation Systems businesses provide automated processing and handling equipment to consumer-based industries. Agricultural Products produces crop protection and pest control chemicals for worldwide markets. The Specialty Chemicals businesses develop and manufacture highly specialized products used in food, pharmaceutical and personal care products. The Industrial Chemicals businesses provide commodity- based chemicals produced in large quantities to industrial consumers. Business and geographic segment data for 1999, 1998 and 1997 are summarized on pages 16, 17 and 36 of the 1999 Annual Report to Stockholders, which is incorporated herein by reference. ITEM 1. BUSINESS Incorporated by Reference From: (a) General Development - 1999 Annual Report to of Business Stockholders, pages 2-4 and 56, Management's Discussion and Analysis on pages 22-31, and Notes 2, 3 and 4 to the consolidated financial statements on pages 40-43 (b) Financial Information - 1999 Annual Report to About Industry Segments Stockholders, pages 16-17 and page 36 Page 3 (c) Narrative Description - 1999 Annual Report to of Business Stockholders, pages 18-21 and 22-31 Source and Availability of Raw Materials - ---------------------------------------- FMC's raw material requirements vary by business segment and include mineral- related natural resources, processed chemicals, seaweed, steel, aluminum, steel castings and forgings and energy sources, such as oil, gas, coal, coke, hydroelectric power and nuclear power. Ores used in the Industrial Chemicals manufacturing process, such as trona and phosphate rock, are produced from mines in the United States on property held by FMC under long-term leases subject to periodic adjustment of royalty rates. Raw materials used by Specialty Chemicals include lithium carbonate, which is obtained from a South American manufacturer under a long-term sourcing agreement, and alginates and carrageenan, which are derived from various types of seaweed that are sourced by the company on a global basis. Raw materials used by Agricultural Products, primarily processed chemicals, are obtained from worldwide sources. The business segments that are involved in machinery production, Energy Systems and Food and Transportation Systems, purchase carbon steel, stainless steel, aluminum and steel castings and forgings both domestically and internationally. The company does not use single source suppliers for the majority of its raw material purchases and believes the available supplies of raw materials are adequate. Patents - ------- FMC owns a number of U.S. and foreign patents, trademarks and licenses that are cumulatively important to its business. FMC does not believe that the loss of any one or group of related patents, trademarks or licenses would have a material adverse effect on the overall business of FMC. Seasonality - ----------- FMC's businesses are generally not subject to significant seasonal fluctations, except for the Agricultural Products segment, which tends toward lower profitability in the fourth quarter primarily due to seasonality in worldwide agricultural markets. Page 4 Competitive Conditions - ---------------------- FMC encounters substantial competition in each of its five segments. This competition is expected to continue in both the United States and markets outside the United States. FMC markets its products through its own sales organization and through independent distributors and sales representatives. Competitive factors impacting sales of the company's products include: price, service (including the ability to deliver products on an "as needed, where needed" basis), product quality, warranty, technological innovation and technical proficiency. The number of the company's principal competitors varies from segment to segment. See pages 18 through 21 of the 1999 Annual Report to Stockholders for information about each segment's principal products. Research and Development Expense - -------------------------------- In Millions Year Ended December 31 1999 1998 1997 ------ ------ ------ Energy Systems $ 25.7 $ 24.7 $ 20.0 Food and Transportation Systems 26.1 26.0 26.7 Agricultural Products 60.9 60.2 73.9 Specialty Chemicals 21.2 28.0 35.2 Industrial Chemicals 18.5 18.6 18.2 Corporate - 0.2 - ------ ------ ------ Total $152.4 $157.7 $174.0 ====== ====== ====== Research and development ("R&D") expense for Specialty Chemicals declined in 1999 and 1998. The 1999 decline was primarily due to the divestiture of businesses, while the decline in 1998 reflected the segment's reallocation of certain R&D resources toward customer-focused technical support (which is included in selling, general and administrative expenses) and R&D workforce reductions. Agricultural Products R&D costs declined in 1998 when compared with 1997, reflecting the completion of product development cycles related to Authority and Aim herbicides. Page 5 Environmental - ------------- Incorporated by Reference From: Compliance with Environmental - 1999 Annual Report to Laws and Regulations Stockholders, Note 14 to the consolidated financial statements on pages 50-51 Employees - --------- FMC employs 15,609 people in its domestic and foreign operations. Approximately 2,400 such employees are represented by collective bargaining agreements in the United States. In 2000, 5 of the company's 14 collective bargaining agreements will expire, covering approximately 1,500 employees. Certain of those contracts are under negotiation at the present time. FMC maintains good employee relations and has successfully concluded virtually all of its recent negotiations without a work stoppage. In those rare instances where a work stoppage has occurred, there has been no material effect on consolidated sales and earnings. FMC, however, cannot predict the outcome of future contract negotiations. Incorporated by Reference From: (d) Financial Information - 1999 Annual Report to About Foreign and Domestic Stockholders, page 36 Operations and Export Sales Forward Looking Statements - Safe Harbor Provisions - --------------------------------------------------- Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: The company and its representatives may from time to time make written or oral statements that are "forward-looking" and provide other than historical information, including statements contained in this Annual Report on Form 10-K, in the company's other filings with the Securities and Exchange Commission or in reports to its stockholders. Whenever possible, FMC has identified these forward-looking statements by such words or phrases as "will likely result", "is confident that", "expected", "should", "could", "will continue to", "believes", "anticipates", "predicts", "forecasts", "estimates", "projects" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Page 6 Reform Act of 1995. Such forward-looking statements are based on management's current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. The company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. In connection with the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, the company is hereby identifying important factors that could affect the company's financial performance and could cause the company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. Among the factors that could have an impact on the company's ability to achieve its operating results and growth plan goals are: . Significant price competition, particularly among competitors in the company's chemical businesses; . The impact of unforeseen economic and political changes in the international markets where the company competes, including currency exchange rates, war, civil unrest, inflation rates, recessions, trade restrictions, foreign ownership restrictions and economic embargoes imposed by the United States or any of the foreign countries in which FMC does business, and other external factors over which the company has no control; . The impact of significant changes in interest rates or taxation rates; . Increases in ingredient or raw material prices compared with historical levels, or shortages of ingredients or raw materials; . Inherent risks in the marketplace associated with new product introductions and technologies, particularly in agricultural and specialty chemicals; . Changes in capital spending by customers in the petroleum exploration and airline industries; . Risks associated with developing new manufacturing processes, particularly with respect to complex chemical products; . The ability of the company to integrate possible future acquisitions or joint ventures into its existing operations; Page 7 . The impact of freight transportation delays beyond the control of the company; . The effect of previously undetected compliance issues related to the arrival of the year 2000; . Risks associated with joint venture, partnership or limited endeavors in which the company may be responsible at least in part for the acts or omissions of its partners; . Conditions affecting domestic and international capital markets; . Risks derived from unforeseen developments in industries served by the company, such as extreme weather patterns or low insect infestations in the agricultural sector, political or economic changes in the energy industries, and other external factors over which the company has no control; . Risks associated with litigation, including the possibility that current reserves and estimated loss contingencies relating to the company's ongoing litigation may prove inadequate; . Environmental liabilities that may arise in the future that exceed current reserves and estimated loss contingencies; and . Increased competition in the hiring and retention of employees. The company cautions that the foregoing list of important factors may not be all-inclusive, and it specifically declines to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. With respect to forward-looking statements set forth in the notes to consolidated financial statements, including those relating to environmental obligations, contingent liabilities and legal proceedings, as well as this 1999 Annual Report on Form 10-K, some of the factors that could affect the ultimate disposition of those contingencies are changes in applicable laws, the development of facts in individual cases, settlement opportunities and the actions of plaintiffs, judges and juries. ITEM 2. PROPERTIES FMC leases executive offices in Chicago and administrative offices in Philadelphia. The company operates 97 manufacturing facilities and mines in 26 countries. Its major research facility is in Page 8 Princeton, NJ. FMC holds mining leases on shale and ore deposits in Idaho to supply its phosphorus plant in Pocatello, and owns substantial phosphatic ore deposits in Rich County, Utah. Trona ore, used for soda ash production in Green River, WY, is mined primarily from property held under long-term leases. FMC owns the land and mineral rights to the Salar del Hombre Muerto lithium reserves in Argentina. Many of FMC's chemical plants require the basic raw materials, which are provided by these FMC-owned or leased mines, without which other sources would have to be obtained. With regard to FMC's mining properties operated under long-term leases, no single lease or related group of leases is material to the businesses or to the company as a whole. Most of FMC's plant sites are owned, with an immaterial number of them being leased. FMC believes its properties and facilities meet present requirements and are in good operating condition and that each of its significant manufacturing facilities is operating at a level consistent with the industry in which it operates. The number and location of FMC's production properties for continuing operations are: Latin ----- America ------- United and Western ------ --- ------- States Canada Europe Other Total -------- -------- --------- ------- ------- Energy Systems 8 5 5 5 23 Food and Transportation Systems 10 2 7 1 20 Agricultural Products 6 1 - 3 10 Specialty Chemicals 4 2 7 1 14 Industrial Chemicals 14 2 14 - 30 -- -- -- -- -- Total 42 12 33 10 97 == == == == == ITEM 3. LEGAL PROCEEDINGS Environmental Proceedings - ------------------------- In June 1999, the Federal District Court in Idaho approved a Consent Decree signed by the company, the United States Environmental Protection Agency ("EPA")(Region X) and the United States Department of Justice ("DOJ") settling outstanding alleged violations of the Resource Conservation and Recovery Act ("RCRA") at the company's Phosphorus Chemicals ("PCD") plant in Pocatello, Idaho. The RCRA Consent Decree provides for injunctive relief covering remediation expense for closure of existing ponds, estimated at $50 million, and in excess of $100 million of capital costs for waste treatment and other compliance projects, including supplemental environmental projects. These amounts will be expended over approximately four years. As described in Note 4 to the consolidated financial statements, included in the 1999 Annual Report to Stockholders, an expected increase in capital costs for Page 9 environmental compliance contributed to an impairment in the value of PCD's assets during the fourth quarter of 1997. The company provided for the estimated expenses related to the Consent Decree in prior periods. In addition, FMC signed a second Consent Decree with the EPA, which was lodged in court on July 21, 1999. The Consent Decree relates to a Record of Decision ("ROD") issued by the EPA in 1998 which addresses previously closed ponds on the FMC portion of the Eastern Michaud Flats Superfund site, including FMC's PCD Pocatello, Idaho, facility. The remedy the EPA selected in the ROD is a combination of capping, surface runoff controls and institutional controls for soils, with a contingency for extraction and recycling for hydraulic control of groundwater. FMC believes its reserves for environmental costs adequately provide for the estimated costs of the Superfund remediation plan for the site and the expenses previously described related to the RCRA Consent Decree. On October 21, 1999 the Federal District Court for the Western District of Virginia approved a Consent Decree signed by the company, the EPA (Region III) and the DOJ regarding past response costs and future clean-up work at the discontinued fiber manufacturing site in Front Royal, Virginia. As part of a prior settlement, government agencies are expected to reimburse FMC for approximately one third of the clean up costs due to the government's role at the site. FMC's $70 million portion of the settlement was provided for in 1998 and prior years, and no additional charge to earnings was recorded in 1999. See Note 14 to the consolidated financial statements (pages 50-51 of the 1999 Annual Report to Stockholders) for a discussion of legal proceedings against other Potentially Responsible Parties and insurers for contribution and/or coverage with respect to environmental remediation costs. Other - ----- On April 14, 1998, a jury returned a verdict against the company in the amount of $125.0 million in conjunction with a federal False Claims Act action, in which Mr. Henry Boisvert filed and ultimately took to trial allegations that the company had filed false claims for payment in connection with its contract to provide Bradley Fighting Vehicles to the U.S. Army between 1981 and 1996. Under law, portions of the jury verdict were subject to doubling or trebling. On December 24, 1998, the U.S. District Court for the Northern District of California entered judgment for Mr. Boisvert in the amount of approximately $87 million. This was approximately $300 million less than the maximum judgment possible under the jury verdict. The reduction resulted from several rulings by the District Court in favor of the company in the post-trial motions. Briefing on cross-appeals by both parties to the U.S. Court of Page 10 Appeals for the Ninth Circuit has been completed, and it is probable that oral arguments will be heard during 2000. Both sides are asserting arguments on appeal, and a number of the company's arguments, if successful, would alter or eliminate the amount of the existing judgment. Any legal proceeding is subject to inherent uncertainty, and it is not possible to predict how the appellate court will rule. Therefore, the company's management believes based on a review, including a review by outside counsel, that it is not possible to estimate the amount of a probable loss, if any, to the company that might result from some adverse aspects of the judgment ultimately standing against the company. Accordingly, no provision for this matter has been made in the company's consolidated financial statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. Executive Officers of the Registrant - ------------------------------------ The executive officers of FMC Corporation, together with the offices in FMC Corporation currently held by them, their business experience since January 1, 1995, and their ages as of March 1, 2000, are as follows:
Age Office, year of election and other Name 3/1/2000 information for past five years - -------------------------------------------------------------------------------------------------------------------------------- Robert N. Burt 62 Chairman of the Board and Chief Executive Officer (91); President (90-93) Joseph H. Netherland 53 President (99); Executive Vice President (98); Vice President (87) and General Manager-Energy Systems Group (93) William H. Schumann III 49 Senior Vice President and Chief Financial Officer (99); Vice President, Corporate Development (98); Vice President and General Manager-Agricultural Products Group (95); Director, North American Operations, Agricultural Products Group (93-95); Executive Director, Corporate Development (91-93) William J. Kirby 62 Senior Vice President (94); Vice President-Administration (85)
Page 11 Thomas P. Hester 62 Senior Vice President, General Counsel and Corporate Secretary (00); Partner, Mayer, Brown & Platt (97); Senior Vice President, General Counsel and Secretary, Sears, Roebuck and Co. (98-99); Executive Vice President and General Counsel, Ameritech Corp. (91-97) Charles H. Cannon, Jr. 47 Vice President and General Manager- FMC FoodTech (94) and Transportation Systems Group (98); Manager, Food Processing Systems Division (92-94) W. Kim Foster 51 Vice President and General Manager- Agricultural Products Group (98); Director, International, Agricultural Products Group (97-98); Division Manager, Airport Products and Systems Division (91-97) Robert I. Harries 56 Vice President (92) and General Manager-Chemical Products Group (94) Peter D. Kinnear 52 Vice President (00); General Manager, Petroleum Equipment and Systems Division (94); Division Manager, Wellhead Equipment Division (92); Division Manager, Fluid Control Division (85) Stephanie K. Kushner 44 Vice President and Treasurer (99); Director, Financial Planning (97); Controller, Process Additives Division (92) Ronald D. Mambu 50 Vice President and Controller (95); Director, Financial Planning (94); Director, Strategic Planning (93); Director, Financial Control (87) James A. McClung 62 Vice President-Worldwide Marketing (91) William G. Walter 54 Vice President and General Manager-Specialty Chemicals Group (97); General Manager-Alkali Division (92); International Managing Director, APG (91); Division Manager, Defense Systems International (86); Director of Marketing/Sales-Construction Equipment Group (82)
Each of the company's executive officers has been employed by the company in a managerial capacity for the past five (5) years except for Mr. Hester. No family relationships exist among any of the above-listed officers, and there are no arrangements or understandings between any of the above-listed officers and any other person pursuant to which they serve as an officer. All officers are elected to hold office for one (1) year and until their successors are elected and qualified. Page 12 PART II Incorporated by Reference From: ITEM 5. MARKET FOR - 1999 Annual Report to REGISTRANT'S COMMON Stockholders, pages 30, 37 EQUITY AND RELATED and 56, and Notes 11 and 12 STOCKHOLDER MATTERS to the consolidated financial statements on pages 47-48 ITEM 6. SELECTED FINANCIAL - 1999 Annual Report to DATA Stockholders, pages 54-55 ITEM 7. MANAGEMENT'S - 1999 Annual Report to DISCUSSION AND ANALYSIS Stockholders, pages 22-31 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND - 1999 Annual Report to QUALITATIVE DISCLOSURES Stockholders, page 30 ABOUT MARKET RISK ITEM 8. FINANCIAL - 1999 Annual Report to STATEMENTS AND Stockholders, pages 16-17 SUPPLEMENTARY DATA and 32-52 (INCLUDING ALL SCHEDULES REQUIRED UNDER ITEM 14 OF PART IV) ITEM 9. CHANGES IN AND - None DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Page 13 PART III Incorporated by Reference From: ITEM 10. DIRECTORS AND - Part I; Proxy Statement for EXECUTIVE OFFICERS 2000 Annual Meeting of OF THE REGISTRANT Stockholders, pages 3-8 ITEM 11. EXECUTIVE - Proxy Statement for 2000 COMPENSATION Annual Meeting of Stockholders, pages 14-20 ITEM 12. SECURITY OWNERSHIP - Proxy Statement for 2000 OF CERTAIN BENEFICIAL Annual Meeting of OWNERS AND MANAGEMENT Stockholders, pages 12-13 ITEM 13. CERTAIN RELATION- - Proxy Statement for 2000 SHIPS AND RELATED Annual Meeting of TRANSACTIONS Stockholders, page 11 Page 14 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Documents filed with this Report 1. Consolidated financial statements of FMC Corporation and its subsidiaries are incorporated under Item 8 of this Form 10-K. 2. All required financial statement schedules are included in the consolidated financial statements or notes thereto as incorporated under Item 8 of this Form 10-K. All other schedules are omitted because of the absence of conditions under which they are required or because information called for is shown in the financial statements and notes thereto in the 1999 Annual Report to Stockholders. 3. Exhibits: See attached Index of Exhibits (b) Reports on Form 8-K During the quarter ended December 31, 1999, the Registrant filed reports on Form 8-K as follows: Date Subject ---- ------- December 16, 1999 FMC's anticipated growth in fourth quarter and full year 1999 earnings from continuing operations. (c) Exhibits See Index of Exhibits beginning on page 17 of this document. Page 15 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FMC CORPORATION (Registrant) By: /s/ William H. Schumann III --------------------------- William H. Schumann III Senior Vice President and Chief Financial Officer Date: March 29, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. Signature Title - --------- ----- William H. Schumann III Senior Vice President and /s/ William H. Schumann III Chief Financial Officer --------------------------- William H. Schumann III March 29, 2000 Ronald D. Mambu Vice President, Controller /s/ Ronald D. Mambu and Principal Accounting ------------------------- Officer Ronald D. Mambu March 29, 2000 Robert N. Burt Chairman of the Board and /s/ Robert N. Burt Chief Executive Officer ------------------------- Joseph H. Netherland President /s/ Joseph H. Netherland ------------------------- B.A. Bridgewater, Jr. Director /s/ B.A. Bridgewater, Jr. ------------------------- Patricia A. Buffler Director /s/ Patricia A. Buffler ------------------------- Albert J. Costello Director /s/ Albert J. Costello ------------------------- Paul L. Davies, Jr. Director /s/ Paul L. Davies, Jr. ------------------------- Asbjorn Larsen Director /s/ Asbjorn Larsen ------------------------- Edward J. Mooney Director /s/ Edward J. Mooney ------------------------- William F. Reilly Director /s/ William F. Reilly ------------------------- Enrique J. Sosa Director /s/ Enrique J. Sosa ------------------------- James R. Thompson Director /s/ James R. Thompson ------------------------- Clayton Yeutter Director /s/ Clayton Yeutter ------------------------- Page 16 INDEX OF EXHIBITS FILED WITH OR INCORPORATED BY REFERENCE INTO FORM 10-K OF FMC CORPORATION FOR THE YEAR ENDED DECEMBER 31, 1999 Exhibit - ------- No. Exhibit Description - -- ------------------- 2.1 Purchase Agreement, dated as of August 25, 1997, by and among FMC Corporation, Harsco Corporation, Harsco UDLP Corporation and Iron Horse Acquisition Corp. (incorporated by reference from Exhibit 2.1 to the Form 8-K/A filed on October 16, 1997) 3.1 Restated Certificate of Incorporation, as filed on June 23, 1998 (incorporated by reference from Exhibit 4.1 to the Form S-3 filed on July 21, 1998) 3.2 Restated By-Laws of the company, amended as of February 20, 1998 (incorporated by reference from Exhibit 3.3 to the Annual Report on Form 10-K filed on March 17, 1998) 4.1 Amended and Restated Rights Agreement, dated as of February 19, 1988, between Registrant and Harris Trust and Savings Bank (incorporated by reference from Exhibit 4 to the Form SE (File No. 1-02376) filed on March 25, 1993) 4.2 Amendment to Amended and Restated Rights Agreement, dated February 9, 1996 (incorporated by reference from Exhibit 1 to the Form 8-K filed on February 9, 1996) 4.3 $450,000,000 Five-Year Credit Agreement, dated as of December 6, 1996, among FMC Corporation, the Lenders Party thereto and Morgan Guaranty Trust Company of New York as Agent, J.P. Morgan Securities Inc., Arranger (incorporated by reference from Exhibit 4.3 to 1998 Annual Report on Form 10-K filed on March 25, 1999) 4(iii)(A) Registrant undertakes to furnish to the Commission upon request, a copy of any instrument defining the rights of holders of long-term debt of the Registrant and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which financial statements are required to be filed Page 17 10.1* FMC 1997 Compensation Plan for Non-Employee Directors, as amended April 18, 1997 (incorporated by reference from Exhibit 10.1 to the Quarterly Report on Form 10-Q filed May 15, 1997) 10.1.a* Amendment of FMC Corporation 1997 Plan for Non-Employee Directors 10.2* FMC 1981 Incentive Share Plan, as amended, effective May 28, 1986 (incorporated by reference from Exhibit 10.1 to the Form SE (File No. 1-02376) filed on March 25, 1993) 10.3* FMC 1990 Incentive Share Plan (incorporated by reference from Exhibit 10.1 to the Form SE (File No. 1-02376) filed on March 26, 1991) 10.3.a* Amendment dated April 18, 1997 to FMC 1990 Incentive Share Plan (incorporated by reference from Exhibit 10.3.a to the Quarterly Report on Form 10-Q filed on May 15, 1997) 10.3.b* Amendment to the FMC 1990 Incentive Share Plan 10.4* FMC Corporation Employees' Retirement Program, as amended and restated effective January 1, 1999 10.4.a* First Amendment of FMC Corporation Employee's Retirement Program Part I Salaried and Non-Union Hourly Employees' Plan 10.4.b* First Amendment of FMC Corporation Employees' Retirement Program Part II Union Employees' Plan (dated September 16, 1999) 10.5* FMC Corporation Savings and Investment Plan, as amended and restated as of January 1, 1999 10.6* FMC Salaried Employees' Equivalent Retirement Plan (incorporated by reference from Exhibit 10.4 to the Form SE (File No. 1-02376) filed on March 27, 1992) 10.7* FMC Corporation Non-Qualified Retirement and Thrift Plan (incorporated by reference from Exhibit 10.8 to the Annual Report on Form 10-K filed on March 17, 1998) 10.8* FMC 1995 Management Incentive Plan, as amended as of October 17, 1997 (incorporated by reference from Exhibit 10.9 to the Annual Report on Form 10-K filed on March 17, 1998) _______________________ * Indicates a management contract or compensatory plan or arrangement. Page 18 10.9* FMC 1995 Stock Option Plan, as amended as of April 18, 1997 (incorporated by reference from Exhibit 10.10 to the Form 10-Q filed on May 15, 1997) 10.9.a* Amendment to the FMC 1995 Stock Option Plan (As Amended 4/18/97) (Dated September 16, 1999) 10.10* FMC Corporation Executive Severance Plan, as amended as of April 18, 1997 (incorporated by reference from Exhibit 10.11 to the Annual Report on Form 10-K filed on March 17, 1998) 10.11* Master Trust Agreement between FMC Corporation and Fidelity Management Trust Company, dated June 1, 1997 (incorporated by reference from Exhibit 10.12 to the Annual Report on Form 10-K filed on March 17, 1998) 10.12* FMC Corporation Defined Benefit Retirement Trust, as amended and restated as of August 31, 1999 10.13 Fiscal Agency Agreement between FMC Corporation and Union Bank of Switzerland, Fiscal Agent, dated as of January 16, 1990 (incorporated by reference from Exhibit 10.4 to the Form SE (File No. 1-02376) filed on March 28, 1990) 10.15 Supplemental Agreement No. 1 to Purchase Agreement, dated as of August 25, 1997, by and among FMC Corporation, Harsco Corporation, Harsco UDLP Corporation and Iron Horse Acquisition Corp. (incorporated by reference from Exhibit 16.1 to the Form 8-K/A filed on December 23, 1997) 10.16 Allocation and Contribution Agreement, by and among FMC Corporation, Harsco Corporation and Harsco UDLP Corporation (incorporated by reference from Exhibit 10.1 to the Form 8-K/A filed on December 23, 1997) 12 Statement re Computation of Ratios of Earnings to Fixed Charges 13 1999 Annual Report to Stockholders is included as an Exhibit to this report for the information of the Securities and Exchange Commission and, except for those portions thereof specifically incorporated by reference elsewhere herein, such Annual Report should not be deemed filed as a part of this report. 21 List of Significant Subsidiaries of Registrant 23 Consent of KPMG LLP 24 Powers of Attorney 27 Financial Data Schedule __________________ * Indicates a management contract or compensatory plan or arrangement. Page 19 EX-10.1A 2 AMENDMENT OF 1997 PLAN FOR NON-EMPLOYEE DIRECTORS Amendment --------- of -- FMC Corporation 1997 Compensation Plan for Non-Employee Directors ----------------------------------------------------------------- WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation 1997 Compensation Plan for Non-Employee Directors (the "Plan"); and WHEREAS, the Company previously has amended the Plan and now considers it desirable to further amend the Plan. NOW, THEREFORE, in exercise of the authority delegated to the undersigned officer by Resolution of the Company's Board of Directors and by virtue of the power reserved to the Company under Section 8 of the Plan, the Plan, as previously amended, be and is hereby further amended, effective as of October 17, 1997, in the following particulars: 1. By adding the following new sentence to paragraph 2(d) of the Plan: "Each Option that has not vested under the foregoing provisions of this paragraph, will vest and become exercisable upon a Change in Control." 2. By substituting the following for paragraph (d) of Annex A to the Plan: "d. A 'Change in Control' of the Company shall be deemed to have occurred as of the first day that any one or more of the following condition is satisfied: (1) The 'beneficial ownership' (as defined in Rule 13d-3 under the Exchange Act) of securities representing more than 20 percent (20%) of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the 'Company Voting Securities') is acquired by a `Person' as defined in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate thereof, any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company); provided, however that any acquisition from the Company or any acquisition pursuant to a transaction that complies with clauses (i), (ii) and (iii) of paragraph (3) of this paragraph d shall not be a Change in Control under this paragraph (1); or (2) Individuals who, as of the date hereof, constitute the Board of Directors (the `Incumbent Board') cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or (3) Consummation by the Company of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets or stock of another entity (a `Business Combination'), in each case, unless immediately following such Business Combination: (i) more than 60% of the combined voting power of then outstanding voting securities entitled to vote generally in the election of directors of (x) the corporation resulting from such Business Combination (the `Surviving Corporation'), or (y) if applicable, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries (the `Parent Corporation'), is represented, directly or indirectly by Company Voting Securities outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Company Voting Securities, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that such ownership of the Company existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (4) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. However, in no event shall a Change in Control be deemed to have occurred, with respect to the Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed -2- 'part of a purchasing group' for purposes of the preceding sentence if the Participant is an equity participant in the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the nonemployee continuing Directors)." IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan to be executed this 16th day of September , 1999. FMC Corporation By: /s/ Michael Murray ---------------------------------------- Its: Vice President, Human Resources -------------------------------- -3- EX-10.3B 3 AMENDMENT TO 1990 INCENTIVE SHARE PLAN Amendment --------- to the ------ FMC 1990 Incentive Share Plan ----------------------------- WHEREAS, FMC Corporation (the "Company") maintains the FMC 1990 Incentive Share Plan (the "Plan"); and WHEREAS, the Company previously has amended the Plan and the Company now considers it desirable to further amend the Plan. NOW, THEREFORE, in exercise of the authority delegated to the undersigned officer by Resolution of the Company's Board of Directors and by virtue of the power reserved to the Company under Section 12(a) of the Plan, the Plan, as previously amended, be and is hereby further amended, by substituting the following for Section 11(a) of the Plan, effective as of September 1, 1999: "(a) Assignment and Transfer. Except as provided below, Options shall not be transferable other than by will or the laws of descent and distribution, shall not be subject to execution, attachment or similar process, and may be exercised or otherwise realized, during the grantee's lifetime, only by the grantee or his or her guardian or legal representative. (i) Beginning September 1, 1999, an Option agreement for a grant of Nonqualified Stock Options, may permit or may be amended to permit the Participant who received the Option, at any time prior to the Participant's death, to assign all or any portion of the Option granted to him or her to: (A) the Participant's spouse or lineal descendants; (B) the trustee of a trust for the primary benefit of the Participant, the Participant's spouse or lineal descendants, or any combination thereof; (C) a partnership of which the Participant, the Participant's spouse and/or lineal descendants are the only partners; (D) custodianships under the Uniform Transfers to Minors Act or any other similar statute; or (E) upon the termination of a trust by the custodian or trustee thereof, or the dissolution or other termination of the family partnership or the termination of a custodianship under the Uniform Transfers to Minors Act or other similar statute, to the person or persons who, in accordance with the terms of such trust, partnership or custodianship are entitled to receive Options held in trust, partnership or custody. In such event, the spouse, lineal descendant, trustee, partnership or custodianship will be entitled to all of the Participant's rights with respect to the assigned portion of such Option, and such portion of the Option will continue to be subject to all of the terms, conditions and restrictions applicable to the Option, as set forth herein and in the related option agreement. Any such assignment will be permitted only if: (x) the Participant does not receive any consideration therefor; and (y) the assignment is expressly permitted by the applicable Option agreement and any amendment thereto as approved by the Committee. The Committee's approval of an Option agreement with assignment rights or amendment of an Option agreement to allow for assignment rights for any one Participant shall not require the Committee to include such assignment rights in an Option agreement or any amendment thereto with any other Participant. Any such assignment shall be evidenced by an appropriate written document executed by the Participant, and the Participant shall deliver a copy thereof to the Committee on or prior to the effective date of the assignment. (iii) An assignee or transferee of an Option must sign an agreement with FMC to be bound by the terms of the applicable Option agreement." IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan to be executed this 16th day of September, 1999. FMC Corporation By: /s/ Michael Murray ------------------------------------ Its: Vice President, Human Resources --------------------------------- -2- EX-10.4 4 EMPLOYEES' RETIREMENT PROGRAM FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART I SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN TABLE OF CONTENTS ----------------- INTRODUCTION................................................................ 1 ARTICLE I................................................................... 2 Definitions................................................................. 2 Actuarial Equivalent........................................................ 2 Administrator............................................................... 2 Affiliate................................................................... 2 Annuity Starting Date....................................................... 3 Beneficiary................................................................. 3 Board....................................................................... 3 Code........................................................................ 3 Committee................................................................... 3 Company..................................................................... 3 Early Retirement Benefit.................................................... 3 Early Retirement Date....................................................... 4 Earnings.................................................................... 4 Effective Date.............................................................. 4 Eligible Employee........................................................... 4 Employee.................................................................... 5 Employee Contributions...................................................... 5 Employment Commencement Date................................................ 5 ERISA....................................................................... 5 50% Joint and Survivor's Annuity............................................ 5 Final Average Yearly Earnings............................................... 5 Foreign Subsidiary.......................................................... 6 Hour of Service............................................................. 6 Individual Life Annuity..................................................... 6 Interest.................................................................... 6 Investment Manager.......................................................... 6 Joint Annuitant............................................................. 6 Leased Employee............................................................. 6 Level Income Option......................................................... 6 Normal Retirement Date...................................................... 6 100% Joint and Survivor's Annuity........................................... 6 One-year Period of Severance................................................ 6 Participant................................................................. 7 Participating Employer...................................................... 7 Period of Service........................................................... 7 Period of Severance......................................................... 7 Plan........................................................................ 7 Plan Year................................................................... 7 i Primary Social Security Benefit............................................. 7 Reemployment Commencement Date.............................................. 7 Severance From Service Date................................................. 7 Social Security Covered Compensation Base................................... 8 Supplement.................................................................. 8 Thrift Plan................................................................. 8 Trust....................................................................... 8 Trust Fund.................................................................. 9 Year of Credited Service.................................................... 9 Year of Vesting Service..................................................... 9 ARTICLE II.................................................................. 11 Participation............................................................... 11 2.1 Eligibility and Commencement of Participation.......................... 11 2.2 Provision of Information............................................... 11 2.3 Termination of Participation........................................... 11 2.4 Special Rules Relating to Veterans' Reemployment Rights. .............. 11 ARTICLE III................................................................. 12 Normal, Early and Deferred Retirement Benefits.............................. 12 3.1 Normal Retirement Benefits............................................. 12 3.2 Early Retirement Benefits.............................................. 13 3.3 Deferred Retirement Benefits........................................... 13 3.4 Suspension of Benefits................................................. 14 3.5 Benefit Limitations.................................................... 17 ARTICLE IV.................................................................. 20 Termination Benefits........................................................ 20 4.1 Termination of Service................................................. 20 4.2 Amount of Termination Benefit.......................................... 20 ARTICLE V................................................................... 22 Refund of Employee Contributions............................................ 22 5.1 Employee Contributions................................................. 22 5.2 Withdrawal of Employee Contributions................................... 22 5.3 Refund Upon Death Before Annuity Starting Date......................... 22 5.4 Refund After Annuity Starting Date..................................... 22 ARTICLE VI.................................................................. 24 Payment of Retirement Benefits.............................................. 24 6.1 Normal Form of Benefit................................................. 24 6.2 Available Forms of Benefits............................................ 24 6.3 Five Year Certain Benefit.............................................. 25 6.4 Election of Benefits................................................... 25 6.5 Joint Annuitants....................................................... 27 ARTICLE VII................................................................. 28 ii Survivor's Benefits......................................................... 28 7.1 Preretirement Survivor's Benefit....................................... 28 7.2 Surviving Spouse's Benefit............................................. 29 7.3 Certain Former Employees............................................... 29 ARTICLE VIII................................................................ 31 Fiduciaries................................................................. 31 8.1 Named Fiduciaries...................................................... 31 8.2 Employment of Advisers................................................. 31 8.3 Multiple Fiduciary Capacities.......................................... 31 8.4 Payment of Expenses.................................................... 31 8.5 Indemnification........................................................ 32 ARTICLE IX.................................................................. 33 Plan Administration......................................................... 33 9.1 Powers, Duties and Responsibilities of the Administrator............... 33 9.2 Delegation of Administration Responsibilities.......................... 33 9.3 Committee Members...................................................... 34 ARTICLE X................................................................... 35 Funding of the Plan......................................................... 35 10.1 Appointment of Trustee................................................. 35 10.2 Actuarial Cost Method.................................................. 35 10.3 Cost of the Plan....................................................... 35 10.4 Funding Policy......................................................... 35 10.5 Cash Needs of the Plan................................................. 36 10.6 Public Accountant...................................................... 36 10.7 Enrolled Actuary....................................................... 36 10.8 Basis of Payments to the Plan.......................................... 36 10.9 Basis of Payments from the Plan........................................ 36 ARTICLE XI.................................................................. 37 Plan Amendment or Termination............................................... 37 11.1 Plan Amendment or Termination.......................................... 37 11.2 Limitations on Plan Amendment.......................................... 37 11.3 Effect of Plan Termination............................................. 37 11.4 Allocation of Trust Fund on Termination................................ 37 ARTICLE XII................................................................. 39 Miscellaneous Provisions.................................................... 39 12.1 Subsequent Changes..................................................... 39 12.2 Plan Mergers........................................................... 39 12.3 No Assignment of Property Rights....................................... 39 12.4 Beneficiary............................................................ 40 12.5 Benefits Payable to Minors, Incompetents and Others.................... 40 12.6 Employment Rights...................................................... 41 12.7 Proof of Age and Marriage.............................................. 41 iii 12.8 Small Annuities....................................................... 41 12.9 Controlling Law....................................................... 41 12.10 Direct Rollover Option................................................ 41 12.11 Claims Procedure...................................................... 42 12.11 Claims Procedure...................................................... 42 12.12 Participation in the Plan by an Affiliate............................. 44 12.13 Action by Participating Employers..................................... 44 ARTICLE XIII................................................................ 45 Top Heavy Provisions........................................................ 45 13.1 Top Heavy Definitions................................................. 45 13.2 Determination of Top Heavy Status..................................... 48 13.3 Minimum Benefit Requirement for Top Heavy Plan........................ 48 13.4 Vesting Requirement for Top Heavy Plan................................ 49 EXHIBIT A - Credited Service................................................ 51 EXHIBIT B - Inactive Locations.............................................. 52 EXHIBIT C - Merged Plans.................................................... 53 EXHIBIT D - Certain Retired Participants.................................... 54 EXHIBIT E - Actuarial Equivalence Tables.................................... 58 SUPPLEMENT 1 - Specialty Chemicals Division, Livonia, Michigan.............. 59 SUPPLEMENT 2 - Marine Colloids Division..................................... 60 SUPPLEMENT 3 - Jetway Equipment Division.................................... 63 SUPPLEMENT 4 - Stein........................................................ 65 SUPPLEMENT 5 - Moorco International Inc. Retirement Income Plan............ 66 SUPPLEMENT 6 - Smith Meter, Inc. Salaried Retirement Plan.................. 68 iv FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART I SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN INTRODUCTION The FMC Corporation Employees' Retirement Program ("Program"), previously known as the FMC Corporation Salaried Employees' Retirement Plan ("Salaried Plan") was established, effective September 30, 1941, as the Employees' Retirement Plan. The Salaried Plan was subsequently amended, certain plans were subsequently merged into it, including certain frozen and union plans, and the FMC Corporation Salaried Employees' Retirement Plan was renamed as the Program. The Program consists of two parts, Part I Salaried and Nonunion Hourly Employees' Retirement Plan and Part II Union Hourly Employees' Retirement Plan, which are contained in two separate plan documents. Supplements to Part I and Part II of the Program contain provisions which apply only to a specific group of Employees or Participants as specified therein and override any contrary provision of the Program or either Part I or Part II. This document is Part I Salaried and Nonunion Hourly Employees' Retirement Plan ("Plan") and covers the eligible employees as provided in Article II Participation. This document is an amendment and restatement of the Plan generally effective as of January 1, 1999, except as and to the extent otherwise provided herein. This document shall not be construed to affect the making of contributions or alter the right to participate in the Plan with respect to any Plan Year ending before January 1, 1999, to affect a Participant's accrued benefit for any such prior Plan Year or to alter in any way the rights of any Participant, Joint Annuitant or Beneficiary who has retired, died, or with respect to whom there has been a Severance From Service Date before January 1, 1999. The Plan is intended to be qualified under Code Section 401(a), and its associated trust is intended to be tax exempt under Code Section 501(a). The Plan is intended also to meet the requirements of ERISA and shall be interpreted, wherever possible, to comply with the terms of the Code and ERISA. The Plan is intended to provide a regular monthly retirement benefit for employees who meet the eligibility requirements. 1 ARTICLE I Definitions ----------- For purposes of this Plan and any amendments to it, the following terms have the meanings ascribed to them below. Actuarial Equivalent means a benefit determined to be of equal value to another benefit on the basis of either (a) the actuarial assumptions in Exhibit E-1, E-2, E-3 or E-4, as applicable, or (b) the mortality table and interest rate described in the applicable Supplement. Notwithstanding the foregoing, for purposes of Section 12.8, Actuarial Equivalent value shall be determined as follows: (i) for Annuity Starting Dates occurring prior to June 1, 1995, based on the actuarial assumptions in Exhibit E-4; provided that the interest rate shall not exceed the rate for immediate annuities used by the Pension Benefit Guaranty Corporation for plans terminating on the first day of the Plan Year that contains the Annuity Starting Date; (ii) for Annuity Starting Dates occurring on or after June 1, 1995, with respect to any Participant who had an Hour of Service prior to August 31, 1999, based on the 1983 Group Annuity Mortality Table (weighed 50% male and 50% female) (or the applicable mortality table prescribed under Section 417(e)(3) of the Code) and the lesser of the interest rate in Exhibit E-4 or the applicable interest rate prescribed under Section 417(e)(3) of the Code for the November preceding the Plan Year that contains the Annuity Starting Date; and (iii) for Annuity Starting Dates occurring on or after August 31, 1999, with respect to any Participant who did not have an Hour of Service prior to July 1, 1999, based on the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female) (or the applicable mortality table, prescribed under Section 417(e)(3) of the Code) and the applicable interest rate prescribed under Section 417(e)(3) of the Code for the November preceding the Plan Year that contains the Annuity Starting Date. Administrator means the Company. The Plan is administered by the Company through the Committee. The Administrator and the Committee have the responsibilities specified in Article IX. Affiliate means any corporation, partnership, or other entity that is: (a) a member of a controlled group of corporations of which the Company is a member (as described in Code Section 414(b)); 2 (b) a member of any trade or business under common control with the Company (as described in Code Section 414(c)); (c) a member of an affiliated service group that includes the Company (as described in Code Section 414(m)); (d) an entity required to be aggregated with the Company pursuant to regulations promulgated under Code Section 414(o); or (e) a leasing organization that provides Leased Employees to the Company or an Affiliate (as determined under paragraphs (a) through (d) above), unless (i) the Leased Employees constitute less than 20% of the nonhighly compensated workforce of the Company and Affiliates (as determined under paragraphs (a) through (d) above); and (ii) the Leased Employees are covered by a plan described in Code Section 414(n)(5). "Leasing organization" has the meaning ascribed to it in the definition of "Leased Employee" below. For purposes of Section 3.5, the 80% thresholds of Code Sections 414(b) and (c) are deemed to be "more than 50%," rather than "at least 80%." Annuity Starting Date means the first day of the first period for which an amount is paid in an annuity or other form of benefit. In the case of a lump sum distribution, the Annuity Starting Date is the date payment is actually made. Beneficiary means the person or persons determined pursuant to Section 12.4. Board means the board of directors of the Company. Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific provision of the Code includes that provision, any successor to it and any valid regulation promulgated under the provision or successor provision. Committee means the FMC Employee Welfare Benefits Plan Committee as described in Section 9.3, its authorized delegatee and any successor to the Committee. Company means FMC Corporation, a Delaware corporation, and any successor to it. Early Retirement Benefit means the benefits determined pursuant to Section 3.2. 3 Early Retirement Date means (a) in the case of an Employee who became a Participant before January 1, 1984, the Participant's 55th birthday; and (b) in the case of an Employee who became a Participant after December 31, 1983, the later of the Participant's 55th birthday and the date the Participant acquires 10 Years of Credited Service. Earnings means the Participant's total compensation paid as an Eligible Employee, including overtime, administrative and discretionary bonuses, the Participant's Employee-elected Company contributions under the Thrift Plan and amounts contributed to a plan described in Code Section 125 or 132, and sales bonuses and sales commissions earned and paid within a reasonable period of time after the end of the Plan Year, and incentive compensation earned pursuant to an incentive compensation arrangement and paid within a reasonable period of time after the end of the Plan Year, but excluding hiring bonuses, stay bonuses, awards, deferred compensation, severance pay, accrued (but not earned) vacation, other special payments such as reimbursements, relocation or moving expense allowances, stock options, other stock-based compensation, other distributions that receive special tax benefits, any amounts paid by a Participating Employer to cover an Employee's FICA tax obligation as to amounts deferred or accrued under any nonqualified retirement plan of a Participating Employer, and any gross-up paid by a Participating Employer or Employee FICA amounts it pays. Earnings also includes sick pay or sickness benefits, but not disability benefits from the Long-term Disability Plan for Employees of FMC Corporation. A Participant's Earnings will be conclusively determined according to the Company's records. The annual amount of Earnings taken into account for a Participant must not exceed $160,000 (as adjusted by the Internal Revenue Service for cost- of-living increases in accordance with Code Section 401(a)(17)(B)). Effective Date means January 1, 1999 or, if later, an Employee's Employment Commencement Date or Reemployment Commencement date, whichever is applicable. Eligible Employee means an Employee of a Participating Employer who is employed on a salaried basis or in such other classifications as the Company may designate as salaried positions, other than: (a) a Leased Employee; (b) a member of a bargaining unit covered by a collective bargaining agreement that does not specifically provide for participation in the Plan by members of the bargaining unit; or (c) any Employee who generally resides outside the United States or whose principal duties generally are performed outside the United States as determined by the Company, unless such individual is a United States citizen or permanent resident alien or the Company designates such individual as an Eligible Employee. 4 Any individual who is a United States citizen or permanent resident alien and who is employed by a Foreign Subsidiary in a position which would make such individual an Eligible Employee if employed by the Company shall be deemed to be employed by the Company, provided that no entity other than the Company makes contributions under any funded plan of deferred compensation (other than the Thrift Plan or any governmental retirement plan) with respect to the remuneration such individual receives from such Foreign Subsidiary. Employee means a common law employee or Leased Employee of the Company or an Affiliate, subject to the following rules: (a) a person who is not a Leased Employee and who is engaged as an independent contractor is not an Employee; (b) only individuals who are paid as employees from the payroll of the Company or an Affiliate and treated as employees are Employees under the Plan; and (c) any person retroactively found to be a common law employee shall not be eligible to participate in the Plan for any period he was not an Employee under the Plan. Employee Contributions means required contributions made by Participants to the Plan or prior plans prior to May 1, 1969. Employment Commencement Date means the date on which the Employee first performs an Hour of Service. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a specific provision of ERISA includes the provision, any successor provision and any valid regulation promulgated under the provision or successor provision. 50% Joint and Survivor's Annuity means the immediate annuity determined pursuant to Section 6.1.2. Final Average Yearly Earnings means 1/5th of the sum of the Participant's Earnings while an Eligible Employee for the 60 consecutive calendar months (not taking into account months in which the Participant had no Earnings) out of the past 120 calendar months in which such Earnings were the highest. If the commencement of a Participant's retirement benefits hereunder is preceded by a period of long-term disability, the Company may adjust Final Average Yearly Earnings on a nondiscriminatory basis. With respect to Participants who accepted offers of employment with Snap-On Incorporated ("Snap- On") as a result of the Company's sale of assets of its Automotive Service Equipment Division to Snap-On, the Participants' Earnings shall include eligible wages with Snap-On and its subsidiaries for purposes of calculating Final Average Yearly Earnings. 5 Foreign Subsidiary means a foreign corporation covered by an agreement between the Company and the Internal Revenue Service extending Federal Social Security benefits to such foreign corporation's employees who are United States citizens, provided that either (a) not less than 20% of the voting stock of such foreign corporation is owned by the Company or (b) more than 50% of the voting stock of such foreign corporation is owned by another foreign corporation which is described in (a) above. Hour of Service means each hour for which an Employee is directly or indirectly paid or entitled to payment by the Company or an Affiliate for the performance of duties. Individual Life Annuity means the annuity determined pursuant to Section 6.1.1. Interest means interest compounded annually at the following rates: (a) for periods prior to January 1, 1976, (i) if Employee Contributions are withdrawn in a lump sum before or upon retirement, 3%; (ii) if Employee Contributions are left in the Plan to provide an adjustment to the retirement benefit, 5%; (b) for periods after December 31, 1975, 5%. Investment Manager means a person who is an "investment manager" as defined in section 3(38) of ERISA. Joint Annuitant means the individual determined pursuant to Section 6.5. Leased Employee means an individual who performs services for the Company or an Affiliate on a substantially full-time basis for a period of at least one year, under the primary direction or control of the Company or an Affiliate, and under an agreement between the Company or Affiliate and a leasing organization. The leasing organization can be a third party or the Leased Employee himself. Level Income Option means the annuity determined pursuant to Section 6.2.4. Normal Retirement Date means the Participant's 65th birthday. 100% Joint and Survivor's Annuity means the immediate annuity determined pursuant to Section 6.2.3. One-Year Period of Severance means a 12-consecutive-month period commencing on an Employee's Severance From Service Date in which the Employee is not credited with an Hour of Service. 6 Participant means an Eligible Employee who has begun, but not ended, his or her participation in the Plan pursuant to the provisions of Article II. Participating Employer means the Company and each other Affiliate that adopts the Plan with the consent of the Board, as provided in Section 12.12. Period of Service means the period commencing on the Effective Date and ending on the Severance From Service Date. All Periods of Service (whether or not consecutive) shall be aggregated. Notwithstanding the foregoing, if an Employee incurs a One-Year Period of Severance at a time when he or she has no vested interest under the Plan and the Employee does not perform an Hour of Service within 5 years after the beginning of the One-Year Period of Severance, or fails to complete a Period of Vesting Service of 1 year after he or she performs an Hour of Service following the One-Year Period of Severance, the Period of Vesting Service prior to such One-Year Period of Severance shall not be aggregated. Period of Severance means the period commencing on the Severance From Service Date and ending on the date on which the Employee again performs an Hour of Service. Plan means Part I FMC Corporation Salaried and Nonunion Hourly Employees' Retirement Plan of the FMC Employees' Retirement Program. Plan Year means the 12-month period beginning on January 1 and ending the next December 31. Primary Social Security Benefit means the primary benefit which the Participant is eligible to receive at age 65 under the old age portion of the Federal Old Age, Survivors' and Disability Insurance Program assuming that after termination of employment with the Company and Affiliates the Participant has no further earnings subject to such programs. A Participant's Primary Social Security Benefit shall be determined by taking his Earnings at the time of his employment and applying a salary scale, projected backwards, reflecting the actual change in the average wage from year to year as determined by the Social Security Administration. Reemployment Commencement Date means the first date following a Period of Severance which is not required to be taken into account for purposes of an Employee's Period of Vesting Service on which the Employee performs an Hour of Service. Severance From Service Date means the earliest of: (a) the date on which an Employee voluntarily terminates, retires, is discharged or dies; (b) the first anniversary of the first date of a period in which an Employee remains absent from service (with or without pay) with the Company and Affiliates for any reason other than voluntary termination, retirement, discharge or death; or 7 (c) the second anniversary of the date an Employee is absent pursuant to a maternity or paternity leave of absence; provided, however, that the period between the first and second anniversaries of the first date of such absence shall be neither a Period of Service nor a One-Year Period of Severance. Notwithstanding the foregoing, a Severance From Service Date shall not be considered to have occurred under the following circumstances: (i) during a leave of absence, vacation or holiday with pay; (ii) during a leave of absence without pay granted by reason of disability or under the Family and Medical Leave Act of 1993; (iii) during a period of qualified military service, provided the Employee makes application to return within 90 days after completion of active service and returns to active employment as an Employee while reemployment rights are protected by law. If the Employee does not so return, the Employee shall have a Severance From Service Date on the first anniversary of the date of entry into military service. If the Employee violates the terms of a leave of absence, the Employee shall be deemed to have voluntarily terminated as of the date of such violation. In the case of a leave in excess of 12 months, if the Employee fails to return to active employment immediately after such leave, the Employee shall be deemed to have voluntarily terminated as of the last day of the 12th month of the leave. A "maternity or paternity leave of absence" means an absence from work by reason of the Employee's pregnancy, birth of the Employee's child, placement of a child with the Employee in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement. Social Security Covered Compensation Base means the average of the compensation and benefit bases in effect under Section 230 of the Social Security Act for each year in the 35-year period ending with the year in which the participant attains Social Security retirement age as defined in Section 415(b)(8) of the Code. Supplement means the provisions of the Plan which apply only to a specific group of Employees or Participants as detailed in such Supplement and which override any contrary provision of the Plan. Thrift Plan means the FMC Corporation Employees' Thrift and Stock Purchase Plan, as amended from time to time. Trust means the trust established by the Trust Agreement. "Trust Agreement" means the trust agreement or agreements, as amended from time to time, entered into by the 8 Company and the Trustee pursuant to Section 8.1. "Trustee" means the trustee or trustees at any time appointed by the Company pursuant to Section 8.1. Trust Fund means the trust fund established and maintained by the Trustee to hold all assets of the Plan pursuant to the Trust Agreement. Year of Credited Service means (a) the Employee's Years of Credited Service prior to the Effective Date, and (b) the total number of calendar months during the Employee's Period of Service while the Employee is an Eligible Employee and after he has become a Participant divided by 12. A partial month in such Period of Service counts as a whole month, and fractional Years of Credited Service shall be taken into account in determining a Participant's benefits. Year of Credited Service shall also include such other periods as the Company recognizes as a Year of Credited Service, pursuant to written and nondiscriminatory rules. Notwithstanding the foregoing, Credited Service shall not include (i) any leave of absence without pay unless the Employee returns to active employment as an Employee immediately after such leave and abides by all the terms of the leave, (ii) any maternity or paternity leave of absence unless the Employee returns to active employment as an Employee within 12 months after the first day of such leave, or (iii) any period of service with respect to which such Eligible Employee accrues a benefit under any pension, profit sharing or other retirement plan listed on Exhibit A. Year of Vesting Service means (a) the Employee's Years of Service prior to the Effective Date, and (b) the total number of calendar months during the Employee's Period of Service divided by 12, determined in accordance with the following rules: (i) a partial month in the Employee's Period of Service counts as a whole month; (ii) if the Employee has a Severance From Service Date by reason of a voluntary termination, discharge or retirement and the Employee then performs 1 Hour of Service within 12 months of the Severance From Service Date, such Period of Severance is included in the Period of Vesting Service. If the Employee has a Severance From Service Date by reason of a voluntary termination, discharge or retirement during an absence from service of 12 months or less for any reason other than a voluntary termination, discharge or retirement, and then performs 1 Hour of Service within 12 months of the date on which the Employee was first absent from service, such Period of Severance is included in the Period of Vesting Service; (iii) period of Vesting Service also includes the following: (1) a period of employment with an employer substantially all of the equity interest or assets of which have been acquired by the Company or an Affiliate, but only to the extent that the Company 9 expressly recognizes such period as a Period of Vesting Service pursuant to written and nondiscriminatory rules; and (2) such other periods as the Company recognizes as a Period of Vesting Service pursuant to written and nondiscriminatory rules. 10 ARTICLE II Participation ------------- 2.1 Eligibility and Commencement of Participation --------------------------------------------- Except as otherwise provided in the applicable Supplement, each Employee shall automatically become a Participant in the Plan as of the first day of the month in which the Participant satisfies all of the following requirements: (a) the Employee is an Eligible Employee; and (b) the Employee either (i) is a permanent, full-time Employee, or (ii) has completed not less than 1,000 Hours of Service in a 12- month period beginning on the date his employment commenced or any anniversary thereof. 2.2 Provision of Information ------------------------ Each Participant must make available to the Administrator any information it reasonably requests. As a condition of participation in the Plan, an Employee agrees, on his or her own behalf and on behalf of all persons who may have or claim any right by reason of the Employee's participation in the Plan, to be bound by all provisions of the Plan. 2.3 Termination of Participation ---------------------------- A Participant ceases to be a Participant when he or she dies or, if earlier, when his or her entire vested benefit accrued under the Plan has been paid to him or her. 2.4 Special Rules Relating to Veterans' Reemployment Rights ------------------------------------------------------- Notwithstanding any provision of this Plan to the contrary, with respect to an Eligible Employee or Participant who is reemployed in accordance with the reemployment provisions of the Uniformed Services Employment and Reemployment Rights Act following a period of qualifying military service (as determined under such Act), contributions, benefits and service credit will be provided in accordance with Section 414(u) of the Code. 11 ARTICLE III Normal, Early and Deferred Retirement Benefits ---------------------------------------------- 3.1 Normal Retirement Benefits -------------------------- 3.1.1 Normal Retirement: A Participant who retires on the Normal Retirement Date shall be entitled to receive a Normal Retirement Benefit determined under Section 3.1.2. Payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's Normal Retirement Date, unless the Participant elects to defer commencement subject to Section 3.3.2. 3.1.2 Calculation of Normal Retirement Benefit: Subject to Section 3.1.3, a Participant's monthly Normal Retirement Benefit shall be equal to the product of (a) multiplied by (b) below: (a) 1/12th of the sum of (i) and (ii) below: (i) the sum of (1) 1% of the Participant's Final Average Yearly Earnings up to the Social Security Covered Compensation Base and (2) 1-1/2% of the Participant's Final Average Yearly Earnings in excess of the Social Security Covered Compensation Base multiplied by the Participant's expected Years of Credited Service at age 65 up to 35 Years of Credited Service; and (ii) 1-1/2% of the Participant's Final Average Yearly Earnings multiplied by the Participant's expected Years of Credited Service at age 65 in excess of 35 Years of Credited Service. (b) the ratio of actual Years of Credited Service to expected Years of Credited Service at age 65. In no event, however, shall a Participant's monthly Normal Retirement Benefit be less than his or her accrued monthly Normal Retirement Benefit under the Plan as of December 31, 1990. 3.1.3 Increases for Employee Contributions: A Participant's Normal Retirement Benefit shall be increased $1 for each $120.00 of unwithdrawn Employee Contributions and Interest credited to the Participant. 3.1.4 Reductions for Certain Benefits: A Participant's Normal Retirement Benefit shall be reduced by the value of (a) the Participant's vested benefit accrued under the Plan as of November 30, 1985 (to the extent funded by an individual Aetna nonparticipating annuity) and (b) any vested benefit payable to the Participant under any pension, profit sharing or other retirement plan other than the Thrift Plan (hereinafter called "Duplicate Benefit Plan") which is attributable to any period which counts as Credited Service under this Plan. For 12 purposes of determining the amount of the reduction, the vested benefit under the Duplicate Benefit Plan shall be converted to a form which is identical to the form of benefit which is to be paid under this Plan. Such conversion will be made using the actuarial assumptions in effect (as shown on Exhibits E- 1, E-2, E-3, and E-4, as amended from time to time) as of the Annuity Starting Date. The value of the Participant's vested benefit under the Duplicate Benefit Plan shall be determined as of the earlier of such date or the date distribution of such vested benefit was made or commenced. 3.2 Early Retirement Benefits ------------------------- 3.2.1 Early Retirement: A Participant who retires on or after the Early Retirement Date shall be entitled to receive an Early Retirement Benefit determined under Section 3.2.2. Payment of such benefit shall commence as of the first of the month after the Participant retires or, if the Participant elects, as of the first day of any subsequent month. Any such election of a deferred commencement date may be revoked at any time prior to such date and a new date may be elected by giving advance written notice to the Administrator in accordance with rules prescribed by the Administrator. 3.2.2 Calculation of Early Retirement Benefit: Subject to Sections 3.2.3 and 3.2.4, a Participant's monthly Early Retirement Benefit shall be equal to the greater of (a) or (b) below: (a) an amount determined pursuant to Section 3.1.2; and (b) the Participant's accrued monthly unreduced Early Retirement Benefit under the Plan as of December 31, 1990. 3.2.3 Early Retirement Reduction Factor: The Participant's Early Retirement Benefit computed pursuant to Section 3.2.2 shall be reduced by 1/3 of 1% for each month in excess of 36 by which the commencement of the Participant's Early Retirement Benefit precedes the Participant's 62nd birthday. 3.2.4 Adjustments to Early Retirement Benefit: A Participant's Early Retirement Benefit shall be increased as provided in Section 3.1.3 except that the number of dollars of unwithdrawn Employee Contributions and Interest required to provide $1 of monthly retirement benefits shall be increased by $3 for each full year by which the commencement of the Participant's Early Retirement Benefit precedes the Participant's Normal Retirement Date. 3.3 Deferred Retirement Benefits ---------------------------- 3.3.1 Deferred Retirement: A Participant who retires after the Normal Retirement Date shall be entitled to receive a Normal Retirement Benefit determined under Section 3.1.2 commencing as of the first day of the month coinciding with or next following the date the Participant actually retires. Each Participant shall accrue additional benefits hereunder after the Participant's Normal Retirement Date with respect to the portion of the Normal Retirement Benefit which is attributable to contributions by the Company, and the amount of Employee Contributions and Interest required to provide $1 of monthly retirement benefit under 13 Section 3.1.3 shall be decreased by $3 for each full year by which the commencement of the Normal Retirement Benefit follows the Normal Retirement Date. 3.3.2 Distribution Requirements: Except as hereinafter provided, unless the Participant elects otherwise in accordance with the terms of the Plan, payment of a Participant's retirement benefits will begin no later than 60 days after the close of the Plan Year in which the latest of the following events occurs: (a) the Participant's 65th birthday; (b) the 10th anniversary of the year in which the Participant commenced participation in the Plan; and (c) the Participant terminates employment with the Company and all Affiliates. If the amount of the payment required to commence on the date determined under this Section 3.3.2 cannot be ascertained by such date, or if it is not possible to make such payment on such date because the Administrator cannot locate the Participant after making reasonable efforts to do so, a payment retroactive to such date may be made no later than 60 days after the earliest date on which the amount of such payment can be ascertained under this Plan or the date the Participant is located. Notwithstanding any other provision of this Plan: (i) the accrued benefit of a Participant who attains age 70-1/2 on or after January 1, 2000 must be distributed or commence to be distributed no later than the April 1 following the later of (1) the calendar year in which the Participant attains age 70-1/2 or (2) the calendar year in which the Participant retires (unless the Participant is a 5% owner, as defined in Code Section 416, of the Company with respect to the Plan Year in which the Participant attains age 70-1/2, in which case this Subsection (2) shall not apply); and (ii) the accrued benefit of a Participant who attains age 70-1/2 prior to January 1, 2000 must be distributed or commence to be distributed no later than the April 1 following the calendar year in which the Participant attains age 70-1/2 unless the Participant is not a 5% owner (as defined in Subsection (i)) and elects to defer distribution to the calendar year in which the Participant retires. All Plan distributions will comply with Code Section 401(a)(9), including Department of Treasury Regulation Section 1.401(a)(9)-2. 3.4 Suspension of Benefits ---------------------- 14 3.4.1 Prior to Normal Retirement Date: If a Participant receives retirement benefits under the Plan following a termination of his employment prior to the Participant's Normal Retirement Date and again becomes an Employee prior to the Participant's Normal Retirement Date, no retirement benefits shall be paid during such later period of employment and up to the Participant's Normal Retirement Date. Any benefits payable under the Plan to or on behalf of the Participant at the time of the Participant's subsequent termination of employment shall be reduced by the actuarial equivalent (based on the assumptions in Exhibit E-4) of any benefits paid to the Participant after the Participant earlier termination and prior to his Normal Retirement Date. 3.4.2 After Normal Retirement Date: If (a) a Participant whose employment terminates again becomes an Employee after the Participant's Normal Retirement Date, or again becomes an Employee prior to the Participant's Normal Retirement Date and continues in employment beyond the Participant's Normal Retirement Date, or (b) a Participant continues in employment with the Company and Affiliates after his Normal Retirement Date without a prior termination, the following provisions of this Section 3.4.2 shall become applicable to the Participant as of the Participant's Normal Retirement Date or, if later, the Participant's date of reemployment. (i) For purposes of this Section 3.4.2, the following definitions shall apply: (1) Postretirement Date Service means each calendar month after a Participant's Normal Retirement Date and subsequent to the time that: (A) payment of retirement benefits commenced to the Participant if the Participant returned to employment with the Company and Affiliates, or (B) payment of retirement benefits would have commenced to him if the Participant had not remained in employment with the Company and Affiliates, if in either case the Participant receives pay from the Company and Affiliates for any Hours of Service performed on each of 8 or more days (or separate work shifts) in such calendar month. (2) Suspendable Amount means the monthly retirement benefits otherwise payable in a calendar month in which the Participant is engaged in Postretirement Date Service. (ii) Payment shall be permanently withheld of a portion of a Participant's retirement benefits, not in excess of the Suspendable Amount, for each calendar month during which the Participant is employed in Postretirement Date Service. 15 (iii) If payments have been suspended pursuant to Subsection (ii) above, such payments shall resume no later than the first day of the third calendar month after the calendar month in which the Participant ceases to be employed in Postretirement Date Service; provided, however, that no payments shall resume until the Participant has complied with the requirements set forth in Subsection (vi) below. The initial payment upon resumption shall include the payment scheduled to occur in the calendar month when payments resume and any amounts withheld during the period between the cessation of Postretirement Date Service and the resumption of payment, less any amounts that are subject to offset pursuant to Subsection (iv) below. (iv) Retirement benefits made subsequent to Postretirement Date Service shall be reduced by (1) the actuarial equivalent (based on the assumptions in Exhibit E-4) of any benefits paid to the Participant prior to the time the Participant is reemployed after the Participant's Normal Retirement Date (such reduction will occur only if such benefits are not repaid in full to the Trust within 2 years after his date of reemployment); and (2) the amount of any payments previously made during those calendar months in which the Participant was engaged in Postretirement Date Service; provided, however, that such reduction under (Subsection (2)) shall not exceed, in any one month, 25% percent of that month's total retirement benefits (excluding amounts described in Subsection (ii) above) that would have been due but for the offset. (v) Any Participant whose retirement benefits are suspended pursuant to Subsection (ii) of this Section 3.4.2 shall be notified (by personal delivery or certified or registered mail) during the first calendar month in which payments are withheld that the Participant's retirement benefits are suspended. Such notification shall include: (1) a description of the specific reasons for the suspension of payments; (2) a general description of the Plan provisions relating to the suspension; (3) a copy of the provisions; (4) a statement to the effect that applicable Department of Labor Regulations may be found at Section 2530.203-3 of Title 29 of the Code of Federal Regulations; (5) the procedure for appealing the suspension, which procedure shall be governed by Section 12.11; and 16 (6) the procedure for filing a benefits resumption notification pursuant to Subsection (vi) below. If payments subsequent to the suspension are to be reduced by an offset pursuant to Subsection (iv) above, the notification shall specifically identify the periods of employment for which the amounts to be offset were paid, the Suspendable Amounts subject to offset, and the manner in which the Plan intends to offset such Suspendable Amounts. (vi) Payments shall not resume as set forth in Subsection (iii) above until a Participant performing Postretirement Date Service notifies the Administrator in writing of the cessation of such Service and supplies the Administrator with such proof of the cessation as the Administrator may reasonably require. (vii) A Participant may request, pursuant to the procedure contained in Section 12.11, a determination whether specific contemplated employment will constitute Postretirement Date Service. 3.5 Benefit Limitations ------------------- 3.5.1 Limitation on Accrued Benefit: Notwithstanding any other provision of the Plan, the annual benefit payable under the Plan to a Participant, when expressed as a monthly benefit commencing at the Participant's Social Security Retirement Age (as defined in Code Section 415(b)(8)), shall not exceed the lesser of (a) $7,500 or (b) the highest average of the Participant's monthly compensation for 3 consecutive calendar years, subject to the following: (i) The maximum shall apply to the Individual Life Annuity computed under Section 3.1, 3.2, 3.3 or Article IV and to that portion of the 50% Joint and Survivor's Annuity payable to the Participant during the Participant's lifetime. (ii) If a Participant has fewer than 10 years of participation in the Plan, the maximum dollar limitation of Subsection (a) above shall be multiplied by a fraction of which the numerator is the Participant's actual years of participation in the Plan (computed to fractional parts of a year) and the denominator is 10. If a Participant has fewer than 10 Years of Vesting Service, the maximum compensation limitation in Subsection (b) above shall be multiplied by a fraction of which the numerator is the Years of Vesting Service (computed to fractional parts of a year) and the denominator is 10. Provided, however, that in no event shall such dollar or compensation limitation, as applicable, be less than 1/10th of such limitation determined without regard to any adjustment under this Subsection (ii). 17 (iii) As of January 1 of each year, 1/12th of the dollar limitation as determined by the Commissioner of Internal Revenue for that calendar year to reflect increases in the cost of living shall become effective as the maximum dollar limitation in Subsection (a) above for the Plan Year ending within that calendar year for Participants terminating in or after such Plan Year. (iv) The dollar limitation under Subsection (a) above shall be modified as follows to reflect commencement of retirement benefits on a date other than the Participant's Social Security Retirement Age: (1) if the Participant's Social Security Retirement Age is 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the dollar limitation under Subsection (a) above by 5/9ths of 1% for each month by which benefits commence before the month in which the Participant attains age 65; (2) if the Participant's Social Security Retirement Age is greater than 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the dollar limitation under Subsection (a) above by 5/9ths of 1% for each of the first 36 months and by 5/12ths of 1% for each of the additional months by which benefits commence before the month in which the Participant attains the Participant's Social Security Retirement Age; (3) if the Participant's benefit commences prior to age 62, the dollar limitation shall be the actuarial equivalent of Subsection (a) above, payable at age 62, as determined above, reduced for each month by which benefits commence before the month in which the Participant attains age 62. The interest rate for determining Actuarial Equivalence shall be the greater of the interest rate assumption under the Plan for determining early retirement benefits or 5% per year. The mortality basis for determining Actuarial Equivalence for terminations on or after January 1, 1985 shall be the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female); (4) in the case of a Participant whose retirement benefit commences after the Participant's Social Security Retirement Age, the dollar limitation shall be the Actuarial Equivalent of Subsection (a) above payable at the Participant's Social Security Retirement Age, using the lesser of the interest rate assumption under the Plan or 5% per year. The mortality basis for determining Actuarial Equivalence for terminations on or after January 1, 1985 shall be the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female). (v) Notwithstanding the foregoing, the maximum as applied to any Employee on April 1, 1987 shall in no event be less than the Participant's "current 18 accrued benefit" as of March 31, 1987, as that term is defined in Section 1106 of the Tax Reform Act of 1986. (vi) The maximum shall apply to the benefits payable to a Participant under the Plan and all other tax-qualified defined benefit plans of the Company and Affiliates (whether or not terminated), and benefits shall be reduced, if necessary, in the reverse of the chronological order of participation in such plans. 3.5.2 Multiple Plan Reduction: With respect to a Participant who did not have 1 Hour of Service after December 31, 1999 and who is (or has been) a participant in any defined contribution plan (whether or not terminated) maintained by the Company or an Affiliate, the sum of the Participant's defined benefit plan fraction (as defined under Code Section 415(e)(2)) and defined contribution plan fraction (as defined under Code Section 415(e)(3)) shall not exceed 1. If such sum exceeds 1, the participant's defined benefit plan fraction shall be reduced until such sum equal 1. 3.5.3 Annual Compensation Limit: The accrued benefit of each "Section 401(a)(17) employee" under this Plan will be the greater of the accrued benefit determined for the Employee under (a) or (b) below: (a) the Employee's accrued benefit determined with respect to the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the Employee's total Years of Credited Service, or (b) the sum of: (i) the Employee's accrued benefit as of the last day of the last Plan Year beginning before January 1, 1994, frozen in accordance with section 1.401(a)(4)-13 of the regulations under the Code, and (ii) the Employee's accrued benefit determined under the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the Employee's Years of Credited Service credited to the Employee for Plan Years beginning on or after January 1, 1994. A "Section 401(a)(17) employee" means an Employee whose current accrued benefit as of a date on or after the first day of the first Plan Year beginning on or after January 1, 1994, is based on Earnings for a year beginning prior to January 1, 1994 that exceeded $150,000. 19 ARTICLE IV Termination Benefits -------------------- 4.1 Termination of Service ---------------------- Except as otherwise provided in the applicable Supplement, a Participant who has 5 Years of Vesting Service but who ceases to be an Employee before the Participant's Early Retirement Date for any reason other than death, shall be entitled to receive a "Termination Benefit" determined under Section 4.2. Except as otherwise provided in the applicable Supplement, unless the Participant elects otherwise subject to Section 3.3.2, payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's Normal Retirement Date or, if the Participant elects, as of the first day of any month before such Normal Retirement Date and coincident with or following the Participant's 55th birthday. Any such election of the earlier Annuity Starting Date shall be made by giving advance written notice to the Administrator in accordance with rules prescribed by the Administrator. Except as provided in Article V and Article VII, no benefits shall be payable to any person if the Participant dies prior to the Annuity Starting Date. A terminated Participant who has no vested interest in the Participant's accrued benefit shall be deemed to have received a distribution of the Participant's entire vested benefit. 4.2 Amount of Termination Benefit ----------------------------- Except as otherwise provided in the applicable Supplement, a Participant's monthly Termination Benefit shall be determined pursuant to Sections 3.1.2 and 3.1.3 as in effect on the date the Participant terminates employment, except that the following adjustments shall be made if payment of the Participant's Termination Benefit is to commence before the Normal Retirement Date: (a) the amount computed pursuant to Section 3.1.2 shall be reduced by 1/2 of 1% for each month between the Annuity Starting Date and the Normal Retirement Date; (b) the amount of Employee Contributions and Interest required to provide $1 of monthly retirement benefit under Section 3.1.3 shall be increased by $3 for each full year by which the Annuity Starting Date precedes the Normal Retirement Date; (c) notwithstanding Subsection (a) of this Section 4.2, the amounts computed pursuant to Section 3.1.2 shall be reduced by 1/3 of 1% for each month in excess of 36 by which the Annuity Starting Date precedes the Participant's 62nd birthday if: (i) the Participant's combined age and Years of Credited Service equal at least 65, and the Participant ceases to be an Employee (1) because of the permanent shutdown of a single site of employment or one or 20 more facilities or operating units within a single site of employment or (2) in connection with a permanent reduction in force; or (ii) the Participant has Years of Credited Service attributable to employment before January 1, 1989, has attained age 40, and permanently ceases to be an Employee because of the permanent shutdown of a single site of employment, resulting in the termination of employment of not more than 20 Participants at that employment site. Notwithstanding any contrary provision of the Plan, for purposes of determining a Participant's total combined age and Years of Vesting Service under Section 4.2(c)(i), a partial month of age or Period of Service shall be counted as a whole month, and fractional years of age and Years of Vesting Service shall be taken into account. (d) Effective January 1, 1995, a Participant covered under Subsection (c) of this Section 4.2 who has 10 Years of Credited Service shall have added to his age the period of time during which he is receiving severance pay from the Company. 21 ARTICLE V Refund of Employee Contributions -------------------------------- 5.1 Employee Contributions ---------------------- With respect to various periods prior to May 1, 1969, certain Participants were required to make Employee Contributions to this Plan or to certain prior plans. Since April 30, 1969, no Employee Contributions have been made to any of said plans. 5.2 Withdrawal of Employee Contributions ------------------------------------ A Participant may withdraw all of the Participant's Employee Contributions, plus Interest thereon to the date of withdrawal, at any time before payment of a monthly retirement benefit commences by giving advance written notice to the Administrator in accordance with procedures prescribed by the Administrator. No partial withdrawal of Employee Contributions and Interest shall be permitted. Payment of the Participant's Employee Contributions plus Interest shall be in the normal form of benefit (50% Joint and Survivor's Annuity for a married Participant, Individual Life Annuity for an unmarried Participant) unless the Participant waives such annuity (with the consent of the Participant's spouse, if the Participant is married, in accordance with Section 6.4) and elects payment in a single sum. 5.3 Refund Upon Death Before Annuity Starting Date ---------------------------------------------- If a Participant dies before the Annuity Starting Date, the Participant's Beneficiary shall receive in a lump sum a refund of the Participant's unwithdrawn Employee Contributions and Interest. The refund shall be made as soon as reasonably practicable after the date of the Participant's death, and Interest shall be computed to the date when the refund is paid. 5.4 Refund After Annuity Starting Date ---------------------------------- If a Participant dies after the Annuity Starting Date, there shall be paid to his or her Beneficiary the difference, if any, between such Participant's Employee Contributions and Interest as of the Annuity Starting Date and: (a) if the Participant elected an Individual Life Annuity or a Level Income Option, the portion of the benefits which the Participant has received which are attributable to Employee Contributions and Interest; (b) if the Participant elected any other form of benefit, the portion of the benefits received by the Participant and the Participant's Joint Annuitant which are attributable to Employee Contributions and Interest. 22 Any payment pursuant to (a) above shall be made as soon as reasonably practicable after the Participant's death. Any payment pursuant to (b) above shall be made as soon as reasonably practicable after all other benefit payments to the Joint Annuitant have ceased. 23 ARTICLE VI Payment of Retirement Benefits ------------------------------ 6.1 Normal Form of Benefit ---------------------- Except as otherwise provided in the applicable Supplement, a Participant's benefit shall be paid in the form of a 50% Joint and Survivor's Annuity, with the Participant's spouse as Joint Annuitant if the Participant is married on the Annuity Starting Date, and in the form of an Individual Life Annuity if the Participant is not married on the Annuity Starting Date, unless the Participant elects with spousal consent not to receive payments pursuant to this 6.1 and to receive payments in one of the optional forms permitted under Section 6.2. An election not to receive the normal form of benefit and to receive payment in any optional form shall satisfy the applicable requirements of Section 6.4. 6.2 Available Forms of Benefits --------------------------- A Participant may elect with spousal consent and in accordance with Section 6.4, to receive the Participant's benefits in any one of the forms of benefits described in this Section 6.2. 6.2.1 Individual Life Annuity: An Individual Life Annuity is an immediate annuity which provides equal monthly payments for the Participant's life only. 6.2.2 50% Joint and Survivor's Annuity: A 50% Joint and Survivor's Annuity is an immediate annuity which is the actuarial equivalent of an Individual Life Annuity (determined in accordance with Exhibit E-1), but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, 50% of such reduced annuity will, subject to Section 6.2, be paid to the Participant's surviving Joint Annuitant for such Joint Annuitant's life. 6.2.3 100% Joint and Survivor's Annuity: A 100% Joint and Survivor's Annuity is an immediate annuity which is the actuarial equivalent of an Individual Life Annuity (determined in accordance with Exhibit E-2), but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, 100% of such reduced annuity will continue to be paid to the Participant's surviving Joint Annuitant for such Joint Annuitant's life. 6.2.4 Level Income Option: The Level Income Option provides greater monthly annuity payments prior to the Participant's 62nd birthday (determined in accordance with Exhibit E-3) and after such birthday provides reduced monthly annuity payments in an amount which, when added to the Primary Social Security Benefits which the Participant could elect to receive, approximately equals the amount of the monthly annuity paid prior to the Participant's 62nd birthday. A Participant who is entitled to an Early Retirement Benefit under 24 Section 3.2 and who elects to have such benefit commence prior to age 62 may elect the Level Income Option, unless the Primary Social Security Benefits which the Participant could elect to receive at age 62 would equal or exceed the amount of the monthly annuity payments prior to age 62 or unless the Participant is receiving Social Security disability benefits. Such election shall be subject to the approval of the Participant's spouse, given in accordance with the requirements for spousal consent under Section 6.4. 6.3 5 Year Certain Benefit ---------------------- If a Participant who retires prior to January 2, 1984, is receiving retirement benefits in the form of an Individual Life Annuity or a Joint and Survivor Annuity pursuant to Sections 3.1, 3.2 or 3.3 (but not a Participant receiving a Termination Benefit pursuant to Article IV) and dies before the Participant (or the Participant and the Participant's Joint Annuitant) has received 60 monthly payments, the Participant's Beneficiary shall receive the same benefits (other than any benefits attributable to employee contributions) the Participant was receiving until the number of monthly payments made to the Participant (or the Participant and the Participant's Joint Annuitant) and the Beneficiary equals 60. Any Participant who commences participation in this Plan prior to January 2, 1984 and retires after January 1, 1984, entitled to retirement benefits under this Plan shall receive benefits without the 5 Year Certain Benefit described in the preceding sentence in an amount not less than the actuarial equivalent, calculated in accordance with Exhibit E-5, of the retirement benefits the Participant had accrued under this plan as of January 1, 1984 (based upon his Final Average Monthly Earnings as of that date), payable with the 5 Year Certain Benefit. 6.4 Election of Benefits -------------------- 6.4.1 The Administrator shall provide each Participant with a written notice containing the following information: (a) a general description of the normal form of benefit payable under the Plan; (b) the Participant's right to make and the effect of an election to waive the normal form of benefit; (c) the right of the Participant's spouse not to consent to the Participant's election under Section 6.1; (d) the right of Participant to revoke such election, and the effect of such revocation; (e) the optional forms of benefits available under the Plan; and (f) the Participant's right to request in writing information on the particular financial effect of an election by the Participant to receive an optional form of benefit in lieu of the normal form of benefit. 25 6.4.2 The notice under Section 6.4.1 shall be provided to the Participant at each of the following times as shall be applicable to him: (a) not more than 90 days and not less than 30 days after a Participant who is in the employ of the Company or an Affiliate gives notice of the Participant's intention to terminate employment and commence receipt of the Participant's retirement benefits under the Plan; or (b) not more than 90 days and not less than 30 days prior to the attainment of age 65 of a Participant (whether or not the Participant has terminated employment) who has not previously commenced receiving retirement benefits. The election period in Section 6.4.3 for a Participant who requests additional information during the election period will be extended until 90 days after the additional information is mailed or personally delivered. Any such request shall be made only within 90 days after the date the information described in Section 6.4.1 is given to the Participant, and the Administrator shall not be obligated to comply with more than one such request. Any information provided pursuant to this Section 6.3.2 will be given to the Participant within 30 days after the date of the Participant's request and will be based upon the estimated benefits to which the Participant will be entitled as of the later of the first day on which such benefits could commence or the last day of the Plan Year in which the Participant's request is received. If a Participant files an election (or revokes an election) pursuant to this Section 6.4 less than 60 days prior to the Annuity Starting Date, such Participant's initial payments may be delayed for administrative reasons. In such event, the payments shall begin as soon as practicable and shall be made retroactively to such date. 6.4.3 A Participant may make the election provided in Section 6.3 by filing the prescribed form with the Administrator at any time during the election period. The election period shall begin 90 days prior to the Participant's Annuity Starting Date. Such election shall be subject to the written consent of the Participant's spouse, acknowledging the effect of the election and witnessed by a Plan representative or a notary public. Such spousal consent shall not be required if the Participant establishes to the satisfaction of the Administrator that the consent of the spouse may not be obtained because there is no spouse or the spouse cannot be located. A spouse's consent shall be irrevocable. The election in Section 6.3 may be revoked or changed at any time during the election period but shall be irrevocable thereafter. 6.4.4 Notwithstanding Section 6.4.3: (a) distribution of benefits may commence less than 30 days after the notice required pursuant to Section 6.4.1 is provided if: (i) the Participant elects to waive the requirement that notice be given at least 30 days prior to the Annuity Starting Date; and 26 (ii) the distribution commences more than 7 days after such notice is provided. (b) The notice described in Section 6.4.1 may be provided after the Annuity Starting Date, in which case the applicable election period shall not end before the 30th day after the date on which such notice is provided, unless the Participant elects to waive the 30-day notice requirements pursuant to Subsection (a) above. 6.5 Joint Annuitants ---------------- A Participant who elects a joint and survivor's annuity shall designate a Joint Annuitant when making such an election. A Participant may designate any individual as the Joint Annuitant; provided, however, that the Joint Annuitant shall be the Participant's spouse unless the Participant's spouse consents to the designation of another individual in accordance with the requirements for spousal consent under Section 6.4.3. A designation of a Joint Annuitant may be revoked or changed at any time during the applicable election period described in Section 6.4.3 but shall become irrevocable thereafter. If the Joint Annuitant dies on or after the Annuity Starting Date the Participant shall continue to receive the reduced monthly annuity. 27 ARTICLE VII Survivor's Benefits ------------------- 7.1 Preretirement Survivor's Benefit -------------------------------- 7.1.1 Eligibility: If a Participant who continues to be employed by the Company at any time on or after attaining age 55 and 10 Years of Credited Service dies (whether or not so employed on the date of death) before the Annuity Starting Date, then such Participant's surviving Joint Annuitant (if any) shall be entitled to receive a survivor's benefit for life, determined under Section 7.2. Payment of such benefit shall commence as of the first day of the month coincident with or next following the date of the Participant's death. 7.1.2 Amount of Preretirement Survivor's Benefit: The preretirement survivor's benefit under this Section 7.1 shall be computed as follows: (a) If the Participant's Period of Service has not terminated before the Participant's death, the survivor's benefit shall be equal to the benefit which would have been paid to the Participant's Joint Annuitant if the Participant's Period of Service had terminated on the date of death, benefits in the form of a 50% Joint and Survivor's Annuity commenced as of the first day of the next following month, and the Participant died on such day. (b) If the Participant's Period of Service has terminated before the Participant's death but the Participant has deferred the commencement of the Early Retirement Benefit, the survivor's benefit shall be equal to the benefit which the Participant's Joint Annuitant would have been paid if the Participant had elected a 50% Joint and Survivor's benefit commencing as of the first day of the month next following the date of the Participant's death. (c) The survivor's benefit payable pursuant to this Section 7.1.2 shall exclude any retirement benefit based upon Employee Contributions and Interest (which will be refunded upon the Participant's death, to the extent provided in Article V). 7.1.3 Designation of Joint Annuitant Other Than Spouse: A participant may elect at any time during the Election Period (as defined in Section 7.1.5) to waive the Preretirement Survivor Annuity and to revoke any such election at any time during the Election Period. Any election by a Participant to waive the Preretirement Survivor Annuity shall not take effect unless the Participant's spouse consents in writing to such election, such consent acknowledges the effect of such an election and the consent is witnessed by a representative of the Plan or a notary public, unless the Participant establishes to the satisfaction of the Committee 28 that such consent may not be obtained because there is no spouse, the spouse cannot be located or because of such other circumstances as the Secretary of the Treasury may by regulations prescribe. The consent by a spouse shall be irrevocable and shall be effective only with respect to that spouse. 7.1.4 Explanation of Preretirement Survivor's Benefit: The Committee shall provide each Participant with a written explanation with respect to the Preretirement Survivor Annuity as soon as administratively feasible after the Participant attains age 55. The explanation shall include: (a) the terms and conditions of the Preretirement Survivor Annuity, (b) the Participant's right to make, and the effect of, an election to waive the Preretirement Survivor Annuity, (c) the rights of the Participant's spouse in connection therewith, and (d) the right to make, and the effect of, the revocation of an election to waive the Preretirement Survivor Annuity. 7.1.5 Election Period: For purposes of this Section 7.1.5, the term "Election Period" means the period that begins on the Participant's 55th birthday and ends on the date of the Participant's death. 7.2 Surviving Spouse's Benefit -------------------------- If a Participant who has 5 or more Years of Vesting Service but does not meet the requirements for the preretirement survivor's benefit under Section 7.1 dies before the Annuity Starting Date, then such Participant's surviving spouse (if any) shall be entitled to receive a survivor's benefit for life. The amount of such survivor's benefit shall be determined pursuant to Section 4.2 based upon the Participant's age and Years of Credited Service on the date of the Participant's death and paid in the form of a 50% Joint and Survivor's Annuity as if the Participant had died on the date such benefits commenced. The survivor's benefit payable pursuant to this Section 7.2 shall exclude any retirement benefit based upon Employee Contributions and Interest (which will be refunded upon the Participant's death to the extent provided in Article V). Payment of the survivor's benefit shall commence on the first day of the month coincident with or next following the later of the Participant's 55th birthday or his death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 7.3 Certain Former Employees ------------------------ Participants who have 10 Years of Vesting Service but who are not credited with an Hour of Service on or after August 23, 1984 and are not receiving benefits on that date shall be entitled to elect survivor's benefits only as follows: 29 (a) If the Participant is credited with an Hour of Service under this Plan or a predecessor plan on or after September 2, 1974, but is not otherwise credited with an Hour of Service in a Plan Year beginning on or after January 1, 1976, the Participant shall be afforded an opportunity to elect payment of benefits in the form of a 50% Joint and Survivor's Annuity. (b) If the Participant is credited with an Hour of Service under this Plan or a predecessor plan in a Plan Year beginning after December 31, 1975, the Participant shall be afforded the opportunity to elect a Surviving Spouse's Benefit under Section 7.2. 30 ARTICLE VIII Fiduciaries ----------- 8.1 Named Fiduciaries ----------------- 8.1.1 The Company is the Plan sponsor and a "named fiduciary" with respect to control over and management of the Plan's assets only to the extent that it (a) shall appoint the members of the Committee which administers the Plan at the Administrator's direction; (b) shall delegate its authorities and duties as "plan administrator," as defined under ERISA, to the Committee; and (c) shall continually monitor the performance of the Committee. 8.1.2 The Company, as Administrator, and the Committee, which administers the Plan at the Administrator's direction, are "named fiduciaries" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to control and manage the operation and administration of the Plan. The Administrator is also the "administrator" and "plan administrator" of the Plan, as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g), respectively. 8.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to manage and control all Trust assets, except to the extent that authority is delegated to an Investment Manager or to the extent the Administrator or the Committee directs the allocation of Trust assets among general investment categories. 8.1.4 The Company, the Administrator, and the Trustee are the only named fiduciaries of the Plan. 8.2 Employment of Advisers ---------------------- A named fiduciary, and any fiduciary appointed by a named fiduciary, may employ one or more persons to render advice regarding any of the named fiduciary's or fiduciary's responsibilities under the Plan. 8.3 Multiple Fiduciary Capacities ----------------------------- Any named fiduciary and any other fiduciary may serve in more than one fiduciary capacity with respect to the Plan. 8.4 Payment of Expenses ------------------- All Plan expenses, including expenses of the Administrator, the Committee, the Trustee, any Investment Manager and any insurance company, will be paid by the Trust Fund, unless a Participating Employer elects to pay some or all of those expenses. 31 8.5 Indemnification --------------- To the extent not prohibited by state or federal law, each Participating Employer agrees to, and will indemnify and save harmless the Administrator, any past, present, additional or replacement member of the Committee, and any other employee, officer or director of that Participating Employer, from all claims for liability, loss, damage (including payment of expenses to defend against any such claim) fees, fines, taxes, interest, penalties and expenses which result from any exercise or failure to exercise any responsibilities with respect to the Plan, other than willful misconduct or willful failure to act. 32 ARTICLE IX Plan Administration ------------------- 9.1 Powers, Duties and Responsibilities of the Administrator and the Committee -------------------------------------------------------------------------- 9.1.1 The Administrator and the Committee have full discretion and power to construe the Plan and to determine all questions of fact or interpretation that may arise under it. Interpretation of the Plan or determination of questions of fact regarding the Plan by the Administrator or the Committee will be conclusively binding on all persons interested in the Plan. 9.1.2 The Administrator and the Committee have the power to promulgate such rules and procedures, to maintain or cause to be maintained such records, and to issue such forms as they deem necessary or proper to administer the Plan. 9.1.3 Subject to the terms of the Plan, the Administrator and/or the Committee will determine the time and manner in which all elections authorized by the Plan must be made or revoked. 9.1.4 The Administrator and the Committee have all the rights, powers, duties and obligations granted or imposed upon them elsewhere in the Plan. 9.1.5 The Administrator and the Committee have the power to do all other acts in the judgment of the Administrator or Committee necessary or desirable for the proper and advantageous administration of the Plan. 9.1.6 The Administrator and the Committee will exercise all responsibilities in a uniform and nondiscriminatory manner. 9.2 Delegation of Administration Responsibilities --------------------------------------------- The Administrator and the Committee may designate by written instrument one or more actuaries, accountants or consultants as fiduciaries to carry out, where appropriate, their administrative responsibilities, including their fiduciary duties. The Committee may from time to time allocate or delegate to any subcommittee, member of the Committee and others, not necessarily employees of the Company, any of its duties relative to compliance with ERISA, administration of the Plan and other related matters, including those involving the exercise of discretion. The Company's duties and responsibilities under the Plan shall be carried out by its directors, officers and employees, acting on behalf of and in the name of the Company in their capacities as directors, officers and employees, and not as individual fiduciaries. No director, officer nor employee of the Company shall be a fiduciary with respect to the Plan unless he or she is specifically so designated and expressly accepts such designation. 33 9.3 Committee Members ----------------- The Committee shall consist of not less than three people, who need not be directors, and shall be appointed by the Chief Executive Officer of the Company. Any Committee member may resign and the Chief Executive Officer may remove any Committee member, with or without cause, at any time. A majority of the members of the Committee shall constitute a quorum for the transaction of business and the act of a majority of the Committee members at a meeting at which a quorum is present shall be the act of the Committee. The Committee can act by written consent signed by all of its members. Any members of the Committee who are Employees shall not receive compensation for their services for the Committee. No Committee member shall be entitled to act on or decide any matter relating solely to his or her status as a Participant. 34 ARTICLE X Funding of the Plan ------------------- 10.1 Appointment of Trustee ---------------------- The Committee or its authorized delegatee will appoint the Trustee and either may remove it. The Trustee accepts its appointment by executing the Trust Agreement. A Trustee will be subject to direction by the Committee or its authorized delegatee or, to the extent specified by the Company, by an Investment Manager, and will have the degree of discretion to manage and control Plan assets specified in the Trust Agreement. Neither the Company nor any other Plan fiduciary will be liable for any act or omission to act of a Trustee, as to duties delegated to the Trustee. 10.2 Actuarial Cost Method --------------------- The Committee or its authorized delegatee shall determine the actuarial cost method to be used in determining costs and liabilities under the Plan pursuant to Section 301 et seq., of ERISA, and Section 412 of the Code. The Committee or its authorized delegatee shall review such actuarial cost method from time to time, and if it determines from review that such method is no longer appropriate, then it shall petition the Secretary of the Treasury for approval of a change of actuarial cost method. 10.3 Cost of the Plan ---------------- Annually the Committee or its authorized delegatee shall determine the normal cost of the Plan for the Plan Year and the amount (if any) of the unfunded past service cost on the basis of the actuarial cost method established for the Plan using actuarial assumptions which, in the aggregate, are reasonable. The Committee or its authorized delegatee shall also determine the contributions required to be made for each Plan Year by the Participating Companies in order to satisfy the minimum funding standard (or alternative minimum funding standard) for such Plan Year determined pursuant to Sections 302 through 305 of ERISA and Section 412 of the Code. 10.4 Funding Policy -------------- The Participating Companies shall cause contributions to be made to the Plan for each Plan Year in the amount necessary to satisfy the minimum funding standard (or alternative minimum funding standard) for such Plan Year; provided, however, that this obligation shall cease when the Plan is terminated. In the case of a partial termination of the Plan, this obligation shall cease with respect to those Participants, Joint Annuitants and Beneficiaries who are affected by such partial termination. Each contribution is conditioned upon its deductibility under Section 404 of the Code and shall be returned to the Participating Companies within one year after the disallowance of the deduction (to the extent disallowed). Upon the Company's written 35 request, a contribution that was made by a mistake of fact shall be returned to the Participating Company within one year after the payment of the contribution. 10.5 Cash Needs of the Plan ---------------------- The Committee or its authorized delegatee from time to time shall estimate the benefits and administrative expenses to be paid out of the Plan during the period for which the estimate is made and shall also estimate the contributions to be made to the Plan during such period by the Participating Companies. The Committee or its authorized delegatee shall inform the Trustees of the estimated cash needs of and contributions to the Plan during the period for which such estimates are made. Such estimates shall be made on an annual, quarterly, monthly or other basis, as the Committee shall determine. 10.6 Public Accountant ----------------- The Committee or its authorized delegatee shall engage an independent qualified public accountant to conduct such examinations and to render such opinions as may be required by Section 103(a)(3) of ERISA. The Committee or its authorized delegatee in its discretion may remove and discharge the person so engaged, but in such case it shall engage a successor independent qualified public accountant to perform such examinations and to render such opinions. 10.7 Enrolled Actuary ---------------- The Committee or its authorized delegatee shall engage an enrolled actuary to prepare the actuarial statement described in Section 103(d) of ERISA and to render the opinion described in Section 103(a)(4) of ERISA. The Committee or its authorized delegatee in its discretion may remove and discharge the person so engaged, but in such event it shall engage a successor enrolled actuary to perform such examination and render such opinion. 10.8 Basis of Payments to the Plan ----------------------------- All contributions to the Plan shall be made by the Participating Companies, and no contributions shall be required of or permitted by Participants. From time to time the Participating Companies shall make such contributions to the Plan as the Company determines to be necessary or desirable in order to fund the benefits provided by the Plan, and any expenses thereof which are paid out of the Trust Fund and in order to carry out the obligations of the Participating Companies set forth in Section 10.3. All contributions to the Plan shall be held by the Trustee in accordance with the Trust Agreement. 10.9 Basis of Payments from the Plan ------------------------------- All benefits payable under the Plan shall be paid by the Trustee out of the Trust Fund pursuant to the directions of the Administrator or the Committee and the terms of the Trust Agreement. The Trustee shall pay all proper expenses of the Plan and the Trust Fund out of the Trust Fund, except to the extent paid by the Participating Companies. 36 ARTICLE XI Plan Amendment or Termination ----------------------------- 11.1 Plan Amendment or Termination ----------------------------- The Company may amend, modify or terminate the Plan at any time by resolution of the Board or by resolution of or other action recorded in the minutes of the Administrator or the Committee. Execution and delivery by the Chairman of the Board, the President, any Vice President of the Company or the Committee of an amendment to the Plan is conclusive evidence of the amendment, modification or termination. 11.2 Limitations on Plan Amendment ----------------------------- No Plan amendment can: (a) authorize any part of the Trust Fund to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Joint Annuitants and Beneficiaries; (b) decrease the accrued benefits of any Participant or his or her Joint Annuitant or Beneficiary under the Plan; or (c) except to the extent permitted by law, eliminate or reduce an early retirement benefit or retirement-type subsidy (as defined in Code Section 411) or an optional form of benefit with respect to service prior to the date the amendment is adopted or effective, whichever is later. 11.3 Effect of Plan Termination -------------------------- Upon termination of the Plan, each Participant's rights to benefits accrued hereunder shall be vested and nonforfeitable, and the Trust shall continue until the Trust Fund has been distributed as provided in Section 11.4. Any other provision hereof notwithstanding, the Participating Companies shall have no obligation to continue making contributions to the Plan after termination of the Plan. Except as otherwise provided in ERISA, neither the Participating Companies nor any other person shall have any liability or obligation to provide benefits hereunder after such termination in excess of the value of the Trust Fund. Upon such termination, Participants, Joint Annuitants, and Beneficiaries shall obtain benefits solely from the Trust Fund. Upon partial termination of the Plan, this Section 11.3 shall apply only with respect to such Participants, Joint Annuitants and Beneficiaries as are affected by such partial termination. 11.4 Allocation of Trust Fund on Termination --------------------------------------- 37 On termination of the Plan, the Trust Fund shall be allocated by the Administrator on an actuarial basis among Participants, Joint Annuitants and Beneficiaries in the manner prescribed by Section 4044 of ERISA. Any residual assets of the Trust Fund remaining after such allocation shall be distributed to the Company if (a) all liabilities of the Plan to Participants, Joint Annuitants and Beneficiaries have been satisfied and (b) such a distribution does not contravene any provision of law. The foregoing notwithstanding, if any remaining assets of the Plan are attributable to Employee Contributions, such assets shall be equitably distributed to the Participants who made such contributions (or to their Beneficiaries) in accordance with their rate of contribution. Effective January 1, 1989, the benefit of any highly compensated employee or former employee (determined in accordance with section 414(g) of the Code and regulations thereunder) shall be limited to a benefit that is nondiscriminatory under section 401(a)(4) of the Code. In the event of a partial termination of the Plan, the Administrator shall arrange for the division of the Trust Fund, on a nondiscriminatory basis to the extent required by section 401 of the Code, into the portion attributable to those Participants, Joint Annuitants and Beneficiaries who are not affected by such partial termination and the portion attributable to such persons who are so affected. The portion of the Trust Fund attributable to persons who are so affected shall be allocated in the manner prescribed by section 4044 of ERISA. 38 ARTICLE XII Miscellaneous Provisions ------------------------ 12.1 Subsequent Changes ------------------ Except as provided in Exhibit D, all benefits to which any Participant, Joint Annuitant, or Beneficiary may be entitled hereunder shall be determined under the Plan in effect when the Participant ceases to be an Eligible Employee and shall not be affected by any subsequent change in the provisions of the Plan, unless the Participant again becomes an Eligible Employee. 12.2 Plan Mergers ------------ The Plan shall not be merged or consolidated with any other plan, and no assets or liabilities of the Plan shall be transferred to any other plan, unless each Participant would receive a benefit immediately after such merger, consolidation or transfer (if the Plan then terminated) which is equal to or greater than the benefit such Participant would have been entitled to receive immediately before such merger, consolidation or transfer (if the Plan had then been terminated). A list of plans which have been merged into the Plan since January 1, 1979 is attached hereto and made a part hereof as Exhibit C. 12.3 No Assignment of Property Rights -------------------------------- The interest or property rights of any person in the Plan, in the Trust Fund or in any payment to be made under the Plan shall not be assignable nor be subject to alienation or option, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any act in violation of this Section 12.3 shall be void. This provision shall not apply to a "qualified domestic relations order" defined in Code Section 414(p). The Company shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. In addition, the prohibition of this Section 12.3 will not apply to any offset of a Participant's benefit under the Plan against an amount the Participant is ordered or required to pay to the Plan under a judgment, order, decree or settlement agreement that meets the requirements as set forth in this Section 12.3. The Participant must be ordered or required to pay the Plan under a judgment of conviction for a crime involving the Plan, under a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or pursuant to a settlement agreement between the Secretary of Labor and the Participant in connection with a violation (or alleged violation) of that part 4. This judgment, order, decree or settlement agreement must expressly provide for the offset of all or part of the amount that must be paid to the Plan against the Participant's benefit under the Plan. In addition, if a Participant is entitled to 39 receive a 50% Joint and Survivor Annuity under Section 6.1 of the Plan or a Survivor's Benefit under Article VII of the Plan, and the Participant is married at the time at which the offset is to be made, the Participant's spouse must consent to the offset in accordance with the spousal consent requirements of Section 6.4.3 of the Plan, an election to waive the right of the spouse to the 50% Joint and Survivor Annuity (made in accordance with Section 6.4 of the Plan) or to the Survivor's Benefit (made in accordance with Article VII of the Plan) must be in effect, the spouse is ordered or required in the judgment, order, decree, or settlement to pay an amount to the Plan in connection with a violation of Part 4 of subtitle B or ERISA Title I, or the spouse retains in the judgment, order, decree, or settlement the right to receive the survivor annuity under the 50% Joint and Survivor Annuity or under the Survivor's Benefit, determined in the following manner: the Participant terminated employment on the date of the offset, there was no offset, the Plan permitted the commencement of benefits only on or after Normal Retirement Age, the Plan provided only the minimum-required qualified joint and survivor annuity, and the amount of the Survivor's Benefit under the Plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. For purposes of this Section 12.3 the term "minimum-required qualified joint and survivor annuity" means a qualified joint and survivor annuity which is the actuarial equivalent of the Participant's accrued benefit and under which the survivor's annuity is 50% of the amount of the annuity which is payable during the joint lives of the Participant and the Participant's spouse. 12.4 Beneficiary ----------- The Beneficiary of a Participant shall be the person or persons so designated by such Participant. If no Beneficiary has been designated or if the designated Beneficiary is not living when a Plan Benefit is to be distributed, the Beneficiary shall be such Participant's spouse if then living or, if not, such Participant's then living children in equal shares or, if there are no children, such Participant's estate. A Participant may revoke and change a designation of a Beneficiary at any time. A designation of a Beneficiary, or any revocation and change thereof, shall be effective only if it is made in writing in a form acceptable to the Administrator and is received by it prior to the Participant's death. 12.5 Benefits Payable to Minors, Incompetents and Others --------------------------------------------------- If any benefit is payable to a minor, an incompetent, or a person otherwise under a legal disability, or to a person the Administrator reasonably believes to be physically or mentally incapable of handling and disposing of his or her property, whether because of his or her advanced age, illness, or other physical or mental impairment, the Administrator has the power to apply all or any part of the benefit directly to the care, comfort, maintenance, support, education, or use of the person, or to pay all or any part of the benefit to the person's parent, guardian, committee, conservator, or other legal representative, wherever appointed, to the individual with whom the person is living or to any other individual or entity having the care and control of the person. The Plan, the Administrator and any other Plan fiduciary will have fully discharged all responsibilities to the Participant, Joint Annuitant or Beneficiary entitled to a payment by making payment under the preceding sentence. 40 12.6 Employment Rights ----------------- Nothing in the Plan shall be deemed to give any person a right to remain in the employ of the Company and Affiliates or affect any right of the Company or any Affiliate to terminate a person's employment with or without cause. 12.7 Proof of Age and Marriage ------------------------- Participants and Joint Annuitants shall furnish proof of age and marital status satisfactory to the Administrator at such time or times as it shall prescribe. The Administrator may delay the disbursement of any benefits under the Plan until all pertinent information with respect to age or marital status has been furnished and then make payment retroactively. 12.8 Small Annuities --------------- If the lump sum Actuarial Equivalent value of (a) a Normal, Early, or Deferred Retirement Benefit under Article III, Termination Benefit (payable at the Participant's Normal Retirement Date) under Article IV, or Survivor's Benefit under Article VII, excluding the individual Aetna nonparticipating annuity (if any), and (b) the lump sum Actuarial Equivalent value of the individual Aetna nonparticipating annuity (if any) are both $5,000 or less, such amounts shall be paid in a lump sum as soon as administratively practicable following the Participant's retirement, termination of employment, or death. If a lump sum distribution is so paid and the Participant is thereafter reemployed by the Company, the Participant shall have the option to repay to the Plan the amount of such distribution, together with interest at the rate of 5% per annum (or such other rate as may be prescribed pursuant to section 411(c)(2)(C)(III) of the Code), compounded annually from the date of the distribution to the date of repayment. If a reemployed Participant does not make such repayment, no part of the Period of Service with respect to which the lump sum distribution was made shall count as Years of Vesting Service or Years of Credited Service. 12.9 Controlling Law --------------- The Plan and all rights thereunder shall be interpreted and construed in accordance with ERISA and, to the extent that state law is not preempted by ERISA, the law of the State of Illinois. 12.10 Direct Rollover Option ---------------------- Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section 12.10, a distributee may elect, at the time and in the manner prescribed by the 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. 41 (a) As used in this Section 12.10, an "eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; 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); and any other distribution(s) that is reasonably expected to total less than $200 during a year. (b) As used in this Section 12.10, an "eligible retirement plan" means 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. In the case of an eligible rollover distribution to the surviving spouse, however, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) As used in this Section 12.10, a "distributee" includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (d) As used in this Section 12.10, a "direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee. 12.11 Claims Procedure ---------------- 12.11.1 Any application for benefits under the Plan and all inquiries concerning the Plan shall be submitted to the Company at such address as may be announced to Participants from time to time. Applications for benefits shall be in writing on the form prescribed by the Company and shall be signed by the Participant or, in the case of a benefit payable after the death of the Participant, by the Participant's surviving spouse, Joint Annuitant or Beneficiary, as the case may be. 12.11.2 The Company shall give written notice of its decision on any application to the applicant within 90 days. If special circumstances require a longer period of time the Company shall so notify the applicant within 90 days, and give written notice of its decision to 42 the applicant within 180 days after receiving the application. In the event any application for benefits is denied in whole or in part, the Company shall notify the applicant in writing of the right to a review of the denial. Such written notice shall set forth, in a manner calculated to be understood by the applicant, specific reasons for the denial, specific references to the Plan provisions on which the denial is based, a description of any information or material necessary to perfect the application, an explanation of why such material is necessary and an explanation of the Plan's review procedure. 12.11.3 The Company shall appoint a "Review Panel," which shall consist of three or more individuals who may (but need not) be employees of the Company. The Review Panel shall be the named fiduciary which has the authority to act with respect to any appeal from a denial of benefits under the Plan. 12.11.4 Any person (or his authorized representative) whose application for benefits is denied in whole or in part may appeal the denial by submitting to the Review Panel a request for a review of the application within 60 days after receiving written notice of the denial. The Company shall give the applicant or such representative an opportunity to review, by written request, pertinent materials (other than legally privileged documents) in preparing such request for review. The request for review shall be in writing and addressed as follows: "Review Panel of the Employee Welfare Benefits Plan Committee, 200 East Randolph Drive, Chicago, Illinois 60601." The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the applicant deems pertinent. The Review Panel may require the applicant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. 12.11.5 The Review Panel shall act upon each request for review within 60 days after receipt thereof. If special circumstances require a longer period of time the Review Panel shall so notify the applicant within 60 days, and give written notice of its decision to the applicant within 120 days after receiving the request for review. The Review Panel shall give notice of its decision to the Company and to the applicant in writing. In the event the Review Panel confirms the denial of the application for benefits in whole or in part, such notice shall set forth in a manner calculated to be understood by the applicant, the specific reasons for such denial and specific references to the Plan provisions on which the decision is based. 12.11.6 The Review Panel shall establish such rules and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its responsibilities under this Section 12.11. 12.11.7 No legal or equitable action for benefits under the Plan shall be brought unless and until the claimant (a) has submitted a written application for benefits in accordance with Section 12.10.1, (b) has been notified by the Company that the application is denied, (c) has filed a written request for a review of the application in accordance with Section 12.10.4 and (d) has been notified in writing that the Review Panel has affirmed the denial of the application; provided that legal action may be brought after the Review Panel has failed to take any action on the claim within the time prescribed in Section 12.11.5. A claimant may not bring an action for 43 benefits in accordance with this Section 12.11.7 after 90 days after the Review Panel denies the claimant's application for benefits. 12.12 Participation in the Plan by an Affiliate ----------------------------------------- 12.12.1 With the consent of the Board, any Affiliate, by appropriate action of its board of directors, a general partner or the sole proprietor, as the case may be, may adopt the Plan and determine the classes of its Employees that will be Eligible Employees. 12.12.2 A Participating Employer will have no power with respect to the Plan except as specifically provided herein. 12.13 Action by Participating Employers --------------------------------- Any action required to be taken by the Company pursuant to any Plan provisions will be evidenced in the manner set forth in Section 11.1. Any action required to be taken by a Participating Employer will be evidenced by a resolution of the Participating Employer's board of directors (or an authorized committee of that board). Participating Employer action may also be evidenced by a written instrument executed by any person or persons authorized to take the action by the Participating Employer's board of directors, any authorized committee of that board, or the stockholders. A copy of any written instrument evidencing the action by the Company or Participating Employer must be delivered to the secretary or assistant secretary of the Company or Participating Employer. 44 ARTICLE XIII Top Heavy Provisions -------------------- 13.1 Top Heavy Definitions --------------------- For purposes of this Article XIII and any amendments to it, the terms listed in this Section 13.1 have the meanings ascribed to them below. Aggregate Account means the value of all accounts maintained on behalf of a Participant, whether attributable to Company or employee contributions, determined under applicable provisions of the defined contribution plan used in determining Top Heavy Plan status. Aggregation Group means the group of plans in a Mandatory Aggregation Group, if any, that includes the Plan, unless including additional Related Plans in the group would prevent the Plan for being a Top Heavy Plan, in which case Aggregation Group means the group of plans in a Permissive Aggregation Group, if any, that includes the Plan. Compensation means compensation as defined in Code Section 415(c)(3) and Treasury regulations thereunder. For purposes of determining who is a Key Employee, Compensation will be applied by taking into account amounts paid by Affiliates who are not Participating Employers, as well as amounts paid by Participating Employers, and without applying the exclusions for amounts paid by a Participating Employer to cover an Employee's nonqualified deferred compensation FICA tax obligations and for gross-up payments on such FICA tax payments. Determination Date means, for a Plan Year, the last day of the preceding Plan Year. If the Plan is part of an Aggregation Group, the Determination Date for each other plan will be, for any Plan Year, the Determination Date for that other plan that falls in the same calendar year as the Determination Date for the Plan. Key Employee means an employee described in Code Section 416(i)(1) and the regulations promulgated thereunder. Generally, a Key Employee is an Employee or former Employee who, at any time during the Plan Year containing the Determination Date or any of the 4 preceding Plan Years, is: (a) an officer of the Company or an Affiliate with annual Compensation greater than 50% of the amount in effect under Code Section 415(b)(1)(A); (b) one of the 10 Employees of the Company and all Affiliates owning (or considered to own within the meaning of Code Section 318) the largest interests in any of the Company and the Affiliates, but only if the 45 Employee has annual Compensation greater than the limitation in effect under Code Section 415(c)(1)(A); (c) a 5% owner of the Company or an Affiliate; or (d) a 1% owner of the Company or an Affiliate with annual Compensation from the Company and all Affiliates of more than $150,000. Mandatory Aggregation Group means each plan (considering the Plan and Related Plans) that, during the Plan Year that contains the Determination Date or any of the 4 preceding Plan Years: (a) had a participant who was a Key Employee; or (b) was required to be considered with a plan in which a Key Employee participated in order to enable the plan in which the Key Employee participated to meet the requirements of Code Section 401(a)(4) or 410(b). Non-key Employee means an Employee or former Employee who is not a Key Employee. Permissive Aggregation Group means the group of plans consisting of the plans in a Mandatory Aggregation Group with the Plan, plus any other Related Plan or Plans that, when considered as a part of the Aggregation Group, does not cause the Aggregation Group to fail to satisfy the requirements of Code Section 401(a)(4) or 410(b). Present Value of Accrued Benefits means, in the case of a defined benefit plan, a Participant's present value of accrued benefits determined as follows: (a) as of the most recent "Actuarial Valuation Date," which is the most recent valuation date within a 12-month period ending on the Determination Date. (b) as if the Participant terminated service as of the actuarial valuation date; and (c) the Actuarial Valuation Date must be the same date used for computing the defined benefit plan minimum funding costs, regardless of whether a valuation is performed that Plan Year. Present Value means, in calculating a Participant's present value of accrued benefits as of a Determination Date, the sum of: (a) the present value of accrued benefits using the actuarial assumptions of Exhibit E-4; 46 (b) any Plan distributions made within the Plan Year that includes the Determination Date or within the 4 preceding Plan Years. However, in the case of distributions made after the valuation date and prior to the Determination Date, such distributions are not included as distributions for top heavy purposes to the extent that such distributions are already included in the Participant's present value of accrued benefits as of the valuation date. Notwithstanding anything herein to the contrary, all distributions, including distributions under a terminated plan which if it had not been terminated would have been required to be included in an Aggregation Group, will be counted; (c) any Employee Contributions, whether voluntary or mandatory. However, amounts attributable to tax deductible Qualified Voluntary Employee Contributions shall not be considered to be a part of the Participant's present value of accrued benefits; (d) with respect to unrelated rollovers and plan-to-plan transfers (ones which are both initiated by the Participant and made from a plan maintained by one employer to a plan maintained by another employer), if this Plan provides for rollovers or plan-to-plan transfers, it shall always consider such rollover or plan-to-plan transfer as a distribution for the purposes of this Section 13.1. If this Plan is the plan accepting such rollovers or plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan transfers, as part of the Participant's present value of accrued benefits; and (e) with respect to related rollovers and plan-to-plan transfers (ones either not initiated by the Participant or made to a plan maintained by the same employer), if this Plan provides the rollover or plan-to-plan transfer, it shall not be counted as a distribution for purposes of this Section. If this Plan is the plan accepting such rollover or plan-to-plan transfer, it shall consider such rollover or plan-to-plan transfer as part of the Participant's present value of accrued benefits, irrespective of the date on which such rollover or plan-to-plan transfer is accepted. Related Plan means any other defined contribution plan (a "Related Defined Contribution Plan") or defined benefit plan (a "Related Defined Benefit Plan") (both as defined in Code Section 415(k), maintained by the Company or an Affiliate. A Super Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the present value of accrued benefits and the Aggregate Accounts of Key Employees under all plans in the Aggregation Group exceeds 90% of the sum of the present value of accrued benefits and the Aggregate Accounts of all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits and/or Aggregate Accounts for all employees, the present value of accrued benefits and/or Aggregate Accounts for any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. 47 Super Top Heavy Plan means the Plan when it is described in the second sentence of Section 13.2. A Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the Present Value of Accrued Benefits for Key Employees under all plans in the Aggregation Group exceeds 60% of the sum of the Present Value of Accrued Benefits for all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits for all employees, the Present Value of Accrued Benefits for any Non- key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. Top Heavy Plan means the Plan when it is described in the first sentence of Section 13.2. 13.2 Determination of Top Heavy Status --------------------------------- This Plan is a Top Heavy Plan in any Plan Year in which it is a member of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in which it is a member of a Super Top Heavy Aggregation Group, including a Super Top Heavy Aggregation Group that includes only the Plan. 13.3 Minimum Benefit Requirement for Top Heavy Plan ---------------------------------------------- 13.3.1 Minimum Accrued Benefit: The minimum accrued benefit (expressed as an Individual Life Annuity commencing at Normal Retirement Date) derived from Company contributions to be provided under this Section for each Non-key Employee who is a Participant for any Plan Year in which this Plan is a Top Heavy Plan shall equal the product of (a) 1/12th of "416 Compensation" averaged over 5 the consecutive Plan Years (or actual number of Plan Years if less) which produce the highest average and (b) the lesser of (i) 2% multiplied by Years of Vesting Service or (ii) 20%. 13.3.2 For purposes of providing the minimum benefit under Code Section 416, a Non-key Employee who is not a Participant solely because (a) his compensation is below a stated amount or (b) he declined to make mandatory contributions to the Plan will be considered to be a Participant. 13.3.3 For purposes of this Section 13.3, Years of Vesting Service for any Plan Year ending prior to January 1, 1984, or for any Plan Year during which the Plan was not a Top Heavy Plan shall be disregarded. 13.3.4 For purposes of this Section 13.3, 416 Compensation for any Plan Year ending prior to January 1, 1984, or subsequent to the last Plan Year during which the Plan is a Top Heavy Plan shall be disregarded. 13.3.5 For the purposes of this Section 13.3, "416 Compensation" shall mean W-2 wages for the calendar year ending with or within the Plan Year, and shall be limited to 48 $160,000 (as adjusted for cost-of-living in accordance with Section 401(a)(17)(B) of the Code) in Top Heavy Plan Years. 13.3.6 If payment of the minimum accrued benefit commences at a date other than Normal Retirement Date, or if the form of benefit is other than on Individual Life Annuity, the minimum accrued benefit shall be the actuarial equivalent of the minimum accrued benefit expressed as an Individual Life Annuity commencing at Normal Retirement Date pursuant to Exhibits E-l, E-2, E-3, and E-4. 13.3.7 For any Plan Year before January 1, 2000, when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in both this Plan and a defined contribution plan included in a required Aggregation Group which is top heavy, the extra minimum accrued benefit shall be provided for each Non-key Employee who is a Participant by 20% in Section 13.3.1. 13.3.8 In lieu of the benefit in Section 13.3.7, if a Non-key Employee participates in this Plan and a defined contribution plan included in a Required Aggregation Group which is top heavy, a minimum allocation of 5% of 416 Compensation shall be provided under the defined contribution plan. If the defined contribution plan is amended so that the minimum benefits are no longer provided under the defined contribution plan, the minimum benefits shall be provided under this Plan. However, for any Plan Year when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in both this Plan and a defined contribution plan included in a Required Aggregation Group which is top heavy, 7-1/2% shall be substituted for 5% above. 13.3.9 To the extent required to be nonforfeitable under Section 13.4, the minimum accrued benefit under this Section 13.3 may not be forfeited under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D). 13.4 Vesting Requirement for Top Heavy Plan -------------------------------------- 13.4.1 Notwithstanding any other provision of this Plan, for any Top Heavy Plan Year, the vested portion of any Participant's accrued benefit shall be determined on the basis of the Participant's number of Years of Vesting Service according to the following schedule: Years of Service Percentage Vested ---------------- ----------------- 1 - 2 0% 3 100% If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan, the Company may, in its sole discretion, elect to continue to apply this vesting schedule in determining the vested portion of any Participant's accrued benefit, or revert to the vesting schedule in effect before this Plan became a Top Heavy Plan. Any such reversion shall be treated as a Plan amendment. 49 13.4.2 The computation of the nonforfeitable percentage of the Participant's interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Plan. In the event that this Plan is amended to change or modify any vesting schedule, a Participant with at least 5 Years of Service as of the expiration date of the election period may elect to have the Participant's nonforfeitable percentage computed under the Plan without regard to such amendment. If a Participant fails to make such election, then such Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment and shall end 60 days after the latest of (a) the adoption date of the amendment, (b) the effective date of the amendment, or (c) the date the Participant receives written notice of the amendment from the Company. To record the amendment and restatement of the Plan to read as set forth herein, the Company has caused its authorized member of the Committee to execute the same this 31st day of August, 1999, but to be effective January 1, 1999, except as otherwise provided in the text herein. FMC CORPORATION BY:/s/ J. Paul McGrath __________________________ Member, Employee Welfare Benefits Plan Committee 50 EXHIBIT A CREDITED SERVICE ---------------- Any service acquired as a participant under any of the plans listed herein shall not be counted as Credited Service for purposes of this Plan. 1. Stearns Electric Company Profit Sharing Plan. 2. Fritzke and Icke Employees Savings and Profit Sharing Plan. 3. Employees Profit Sharing Plan of Industrial Brush Company. 4. Wayne Manufacturing Company Profit Sharing Company. 5. P. E. Van Pelt, Inc. Profit Sharing Plan. 6. Mojonnier Bros. Co. Salaried Employees Profit Sharing Plan. 7. Lithium Corporation of America Retirement Plan. 8. Elf Aquitaine, Inc. Pension Plan 9. Frigoscandia Inc. Money Purchase Pension Plan 10. Frigoscandia Inc. Retirement Plan: Pension Plan/401(k) Plan 51 EXHIBIT B INACTIVE LOCATIONS ------------------ The following is a list of former locations of the Company which have been sold or closed. The Plan has retained the assets and liabilities with respect to certain Participants formerly employed by the Company at such locations:
LOCATION DATE SOLD/CLOSED -------- ---------------- - -------------------------------------------------------------------------------- Power Transmission - (Salaried and Nonunion Hourly) September 28, 1981 - -------------------------------------------------------------------------------- FMC Gold - Salaried/1/ July 31, 1996 - -------------------------------------------------------------------------------- Invalco February 26, 1999 - -------------------------------------------------------------------------------- Houston Fluid Control January 1, 1984 - --------------------------------------------------------------------------------
/1/ All benefits except individual Aetna annuities and benefits for inactive participants transferred to the purchaser. 52 EXHIBIT C MERGED PLANS ------------ The following is a list of other plans which have been merged into this Part I Salaried Employees' Retirement Plan on and after January 1, 1979.
EFFECTIVE DATE OF SUPPLEMENT PLAN NAME MERGER NUMBER --------- ------ ---------- - ------------------------------------------------------------------------------------- Salaried Part of the Retirement Plan for January 1, 1979 1 Nonunion Employees of Sun Cleanser Company - ------------------------------------------------------------------------------------- Marine Colloids Division of FMC Corporation January 1, 1979 2 Salaried Employees' Retirement Plan - ------------------------------------------------------------------------------------- Hourly Part of the Retirement Plan for Nonunion September 15, 1980 1 Employees of Sun Cleanser Company - ------------------------------------------------------------------------------------- Pneumo Abex Corporation Retirement Income May 27, 1994 3 Plan (Jetway Equipment Division) - ------------------------------------------------------------------------------------- Retirement Plan for Employees of Stein June 1, 1997 4 - ------------------------------------------------------------------------------------- Moorco International, Inc. Retirement July 1, 1997 5 Income Plan - ------------------------------------------------------------------------------------- Smith Meter, Inc. Salaried Retirement Plan July 1, 1997 6 - -------------------------------------------------------------------------------------
53 EXHIBIT D CERTAIN RETIRED PARTICIPANTS ---------------------------- A. Except as provided in paragraph B. below, the monthly benefit payment of each Participant, Joint Annuitant, or Beneficiary who is receiving a monthly benefit payment on November 1, 1979, with respect to a Participant who retired before July 1, 1978, shall be increased, effective with respect to payments made on and after November 1, 1979, by an amount determined by multiplying the percentage to be obtained from (1) and (2) below, whichever is applicable, by (3) below: (1) If the Participant retired prior to January 1, 1978, the sum of the percentage obtained under a. and b. below, but not to exceed 10%: a. The percentage obtained from the following table: Calendar year during which monthly benefit payments were first paid to the Participant (if the payments on November 1, 1979, were being received by the Participant or by the Joint Annuitant or Beneficiary of a Participant who died after beginning to receive payments), or were first paid to the Joint Annuitant or Beneficiary (if the payments on November 1, 1979, were being received by the Joint Annuitant or Beneficiary of a Participant who died before beginning to receive payments). Percentage ---------- ---------- 1977 2% 1976 4% 1975 6% 1974 8% 1973 or earlier 10% b. A percentage equal to 1/2% for each full year of Credited Service in excess of 30 full years of Credited Service that the Participant had at retirement (e.g., 31 years - 1/2%, 32 years - 1%). (2) If the Participant retired after December 31, 1977, but before July 1, 1978, and if he had 31 or more full years of Credited Service, a percentage equal to 2-1/2% plus an additional 1/2% for each full year of his Credited Service in excess of 31 full years (e.g., 31 years - 2-1/2%, 32 years - 3%), but not to exceed 10%. (3) The amount of the monthly benefit payment which the Participant, Joint Annuitant, or Beneficiary would otherwise have received on November 1, 1979 (if this 54 increase in amount were not granted). If the Participant's monthly benefit payment in this paragraph A(3) is a payment prior to the Participant's 62nd birthday under a Level Income Option, the increase determined by applying the applicable percentage under (1) or (2) above to such payment shall be payable only prior to his 62nd birthday, and after such birthday the applicable percentage under (1) or (2) above shall be applied to the reduced monthly annuity payments otherwise payable under the Level Income Option to increase that amount by said applicable percentage. B. If a Participant attained his Normal Retirement Date before July 1, 1978, but continued in employment after attaining his Normal Retirement Date, the provisions of paragraph A. above shall not be applicable, but instead the following shall apply: (1) If such a Participant, or his Joint Annuitant or Beneficiary, is receiving a monthly benefit payment on November 1, 1979, the monthly benefit payment shall be increased, effective with respect to payments made on and after November 1, 1979, by an amount determined by multiplying the percentage to be obtained from a., b. or c. below, whichever is applicable, by d. below. a. If the Participant attained his Normal Retirement Date before January 1, 1978, and he retired prior to July 1, 1978, the sum of the percentage obtained under i. and ii. below, but not to exceed 10%: i. The percentage obtained from the following table: Calendar year during which the Participant attained his Normal Retirement Date Percentage ------------------------------ ---------- 1977 2% 1976 4% 1975 6% 1974 8% 1973 and earlier 10% ii A percentage equal to 1/2% for each full year of credited Service in excess of 30 full years of Credited Service that the Participant had at retirement (e.g., 31 years - 1/2%, 32 years - 1%). b. If the Participant both attained his Normal Retirement Date and retired after December 31, 1977, but before July 1, 1978, and if he had 31 or more full years of Credited Service, a percentage equal to 2-1/2% plus an additional 1/2% for each full year of his Credited Service in excess of 31 full years (e.g., 31 years - 2-1/2%, 32 years - 3%), but not to exceed 10%. c. If the Participant retired after June 30, 1978 but prior to November 2, 1979, the percentage obtained from the following table: 55 Calendar year during which the Participant attained his Normal Retirement Date Percentage ------------------------------ ---------- 1977 2% 1976 4% 1975 6% 1974 8% 1973 and earlier 10% d. The amount of the monthly benefit payment which the Participant, Joint Annuitant, or Beneficiary would otherwise have received on November 1, 1979 (if this increase in amount were not granted). (2) If such a Participant, or his Joint Annuitant or Beneficiary, is not receiving a monthly benefit payment on November 1, 1979, and the Participant continues in employment, then upon his retirement, the monthly benefit payment thereafter payable to the Participant, or his Joint Annuitant or Beneficiary, shall be increased by an amount determined by multiplying the percentage to be obtained from a. or b. below, whichever is applicable, by c. below: a. The sum of the percentage obtained under i. and ii. below, but not to exceed 10%: i. The percentage obtained from the following table: Calendar year during which the Participant attained his Normal Retirement Date Percentage ------------------------------- ---------- 1977 2% 1976 4% 1975 6% 1974 8% 1973 and earlier 10% ii. A percentage equal to 1/2% for each full year of Credited Service in excess of 30 full years of Credited Service that the Participant had at retirement (e.g., 31 years - 1/2%, 32 years - 1%). b. If the Participant attained his Normal Retirement Date after December 31, 1977, but before July 1, 1978, and if he had 31 or more full years of Credited Service, a percentage equal to 2-1/2% plus an additional 1/2% for each full year of his Credited Service in excess of 31 full years (e.g., 31 years - 2-1/2%, 32 years -3%), but not to exceed 10%. 56 c. The amount of the monthly benefit payment which the Participant, Joint Annuitant, or Beneficiary would otherwise have received on the date benefit payments begin (if this increase in amount were not granted). C. If the amount of monthly increase in the monthly benefit payment to be made under paragraph A. or B. above would be less than $10.00, then the amount shall be $10.00. 57 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 20 21 22 23 24 25 26 27 28 29 Participant's 55 0.8339 0.8348 0.8359 0.8369 0.8381 0.8393 0.8405 0.8418 0.8432 0.8447 Age 56 0.8248 0.8257 0.8268 0.8279 0.8290 0.8302 0.8315 0.8328 0.8342 0.8356 57 0.8152 0.8162 0.8172 0.8183 0.8195 0.8207 0.8219 0.8233 0.8247 0.8262 58 0.8052 0.8062 0.8072 0.8083 0.8095 0.8107 0.8120 0.8133 0.8147 0.8162 59 0.7947 0.7957 0.7968 0.7979 0.7990 0.8002 0.8015 0.8028 0.8043 0.8057 60 0.7838 0.7848 0.7858 0.7869 0.7881 0.7893 0.7906 0.7919 0.7933 0.7948 61 0.7724 0.7734 0.7744 0.7755 0.7767 0.7779 0.7792 0.7805 0.7819 0.7834 62 0.7605 0.7615 0.7626 0.7636 0.7648 0.7660 0.7673 0.7687 0.7701 0.7716 63 0.7482 0.7492 0.7502 0.7513 0.7525 0.7537 0.7550 0.7563 0.7578 0.7593 64 0.7354 0.7364 0.7374 0.7385 0.7397 0.7409 0.7421 0.7435 0.7449 0.7464 65 0.7221 0.7231 0.7241 0.7252 0.7264 0.7276 0.7289 0.7302 0.7316 0.7331 66 0.7084 0.7094 0.7104 0.7115 0.7127 0.7139 0.7151 0.7165 0.7179 0.7194 67 0.6944 0.6954 0.6964 0.6975 0.6986 0.6998 0.7011 0.7024 0.7038 0.7053 68 0.6801 0.6810 0.6820 0.6831 0.6842 0.6854 0.6867 0.6880 0.6894 0.6909 69 0.6654 0.6664 0.6674 0.6685 0.6696 0.6708 0.6720 0.6734 0.6747 0.6762 70 0.6506 0.6515 0.6525 0.6536 0.6547 0.6559 0.6571 0.6585 0.6598 0.6613 71 0.6357 0.6366 0.6376 0.6386 0.6398 0.6409 0.6422 0.6435 0.6448 0.6463 72 0.6207 0.6216 0.6226 0.6236 0.6247 0.6259 0.6271 0.6284 0.6297 0.6312 73 0.6055 0.6064 0.6074 0.6084 0.6095 0.6107 0.6119 0.6131 0.6145 0.6159 74 0.5900 0.5909 0.5919 0.5929 0.5939 0.5951 0.5963 0.5975 0.5989 0.6003 75 0.5741 0.5749 0.5759 0.5769 0.5780 0.5791 0.5802 0.5815 0.5828 0.5842 76 0.5577 0.5585 0.5595 0.5605 0.5615 0.5626 0.5638 0.5650 0.5663 0.5677 77 0.5410 0.5418 0.5428 0.5437 0.5447 0.5458 0.5470 0.5482 0.5495 0.5508 78 0.5243 0.5251 0.5260 0.5270 0.5280 0.5290 0.5301 0.5313 0.5326 0.5339 79 0.5077 0.5085 0.5094 0.5104 0.5113 0.5124 0.5135 0.5147 0.5159 0.5172 80 0.4914 0.4922 0.4931 0.4940 0.4950 0.4960 0.4971 0.4982 0.4994 0.5007 81 0.4755 0.4763 0.4771 0.4780 0.4789 0.4799 0.4810 0.4821 0.4833 0.4845 82 0.4599 0.4607 0.4615 0.4624 0.4633 0.4643 0.4653 0.4664 0.4676 0.4688 83 0.4447 0.4454 0.4462 0.4471 0.4480 0.4490 0.4500 0.4510 0.4522 0.4534 84 0.4298 0.4306 0.4314 0.4322 0.4331 0.4340 0.4350 0.4361 0.4372 0.4384 85 0.4154 0.4161 0.4169 0.4177 0.4186 0.4195 0.4205 0.4215 0.4226 0.4237 86 0.4013 0.4020 0.4027 0.4035 0.4044 0.4053 0.4062 0.4072 0.4082 0.4094 87 0.3874 0.3881 0.3888 0.3896 0.3904 0.3913 0.3922 0.3932 0.3942 0.3953 88 0.3738 0.3745 0.3752 0.3759 0.3767 0.3776 0.3785 0.3794 0.3804 0.3815 89 0.3604 0.3610 0.3617 0.3625 0.3633 0.3641 0.3649 0.3659 0.3668 0.3679
58 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 30 31 32 33 34 35 36 37 38 39 Participant's 55 0.8462 0.8478 0.8495 0.8512 0.8530 0.8550 0.8570 0.8590 0.8612 0.8635 Age 56 0.8372 0.8388 0.8405 0.8422 0.8441 0.8460 0.8480 0.8502 0.8524 0.8547 57 0.8277 0.8293 0.8310 0.8328 0.8347 0.8366 0.8387 0.8408 0.8431 0.8454 58 0.8178 0.8194 0.8211 0.8229 0.8248 0.8268 0.8288 0.8310 0.8333 0.8357 59 0.8073 0.8089 0.8107 0.8125 0.8144 0.8164 0.8185 0.8207 0.8230 0.8254 60 0.7964 0.7980 0.7998 0.8016 0.8035 0.8055 0.8076 0.8098 0.8122 0.8146 61 0.7850 0.7867 0.7884 0.7902 0.7922 0.7942 0.7963 0.7985 0.8009 0.8033 62 0.7732 0.7748 0.7766 0.7784 0.7803 0.7824 0.7845 0.7868 0.7891 0.7916 63 0.7608 0.7625 0.7642 0.7661 0.7680 0.7701 0.7722 0.7745 0.7768 0.7793 64 0.7480 0.7497 0.7514 0.7533 0.7552 0.7573 0.7594 0.7617 0.7640 0.7665 65 0.7347 0.7364 0.7381 0.7400 0.7419 0.7440 0.7461 0.7484 0.7508 0.7533 66 0.7210 0.7226 0.7244 0.7262 0.7282 0.7302 0.7324 0.7346 0.7370 0.7395 67 0.7069 0.7085 0.7103 0.7121 0.7141 0.7161 0.7183 0.7205 0.7229 0.7254 68 0.6925 0.6941 0.6959 0.6977 0.6996 0.7017 0.7038 0.7061 0.7085 0.7110 69 0.6778 0.6794 0.6811 0.6830 0.6849 0.6869 0.6891 0.6913 0.6937 0.6962 70 0.6629 0.6645 0.6662 0.6680 0.6699 0.6719 0.6741 0.6763 0.6787 0.6812 71 0.6478 0.6494 0.6511 0.6529 0.6548 0.6569 0.6590 0.6612 0.6636 0.6660 72 0.6327 0.6343 0.6360 0.6378 0.6397 0.6417 0.6438 0.6460 0.6483 0.6508 73 0.6174 0.6190 0.6207 0.6225 0.6243 0.6263 0.6284 0.6306 0.6329 0.6354 74 0.6018 0.6033 0.6050 0.6067 0.6086 0.6106 0.6126 0.6148 0.6171 0.6195 75 0.5857 0.5872 0.5889 0.5906 0.5924 0.5943 0.5964 0.5985 0.6008 0.6032 76 0.5691 0.5706 0.5723 0.5740 0.5758 0.5777 0.5797 0.5818 0.5841 0.5864 77 0.5522 0.5537 0.5553 0.5570 0.5588 0.5607 0.5626 0.5647 0.5670 0.5693 78 0.5353 0.5368 0.5384 0.5400 0.5418 0.5436 0.5456 0.5476 0.5498 0.5521 79 0.5186 0.5200 0.5215 0.5232 0.5249 0.5267 0.5286 0.5307 0.5328 0.5351 80 0.5020 0.5035 0.5050 0.5066 0.5082 0.5100 0.5119 0.5139 0.5160 0.5182 81 0.4859 0.4873 0.4887 0.4903 0.4920 0.4937 0.4956 0.4975 0.4996 0.5018 82 0.4701 0.4714 0.4729 0.4744 0.4760 0.4778 0.4796 0.4815 0.4835 0.4857 83 0.4546 0.4560 0.4574 0.4589 0.4605 0.4622 0.4639 0.4658 0.4678 0.4699 84 0.4396 0.4409 0.4423 0.4437 0.4453 0.4469 0.4487 0.4505 0.4525 0.4545 85 0.4249 0.4262 0.4275 0.4290 0.4305 0.4321 0.4338 0.4356 0.4375 0.4395 86 0.4105 0.4118 0.4131 0.4145 0.4160 0.4176 0.4192 0.4210 0.4228 0.4248 87 0.3965 0.3977 0.3990 0.4003 0.4018 0.4033 0.4049 0.4066 0.4085 0.4104 88 0.3826 0.3838 0.3851 0.3864 0.3878 0.3893 0.3909 0.3925 0.3943 0.3962 89 0.3690 0.3701 0.3713 0.3726 0.3740 0.3754 0.3770 0.3786 0.3803 0.3822
59 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 40 41 42 43 44 45 46 47 48 49 Participant's 55 0.8659 0.8683 0.8709 0.8735 0.8762 0.8791 0.8820 0.8850 0.8881 0.8912 Age 56 0.8571 0.8596 0.8622 0.8649 0.8677 0.8706 0.8736 0.8767 0.8799 0.8831 57 0.8479 0.8504 0.8531 0.8558 0.8587 0.8616 0.8647 0.8679 0.8712 0.8745 58 0.8381 0.8407 0.8434 0.8462 0.8491 0.8522 0.8553 0.8586 0.8619 0.8654 59 0.8279 0.8305 0.8332 0.8361 0.8391 0.8422 0.8454 0.8487 0.8522 0.8557 60 0.8171 0.8198 0.8226 0.8255 0.8285 0.8316 0.8349 0.8383 0.8418 0.8455 61 0.8059 0.8086 0.8114 0.8143 0.8174 0.8206 0.8239 0.8274 0.8310 0.8347 62 0.7942 0.7969 0.7997 0.8027 0.8058 0.8090 0.8124 0.8159 0.8196 0.8234 63 0.7819 0.7847 0.7875 0.7905 0.7937 0.7969 0.8004 0.8040 0.8077 0.8116 64 0.7692 0.7719 0.7748 0.7778 0.7810 0.7843 0.7878 0.7914 0.7952 0.7991 65 0.7559 0.7587 0.7616 0.7646 0.7678 0.7711 0.7746 0.7783 0.7821 0.7861 66 0.7422 0.7450 0.7479 0.7509 0.7541 0.7575 0.7610 0.7647 0.7686 0.7726 67 0.7281 0.7309 0.7338 0.7368 0.7401 0.7435 0.7470 0.7507 0.7546 0.7587 68 0.7136 0.7164 0.7193 0.7224 0.7256 0.7290 0.7326 0.7363 0.7403 0.7444 69 0.6988 0.7016 0.7045 0.7076 0.7109 0.7143 0.7178 0.7216 0.7255 0.7297 70 0.6838 0.6866 0.6895 0.6926 0.6958 0.6992 0.7028 0.7066 0.7105 0.7147 71 0.6687 0.6714 0.6743 0.6774 0.6806 0.6840 0.6876 0.6914 0.6953 0.6995 72 0.6534 0.6562 0.6591 0.6621 0.6653 0.6687 0.6723 0.6760 0.6800 0.6842 73 0.6379 0.6407 0.6436 0.6466 0.6498 0.6532 0.6567 0.6605 0.6644 0.6686 74 0.6221 0.6248 0.6277 0.6307 0.6339 0.6372 0.6408 0.6445 0.6484 0.6525 75 0.6058 0.6085 0.6113 0.6143 0.6174 0.6208 0.6243 0.6280 0.6319 0.6360 76 0.5890 0.5916 0.5944 0.5974 0.6005 0.6038 0.6073 0.6109 0.6148 0.6189 77 0.5718 0.5744 0.5772 0.5801 0.5832 0.5864 0.5899 0.5935 0.5974 0.6014 78 0.5546 0.5571 0.5599 0.5627 0.5658 0.5690 0.5724 0.5760 0.5798 0.5838 79 0.5375 0.5400 0.5427 0.5455 0.5485 0.5517 0.5551 0.5586 0.5624 0.5663 80 0.5206 0.5231 0.5257 0.5285 0.5315 0.5346 0.5379 0.5414 0.5451 0.5490 81 0.5041 0.5065 0.5091 0.5119 0.5148 0.5179 0.5211 0.5245 0.5282 0.5320 82 0.4879 0.4903 0.4929 0.4956 0.4984 0.5014 0.5046 0.5080 0.5116 0.5154 83 0.4721 0.4745 0.4770 0.4796 0.4824 0.4854 0.4885 0.4918 0.4953 0.4990 84 0.4567 0.4590 0.4615 0.4640 0.4668 0.4697 0.4728 0.4760 0.4794 0.4831 85 0.4416 0.4439 0.4463 0.4488 0.4515 0.4543 0.4574 0.4605 0.4639 0.4675 86 0.4269 0.4291 0.4314 0.4339 0.4365 0.4393 0.4423 0.4454 0.4487 0.4522 87 0.4124 0.4146 0.4169 0.4193 0.4218 0.4246 0.4274 0.4305 0.4337 0.4371 88 0.3982 0.4003 0.4025 0.4049 0.4074 0.4100 0.4128 0.4158 0.4190 0.4223 89 0.3841 0.3861 0.3883 0.3906 0.3931 0.3957 0.3984 0.4013 0.4044 0.4077
60 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 50 51 52 53 54 55 56 57 58 59 Participant's 55 0.8945 0.8978 0.9012 0.9046 0.9081 0.9116 0.9152 0.9188 0.9224 0.9261 Age 56 0.8865 0.8899 0.8935 0.8970 0.9007 0.9044 0.9082 0.9120 0.9158 0.9196 57 0.8780 0.8816 0.8852 0.8890 0.8928 0.8966 0.9006 0.9046 0.9086 0.9126 58 0.8690 0.8727 0.8765 0.8803 0.8843 0.8883 0.8924 0.8966 0.9008 0.9051 59 0.8594 0.8632 0.8671 0.8711 0.8752 0.8794 0.8837 0.8881 0.8925 0.8970 60 0.8493 0.8532 0.8572 0.8613 0.8656 0.8699 0.8744 0.8789 0.8836 0.8882 61 0.8386 0.8426 0.8467 0.8510 0.8554 0.8599 0.8645 0.8692 0.8741 0.8790 62 0.8274 0.8315 0.8357 0.8401 0.8446 0.8493 0.8541 0.8590 0.8640 0.8691 63 0.8156 0.8198 0.8241 0.8286 0.8333 0.8380 0.8430 0.8481 0.8532 0.8585 64 0.8032 0.8075 0.8119 0.8165 0.8213 0.8262 0.8313 0.8365 0.8419 0.8474 65 0.7903 0.7946 0.7991 0.8038 0.8087 0.8137 0.8190 0.8243 0.8299 0.8356 66 0.7769 0.7813 0.7858 0.7906 0.7956 0.8007 0.8061 0.8116 0.8173 0.8231 67 0.7630 0.7674 0.7721 0.7769 0.7820 0.7872 0.7927 0.7983 0.8042 0.8102 68 0.7487 0.7532 0.7579 0.7628 0.7679 0.7733 0.7788 0.7846 0.7906 0.7967 69 0.7340 0.7385 0.7433 0.7483 0.7534 0.7589 0.7645 0.7704 0.7765 0.7828 70 0.7190 0.7236 0.7284 0.7334 0.7386 0.7441 0.7498 0.7558 0.7620 0.7684 71 0.7038 0.7084 0.7132 0.7183 0.7236 0.7291 0.7349 0.7409 0.7472 0.7538 72 0.6885 0.6931 0.6979 0.7030 0.7083 0.7139 0.7197 0.7258 0.7322 0.7388 73 0.6729 0.6775 0.6824 0.6874 0.6928 0.6984 0.7043 0.7104 0.7168 0.7235 74 0.6569 0.6615 0.6663 0.6714 0.6768 0.6824 0.6883 0.6945 0.7009 0.7077 75 0.6403 0.6449 0.6497 0.6548 0.6601 0.6658 0.6717 0.6779 0.6844 0.6912 76 0.6232 0.6278 0.6326 0.6376 0.6429 0.6486 0.6545 0.6607 0.6672 0.6741 77 0.6057 0.6102 0.6149 0.6200 0.6253 0.6309 0.6368 0.6430 0.6495 0.6564 78 0.5880 0.5925 0.5972 0.6022 0.6075 0.6130 0.6189 0.6251 0.6316 0.6385 79 0.5705 0.5749 0.5796 0.5845 0.5897 0.5953 0.6011 0.6072 0.6137 0.6205 80 0.5531 0.5575 0.5621 0.5670 0.5722 0.5776 0.5834 0.5895 0.5959 0.6027 81 0.5361 0.5404 0.5449 0.5498 0.5549 0.5603 0.5660 0.5720 0.5784 0.5852 82 0.5194 0.5236 0.5281 0.5328 0.5379 0.5432 0.5489 0.5549 0.5612 0.5679 83 0.5030 0.5071 0.5116 0.5162 0.5212 0.5265 0.5320 0.5380 0.5442 0.5508 84 0.4870 0.4910 0.4954 0.5000 0.5049 0.5101 0.5156 0.5214 0.5276 0.5341 85 0.4713 0.4753 0.4795 0.4841 0.4889 0.4940 0.4994 0.5051 0.5112 0.5176 86 0.4559 0.4598 0.4640 0.4684 0.4732 0.4782 0.4835 0.4891 0.4951 0.5015 87 0.4408 0.4446 0.4487 0.4531 0.4577 0.4626 0.4678 0.4734 0.4793 0.4855 88 0.4259 0.4296 0.4336 0.4379 0.4424 0.4472 0.4524 0.4578 0.4636 0.4697 89 0.4111 0.4148 0.4187 0.4229 0.4273 0.4320 0.4370 0.4424 0.4480 0.4540
61 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 60 61 62 63 64 65 66 67 68 69 Participant's 55 0.9297 0.9332 0.9368 0.9403 0.9437 0.9471 0.9504 0.9537 0.9568 0.9599 Age 56 0.9234 0.9272 0.9310 0.9348 0.9385 0.9421 0.9457 0.9492 0.9526 0.9559 57 0.9167 0.9207 0.9247 0.9287 0.9327 0.9366 0.9404 0.9442 0.9479 0.9514 58 0.9094 0.9136 0.9179 0.9222 0.9264 0.9306 0.9347 0.9387 0.9427 0.9466 59 0.9015 0.9060 0.9105 0.9150 0.9195 0.9240 0.9284 0.9327 0.9370 0.9412 60 0.8930 0.8977 0.9025 0.9073 0.9121 0.9168 0.9215 0.9262 0.9307 0.9352 61 0.8839 0.8889 0.8939 0.8990 0.9040 0.9091 0.9141 0.9191 0.9240 0.9288 62 0.8742 0.8795 0.8848 0.8901 0.8954 0.9008 0.9061 0.9114 0.9166 0.9218 63 0.8639 0.8694 0.8750 0.8805 0.8862 0.8918 0.8974 0.9031 0.9086 0.9142 64 0.8530 0.8587 0.8645 0.8703 0.8762 0.8822 0.8881 0.8941 0.9000 0.9059 65 0.8414 0.8473 0.8533 0.8594 0.8656 0.8718 0.8781 0.8844 0.8907 0.8969 66 0.8292 0.8353 0.8415 0.8479 0.8544 0.8609 0.8675 0.8741 0.8807 0.8874 67 0.8164 0.8227 0.8292 0.8358 0.8425 0.8493 0.8562 0.8632 0.8701 0.8772 68 0.8031 0.8096 0.8163 0.8231 0.8301 0.8372 0.8444 0.8516 0.8590 0.8663 69 0.7893 0.7960 0.8029 0.8099 0.8171 0.8245 0.8319 0.8395 0.8472 0.8549 70 0.7751 0.7819 0.7890 0.7962 0.8037 0.8113 0.8190 0.8269 0.8349 0.8430 71 0.7605 0.7675 0.7748 0.7822 0.7898 0.7977 0.8057 0.8138 0.8221 0.8306 72 0.7457 0.7528 0.7602 0.7678 0.7757 0.7837 0.7919 0.8004 0.8090 0.8178 73 0.7305 0.7378 0.7453 0.7530 0.7610 0.7693 0.7777 0.7864 0.7953 0.8044 74 0.7148 0.7221 0.7297 0.7376 0.7458 0.7542 0.7628 0.7718 0.7809 0.7903 75 0.6983 0.7057 0.7134 0.7214 0.7297 0.7383 0.7472 0.7563 0.7657 0.7753 76 0.6812 0.6887 0.6964 0.7045 0.7129 0.7216 0.7307 0.7400 0.7496 0.7595 77 0.6635 0.6710 0.6789 0.6870 0.6955 0.7043 0.7135 0.7230 0.7328 0.7429 78 0.6456 0.6531 0.6610 0.6692 0.6777 0.6867 0.6959 0.7055 0.7155 0.7259 79 0.6277 0.6352 0.6431 0.6513 0.6599 0.6689 0.6782 0.6880 0.6981 0.7086 80 0.6099 0.6174 0.6252 0.6334 0.6420 0.6511 0.6605 0.6703 0.6805 0.6911 81 0.5922 0.5997 0.6075 0.6157 0.6244 0.6334 0.6428 0.6527 0.6630 0.6737 82 0.5749 0.5823 0.5901 0.5983 0.6068 0.6159 0.6253 0.6352 0.6456 0.6564 83 0.5578 0.5651 0.5729 0.5810 0.5895 0.5985 0.6079 0.6178 0.6282 0.6391 84 0.5410 0.5482 0.5559 0.5640 0.5725 0.5814 0.5908 0.6007 0.6111 0.6220 85 0.5244 0.5316 0.5392 0.5472 0.5556 0.5645 0.5739 0.5837 0.5941 0.6050 86 0.5082 0.5153 0.5227 0.5306 0.5390 0.5478 0.5571 0.5669 0.5772 0.5881 87 0.4921 0.4991 0.5065 0.5143 0.5225 0.5312 0.5404 0.5502 0.5604 0.5713 88 0.4762 0.4831 0.4903 0.4980 0.5062 0.5148 0.5239 0.5335 0.5437 0.5545 89 0.4604 0.4672 0.4743 0.4819 0.4899 0.4984 0.5074 0.5169 0.5270 0.5377
62 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 70 71 72 73 74 75 76 77 78 79 Participant's 55 0.9628 0.9656 0.9683 0.9708 0.9732 0.9754 0.9775 0.9795 0.9813 0.9830 Age 56 0.9591 0.9621 0.9650 0.9678 0.9704 0.9728 0.9751 0.9773 0.9793 0.9812 57 0.9549 0.9582 0.9614 0.9644 0.9673 0.9699 0.9725 0.9748 0.9771 0.9791 58 0.9503 0.9539 0.9574 0.9607 0.9638 0.9667 0.9695 0.9721 0.9745 0.9768 59 0.9452 0.9491 0.9529 0.9565 0.9599 0.9631 0.9661 0.9690 0.9716 0.9742 60 0.9396 0.9439 0.9479 0.9518 0.9555 0.9590 0.9624 0.9655 0.9684 0.9712 61 0.9335 0.9381 0.9425 0.9467 0.9507 0.9546 0.9582 0.9616 0.9649 0.9679 62 0.9269 0.9318 0.9365 0.9411 0.9455 0.9497 0.9536 0.9574 0.9609 0.9643 63 0.9196 0.9249 0.9300 0.9350 0.9397 0.9442 0.9485 0.9526 0.9565 0.9602 64 0.9117 0.9174 0.9229 0.9282 0.9333 0.9382 0.9429 0.9474 0.9516 0.9556 65 0.9031 0.9092 0.9151 0.9208 0.9264 0.9317 0.9367 0.9416 0.9462 0.9506 66 0.8939 0.9004 0.9067 0.9129 0.9188 0.9245 0.9300 0.9352 0.9403 0.9450 67 0.8841 0.8910 0.8977 0.9043 0.9106 0.9168 0.9227 0.9284 0.9338 0.9390 68 0.8737 0.8810 0.8881 0.8951 0.9019 0.9085 0.9148 0.9209 0.9268 0.9324 69 0.8627 0.8704 0.8779 0.8853 0.8926 0.8996 0.9064 0.9129 0.9193 0.9253 70 0.8511 0.8592 0.8672 0.8750 0.8827 0.8901 0.8974 0.9044 0.9112 0.9177 71 0.8391 0.8475 0.8559 0.8642 0.8723 0.8802 0.8879 0.8954 0.9027 0.9096 72 0.8266 0.8354 0.8442 0.8529 0.8614 0.8698 0.8780 0.8859 0.8937 0.9011 73 0.8136 0.8228 0.8320 0.8410 0.8500 0.8588 0.8675 0.8759 0.8841 0.8921 74 0.7998 0.8094 0.8189 0.8284 0.8378 0.8471 0.8561 0.8651 0.8738 0.8822 75 0.7852 0.7951 0.8050 0.8149 0.8247 0.8344 0.8439 0.8533 0.8625 0.8715 76 0.7696 0.7798 0.7901 0.8004 0.8106 0.8207 0.8307 0.8406 0.8503 0.8598 77 0.7533 0.7638 0.7744 0.7850 0.7956 0.8061 0.8166 0.8269 0.8371 0.8471 78 0.7364 0.7472 0.7581 0.7691 0.7800 0.7909 0.8018 0.8126 0.8232 0.8337 79 0.7194 0.7304 0.7415 0.7528 0.7641 0.7753 0.7866 0.7978 0.8089 0.8199 80 0.7021 0.7133 0.7247 0.7362 0.7478 0.7594 0.7710 0.7826 0.7941 0.8055 81 0.6848 0.6962 0.7078 0.7195 0.7314 0.7433 0.7552 0.7672 0.7791 0.7909 82 0.6676 0.6791 0.6909 0.7028 0.7149 0.7270 0.7393 0.7515 0.7638 0.7760 83 0.6504 0.6620 0.6739 0.6860 0.6983 0.7107 0.7232 0.7357 0.7483 0.7609 84 0.6333 0.6450 0.6570 0.6693 0.6817 0.6943 0.7070 0.7198 0.7327 0.7456 85 0.6163 0.6281 0.6402 0.6525 0.6651 0.6778 0.6907 0.7038 0.7169 0.7301 86 0.5994 0.6112 0.6233 0.6357 0.6484 0.6613 0.6744 0.6876 0.7010 0.7145 87 0.5826 0.5944 0.6065 0.6190 0.6317 0.6447 0.6579 0.6713 0.6849 0.6986 88 0.5657 0.5775 0.5896 0.6021 0.6149 0.6279 0.6412 0.6547 0.6685 0.6824 89 0.5489 0.5606 0.5727 0.5851 0.5979 0.6110 0.6244 0.6380 0.6519 0.6659
63 Exhibit E-1 FMC Corporation Optional Form Factors For Conversion from Single Life Annuity to 50% Joint and Survivor Annuity Form Mortality: 1971GAT (95% Male / 5% Female); Interest: 6.0% Payment at Beginning of Month
Beneficiary's Age 80 81 82 83 84 85 86 87 88 89 Participant's 55 0.9846 0.9860 0.9874 0.9886 0.9898 0.9908 0.9918 0.9927 0.9935 0.9943 Age 56 0.9829 0.9845 0.9860 0.9874 0.9887 0.9898 0.9909 0.9919 0.9928 0.9936 57 0.9810 0.9828 0.9845 0.9860 0.9874 0.9887 0.9899 0.9910 0.9920 0.9929 58 0.9789 0.9809 0.9827 0.9844 0.9860 0.9874 0.9887 0.9900 0.9911 0.9921 59 0.9765 0.9787 0.9807 0.9826 0.9843 0.9859 0.9874 0.9888 0.9900 0.9912 60 0.9738 0.9762 0.9784 0.9805 0.9825 0.9843 0.9859 0.9874 0.9888 0.9901 61 0.9708 0.9734 0.9759 0.9782 0.9804 0.9824 0.9842 0.9859 0.9874 0.9889 62 0.9674 0.9703 0.9731 0.9756 0.9780 0.9802 0.9823 0.9842 0.9859 0.9875 63 0.9636 0.9668 0.9699 0.9727 0.9754 0.9778 0.9801 0.9822 0.9841 0.9859 64 0.9594 0.9630 0.9663 0.9694 0.9723 0.9751 0.9776 0.9800 0.9821 0.9841 65 0.9547 0.9586 0.9623 0.9657 0.9690 0.9720 0.9748 0.9774 0.9798 0.9821 66 0.9495 0.9538 0.9578 0.9616 0.9652 0.9686 0.9717 0.9746 0.9773 0.9797 67 0.9439 0.9486 0.9530 0.9571 0.9611 0.9648 0.9682 0.9714 0.9744 0.9772 68 0.9378 0.9428 0.9477 0.9522 0.9565 0.9606 0.9644 0.9679 0.9712 0.9743 69 0.9311 0.9366 0.9419 0.9468 0.9515 0.9560 0.9602 0.9641 0.9677 0.9711 70 0.9240 0.9299 0.9356 0.9410 0.9462 0.9510 0.9556 0.9599 0.9639 0.9677 71 0.9164 0.9228 0.9289 0.9348 0.9404 0.9457 0.9507 0.9554 0.9598 0.9640 72 0.9083 0.9152 0.9219 0.9282 0.9343 0.9400 0.9455 0.9506 0.9554 0.9600 73 0.8997 0.9072 0.9143 0.9211 0.9277 0.9339 0.9398 0.9454 0.9507 0.9557 74 0.8904 0.8983 0.9060 0.9133 0.9204 0.9271 0.9336 0.9397 0.9454 0.9508 75 0.8802 0.8886 0.8968 0.9047 0.9123 0.9196 0.9266 0.9332 0.9395 0.9454 76 0.8690 0.8780 0.8867 0.8952 0.9033 0.9112 0.9187 0.9259 0.9327 0.9392 77 0.8569 0.8664 0.8757 0.8847 0.8934 0.9019 0.9100 0.9178 0.9252 0.9323 78 0.8440 0.8541 0.8639 0.8735 0.8829 0.8919 0.9006 0.9090 0.9171 0.9247 79 0.8306 0.8412 0.8516 0.8618 0.8717 0.8813 0.8907 0.8997 0.9083 0.9166 80 0.8168 0.8279 0.8388 0.8495 0.8600 0.8702 0.8802 0.8898 0.8991 0.9080 81 0.8026 0.8142 0.8256 0.8368 0.8479 0.8587 0.8693 0.8795 0.8894 0.8989 82 0.7882 0.8002 0.8121 0.8238 0.8354 0.8468 0.8579 0.8688 0.8793 0.8895 83 0.7734 0.7859 0.7982 0.8105 0.8226 0.8345 0.8462 0.8576 0.8688 0.8796 84 0.7585 0.7713 0.7841 0.7968 0.8094 0.8219 0.8341 0.8461 0.8579 0.8693 85 0.7434 0.7566 0.7697 0.7829 0.7959 0.8089 0.8217 0.8342 0.8466 0.8586 86 0.7280 0.7415 0.7551 0.7686 0.7821 0.7955 0.8088 0.8220 0.8349 0.8475 87 0.7123 0.7262 0.7401 0.7540 0.7679 0.7818 0.7956 0.8093 0.8227 0.8360 88 0.6964 0.7105 0.7247 0.7390 0.7533 0.7676 0.7819 0.7961 0.8101 0.8239 89 0.6802 0.6945 0.7090 0.7236 0.7383 0.7530 0.7677 0.7824 0.7969 0.8113
64 SUPPLEMENT 1 SPECIALTY CHEMICALS DIVISION, LIVONIA, MICHIGAN ----------------------------------------------- 1-1 Eligible Employees ------------------ The terms of this Supplement apply only to Participants who were Eligible Employees of the FMC Corporation Specialty Chemicals Division in Livonia, Michigan (the "Division") on the Sale Date. Certain Participants in such group previously participated in the salaried part of the Retirement Plan for Nonunion Employees of Sun Cleaner Company (merged into the Plan effective January 1, 1979) or the hourly part of the Retirement Plan for Nonunion Employees of Sun Cleaner Company (merged into the Plan effective September 15, 1980). 1-2 Sale Date --------- Effective August 16, 1985 ("Sale Date") the Division was sold to Olin Corporation (the "Purchaser"). 1-3 Early Retirement Date --------------------- With respect to any Participant who was an Eligible Employee of the Division on the Sale Date, such Participant's employment with the Purchaser shall be considered as employment with the Company for purposes of satisfying the age requirement for Early Retirement Date. 1-4 Year of Vesting Service ----------------------- With respect to any Participant who was an Eligible Employee of the Division on the Sale Date who was not 100% vested in his benefits under the Plan on such date, such Participant's years of vesting service with the Purchaser (determined in accordance with rules similar to the rules used to determine Years of Vesting Service under this Plan) will be considered Years of Vesting Service under this Plan for purposes of determining such Participant's vesting in benefits accrued under this Plan. 65 SUPPLEMENT 2 MARINE COLLOIDS DIVISION ------------------------ 2-1 Eligible Employees ------------------ The terms of this Supplement apply only to individuals who were participants in the Marine Colloids, Inc. Pension Plan ("Prior Plan") prior to January 1, 1979 (the Merger Date") and who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 2-2 Calculation of Normal Retirement Benefit ---------------------------------------- A Participant's monthly Normal Retirement Benefit shall be no less than the normal retirement benefit to which the Participant would have been entitled under the Prior Plan if the Participant had terminated employment immediately prior to the Merger Date. 2-3 Early Retirement Date --------------------- Early Retirement Date means a Participant's 55th birthday. 2-4 Calculation of Early Retirement Benefit --------------------------------------- Subject to Section 2-5 of this Supplement, if a Participant has 10 or more Years of Credited Service, the Participant's monthly Early Retirement Benefit under the Prior Plan will equal the greater of the amounts shown in Subsections (a) and (b) below. If a Participant has fewer than 10 Years of Credited Service, his monthly Early Retirement Benefit under the Prior Plan will equal the amount shown in Subsection (a) below. (a) 1-1/2% of the Participant's highest average earnings multiplied by the Participant's years of credited service (all as determined under the Prior Plan), reduced by the Social Security offset. The Social Security offset is an amount equal to 50% of the Participant's primary Social Security benefit (determined under the Prior Plan) multiplied by his or her Years of Vesting Service (not in excess of 30), divided by 30. If the early retirement benefit commences before the Participant reaches age 61, the Social Security offset will not be larger than the Participant's primary Social Security benefit (determined under the Prior Plan) multiplied by the percentage determined by the following schedule: 66
------------------------------------------------ Age of Benefit Social Security Commencement Date Amount Reduced to ----------------- ----------------- ------------------------------------------------ 60 48.0 ------------------------------------------------ 59 45.6 ------------------------------------------------ 58 43.2 ------------------------------------------------ 57 40.8 ------------------------------------------------ 56 38.4 ------------------------------------------------ 55 36.0 ------------------------------------------------
If the Participant's age is not a whole number when the early retirement benefit begins, an appropriate interpolation of the percentage indicated by the above schedule will be made. (b) 1% of the Participant's highest average earnings multiplied by the Participant's years of credited service (both as determined under the Prior Plan). 2-5 Early Retirement Reduction Factor --------------------------------- The Participant's Early Retirement Benefit computed pursuant to Section 2-4 of this Supplement shall be reduced by 1/3 of 1% for each month in excess of 36 by which the commencement of the Participant's Early Retirement Benefit precedes the Participant's Normal Retirement Date. 2-6 Years of Vesting Service ------------------------ A Participant is fully vested in the Participant's benefit under the Prior Plan. A Participant's Employment Commencement Date will be the date the Participant was first employed by the Company or an Affiliate, or any earlier date from which the Participant was granted vesting service under the Prior Plan. In no event will a Participant be credited with fewer Years of Vesting Service under the Plan than the Participant would have been credited with under the vesting rules of the Prior Plan. 2-7 Available Forms of Benefits --------------------------- In addition to the optional forms of benefit described in the Plan, a Participant may elect to receive the Participant's benefit under the Prior Plan in the following form of benefit: Life and 5 Year Certain Annuity: A Life and 5 Year Certain Annuity is an immediate annuity which is the Actuarial Equivalent of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's 67 death, if the monthly annuity has been paid for a period shorter than 60 months, it will continue, in the same amount as during the Participant's life, for the remainder of the 60 month term certain. The Participant's Joint Annuitant will receive any payments due after the Participant's death. 2-8 Payment to Active Participant After Normal Retirement Date ---------------------------------------------------------- A Participant who continues to be employed by the Company or a Participating Employer after reaching his or her Normal Retirement Date may begin receiving his or her benefit with respect to the Prior Plan at or after his or her Normal Retirement Date. 68 SUPPLEMENT 3 JETWAY SYSTEMS DIVISION ----------------------- 3-1 Eligible Employees The terms of this Supplement apply only to individuals who are current or former salaried and nonunion hourly employees of the FMC Corporation Jetway Systems Division and who were participants in the Pneumo Abex Corporation Retirement Income Plan ("Prior Plan") before May 27, 1994 (the "Merger Date") who had not received a full distribution of their benefit under such plan as of the Effective Date ("Participant"). On the Merger Date the benefits of such participants were spun off from the Prior Plan and merged into this Plan. 3-2 Calculation of Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be no less than the normal retirement benefit to which the Participant would have been entitled under the Prior Plan if the Participant had terminated employment immediately prior to the Merger Date. 3-3 Early Retirement Date Early Retirement Date means the earlier of: (a) a Participant's Early Retirement Date under the Plan or (b) the date the Participant has a Severance from Service before Normal Retirement Date for a reason other than death (i) if the Participant is at least age 55 and has at least 10 Years of Vesting Service, (ii) if the Participant was hired before age 35 and before January 1, 1989 and the sum of the Participant's age and Years of Vesting Service is at least 75, or (iii) if the Participant was entitled to an early retirement benefit under the Prior Plan. 3-4 Termination Benefit If a Participant has a Severance from Service before Early or Normal Retirement Date for a reason other than death and had accrued at least 10 Years of Vesting Service, the Participant may begin to receive the Participant's Plan benefit, subject to the Plan's reduction for early retirement, as early as the date the Participant reaches age 55. 3-5 Years of Vesting Service A Participant is fully vested in the Participant's benefit under the Plan. A Participant's Employment Commencement Date will be the date the Participant was first employed by the Company or an Affiliate, or any earlier date from which the Participant was granted vesting service under the Prior Plan. In no event will a Participant be credited with fewer Years of Vesting Service under the Plan than the Participant would have been credited with under the vesting rules of the Prior Plan. 69 3-6 Available Forms of Benefits In addition to the optional forms of benefit described in the Plan, a Participant may elect to receive his benefit under the Prior Plan in the following form of benefit: Life and 10 Year Certain Annuity: A Life and 10 Year Certain Annuity is an immediate annuity which is the Actuarial Equivalent of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, if the monthly annuity has been paid for a period shorter than 10 years, it will continue in the same amount as during the Participant's life, for the remainder of the 10 year term certain. The Participant's Joint Annuitant will receive any payments due after the Participant's death. 3-7 Special Provisions for Participants in the Retirement Plan for Salaried Employees of Abex Corporation In addition to the special provisions of the preceding sections, a Participant who participated in the Retirement Plan for Salaried Employees of Abex Corporation before January 1, 1989 will be subject to the following provision with respect to the Participant's Prior Plan benefit accrued before January 1, 1989: Special Rule of 75 Benefit: Participants who were hired before age 35 and before January 1, 1989, and who accrue total years of age and Vesting Service at Early Retirement equal to at least 75 will be entitled to a monthly benefit at their Early Retirement Date reduced by 1/3 of 1% for each month payments are made before the Participant reaches age 65. 70 SUPPLEMENT 4 STEIN ----- 4-1 Eligible Employees The terms of this Supplement apply only to individuals who were participants in the Retirement Plan for Employees of Stein (the "Prior Plan") prior to June 1, 1997 (the "Merger Date") and who had not received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 4-2 Calculation of Normal Retirement Benefit A Participant's Normal Retirement Benefit shall be no less than the normal retirement benefit to which the Participant would have been entitled under the Prior Plan if the Participant had permanently terminated employment immediately prior to the Merger Date. 4-3 Years of Vesting Service A Participant is fully vested in the Participant's benefit under the Prior Plan. A Participant's Employment Commencement Date will be the date the Participant was first employed by the Company or an Affiliate, or any earlier date from which the Participant was granted vesting service under the Prior Plan. In no event will a Participant be credited with fewer Years of Vesting Service under the Plan than the Participant would have been credited with under the vesting rules of the Prior Plan. 4-4 Available Forms of Benefits In addition to the optional forms of benefit described in the Plan, a Participant may elect to receive the Participant's benefit under the Prior Plan in the following form of benefit: Life and 5 Year Certain Annuity: A Life and 10 Year Certain Annuity is an immediate annuity which is the Actuarial Equivalent of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, if the monthly annuity has been paid for a period shorter than 60 months, it will continue, in the same amount as during the Participant's life, for the remainder of the 60 month term certain. The Participant's Joint Annuitant will receive any payments due after the Participant's death. 71 SUPPLEMENT 5 MOORCO INTERNATIONAL INC. RETIREMENT INCOME PLAN ------------------------------------------------ 5-1 Eligible Employees The terms of this Supplement apply only to individuals who were participants in the Moorco International Inc. Retirement Income Plan (the "Prior Plan") prior to July 1, 1997 (the "Merger Date") and who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 5-2 Calculation of Normal Retirement Benefit A Participant's Normal Retirement Benefit shall be no less than the normal retirement benefit to which the Participant would have been entitled if the Participant had terminated employment immediately prior to the Merger Date. 5-3 Early Retirement Date Early Retirement Date means the earlier of: (a) Early Retirement Date under the Plan; or (b) the date the Participant has a Severance from Service before Normal Retirement Date for a reason other than death, if the Participant is at least age 55 and has at least 10 Years of Vesting Service or if the Participant was entitled to an early retirement benefit under the Geosource Inc. Retirement Income Plan. 5-4 Years of Vesting Service A Participant is fully vested in the Participant's benefits under the Prior Plan. A Participant's Employment Commencement Date will be the date the Participant was first employed by the Company or an Affiliate, or any earlier date from which the Participant was first granted vesting service under the Prior Plan. Each Participant will be credited with the number of full years of vesting service with which the Participant was credited under the Prior Plan plus the greater of: (a) 6 months of Vesting Service; and (b) if the Participant accrued 1,000 hours of service under the Prior Plan during the period from January 1, 1997 through June 30, 1997, 1 Year of Vesting Service. In no event will a Participant be credited with fewer Years of Vesting Service under the Plan than the Participant would have been credited with under the vesting rules of the Prior Plan. 5-5 Available Forms of Benefits In addition to the optional forms of benefit described in the Plan, a Participant may elect to receive the Participant's benefit under the Prior Plan in the following form: 72 Life and Term Certain Annuity: A Life and Term Certain Annuity is an immediate annuity which is the Actuarial Equivalent (determined in accordance with Exhibit E-1) of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, if the monthly annuity has been paid for a period shorter than the term certain chosen by the Participant, it will continue, in the same amount as during the Participant's life, for the remainder of the term certain. The Participant's Joint Annuitant will receive any payments due after the Participant's death. The Participant may choose a term certain of 60, 120, 180 or 240 months, so long as the term certain does not exceed the joint life expectancies of the Participant and the Joint Annuitant. 5-6 Non-Spouse Death Benefit If the Preretirement Survivor's Benefit is not payable to the spouse of a deceased Participant, and if the Participant dies on or after the Participant's Early Retirement Date, the Participant's Beneficiary will be entitled to a death benefit consisting of monthly payments made for a period of 60 months, beginning as of the first day of the month coincident with or next following the month in which the Participant dies. The amount of the monthly payment will be equal to the monthly payment to which the Participant would have been entitled if the Participant had retired on the day before his death, and had elected to receive only the Participant's Prior Plan benefit in the form of an immediate Life and Term Certain Annuity with a term certain of 60 months. 73 SUPPLEMENT 6 SMITH METER, INC. SALARIED RETIREMENT PLAN ------------------------------------------ 6-1 Eligible Employees The terms of this Supplement apply only to individuals who were participants in the Smith Meter, Inc. Salaried Retirement Plan ("Prior Plan") prior to July 1, 1997 (the "Merger Date") and who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 6-2 Calculation of Normal Retirement Benefit A Participant's Normal Retirement Benefit shall be no less than the normal retirement benefit to which the Participant would have been entitled if the Participant had permanently terminated employment with the Company and all Affiliates on the Merger Date. 6-3 Early Retirement Date Early Retirement Date means the earlier of: (a) the Participant's Early Retirement Date under the Plan, or (b) the date the Participant has a Severance from Service before Normal Retirement Date for a reason other than death (i) if the Participant is at least age 57 and has at least 10 Years of Vesting Service or (ii) if the Participant was entitled to an early retirement benefit under the Geosource Inc. Smith Meter Systems Division Salaried Retirement Income Plan. 6-4 Normal Retirement Date Normal Retirement Date means the earlier of: (a) the Participant's Normal Retirement Date under the Plan, or (b) the date the Participant has a Severance from Service with at least 10 Years of Vesting Service at or after age 62. 6-5 Years of Vesting Service A Participant is fully vested in the Participant's benefits under the Prior Plan. A Participant's Employment Commencement Date will be the date the Participant was first employed by the Company or any Affiliate, or any earlier date from which he was granted vesting service under the Prior Plan. Each Participant will be credited with the number of full years of vesting service with which the Participant was credited under the Prior Plan plus the greater of: (a) 6 months of Vesting Service, or (b) if the Participant accrued 1,000 hours of service under the Prior Plan during the period from January 1, 1997 through June 30, 1997, 1 Year of Vesting Service. In no event will a Participant be credited with fewer Years of Vesting Service under the Plan than the Participant would have been credited with under the vesting rules of the Prior Plan. 74 6-6 Available Forms of Benefits In addition to the optional forms of benefit described in the Plan, a Participant may elect to receive his Prior Plan benefit in the following form of benefit: Life and Term Certain Annuity: A Life and Term Certain Annuity is an immediate annuity which is the Actuarial Equivalent (determined in accordance with Exhibit E-1) of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, if the monthly annuity has been paid for a period shorter than the term certain chosen by the Participant, it will continue, in the same amount as during the Participant's life, for the remainder of the term certain. The Participant's Joint Annuitant will receive any payments due after the Participant's death. The Participant may choose a term certain of 60, 120, 180 or 240 months, so long as the term certain does not exceed the joint life expectancies of the Participant and the Joint Annuitant. 6-7 Payment to Active Participant After Normal Retirement Date A Participant who continues to be employed by the Company or a Participating Employer after reaching Normal Retirement Date may begin receiving the Participant's Prior Plan benefit at or after Normal Retirement Date. 6-8 Non-Spouse Death Benefit If the Preretirement Survivor's Benefit is not payable to the spouse of a deceased Participant, and if the Participant dies on or after the Participant's Early Retirement Date, the Participant's Beneficiary will be entitled to a death benefit consisting of monthly payments made for a period of 60 months, beginning as of the first day of the month coincident with or next following the month in which the Participant dies. The amount of the monthly payment will be equal to the monthly payment to which the Participant would have been entitled if he had retired on the day before his death, and had elected to receive only his Prior Plan benefit in the form of an immediate Life and Term Certain Annuity with a term certain of 60 months. 75 FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART II UNION HOURLY EMPLOYEES' RETIREMENT PLAN TABLE OF CONTENTS ----------------- INTRODUCTION......................................................... 1 ARTICLE I............................................................ 2 Definitions......................................................... 2 Actuarial Equivalent................................................ 2 Administrator....................................................... 2 Affiliate........................................................... 3 Annuity Starting Date............................................... 3 Beneficiary......................................................... 3 Board............................................................... 3 Code................................................................ 3 Collective Bargaining Agreement..................................... 3 Committee........................................................... 3 Company............................................................. 3 Early Retirement Benefit............................................ 4 Early Retirement Date............................................... 4 Effective Date...................................................... 4 Eligible Employee................................................... 4 Employee............................................................ 4 Employment Commencement Date........................................ 4 ERISA............................................................... 4 50% Joint and Survivor's Annuity.................................... 4 Hour of Service..................................................... 4 Individual Life Annuity............................................. 4 Investment Manager.................................................. 5 Leased Employee..................................................... 5 Normal Retirement Benefit........................................... 5 Normal Retirement Date.............................................. 5 100% Joint and Survivor's Annuity................................... 5 One-year Period of Severance........................................ 5 Participant......................................................... 5 Participating Employer.............................................. 5 Period of Service................................................... 5 Period of Severance................................................. 5 Plan................................................................ 5 Plan Year........................................................... 6 Reemployment Commencement Date...................................... 6 Severance From Service Date......................................... 6 Supplement.......................................................... 7 Total and Permanent Disability...................................... 7 Trust............................................................... 7 Trust Fund.......................................................... 7 Year of Credited Service............................................ 7 i Year of Vesting Service............................................. 7 ARTICLE II........................................................... 9 Participation....................................................... 9 2.1 Eligibility and Commencement of Participation.................. 9 2.2 Provision of Information....................................... 9 2.3 Termination of Participation................................... 9 2.4 Special Rules Relating to Veterans' Reemployment Rights........ 9 ARTICLE III.......................................................... 10 Normal, Early and Deferred Retirement Benefits...................... 10 3.1 Normal Retirement Benefits..................................... 10 3.2 Early Retirement Benefits...................................... 10 3.3 Deferred Retirement Benefits................................... 10 3.4 Suspension of Benefits......................................... 12 3.5 Benefit Limitations............................................ 14 ARTICLE IV........................................................... 17 Termination Benefits................................................ 17 4.1 Termination of Service......................................... 17 4.2 Amount of Termination Benefit.................................. 17 ARTICLE V............................................................ 18 Refund of Employee Contributions.................................... 18 5.1 Disability Retirement.......................................... 18 5.2 Amount of Disability Retirement Benefit........................ 18 ARTICLE VI........................................................... 19 Payment of Retirement Benefits...................................... 19 6.1 Normal Form of Benefit......................................... 19 6.2 Optional Forms of Benefit...................................... 19 6.3 Election of Benefits........................................... 19 ARTICLE VII.......................................................... 22 Survivor's Benefits................................................. 22 7.1 Surviving Spouse's Benefit..................................... 22 7.2 Certain Former Employees....................................... 22 ARTICLE VIII......................................................... 23 Fiduciaries......................................................... 23 8.1 Named Fiduciaries.............................................. 23 8.2 Employment of Advisers......................................... 23 8.3 Multiple Fiduciary Capacities.................................. 23 8.4 Payment of Expenses............................................ 23 8.5 Indemnification................................................ 24 ARTICLE IX........................................................... 25 ii Plan Administration................................................. 25 9.1 Powers, Duties and Responsibilities of the Administrator....... 25 9.2 Delegation of Administration Responsibilities.................. 25 9.3 Committee Members.............................................. 26 ARTICLE X............................................................ 27 Funding of the Plan................................................. 27 10.1 Appointment of Trustee......................................... 27 10.2 Actuarial Cost Method.......................................... 27 10.3 Cost of the Plan............................................... 27 10.4 Funding Policy................................................. 27 10.5 Cash Needs of the Plan......................................... 28 10.6 Public Accountant.............................................. 28 10.7 Enrolled Actuary............................................... 28 10.8 Basis of Payments to the Plan.................................. 28 10.9 Basis of Payments from the Plan................................ 28 ARTICLE XI........................................................... 29 Plan Amendment or Termination....................................... 29 11.1 Plan Amendment or Termination.................................. 29 11.2 Limitations on Plan Amendment.................................. 29 11.3 Effect of Plan Termination..................................... 29 11.4 Allocation of Trust Fund on Termination........................ 30 ARTICLE XII.......................................................... 31 Miscellaneous Provisions............................................ 31 12.1 Subsequent Changes............................................. 31 12.2 Plan Mergers................................................... 31 12.3 No Assignment of Property Rights............................... 31 12.4 Beneficiary.................................................... 32 12.5 Benefits Payable to Minors, Incompetents and Others............ 32 12.6 Employment Rights.............................................. 33 12.7 Proof of Age and Marriage...................................... 33 12.8 Small Annuities................................................ 33 12.9 Controlling Law................................................ 33 12.10 Direct Rollover Option......................................... 33 12.11 Claims Procedure............................................... 34 12.12 Participation in the Plan by an Affiliate...................... 35 12.13 Action by Participating Employers.............................. 36 ARTICLE XIII......................................................... 37 Top Heavy Provisions................................................ 37 13.1 Top Heavy Definitions.......................................... 37 13.2 Determination of Top Heavy Status.............................. 40 13.3 Minimum Benefit Requirement for Top Heavy Plan................. 40 13.4 Vesting Requirement for Top Heavy Plan......................... 41 iii EXHIBIT A - Merged Plans............................................. 43 SUPPLEMENT 1 - Industrial Chemical Division, Green River, Wyoming.... 45 SUPPLEMENT 2 - Jetway Systems Division, Ogden, Utah.................. 49 SUPPLEMENT 3 - Packing Machinery Division, Green Bay, Wisconsin...... 52 SUPPLEMENT 4 - Agricultural Chemical Division, Fresno, California.... 54 SUPPLEMENT 5 - Sweeper Division, Pomona, California.................. 56 SUPPLEMENT 6 - Skull Point Mine, Kemmerer, Wyoming................... 57 SUPPLEMENT 7 - Commercial Segment, San Jose, California.............. 59 SUPPLEMENT 8 - Agriculture Chemical Division, Baltimore, Maryland.... 61 SUPPLEMENT 9 - Inorganic Chemical Division, Tonowanda, New York...... 64 SUPPLEMENT 10 - Industrial Chemicals Division, Carteret, New Jersey.. 67 SUPPLEMENT 11 - Smith Meter Plant, Erie, Pennsylvania................ 70 SUPPLEMENT 12 - Food Processing Machinery Division, Hoopeston, Illinois............................................. 75 SUPPLEMENT 13 - Kemmerer Coke Plant, Kemmerer, Wyoming............... 78 SUPPLEMENT 14 - Industrial Chemical Division, Lawrence, Kansas....... 86 SUPPLEMENT 15 - Agricultural Chemical Division, Middleport, New York. 89 SUPPLEMENT 16 - Industrial Chemical Division, Newark, California..... 91 SUPPLEMENT 17 - Food and Pharmaceutical Products Division, Newark, Delaware............................................. 93 SUPPLEMENT 18 - Industrial Chemical Division, Nitro, West Virginia... 95 SUPPLEMENT 19 - Industrial Chemical Division, Pocatello, Idaho....... 98 SUPPLEMENT 20 - Industrial Chemical Group, Spring Hill Plant, West Virginia............................................. 101 iv FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART II UNION HOURLY EMPLOYEES' RETIREMENT PLAN INTRODUCTION The FMC Corporation Employees' Retirement Program ("Program"), previously known as the FMC Corporation Salaried Employees' Retirement Plan ("Salaried Plan"), was established, effective September 30, 1941, as the Employees' Retirement Plan. The Salaried Plan was subsequently amended, certain plans were subsequently merged into the Salaried Plan, including certain frozen and union plans, and the Salaried Plan was renamed as the Program. The Program consists of two parts, Part I Salaried and Nonunion Hourly Employees' Retirement Plan and Part II Union Hourly Employees' Retirement Plan, which are contained in two separate plan documents. Supplements to Part I and Part II of the Program contain provisions which apply only to a specific group of Employees or Participants as specified therein and override any contrary provision of the Program or either Part I or Part II. This document is Part II Union Hourly Employees' Retirement Plan ("Plan") and covers certain eligible union hourly employees as provided in Article II Participation. This document is an amendment and restatement of the Plan generally effective as of January 1, 1999, except as and to the extent otherwise provided herein. This document shall not be construed to affect the making of contributions or alter the right to participate in the Plan with respect to any Plan Year ending before January 1, 1999, to affect a Participant's accrued benefit for any such prior Plan Year or to alter in any way the rights of a Participant or Beneficiary who has retired, died or with respect to whom there has been a Severance From Service Date before January 1, 1999. The Plan is intended to be qualified under Code Section 401(a), and its associated trust is intended to be tax exempt under Code Section 501(a). The Plan is intended also to meet the requirements of ERISA and shall be construed wherever possible to comply with the terms of the Code and ERISA. The Plan is intended to provide a regular monthly retirement benefit for employees who meet the eligibility requirements. 1 ARTICLE I Definitions ----------- For purposes of this Plan and any amendments to it, the following terms have the meanings ascribed to them below. Actuarial Equivalent means a benefit determined to be of equal value to another benefit on the basis of either (a) the UP-1984 Mortality Table and 8- 1/2% interest compounded annually or (b) the mortality table and interest rate described in the applicable Supplement. Notwithstanding the foregoing, for purposes of Section 12.8, Actuarial Equivalent value shall be determined as follows: (i) for Annuity Starting Dates occurring prior to June 1, 1995, based on the actuarial assumptions described above; provided that the interest rate shall not exceed the rate for immediate annuities used by the Pension Benefit Guaranty Corporation for plans terminating on the first day of the Plan Year that contains the Annuity Starting Date; (ii) for Annuity Starting Dates occurring on or after June 1, 1995, with respect to any Participant who had an Hour of Service prior to August 31, 1999, based on the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female) (or the applicable mortality table prescribed under Section 417(e)(3) of the Code) and the lesser of the interest rate described above or the applicable interest rate prescribed under Section 417(e)(3) of the Code for the November preceding the Plan Year that contains the Annuity Starting Date; and (iii) for Annuity Starting Dates occurring on or after August 31, 1999, with respect to any Participant who did not have an Hour of Service prior to August 31, 1999 based on the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female) (or the applicable mortality table, prescribed under Section 417(e)(3) of the Code) and the applicable interest rate prescribed under Section 417(e)(3) of the Code for the November preceding the Plan Year that contains the Annuity Starting Date. Administrator means the Company. The Plan is administered by the Company through the Committee. The Administrator and the Committee have the responsibilities specified in Article IX. 2 Affiliate means any corporation, partnership, or other entity that is: (a) a member of a controlled group of corporations of which the Company is a member (as described in Code Section 414(b)); (b) a member of any trade or business under common control with the Company (as described in Code Section 414(c)); (c) a member of an affiliated service group that includes the Company (as described in Code Section 414(m)); (d) an entity required to be aggregated with the Company pursuant to regulations promulgated under Code Section 414(o); or (e) a leasing organization that provides Leased Employees to the Company or an Affiliate (as determined under paragraphs (a) through (d) above), unless (i) the Leased Employees constitute less than 20% of the nonhighly compensated workforce of the Company and Affiliates (as determined under paragraphs (a) through (d) above; and (ii) the Leased Employees are covered by a plan described Code Section 414(n)(5). "Leasing organization" has the meaning ascribed to it in the definition of "Leased Employee" below. For purposes of Section 3.5, the 80% thresholds of Code Sections 414(b) and (c) are deemed to be "more than 50%," rather than "at least 80%." Annuity Starting Date means the first day of the first period for which an amount is paid in an annuity or other form of benefit. In the case of a lump sum distribution, the Annuity Starting Date is the date payment is actually made. Beneficiary means the person or persons determined pursuant to Section 12.4. Board means the board of directors of the Company. Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific provision of the Code includes that provision, any successor to it and any valid regulation promulgated under the provision or successor provision. Collective Bargaining Agreement means the collective bargaining agreement referred to in the applicable Supplement. Committee means the FMC Corporation Employee Welfare Benefits Plan Committee, as described in Section 9.3, its authorized delegatee and any successor to the Committee. 3 Company means FMC Corporation, a Delaware corporation, and any successor to it. Early Retirement Benefit means the benefits determined pursuant to Section 3.2. Early Retirement Date means the later of the Participant's 55th birthday and the date he or she acquires 10 Years of Credited Service. Effective Date means January 1, 1999 or, if later, an Employee's Employment Commencement Date or Reemployment Commencement Date, whichever is applicable. Eligible Employee means an Employee of a Participating Employer, other than a Leased Employee, who is employed on an hourly basis and covered by the applicable Collective Bargaining Agreement which specifically provides for Plan participation, or to whom coverage under the Plan is extended by the Company. Employee means a common law employee or Leased Employee of the Company or an Affiliate, subject to the following rules: (a) a person who is not a Leased Employee and who is engaged as an independent contractor is not an Employee; (b) only individuals who are paid as employees from the payroll of the Company or an Affiliate and treated as employees are Employees under the Plan; and (c) any person retroactively found to be a common law employee shall not be eligible to participate in the Plan for any period he was not an Employee under the Plan. Employment Commencement Date means the date on which the Employee first performs an Hour of Service. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a specific provision of ERISA includes the provision, any successor provision and any valid regulation promulgated under the provision or successor provision. 50% Joint and Survivor's Annuity means an immediate annuity which is the Actuarial Equivalent of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than an Individual Life Annuity. After the Participant's death, 50% of such reduced annuity will be paid to the Participant's surviving spouse for such spouse's life. 4 Hour of Service means each hour for which an Employee is directly or indirectly paid or entitled to payment by the Company or an Affiliate for the performance of duties. Individual Life Annuity means an immediate annuity which provides equal monthly payments for the Participant's life only. Investment Manager means a person who is an "investment manager" as defined in section 3(38) of ERISA. Leased Employee means an individual who performs services for the Company or an Affiliate on a substantially full-time basis for a period of at least 1 year, under the primary direction or control of the Company or an Affiliate, and under an agreement between the Company or Affiliate and a leasing organization. The leasing organization can be a third party or the Leased Employee himself. Normal Retirement Benefit means the benefits determined pursuant to Section 3.1. Normal Retirement Date means the Participant's 65th birthday, except as otherwise provided in the applicable Supplement. 100% Joint and Survivor's Annuity means an immediate annuity which is the Actuarial Equivalent of an Individual Life Annuity, but which provides a smaller monthly annuity for the Participant's life than a 50% Joint and Survivor Annuity. After the Participant's death, 100% of such reduced annuity will continue to be paid to the Participant's surviving spouse for such spouse's life. One-Year Period of Severance means a 12-consecutive-month period commencing on an Employee's Severance From Service Date in which the Employee is not credited with an Hour of Service. Participant means an Eligible Employee who has begun but not ended his or her participation in the Plan pursuant to the provisions of Article II. Participating Employer means the Company and each other Affiliate that adopts the Plan with the consent of the Board, as provided in Section 12.12. Period of Service means the period commencing on the Effective Date and ending on the Severance From Service Date. All Periods of Service (whether or not consecutive) shall be aggregated. Notwithstanding the foregoing, if an Employee incurs a One-Year Period of Severance at a time when he or she has no vested interest under the Plan and the Employee does not perform an Hour of Service within 5 years after the beginning of the One-Year Period of Severance, or fails to complete a Period of Service of 1 year after he or she performs an Hour of Service following the One-Year Period of Severance, the Period of Service prior to such One-Year Period of Severance shall not be aggregated. 5 Period of Severance means the period commencing on the Severance From Service Date and ending on the date on which the Employee again performs an Hour of Service. Plan means Part II Union Hourly Employees' Retirement Plan of the FMC Corporation Employees' Retirement Program. Plan Year means the 12-month period beginning on January 1 and ending the next December 31. Reemployment Commencement Date means the first date following a Period of Severance which is not required to be taken into account for purposes of an Employee's Period of Vesting Service on which the Employee performs an Hour of Service. Severance From Service Date means the earliest of: (a) the date on which an Employee voluntarily terminates, retires, is discharged or dies; (b) the first anniversary of the first date of a period in which an Employee remains absent from service (with or without pay) with the Company and Affiliates for any reason other than voluntary termination, retirement, discharge or death; or (c) the second anniversary of the date an Employee is absent pursuant to a maternity or paternity leave of absence; provided, however, that the period between the first and second anniversaries of the first date of such absence shall be neither a Period of Service nor a One-Year Period of Severance. Notwithstanding the foregoing, a Severance From Service Date shall not be considered to have occurred under the following circumstances: (i) during a leave of absence, vacation or holiday with pay; (ii) during a leave of absence without pay granted by reason of disability or under the Family and Medical Leave Act of 1993; (iii) during a period of qualified military service, provided the Employee makes application to return within 90 days after completion of active service and returns to active employment as an Employee while reemployment rights are protected by law. If the Employee does not so return, the Employee shall have a Severance From Service Date on the first anniversary of the date of entry into military service. If the Employee violates the terms of a leave of absence, the Employee shall be deemed to have voluntarily terminated as of the date of such violation. In the case of a leave in excess of 12 months, if the Employee fails to return to active employment immediately after such 6 leave, the Employee shall be deemed to have voluntarily terminated as of the last day of the 12th month of the leave. A "maternity or paternity leave of absence" means an absence from work by reason of the Employee's pregnancy, birth of the Employee's child, placement of a child with the Employee in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement. Supplement means the provisions of the Plan which apply only to a specific group of Employees or Participants as detailed in such Supplement and which override any contrary provision of the Plan. Total and Permanent Disability has the meaning assigned thereto in the applicable Supplement. Trust means the trust established by the Trust Agreement. "Trust Agreement" means the trust agreement or agreements, as amended from time to time, entered into by the Company and the Trustee pursuant to Section 8.1. "Trustee" means the trustee or trustees at any time appointed by the Company pursuant to Section 8.1. Trust Fund means the trust fund established and maintained by the Trustee to hold all assets of the Plan pursuant to the Trust Agreement. Year of Credited Service means (a) the Employee's Years of Credited Service prior to the Effective Date, and (b) the total number of calendar months during the Employee's Period of Service while the Employee is an Eligible Employee and after he has become a Participant divided by 12. A partial month in such Period of Service counts as a whole month, and fractional Years of Credited Service shall be taken into account in determining a Participant's benefits. Year of Credited Service shall also include such other periods as the Company recognizes as a Year of Credited Service, pursuant to written and nondiscriminatory rules. Notwithstanding the foregoing, Credited Service shall not include: (i) any leave of absence without pay unless the Employee returns to active employment as an Employee immediately after such leave and abides by all the terms of the leave, (ii) any maternity or paternity leave of absence unless the Employee returns to active employment as an Employee within 12 months after the first day of such leave, or (iii) any period of service with respect to which such Eligible Employee accrues a benefit under any pension, profit sharing or other retirement plan listed on Exhibit A. Year of Vesting Service means (a) the Employee's Years of Service prior to the Effective Date, and (b) the total number of calendar months during the Employee's Period of Service divided by 12, determined in accordance with the following rules: (i) a partial month in the Employee's Period of Service counts as a whole month; 7 (ii) if the Employee has a Severance From Service Date by reason of a voluntary termination, discharge or retirement and the Employee then performs 1 Hour of Service within 12 months of the Severance From Service Date, such Period of Severance is included in the Period of Service. If the Employee has a Severance From Service Date by reason of a voluntary termination, discharge or retirement during an absence from service of 12 months or less for any reason other than a voluntary termination, discharge or retirement, and then performs 1 Hour of Service within 12 months of the date on which the Employee was first absent from service, such Period of Severance is included in the Period of Service; (iii) period of Service also includes the following: (1) a period of employment with an employer substantially all of the equity interest or assets of which have been acquired by the Company or an Affiliate, but only to the extent that the Company expressly recognizes such period as a Period of Service pursuant to written and nondiscriminatory rules; and (2) such other periods as the Company recognizes as a Period of Service pursuant to written and nondiscriminatory rules. 8 ARTICLE II Participation ------------- 2.1 Eligibility and Commencement of Participation --------------------------------------------- Except as otherwise provided in the applicable Supplement, each Employee shall automatically become a Participant in the Plan as of the date he or she satisfies all of the following requirements: (a) the Employee is an Eligible Employee; and (b) the Employee either (i) is a permanent, full-time employee, or (ii) has completed not less than 1,000 Hours of Service in a 12-month period beginning on the Employee's Employment Commencement Date or any anniversary thereof. 2.2 Provision of Information ------------------------ Each Participant must make available to the Administrator any information it reasonably requests. As a condition of participation in the Plan, an Employee agrees, on his or her own behalf and on behalf of all persons who may have or claim any right by reason of the Employee's participation in the Plan, to be bound by all provisions of the Plan. 2.3 Termination of Participation ---------------------------- A Participant ceases to be a Participant when he or she dies or, if earlier, when his or her entire vested benefit accrued under the Plan has been paid to him or her. 2.4 Special Rules Relating to Veterans' Reemployment Rights ------------------------------------------------------- Notwithstanding any provision of this Plan to the contrary, with respect to an Eligible Employee or Participant who is reemployed in accordance with the reemployment provisions of the Uniformed Services Employment and Reemployment Rights Act following a period of qualifying military service (as determined under such Act), contributions, benefits and service credit will be provided in accordance with Section 414(u) of the Code. 9 ARTICLE III Normal, Early and Deferred Retirement Benefits ---------------------------------------------- 3.1 Normal Retirement Benefits -------------------------- 3.1.1 Normal Retirement: A Participant who retires on the Normal Retirement Date shall be entitled to receive a Normal Retirement Benefit determined under Section 3.1.2. Payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's Normal Retirement Date, unless the Participant elects to defer commencement subject to Section 3.3.2. 3.1.2 Amount of Normal Retirement Benefit: A Participant's monthly Normal Retirement Benefit shall be equal to the amount determined in accordance with the applicable Supplement. 3.2 Early Retirement Benefits ------------------------- 3.2.1 Early Retirement: A Participant who retires on or after the Early Retirement Date shall be entitled to receive an Early Retirement Benefit determined under Section 3.2.2. Payment of such benefit shall commence as of the first of the month coincident with or next following the Participant's Early Retirement Date or, if the Participant elects, as of the first day of any subsequent month, but not later than the Normal Retirement Date. Any such election of a deferred commencement date may be revoked at any time prior to such date and a new date may be elected by giving advance written notice to the Administrator in accordance with rules prescribed by the Administrator. 3.2.2 Amount of Early Retirement Benefit: Subject to Section 3.2.3, a Participant's monthly Early Retirement Benefit shall be equal to an amount determined pursuant to Section 3.1.2 as in effect on the date the Participant's Years of Credited Service terminate, based on the Participant's Years of Credited Service as of such date. 3.2.3 Early Retirement Reduction Factor: If a Participant's Early Retirement Benefit commences prior to the Participant's Normal Retirement Date, the Participant's Early Retirement Benefit computed pursuant to Section 3.2.2 shall be reduced in accordance with the applicable Supplement. 3.3 Deferred Retirement Benefits ---------------------------- 3.3.1 Deferred Retirement: A Participant who retires after the Normal Retirement Date shall be entitled to receive a Normal Retirement Benefit determined under Section 3.1.2 commencing as of the first day of the month coinciding with or next following the date the Participant actually retires. Each Participant shall accrue additional benefits hereunder 10 after the Participant's Normal Retirement Date with respect to the portion of the Normal Retirement Benefit which is attributable to contributions by the Company. 3.3.2 Distribution Requirements: Except as hereinafter provided, unless the Participant elects otherwise in accordance with the terms of the Plan, payment of a Participant's retirement benefits will begin no later than 60 days after the close of the Plan Year in which the latest of the following events occurs: (a) the Participant's 65th birthday; (b) the 10th anniversary of the year in which the Participant commenced participation in the Plan; and (c) the Participant terminates employment with the Company and all Affiliates. If the amount of the payment required to commence on the date determined under this Section 3.3.2 cannot be ascertained by such date, or if it is not possible to make such payment on such date because the Administrator cannot locate the Participant after making reasonable efforts to do so, a payment retroactive to such date may be made no later than 60 days after the earliest date on which the amount of such payment can be ascertained under this Plan or the date the Participant is located. Notwithstanding any other provision of this Plan: (i) the accrued benefit of a Participant who attains age 70-1/2 on or after January 1, 2000 must be distributed or commence to be distributed no later than the April 1 following the later of (1) the calendar year in which the Participant attains age 70-1/2 or (2) the calendar year in which the Participant retires (unless the Participant is a 5% owner, as defined in Code Section 416, of the Company with respect to the Plan Year in which the Participant attains age 70-1/2, in which case this Subsection (2) shall not apply); and (ii) the accrued benefit of a Participant who attains age 70-1/2 prior to January 1, 2000 must be distributed or commence to be distributed no later than the April 1 following the calendar year in which the Participant attains age 70-1/2 unless the Participant is not a 5% owner (as defined in Subsection (i)) and elects to defer distribution to the calendar year in which the Participant retires. All Plan distributions will comply with Code Section 401(a)(9), including Department of Treasury Regulation Section 1.401(a)(9)-2. 11 3.4 Suspension of Benefits ---------------------- 3.4.1 Prior to Normal Retirement Date: If a Participant receives retirement benefits under the Plan following a termination of employment prior to the Participant's Normal Retirement Date and again becomes an Employee prior to Normal Retirement Date, no retirement benefits shall be paid during such later period of employment and up to Normal Retirement Date. Any benefits payable under the Plan to or on behalf of the Participant at the time of the Participant's subsequent termination of employment shall be reduced by the Actuarial Equivalent of any benefits paid to the Participant after the Participant's earlier termination and prior to the Participant's Normal Retirement Date. 3.4.2 After Normal Retirement Date: If (a) a Participant whose employment terminates again becomes an Employee after the Participant's Normal Retirement Date, or again becomes an Employee prior to the Participant's Normal Retirement Date and continues in employment beyond the Participant's Normal Retirement Date, or (b) a Participant continues in employment with the Company and Affiliates after the Participant's Normal Retirement Date without a prior termination, the following provisions of this Section 3.4.2 shall apply to the Participant as of the Participant's Normal Retirement Date or, if later, the Participant's date of reemployment. (i) For purposes of this Section 3.4.2, the following definitions shall apply: (1) Postretirement Date Service means each calendar month after a Participant's Normal Retirement Date and subsequent to the time that: (A) payment of retirement benefits commenced to the Participant if the Participant returned to employment with the Company and Affiliates, or (B) payment of retirement benefits would have commenced to the Participant if the Participant had not remained in employment with the Company and Affiliates, if in either case the Participant receives pay from the Company and Affiliates for any Hours of Service performed on each of 8 or more days (or separate work shifts) in such calendar month. (2) Suspendable Amount means the monthly retirement benefits otherwise payable in a calendar month in which the Participant is engaged in Postretirement Date Service. (ii) Payment shall be permanently withheld on a portion of a Participant's retirement benefits, not in excess of the Suspendable Amount, for each 12 calendar month during which the Participant is employed in Postretirement Date Service. (iii) If payments have been suspended pursuant to Subsection (ii) above, such payments shall resume no later than the first day of the third calendar month after the calendar month in which the Participant ceases to be employed in Postretirement Date Service; provided, however, that no payments shall resume until the Participant has complied with the requirements set forth in Subsection (vi) below. The initial payment upon resumption shall include the payment scheduled to occur in the calendar month when payments resume and any amounts withheld during the period between the cessation of Postretirement Date Service and the resumption of payment, less any amounts that are subject to offset pursuant to Subsection (iv) below. (iv) Retirement benefits made subsequent to Postretirement Date Service shall be reduced by (1) the Actuarial Equivalent of any benefits paid to the Participant prior to the time the Participant is reemployed after the Participant's Normal Retirement Date (such reduction will occur only if such benefits are not repaid in full to the Trust within two years after the Participant's date of reemployment); and (2) the amount of any payments previously made during those calendar months in which the Participant was engaged in Postretirement Date Service; provided, however, that such reduction under Subsection (2) shall not exceed, in any one month, 25% percent of that month's total retirement benefits (excluding amounts described in Subsection (ii) above) that would have been due but for the offset. (v) Any Participant whose retirement benefits are suspended pursuant to Subsection (ii) of this Section 3.4.2 shall be notified (by personal delivery or certified or registered mail) during the first calendar month in which payments are withheld that the Participant's retirement benefits are suspended. Such notification shall include: (1) a description of the specific reasons for the suspension of payments; (2) a general description of the Plan provisions relating to the suspension; (3) a copy of the provisions; (4) a statement to the effect that applicable Department of Labor Regulations may be found at Section 2530.203-3 of Title 29 of the Code of Federal Regulations; 13 (5) the procedure for appealing the suspension, which procedure shall be governed by Section 12.11; and (6) the procedure for filing a benefits resumption notification pursuant to Subsection (vi) below. If payments subsequent to the suspension are to be reduced by an offset pursuant to Subsection (iv) above, the notification shall specifically identify the periods of employment for which the amounts to be offset were paid, the Suspendable Amounts subject to offset, and the manner in which the Plan intends to offset such Suspendable Amounts. (vi) Payments shall not resume as set forth in Subsection (iii) above until a Participant performing Postretirement Date Service notifies the Administrator in writing of the cessation of such Service and supplies the Administrator with such proof of the cessation as the Administrator may reasonably require. (vii) A Participant may request, pursuant to the procedure contained in Section 12.11, a determination whether specific contemplated employment will constitute Postretirement Date Service. 3.5 Benefit Limitations ------------------- 3.5.1 Limitation on Accrued Benefit: Notwithstanding any other provision of the Plan, the annual benefit payable under the Plan to a Participant, when expressed as a monthly benefit commencing at the Participant's Social Security Retirement Age (as defined in Code Section 415(b)(8)), shall not exceed the lesser of (a) $7,500 or (b) the highest average of the Participant's monthly compensation for 3 consecutive calendar years, subject to the following: (i) The maximum shall apply to the Individual Life Annuity and to that portion of the 100% (or 50%, as applicable) Joint and Survivor's Annuity payable to the Participant during his lifetime. (ii) If a Participant has fewer than 10 years of participation in the Plan, the maximum dollar limitation of Subsection (a) above shall be multiplied by a fraction of which the numerator is the Participant's actual years of participation in the Plan (computed to fractional parts of a year) and the denominator is 10. If a Participant has fewer than 10 Years of Vesting Service, the maximum compensation limitation in Subsection (b) above shall be multiplied by a fraction of which the numerator is the Years of Vesting Service (computed to fractional parts of a year) and the denominator is 10. Provided, however, that in no event shall such dollar or compensation limitation, as applicable, be less than 1/10th of such limitation determined without regard to any adjustment under this Subsection (ii). 14 (iii) As of January 1 of each year, 1/12th of the dollar limitation as determined by the Commissioner of Internal Revenue for that calendar year to reflect increases in the cost of living shall become effective as the maximum dollar limitation in Subsection (a) above for the Plan Year ending within that calendar year for Participants terminating in or after such Plan Year. (iv) The dollar limitation under Subsection (a) above shall be modified as follows to reflect commencement of retirement benefits on a date other than the Participant's Social Security Retirement Age: (1) If the Participant's Social Security Retirement Age is 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the dollar limitation under Subsection (a) above by 5/9ths of 1% for each month by which benefits commence before the month in which the Participant attains age 65; (2) If the Participant's Social Security Retirement Age is greater than 65, the dollar limitation for benefits commencing on or after age 62 is determined by reducing the dollar limitation under Subsection (a) above by 5/9ths of 1% for each of the first 36 months and by 5/12ths of 1% for each of the additional months by which benefits commence before the month in which the Participant attains Social Security Retirement Age; (3) If the Participant's benefit commences prior to age 62, the dollar limitation shall be the actuarial equivalent of Subsection (a) above, payable at age 62, as determined above, reduced for each month by which benefits commence before the month in which the Participant attains age 62. Actuarial equivalence shall be determined using the greater of the interest rate assumption under the Plan for determining early retirement benefits or 5% per year. The mortality basis for determining Actuarial Equivalence for terminations prior to January 1, 1995 shall be the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female); (4) In the case of a Participant whose retirement benefit commences after Social Security Retirement Age, the dollar limitation shall be the actuarial equivalent of Subsection (a) above payable at Social Security Retirement Age, using the lesser of the interest rate assumption under the Plan or 5% per year. The mortality basis for determining Actuarial Equivalence for terminations prior to January 1, 1995 shall be the 1983 Group Annuity Mortality Table (weighted 50% male and 50% female). 15 (v) Notwithstanding the foregoing, the maximum as applied to any Employee on April 1, 1987 shall in no event be less than the Participant's "current accrued benefit" as of March 31, 1987, as that term is defined in Section 1106 of the Tax Reform Act of 1986. (vi) The maximum shall apply to the benefits payable to a Participant under the Plan and all other tax-qualified defined benefit plans of the Company and Affiliates (whether or not terminated), and benefits shall be reduced, if necessary, in the reverse of the chronological order of participation in such plans. 3.5.2 Multiple Plan Reduction: With respect to a Participant who did not have 1 Hour of Service after December 31, 1999 and who is (or has been) a participant in any defined contribution plan (whether or not terminated) maintained by the Company or an Affiliate, the sum of the Participant's defined benefit plan fraction (as defined under Code Section 415(e)(2)) and defined contribution plan fraction (as defined under Code Section 415(e)(3)) shall not exceed 1. If such sum exceeds 1, the participant's defined benefit plan fraction shall be reduced until such sum equal 1. 16 ARTICLE IV Termination Benefits -------------------- 4.1 Termination of Service ---------------------- Except as provided in the applicable Supplement, a Participant who has 5 Years of Vesting Service but who ceases to be an Employee before the Participant's Early Retirement Date for any reason other than death shall be entitled to receive a "Termination Benefit" determined under Section 4.2. Except as provided in the applicable Supplement, payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's Normal Retirement Date, unless the Participant elects to defer commencement subject to Section 3.3.2. Except as provided in the applicable Supplement, if the Participant satisfies the age requirement for an Early Retirement Benefit, the Participant may elect payment of the Actuarial Equivalent of the Participant's Termination Benefit to commence as of the first day of any month before such Normal Retirement Date and coincident with or following the Participant's Early Retirement Date. Any such election of the earlier Annuity Starting Date shall be made by giving advance written notice to the Administrator in accordance with rules prescribed by the Administrator. Except as provided in Article V and Article VII, no benefits shall be payable to any person if the Participant dies prior to the Annuity Starting Date. A terminated Participant who has no vested interest in the Participant's accrued benefit shall be deemed to have received a distribution of the Participant's entire vested benefit. 4.2 Amount of Termination Benefit ----------------------------- Except as provided in the applicable Supplement, a Participant's monthly Termination Benefit shall be determined pursuant to Section 3.1.2 as in effect on the date his Years of Credited Service terminate based on the Participant's Years of Credited Service as of such date. Except as provided in the applicable Supplement, if payment of the Participant's Termination Benefit commences before the Normal Retirement Date, the amount of the monthly benefit shall be reduced to an Actuarial Equivalent to reflect such earlier commencement. 17 ARTICLE V Disability Retirement Benefits ------------------------------ 5.1 Disability Retirement --------------------- To the extent provided in the applicable Supplement, a Participant who is an Employee and who satisfies the requirements for Disability Retirement in the applicable Supplement shall be entitled to receive a Disability Retirement Benefit determined under Section 5.2. If a Participant's Total and Permanent Disability ceases, the payment of the Participant's Disability Retirement Benefit shall cease. 5.2 Amount of Disability Retirement Benefit --------------------------------------- A Participant's Disability Retirement Benefit shall be determined pursuant to the applicable Supplement as in effect on the date the Participant's Years of Credited Service terminate. 18 ARTICLE VI Payment of Retirement Benefits ------------------------------ 6.1 Normal Form of Benefit ---------------------- Except as otherwise provided in the applicable Supplement, a Participant's benefit shall be paid in the form of a 100% Joint and Survivor's Annuity, with the Participant's spouse as joint annuitant if the Participant is married on the Annuity Starting Date, and in the form of an Individual Life Annuity if the Participant is not married on the Annuity Starting Date, unless the Participant elects not to receive payments pursuant to this Section 6.1 and to receive payments in one of the optional forms permitted under Section 6.2. An election not to receive the normal form of benefit and to receive payment in an optional form shall satisfy the applicable requirements of Section 6.3. 6.2 Optional Forms of Benefit ------------------------- Except as otherwise provided in the applicable Supplement, a married Participant may elect, with spousal consent and in accordance with Section 6.3, to receive the Participant's benefits in the form of an Individual Life Annuity. 6.3 Election of Benefits -------------------- 6.3.1 The Administrator shall provide each Participant with a written notice containing the following information: (a) a general description of the normal form of benefit payable under the Plan; (b) the Participant's right to make and the effect of an election to waive the normal form of benefit; (c) the right of the Participant's spouse not to consent to the Participant's election under Section 6.1; (d) the right of Participant to revoke such election, and the effect of such revocation; (e) the optional forms of benefits available under the Plan; and (f) the Participant's right to request in writing information on the particular financial effect of an election by the Participant to receive an optional form of benefit in lieu of the normal form of benefit. 19 6.3.2 The notice under Section 6.3.1 shall be provided to the Participant at each of the following times as shall be applicable to him: (a) not more than 90 days and not less than 30 days after a Participant who is in the employ of the Company or an Affiliate gives notice of the Participant's intention to terminate employment and commence receipt of the Participant's retirement benefits under the Plan; or (b) not more than 90 days and not less than 30 days prior to the attainment of age 65 of a Participant (whether or not the Participant has terminated employment) who has not previously commenced receiving retirement benefits. The election period in Section 6.3.3 for a Participant who requests additional information during the election period will be extended until 90 days after the additional information is mailed or personally delivered. Any such request shall be made only within 90 days after the date the information described in Section 6.3.1 is given to the Participant, and the Administrator shall not be obligated to comply with more than one such request. Any information provided pursuant to this Section 6.3.2 will be given to the Participant within 30 days after the date of the Participant's request and will be based upon the estimated benefits to which the Participant will be entitled as of the later of the first day on which such benefits could commence or the last day of the Plan Year in which the Participant's request is received. If a Participant files an election (or revokes an election) pursuant to this Section 6.3 less than 60 days prior to the Annuity Starting Date, such Participant's initial payments may be delayed for administrative reasons. In such event, the payments shall begin as soon as practicable and shall be made retroactively to such date. 6.3.3 A Participant may make the election provided in Section 6.1 by filing the prescribed form with the Administrator at any time during the election period. The election period shall begin 90 days prior to the Participant's Annuity Starting Date. Such election shall be subject to the written consent of the Participant's spouse, acknowledging the effect of the election and witnessed by a Plan representative or a notary public. Such spousal consent shall not be required if the Participant establishes to the satisfaction of the Administrator that the consent of the spouse may not be obtained because there is no spouse or the spouse cannot be located. A spouse's consent shall be irrevocable. The election in Section 6.1 may be revoked or changed at any time during the election period but shall be irrevocable thereafter. 6.3.4 Notwithstanding Section 6.3.3: (a) distribution of benefits may commence less than 30 days after the notice required pursuant to Section 6.3.1 is provided if: (i) the Participant elects to waive the requirement that notice be given at least 30 days prior to the Annuity Starting Date; and 20 (ii) the distribution commences more than 7 days after such notice is provided. (b) The notice described in Section 6.3.1 may be provided after the Annuity Starting Date, in which case the applicable election period shall not end before the 30th day after the date on which such notice is provided, unless the Participant elects to waive the 30-day notice requirements pursuant to Subsection (a) above. 21 ARTICLE VII Survivor's Benefits ------------------- 7.1 Surviving Spouse's Benefit -------------------------- If a Participant who has 5 or more Years of Vesting Service dies before the Annuity Starting Date and leaves a surviving spouse to whom the Participant has been married for at least 12 months, the Participant's surviving spouse shall be entitled to receive a survivor's benefit for life. Except as otherwise provided in the applicable Supplement, the amount of such survivor's benefit shall be determined pursuant to Section 4.2 based upon the Participant's age and Years of Credited Service on the date of the Participant's death and paid in the form of a 50% Joint and Survivor's Annuity as if the Participant had died on the day before such benefits commence. Except as otherwise provided in the applicable Supplement, payment of the survivor's benefit shall commence on the first day of the month coincident with or next following the later of the first date the Participant could have commenced an Early Retirement Benefit or the Participant's death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 7.2 Certain Former Employees ------------------------ Participants who have 10 Years of Vesting Service but who are not credited with an Hour of Service on or after August 23, 1984 and are not receiving benefits on that date shall be entitled to elect survivor's benefits only as follows: (a) if the Participant is credited with an Hour of Service under this Plan or a predecessor plan on or after September 2, 1974, but is not otherwise credited with an Hour of Service in a Plan Year beginning on or after January 1, 1976, the Participant shall be afforded an opportunity to elect payment of benefits in the form of a 100% Joint and Survivor's Annuity; or (b) if the Participant is credited with an Hour of Service under this Plan or a predecessor plan in a Plan Year beginning after December 31, 1975, the Participant shall be afforded the opportunity to elect a Surviving Spouse's Benefit under Section 7.1. 22 ARTICLE VIII Fiduciaries ----------- 8.1 Named Fiduciaries ----------------- 8.1.1 The Company is the Plan sponsor and a "named fiduciary" with respect to control over and management of the Plan's assets only to the extent that it (a) shall appoint the members of the Committee which administers the Plan at the Administrator's direction; (b) shall delegate its authorities and duties as "plan administrator," as defined under ERISA, to the Committee; and (c) shall continually monitor the performance of the Committee. 8.1.2 The Company, as Administrator, and the Committee, which administers the Plan at the Administrator's direction, are "named fiduciaries" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to control and manage the operation and administration of the Plan. The Administrator is also the "administrator" and "plan administrator" of the Plan, as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g), respectively. 8.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to manage and control all Trust assets, except to the extent that authority is delegated to an Investment Manager or to the extent the Administrator or the Committee directs the allocation of Trust assets among general investment categories. 8.1.4 The Company, the Administrator, and the Trustee are the only named fiduciaries of the Plan. 8.2 Employment of Advisers ---------------------- A named fiduciary, and any fiduciary appointed by a named fiduciary, may employ one or more persons to render advice regarding any of the named fiduciary's or fiduciary's responsibilities under the Plan. 8.3 Multiple Fiduciary Capacities ----------------------------- Any named fiduciary and any other fiduciary may serve in more than one fiduciary capacity with respect to the Plan. 8.4 Payment of Expenses ------------------- All Plan expenses, including expenses of the Administrator, the Committee, the Trustee, any Investment Manager and any insurance company, will be paid by the Trust Fund, unless a Participating Employer elects to pay some or all of those expenses. 23 8.5 Indemnification --------------- To the extent not prohibited by state or federal law, each Participating Employer agrees to, and will indemnify and save harmless the Administrator, any past, present, additional or replacement member of the Committee, and any other employee, officer or director of that Participating Employer, from all claims for liability, loss, damage (including payment of expenses to defend against any such claim) fees, fines, taxes, interest, penalties and expenses which result from any exercise or failure to exercise any responsibilities with respect to the Plan, other than willful misconduct or willful failure to act. 24 ARTICLE IX Plan Administration ------------------- 9.1 Powers, Duties and Responsibilities of the Administrator and the Committee 9.1.1 The Administrator and the Committee have full discretion and power to construe the Plan and to determine all questions of fact or interpretation that may arise under it. Interpretation of the Plan or determination of questions of fact regarding the Plan by the Administrator or the Committee will be conclusively binding on all persons interested in the Plan. 9.1.2 The Administrator and the Committee have the power to promulgate such rules and procedures, to maintain or cause to be maintained such records, and to issue such forms as it deems necessary or proper to administer the Plan. 9.1.3 Subject to the terms of the Plan, the Administrator and/or the Committee will determine the time and manner in which all elections authorized by the Plan must be made or revoked. 9.1.4 The Administrator and the Committee have all the rights, powers, duties and obligations granted or imposed upon them elsewhere in the Plan. 9.1.5 The Administrator and the Committee have the power to do all other acts in the judgment of the Administrator or the Committee necessary or desirable for the proper and advantageous administration of the Plan. 9.1.6 The Administrator and the Committee will exercise all responsibilities in a uniform and nondiscriminatory manner. 9.2 Delegation of Administration Responsibilities The Administrator and the Committee may designate by written instrument one or more actuaries, accountants or consultants as fiduciaries to carry out, where appropriate, the administrative responsibilities, including their fiduciary duties. The Committee may from time to time allocate or delegate to any subcommittee, member of the Committee and others, not necessarily employees of the Company, any of its duties relative to compliance with ERISA, administration of the Plan and related matters, including involving the exercise of discretion. The Company's duties and responsibilities under the Plan shall be carried out by its directors, officers and employees, acting on behalf of and in the name of the Company in their capacities as directors, officers and employees, and not as individual fiduciaries. No director, officer nor employee of the Company shall be a fiduciary with respect to the Plan unless he or she is specifically so designated and expressly accepts such designation. 25 9.3 Committee Members The Committee shall consist of not less than 3 people, who need not be directors, and shall be appointed by the Chief Executive Officer of the Company. Any Committee member may resign and the Chief Executive Officer may remove any Committee member, with or without cause, at any time. A majority of the members of the Committee shall constitute a quorum for the transaction of business and the act of a majority of the Committee members at a meeting at which a quorum is present shall be the act of the Committee. The Committee can act by written consent signed by all of its members. Any members of the Committee who are Employees shall not receive compensation for their services for the Committee. No Committee member shall be entitled to act on or decide any matter relating solely to his or her status as a Participant. 26 ARTICLE X Funding of the Plan ------------------- 10.1 Appointment of Trustee The Committee or its authorized delegatee will appoint the Trustee and either may remove it. The Trustee accepts its appointment by executing the Trust Agreement. A Trustee will be subject to direction by the Committee or its authorized delegatee or, to the extent specified by the Company, by an Investment Manager, and will have the degree of discretion to manage and control Plan assets specified in the Trust Agreement. Neither the Company nor any other Plan fiduciary will be liable for any act or omission to act of a Trustee, as to duties delegated to the Trustee. 10.2 Actuarial Cost Method The Committee or its authorized delegatee shall determine the actuarial cost method to be used in determining costs and liabilities under the Plan pursuant to Section 301 et seq., of ERISA and Section 412 of the Code. The Committee or its authorized delegatee shall review such actuarial cost method from time to time, and if it determines from review that such method is no longer appropriate, then it shall petition the Secretary of the Treasury for approval of a change of actuarial cost method. 10.3 Cost of the Plan Annually the Committee or its authorized delegatee shall determine the normal cost of the Plan for the Plan Year and the amount (if any) of the unfunded past service cost on the basis of the actuarial cost method established for the Plan using actuarial assumptions which, in the aggregate, are reasonable. The Committee or its authorized delegatee shall also determine the contributions required to be made for each Plan Year by the Participating Companies in order to satisfy the minimum funding standard (or alternative minimum funding standard) for such Plan Year determined pursuant to Sections 302 through 305 of ERISA and Section 412 of the Code. 10.4 Funding Policy The Participating Companies shall cause contributions to be made to the Plan for each Plan Year in the amount necessary to satisfy the minimum funding standard (or alternative minimum funding standard) for such Plan Year; provided, however, that this obligation shall cease when the Plan is terminated. In the case of a partial termination of the Plan, this obligation shall cease with respect to those Participants, Joint Annuitants and Beneficiaries who are affected by such partial termination. Each contribution is conditioned upon its deductibility under Section 404 of the Code and shall be returned to the Participating Companies within one year after the disallowance of the deduction (to the extent disallowed). Upon the Company's written 27 request, a contribution that was made by a mistake of fact shall be returned to the Participating Company within one year after the payment of the contribution. 10.5 Cash Needs of the Plan The Committee or its authorized delegatee from time to time shall estimate the benefits and administrative expenses to be paid out of the Plan during the period for which the estimate is made and shall also estimate the contributions to be made to the Plan during such period by the Participating Companies. The Committee or its authorized delegatee shall inform the Trustees of the estimated cash needs of and contributions to the Plan during the period for which such estimates are made. Such estimates shall be made on an annual, quarterly, monthly or other basis, as the Committee shall determine. 10.6 Public Accountant The Committee or its authorized delegatee shall engage an independent qualified public accountant to conduct such examinations and to render such opinions as may be required by Section 103(a)(3) of ERISA. The Committee or its authorized delegatee in its discretion may remove and discharge the person so engaged, but in such case it shall engage a successor independent qualified public accountant to perform such examinations and to render such opinions. 10.7 Enrolled Actuary The Committee or its authorized delegatee shall engage an enrolled actuary to prepare the actuarial statement described in Section 103(d) of ERISA and to render the opinion described in Section 103(a)(4) of ERISA. The Committee or its authorized delegatee in its discretion may remove and discharge the person so engaged, but in such event it shall engage a successor enrolled actuary to perform such examination and render such opinion. 10.8 Basis of Payments to the Plan All contributions to the Plan shall be made by the Participating Companies and no contributions shall be required of or permitted by Participants. From time to time the Participating Companies shall make such contributions to the Plan as the Company determines to be necessary or desirable in order to fund the benefits provided by the Plan and any expenses thereof which are paid out of the Trust Fund and in order to carry out the obligations of the Participating Companies set forth in Section 10.3. All contributions to the Plan shall be held by the Trustee in accordance with the Trust Agreement. 10.9 Basis of Payments from the Plan All benefits payable under the Plan shall be paid by the Trustee out of the Trust Fund pursuant to the directions of the Committee or its authorized delegatee and the terms of the Trust Agreement. The Trustee shall pay all proper expenses of the Plan and the Trust Fund out of the Trust Fund, except to the extent paid by the Participating Companies. 28 ARTICLE XI Plan Amendment or Termination ----------------------------- 11.1 Plan Amendment or Termination The Company may, subject to any applicable Collective Bargaining Agreement, amend, modify or terminate the Plan at any time by resolution of the Board or by resolution of or other action recorded in the minutes of the Administrator or Committee. Execution and delivery by the Administrator or the Committee or by the Chairman of the Board, the President, or any Vice President of the Company of an amendment to the Plan is conclusive evidence of the amendment, modification or termination. The Committee in any event shall have the authority to amend the Plan at any time to the extent that such amendments are required in order to obtain a favorable determination letter from the Internal Revenue Service regarding the Plan's qualification under the Code or to conform the Plan to such regulations and rulings as may be issued by the Internal Revenue Service or the United States Department of Labor. 11.2 Limitations on Plan Amendment No Plan amendment can: (a) authorize any part of the Trust Fund to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries; (b) decrease the accrued benefits of any Participant or his or her Beneficiary under the Plan; or (c) except to the extent permitted by law, eliminate or reduce an early retirement benefit or retirement-type subsidy (as defined in Code Section 411) or an optional form of benefit with respect to service prior to the date the amendment is adopted or effective, whichever is later. 11.3 Effect of Plan Termination Upon termination of the Plan, each Participant's rights to benefits accrued hereunder shall be vested and nonforfeitable, and the Trust shall continue until the Trust Fund has been distributed as provided in Section 11.4. Any other provision hereof notwithstanding, the Participating Companies shall have no obligation to continue making contributions to the Plan after termination of the Plan. Except as otherwise provided in ERISA, neither the Participating Companies nor any other person shall have any liability or obligation to provide benefits hereunder after such termination in excess of the value of the Trust Fund. Upon such termination, Participants and Beneficiaries shall obtain benefits solely from the Trust Fund. 29 Upon partial termination of the Plan, this Section 11.3 shall apply only with respect to such Participants and Beneficiaries as are affected by such partial termination. 11.4 Allocation of Trust Fund on Termination On termination of the Plan, the Trust Fund shall be allocated by the Administrator on an actuarial basis among Participants and Beneficiaries in the manner prescribed by Section 4044 of ERISA. Any residual assets of the Trust Fund remaining after such allocation shall be distributed to the Company if (a) all liabilities of the Plan to Participants and Beneficiaries have been satisfied and (b) such a distribution does not contravene any provision of law. The foregoing notwithstanding, if any remaining assets of the Plan are attributable to Employee Contributions, such assets shall be equitably distributed to the Participants who made such contributions (or to their Beneficiaries) in accordance with their rate of contribution. Effective January 1, 1989, the benefit of any highly compensated employee or former employee (determined in accordance with section 414(g) of the Code and regulations thereunder) shall be limited to a benefit that is nondiscriminatory under section 401(a)(4) of the Code. In the event of a partial termination of the Plan, the Administrator shall arrange for the division of the Trust Fund, on a nondiscriminatory basis to the extent required by section 401 of the Code, into the portion attributable to those Participants and Beneficiaries who are not affected by such partial termination and the portion attributable to such persons who are so affected. The portion of the Trust Fund attributable to persons who are so affected shall be allocated in the manner prescribed by section 4044 of ERISA. 30 ARTICLE XII Miscellaneous Provisions ------------------------ 12.1 Subsequent Changes All benefits to which any Participant may be entitled hereunder shall be determined under the Plan in effect when the Participant ceases to be an Eligible Employee and shall not be affected by any subsequent change in the provisions of the Plan, unless the Participant again becomes an Eligible Employee. 12.2 Plan Mergers The Plan shall not be merged or consolidated with any other plan, and no assets or liabilities of the Plan shall be transferred to any other plan, unless each Participant would receive a benefit immediately after such merger, consolidation or transfer (if the Plan then terminated) which is equal to or greater than the benefit such Participant would have been entitled to receive immediately before such merger, consolidation or transfer (if the Plan had then been terminated). A list of other plans which have been merged into the Plan is attached hereto and made a part hereof as Exhibit A. 12.3 No Assignment of Property Rights The interest or property rights of any person in the Plan, in the Trust Fund or in any payment to be made under the Plan shall not be assignable nor be subject to alienation or option, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any act in violation of this Section 12.3 shall be void. This provision shall not apply to a "qualified domestic relations order" defined in Code Section 414(p). The Company shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. In addition, the prohibition of this Section 12.3 will not apply to any offset of a Participant's benefit under the Plan against an amount the Participant is ordered or required to pay to the Plan under a judgment, order, decree or settlement agreement that meets the requirements as set forth in this Section 12.3. The Participant must be ordered or required to pay the Plan under a judgment of conviction for a crime involving the Plan, under a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or pursuant to a settlement agreement between the Secretary of Labor and the Participant in connection with a violation (or alleged violation) of that part 4. This judgment, order, decree or settlement agreement must expressly provide for the offset of all or part of the amount that must be paid to the Plan against the Participant's benefit under the Plan. In addition, if a Participant is entitled to receive a 100% Joint and Survivor Annuity under Section 6.1 of the Plan or a Surviving Spouse's 31 Benefit under Section 7.1 of the Plan, and the Participant is married at the time at which the offset is to be made, the Participant's spouse must consent to the offset in accordance with the spousal consent requirements of Section 6.3.3 of the Plan, an election to waive the right of the spouse to the 100% Joint and Survivor Annuity (made in accordance with Section 6.3 of the Plan) or the Surviving Spouse's Benefit under Section 7.1 of the Plan, must be in effect, the spouse is ordered or required in the judgment, order, decree, or settlement to pay an amount to the Plan in connection with a violation of Part 4 of subtitle B or ERISA Title I, or the spouse retains in the judgment, order, decree, or settlement the right to receive the survivor annuity under the 100% Joint and Survivor Annuity or under the Surviving Spouse's Benefit, determined in the following manner: the Participant terminated employment on the date of the offset, there was no offset, the Plan permitted the commencement of benefits only on or after Normal Retirement Age, the Plan provided only the minimum- required qualified joint and survivor annuity, and the amount of the Surviving Spouse's Benefit under the Plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. For purposes of this Section 12.3 the term "minimum-required qualified joint and survivor annuity" means a qualified joint and survivor annuity which is the Actuarial Equivalent of the Participant's accrued benefit and under which the survivor's annuity is 50% of the amount of the annuity which is payable during the joint lives of the Participant and the Participant's spouse. 12.4 Beneficiary To the extent permitted by the applicable Supplement, the Beneficiary of a Participant shall be the person or persons so designated by such Participant with spousal consent and in accordance with Section 6.3. A Participant may revoke and change a designation of a Beneficiary at any time. A designation of a Beneficiary, or any revocation and change thereof, shall be effective only if it is made in writing in a form acceptable to the Administrator and is received by it prior to the Participant's death. 12.5 Benefits Payable to Minors, Incompetents and Others If any benefit is payable to a minor, an incompetent, or a person otherwise under a legal disability, or to a person the Administrator reasonably believes to be physically or mentally incapable of handling and disposing of his or her property, whether because of his or her advanced age, illness, or other physical or mental impairment, the Administrator has the power to apply all or any part of the benefit directly to the care, comfort, maintenance, support, education, or use of the person, or to pay all or any part of the benefit to the person's parent, guardian, committee, conservator, or other legal representative, wherever appointed, to the individual with whom the person is living or to any other individual or entity having the care and control of the person. The Plan, the Administrator and any other Plan fiduciary will have fully discharged all responsibilities to the Participant or Beneficiary entitled to a payment by making payment under the preceding sentence. 32 12.6 Employment Rights Nothing in the Plan shall be deemed to give any person a right to remain in the employ of the Company and Affiliates or affect any right of the Company or any Affiliate to terminate a person's employment with or without cause. 12.7 Proof of Age and Marriage Participants and Beneficiaries shall furnish proof of age and marital status satisfactory to the Administrator at such time or times as it shall prescribe. The Administrator may delay the disbursement of any benefits under the Plan until all pertinent information with respect to age or marital status has been furnished and then make payment retroactively. 12.8 Small Annuities If the lump sum Actuarial Equivalent value of a retirement or survivor's benefit is $5,000 or less, such amount shall be paid in a lump sum as soon as administratively practicable following the Participant's retirement, termination of employment, or death. If a lump sum distribution is so paid and the Participant is thereafter reemployed by the Company, the Participant shall have the option to repay to the Plan the amount of such distribution, together with interest at the rate of 5% per annum (or such other rate as may be prescribed pursuant to section 411(c)(2)(C)(III) of the Code), compounded annually from the date of the distribution to the date of repayment. If a reemployed Participant does not make such repayment, no part of the Period of Service with respect to which the lump sum distribution was made shall count as Years of Vesting Service or Years of Credited Service. 12.9 Controlling Law The Plan and all rights thereunder shall be interpreted and construed in accordance with ERISA and, to the extent that state law is not preempted by ERISA, the law of the State of Illinois. 12.10 Direct Rollover Option Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section 12.10, a distributee may elect, at the time and in the manner prescribed by the 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. (a) As used in this Section 12.10, an "eligible rollover distribution" means 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 33 payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; 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); and any other distribution(s) that is reasonably expected to total less than $200 during a year. (b) As used in this Section 12.10, an "eligible retirement plan" means 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. In the case of an eligible rollover distribution to the surviving spouse, however, an eligible retirement plan is an individual retirement account or individual retirement annuity. (c) As used in this Section 12.10, a "distributee" includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (d) As used in this Section 12.10, a "direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee. 12.11 Claims Procedure 12.11.1 Any application for benefits under the Plan and all inquiries concerning the Plan shall be submitted to the Company at such address as may be announced to Participants from time to time. Applications for benefits shall be in writing on the form prescribed by the Company and shall be signed by the Participant or, in the case of a benefit payable after the death of the Participant, by the Participant's surviving spouse or Beneficiary, as the case may be. 12.11.2 The Company shall give written notice of its decision on any application to the applicant within 90 days. If special circumstances require a longer period of time the Company shall so notify the applicant within 90 days, and give written notice of its decision to the applicant within 180 days after receiving the application. In the event any application for benefits is denied in whole or in part, the Company shall notify the applicant in writing of the right to a review of the denial. Such written notice shall set forth, in a manner calculated to be understood by the applicant, specific reasons for the denial, specific references to the Plan provisions on which the denial is based, a description of any information or material necessary to 34 perfect the application, an explanation of why such material is necessary and an explanation of the Plan's review procedure. 12.11.3 The Company shall appoint a "Review Panel," which shall consist of three or more individuals who may (but need not) be employees of the Company. The Review Panel shall be the named fiduciary which has the authority to act with respect to any appeal from a denial of benefits under the Plan. 12.11.4 Any person (or his authorized representative) whose application for benefits is denied in whole or in part may appeal the denial by submitting to the Review Panel a request for a review of the application within 60 days after receiving written notice of the denial. The Company shall give the applicant or such representative an opportunity to review, by written request, pertinent materials (other than legally privileged documents) in preparing such request for review. The request for review shall be in writing and addressed as follows: "Review Panel of the Employee Welfare Benefits Plan Committee, 200 East Randolph Drive, Chicago, Illinois 60601." The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the applicant deems pertinent. The Review Panel may require the applicant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. 12.11.5 The Review Panel shall act upon each request for review within 60 days after receipt thereof. If special circumstances require a longer period of time the Review Panel shall so notify the applicant within 60 days, and give written notice of its decision to the applicant within 120 days after receiving the request for review. The Review Panel shall give notice of its decision to the Company and to the applicant in writing. In the event the Review Panel confirms the denial of the application for benefits in whole or in part, such notice shall set forth in a manner calculated to be understood by the applicant, the specific reasons for such denial and specific references to the Plan provisions on which the decision is based. 12.11.6 The Review Panel shall establish such rules and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its responsibilities under this Section 12.11. 12.11.7 No legal or equitable action for benefits under the Plan shall be brought unless and until the claimant (a) has submitted a written application for benefits in accordance with Section 12.10.1, (b) has been notified by the Company that the application is denied, (c) has filed a written request for a review of the application in accordance with Section 12.10.4 and (d) has been notified in writing that the Review Panel has affirmed the denial of the application; provided that legal action may be brought after the Review Panel has failed to take any action on the claim within the time prescribed in Section 12.11.5. A claimant may not bring an action for benefits in accordance with this Section 12.11.7 after 90 days after the Review Panel denies the claimant's application for benefits. 12.12 Participation in the Plan by an Affiliate 35 12.12.1 With the consent of the Board, any Affiliate, by appropriate action of its board of directors, a general partner or the sole proprietor, as the case may be, may adopt the Plan and determine the classes of its Employees that will be Eligible Employees. 12.12.2 A Participating Employer will have no power with respect to the Plan except as specifically provided herein. 12.13 Action by Participating Employers Any action required to be taken by the Company pursuant to any Plan provisions will be evidenced in the manner set forth in Section 11.1. Any action required to be taken by a Participating Employer will be evidenced by a resolution of the Participating Employer's board of directors (or an authorized committee of that board). Participating Employer action may also be evidenced by a written instrument executed by any person or persons authorized to take the action by the Participating Employer's board of directors, any authorized committee of that board, or the stockholders. A copy of any written instrument evidencing the action by the Company or Participating Employer must be delivered to the secretary or assistant secretary of the Company or Participating Employer. 36 ARTICLE XIII Top Heavy Provisions -------------------- 13.1 Top Heavy Definitions For purposes of this Article XIII and any amendments to it, the terms listed in this Section 13.1 have the meanings ascribed to them below. Aggregate Account means the value of all accounts maintained on behalf of a Participant, whether attributable to Company or employee contributions, determined under applicable provisions of the defined contribution plan used in determining Top Heavy Plan status. Aggregation Group means the group of plans in a Mandatory Aggregation Group, if any, that includes the Plan, unless including additional Related Plans in the group would prevent the Plan for being a Top Heavy Plan, in which case Aggregation Group means the group of plans in a Permissive Aggregation Group, if any, that includes the Plan. Compensation means compensation as defined in Code Section 415(c)(3) and Treasury regulations thereunder. For purposes of determining who is a Key Employee, Compensation will be applied by taking into account amounts paid by Affiliates who are not Participating Employers, as well as amounts paid by Participating Employers, and without applying the exclusions for amounts paid by a Participating Employer to cover an Employee's nonqualified deferred compensation FICA tax obligations and for gross-up payments on such FICA tax payments. Determination Date means, for a Plan Year, the last day of the preceding Plan Year. If the Plan is part of an Aggregation Group, the Determination Date for each other plan will be, for any Plan Year, the Determination Date for that other plan that falls in the same calendar year as the Determination Date for the Plan. Key Employee means an employee described in Code Section 416(i)(1) and the regulations promulgated thereunder. Generally, a Key Employee is an Employee or former Employee who, at any time during the Plan Year containing the Determination Date or any of the 4 preceding Plan Years, is: (a) an officer of the Company or an Affiliate with annual Compensation greater than 50% of the amount in effect under Code Section 415(b)(1)(A); (b) one of the 10 Employees of the Company and all Affiliates owning (or considered to own within the meaning of Code Section 318) the largest interests in any of the Company and the Affiliates, but only if the Employee has annual Compensation greater than the limitation in effect under Code Section 415(c)(1)(A); (c) a 5% owner of the Company or an Affiliate; or 37 (d) a 1% owner of the Company or an Affiliate with annual Compensation from the Company and all Affiliates of more than $150,000. Mandatory Aggregation Group means each plan (considering the Plan and Related Plans) that, during the Plan Year that contains the Determination Date or any of the 4 preceding Plan Years: (a) had a participant who was a Key Employee; or (b) was required to be considered with a plan in which a Key Employee participated in order to enable the plan in which the Key Employee participated to meet the requirements of Code Section 401(a)(4) or 410(b). Non-key Employee means an Employee or former Employee who is not a Key Employee. Permissive Aggregation Group means the group of plans consisting of the plans in a Mandatory Aggregation Group with the Plan, plus any other Related Plan or Plans that, when considered as a part of the Aggregation Group, does not cause the Aggregation Group to fail to satisfy the requirements of Code Section 401(a)(4) or 410(b). Present Value of Accrued Benefits means, in the case of a defined benefit plan, a Participant's present value of accrued benefits determined as follows: (a) as of the most recent "Actuarial Valuation Date," which is the most recent valuation date within a 12-month period ending on the Determination Date; (b) as if the Participant terminated service as of the actuarial valuation date; and (c) the Actuarial Valuation Date must be the same date used for computing the defined benefit plan minimum funding costs, regardless of whether a valuation is performed that Plan Year. Present Value means, in calculating a Participant's present value of accrued benefits as of a Determination Date, the sum of: (a) the Actuarial Equivalent present value of accrued benefits; (b) any Plan distributions made within the Plan Year that includes the Determination Date or within the 4 preceding Plan Years. However, in the case of distributions made after the valuation date and prior to the Determination Date, such distributions are not included as distributions for top heavy purposes to the extent that such distributions are already included in the Participant's present value of accrued benefits as of the valuation date. Notwithstanding anything herein to the contrary, all 38 distributions, including distributions under a terminated plan which if it had not been terminated would have been required to be included in an Aggregation Group, will be counted; (c) any Employee Contributions, whether voluntary or mandatory. However, amounts attributable to tax deductible Qualified Voluntary Employee Contributions shall not be considered to be a part of the Participant's present value of accrued benefits; (d) with respect to unrelated rollovers and plan-to-plan transfers (ones which are both initiated by the Participant and made from a plan maintained by one employer to a plan maintained by another employer), if this Plan provides for rollovers or plan-to-plan transfers, it shall always consider such rollover or plan-to-plan transfer as a distribution for the purposes of this Section 13.1. If this Plan is the plan accepting such rollovers or plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan transfers, as part of the Participant's present value of accrued benefits; and (e) with respect to related rollovers and plan-to-plan transfers (ones either not initiated by the Participant or made to a plan maintained by the same employer), if this Plan provides the rollover or plan-to-plan transfer, it shall not be counted as a distribution for purposes of this Section. If this Plan is the plan accepting such rollover or plan-to-plan transfer, it shall consider such rollover or plan-to-plan transfer as part of the Participant's present value of accrued benefits, irrespective of the date on which such rollover or plan-to-plan transfer is accepted. Related Plan means any other defined contribution plan (a "Related Defined Contribution Plan") or defined benefit plan (a "Related Defined Benefit Plan") (both as defined in Code Section 415(k), maintained by the Company or an Affiliate. A Super Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the present value of accrued benefits and the Aggregate Accounts of Key Employees under all plans in the Aggregation Group exceeds 90% of the sum of the present value of accrued benefits and the Aggregate Accounts of all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits and/or Aggregate Accounts for all employees, the present value of accrued benefits and/or Aggregate Accounts for any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. Super Top Heavy Plan means the Plan when it is described in the second sentence of Section 13.2. A Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the Present Value of Accrued Benefits for Key Employees under all plans in the Aggregation Group exceeds 60% of the sum of the Present Value of Accrued 39 Benefits for all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits for all employees, the Present Value of Accrued Benefits for any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. Top Heavy Plan means the Plan when it is described in the first sentence of Section 13.2. 13.2 Determination of Top Heavy Status This Plan is a Top Heavy Plan in any Plan Year in which it is a member of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in which it is a member of a Super Top Heavy Aggregation Group, including a Super Top Heavy Aggregation Group that includes only the Plan. 13.3 Minimum Benefit Requirement for Top Heavy Plan 13.3.1 Minimum Accrued Benefit: The minimum accrued benefit (expressed as an Individual Life Annuity commencing at Normal Retirement Date) derived from Company contributions to be provided under this Section for each Non-key Employee who is a Participant for any Plan Year in which this Plan is a Top Heavy Plan shall equal the product of (a) 1/12th of "416 Compensation" averaged over 5 the consecutive Plan Years (or actual number of Plan Years if less) which produce the highest average and (b) the lesser of (i) 2% multiplied by Years of Vesting Service or (ii) 20%. 13.3.2 For purposes of providing the minimum benefit under Code Section 416, a Non-key Employee who is not a Participant solely because (a) his compensation is below a stated amount or (b) he declined to make mandatory contributions to the Plan will be considered to be a Participant. 13.3.3 For purposes of this Section 13.3, Years of Vesting Service for any Plan Year ending prior to January 1, 1984, or for any Plan Year during which the Plan was not a Top Heavy Plan shall be disregarded. 13.3.4 For purposes of this Section 13.3, 416 Compensation for any Plan Year ending prior to January 1, 1984, or subsequent to the last Plan Year during which the Plan is a Top Heavy Plan shall be disregarded. 13.3.5 For the purposes of this Section 13.3, "416 Compensation" shall mean W-2 wages for the calendar year ending with or within the Plan Year, and shall be limited to $160,000 (as adjusted for cost-of-living in accordance with Section 401(a)(17)(B) of the Code) in Top Heavy Plan Years. 13.3.6 If payment of the minimum accrued benefit commences at a date other than Normal Retirement Date, or if the form of benefit is other than on Individual Life Annuity, 40 the minimum accrued benefit shall be the Actuarial Equivalent of the minimum accrued benefit expressed as an Individual Life Annuity commencing at Normal Retirement Date. 13.3.7 For any Plan Year before January 1, 2000, when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in both this Plan and a defined contribution plan included in a required Aggregation Group which is top heavy, the extra minimum accrued benefit shall be provided for each Non-key Employee who is a Participant by 20% in Section 13.3.1. 13.3.8 In lieu of the benefit in Section 13.3.7, if a Non-key Employee participates in this Plan and a defined contribution plan included in a Required Aggregation Group which is top heavy, a minimum allocation of 5% of 416 Compensation shall be provided under the defined contribution plan. If the defined contribution plan is amended so that the minimum benefits are no longer provided under the defined contribution plan, the minimum benefits shall be provided under this Plan. However, for any Plan Year when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a Participant in both this Plan and a defined contribution plan included in a Required Aggregation Group which is top heavy, 7-1/2% shall be substituted for 5% above. 13.3.9 To the extent required to be nonforfeitable under Section 13.4, the minimum accrued benefit under this Section 13.3 may not be forfeited under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D). 13.4 Vesting Requirement for Top Heavy Plan 13.4.1 Notwithstanding any other provision of this Plan, for any Top Heavy Plan Year, the vested portion of any Participant's accrued benefit shall be determined on the basis of the Participant's number of Years of Vesting Service according to the following schedule: Years of Service Percentage Vested ---------------- ----------------- 1 - 2 0% 3 100% If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan, the Company may, in its sole discretion, elect to continue to apply this vesting schedule in determining the vested portion of any Participant's accrued benefit, or revert to the vesting schedule in effect before this Plan became a Top Heavy Plan. Any such reversion shall be treated as a Plan amendment. 13.4.2 The computation of a Participant's nonforfeitable percentage of the Participant's interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Plan. In the event that this Plan is amended to change or modify any vesting schedule, a Participant with at least 5 Years of Service as of the expiration date of the election period may elect to have the Participant's nonforfeitable percentage computed under the Plan without regard to such amendment. If a Participant fails to make such election, then such 41 Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment and shall end 60 days after the latest of (a) the adoption date of the amendment, (b) the effective date of the amendment, or (c) the date the Participant receives written notice of the amendment from the Company. To record the amendment and restatement of the Plan to read as set forth herein, the Company has caused its authorized representative to execute the same this 31st day of August, 1999, but to be effective January 1, 1999, except as otherwise provided in the text herein. FMC CORPORATION BY:/s/ J. Paul McGrath --------------------------------- Member, Employee Welfare Benefits Plan Committee 42 EXHIBIT A MERGED PLANS ------------ The following is a list of plans which have been previously merged into this Plan, the effective date of such merger and the applicable Supplement containing the provisions of such prior plans which have been maintained in this Plan for the applicable Participants. Notwithstanding any Plan provision to the contrary, the terms of the Supplement shall control with respect to the applicable Participants. Unless otherwise defined in the Supplement, defined terms used in the Supplement have the meanings ascribed to them elsewhere in the Plan.
EFFECTIVE DATE OF SUPPLEMENT PLAN MERGER NUMBER - ------ --------- ---------- FMC Corporation Pension Plan for Hourly Employees - January 1, 1991 1 Industrial Chemical Division - Green River, WY - ----------------------------------------------------------------------------------------------- Jetway Systems Division Pension Plan for Hourly May 27, 1994 2 Employees - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 3 Packaging Machinery Division, Green Bay, WI - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 4 Agricultural Chemical Division, Fresno, CA - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees - December 31, 1998 5 Sweeper Division, Pomona, CA - ----------------------------------------------------------------------------------------------- Skull Point Mine, Kemmerer, Wyoming December 31, 1998 6 - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for San Jose Commercial December 31, 1998 7 Segment Hourly Employees - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Agriculture Chemical December 31, 1998 8 Division, Baltimore - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 9 Inorganic Chemical Division, Tonowanda, New York - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan - Industrial Chemicals December 31, 1998 10 Division, Carteret - ----------------------------------------------------------------------------------------------- Smith Meter, Inc., Erie Plant Industrial Pension Plan December 31, 1998 11 - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan - Food Processing December 31, 1998 12 Machinery Division, Hoopeston - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 13 Kemmerer Coke Plant - ----------------------------------------------------------------------------------------------- FMC Corporation Hourly Retirement Plan for Industrial December 31, 1998 14 Chemical Division, Lawrence Kansas - ----------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 15 Agricultural Chemical Division, Middleport - ----------------------------------------------------------------------------------------------- FMC Corporation Hourly Retirement Plan for Industrial December 31, 1998 16 - -----------------------------------------------------------------------------------------------
43
Chemical Division, Newark, CA - ------------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Newark, Delaware - December 31, 1998 17 Food and Pharmaceutical Products Division - ------------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Industrial Chemical December 31, 1998 18 Division, Nitro, West Virginia - ------------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Hourly Employees of December 31, 1998 19 Industrial Chemical Division, Pocatello, Idaho - ------------------------------------------------------------------------------------------------- FMC Corporation Retirement Plan for Industrial Chemical December 31, 1998 20 Group, Spring Hill/Steam Plan - -------------------------------------------------------------------------------------------------
44 SUPPLEMENT 1 INDUSTRIAL CHEMICAL DIVISION, GREEN RIVER, WYOMING -------------------------------------------------- 1-1 Eligible Employees The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Industrial Chemical Division who work in Green River, Wyoming and are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America, Local No. 13214. 1-2 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the following: (a) other than for purposes of a "qualified domestic relations order" as defined in Code Section 414(p), based on Table 1 of this Supplement; and (b) for purposes of a "qualified domestic relations order" as defined in Code Section 414(p), the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 1-3 Earnings Earnings means the Participant's total compensation paid as an Eligible Employee, including overtime, administrative and discretionary bonuses, and his Employee-elected Company contributions under a plan described in Code Section 125, 132 or 401(k), but excluding awards, deferred compensation, severance pay, other special payments such as relocation or moving expense allowances, and stock options or other stock-based compensation. Earnings also includes sick pay or sickness benefits, but not disability benefits from the Long-Term Disability Plan for Employees of FMC Corporation. A Participant's Earnings will be conclusively determined according to the Company's records. The annual amount of Earnings taken into account for a Participant must not exceed $160,000 (as adjusted by the Internal Revenue Service for cost- of-living increases in accordance with Code Section 401(a)(17)(B)). Final Average Monthly Earnings means the average of the Participant's monthly Earnings during the 3 calendar years in which Earnings were the highest during the 10 calendar years preceding the Participant's retirement. For the period July 1, 1997 through July 1, 2007, Earnings in excess of $100,000 in any calendar year will not be used in calculating Final Average Monthly Earnings. 45 1-4 Commencement of Participation An Eligible Employee shall become a Participant as of the date the Participant completes one Year of Credited Service. 1-5 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 1-6 Amount of Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the product of the Participant's Years of Credited Service multiplied by 1.2% of the Participant's Final Average Monthly Earnings, plus the product of the Participant's full Years of Credited Service (disregarding any fractional year) multiplied by $5.00. The minimum monthly Normal Retirement Benefit is $25.00 for each Year of Credited Service. 1-7 Early Retirement Reduction Factor If a Participant has less than 30 Years of Credited Service and his Early Retirement Benefit commences prior to age 62, his Early Retirement Benefit shall be reduced by 1/4 of 1% for each month between his Annuity Starting Date and his 62nd birthday. If a Participant has 30 or more Years of Credited Service and his Early Retirement Benefit commences prior to age 62, his Early Retirement Benefit shall be reduced by 1/6 of 1% for each month between his Annuity Starting Date and his 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. A Participant who retires on or after July 1, 1997 but before July 1, 2000 and after attaining age 60 shall receive a supplemental Early Retirement Benefit of $200 per month until the Participant attains age 65. 1-8 Normal Form of Benefit If the spouse of a Participant predeceases him after payment of the 100% Joint and Survivor's Annuity has commenced, the Participant's monthly pension will be increased to the amount of the Individual Life Annuity as of the first day of the month following the Administrator's receipt of notice of such death. 46 1-9 Optional Forms of Benefit ------------------------- A married Participant may elect, with spousal consent in accordance with Section 6.3, to receive the Participant's benefits in one of the following forms: (a) an Individual Life Annuity; (b) a 50% Joint and Survivor's Annuity; or (c) a 100% Joint and Survivor's Annuity. If the spouse of a Participant predeceases the Participant after payment of the 50% Joint and Survivor's Annuity or 100% Joint and Survivor's Annuity has commenced, the Participant's monthly pension will be increased to the amount of the Individual Life Annuity as of the first day of the month following the Administrator's receipt of notice of such death. 1-10 Surviving Spouse's Benefit -------------------------- The amount of the surviving spouse's benefit shall be determined pursuant to Section 1-6 based on the Participant's age, Final Average Earnings and Years of Credited Service on the date of the Participant's death and paid in the form of a 100% Joint and Survivor's Annuity as if the Participant had retired on the day preceding the Participant's death or the day the Participant would have reached age 55, if later. 1-11 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability occurs shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in work for the Company. 1-12 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 1-6, based on the Participant's Final Average Earnings and Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month coincident with or immediately following the medical certification of disability, unless the Participant elects a later date. 47 Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments) and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 48 SUPPLEMENT 2 JETWAY SYSTEMS DIVISION, OGDEN, UTAH ------------------------------------ 2-1 Eligible Employees The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Jetway Systems Division who work in Ogden, Utah and are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America Local Union 6162. 2-2 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the UP-1983 Group Annuity Mortality table for males set back 1 year for the Participant and 5 years for the Beneficiary, and 8% interest compounded annually. 2-3 Average Monthly Earnings Average Monthly Earnings means the average for each Participant determined by dividing total Considered Compensation during the Participant's 9- year Period of Service ending on his retirement or Severance from Service Date by 108. The denominator of 108 shall be reduced to the number of months actually worked if the Participant was not employed by the Company during that entire 9- year period. The denominator shall also be reduced in the case of Disability Retirement by the number of months without pay because of Disability in the last 6 months before retirement, and in all other cases shall be reduced by the greater of the number of months without pay (a) in excess of 3, during each absence, or (b) in excess of 12. 2-4 Considered Compensation Considered Compensation means the Base Pay paid to an individual by the Company and/or any Affiliate during a Plan Year while that individual is a Participant. "Base Pay" means a Participant's regular hourly wage and does not include bonuses, amounts paid in lieu of regular vacation, overtime or other premium pay, deferred compensation, stock options, and other amounts that receive special tax treatment. The annual amount of Considered Compensation taken into account for a Participant must not exceed $160,000 (as adjusted by the Internal Revenue Service for cost-of-living increases in accordance with Code Section 401(a)(17)(B).) 2-5 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 49 2-6 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the greater of (a) or (b): (a) 1.025% of Average Monthly Earnings multiplied by the Participant's Years of Credited Service. (b) The product of the benefit rate provided below in effect at the termination of the Participant's Years of Credited Service multiplied by the Participant's Years of Credited Service. Termination Date Benefit Rate ---------------- ------------ On or after September 1, 1998 $21.50 but before August 31, 1999 On or after September 1, 1999 $22.50 2-7 Early Retirement Date Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires 15 years of Credited Service. 2-8 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 65, the Participant's Early Retirement Benefit shall be paid according to the reduced percentage provided below.
Age Benefits Reduced Begin Percentage ------------------------------------------------- 65 00.00% ------------------------------------------------- 64 93.00% ------------------------------------------------- 63 86.53% ------------------------------------------------- 62 80.60% ------------------------------------------------- 61 75.20% ------------------------------------------------- 60 70.33% ------------------------------------------------- 59 66.00% ------------------------------------------------- 58 62.20% ------------------------------------------------- 57 58.93% ------------------------------------------------- 56 56.20% ------------------------------------------------- 55 54.00% -------------------------------------------------
50 2-9 Disability Retirement A Participant who has completed 10 Years of Vesting Service who retires due to Total and Permanent Disability shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 2-10 Disability Retirement Benefit If the Participant is eligible for unreduced Social Security benefits, the Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, without reduction for early commencement, but shall be no less than $100 per month. If the Participant is not eligible for unreduced Social Security benefits, the Participant's Disability Retirement Benefit shall be determined according to the preceding sentence, then increased by $100 per month. 2-11 Normal Form of Benefit A Participant's benefit shall be paid in the form of a 50% Joint and Survivor's Annuity, with the Participant's spouse as joint annuitant if the Participant is married on the Annuity Starting Date, and in the form of an Individual Life Annuity if the Participant is not married on the Annuity Starting Date, unless the Participant elects, in accordance with Section 6.3, not to receive payment in the normal form and to receive payment in one of the permitted optional forms. 2-12 Optional Forms of Benefit A Participant may elect, in accordance with Section 6.3, to receive the Participant's benefits in one of the following optional forms: (a) an Individual Life Annuity; or (b) a 50% or 100% joint and survivor annuity, with the Participant's Beneficiary as the survivor. 2-13 Surviving Spouse's Benefit The amount of the surviving spouse's benefit shall be determined pursuant to this Supplement as if the Participant had retired on the later of the Participant's 55th birthday or the date of the Participant's death. Payment of the survivor's benefit shall commence on the first day of the month next following the later of the Participant's 55th birthday or the 51 Participant's death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 52 SUPPLEMENT 3 PACKAGING MACHINERY DIVISION, GREEN BAY, WISCONSIN -------------------------------------------------- 3-1 Eligible Employees The terms of this Supplement apply only to individuals participating in the FMC Corporation Retirement Plan for Hourly Employees - Packaging Machinery Division, Green Bay, Wisconsin ("Prior Plan") on the Freeze Date who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 3-2 Freeze Date Effective March 22, 1995 ("Freeze Date") the union group covering the Participants was decertified and the Prior Plan was frozen. No new participants entered the Prior Plan after the Freeze Date, and no benefits accrued under the Prior Plan after the Freeze Date. 3-3 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 3-4 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 3-5 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the Participant's monthly normal retirement benefit accrued under the Prior Plan as of the Freeze Date. 3-6 Early Retirement Date Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires 15 Years of Credited Service. 3-7 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 4% for each year between the Participant's Annuity Starting Date and the Participant's 65th birthday. 53 3-8 Surviving Spouse's Benefit The amount of the surviving spouse's benefit shall be determined pursuant to this Supplement as if the Participant had retired on the later of the Participant's 55th birthday or the date of the Participant's death. Payment of the survivor's benefit shall commence on the first day of the month next following the later of the Participant's 55th birthday or the Participant's death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 54 SUPPLEMENT 4 Agricultural Chemical Division, Fresno, California -------------------------------------------------- 4-1 Eligible Employees The terms of this Supplement apply only to individuals participating in the FMC Corporation Retirement Plan for Hourly Employees, Agricultural Chemical Division, Fresno, California ("Prior Plan") on the Freeze Date who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 4-2 Freeze Date Effective December 31, 1992 ("Freeze Date") the Prior Plan was frozen. No new participants entered the Prior Plan after the Freeze Date, and no benefits accrued under the Prior Plan after the Freeze Date. 4-3 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 4-4 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 4-5 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the Participant's monthly normal retirement benefit accrued under the Prior Plan as of the Freeze Date. 4-6 Early Retirement Date Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires 15 Years of Credited Service. 4-7 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 2% for each of the first 3 years between the Participant's Annuity Starting Date and the Participant's 65th birthday, plus 4% for each additional year the Participant's Annuity Starting Date precedes the Participant's 65th birthday. 55 4-7 Surviving Spouse's Benefit The amount of the surviving spouse's benefit shall be determined pursuant to this Supplement as if the Participant had retired on the later of the Participant's 55th birthday or the date of the Participant's death. Payment of the survivor's benefit shall commence on the first day of the month next following the later of the Participant's 55th birthday or the Participant's death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 56 SUPPLEMENT 5 Sweeper Division, Pomona, California ------------------------------------ 5-1 Eligible Employees The terms of this Supplement apply only to individuals participating in the FMC Corporation Retirement Plan for Hourly Employees, Sweeper Division, Pomona, California ("Prior Plan") on the Freeze Date who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 5-2 Freeze Date Effective March 31, 1992 ("Freeze Date") the Prior Plan was frozen was frozen. No new participants entered the Prior Plan after the Freeze Date, and no benefits accrued under the Prior Plan after the Freeze Date. 5-3 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 5-4 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 5-5 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the Participant's monthly normal retirement benefit accrued under the Prior Plan as of the Freeze Date. 5-6 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 5% for each year between the Participant's Annuity Starting Date and the Participant's 65th birthday. 5-7 Surviving Spouse's Benefit The amount of the surviving spouse's benefit shall be determined pursuant to this Supplement as if the Participant had retired on the later of the Participant's 55th birthday or the date of the Participant's death. Payment of the survivor's benefit shall commence on the first day of the month next following the later of the Participant's 55th birthday or the Participant's death, 57 unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. SUPPLEMENT 6 SKULL POINT MINE, KEMMERER, WYOMING ----------------------------------- 6-1 Eligible Employees The terms of this Supplement apply only to individuals participating in the Skull Point Mine Pension Plan ("Prior Plan") on the Freeze Date who had not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 6-2 Freeze Date Effective March 10, 1997 (the "Freeze Date") the Prior Plan was frozen. No new participants entered the Prior Plan after the Freeze Date, and no benefits accrued under the Prior Plan after the Freeze Date. 6-3 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on Table 6 of this Supplement. 6-4 Service For purposes of this Supplement, Years of Credited Service, Nonsignatory Past Service and Reciprocal Service shall have the meanings assigned thereto under the terms of the Prior Plan as in effect on the Freeze Date. 6-5 Normal Retirement Date Normal Retirement Date means the first day of the month following the later of the Participant's 65th birthday or the 5th anniversary of the date the Participant commenced participation in the Plan. 6-6 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be the Participant's monthly normal retirement benefit accrued under the Prior Plan as of the Freeze Date. 6-7 Early Retirement Date 58 Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires (a) 10 Years of Vesting Service or (b) 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past Service. 6-8 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 6-9 Termination of Service ---------------------- A Participant who ceases to be an Employee before his Early Retirement Date or Disability Retirement Date for any reason other than death shall be entitled to receive a Termination Benefit if the Participant has 5 Years of Vesting Service or 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past Service. Payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's Normal Retirement Date or, if the Participant elects, as of the first day of any month before such Normal Retirement Date and coincident with or following the Participant's 55th birthday. 6-10 Amount of Termination Benefit ----------------------------- A Participant's monthly Termination Benefit shall be determined as a Normal Retirement Benefit under this Supplement, based on the Participant's normal retirement benefit accrued under the Prior Plan as of the Freeze Date. Subject to the terms of the Prior Plan, if payment of the Participant's Termination Benefit commences before age 62, the amount of the monthly benefit shall be reduced to an Actuarial Equivalent to reflect such earlier commencement. 6-11 Normal Form of Benefit ---------------------- The normal form of benefit shall be a 50% Joint and Survivor's Annuity with the Participant's spouse as joint annuitant if the Participant is married on the Annuity Starting Date, and an Individual Life Annuity if the Participant is not married on the Annuity Starting Date. 59 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 20 21 22 23 24 20 0.9713 0.9726 0.9738 0.9751 0.9763 21 0.9690 0.9704 0.9717 0.9730 0.9743 22 0.9667 0.9681 0.9695 0.9709 0.9722 23 0.9641 0.9656 0.9671 0.9686 0.9700 24 0.9614 0.9630 0.9646 0.9661 0.9676 25 0.9586 0.9602 0.9618 0.9635 0.9650 26 0.9555 0.9572 0.9589 0.9606 0.9623 27 0.9523 0.9541 0.9559 0.9576 0.9594 28 0.9489 0.9507 0.9526 0.9544 0.9563 29 0.9453 0.9472 0.9491 0.9511 0.9530 30 0.9415 0.9435 0.9455 0.9475 0.9495 31 0.9374 0.9395 0.9416 0.9437 0.9457 32 0.9332 0.9353 0.9375 0.9396 0.9418 33 0.9287 0.9310 0.9332 0.9354 0.9376 34 0.9241 0.9263 0.9286 0.9309 0.9332 35 0.9191 0.9215 0.9238 0.9262 0.9286 36 0.9140 0.9164 0.9188 0.9212 0.9237 37 0.9086 0.9110 0.9135 0.9160 0.9185 38 0.9029 0.9054 0.9079 0.9105 0.9131 39 0.8970 0.8995 0.9021 0.9047 0.9074 40 0.8908 0.8934 0.8960 0.8987 0.9014 41 0.8843 0.8869 0.8896 0.8923 0.8951 42 0.8775 0.8802 0.8829 0.8857 0.8885 43 0.8704 0.8732 0.8759 0.8788 0.8816 44 0.8631 0.8659 0.8687 0.8715 0.8745 45 0.8555 0.8583 0.8611 0.8640 0.8670 46 0.8476 0.8504 0.8533 0.8562 0.8592 47 0.8394 0.8422 0.8451 0.8481 0.8512 48 0.8309 0.8337 0.8367 0.8397 0.8428 49 0.8221 0.8250 0.8279 0.8310 0.8341 50 0.8130 0.8159 0.8189 0.8220 0.8251 51 0.8036 0.8065 0.8095 0.8126 0.8158 52 0.7938 0.7968 0.7998 0.8029 0.8061 53 0.7838 0.7867 0.7897 0.7929 0.7961 54 0.7733 0.7763 0.7793 0.7825 0.7857 55 0.7625 0.7655 0.7685 0.7717 0.7749 56 0.7514 0.7543 0.7574 0.7605 0.7638 57 0.7398 0.7427 0.7458 0.7490 0.7522 58 0.7278 0.7308 0.7338 0.7370 0.7402 59 0.7154 0.7184 0.7214 0.7246 0.7278 60 0.7026 0.7056 0.7086 0.7118 0.7150 61 0.6895 0.6924 0.6954 0.6986 0.7018 62 0.6760 0.6789 0.6819 0.6850 0.6882 63 0.6621 0.6650 0.6680 0.6711 0.6743 64 0.6478 0.6507 0.6536 0.6567 0.6599 65 0.6332 0.6360 0.6389 0.6420 0.6452 66 0.6182 0.6210 0.6239 0.6269 0.6301 67 0.6029 0.6057 0.6086 0.6116 0.6147 68 0.5873 0.5901 0.5929 0.5959 0.5989 69 0.5714 0.5742 0.5770 0.5799 0.5829 70 0.5554 0.5581 0.5608 0.5637 0.5667 71 0.5392 0.5419 0.5446 0.5474 0.5503 72 0.5231 0.5256 0.5283 0.5311 0.5340 73 0.5069 0.5094 0.5120 0.5148 0.5176 74 0.4906 0.4931 0.4957 0.4984 0.5011 75 0.4743 0.4767 0.4792 0.4819 0.4846 76 0.4579 0.4602 0.4627 0.4653 0.4679 77 0.4415 0.4438 0.4462 0.4487 0.4512 78 0.4252 0.4274 0.4298 0.4322 0.4347 79 0.4092 0.4114 0.4136 0.4160 0.4185 80 0.3935 0.3956 0.3978 0.4001 0.4025 81 0.3781 0.3802 0.3823 0.3846 0.3869 82 0.3631 0.3651 0.3672 0.3694 0.3716 83 0.3484 0.3504 0.3524 0.3545 0.3567 84 0.3341 0.3360 0.3379 0.3399 0.3421 85 0.3201 0.3219 0.3238 0.3257 0.3278 86 0.3064 0.3081 0.3099 0.3118 0.3138 87 0.2930 0.2947 0.2964 0.2982 0.3001 88 0.2798 0.2815 0.2832 0.2849 0.2867 89 0.2670 0.2685 0.2702 0.2719 0.2736 90 0.2544 0.2559 0.2575 0.2591 0.2608 91 0.2421 0.2435 0.2450 0.2466 0.2482 92 0.2301 0.2315 0.2329 0.2344 0.2359 93 0.2182 0.2196 0.2209 0.2223 0.2238 94 0.2065 0.2078 0.2091 0.2104 0.2119 95 0.1951 0.1963 0.1976 0.1989 0.2002 96 0.1841 0.1853 0.1864 0.1877 0.1889 97 0.1735 0.1746 0.1757 0.1768 0.1781 98 0.1631 0.1641 0.1652 0.1663 0.1674 99 0.1530 0.1539 0.1549 0.1560 0.1570
60 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 25 26 27 28 29 20 0.9774 0.9786 0.9797 0.9808 0.9818 21 0.9756 0.9768 0.9780 0.9791 0.9802 22 0.9736 0.9749 0.9761 0.9773 0.9785 23 0.9714 0.9728 0.9741 0.9754 0.9767 24 0.9691 0.9705 0.9720 0.9733 0.9747 25 0.9666 0.9681 0.9696 0.9711 0.9726 26 0.9640 0.9656 0.9672 0.9687 0.9702 27 0.9611 0.9628 0.9645 0.9661 0.9678 28 0.9581 0.9599 0.9617 0.9634 0.9651 29 0.9549 0.9567 0.9586 0.9604 0.9622 30 0.9514 0.9534 0.9554 0.9573 0.9592 31 0.9478 0.9499 0.9519 0.9539 0.9559 32 0.9439 0.9461 0.9482 0.9503 0.9524 33 0.9398 0.9421 0.9443 0.9465 0.9487 34 0.9355 0.9378 0.9401 0.9424 0.9447 35 0.9309 0.9333 0.9357 0.9381 0.9405 36 0.9261 0.9286 0.9311 0.9336 0.9360 37 0.9210 0.9236 0.9261 0.9287 0.9313 38 0.9157 0.9183 0.9209 0.9236 0.9263 39 0.9100 0.9127 0.9155 0.9182 0.9210 40 0.9041 0.9069 0.9097 0.9125 0.9154 41 0.8979 0.9007 0.9036 0.9065 0.9094 42 0.8914 0.8943 0.8972 0.9002 0.9032 43 0.8846 0.8875 0.8905 0.8936 0.8967 44 0.8774 0.8805 0.8835 0.8867 0.8898 45 0.8700 0.8731 0.8762 0.8794 0.8827 46 0.8623 0.8654 0.8686 0.8719 0.8752 47 0.8543 0.8575 0.8607 0.8640 0.8674 48 0.8459 0.8492 0.8525 0.8558 0.8593 49 0.8373 0.8406 0.8439 0.8473 0.8508 50 0.8283 0.8316 0.8350 0.8385 0.8420 51 0.8190 0.8224 0.8258 0.8293 0.8329 52 0.8094 0.8127 0.8162 0.8197 0.8234 53 0.7994 0.8028 0.8063 0.8098 0.8135 54 0.7890 0.7924 0.7959 0.7995 0.8032 55 0.7783 0.7817 0.7852 0.7889 0.7926 56 0.7671 0.7706 0.7741 0.7778 0.7815 57 0.7556 0.7590 0.7626 0.7662 0.7700 58 0.7436 0.7470 0.7506 0.7543 0.7581 59 0.7312 0.7346 0.7382 0.7419 0.7457 60 0.7184 0.7218 0.7254 0.7291 0.7329 61 0.7052 0.7086 0.7122 0.7158 0.7196 62 0.6916 0.6950 0.6986 0.7022 0.7060 63 0.6776 0.6810 0.6845 0.6882 0.6920 64 0.6632 0.6666 0.6701 0.6738 0.6775 65 0.6484 0.6518 0.6553 0.6589 0.6627 66 0.6333 0.6367 0.6401 0.6437 0.6475 67 0.6179 0.6212 0.6246 0.6282 0.6319 68 0.6021 0.6054 0.6088 0.6123 0.6160 69 0.5860 0.5893 0.5926 0.5961 0.5997 70 0.5698 0.5730 0.5763 0.5797 0.5833 71 0.5534 0.5565 0.5598 0.5632 0.5667 72 0.5370 0.5401 0.5433 0.5466 0.5501 73 0.5205 0.5236 0.5267 0.5300 0.5334 74 0.5040 0.5070 0.5101 0.5133 0.5167 75 0.4874 0.4903 0.4934 0.4965 0.4998 76 0.4707 0.4735 0.4765 0.4796 0.4828 77 0.4539 0.4567 0.4596 0.4627 0.4658 78 0.4374 0.4401 0.4429 0.4459 0.4489 79 0.4210 0.4237 0.4264 0.4293 0.4323 80 0.4050 0.4076 0.4102 0.4130 0.4159 81 0.3893 0.3918 0.3944 0.3971 0.4000 82 0.3740 0.3764 0.3789 0.3816 0.3843 83 0.3589 0.3613 0.3638 0.3663 0.3690 84 0.3443 0.3465 0.3489 0.3514 0.3540 85 0.3299 0.3321 0.3344 0.3368 0.3393 86 0.3159 0.3180 0.3202 0.3225 0.3250 87 0.3021 0.3042 0.3063 0.3086 0.3109 88 0.2887 0.2906 0.2927 0.2949 0.2971 89 0.2755 0.2774 0.2794 0.2814 0.2836 90 0.2625 0.2644 0.2663 0.2683 0.2703 91 0.2499 0.2517 0.2535 0.2554 0.2574 92 0.2375 0.2392 0.2410 0.2428 0.2447 93 0.2254 0.2270 0.2287 0.2304 0.2322 94 0.2133 0.2149 0.2165 0.2181 0.2199 95 0.2016 0.2031 0.2046 0.2062 0.2078 96 0.1903 0.1917 0.1931 0.1946 0.1962 97 0.1793 0.1806 0.1820 0.1834 0.1849 98 0.1686 0.1699 0.1712 0.1725 0.1739 99 0.1582 0.1593 0.1606 0.1618 0.1632
61 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Beneficiary Age Participant Age Years Years 30 31 32 33 34 20 0.9828 0.9837 0.9847 0.9855 0.9864 21 0.9813 0.9823 0.9833 0.9843 0.9852 22 0.9797 0.9808 0.9818 0.9829 0.9838 23 0.9779 0.9791 0.9802 0.9813 0.9824 24 0.9760 0.9773 0.9785 0.9797 0.9808 25 0.9740 0.9753 0.9766 0.9779 0.9791 26 0.9717 0.9732 0.9746 0.9759 0.9773 27 0.9693 0.9709 0.9724 0.9738 0.9752 28 0.9668 0.9684 0.9700 0.9716 0.9731 29 0.9640 0.9657 0.9674 0.9691 0.9707 30 0.9610 0.9629 0.9647 0.9664 0.9681 31 0.9579 0.9598 0.9617 0.9636 0.9654 32 0.9545 0.9565 0.9585 0.9605 0.9624 33 0.9509 0.9530 0.9551 0.9572 0.9592 34 0.9470 0.9492 0.9515 0.9536 0.9558 35 0.9429 0.9452 0.9476 0.9499 0.9521 36 0.9385 0.9410 0.9434 0.9458 0.9482 37 0.9339 0.9364 0.9390 0.9415 0.9440 38 0.9289 0.9316 0.9343 0.9369 0.9395 39 0.9237 0.9265 0.9293 0.9320 0.9348 40 0.9182 0.9211 0.9239 0.9268 0.9297 41 0.9124 0.9154 0.9183 0.9213 0.9243 42 0.9063 0.9093 0.9124 0.9155 0.9186 43 0.8998 0.9030 0.9061 0.9093 0.9125 44 0.8930 0.8963 0.8995 0.9028 0.9061 45 0.8859 0.8893 0.8926 0.8960 0.8994 46 0.8785 0.8819 0.8854 0.8889 0.8924 47 0.8708 0.8743 0.8778 0.8814 0.8850 48 0.8628 0.8663 0.8699 0.8736 0.8773 49 0.8544 0.8580 0.8617 0.8654 0.8692 50 0.8456 0.8493 0.8531 0.8569 0.8608 51 0.8365 0.8403 0.8441 0.8480 0.8519 52 0.8271 0.8309 0.8347 0.8387 0.8427 53 0.8172 0.8211 0.8250 0.8290 0.8331 54 0.8070 0.8109 0.8149 0.8190 0.8231 55 0.7964 0.8003 0.8044 0.8085 0.8127 56 0.7854 0.7893 0.7934 0.7976 0.8018 57 0.7739 0.7779 0.7820 0.7862 0.7905 58 0.7620 0.7660 0.7701 0.7743 0.7787 59 0.7496 0.7536 0.7578 0.7620 0.7664 60 0.7368 0.7408 0.7450 0.7493 0.7537 61 0.7236 0.7276 0.7318 0.7361 0.7405 62 0.7099 0.7140 0.7182 0.7225 0.7269 63 0.6959 0.6999 0.7041 0.7084 0.7129 64 0.6814 0.6855 0.6896 0.6939 0.6984 65 0.6666 0.6706 0.6747 0.6790 0.6834 66 0.6513 0.6553 0.6594 0.6637 0.6681 67 0.6357 0.6397 0.6438 0.6480 0.6524 68 0.6198 0.6237 0.6278 0.6320 0.6363 69 0.6035 0.6074 0.6114 0.6156 0.6199 70 0.5870 0.5908 0.5948 0.5990 0.6032 71 0.5704 0.5742 0.5781 0.5822 0.5864 72 0.5537 0.5574 0.5613 0.5654 0.5695 73 0.5370 0.5407 0.5445 0.5485 0.5526 74 0.5202 0.5238 0.5275 0.5314 0.5355 75 0.5032 0.5068 0.5104 0.5143 0.5183 76 0.4862 0.4896 0.4932 0.4970 0.5009 77 0.4691 0.4725 0.4760 0.4797 0.4835 78 0.4521 0.4554 0.4589 0.4625 0.4662 79 0.4354 0.4386 0.4420 0.4455 0.4492 80 0.4190 0.4221 0.4254 0.4288 0.4324 81 0.4029 0.4060 0.4092 0.4125 0.4159 82 0.3872 0.3901 0.3932 0.3965 0.3999 83 0.3718 0.3746 0.3777 0.3808 0.3841 84 0.3567 0.3595 0.3624 0.3654 0.3686 85 0.3419 0.3446 0.3474 0.3504 0.3535 86 0.3275 0.3301 0.3328 0.3357 0.3387 87 0.3133 0.3159 0.3185 0.3213 0.3241 88 0.2994 0.3019 0.3044 0.3071 0.3099 89 0.2858 0.2882 0.2906 0.2932 0.2959 90 0.2725 0.2748 0.2771 0.2796 0.2822 91 0.2595 0.2617 0.2639 0.2663 0.2688 92 0.2467 0.2488 0.2510 0.2532 0.2556 93 0.2341 0.2361 0.2382 0.2404 0.2426 94 0.2217 0.2236 0.2256 0.2276 0.2298 95 0.2096 0.2114 0.2132 0.2152 0.2173 96 0.1978 0.1995 0.2013 0.2032 0.2052 97 0.1865 0.1881 0.1898 0.1916 0.1934 98 0.1754 0.1770 0.1786 0.1803 0.1820 99 0.1646 0.1660 0.1675 0.1691 0.1708
62 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Beneficiary Age Participant Age Years Years 35 36 37 38 39 20 0.9872 0.9880 0.9887 0.9894 0.9900 21 0.9860 0.9869 0.9877 0.9884 0.9891 22 0.9848 0.9857 0.9866 0.9874 0.9882 23 0.9834 0.9844 0.9853 0.9862 0.9871 24 0.9819 0.9830 0.9840 0.9850 0.9859 25 0.9803 0.9814 0.9825 0.9836 0.9846 26 0.9785 0.9798 0.9809 0.9821 0.9831 27 0.9766 0.9779 0.9792 0.9804 0.9816 28 0.9745 0.9759 0.9773 0.9786 0.9799 29 0.9723 0.9738 0.9752 0.9766 0.9780 30 0.9698 0.9714 0.9730 0.9745 0.9760 31 0.9672 0.9689 0.9706 0.9722 0.9738 32 0.9643 0.9661 0.9679 0.9697 0.9714 33 0.9612 0.9632 0.9651 0.9670 0.9688 34 0.9579 0.9600 0.9620 0.9640 0.9659 35 0.9544 0.9566 0.9587 0.9608 0.9629 36 0.9506 0.9529 0.9552 0.9574 0.9596 37 0.9465 0.9489 0.9513 0.9537 0.9560 38 0.9421 0.9447 0.9472 0.9497 0.9522 39 0.9375 0.9402 0.9429 0.9455 0.9481 40 0.9325 0.9354 0.9382 0.9409 0.9437 41 0.9272 0.9302 0.9331 0.9361 0.9389 42 0.9216 0.9247 0.9278 0.9308 0.9339 43 0.9157 0.9189 0.9221 0.9253 0.9285 44 0.9095 0.9128 0.9161 0.9194 0.9228 45 0.9029 0.9063 0.9098 0.9132 0.9167 46 0.8959 0.8995 0.9031 0.9067 0.9103 47 0.8887 0.8923 0.8960 0.8998 0.9035 48 0.8810 0.8848 0.8886 0.8925 0.8963 49 0.8730 0.8769 0.8809 0.8848 0.8888 50 0.8647 0.8687 0.8727 0.8768 0.8809 51 0.8560 0.8601 0.8642 0.8684 0.8726 52 0.8468 0.8510 0.8553 0.8596 0.8639 53 0.8373 0.8416 0.8459 0.8503 0.8548 54 0.8274 0.8317 0.8361 0.8406 0.8452 55 0.8170 0.8214 0.8259 0.8305 0.8352 56 0.8062 0.8107 0.8152 0.8199 0.8247 57 0.7949 0.7994 0.8041 0.8088 0.8137 58 0.7832 0.7877 0.7924 0.7972 0.8022 59 0.7709 0.7755 0.7803 0.7852 0.7901 60 0.7582 0.7629 0.7677 0.7726 0.7776 61 0.7451 0.7498 0.7546 0.7595 0.7646 62 0.7315 0.7362 0.7410 0.7460 0.7512 63 0.7174 0.7222 0.7270 0.7321 0.7372 64 0.7030 0.7077 0.7126 0.7176 0.7228 65 0.6880 0.6928 0.6976 0.7027 0.7079 66 0.6727 0.6774 0.6823 0.6873 0.6925 67 0.6570 0.6617 0.6665 0.6716 0.6768 68 0.6409 0.6455 0.6504 0.6554 0.6606 69 0.6244 0.6291 0.6339 0.6389 0.6440 70 0.6077 0.6123 0.6171 0.6220 0.6272 71 0.5908 0.5954 0.6001 0.6050 0.6101 72 0.5739 0.5784 0.5831 0.5879 0.5930 73 0.5569 0.5613 0.5659 0.5707 0.5757 74 0.5397 0.5441 0.5487 0.5534 0.5583 75 0.5224 0.5267 0.5312 0.5359 0.5407 76 0.5050 0.5092 0.5136 0.5182 0.5230 77 0.4875 0.4916 0.4960 0.5004 0.5051 78 0.4701 0.4742 0.4784 0.4828 0.4874 79 0.4530 0.4569 0.4611 0.4654 0.4698 80 0.4361 0.4400 0.4440 0.4482 0.4526 81 0.4196 0.4233 0.4273 0.4314 0.4356 82 0.4034 0.4070 0.4109 0.4148 0.4190 83 0.3875 0.3911 0.3948 0.3987 0.4027 84 0.3719 0.3754 0.3790 0.3828 0.3867 85 0.3567 0.3600 0.3635 0.3672 0.3710 86 0.3418 0.3450 0.3484 0.3519 0.3556 87 0.3271 0.3303 0.3335 0.3370 0.3406 88 0.3128 0.3158 0.3190 0.3223 0.3257 89 0.2987 0.3016 0.3046 0.3078 0.3112 90 0.2849 0.2877 0.2906 0.2937 0.2969 91 0.2713 0.2740 0.2769 0.2798 0.2829 92 0.2581 0.2607 0.2634 0.2662 0.2692 93 0.2450 0.2475 0.2501 0.2528 0.2556 94 0.2321 0.2344 0.2369 0.2395 0.2422 95 0.2194 0.2217 0.2240 0.2265 0.2291 96 0.2072 0.2094 0.2116 0.2139 0.2164 97 0.1954 0.1974 0.1996 0.2018 0.2041 98 0.1839 0.1858 0.1878 0.1899 0.1921 99 0.1725 0.1743 0.1762 0.1782 0.1803
63 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Beneficiary Age Participant Age Years Years 40 41 42 43 44 20 0.9907 0.9913 0.9918 0.9924 0.9929 21 0.9898 0.9905 0.9911 0.9917 0.9922 22 0.9889 0.9896 0.9903 0.9909 0.9915 23 0.9879 0.9887 0.9894 0.9901 0.9907 24 0.9868 0.9876 0.9884 0.9892 0.9899 25 0.9855 0.9864 0.9873 0.9881 0.9889 26 0.9842 0.9852 0.9861 0.9870 0.9879 27 0.9827 0.9838 0.9848 0.9858 0.9867 28 0.9811 0.9822 0.9834 0.9844 0.9854 29 0.9793 0.9806 0.9818 0.9829 0.9840 30 0.9774 0.9787 0.9801 0.9813 0.9825 31 0.9753 0.9768 0.9782 0.9795 0.9808 32 0.9730 0.9746 0.9761 0.9775 0.9789 33 0.9705 0.9722 0.9738 0.9754 0.9769 34 0.9678 0.9696 0.9714 0.9731 0.9747 35 0.9649 0.9668 0.9687 0.9705 0.9723 36 0.9617 0.9638 0.9658 0.9678 0.9697 37 0.9583 0.9605 0.9627 0.9648 0.9668 38 0.9546 0.9570 0.9593 0.9615 0.9637 39 0.9506 0.9531 0.9556 0.9580 0.9603 40 0.9464 0.9490 0.9516 0.9541 0.9566 41 0.9418 0.9446 0.9473 0.9500 0.9527 42 0.9369 0.9398 0.9427 0.9456 0.9484 43 0.9316 0.9347 0.9378 0.9408 0.9438 44 0.9260 0.9293 0.9325 0.9357 0.9389 45 0.9201 0.9235 0.9269 0.9303 0.9336 46 0.9138 0.9174 0.9210 0.9245 0.9280 47 0.9072 0.9109 0.9147 0.9183 0.9220 48 0.9002 0.9041 0.9080 0.9118 0.9157 49 0.8928 0.8969 0.9009 0.9049 0.9089 50 0.8851 0.8892 0.8934 0.8976 0.9018 51 0.8769 0.8812 0.8856 0.8899 0.8942 52 0.8683 0.8728 0.8772 0.8817 0.8863 53 0.8593 0.8639 0.8685 0.8732 0.8778 54 0.8498 0.8545 0.8593 0.8641 0.8689 55 0.8399 0.8447 0.8496 0.8546 0.8595 56 0.8295 0.8344 0.8394 0.8445 0.8496 57 0.8186 0.8236 0.8287 0.8339 0.8392 58 0.8072 0.8123 0.8175 0.8228 0.8282 59 0.7952 0.8004 0.8058 0.8112 0.8167 60 0.7828 0.7881 0.7935 0.7990 0.8046 61 0.7699 0.7752 0.7807 0.7863 0.7920 62 0.7564 0.7619 0.7674 0.7731 0.7789 63 0.7425 0.7480 0.7536 0.7594 0.7652 64 0.7281 0.7336 0.7393 0.7451 0.7510 65 0.7133 0.7188 0.7245 0.7303 0.7363 66 0.6979 0.7035 0.7092 0.7151 0.7211 67 0.6821 0.6877 0.6934 0.6993 0.7054 68 0.6660 0.6715 0.6772 0.6831 0.6892 69 0.6494 0.6549 0.6606 0.6665 0.6726 70 0.6325 0.6380 0.6437 0.6496 0.6557 71 0.6154 0.6209 0.6265 0.6324 0.6385 72 0.5982 0.6036 0.6093 0.6151 0.6211 73 0.5809 0.5863 0.5918 0.5976 0.6036 74 0.5634 0.5687 0.5742 0.5800 0.5859 75 0.5458 0.5510 0.5564 0.5621 0.5680 76 0.5279 0.5331 0.5384 0.5440 0.5498 77 0.5100 0.5151 0.5203 0.5258 0.5315 78 0.4922 0.4971 0.5023 0.5077 0.5133 79 0.4745 0.4794 0.4845 0.4897 0.4952 80 0.4571 0.4619 0.4669 0.4720 0.4774 81 0.4401 0.4447 0.4496 0.4546 0.4599 82 0.4234 0.4279 0.4326 0.4376 0.4427 83 0.4069 0.4114 0.4160 0.4208 0.4258 84 0.3908 0.3951 0.3996 0.4043 0.4092 85 0.3750 0.3792 0.3835 0.3881 0.3929 86 0.3595 0.3636 0.3678 0.3722 0.3768 87 0.3443 0.3482 0.3523 0.3566 0.3611 88 0.3294 0.3331 0.3371 0.3413 0.3456 89 0.3147 0.3183 0.3222 0.3262 0.3303 90 0.3003 0.3038 0.3075 0.3113 0.3154 91 0.2861 0.2895 0.2931 0.2968 0.3007 92 0.2723 0.2755 0.2789 0.2825 0.2862 93 0.2486 0.2617 0.2650 0.2684 0.2720 94 0.2450 0.2480 0.2511 0.2544 0.2579 95 0.2318 0.2347 0.2376 0.2408 0.2440 96 0.2190 0.2217 0.2245 0.2275 0.2306 97 0.2066 0.2092 0.2119 0.2147 0.2177 98 0.1945 0.1969 0.1995 0.2021 0.2050 99 0.1825 0.1848 0.1873 0.1898 0.1925
64 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 45 46 47 48 49 20 0.9933 0.9938 0.9942 0.9946 0.9950 21 0.9927 0.9932 0.9937 0.9941 0.9945 22 0.9921 0.9926 0.9931 0.9936 0.9940 23 0.9914 0.9919 0.9925 0.9930 0.9935 24 0.9905 0.9912 0.9918 0.9924 0.9929 25 0.9897 0.9904 0.9910 0.9916 0.9922 26 0.9887 0.9894 0.9902 0.9908 0.9915 27 0.9876 0.9884 0.9892 0.9900 0.9907 28 0.9864 0.9873 0.9882 0.9890 0.9898 29 0.9851 0.9861 0.9870 0.9879 0.9887 30 0.9836 0.9847 0.9857 0.9867 0.9876 31 0.9820 0.9832 0.9843 0.9854 0.9864 32 0.9803 0.9816 0.9828 0.9839 0.9850 33 0.9784 0.9798 0.9811 0.9823 0.9835 34 0.9763 0.9778 0.9792 0.9806 0.9819 35 0.9740 0.9756 0.9772 0.9786 0.9801 36 0.9715 0.9732 0.9749 0.9765 0.9781 37 0.9687 0.9706 0.9725 0.9742 0.9759 38 0.9658 0.9678 0.9698 0.9717 0.9735 39 0.9625 0.9647 0.9668 0.9689 0.9708 40 0.9590 0.9614 0.9636 0.9658 0.9679 41 0.9552 0.9577 0.9602 0.9625 0.9648 42 0.9511 0.9538 0.9564 0.9589 0.9614 43 0.9467 0.9495 0.9523 0.9550 0.9576 44 0.9419 0.9450 0.9479 0.9508 0.9536 45 0.9369 0.9401 0.9432 0.9463 0.9493 46 0.9314 0.9348 0.9381 0.9414 0.9446 47 0.9256 0.9292 0.9327 0.9362 0.9396 48 0.9195 0.9232 0.9269 0.9306 0.9342 49 0.9129 0.9169 0.9208 0.9246 0.9284 50 0.9060 0.9101 0.9142 0.9183 0.9223 51 0.8986 0.9029 0.9072 0.9115 0.9157 52 0.8908 0.8953 0.8998 0.9043 0.9087 53 0.8825 0.8872 0.8919 0.8966 0.9013 54 0.8738 0.8787 0.8835 0.8884 0.8933 55 0.8646 0.8696 0.8747 0.8798 0.8848 56 0.8548 0.8600 0.8653 0.8705 0.8758 57 0.8445 0.8499 0.8553 0.8608 0.8663 58 0.8337 0.8392 0.8448 0.8504 0.8561 59 0.8223 0.8280 0.8337 0.8395 0.8454 60 0.8103 0.8161 0.8220 0.8280 0.8340 61 0.7979 0.8038 0.8098 0.8159 0.8221 62 0.7848 0.7909 0.7970 0.8033 0.8096 63 0.7713 0.7774 0.7837 0.7901 0.7966 64 0.7571 0.7634 0.7697 0.7762 0.7829 65 0.7425 0.7488 0.7553 0.7619 0.7686 66 0.7273 0.7337 0.7402 0.7469 0.7538 67 0.7117 0.7181 0.7247 0.7314 0.7384 68 0.6955 0.7020 0.7086 0.7154 0.7224 69 0.6789 0.6854 0.6921 0.6989 0.7060 70 0.6620 0.6684 0.6751 0.6820 0.6891 71 0.6447 0.6512 0.6579 0.6648 0.6719 72 0.6274 0.6338 0.6405 0.6474 0.6545 73 0.6098 0.6162 0.6229 0.6297 0.6368 74 0.5921 0.5984 0.6050 0.6119 0.6189 75 0.5740 0.5804 0.5869 0.5937 0.6007 76 0.5558 0.5621 0.5685 0.5752 0.5822 77 0.5374 0.5436 0.5500 0.5566 0.5635 78 0.5191 0.5252 0.5315 0.5380 0.5448 79 0.5010 0.5069 0.5131 0.5195 0.5262 80 0.4830 0.4889 0.4949 0.5013 0.5078 81 0.4654 0.4711 0.4771 0.4833 0.4897 82 0.4481 0.4537 0.4595 0.4656 0.4719 83 0.4310 0.4365 0.4422 0.4481 0.4543 84 0.4143 0.4196 0.4251 0.4309 0.4370 85 0.3978 0.4030 0.4084 0.4140 0.4199 86 0.3816 0.3867 0.3919 0.3974 0.4032 87 0.3658 0.3706 0.3757 0.3811 0.3866 88 0.3501 0.3548 0.3598 0.3650 0.3704 89 0.3347 0.3393 0.3441 0.3491 0.3543 90 0.3196 0.3240 0.3286 0.3335 0.3385 91 0.3048 0.3090 0.3135 0.3181 0.3230 92 0.2902 0.2943 0.2985 0.3030 0.3077 93 0.2758 0.2797 0.2838 0.2881 0.2926 94 0.2614 0.2652 0.2691 0.2733 0.2776 95 0.2475 0.2511 0.2548 0.2588 0.2629 96 0.2339 0.2373 0.2409 0.2447 0.2486 97 0.2208 0.2240 0.2275 0.2310 0.2348 98 0.2079 0.2110 0.2143 0.2177 0.2212 99 0.1953 0.1982 0.2013 0.2045 0.2079
65 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 50 51 52 53 54 20 0.9953 0.9957 0.9960 0.9963 0.9965 21 0.9949 0.9953 0.9956 0.9959 0.9962 22 0.9945 0.9949 0.9952 0.9956 0.9959 23 0.9940 0.9944 0.9948 0.9952 0.9955 24 0.9934 0.9939 0.9943 0.9947 0.9951 25 0.9928 0.9933 0.9938 0.9943 0.9947 26 0.9921 0.9927 0.9932 0.9937 0.9942 27 0.9913 0.9920 0.9925 0.9931 0.9936 28 0.9905 0.9912 0.9918 0.9924 0.9930 29 0.9895 0.9903 0.9910 0.9917 0.9923 30 0.9885 0.9893 0.9901 0.9908 0.9915 31 0.9874 0.9883 0.9891 0.9899 0.9907 32 0.9861 0.9871 0.9880 0.9889 0.9897 33 0.9847 0.9858 0.9868 0.9878 0.9887 34 0.9831 0.9843 0.9854 0.9865 0.9875 35 0.9814 0.9827 0.9839 0.9851 0.9862 36 0.9795 0.9809 0.9823 0.9835 0.9847 37 0.9775 0.9790 0.9805 0.9818 0.9832 38 0.9752 0.9769 0.9784 0.9800 0.9814 39 0.9727 0.9745 0.9762 0.9779 0.9794 40 0.9700 0.9719 0.9738 0.9756 0.9773 41 0.9670 0.9691 0.9711 0.9731 0.9749 42 0.9637 0.9660 0.9682 0.9703 0.9723 43 0.9602 0.9626 0.9650 0.9673 0.9695 44 0.9563 0.9590 0.9615 0.9640 0.9663 45 0.9522 0.9550 0.9578 0.9604 0.9630 46 0.9477 0.9507 0.9537 0.9565 0.9593 47 0.9429 0.9461 0.9493 0.9523 0.9553 48 0.9377 0.9412 0.9445 0.9478 0.9510 49 0.9322 0.9359 0.9394 0.9429 0.9463 50 0.9263 0.9301 0.9340 0.9377 0.9413 51 0.9199 0.9240 0.9281 0.9320 0.9359 52 0.9131 0.9175 0.9217 0.9260 0.9301 53 0.9059 0.9104 0.9150 0.9194 0.9238 54 0.8981 0.9029 0.9077 0.9124 0.9171 55 0.8880 0.8920 0.8960 0.9000 0.9030 56 0.8790 0.8830 0.8870 0.8920 0.8960 57 0.8700 0.8740 0.8790 0.8830 0.8870 58 0.8600 0.8650 0.8690 0.8740 0.8780 59 0.8500 0.8550 0.8590 0.8630 0.8690 60 0.8390 0.8440 0.8480 0.8530 0.8580 61 0.8280 0.8320 0.8370 0.8420 0.8470 62 0.8160 0.8210 0.8250 0.8300 0.8350 63 0.8032 0.8099 0.8166 0.8235 0.8304 64 0.7896 0.7965 0.8034 0.8105 0.8176 65 0.7755 0.7825 0.7896 0.7968 0.8042 66 0.7607 0.7679 0.7751 0.7825 0.7901 67 0.7454 0.7527 0.7601 0.7677 0.7753 68 0.7296 0.7369 0.7445 0.7521 0.7600 69 0.7132 0.7206 0.7283 0.7361 0.7440 70 0.6964 0.7039 0.7116 0.7195 0.7275 71 0.6792 0.6867 0.6945 0.7025 0.7106 72 0.6618 0.6694 0.6772 0.6852 0.6934 73 0.6442 0.6517 0.6595 0.6676 0.6759 74 0.6262 0.6338 0.6416 0.6496 0.6580 75 0.6080 0.6155 0.6233 0.6313 0.6397 76 0.5894 0.5969 0.6046 0.6127 0.6210 77 0.5706 0.5780 0.5857 0.5937 0.6020 78 0.5519 0.5592 0.5668 0.5747 0.5829 79 0.5332 0.5404 0.5479 0.5557 0.5639 80 0.5147 0.5218 0.5292 0.5369 0.5450 81 0.4964 0.5034 0.5107 0.5183 0.5263 82 0.4785 0.4853 0.4925 0.5000 0.5078 83 0.4608 0.4675 0.4745 0.4818 0.4895 84 0.4433 0.4499 0.4567 0.4639 0.4714 85 0.4261 0.4325 0.4392 0.4463 0.4536 86 0.4091 0.4154 0.4220 0.4288 0.4360 87 0.3925 0.3986 0.4049 0.4116 0.4186 88 0.3760 0.3819 0.3881 0.3946 0.4014 89 0.3598 0.3655 0.3715 0.3778 0.3845 90 0.3438 0.3494 0.3552 0.3613 0.3677 91 0.3281 0.3335 0.3391 0.3450 0.3512 92 0.3127 0.3178 0.3232 0.3289 0.3349 93 0.2974 0.3023 0.3075 0.3130 0.3188 94 0.2821 0.2869 0.2919 0.2972 0.3027 95 0.2672 0.2718 0.2766 0.2816 0.2870 96 0.2528 0.2571 0.2617 0.2665 0.2716 97 0.2387 0.2429 0.2473 0.2519 0.2567 98 0.2250 0.2289 0.2331 0.2375 0.2421 99 0.2114 0.2152 0.2191 0.2233 0.2277
66 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 55 56 57 58 59 20 0.9968 0.9970 0.9972 0.9975 0.9977 21 0.9965 0.9968 0.9970 0.9973 0.9975 22 0.9962 0.9965 0.9968 0.9970 0.9973 23 0.9959 0.9962 0.9965 0.9968 0.9970 24 0.9955 0.9959 0.9962 0.9965 0.9968 25 0.9951 0.9955 0.9958 0.9962 0.9965 26 0.9946 0.9950 0.9954 0.9958 0.9961 27 0.9941 0.9946 0.9950 0.9954 0.9958 28 0.9935 0.9940 0.9945 0.9950 0.9954 29 0.9929 0.9935 0.9940 0.9945 0.9949 30 0.9922 0.9928 0.9934 0.9939 0.9944 31 0.9914 0.9921 0.9927 0.9933 0.9938 32 0.9905 0.9912 0.9919 0.9926 0.9932 33 0.9895 0.9903 0.9911 0.9918 0.9925 34 0.9884 0.9893 0.9902 0.9909 0.9917 35 0.9872 0.9882 0.9891 0.9900 0.9908 36 0.9859 0.9870 0.9880 0.9889 0.9898 37 0.9844 0.9856 0.9867 0.9877 0.9887 38 0.9827 0.9840 0.9852 0.9864 0.9875 39 0.9809 0.9823 0.9837 0.9849 0.9861 40 0.9789 0.9804 0.9819 0.9833 0.9846 41 0.9767 0.9784 0.9800 0.9815 0.9829 42 0.9742 0.9761 0.9778 0.9795 0.9810 43 0.9715 0.9735 0.9754 0.9773 0.9790 44 0.9686 0.9708 0.9729 0.9748 0.9767 45 0.9654 0.9678 0.9700 0.9722 0.9742 46 0.9619 0.9645 0.9669 0.9693 0.9715 47 0.9582 0.9609 0.9636 0.9661 0.9685 48 0.9541 0.9570 0.9599 0.9627 0.9653 49 0.9496 0.9529 0.9559 0.9589 0.9618 50 0.9449 0.9483 0.9516 0.9548 0.9579 51 0.9397 0.9434 0.9470 0.9504 0.9538 52 0.9341 0.9381 0.9419 0.9456 0.9492 53 0.9281 0.9323 0.9364 0.9404 0.9443 54 0.9216 0.9261 0.9305 0.9347 0.9389 55 0.9070 0.9110 0.9150 0.9190 0.9220 56 0.9000 0.9030 0.9070 0.9110 0.9150 57 0.8920 0.8950 0.8990 0.9030 0.9080 58 0.8820 0.8870 0.8910 0.8950 0.8990 59 0.8730 0.8780 0.8830 0.8870 0.8910 60 0.8630 0.8680 0.8720 0.8780 0.8820 61 0.8520 0.8570 0.8620 0.8670 0.8720 62 0.8410 0.8450 0.8510 0.8560 0.8610 63 0.8374 0.8444 0.8514 0.8584 0.8654 64 0.8248 0.8321 0.8394 0.8467 0.8540 65 0.8116 0.8191 0.8267 0.8343 0.8419 66 0.7977 0.8054 0.8133 0.8211 0.8291 67 0.7832 0.7911 0.7992 0.8073 0.8155 68 0.7680 0.7761 0.7844 0.7928 0.8013 69 0.7522 0.7605 0.7690 0.7776 0.7863 70 0.7358 0.7443 0.7529 0.7618 0.7707 71 0.7190 0.7276 0.7364 0.7454 0.7546 72 0.7019 0.7106 0.7196 0.7287 0.7380 73 0.6844 0.6932 0.7023 0.7116 0.7210 74 0.6666 0.6754 0.6845 0.6939 0.7035 75 0.6483 0.6572 0.6663 0.6758 0.6855 76 0.6296 0.6385 0.6477 0.6572 0.6670 77 0.6106 0.6194 0.6286 0.6382 0.6480 78 0.5914 0.6003 0.6095 0.6190 0.6288 79 0.5723 0.5811 0.5903 0.5997 0.6096 80 0.5533 0.5621 0.5711 0.5805 0.5903 81 0.5345 0.5432 0.5521 0.5615 0.5712 82 0.5159 0.5244 0.5333 0.5425 0.5522 83 0.4975 0.5059 0.5146 0.5238 0.5333 84 0.4793 0.4875 0.4961 0.5051 0.5145 85 0.4613 0.4694 0.4778 0.4867 0.4959 86 0.4435 0.4514 0.4597 0.4684 0.4775 87 0.4260 0.4337 0.4418 0.4503 0.4592 88 0.4086 0.4161 0.4240 0.4323 0.4410 89 0.3914 0.3987 0.4064 0.4145 0.4230 90 0.3745 0.3815 0.3890 0.3969 0.4051 91 0.3577 0.3646 0.3719 0.3795 0.3875 92 0.3412 0.3479 0.3549 0.3623 0.3700 93 0.3249 0.3313 0.3380 0.3452 0.3527 94 0.3086 0.3147 0.3212 0.3281 0.3353 95 0.2926 0.2985 0.3047 0.3113 0.3183 96 0.2770 0.2826 0.2886 0.2949 0.3016 97 0.2618 0.2672 0.2730 0.2790 0.2854 98 0.2470 0.2521 0.2576 0.2633 0.2694 99 0.2323 0.2372 0.2424 0.2478 0.2537
67 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 60 61 62 63 64 20 0.9978 0.9980 0.9982 0.9983 0.9984 21 0.9977 0.9978 0.9980 0.9982 0.9983 22 0.9975 0.9977 0.9979 0.9980 0.9982 23 0.9973 0.9975 0.9977 0.9979 0.9981 24 0.9970 0.9973 0.9975 0.9977 0.9979 25 0.9968 0.9970 0.9973 0.9975 0.9977 26 0.9965 0.9968 0.9970 0.9973 0.9975 27 0.9961 0.9964 0.9967 0.9970 0.9973 28 0.9957 0.9961 0.9964 0.9967 0.9970 29 0.9953 0.9957 0.9961 0.9964 0.9967 30 0.9949 0.9953 0.9957 0.9961 0.9964 31 0.9943 0.9948 0.9953 0.9957 0.9961 32 0.9938 0.9943 0.9948 0.9952 0.9957 33 0.9931 0.9937 0.9942 0.9947 0.9952 34 0.9924 0.9930 0.9936 0.9942 0.9947 35 0.9916 0.9923 0.9929 0.9935 0.9941 36 0.9906 0.9914 0.9922 0.9928 0.9935 37 0.9896 0.9905 0.9913 0.9920 0.9927 38 0.9885 0.9894 0.9903 0.9912 0.9919 39 0.9872 0.9883 0.9893 0.9902 0.9910 40 0.9858 0.9870 0.9881 0.9891 0.9900 41 0.9843 0.9855 0.9867 0.9878 0.9889 42 0.9825 0.9839 0.9852 0.9864 0.9876 43 0.9806 0.9821 0.9836 0.9849 0.9862 44 0.9785 0.9802 0.9817 0.9832 0.9846 45 0.9762 0.9780 0.9797 0.9814 0.9829 46 0.9736 0.9756 0.9775 0.9793 0.9810 47 0.9708 0.9730 0.9751 0.9771 0.9790 48 0.9678 0.9702 0.9725 0.9746 0.9767 49 0.9645 0.9671 0.9696 0.9720 0.9742 50 0.9609 0.9637 0.9664 0.9690 0.9714 51 0.9570 0.9600 0.9630 0.9658 0.9684 52 0.9527 0.9560 0.9592 0.9622 0.9651 53 0.9480 0.9516 0.9551 0.9584 0.9615 54 0.9429 0.9468 0.9505 0.9541 0.9575 55 0.9260 0.9290 0.9330 0.9494 0.9531 56 0.9190 0.9220 0.9260 0.9443 0.9483 57 0.9120 0.9160 0.9190 0.9387 0.9430 58 0.9040 0.9080 0.9120 0.9325 0.9372 59 0.8950 0.9000 0.9050 0.9258 0.9308 60 0.8860 0.8910 0.8960 0.9185 0.9239 61 0.8770 0.8810 0.8860 0.9105 0.9163 62 0.8670 0.8720 0.8770 0.9020 0.9081 63 0.8724 0.8792 0.8860 0.8927 0.8993 64 0.8613 0.8685 0.8757 0.8828 0.8897 65 0.8495 0.8571 0.8646 0.8721 0.8794 66 0.8370 0.8449 0.8528 0.8607 0.8684 67 0.8238 0.8320 0.8403 0.8485 0.8567 68 0.8098 0.8184 0.8270 0.8356 0.8441 69 0.7951 0.8040 0.8129 0.8219 0.8308 70 0.7798 0.7889 0.7982 0.8075 0.8168 71 0.7639 0.7733 0.7828 0.7924 0.8021 72 0.7476 0.7572 0.7670 0.7769 0.7869 73 0.7307 0.7406 0.7506 0.7608 0.7711 74 0.7134 0.7234 0.7337 0.7441 0.7546 75 0.6955 0.7057 0.7161 0.7267 0.7375 76 0.6770 0.6873 0.6979 0.7087 0.7197 77 0.6581 0.6685 0.6792 0.6901 0.7013 78 0.6390 0.6494 0.6602 0.6712 0.6825 79 0.6197 0.6302 0.6410 0.6521 0.6635 80 0.6005 0.6109 0.6218 0.6329 0.6444 81 0.5813 0.5917 0.6025 0.6137 0.6252 82 0.5622 0.5726 0.5834 0.5945 0.6060 83 0.5432 0.5535 0.5642 0.5753 0.5868 84 0.5243 0.5345 0.5451 0.5561 0.5676 85 0.5056 0.5156 0.5261 0.5370 0.5484 86 0.4869 0.4969 0.5072 0.5180 0.5292 87 0.4685 0.4782 0.4884 0.4990 0.5101 88 0.4501 0.4597 0.4697 0.4801 0.4910 89 0.4319 0.4412 0.4510 0.4613 0.4720 90 0.4138 0.4229 0.4325 0.4425 0.4530 91 0.3960 0.4048 0.4141 0.4239 0.4342 92 0.3782 0.3869 0.3959 0.4054 0.4154 93 0.3606 0.3690 0.3777 0.3870 0.3967 94 0.3430 0.3510 0.3595 0.3685 0.3779 95 0.3256 0.3334 0.3416 0.3502 0.3593 96 0.3087 0.3161 0.3240 0.3323 0.3411 97 0.2922 0.2993 0.3069 0.3148 0.3233 98 0.2759 0.2827 0.2900 0.2976 0.3057 99 0.2598 0.2663 0.2732 0.2805 0.2882
68 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 65 66 67 68 69 20 0.9986 0.9987 0.9988 0.9989 0.9990 21 0.9985 0.9986 0.9987 0.9988 0.9989 22 0.9984 0.9985 0.9986 0.9987 0.9989 23 0.9982 0.9984 0.9985 0.9987 0.9988 24 0.9981 0.9982 0.9984 0.9985 0.9987 25 0.9979 0.9981 0.9983 0.9984 0.9986 26 0.9977 0.9979 0.9981 0.9983 0.9985 27 0.9975 0.9977 0.9980 0.9981 0.9983 28 0.9973 0.9975 0.9978 0.9980 0.9982 29 0.9970 0.9973 0.9976 0.9978 0.9980 30 0.9967 0.9970 0.9973 0.9976 0.9978 31 0.9964 0.9967 0.9970 0.9973 0.9976 32 0.9960 0.9964 0.9967 0.9971 0.9973 33 0.9956 0.9960 0.9964 0.9967 0.9971 34 0.9952 0.9956 0.9960 0.9964 0.9968 35 0.9946 0.9951 0.9956 0.9960 0.9964 36 0.9941 0.9946 0.9951 0.9956 0.9960 37 0.9934 0.9940 0.9946 0.9951 0.9955 38 0.9927 0.9933 0.9939 0.9945 0.9950 39 0.9918 0.9926 0.9932 0.9939 0.9945 40 0.9909 0.9917 0.9925 0.9932 0.9938 41 0.9898 0.9907 0.9916 0.9924 0.9931 42 0.9887 0.9897 0.9906 0.9915 0.9923 43 0.9874 0.9885 0.9895 0.9905 0.9914 44 0.9859 0.9872 0.9883 0.9894 0.9904 45 0.9844 0.9857 0.9870 0.9881 0.9892 46 0.9826 0.9841 0.9855 0.9868 0.9880 47 0.9807 0.9823 0.9839 0.9853 0.9866 48 0.9786 0.9804 0.9821 0.9837 0.9851 49 0.9763 0.9783 0.9801 0.9819 0.9835 50 0.9737 0.9759 0.9780 0.9799 0.9817 51 0.9710 0.9733 0.9756 0.9777 0.9797 52 0.9679 0.9705 0.9729 0.9753 0.9774 53 0.9645 0.9674 0.9700 0.9726 0.9750 54 0.9608 0.9639 0.9668 0.9696 0.9722 55 0.9567 0.9601 0.9633 0.9663 0.9692 56 0.9522 0.9558 0.9594 0.9627 0.9658 57 0.9472 0.9512 0.9550 0.9586 0.9621 58 0.9417 0.9460 0.9502 0.9541 0.9579 59 0.9357 0.9404 0.9449 0.9492 0.9533 60 0.9291 0.9342 0.9390 0.9437 0.9481 61 0.9219 0.9274 0.9326 0.9377 0.9425 62 0.9141 0.9200 0.9256 0.9311 0.9363 63 0.9057 0.9119 0.9180 0.9239 0.9295 64 0.8966 0.9032 0.9097 0.9160 0.9221 65 0.8867 0.8938 0.9007 0.9075 0.9140 66 0.8761 0.8836 0.8910 0.8982 0.9052 67 0.8647 0.8727 0.8805 0.8882 0.8957 68 0.8526 0.8610 0.8693 0.8774 0.8854 69 0.8397 0.8485 0.8573 0.8659 0.8743 70 0.8260 0.8353 0.8445 0.8536 0.8625 71 0.8118 0.8214 0.8310 0.8406 0.8500 72 0.7969 0.8069 0.8170 0.8269 0.8368 73 0.7814 0.7918 0.8022 0.8127 0.8230 74 0.7653 0.7760 0.7868 0.7976 0.8084 75 0.7484 0.7595 0.7706 0.7818 0.7930 76 0.7309 0.7422 0.7536 0.7652 0.7768 77 0.7127 0.7243 0.7360 0.7479 0.7598 78 0.6941 0.7059 0.7179 0.7300 0.7423 79 0.6752 0.6872 0.6994 0.7118 0.7244 80 0.6562 0.6683 0.6807 0.6933 0.7061 81 0.6371 0.6493 0.6618 0.6745 0.6876 82 0.6179 0.6302 0.6427 0.6557 0.6688 83 0.5987 0.6110 0.6236 0.6366 0.6499 84 0.5794 0.5917 0.6043 0.6174 0.6308 85 0.5602 0.5724 0.5850 0.5981 0.6115 86 0.5409 0.5530 0.5656 0.5786 0.5921 87 0.5217 0.5337 0.5462 0.5591 0.5725 88 0.5024 0.5143 0.5267 0.5395 0.5529 89 0.4832 0.4949 0.5071 0.5198 0.5331 90 0.4640 0.4755 0.4876 0.5001 0.5132 91 0.4450 0.4562 0.4680 0.4804 0.4933 92 0.4260 0.4370 0.4485 0.4606 0.4733 93 0.4069 0.4177 0.4290 0.4408 0.4532 94 0.3878 0.3983 0.4092 0.4208 0.4329 95 0.3689 0.3790 0.3897 0.4009 0.4127 96 0.3504 0.3601 0.3704 0.3813 0.3927 97 0.3322 0.3416 0.3516 0.3621 0.3731 98 0.3143 0.3233 0.3329 0.3430 0.3537 99 0.2964 0.3051 0.3142 0.3239 0.3342
69 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 70 71 72 73 74 20 0.9991 0.9992 0.9992 0.9993 0.9994 21 0.9990 0.9991 0.9992 0.9993 0.9993 22 0.9990 0.9991 0.9991 0.9992 0.9993 23 0.9989 0.9990 0.9991 0.9992 0.9992 24 0.9988 0.9989 0.9990 0.9991 0.9992 25 0.9987 0.9988 0.9989 0.9990 0.9991 26 0.9986 0.9987 0.9989 0.9990 0.9991 27 0.9985 0.9986 0.9988 0.9989 0.9990 28 0.9983 0.9985 0.9986 0.9988 0.9989 29 0.9982 0.9984 0.9985 0.9987 0.9988 30 0.9980 0.9982 0.9984 0.9985 0.9987 31 0.9978 0.9980 0.9982 0.9984 0.9986 32 0.9976 0.9978 0.9981 0.9983 0.9984 33 0.9974 0.9976 0.9979 0.9981 0.9983 34 0.9971 0.9974 0.9976 0.9979 0.9981 35 0.9968 0.9971 0.9974 0.9976 0.9979 36 0.9964 0.9968 0.9971 0.9974 0.9977 37 0.9960 0.9964 0.9968 0.9971 0.9974 38 0.9955 0.9960 0.9964 0.9967 0.9971 39 0.9950 0.9955 0.9960 0.9964 0.9967 40 0.9944 0.9950 0.9955 0.9959 0.9964 41 0.9938 0.9944 0.9949 0.9954 0.9959 42 0.9930 0.9937 0.9943 0.9949 0.9954 43 0.9922 0.9929 0.9936 0.9943 0.9948 44 0.9913 0.9921 0.9929 0.9936 0.9942 45 0.9902 0.9912 0.9920 0.9928 0.9935 46 0.9891 0.9902 0.9911 0.9920 0.9928 47 0.9879 0.9890 0.9901 0.9910 0.9919 48 0.9865 0.9878 0.9889 0.9900 0.9910 49 0.9850 0.9864 0.9877 0.9889 0.9900 50 0.9833 0.9849 0.9863 0.9876 0.9888 51 0.9815 0.9832 0.9848 0.9862 0.9876 52 0.9795 0.9813 0.9831 0.9847 0.9862 53 0.9772 0.9793 0.9812 0.9830 0.9846 54 0.9747 0.9770 0.9791 0.9811 0.9829 55 0.9719 0.9744 0.9767 0.9789 0.9809 56 0.9688 0.9715 0.9741 0.9765 0.9787 57 0.9653 0.9683 0.9712 0.9738 0.9763 58 0.9614 0.9648 0.9679 0.9708 0.9735 59 0.9571 0.9608 0.9642 0.9674 0.9704 60 0.9524 0.9564 0.9601 0.9636 0.9669 61 0.9471 0.9515 0.9556 0.9594 0.9630 62 0.9413 0.9461 0.9505 0.9548 0.9587 63 0.9350 0.9401 0.9450 0.9496 0.9539 64 0.9280 0.9336 0.9389 0.9439 0.9486 65 0.9203 0.9264 0.9321 0.9376 0.9427 66 0.9120 0.9185 0.9247 0.9307 0.9363 67 0.9030 0.9100 0.9167 0.9231 0.9292 68 0.8932 0.9007 0.9079 0.9148 0.9214 69 0.8826 0.8906 0.8984 0.9058 0.9129 70 0.8713 0.8798 0.8881 0.8960 0.9037 71 0.8593 0.8683 0.8771 0.8856 0.8938 72 0.8466 0.8562 0.8655 0.8745 0.8832 73 0.8333 0.8433 0.8532 0.8627 0.8720 74 0.8191 0.8297 0.8401 0.8502 0.8600 75 0.8042 0.8152 0.8261 0.8367 0.8471 76 0.7884 0.7999 0.8112 0.8224 0.8333 77 0.7718 0.7838 0.7956 0.8072 0.8187 78 0.7547 0.7670 0.7792 0.7913 0.8033 79 0.7371 0.7498 0.7624 0.7749 0.7874 80 0.7191 0.7321 0.7451 0.7580 0.7709 81 0.7008 0.7141 0.7274 0.7407 0.7540 82 0.6823 0.6958 0.7094 0.7231 0.7367 83 0.6635 0.6772 0.6911 0.7050 0.7190 84 0.6445 0.6584 0.6724 0.6866 0.7009 85 0.6253 0.6393 0.6535 0.6679 0.6824 86 0.6059 0.6200 0.6343 0.6488 0.6635 87 0.5864 0.6005 0.6149 0.6295 0.6443 88 0.5666 0.5807 0.5952 0.6098 0.6248 89 0.5467 0.5608 0.5752 0.5899 0.6049 90 0.5267 0.5407 0.5550 0.5697 0.5847 91 0.5067 0.5205 0.5347 0.5492 0.5642 92 0.4865 0.5001 0.5142 0.5286 0.5435 93 0.4662 0.4796 0.4934 0.5077 0.5224 94 0.4455 0.4587 0.4723 0.4863 0.5008 95 0.4250 0.4379 0.4512 0.4649 0.4792 96 0.4047 0.4172 0.4302 0.4437 0.4577 97 0.3848 0.3969 0.4095 0.4226 0.4363 98 0.3649 0.3766 0.3889 0.4016 0.4149 99 0.3450 0.3563 0.3681 0.3805 0.3933
70 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 75 76 77 78 79 20 0.9994 0.9995 0.9995 0.9996 0.9996 21 0.9994 0.9995 0.9995 0.9996 0.9996 22 0.9994 0.9994 0.9995 0.9995 0.9996 23 0.9993 0.9994 0.9994 0.9995 0.9996 24 0.9993 0.9993 0.9994 0.9995 0.9995 25 0.9992 0.9993 0.9994 0.9994 0.9995 26 0.9992 0.9992 0.9993 0.9994 0.9994 27 0.9991 0.9992 0.9993 0.9993 0.9994 28 0.9990 0.9991 0.9992 0.9993 0.9994 29 0.9989 0.9990 0.9991 0.9992 0.9993 30 0.9988 0.9989 0.9991 0.9992 0.9992 31 0.9987 0.9989 0.9990 0.9991 0.9992 32 0.9986 0.9987 0.9989 0.9990 0.9991 33 0.9985 0.9986 0.9988 0.9989 0.9990 34 0.9983 0.9985 0.9986 0.9988 0.9989 35 0.9981 0.9983 0.9985 0.9987 0.9988 36 0.9979 0.9981 0.9983 0.9985 0.9987 37 0.9977 0.9979 0.9981 0.9983 0.9985 38 0.9974 0.9977 0.9979 0.9981 0.9983 39 0.9971 0.9974 0.9977 0.9979 0.9982 40 0.9967 0.9971 0.9974 0.9977 0.9979 41 0.9963 0.9967 0.9971 0.9974 0.9977 42 0.9959 0.9963 0.9967 0.9971 0.9974 43 0.9954 0.9959 0.9963 0.9967 0.9970 44 0.9948 0.9953 0.9958 0.9963 0.9967 45 0.9942 0.9948 0.9953 0.9958 0.9963 46 0.9935 0.9942 0.9948 0.9953 0.9958 47 0.9927 0.9935 0.9941 0.9947 0.9953 48 0.9919 0.9927 0.9934 0.9941 0.9947 49 0.9910 0.9919 0.9927 0.9934 0.9941 50 0.9899 0.9909 0.9919 0.9927 0.9934 51 0.9888 0.9899 0.9909 0.9919 0.9927 52 0.9875 0.9888 0.9899 0.9909 0.9919 53 0.9861 0.9875 0.9887 0.9899 0.9909 54 0.9845 0.9860 0.9874 0.9887 0.9899 55 0.9827 0.9844 0.9860 0.9874 0.9887 56 0.9808 0.9826 0.9844 0.9859 0.9874 57 0.9785 0.9806 0.9825 0.9843 0.9859 58 0.9760 0.9783 0.9804 0.9824 0.9842 59 0.9731 0.9757 0.9780 0.9802 0.9822 60 0.9699 0.9728 0.9754 0.9778 0.9800 61 0.9664 0.9695 0.9724 0.9751 0.9775 62 0.9624 0.9658 0.9691 0.9720 0.9747 63 0.9580 0.9618 0.9653 0.9686 0.9716 64 0.9531 0.9572 0.9611 0.9647 0.9681 65 0.9476 0.9522 0.9565 0.9605 0.9641 66 0.9416 0.9466 0.9513 0.9557 0.9597 67 0.9349 0.9404 0.9456 0.9504 0.9549 68 0.9277 0.9336 0.9392 0.9445 0.9494 69 0.9197 0.9261 0.9322 0.9380 0.9434 70 0.9110 0.9180 0.9246 0.9309 0.9368 71 0.9016 0.9092 0.9164 0.9232 0.9296 72 0.8917 0.8998 0.9075 0.9149 0.9218 73 0.8810 0.8897 0.8980 0.9059 0.9134 74 0.8695 0.8788 0.8877 0.8962 0.9043 75 0.8572 0.8670 0.8765 0.8856 0.8943 76 0.8440 0.8544 0.8645 0.8742 0.8835 77 0.8299 0.8409 0.8516 0.8619 0.8718 78 0.8151 0.8266 0.8379 0.8488 0.8593 79 0.7996 0.8117 0.8235 0.8351 0.8462 80 0.7836 0.7962 0.8086 0.8207 0.8324 81 0.7672 0.7803 0.7932 0.8058 0.8181 82 0.7503 0.7638 0.7772 0.7904 0.8032 83 0.7330 0.7469 0.7608 0.7744 0.7878 84 0.7152 0.7295 0.7438 0.7579 0.7717 85 0.6970 0.7116 0.7263 0.7408 0.7552 86 0.6784 0.6933 0.7083 0.7233 0.7380 87 0.6594 0.6746 0.6899 0.7051 0.7203 88 0.6400 0.6554 0.6709 0.6865 0.7020 89 0.6202 0.6357 0.6515 0.6673 0.6831 90 0.6000 0.6157 0.6315 0.6475 0.6636 91 0.5796 0.5952 0.6112 0.6274 0.6436 92 0.5588 0.5745 0.5905 0.6067 0.6231 93 0.5376 0.5532 0.5692 0.5854 0.6019 94 0.5159 0.5313 0.5473 0.5635 0.5799 95 0.4940 0.5093 0.5251 0.5412 0.5576 96 0.4722 0.4873 0.5028 0.5188 0.5351 97 0.4505 0.4653 0.4806 0.4964 0.5125 98 0.4287 0.4432 0.4582 0.4737 0.4895 99 0.4068 0.4209 0.4355 0.4506 0.4662
71 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 80 81 82 83 84 20 0.9997 0.9997 0.9997 0.9998 0.9998 21 0.9996 0.9997 0.9997 0.9997 0.9998 22 0.9996 0.9997 0.9997 0.9997 0.9998 23 0.9996 0.9996 0.9997 0.9997 0.9997 24 0.9996 0.9996 0.9997 0.9997 0.9997 25 0.9995 0.9996 0.9996 0.9997 0.9997 26 0.9995 0.9996 0.9996 0.9996 0.9997 27 0.9995 0.9995 0.9996 0.9996 0.9997 28 0.9994 0.9995 0.9995 0.9996 0.9996 29 0.9994 0.9994 0.9995 0.9996 0.9996 30 0.9993 0.9994 0.9995 0.9995 0.9996 31 0.9993 0.9993 0.9994 0.9995 0.9995 32 0.9992 0.9993 0.9994 0.9994 0.9995 33 0.9991 0.9992 0.9993 0.9994 0.9994 34 0.9990 0.9991 0.9992 0.9993 0.9994 35 0.9989 0.9990 0.9992 0.9992 0.9993 36 0.9988 0.9989 0.9991 0.9992 0.9993 37 0.9987 0.9988 0.9990 0.9991 0.9992 38 0.9985 0.9987 0.9988 0.9990 0.9991 39 0.9984 0.9985 0.9987 0.9989 0.9990 40 0.9982 0.9984 0.9985 0.9987 0.9989 41 0.9979 0.9982 0.9984 0.9985 0.9987 42 0.9977 0.9979 0.9982 0.9984 0.9986 43 0.9974 0.9977 0.9979 0.9981 0.9984 44 0.9970 0.9974 0.9976 0.9979 0.9981 45 0.9967 0.9970 0.9973 0.9976 0.9979 46 0.9962 0.9967 0.9970 0.9973 0.9976 47 0.9958 0.9962 0.9967 0.9970 0.9974 48 0.9953 0.9958 0.9963 0.9967 0.9970 49 0.9947 0.9953 0.9958 0.9963 0.9967 50 0.9941 0.9948 0.9953 0.9958 0.9963 51 0.9935 0.9942 0.9948 0.9954 0.9959 52 0.9927 0.9935 0.9942 0.9948 0.9954 53 0.9919 0.9927 0.9935 0.9942 0.9949 54 0.9909 0.9919 0.9928 0.9935 0.9943 55 0.9899 0.9909 0.9919 0.9928 0.9936 56 0.9887 0.9899 0.9910 0.9919 0.9928 57 0.9873 0.9887 0.9899 0.9910 0.9919 58 0.9858 0.9873 0.9886 0.9898 0.9909 59 0.9840 0.9857 0.9872 0.9885 0.9898 60 0.9820 0.9839 0.9855 0.9871 0.9885 61 0.9798 0.9818 0.9837 0.9854 0.9870 62 0.9772 0.9795 0.9816 0.9836 0.9853 63 0.9744 0.9769 0.9793 0.9814 0.9834 64 0.9712 0.9740 0.9766 0.9790 0.9812 65 0.9676 0.9707 0.9736 0.9763 0.9788 66 0.9635 0.9670 0.9702 0.9732 0.9760 67 0.9590 0.9629 0.9665 0.9698 0.9728 68 0.9540 0.9583 0.9622 0.9659 0.9693 69 0.9484 0.9531 0.9575 0.9616 0.9653 70 0.9423 0.9475 0.9523 0.9567 0.9609 71 0.9356 0.9412 0.9465 0.9515 0.9561 72 0.9284 0.9345 0.9403 0.9457 0.9508 73 0.9205 0.9272 0.9335 0.9394 0.9450 74 0.9120 0.9192 0.9261 0.9325 0.9386 75 0.9026 0.9104 0.9179 0.9249 0.9315 76 0.8924 0.9008 0.9088 0.9164 0.9236 77 0.8813 0.8904 0.8990 0.9072 0.9150 78 0.8695 0.8791 0.8884 0.8972 0.9056 79 0.8569 0.8672 0.8771 0.8866 0.8956 80 0.8438 0.8547 0.8652 0.8753 0.8850 81 0.8301 0.8416 0.8527 0.8634 0.8737 82 0.8158 0.8279 0.8396 0.8510 0.8619 83 0.8008 0.8135 0.8259 0.8378 0.8494 84 0.7853 0.7986 0.8115 0.8241 0.8363 85 0.7692 0.7830 0.7965 0.8097 0.8225 86 0.7526 0.7669 0.7809 0.7946 0.8080 87 0.7353 0.7500 0.7645 0.7788 0.7928 88 0.7173 0.7325 0.7475 0.7623 0.7768 89 0.6988 0.7143 0.7298 0.7450 0.7600 90 0.6796 0.6955 0.7113 0.7270 0.7425 91 0.6599 0.6761 0.6922 0.7083 0.7242 92 0.6395 0.6559 0.6724 0.6888 0.7051 93 0.6185 0.6351 0.6517 0.6684 0.6851 94 0.5965 0.6133 0.6301 0.6470 0.6640 95 0.5742 0.5910 0.6079 0.6250 0.6422 96 0.5516 0.5684 0.5853 0.6025 0.6198 97 0.5289 0.5455 0.5625 0.5796 0.5971 98 0.5057 0.5223 0.5391 0.5562 0.5736 99 0.4821 0.4984 0.5150 0.5320 0.5494
72 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Participant Age Beneficiary Age Years Years 85 86 87 88 89 20 0.9998 0.9998 0.9998 0.9999 0.9999 21 0.9998 0.9998 0.9998 0.9999 0.9999 22 0.9998 0.9998 0.9998 0.9998 0.9999 23 0.9998 0.9998 0.9998 0.9998 0.9999 24 0.9998 0.9998 0.9998 0.9998 0.9998 25 0.9997 0.9998 0.9998 0.9998 0.9998 26 0.9997 0.9997 0.9998 0.9998 0.9998 27 0.9997 0.9997 0.9998 0.9998 0.9998 28 0.9997 0.9997 0.9997 0.9998 0.9998 29 0.9996 0.9997 0.9997 0.9998 0.9998 30 0.9996 0.9997 0.9997 0.9997 0.9998 31 0.9996 0.9996 0.9997 0.9997 0.9997 32 0.9996 0.9996 0.9996 0.9997 0.9997 33 0.9995 0.9996 0.9996 0.9997 0.9997 34 0.9995 0.9995 0.9996 0.9996 0.9997 35 0.9994 0.9995 0.9995 0.9996 0.9996 36 0.9994 0.9994 0.9995 0.9996 0.9996 37 0.9993 0.9994 0.9994 0.9995 0.9996 38 0.9992 0.9993 0.9994 0.9995 0.9995 39 0.9991 0.9992 0.9993 0.9994 0.9995 40 0.9990 0.9991 0.9992 0.9993 0.9994 41 0.9989 0.9990 0.9991 0.9992 0.9993 42 0.9987 0.9989 0.9990 0.9991 0.9992 43 0.9986 0.9987 0.9989 0.9990 0.9991 44 0.9984 0.9986 0.9987 0.9989 0.9990 45 0.9981 0.9984 0.9986 0.9987 0.9989 46 0.9979 0.9982 0.9984 0.9986 0.9987 47 0.9977 0.9979 0.9982 0.9984 0.9986 48 0.9974 0.9977 0.9979 0.9982 0.9984 49 0.9971 0.9974 0.9977 0.9980 0.9982 50 0.9967 0.9971 0.9974 0.9977 0.9980 51 0.9963 0.9967 0.9971 0.9975 0.9978 52 0.9959 0.9964 0.9968 0.9972 0.9975 53 0.9954 0.9960 0.9964 0.9968 0.9972 54 0.9949 0.9955 0.9960 0.9965 0.9969 55 0.9943 0.9950 0.9955 0.9961 0.9965 56 0.9936 0.9943 0.9950 0.9956 0.9961 57 0.9928 0.9937 0.9944 0.9951 0.9956 58 0.9920 0.9929 0.9937 0.9944 0.9951 59 0.9909 0.9919 0.9929 0.9937 0.9945 60 0.9898 0.9909 0.9919 0.9929 0.9937 61 0.9884 0.9897 0.9909 0.9919 0.9929 62 0.9869 0.9884 0.9897 0.9909 0.9920 63 0.9852 0.9868 0.9883 0.9896 0.9909 64 0.9832 0.9851 0.9867 0.9882 0.9896 65 0.9810 0.9831 0.9849 0.9866 0.9882 66 0.9785 0.9808 0.9829 0.9848 0.9866 67 0.9756 0.9782 0.9806 0.9827 0.9847 68 0.9724 0.9753 0.9779 0.9804 0.9826 69 0.9688 0.9720 0.9750 0.9777 0.9802 70 0.9648 0.9683 0.9716 0.9747 0.9774 71 0.9603 0.9643 0.9679 0.9713 0.9744 72 0.9555 0.9598 0.9639 0.9676 0.9711 73 0.9501 0.9550 0.9594 0.9636 0.9674 74 0.9442 0.9495 0.9545 0.9591 0.9633 75 0.9377 0.9435 0.9489 0.9540 0.9587 76 0.9304 0.9367 0.9427 0.9483 0.9535 77 0.9223 0.9293 0.9358 0.9419 0.9477 78 0.9136 0.9211 0.9283 0.9350 0.9413 79 0.9042 0.9124 0.9201 0.9274 0.9343 80 0.8942 0.9030 0.9114 0.9193 0.9268 81 0.8836 0.8931 0.9021 0.9106 0.9187 82 0.8724 0.8825 0.8922 0.9014 0.9101 83 0.8606 0.8713 0.8816 0.8915 0.9009 84 0.8481 0.8595 0.8704 0.8810 0.8911 85 0.8349 0.8469 0.8586 0.8698 0.8806 86 0.8210 0.8337 0.8460 0.8579 0.8694 87 0.8064 0.8197 0.8327 0.8453 0.8574 88 0.7910 0.8050 0.8186 0.8318 0.8447 89 0.7748 0.7894 0.8036 0.8175 0.8310 90 0.7578 0.7729 0.7878 0.8023 0.8166 91 0.7400 0.7557 0.7711 0.7863 0.8012 92 0.7214 0.7375 0.7535 0.7693 0.7848 93 0.7018 0.7184 0.7348 0.7512 0.7674 94 0.6810 0.6980 0.7149 0.7318 0.7486 95 0.6595 0.6768 0.6941 0.7115 0.7288 96 0.6373 0.6549 0.6726 0.6903 0.7081 97 0.6147 0.6324 0.6504 0.6685 0.6867 98 0.5913 0.6092 0.6273 0.6457 0.6642 99 0.5670 0.5850 0.6032 0.6217 0.6405
73 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages) Unisex Unisex Participant Age Beneficiary Age Years Years 90 91 92 93 94 20 0.9999 0.9999 0.9999 0.9999 0.9999 21 0.9999 0.9999 0.9999 0.9999 0.9999 22 0.9999 0.9999 0.9999 0.9999 0.9999 23 0.9999 0.9999 0.9999 0.9999 0.9999 24 0.9999 0.9999 0.9999 0.9999 0.9999 25 0.9999 0.9999 0.9999 0.9999 0.9999 26 0.9998 0.9999 0.9999 0.9999 0.9999 27 0.9998 0.9999 0.9999 0.9999 0.9999 28 0.9998 0.9998 0.9999 0.9999 0.9999 29 0.9998 0.9998 0.9999 0.9999 0.9999 30 0.9998 0.9998 0.9998 0.9999 0.9999 31 0.9998 0.9998 0.9998 0.9999 0.9999 32 0.9998 0.9998 0.9998 0.9998 0.9999 33 0.9997 0.9998 0.9998 0.9998 0.9998 34 0.9997 0.9997 0.9998 0.9998 0.9998 35 0.9997 0.9997 0.9998 0.9998 0.9998 36 0.9997 0.9997 0.9997 0.9998 0.9998 37 0.9996 0.9997 0.9997 0.9997 0.9998 38 0.9996 0.9996 0.9997 0.9997 0.9998 39 0.9995 0.9996 0.9996 0.9997 0.9997 40 0.9995 0.9995 0.9996 0.9997 0.9997 41 0.9994 0.9995 0.9996 0.9996 0.9997 42 0.9993 0.9994 0.9995 0.9996 0.9996 43 0.9992 0.9993 0.9994 0.9995 0.9996 44 0.9991 0.9993 0.9994 0.9994 0.9995 45 0.9990 0.9992 0.9993 0.9994 0.9994 46 0.9989 0.9990 0.9992 0.9993 0.9994 47 0.9988 0.9989 0.9991 0.9992 0.9993 48 0.9986 0.9988 0.9989 0.9991 0.9992 49 0.9984 0.9986 0.9988 0.9990 0.9991 50 0.9982 0.9985 0.9987 0.9988 0.9990 51 0.9980 0.9983 0.9985 0.9987 0.9989 52 0.9978 0.9981 0.9983 0.9985 0.9987 53 0.9976 0.9979 0.9981 0.9984 0.9986 54 0.9973 0.9976 0.9979 0.9982 0.9984 55 0.9970 0.9973 0.9977 0.9980 0.9983 56 0.9966 0.9970 0.9974 0.9977 0.9980 57 0.9962 0.9967 0.9971 0.9975 0.9978 58 0.9957 0.9962 0.9967 0.9971 0.9975 59 0.9951 0.9957 0.9963 0.9968 0.9972 60 0.9945 0.9952 0.9958 0.9963 0.9968 61 0.9938 0.9945 0.9952 0.9958 0.9964 62 0.9929 0.9938 0.9946 0.9953 0.9959 63 0.9920 0.9930 0.9938 0.9946 0.9954 64 0.9909 0.9920 0.9930 0.9939 0.9947 65 0.9896 0.9909 0.9920 0.9930 0.9939 66 0.9881 0.9896 0.9909 0.9920 0.9931 67 0.9865 0.9881 0.9896 0.9909 0.9921 68 0.9846 0.9864 0.9881 0.9896 0.9909 69 0.9824 0.9845 0.9864 0.9881 0.9896 70 0.9800 0.9823 0.9844 0.9863 0.9881 71 0.9773 0.9799 0.9822 0.9844 0.9864 72 0.9743 0.9772 0.9798 0.9823 0.9845 73 0.9710 0.9742 0.9772 0.9799 0.9824 74 0.9673 0.9709 0.9742 0.9772 0.9800 75 0.9631 0.9671 0.9708 0.9742 0.9773 76 0.9583 0.9628 0.9670 0.9708 0.9743 77 0.9530 0.9580 0.9626 0.9668 0.9707 78 0.9472 0.9526 0.9577 0.9625 0.9668 79 0.9408 0.9468 0.9524 0.9576 0.9625 80 0.9338 0.9404 0.9466 0.9524 0.9577 81 0.9264 0.9336 0.9404 0.9467 0.9526 82 0.9184 0.9263 0.9336 0.9405 0.9470 83 0.9099 0.9183 0.9263 0.9339 0.9410 84 0.9007 0.9098 0.9185 0.9267 0.9344 85 0.8909 0.9007 0.9100 0.9189 0.9273 86 0.8804 0.8909 0.9010 0.9105 0.9196 87 0.8691 0.8804 0.8912 0.9015 0.9112 88 0.8571 0.8691 0.8806 0.8916 0.9022 89 0.8442 0.8569 0.8692 0.8810 0.8923 90 0.8304 0.8439 0.8569 0.8695 0.8817 91 0.8158 0.8300 0.8438 0.8572 0.8701 92 0.8001 0.8151 0.8296 0.8438 0.8576 93 0.7833 0.7990 0.8143 0.8294 0.8440 94 0.7652 0.7815 0.7977 0.8135 0.8290 95 0.7460 0.7630 0.7799 0.7965 0.8129 96 0.7259 0.7435 0.7611 0.7785 0.7957 97 0.7049 0.7231 0.7413 0.7594 0.7774 98 0.6828 0.7016 0.7203 0.7391 0.7579 99 0.6595 0.6786 0.6979 0.7173 0.7368
74 FMC CORPORATION - SKULL POINT MINE UNION Normal Form: Payable Immediately Life Annuity Optional Form: Joint Life Payable Immediately Reduction on Participant's Death -- 50% Continued to Beneficiary Factors to Convert from the Normal Form to the Optional Form Payment at Beginning of Month Mortality: Retiree - 71GAT Beneficiary - 71GAT Interest: 3.00% (Except at frozen ages)
Unisex Unisex Beneficiary Age Participant Age Years Years 95 96 97 98 99 20 0.9999 1.0000 1.0000 1.0000 1.0000 21 0.9999 0.9999 1.0000 1.0000 1.0000 22 0.9999 0.9999 1.0000 1.0000 1.0000 23 0.9999 0.9999 1.0000 1.0000 1.0000 24 0.9999 0.9999 0.9999 1.0000 1.0000 25 0.9999 0.9999 0.9999 1.0000 1.0000 26 0.9999 0.9999 0.9999 0.9999 1.0000 27 0.9999 0.9999 0.9999 0.9999 1.0000 28 0.9999 0.9999 0.9999 0.9999 1.0000 29 0.9999 0.9999 0.9999 0.9999 0.9999 30 0.9999 0.9999 0.9999 0.9999 0.9999 31 0.9999 0.9999 0.9999 0.9999 0.9999 32 0.9999 0.9999 0.9999 0.9999 0.9999 33 0.9999 0.9999 0.9999 0.9999 0.9999 34 0.9999 0.9999 0.9999 0.9999 0.9999 35 0.9998 0.9999 0.9999 0.9999 0.9999 36 0.9998 0.9999 0.9999 0.9999 0.9999 37 0.9998 0.9998 0.9999 0.9999 0.9999 38 0.9998 0.9998 0.9998 0.9999 0.9999 39 0.9998 0.9998 0.9998 0.9999 0.9999 40 0.9997 0.9998 0.9998 0.9998 0.9999 41 0.9997 0.9998 0.9998 0.9998 0.9998 42 0.9997 0.9997 0.9998 0.9998 0.9998 43 0.9996 0.9997 0.9997 0.9998 0.9998 44 0.9996 0.9996 0.9997 0.9997 0.9998 45 0.9995 0.9996 0.9997 0.9997 0.9998 46 0.9995 0.9995 0.9996 0.9997 0.9997 47 0.9994 0.9995 0.9996 0.9996 0.9997 48 0.9993 0.9994 0.9995 0.9996 0.9996 49 0.9992 0.9993 0.9994 0.9995 0.9996 50 0.9991 0.9993 0.9994 0.9995 0.9995 51 0.9990 0.9992 0.9993 0.9994 0.9995 52 0.9989 0.9991 0.9992 0.9993 0.9994 53 0.9988 0.9990 0.9991 0.9992 0.9994 54 0.9986 0.9988 0.9990 0.9991 0.9993 55 0.9985 0.9987 0.9989 0.9991 0.9992 56 0.9983 0.9985 0.9988 0.9989 0.9991 57 0.9981 0.9984 0.9986 0.9988 0.9990 58 0.9979 0.9982 0.9984 0.9987 0.9989 59 0.9976 0.9979 0.9982 0.9985 0.9987 60 0.9973 0.9976 0.9980 0.9983 0.9985 61 0.9969 0.9973 0.9977 0.9980 0.9983 62 0.9965 0.9970 0.9974 0.9978 0.9981 63 0.9960 0.9965 0.9970 0.9975 0.9979 64 0.9954 0.9961 0.9966 0.9971 0.9975 65 0.9948 0.9955 0.9961 0.9967 0.9972 66 0.9940 0.9948 0.9956 0.9962 0.9968 67 0.9931 0.9941 0.9949 0.9956 0.9963 68 0.9921 0.9932 0.9941 0.9950 0.9957 69 0.9910 0.9922 0.9933 0.9942 0.9951 70 0.9896 0.9910 0.9922 0.9933 0.9943 71 0.9881 0.9897 0.9911 0.9923 0.9935 72 0.9865 0.9882 0.9898 0.9912 0.9925 73 0.9846 0.9866 0.9884 0.9900 0.9915 74 0.9825 0.9848 0.9868 0.9886 0.9903 75 0.9802 0.9827 0.9850 0.9870 0.9889 76 0.9774 0.9803 0.9829 0.9852 0.9873 77 0.9743 0.9775 0.9804 0.9830 0.9854 78 0.9708 0.9744 0.9777 0.9806 0.9833 79 0.9669 0.9710 0.9746 0.9779 0.9810 80 0.9627 0.9672 0.9712 0.9750 0.9784 81 0.9580 0.9630 0.9675 0.9717 0.9755 82 0.9530 0.9585 0.9635 0.9681 0.9724 83 0.9475 0.9536 0.9591 0.9642 0.9689 84 0.9416 0.9482 0.9543 0.9599 0.9651 85 0.9351 0.9423 0.9490 0.9552 0.9610 86 0.9281 0.9360 0.9433 0.9501 0.9564 87 0.9204 0.9290 0.9370 0.9444 0.9514 88 0.9121 0.9214 0.9301 0.9382 0.9459 89 0.9031 0.9131 0.9225 0.9314 0.9397 90 0.8932 0.9041 0.9142 0.9239 0.9330 91 0.8825 0.8942 0.9052 0.9156 0.9255 92 0.8709 0.8834 0.8953 0.9066 0.9174 93 0.8581 0.8716 0.8844 0.8966 0.9082 94 0.8440 0.8584 0.8721 0.8853 0.8979 95 0.8288 0.8441 0.8588 0.8729 0.8866 96 0.8125 0.8287 0.8444 0.8595 0.8742 97 0.7951 0.8123 0.8289 0.8450 0.8608 98 0.7764 0.7945 0.8120 0.8292 0.8461 99 0.7561 0.7751 0.7936 0.8119 0.8299
75 SUPPLEMENT 7 COMMERCIAL SEGMENT, SAN JOSE, CALIFORNIA ---------------------------------------- 7-1 Eligible Employees ------------------ The terms of this Supplement apply only to individuals participating in the FMC Corporation Retirement Plan for San Jose Commercial Segment Hourly Employees ("Prior Plan") on the Freeze Date who have not yet received a full distribution of their benefit under such Prior Plan as of the Effective Date ("Participant"). 7-2 Freeze Date ----------- Effective December 19, 1980 ("Freeze Date"), the Prior Plan was frozen. No new participants entered the Prior Plan after the Freeze Date, and no benefits accrued under the Prior Plan after the Freeze Date. 7-3 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1983 Group Annuity Mortality Table and 7.36% interest compounded annually. 7-4 Normal Retirement Date ---------------------- Normal Retirement Date means the end of the calendar month in which the Participant attains age 65. 7-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be the Participant's monthly normal retirement benefit accrued under the Prior Plan as of the Freeze Date. 7-6 Early Retirement Date --------------------- Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires 10 Years of Vesting Service. 7-7 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for each month between his Annuity Starting Date and the Participant's 62nd birthday. 76 7-9 Termination Benefits Reduction Factor ------------------------------------- If a Participant's Termination Benefit commences prior to age 65, the Participant's Termination Benefit shall be reduced by 5/12 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 65th birthday. 77 SUPPLEMENT 8 AGRICULTURE CHEMICAL DIVISION, BALTIMORE, MARYLAND -------------------------------------------------- 8-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Agricultural Chemical Group who work in Baltimore, Maryland and who are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America, AFL-CIO, CLC, Local No. 12517, District 8. 8-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 8-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 Year of Credited Service. 8-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 8-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date his Years of Credited Service terminate, multiplied by the Participant's Years of Credited Service: Termination Date Benefit Rate ---------------- ------------ On or after June 1, 1998 $25.50 but before June 1, 1999 On or after June 1, 1999 $26.50 8-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 4% for each year between the Participant's Annuity Starting Date and the Participant's 65th birthday. 78 If a Participant's Early Retirement Benefit commences on or after age 62 but prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 2% for each year between the Participant's Annuity Starting Date and the Participant's 65th birthday. 8-7 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 26 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 8-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 8-7 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 8-9 Termination Benefits -------------------- 79 If a Participant has attained age 55 and completed 5 Years of Vesting Service, the Participant may elect payment of the Actuarial Equivalent of the Participant's Termination Benefit to commence as of the first day of any month before the Participant's Normal Retirement Date. 80 SUPPLEMENT 9 INORGANIC CHEMICAL DIVISION, TONOWANDA, NEW YORK ------------------------------------------------ 9-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Inorganic Chemical Division who work in Tonowanda, New York and who are covered by the Collective Bargaining Agreement between the Company and the International Chemical Workers Union, Local No. 76. 9-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the following: (a) for purposes of the 50% or 100% Joint and Survivor's Annuity and Section 4.1 of the Plan, the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. (b) for purposes of Section 9-9 of this Supplement, the 1971 Group Annuity Table (weighted 95% male, 5% female) and 4.5% interest compounded annually. 9-3 Commencement and Participation ------------------------------ An Eligible Employee shall become a Participant as of the date the Participant completes 1 Year of Credited Service. 9-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 9-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date his Years of Credited Service terminate, multiplied by the Participant's Years of Credited Service: Termination Date Benefit Rate ---------------- ------------ On or after July 15, 1998 but $29.00 before July 15, 1999 On or after July 15, 1999 $30.00 81 Notwithstanding the foregoing, if a Participant's Annuity Starting Date occurs on or after July 1, 1997 and after the Participant's 62nd birthday, such Participant's Normal Retirement Benefit shall not be less than the benefit to which he would have been entitled had his Years of Credited Service terminated on July 15, 1999. 9-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for each month between his Annuity Starting Date and the Participant's 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 9-7 Disability Retirement --------------------- A Participant who has attained age 45 and completed 15 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 26 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 9-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of his Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 9-8 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right 82 to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 9-9 Optional Forms of Benefits -------------------------- A Participant may elect, with spousal consent and in accordance with Section 6.3, to receive Plan benefits in one of the following optional forms: (a) a married Participant may elect an Individual Life Annuity; (b) a Participant who is eligible for a Normal or Early Retirement Benefit may elect a 100% joint and survivor annuity with the Participant's Beneficiary as the survivor; or (c) a Participant who has not attained age 62 and who is eligible for an Early Retirement Benefit may elect a level income option so that the Participant's benefit payments are increased until Social Security benefits are payable, then decreased thereafter to provide a level income from both sources. 83 SUPPLEMENT 10 INDUSTRIAL CHEMICALS DIVISION, CARTERET, NEW JERSEY --------------------------------------------------- 10-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Industrial Chemicals Division who were in Carteret, New Jersey, and who are covered by the Collective Bargaining Agreement between the Company and the International Chemical Workers Union, Local No. 144. 10-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 10-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes one Year of Credited Service. 10-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 10-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after November 1, 1998 but before November 1, 1999: Years of Credited Service Service Segment Multiplier ----------------------------------------------------------- 1-10 years $30.00 ----------------------------------------------------------- 11-20 years $31.00 ----------------------------------------------------------- 21 + years $32.00 ----------------------------------------------------------- 84 For Participants who retire on or after November 1, 1999 but before November 1, 2000: Years of Credited Service Service Segment Multiplier --------------------------------------------------------- 1-10 years $31.00 --------------------------------------------------------- 11-20 years $32.00 --------------------------------------------------------- 21 + years $33.00 --------------------------------------------------------- For Participants who retire on or after November 1, 2000: Years of Credited Service Service Segment Multiplier --------------------------------------------------------- 1-10 years $32.00 --------------------------------------------------------- 11-20 years $33.00 --------------------------------------------------------- 21 + years $34.00 --------------------------------------------------------- 10-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences on or after age 55 but before age 62, the Participant's Early Retirement Benefit shall be reduced by a percentage equal to (a) the product of 1/6 of 1% multiplied by the number of months between age 62 and the Normal Retirement Date, plus (b) the product of 1/3 of 1% multiplied by the number of months between the Participant's Annuity Starting Date and the Participant's 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62 but before age 65 and the Participant has less than 30 Years of Credited Service, the Participant's Early Retirement Benefit shall be reduced by 1/6 of 1% for each month between the Annuity Starting Date and the Participant's 65th birthday. If a Participant's Early Retirement Benefit commences on or after age 62 and the Participant has 30 or more Years of Credited Service, no reduction shall apply. 10-7 Surviving Spouse's Benefit -------------------------- Payment of the survivor's benefit shall commence on the first day of the month next following the later of the first date the Participant would have attained age 55 or the Participant's death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 10-8 Disability Retirement --------------------- 85 A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 13 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, which qualifies such Participant for Social Security benefits. 10-9 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 13-week period described in Section 10-8 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 10-10 Termination Benefits -------------------- If a Participant has attained age 55 and completed 5 Years of Vesting Service, the Participant may elect payment of the Actuarial Equivalent of the Participant's Termination Benefit to commence as of the first day of any month before the Participant's Normal Retirement Date. 86 SUPPLEMENT 11 SMITH METER PLANT, ERIE, PENNSYLVANIA ------------------------------------- 11-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Smith Meter Plan who work in Erie, Pennsylvania and who are covered by the Collective Bargaining Agreement between the Company and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America Local No. 714. 11-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the UP-1984 Mortality Table (for nondisabled participants) and the 1965 Railroad Board Total Disabled Annuitants Mortality Table - Ultimate Rates (for disabled participants) and the interest rate used by the Pension Benefit Guaranty Corporation for valuing immediate annuities for defined benefit plans terminating on the preceding December 31. No adjustment to such interest rate shall be made if the difference between the otherwise current rate and the applicable PBGC rate is less than 0.5%. 11-3 Service ------- Break-In-Service occurs when a nonvested Employee does not accrue at least 170 Hours of Service during a calendar year. Any such break shall cause a forfeiture of prior Years of Vesting Service if the total years of consecutive Breaks-in-Service equals or exceeds the greater of five or the number of Years of Vesting Service. If the number of consecutive Breaks-in-Service do not operate to cause a forfeiture of prior Years of Vesting Service, the prior Years of Vesting Service shall be reinstated after the Employee is again credited with 1/10th Year of Vesting Service. Further, if an Employee becomes eligible for a Disability Retirement Benefit and recovers prior to his 65th birthday, he shall retain his Years of Vesting Service upon return to active employment with the Company within 30 days after Disability Retirement Benefits cease. Hour of Service means: --------------- (a) Each hour during an applicable computation period for which an Employee is directly or indirectly paid or entitled to payment as an Employee for services performed, including back pay, irrespective of mitigation of damages, or such hours directly or indirectly paid for reasons other than the performance of duties during the applicable computation period, such as vacation, holidays, paid sick or funeral leaves, and similar paid periods of nonworking time, or periods of absence because of jury duty, military leaves and other Company approved leaves of absence. The number of Hours of Service to be credited to an Employee as a result of payment for other than duties performed shall be computed in accordance 87 with such Employee's hourly rate of pay during that computation period for which payment is made. (b) Such Hours of Service which are paid for other than at the time they accrued shall be deemed accumulated for all purposes herein during the period for which they accrued irrespective of when payment is made. (c) The number of Hours of Service to be credited to an Employee for any computation period shall be governed by Sections 2530.200b-2(b) and (c) of the Labor Department Regulations relating to ERISA. (d) Anything contained herein to the contrary notwithstanding and solely for purposes of determining whether a Break-in-Service has occurred for purposes of Years of Vesting Service, an Employee who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such Employee but for such absence, or in any case in which Hours of Service cannot be determined, 8 Hours of Service per day of such absence. The total number of Hours of Service credited under this paragraph for any single continuous period shall not exceed 501 hours. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence, (i) by reason of the pregnancy of the individual, (ii) by reason of a birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited in the Plan Year in which the absence begins if such crediting is required to prevent a Break-in-Service in such Plan Year, or (in all other cases) in the following Plan Year. One Year Break-In-Service means any calendar year during which an Employee completes less than 170 Hours of Service. Year of Credited Service means (A) the Employee's Years of Credited Service prior to the Effective Date, and (B) the Employee's Years of Vesting Service while the Employee is an Eligible Employee and after the Employee becomes a Participant. Notwithstanding the foregoing, benefit payments under this Plan for periods of service credited under any other retirement plans sponsored by the Company or an Affiliate as certified by the Administrator shall be reduced (but not below zero) by the amount of any benefit payments under such other plan for the same period of time. Year of Vesting Service means (A) the Employee's Years of Service prior to the Effective Date, and (B) the total number of calendar years in which the Employee is credited with 1000 or more Hours of Service, or, subject to the provisions of this Supplement on Break-In-Service, a proportionate credit for 1/10th of a Year of Vesting Service for each 100 Hours of Service credited during such calendar year if the Employee is credited with less than 1000 Hours of Service during such calendar year. 88 11-4 Normal Retirement Date ---------------------- Normal Retirement Date means the earlier of (a) the first date the Participant has attained age 62 and completed 10 years of Vesting Service, or (b) the Participant's 65th birthday. 11-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date the Participant's Years of Credited Service terminate, multiplied by the Participant's Years of Credited Service: Termination Date Benefit Rate ---------------- ------------ On or after January 1, 1999 $25.00 A Participant's monthly Normal Retirement Benefit shall be increased by $20.00 per month after the Participant attains age 65, and by an additional $20.00 per month after the Participant's spouse attains age 65. 11-6 Early Retirement Date --------------------- Early Retirement Date means the later of the Participant's 57th birthday and the date the Participant acquires 10 Years of Credited Service. 11-7 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by a percentage equal to 4% multiplied by the number of years (prorated for any fraction of a year) from the Annuity Starting Date to the first day of the month following the Participant's 62nd birthday. 11-8 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service and suffers a Total and Permanent Disability while he is an Employee and before he has attained age 62 shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means total disability by bodily injury or disease, physical or mental, or both, sufficient to prevent the Employee from engaging in any regular occupation or employment for remuneration or profit, which disability will be permanent and continuous during the remainder of the Employee's life; provided, however, that no Employee shall be deemed to be totally and permanently disabled for the purposes of the Plan if his incapacity consists of chronic alcoholism or addiction to narcotics, or if such incapacity was contracted, suffered or incurred while he was engaged in a felonious enterprise or resulted therefrom or resulted from an intentionally self- inflicted injury or resulted from service in the 89 armed forces of any country. The existence of total and permanent disability shall be determined by the Committee on the basis of medical evidence satisfactory to it. 11-9 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date his Total and Permanent Disability commences, multiplied by the Participant's Years of Credited Service as of such date: Termination Date Benefit Rate ---------------- ------------ On or after January 1, 1999 $50.00 All disability retirement benefits shall be reduced by the amount of (a) worker's compensation benefits; and (b) any present or future payments on account of injury, disease or disability under the Federal Social Security Act, as amended, or any other Federal or State law under which the Company contributes through taxes or otherwise to benefits for injury, disease or disability of Employees whether occupational or non-occupational; provided however, that the provisions of this Section 11-9 shall not operate to reduce the disability retirement benefits to less than the retirement benefits to which the Participant would have been entitled had the Participant reached the Participant's 62nd birthday at time of disability retirement. 11-10 Normal Form of Benefit ---------------------- The normal form of benefit shall be a 50% Joint and Survivor's Annuity with the Participant's spouse as joint annuitant if he is married on the Annuity Starting Date, and an Individual Life Annuity if he is not married on the Annuity Starting Date. 11-11 Optional Forms of Benefit ------------------------- A Participant who is eligible for an Early or Normal Retirement Benefit may, with spousal consent and in accordance with Section 6.3, waive the normal form of benefit and elect one of the optional forms which shall be the Actuarial Equivalent of the normal form of benefit. (a) an Individual Life Annuity, if the Participant is married; (b) a 100% or 66-2/3% Joint and Survivor's Annuity; or (c) a joint and survivor's annuity pursuant to which, upon the Participant's death 50% of the amount paid to the Participant (reduced by 1% for each full year exceeding 10 by which the spouse is younger than the Participant) is paid to the Participant's spouse until the earlier of (i) the spouse's death; (ii) remarriage; or (iii) a total of 120 payments have been made to the Participant and spouse. No benefit shall be paid to the Participant's spouse if the 90 Participant and spouse were married less than 12 months at the time of the Participant's death. 11-12 Surviving Spouse's Benefit -------------------------- If the Participant had attained Early Retirement Date, the amount of the surviving spouse's benefit shall be 50% of the benefit the Participant would have received if the Participant had elected an Individual Life Annuity commencing on the day before the Participant's death. If the Participant had not attained Early Retirement Date, the amount of the surviving spouse's benefit shall be equal to the survivor's benefit under the 50% Joint and Survivor's Annuity the Participant would have received if the Participant had elected such annuity commencing at age 57 or the day before the Participant's death, if later. Monthly surviving spouse benefits payable under this Section 11-12 shall be reduced by 1% for each full year exceeding 10 years by which the surviving spouse is younger than the Participant. 91 SUPPLEMENT 12 FOOD PROCESSING MACHINERY DIVISION, HOOPESTON, ILLINOIS ------------------------------------------------------- 12-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Food Processing Machinery Division who work in Hoopeston, Illinois and who are covered by the Collective Bargaining Agreement between the Company and the Allied Industrial Workers of America, AFL-CIO Local 985. 12-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 12-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 12-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 12-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date the Participant's Years of Credited Service terminate, multiplied by his Years of Credited Service: Termination Date Benefit Rate ---------------- ------------ On or after December 1, 1998 $26.00 12-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 4% for each full year between the Annuity Starting Date and the Participant's 65th birthday. 12-7 Optional Form of Benefits ------------------------- 92 (a) A married Participant may elect, with spousal consent and in accordance with Section 6.3, to receive the Participant's benefits in one of the following forms: (i) an Individual Life Annuity; (ii) a 50% joint and survivor's annuity with the Participant's Beneficiary as survivor; or (iii) a 100% joint and survivor's annuity with the Participant's Beneficiary as survivor. (b) An unmarried Participant who is eligible for Normal Retirement, Early Retirement or Disability Retirement Benefits may elect, in accordance with Section 6.3, to receive the Participant's benefits in one of the following forms: (i) a 50% joint and survivor's annuity with the Participant's Beneficiary as survivor; or (ii) a 100% joint and survivor's annuity with the Participant's Beneficiary as survivor. 12-8 Disability Retirement --------------------- A Participant who has completed 15 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 13 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 12-9 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 13-week period described in Section 12-8 of this Supplement or medical certification of disability, whichever shall be later. 93 Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 94 SUPPLEMENT 13 KEMMERER COKE PLANT, KEMMERER, WYOMING -------------------------------------- 13-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Kemmerer Coke Plant who work in Kemmerer, Wyoming and who are covered by the Collective Bargaining Agreement between the Company and the International Union, United Mine Workers of America. 13-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the following: (a) for purposes of the 50% or 100% Joint and Survivor's Annuity and for purposes a "qualified domestic relations order" as defined in Code Section 414(p), the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually; and (b) for purposes of Sections 13-12 and 13-13 of this Supplement, (i) if the Participant's employment is terminated due to permanent layoff or nonoccupational disability, based on a reduction of 3% for each year between the Participant's Annuity Starting Date and the Participant's 62nd birthday; and (ii) if the Participant's employment is terminated for reasons other than permanent layoff or nonoccupational disability, based on Table 13 of this Supplement. 13-3 Service ------- Break-In-Service occurs when a nonvested Employee does not accrue at least 501 Hours of Service during a calendar year. Any such break shall cause a forfeiture of prior Years of Vesting Service if the total years of consecutive Breaks-in-Service equals or exceeds the greater of five or the number of Years of Vesting Service. If the number of consecutive Breaks-in-Service do not operate to cause a forfeiture of prior Years of Vesting Service, the prior Years of Vesting Service shall be reinstated after the Employee is again credited with one Year of Vesting Service. Hour of Service means: --------------- (a) Each hour during an applicable computation period for which an Employee is directly or indirectly paid or entitled to payment as an Employee for services performed, including back pay, irrespective of mitigation of damages, or such hours directly or indirectly paid for reasons 95 other than the performance of duties during the applicable computation period, such as vacation, holidays, paid sick or funeral leaves, and similar paid periods of nonworking time, or periods of absence because of jury duty, military leaves and other Company approved leaves of absence. The number of Hours of Service to be credited to an Employee as a result of payment for other than duties performed shall be computed in accordance with such Employee's hourly rate of pay during that computation period for which payment is made. (b) Such Hours of Service which are paid for other than at the time they accrued shall be deemed accumulated for all purposes herein during the period for which they accrued irrespective of when payment is made. (c) The number of Hours of Service to be credited to an Employee for any computation period shall be governed by Sections 2530.200b- 2(b) and (c) of the Labor Department Regulations relating to ERISA. (d) Anything contained herein to the contrary notwithstanding and solely for purposes of determining whether a Break-in-Service has occurred for purposes of Years of Vesting Service, an Employee who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such Employee but for such absence, or in any case in which Hours of Service cannot be determined, 8 Hours of Service per day of such absence. The total number of Hours of Service credited under this paragraph for any single continuous period shall not exceed 501 hours. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence, (i) by reason of the pregnancy of the individual, (ii) by reason of a birth of a child of the individual, (iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited in the Plan Year in which the absence begins if such crediting is required to prevent a Break-in-Service in such Plan Year, or (in all other cases) in the following Plan Year. Nonsignatory Past Service has the meaning assigned thereto in the in the Prior Plan. Prior Plan means the FMC Corporation Pension Plan - Kemmerer Coke Plan as in effect on December 31, 1998. Reciprocal Service means service received by an Employee who works for a signatory company and is covered under such company's pension plan if such other plan recognizes service with the Company and Affiliates. An Employee's Reciprocal Service shall be his Reciprocal Service under the Prior Plan and his Reciprocal Service after the Effective Date. 96 Signatory Past Service means the Employee's Signatory Past Service under the Prior Plan as in effect on December 31, 1998, and any Signatory Past Service (as determined under the terms of such plan) which qualifies on his behalf after the Effective Date. Year of Credited Service means (a) the Employee's Years of Credited Service (including Signatory Past Service) prior to the Effective Date, and (b) the total number of years in which the Employee is an Eligible Employee and after the Employee becomes a Participant in which the Employee is credited with 1600 or more Hours of Service. Subject to the provisions of this Supplement on Break-In-Service, an Employee shall receive credit for a partial Year of Credited Service for each year in which he is credited with less than 1600 Hours of Service, based on the proportion that his hours worked during such year bears to 1600, rounded to the nearest 1/10th. Year of Vesting Service means (a) the Employee's Years of Vesting Service under the Prior Plan prior to the Effective Date, and (b) the total number of years in which the Employee is credited with 1000 or more Hours of Service or hours for any other signatory company which counts vesting under their plan on the basis of hours worked or hours of service. In no event shall an Employee be credited with more than one Year of Vesting Service during a year. 13-4 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Employee completes 1 Year of Vesting Service. 13-5 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month following the later of the Participant's 65th birthday or the 5th anniversary of the date the Participant commenced participation in the Plan. 13-6 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of the Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after June 1, 1998, but before June 1, 1999: Years of Credited Service and Reciprocal Service Benefit Rate ---------------------------------------------------- 1-10 years $31.00 ---------------------------------------------------- 11-20 years $31.50 ---------------------------------------------------- 21-30 years $32.00 ---------------------------------------------------- 31-40 years $32.50 ---------------------------------------------------- 97 For Participants who retire on or after June 1, 1999, but before June 1, 2000: Years of Credited Service and Reciprocal Service Benefit Rate ---------------------------------------------------- 1-10 years $32.50 ---------------------------------------------------- 11-20 years $33.00 ---------------------------------------------------- 21-30 years $33.50 ---------------------------------------------------- 31-40 years $34.00 ---------------------------------------------------- For Participants who retire on or after June 1, 2000, but before June 1, 2001: Years of Credited Service and Reciprocal Service Benefit Rate ---------------------------------------------------- 1-10 years $34.00 ---------------------------------------------------- 11-20 years $34.50 ---------------------------------------------------- 21-30 years $35.00 ---------------------------------------------------- 31-40 years $35.50 ---------------------------------------------------- For Participants who retire on or after June 1, 2001: Years of Credited Service and Reciprocal Service Benefit Rate ---------------------------------------------------- 1-10 years $35.00 ---------------------------------------------------- 11-20 years $35.50 ---------------------------------------------------- 21-30 years $36.00 ---------------------------------------------------- 31-40 years $36.50 ---------------------------------------------------- In addition, for each month of a Participant's Nonsignatory Past Service $7.50 per month shall be aggregated with the foregoing amount. 13-7 Early Retirement Date --------------------- Early Retirement Date means the later of the Participant's 55th birthday and the date the Participant acquires (a) 10 Years of Vesting Service or (b) 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past Service. 13-8 Early Retirement Reduction Factor --------------------------------- 98 If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 13-9 Minimum Normal or Early Retirement Benefit ------------------------------------------ The minimum Normal or Early Retirement Benefit, expressed as an Individual Life Annuity, for a Participant who has attained age 55 and acquired 20 Years of Credited Service shall be $279.00 per month. Such minimum shall be increased by $4.50 per month for each 1/4th Year of Credited Service in excess of 20 years, up to $300.00 per month. 13-10 Disability Retirement --------------------- A Participant who retires due to Total and Permanent Disability shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means disability as a result of a mine accident if, by reason of such accident, the Participant is determined to be eligible for Social Security Disability Insurance benefits. 13-11 Disability Retirement Benefit ----------------------------- If a Participant has 10 or more Years of Vesting Service, the Participant's Disability Retirement Benefit shall be the greater of (a) the Participant's Normal Retirement Benefit under this Supplement based upon the Participant's Years of Nonsignatory Past Service, Credited Service, and Reciprocal Service at the time of the Participant's Disability Retirement; or (b) the product of $150.00 multiplied by a fraction the numerator of which is the Participant's Years of Credited Service and the denominator of which is the Participant's Years of Credited Service and Reciprocal Service. If a Participant has less than 10 Years of Vesting Service, the Participant's Disability Retirement Benefit shall be $150.00 per month. 13-12 Termination of Service ---------------------- A Participant who ceases to be an Employee before the Participant's Early Retirement Date or Disability Retirement Date for any reason other than death shall be entitled to receive a Termination Benefit if the Participant has 5 Years of Vesting Service or 20 Years of Credited Service, Reciprocal Service and Nonsignatory Past Service. Payment of such benefit shall commence as of the first day of the month coincident with or next following the Participant's 62nd birthday. If the Participant elects, payment of the Actuarial Equivalent of the Participant's Termination Benefit shall commence as of the first day of any month before such Normal Retirement Date and coincident with or following the Participant's 55th birthday. 13-13 Amount of Termination Benefit ----------------------------- 99 A Participant's monthly Termination Benefit shall be determined as a Normal Retirement Benefit under this Supplement, based on the Participant's Years of Credited Service, Reciprocal Service and Nonsignatory Past Service at the time of termination of employment, disregarding Section 13-7. If payment of the Participant's Termination Benefit commences before age 62, the amount of the monthly benefit shall be reduced to an Actuarial Equivalent to reflect such earlier commencement. Notwithstanding the foregoing, if the Participant has 20 Years of Credited Service and Reciprocal Service, his Termination Benefit shall not be reduced to less than the product of $150.00 multiplied by a fraction the numerator of which is the Participant's Years of Credited Service and the denominator of which is the Participant's Years of Credited Service and Reciprocal Service. 13-14 Normal Form of Benefit ---------------------- The normal form of benefit shall be a 50% Joint and Survivor's Annuity with the Participant's spouse as joint annuitant if the Participant is married on the Annuity Starting Date, and an Individual Life Annuity if the Participant is not married on the Annuity Starting Date. 100 TABLE 13 ACTUARIAL EQUIVALENCE FACTORS FOR DEFERRED VESTED -------------------------------------------------- RETIREMENT BENEFITS COMMENCING PRIOR TO AGE 62 ---------------------------------------------- The following factors are to be multiplied by the full accrued benefit payable commencing at age 62 to yield the equivalent benefit payable commencing at the indicated age:
AGE ACTUARIAL AGE ACTUARIAL EQUIVALENCE EQUIVALENCE YEARS MONTHS FACTOR YEARS MONTHS FACTOR ----- ------ ------ ----- ------ ------ - --------------------------------------------------------------- 55 0 .522 56 0 .569 - --------------------------------------------------------------- 1 .526 1 .573 - --------------------------------------------------------------- 2 .529 2 .577 - --------------------------------------------------------------- 3 .533 3 .582 - --------------------------------------------------------------- 4 .537 4 .586 - --------------------------------------------------------------- 5 .541 5 .590 - --------------------------------------------------------------- 6 .545 6 .595 - --------------------------------------------------------------- 7 .549 7 .599 - --------------------------------------------------------------- 8 .553 8 .604 - --------------------------------------------------------------- 9 .557 9 .608 - --------------------------------------------------------------- 10 .561 10 .612 - --------------------------------------------------------------- 11 .565 11 .617 - --------------------------------------------------------------- - --------------------------------------------------------------- 57 0 .621 58 0 .680 - --------------------------------------------------------------- 1 .626 1 .685 - --------------------------------------------------------------- 2 .631 2 .691 - --------------------------------------------------------------- 3 .636 3 .696 - --------------------------------------------------------------- 4 .641 4 .702 - --------------------------------------------------------------- 5 .646 5 .707 - --------------------------------------------------------------- 6 .651 6 .713 - --------------------------------------------------------------- 7 .655 7 .718 - --------------------------------------------------------------- 8 .660 8 .724 - --------------------------------------------------------------- 9 .665 9 .729 - --------------------------------------------------------------- 10 .670 10 .735 - --------------------------------------------------------------- 11 .675 11 .740 - ---------------------------------------------------------------
101
AGE ACTUARIAL AGE ACTUARIAL EQUIVALENCE EQUIVALENCE YEARS MONTHS FACTOR YEARS MONTHS FACTOR ----- ------ ------ ----- ------ ------ - --------------------------------------------------------------- 59 0 .746 60 0 .820 - --------------------------------------------------------------- 1 .752 1 .827 - --------------------------------------------------------------- 2 .758 2 .834 - --------------------------------------------------------------- 3 .765 3 .841 - --------------------------------------------------------------- 4 .771 4 .848 - --------------------------------------------------------------- 5 .777 5 .855 - --------------------------------------------------------------- 6 .783 6 .863 - --------------------------------------------------------------- 7 .789 7 .870 - --------------------------------------------------------------- 8 .796 8 .877 - --------------------------------------------------------------- 9 .802 9 .884 - --------------------------------------------------------------- 10 .808 10 .891 - --------------------------------------------------------------- 11 .814 11 .898 - --------------------------------------------------------------- - --------------------------------------------------------------- 61 0 .905 62 0 1.000 - --------------------------------------------------------------- 1 .913 - --------------------------------------------------------------- 2 .920 - --------------------------------------------------------------- 3 .928 - --------------------------------------------------------------- 4 .936 - --------------------------------------------------------------- 5 .944 - --------------------------------------------------------------- 6 .952 - --------------------------------------------------------------- 7 .960 - --------------------------------------------------------------- 8 .968 - --------------------------------------------------------------- 9 .976 - --------------------------------------------------------------- 10 .984 - --------------------------------------------------------------- 11 .992 - ---------------------------------------------------------------
102 SUPPLEMENT 14 INDUSTRIAL CHEMICAL DIVISION, LAWRENCE, KANSAS ---------------------------------------------- 14-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Industrial Chemical Division who work in Lawrence, Kansas and who are covered by the Collective Bargaining Agreement between the Company and the International Chemical Workers Union, Local No. 605. 14-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 14-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 14-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 14-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after September 1, 1998, but before September 1, 1999:
Years of Credited Service Service Segment Multiplier -------------------------------------------------------- 1-10 years $29.40 -------------------------------------------------------- 11-20 years $30.40 -------------------------------------------------------- 21 + years $31.40 --------------------------------------------------------
103 For Participants who retire on or after September 1, 1999, but before September 1, 2000:
Years of Credited Service Service Segment Multiplier -------------------------------------------------------- 1-10 years $30.40 -------------------------------------------------------- 11-20 years $31.40 -------------------------------------------------------- 21 + years $32.40 --------------------------------------------------------
For Participants who retire on or after September 1, 2000:
Years of Credited Service Service Segment Multiplier -------------------------------------------------------- 1-10 years $31.40 -------------------------------------------------------- 11-20 years $32.40 -------------------------------------------------------- 21 + years $33.40 --------------------------------------------------------
14-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 65th birthday. If a Participant's Early Retirement Benefit commences on or after age 62 but prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 1/12 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 65th birthday. 14-7 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 13 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant, so certified by a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature qualifying such Participant for Social Security benefits. 14-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. 104 The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 13-week period described in Section 14-7 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) one-half of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 105 SUPPLEMENT 15 AGRICULTURAL CHEMICAL DIVISION, MIDDLEPORT, NEW YORK ---------------------------------------------------- 15-1 Eligible Employees The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Agricultural Chemical Division who work in Middleport, New York and are covered by the Collective Bargaining Agreement between the Company and the International Association of Machinists and Aerospace Workers, AFL-CIO, District 76, Local Lodge 1180. 15-2 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually 15-3 Commencement of Participation An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 15-4 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 15-5 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate provided below in effect on the date the Participant's Years of Credited Service terminate, multiplied by the Participant's Years of Credited Service: Termination Date Benefit Rate ---------------- ------------ On or after January 20, 1998 $23.00 but before January 20, 1999 On or after January 20, 1999 $23.00 but before January 20, 2000 On or after January 20, 2000 $28.00 but before February 1, 2001 Notwithstanding the foregoing, a Participant who has attained age 62 and 10 or more Years of Credited Service who elects to commence Normal Retirement Benefits or Early 106 Retirement Benefits in calendar years 1998 or 1999 shall receive the Participant's benefits based on the monthly benefit rate of $28.00, subject to applicable terms of the Plan. 15-6 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 10% for the first year the Participant is less than age 62, plus 4% for each additional year the Participant is less than age 62. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 15-7 Disability Retirement A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 26 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant, so certified by a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 15-8 Disability Retirement Benefit The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 15-7 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) one-half of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be 107 entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 108 SUPPLEMENT 16 INDUSTRIAL CHEMICAL DIVISION, NEWARK, CALIFORNIA ------------------------------------------------ 16-1 Eligible Employees The terms of this Supplement apply to Eligible Employees of the FMC Corporation Phosphorus Chemicals Division who work in Newark, California and are covered by the Collective Bargaining Agreement between the Company and the International Chemical Workers Union and its Local Union No. 62. 16-2 Actuarial Equivalent Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually 16-3 Commencement of Participation An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 16-4 Normal Retirement Date Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 16-5 Normal Retirement Benefit A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the fixed rate of $28.00 by the number of Participant's Years of Credited Service. 16-6 Early Retirement Reduction Factor If a Participant's Early Retirement Benefit commences prior to age 60, the Participant's Early Retirement Benefit shall be reduced by 4% for each year between his Annuity Starting Date and his 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 60 but prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 3% for each year between his Annuity Starting Date and his 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 109 16-7 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 26 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant, so certified by a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature qualifying such Participant for Social Security benefits. 16-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 16-7 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) one-half of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 110 SUPPLEMENT 17 FOOD AND PHARMACEUTICAL PRODUCTS DIVISION, ------------------------------------------ NEWARK, DELAWARE ---------------- 17-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Food and Pharmaceutical Products Division who work in Newark, Delaware and are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America on behalf of Local Union No. 13028. 17-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the following: (a) for purposes of the 50% or 100% Joint and Survivor's Annuity and Section 4.1 of the Plan, the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually; and (b) for purposes of the level income option in Section 17-8(c) of this Supplement, the 1971 Group Annuity Table (weighted 95% male, 5% female) and 4.5% interest compounded annually. 17-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 Year of Credited Service. 17-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month next following ---------------------- the Participant's 65th birthday. 17-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: 111 For Participants who retire on or after November 1, 1998 but before October 1, 1999: Years of Credited Service Service Segment Multiplier 1-10 years $23.50 - ------------------------------------------------------------------------ 11-20 years $24.50 - ------------------------------------------------------------------------ 21 + years $25.50 - ------------------------------------------------------------------------ 17-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 65, the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for each month between the Participant's Annuity Starting Date and the Participant's 65th birthday. 17-7 Optional Forms of Benefit ------------------------- A Participant may elect with spousal consent and in accordance with Section 6.3, to receive benefits in any of the following optional forms of benefit: (a) an Individual Life Annuity; (b) a 50% or 100% joint and survivor's annuity. After the Participant's death, survivor benefits will continue to be paid to the Participant's designated beneficiary for such beneficiary's life. Such 50% or 100% joint and survivor's annuity shall be the Actuarial Equivalent of an Individual Life Annuity; or (c) level income option. A Participant (other than a Participant entitled only to a Termination Benefit) who is eligible for an Early Retirement Benefit may elect prior to age 62 to have his Plan benefits increased until he is eligible for Social Security benefits, then decreased thereafter so that a level income from the Plan and Social Security is received. Such level income option shall be the Actuarial Equivalent of an Individual Life Annuity. 112 SUPPLEMENT 18 INDUSTRIAL CHEMICAL DIVISION, NITRO, WEST VIRGINIA -------------------------------------------------- 18-1 Eligible Employees ------------------ This Supplement applies only to Eligible Employees of the FMC Corporation Process Additives Division who work in Nitro, West Virginia and are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America District No. 8 on behalf of Local Union 12757. 18-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 18-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 18-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 18-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after March 2, 1998 but before March 2, 1999: Years of Credited Service Service Segment Multiplier 1-10 years $30.50 - ------------------------------------------------------------------------ 11-20 years $31.50 - ------------------------------------------------------------------------ 21 + years $32.50 - ------------------------------------------------------------------------ For Participants who retire on or after March 2, 1999 but before March 2, 2000: Years of Credited Service Service Segment Multiplier 1-10 years $31.50 - ------------------------------------------------------------------------ 11-20 years $32.50 - ------------------------------------------------------------------------ 113 21 + years $33.50 - ------------------------------------------------------------------------ For Participants who retire on or after March 2, 2000: Years of Credited Service Service Segment Multiplier 1-10 years $32.50 - ------------------------------------------------------------------------ 11-20 years $33.50 - ------------------------------------------------------------------------ 21 + years $34.50 - ------------------------------------------------------------------------ 18-6 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 62, the Participant's Early Retirement Benefit shall be reduced by 1/4 of 1% for each month between his Annuity Starting Date and his 62nd birthday. If a Participant's Early Retirement Benefit commences on or after age 62, no reduction shall apply. 18-7 Disability Retirement --------------------- A Participant who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 13 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of his life. 18-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 13-week period described in Section 18-7 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) one-half of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or 114 placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 115 SUPPLEMENT 19 INDUSTRIAL CHEMICAL DIVISION, POCATELLO, IDAHO ---------------------------------------------- 19-1 Eligible Employees ------------------ The terms of this Supplement apply only to Eligible Employees of the FMC Corporation Phosphorus Chemicals Division who work in Pocatello, Idaho and are covered by the Collective Bargaining Agreement between the Company and the International Association of Machinists (AFL-CIO) Gate City Mechanics Lodge No. 1933. 19-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 19-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 19-4 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of the Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after May 1, 1998 but before May 1, 1999: Years of Credited Service Service Segment Multiplier 1-10 years $31.00 ------------------------------------------------------- 11-20 years $32.00 ------------------------------------------------------- 21-30 years $33.00 ------------------------------------------------------- 31-45 years $34.00 ------------------------------------------------------- For Participants who retire on or after May 1, 1999 but before May 1, 2000: Years of Credited Service Service Segment Multiplier 1-10 years $32.00 ------------------------------------------------------- 11-20 years $33.00 ------------------------------------------------------- 21-30 years $34.00 ------------------------------------------------------- 31-45 years $35.00 ------------------------------------------------------- 116 For Participants who retire on or after May 1, 2000: Years of Credited Service Service Segment Multiplier 1-10 years $33.00 - ------------------------------------------------------------------------ 11-20 years $34.00 - ------------------------------------------------------------------------ 21-30 years $35.00 - ------------------------------------------------------------------------ 31-45 years $36.00 - ------------------------------------------------------------------------ The maximum number of Years of Credited Service taken into account under this Supplement shall be 45 years. 19-5 Early Retirement Reduction Factor --------------------------------- If a Participant's Early Retirement Benefit commences prior to age 60, the Participant's Early Retirement Benefit shall be reduced by 1/3 of 1% for each month between his Annuity Starting Date and the last day of the month in which the Participant attains age 62. If a Participant's Early Retirement Benefit commences on or after age 60 but prior to age 62, his Early Retirement Benefit shall be reduced by 1/6 of 1% for each month between the Participant's Annuity Starting Date and the last day of the month in which the Participant attains age 62. If a Participant's Early Retirement Benefit commences on or after the first day of the month following the month in which the Participant attains age 62, no reduction shall apply. 19-6 Disability Retirement --------------------- A Participant who has completed 15 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 26 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 19-7 Disability Retirement Benefit ----------------------------- A Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement up to the maximum Years of Credited Service specified in Section 19-3 of this Supplement. 117 The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 19-6 of this Supplement or medical certification of disability, whichever shall be later. Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) 1/2 of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 118 SUPPLEMENT 20 INDUSTRIAL CHEMICAL GROUP, SPRING HILL PLANT, -------------------------------------------- SOUTH CHARLESTON, WEST VIRGINIA ------------------------------- 20-1 Eligible Employees ------------------ The terms of this Supplement apply to Eligible Employees of the FMC Corporation Industrial Chemical Group, Spring Hill Plant who work in South Charleston, West Virginia and are covered by the Collective Bargaining Agreement between the Company and the United Steelworkers of America, Local Union 12625. 20-2 Actuarial Equivalent -------------------- Actuarial Equivalent, other than for purposes of Section 12.8 of the Plan, shall be determined based on the 1971 Group Annuity Table (weighted 95% male, 5% female) and 6% interest compounded annually. 20-3 Commencement of Participation ----------------------------- An Eligible Employee shall become a Participant as of the date the Participant completes 1 year of Credited Service. 20-4 Normal Retirement Date ---------------------- Normal Retirement Date means the first day of the month coinciding with or next following the Participant's 65th birthday. 20-5 Normal Retirement Benefit ------------------------- A Participant's monthly Normal Retirement Benefit shall be determined by multiplying the appropriate rate by the number of Participant's Years of Credited Service in each service segment as outlined below, then determining the sum of such products: For Participants who retire on or after May 18, 1998 but before May 17, 1999: Years of Credited Service Service Segment Multiplier 1-10 years $31.50 - ------------------------------------------------------------------------ 11-20 years $32.50 - ------------------------------------------------------------------------ 21 + years $33.50 - ------------------------------------------------------------------------ 119 For Participants who retire on or after May 17, 1999: Years of Credited Service Service Segment Multiplier 1-10 years $32.50 - ------------------------------------------------------------------------ 11-20 years $33.50 - ------------------------------------------------------------------------ 21 + years $34.50 - ------------------------------------------------------------------------ 20-6 Early Retirement Reduction Factor --------------------------------- Participants With 30 Years of Credited Service: If the Participant's Early Retirement Benefit commences before the Participant attains age 60, the Participant's Early Retirement Benefit shall be reduced by 3% for each full year that the Participant is less than age 62. If the Participant's Early Retirement Benefit commences on or after the Participant attaining age 60 but before age 62, the Participant's Early Retirement Benefit shall be reduced by 2% for each full year that the Participant is less than age 62. If the Participant's Early Retirement Benefit commences on or after the Participant attains age 62, no reduction shall apply. Participants With Less Than 30 Years of Credited Service: If the Participant's Early Retirement Benefit commences before the Participant attains age 62, the Participant's Early Retirement Benefit shall be reduced by 3% for each full year that the Participant is less than age 62. If the Participant's Early Retirement Benefit commences on or after the Participant attains age 62, no reduction shall apply. 20-7 Disability Retirement --------------------- A Participant who has attained age 40 and who has completed 10 Years of Credited Service as of the date Total and Permanent Disability has endured for a period of 13 weeks shall be eligible for a Disability Retirement Benefit. Total and Permanent Disability means a total and permanent mental or physical disability of a Participant and confirmed by medical examination of a physician selected by the Company or the Participant, and confirmed by medical examination of a physician selected by the other party, whether or not such disability arose out of or during the course of employment, of a nature preventing such Participant from engaging in any occupation for compensation for the balance of the Participant's life. 20-8 Disability Retirement Benefit ----------------------------- The Participant's Disability Retirement Benefit shall be determined pursuant to Section 3.1.2, based on the Participant's Years of Credited Service to the date of the Participant's Disability Retirement. The Disability Retirement payment shall commence with the first day of the month immediately following the expiration of the 26-week period described in Section 20-7 of this Supplement or medical certification of disability, whichever shall be later. 120 Such payment shall also take into account and have deducted therefrom any benefits paid or payable, now or in the future, to the Participant by way of (a) Worker's Compensation payments; (b) public pension payments (except Social Security Disability and Military pension payments); and (c) one-half of any accident or health insurance benefit payment as may be provided by any program as now or in the future made available by the Company or placed in effect by any governmental authority for the benefit of Participants; however, any lump sum award under (a) and (c) above shall not be deducted. Any Participant who shall receive a Disability Retirement Benefit shall be subject to reexamination by a physician of the Company at any time the Company may so request and if, in the opinion of the Company, the Total and Permanent Disability of the Participant shall no longer continue to exist, such Participant's right to a continuance of Disability Retirement Benefit payment shall cease. Failure or refusal of a Participant to submit to medical examination as requested by the Company shall be cause of cancellation of the Disability Retirement Benefit. Such disabled Participant shall, however, be entitled to Early or Normal Retirement benefit payments upon qualification by the Participant under the requirements set forth in Section 3.1 and Section 3.2. In no event, however, shall any Participant be entitled to receive both a Disability Retirement Benefit and an Early or Normal Retirement Benefit, it being intended that there should be no duplication of retirement benefits. 20-9 Normal Form of Benefit ---------------------- If a Participant receives his benefits in the form of a 100% Joint and Survivor's Annuity and his spouse predeceases him, his benefit shall "pop-up" to the Individual Life Annuity form as of the first day of the month following his spouse's death. 20-10 Surviving Spouse's Benefit -------------------------- Payment of the survivor's benefit shall commence on the first day of the month next following the later of the first date the Participant would have attained age 55 or his death, unless the Participant's spouse elects to commence payment of benefits as of the first day of any subsequent month, but not later than the Participant's Normal Retirement Date. 121 EX-10.4A 5 EMPLOYEES' RETIREMENT PROGRAM PART I FIRST AMENDMENT OF FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART I SALARIED AND NONUNION HOURLY EMPLOYEES' RETIREMENT PLAN -------------------------------------------------------------- (As Amended and Restated Effective January 1, 1999) WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation Employees' Retirement Program Part I Salaried and Nonunion Hourly Employees' Retirement Plan (the "Plan"); and WHEREAS, amendment of the Plan is now considered desirable; NOW, THEREFORE, by virtue and in exercise of the powers reserved to the Company under Section 11.1 Plan Amendment or Termination of the Plan, and pursuant to authority delegated to the undersigned officer of the Company by resolution of its Board of Directors, the Plan is hereby amended, effective January 1, 1999, in the following respects: 1. Subsection (iv) of Section 3.4.2 Suspension of Benefits After Normal Retirement Date is hereby amended by deleting the language "(such reduction will occur only if such benefits are not repaid in full to the Trust within 2 years after his date of reemployment.)" 2. Section 4.1 Termination of Service is hereby amended by adding the following sentence to the end thereof: "The Committee or its delegatee may, in its discretion, fully vest a Participant in the Participant's accrued benefit in the event the Participant's employment with the Company is affected by a transaction undertaken by the Company." 3. Section 6.2 Available Forms of Benefit is hereby amended by adding the following Section to the end thereof: "6.2.5 Lump Sum Distribution Option: Participants in the Plan who were: (a) salaried Participants employed at Green Bay, Wisconsin; (b) salaried Participants who were employed by the segment of the Company acquired from Crosby Valve Inc.; and (c) salaried Participants who were employed by the BioProducts Division of the Company at the time of a divestiture of assets by the Company affecting the employment of such Participants by the Company were given a one-time option to elect (i) an immediate lump sum payment which is the actuarial equivalent of an Individual Life Annuity (determined in accordance with the 1983 Group Annuity Mortality Table weighted 50% male and 50% female and the applicable interest rate prescribed under Section 417(e)(3) of the Code for the November preceding the Plan Year that contains the Annuity Starting Date); (ii) an immediate annuity distribution in any form as described in Section 6.2.1 through 6.2.4 above; or (iii) to defer an annuity distribution in any form as described in Section 6.2.1 through 6.2.4 above." IN WITNESS WHEREOF, the Company has caused this amendment to be executed by a duly authorized representative this 9th day of November, 1999. FMC CORPORATION By: /s/ J. Paul McGrath ------------------------------------ Member, Employee Welfare Benefits Plan Committee EX-10.4B 6 EMPLOYEES' RETIREMENT PROGRAM PART II FIRST AMENDMENT OF FMC CORPORATION EMPLOYEES' RETIREMENT PROGRAM PART II UNION HOURLY EMPLOYEES' RETIREMENT PLAN ----------------------------------------------- (As Amended and Restated Effective January 1, 1999) WHEREAS, FMC Corporation (the "Company") maintains the FMC Corporation Employees' Retirement Program Part II Union Hourly Employees' Retirement Plan (the "Plan"); and WHEREAS, amendment of the Plan is now considered desirable; NOW, THEREFORE, by virtue and in exercise of the powers reserved to the Company under Section 11.1 Plan Amendment or Termination of the Plan, and pursuant to authority delegated to the undersigned officer of the Company by resolution of its Board of Directors, the Plan is hereby amended for clarification purposes, effective January 1, 1999, in the following respects: 1. Subsection (iv) of Section 3.4.2 Suspension of Benefits After Normal Retirement Date is hereby amended by deleting the language "(such reduction will occur only if such benefits are not repaid in full to the Trust within 2 years after his date of reemployment.)" 2. Section 4.1 Termination of Service is hereby amended by adding the following sentence to the end thereof: "The Committee or its delegatee may, in its discretion, fully vest a Participant in the Participant's accrued benefit in the event the Participant's employment with the Company is affected by a transaction undertaken by the Company." 3. Supplement 3 PACKAGING MACHINERY DIVISION, GREEN BAY, WISCONSIN is hereby amended by adding the following Section to the end thereof: "3-9 Participants who were Salaried Employees ---------------------------------------- Participants who prior to the Freeze Date became salaried employees and as a result became covered under the FMC Corporation Salaried Employees' Retirement Plan ("Salaried Plan"), or its predecessor plan, were given certain distribution rights as described in Section 6.2.5 of the Salaried Plan that applied to benefits payable under the Plan and the Salaried Plan." IN WITNESS WHEREOF, the Company has caused this amendment to be executed by a duly authorized representative this 9th day of November, 1999. FMC CORPORATION By: /s/ J. Paul McGrath --------------------------------- Member, Employee Welfare Benefits Plan Committee EX-10.5 7 FMC CORPORATION SAVINGS AND INVESTMENT PLAN FMC Corporation Savings and Investment Plan Winston & Strawn Chicago TABLE OF CONTENTS -----------------
PAGE TABLE OF CONTENTS................................ i ARTICLE I........................................ 1 Definitions...................................... 1 Account......................................... 1 Account Balance................................. 1 Administrator................................... 1 Affiliate....................................... 1 After-Tax Contribution.......................... 2 After-Tax Contribution Account.................. 2 After-Tax Contribution Election................. 2 Annuity Contract................................ 2 Annuity Starting Date........................... 2 Basic Contributions............................. 2 Beneficiary..................................... 2 Board........................................... 2 Break in Service................................ 2 Code............................................ 2 Committee....................................... 2 Company......................................... 3 Company Contributions........................... 3 Company Contribution Account.................... 3 Compensation.................................... 3 Contingent Account.............................. 4 Direct Rollover................................. 4 Disability...................................... 4 Distributee..................................... 4 Effective Date.................................. 4 Eligible Employee............................... 4 Eligible Retirement Plan........................ 5 Eligible Rollover Distribution.................. 5 Employee........................................ 5 Employment Commencement Date.................... 6 ERISA........................................... 6 Forfeiture...................................... 6 Funding Agent................................... 6 Harsco Stock Account............................ 6 Highly Compensated Employee..................... 6 Hour of Service................................. 7 Investment Fund................................. 7
-i- Leased Employee............................................................ 7 Nonhighly Compensated Employee............................................. 7 Participant................................................................ 7 Participating Employer..................................................... 7 Period of Separation....................................................... 7 Plan....................................................................... 8 Plan Year.................................................................. 8 Pre-Tax Contribution....................................................... 8 Pre-Tax Contribution Account............................................... 8 Pre-Tax Contribution Election.............................................. 8 Required Beginning Date.................................................... 8 Rollover Contribution...................................................... 8 Rollover Contribution Account.............................................. 8 Stock...................................................................... 8 Stock Fund................................................................. 8 Supplemental Contributions................................................. 9 Surviving Spouse........................................................... 9 Trust...................................................................... 9 Trust Fund................................................................. 9 Trustee.................................................................... 9 Valuation Date............................................................. 9 Year of Service............................................................ 9 ARTICLE II................................................................. 10 Participation............................................................... 10 2.1 Admission as A Participant............................................. 10 2.2 Provision of Information............................................... 10 2.3 Termination of Participation........................................... 11 2.4 Special Rules Relating to Veterans' Reemployment Rights................ 11 ARTICLE III................................................................. 13 Contributions and Account Allocations....................................... 13 3.1 Pre-Tax Contributions.................................................. 13 3.2 After-Tax Contributions................................................ 13 3.3 Rules Applicable to Both Pre-Tax and After-Tax Contributions........... 13 3.4 Company Contributions.................................................. 14 3.5 Rollover Contributions................................................. 15 3.6 Establishment of Accounts.............................................. 15 3.7 Limitation on Annual Additions to Accounts............................. 15 3.8 Reduction of Annual Additions.......................................... 16 3.9 Combined Plan Fraction................................................. 16
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3.10 Limitations on Pre-Tax Contributions, After-Tax Contributions and Company Contributions - Definitions.......................................... 16 3.11 Maximum Amount of Pre-Tax Contributions...................................... 19 3.12 Correction of Excess Pre-Tax Contributions................................... 19 3.13 Actual Deferral Percentage Test.............................................. 20 3.14 Actual Contribution Percentage Test.......................................... 21 3.15 Multiple Use of Alternative Limitation....................................... 23 ARTICLE IV.............................................................................. 24 Vesting................................................................................. 24 4.1 Vesting in After-Tax, Pre-Tax and Rollover Contributions Accounts............ 24 4.2 Vesting in Company Contribution and Contingent Accounts...................... 24 4.3 Forfeitures.................................................................. 25 4.4 Special Vesting Rules for Participants Transferred to Snap-On Incorporated... 25 4.5 Special Vesting Rules for Participants Transferred to Great Lakes Chemical... 26 4.6 Special Vesting Rules for Participants Transferred to Cambrex................ 27 ARTICLE V............................................................................... 28 Timing of Distributions to Participants................................................. 28 5.1 Separation from Service...................................................... 28 5.2 Start of Benefit Payments.................................................... 28 5.3 Additional Distribution Events............................................... 29 5.4 Transfers from the Plan for Changes in a Participant's Employment Status..... 30 ARTICLE VI.............................................................................. 31 Forms of Benefit, In-Service Withdrawals and Loans...................................... 31 6.1 Cashout of Small Amounts..................................................... 31 6.2 Medium of Distribution....................................................... 31 6.3 Forms of Benefit............................................................. 31 6.4 Change in Form, Timing or Medium of Benefit Payment.......................... 32 6.5 Direct Rollover of Eligible Rollover Distributions........................... 32 6.6 In-service and Hardship Withdrawals.......................................... 32 6.7 Loans........................................................................ 35 ARTICLE VII............................................................................. 38 Death Benefits.......................................................................... 38 7.1 Payment of Account Balance................................................... 38 7.2 Failure to Name a Beneficiary................................................ 38 7.3 Waiver of Spousal Beneficiary Rights......................................... 38
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ARTICLE VIII...............................................................................40 Special Forms of Benefit and Special Death Benefit Provisions Applicable to Certain Transferred Participants...........................................................40 8.1 Applicability..................................................................40 8.2 Forms of Benefit for Certain Transferred Participants..........................40 8.3 Change in Form, Timing or Medium of Benefit Payment for Certain Transferred Participants.......................................................42 8.4 Waiver of Normal Form of Benefit for Certain Transferred Participants..........42 8.5 Payment of Account Balances of Certain Transferred Participants Who Die Before Payment Begins......................................................43 8.6 Failure to Name a Beneficiary for Certain Transferred Participants.............44 8.7 Waiver of Preretirement Survivor Annuity for Certain Transferred Participants..45 ARTICLE IX.................................................................................47 Fiduciaries................................................................................47 9.1 Named Fiduciaries..............................................................47 9.2 Employment of Advisers.........................................................47 9.3 Multiple Fiduciary Capacities..................................................47 9.4 Payment of Expenses............................................................47 9.5 Indemnification................................................................48 ARTICLE X..................................................................................49 Plan Administration........................................................................49 10.1 Powers, Duties and Responsibilities of the Administrator and the Committee... 49 10.2 Investment Powers, Duties and Responsibilities of the Administrator and the Committee..............................................................49 10.3 Investment of Accounts.........................................................50 10.4 Valuation of Accounts..........................................................50 10.5 The Insurance Company..........................................................51 10.6 Compensation...................................................................51 10.7 Delegation of Responsibility...................................................51 10.8 Committee Members..............................................................51 ARTICLE XI.................................................................................53 Appointment of Trustee.....................................................................53 ARTICLE XII................................................................................54 Plan Amendment or Termination..............................................................54 12.1 Plan Amendment or Termination..................................................54 12.2 Limitations on Plan Amendment..................................................54 12.3 Right to Terminate Plan or Discontinue Contributions...........................54 12.4 Bankruptcy.....................................................................54
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ARTICLE XIII..................................................................55 Miscellaneous Provisions......................................................55 13.1 Subsequent Changes....................................................55 13.2 Merger or Transfer of Assets..........................................55 13.3 Benefits Not Assignable...............................................55 13.4 Exclusive Benefit of Participants.....................................56 13.5 Benefits Payable to Minors, Incompetents and Others...................56 13.6 Plan Not A Contract of Employment.....................................57 13.7 Source of Benefits....................................................57 13.8 Proof of Age and Marriage.............................................57 13.9 Controlling Law.......................................................57 13.10 Income Tax Withholding................................................57 13.11 Claims Procedure......................................................57 13.12 Participation in the Plan by An Affiliate.............................59 13.13 Action by Participating Employers.....................................59 13.14 Dividends.............................................................59 ARTICLE XIV...................................................................60 Top Heavy Provisions..........................................................60 14.1 Top Heavy Definitions.................................................60 14.2 Determination of Top Heavy Status.....................................63 14.3 Minimum Allocation for Top Heavy Plan.................................63 14.4 Adjustment of Combined Plan Fraction..................................64 APPENDIX A....................................................................66 Bargaining Units Covered......................................................66
-v- BACKGROUND ---------- The Employees' Thrift and Stock Purchase Plan was established by the Company effective April 1, 1961, as the FMC Employees' 1960 Thrift and Stock Purchase Plan. The Plan was subsequently amended from time to time. The Plan was last amended and restated effective April 1, 1991. This document is an amendment and restatement of the Plan effective, except as and to the extent otherwise provided in this document, as of January 1, 1999, and changes the name of the Plan to the FMC Corporation Savings and Investment Plan effective January 1, 2000. The Company or its delegate may amend the Plan to meet applicable rules and regulations of the Internal Revenue Service and the United States Department of Labor, or for other reasons the Company or its delegate deems necessary or desirable. The Plan is intended to be qualified under Code Section 401(a), and its associated trust is intended to be tax exempt under Code Section 501(a). The Plan is intended also to meet the requirements of ERISA, and will be interpreted, wherever possible, to comply with the terms of the Code and ERISA. ARTICLE I Definitions ----------- For purposes of this Plan and any amendments to it, the following terms have the meanings ascribed to them below. Account means the Pre-Tax Contribution Account, After-Tax Contribution Account, Company Contribution Account, Contingent Account, Employee Contribution Account and Rollover Contribution Account, if any, established on behalf of a Participant. Account Balance means the value of the Account maintained on behalf of a Participant, determined as of any Valuation Date. Administrator means the Company. The Plan is administered by the Company through the Committee. The Administrator and the Committee have the responsibilities specified in Article X. Affiliate means any corporation, partnership, or other entity that --------- is: (a) a member of a controlled group of corporations of which the Company is a member (as described in Code Section 414(b)); (b) a member of any trade or business under common control with the Company (as described in Code Section 414(c)); (c) a member of an affiliated service group that includes the Company (as described in Code Section 414(m)); (d) an entity required to be aggregated with the Company pursuant to regulations promulgated under Code Section 414(o); or (e) a leasing organization that provides Leased Employees to the Company or an Affiliate (as determined under paragraphs (a) through (d) above), unless: (i) the Leased Employees make up no more than 20% of the nonhighly compensated workforce of the Company and Affiliates (as determined under paragraphs (a) through (d) above); and (ii) the Leased Employees are covered by a plan described in Code Section 414(n)(5). "Leasing organization" has the meaning ascribed to it in the definition of "Leased Employee" below. For purposes of Section 3.7, the 80% thresholds of Code Sections 414(b) and (c) are deemed to be "more than 50%," rather than "at least 80%." -1- After-Tax Contribution means the amount a Participant contributes in accordance with Section 3.2. A Participant's After-Tax Contribution may be made up of Basic Contributions, Supplemental Contributions or both. After-Tax Contribution Account means the Account established for a Participant pursuant to Section 3.6.2. After-Tax Contribution Election means a Participant's election to make After-Tax Contributions in accordance with Section 3.3.1. Annuity Contract means an individual or group annuity contract issued by an insurance company and providing periodic benefits, whether fixed, variable or both, to a Participant or Beneficiary. An Annuity Contract must provide that a Participant or Beneficiary cannot transfer, sell, assign, discount, or pledge (as collateral for a loan or for any other purpose) all or any part of the contract benefits or value to any person other than the issuer. The terms of an Annuity Contract must comply with the requirements of this Plan. Annuity Starting Date means the first day of the first period for which an amount is paid in an annuity or other form of benefit. In the case of a lump sum distribution, the Annuity Starting Date is the date payment is actually made. Basic Contributions means a Participant's Pre-Tax Contributions and After- Tax Contributions not in excess of five percent of his or her annualized Compensation. Beneficiary means any person designated or deemed designated by a Participant to receive any payment of Plan benefits due after the Participant's death. A married Participant may name a primary Beneficiary other than his or her Surviving Spouse only if the Surviving Spouse consents to the election in the time frame and manner required by Section 7.3. Board means the board of directors of the Company. Break in Service means a Period of Separation that lasts for at least 12 consecutive months. Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to a specific provision of the Code includes that provision, any successor to it and any valid regulation promulgated under the provision or successor provision. Committee means the FMC Corporation Employee Welfare Benefits Plan Committee as described in Section 10.8, its authorized delegatee and any successor to the FMC Corporation Employee Welfare Benefits Plan Committee. -2- Company means FMC Corporation and any successor to it. Company Contributions means the contributions made by the Employer under Section 3.4 after March 31, 1982, other than contributions elected by Participants. Company Contribution Account means an account maintained as to each Participant, to which the Participant's share of Company Contributions made for periods after March 31, 1982 and all earnings and losses attributable to it, are allocated. Compensation means the total compensation paid by the Company or a Participating Employer to an Employee for each Plan Year that is currently includible in gross income for federal income tax purposes: (a) including: overtime, administrative and discretionary bonuses (including completion bonuses, gainsharing bonuses and performance related bonuses); sales incentive bonuses; field premiums; back pay and sick pay; plus the Employee's Pre-Tax Contributions and amounts contributed to a plan described in Code Section 125 or 132; and the 9/12 of the incentive compensation (including management incentive bonuses paid in both cash and restricted stock and local incentive bonuses) paid during the Plan Year for services rendered in the preceding Plan Year, and the 3/12 of the incentive compensation (of the same types) paid during the preceding Plan Year for services rendered in the Plan Year preceding the preceding Plan Year (unless, for periods beginning on or after February 1, 2000, the Participant elects all such incentive compensation paid for prior Plan Years to be included in Compensation for the prior Plan Years, or unless the Participant elects that no such incentive compensation will be included in his or her Compensation); (b) but excluding: hiring bonuses; referral bonuses; stay bonuses; retention bonuses; awards (including safety awards, "Gutbuster" awards and other similar awards); amounts received as deferred compensation; disability payments from insurance or the Long-Term Disability Plan for Employees of FMC Corporation; workers' compensation benefits; state disability benefits; flexible credits (i.e., wellness awards and payments for opting out of benefit coverage); expatriate premiums; grievance or settlement pay; pay in lieu of notice; severance pay; accrued (but not earned) vacation; other special payments such as reimbursements, relocation or moving expense allowances; stock options or other stock-based compensation (except as provided above); effective January 1, 2000, any gross-up paid by a Participating Employer on any amount paid that is Compensation (as defined herein); other distributions that receive special tax benefits; any amounts paid by a Participating Employer to cover an Employee's FICA tax obligation as to amounts deferred or accrued under -3- any nonqualified retirement plan of a Participating Employer; and any gross-up paid by a Participating Employer on any amount paid that is not Compensation (as defined herein). Notwithstanding anything herein to the contrary, no amounts paid to a Participant more than 30 days after his or her termination of employment with the Company or a Participating Employer will be considered Compensation. The annual amount of Compensation taken into account for a Participant must not exceed $160,000 (as adjusted by Internal Revenue Service for cost-of-living increases in accordance with Code Section 401(a)(17)(B)). Compensation taken into account for the 9-month Plan Year from April 1, 1997 through December 31, 1997 was limited to $120,000 for any Participant. Effective April 1, 1997, the Compensation limit will be applied to each Participant without taking into account the Compensation of any of his or her family members. A Participant's Compensation will be conclusively determined according to the Company's records. Contingent Account means an account maintained as to each Participant, to which the Participant's share of Company Contributions made for periods before April 1, 1982, and all earnings and losses attributable to it, are allocated. Direct Rollover means a payment by the Plan to the Eligible Retirement Plan specified by a Distributee. Disability means a medically determinable physical or mental impairment that makes the Participant unable to engage in any substantial gainful activity, can be expected to result in death or be of long and indefinite duration, or has lasted or can be expected to last for a continuous period of at least 12 months. A Participant will be considered to have a Disability at any time only if he or she is then eligible to receive Social Security disability benefits. Distributee means an Employee or former Employee. In addition, the Employee's or former Employee's Surviving Spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined under Code Section 414(p), are Distributees as to their Plan interests. Effective Date means January 1, 1999. Eligible Employee means an Employee of a Participating Employer, other than: (a) a Leased Employee; -4- (b) a member of a bargaining unit covered by a collective bargaining agreement that does not specifically provide for participation in the Plan by members of the bargaining unit, or that is not listed in Appendix A; (c) an Employee who is a nonresident alien of the United States; or (d) an individual working for a Participating Employer under a contract that designates him or her as an independent contractor. An employee who works for a non-U.S. Affiliate, and who would be an Eligible Employee if the non-U.S. Affiliate were a Participating Employer, will be an Eligible Employee during the period in which the employee has U.S. taxable income, and the Company will be deemed to be the Employee's employer for Plan purposes. An individual's status as an Eligible Employee or not will be conclusively determined by the Administrator, subject to the claims review procedure described in Section 13.11. The bargaining units whose members are covered by the Plan, and the effective dates of that coverage, are listed in Appendix A. Eligible Retirement Plan means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a plan described in Code Section 401(a) that accepts the Distributee's Eligible Rollover Distribution. In the case of an Eligible Rollover Distribution paid to a Surviving Spouse, an Eligible Retirement Plan is either an individual retirement account or individual retirement annuity, and does not include an annuity plan or a Code Section 401(a) plan. Eligible Rollover Distribution means any distribution of all or any portion of the balance to the credit of the Distributee, other than (a) a distribution that is one of a series of substantially equal periodic payments made (no less frequently than annually) for the life (or life expectancy) of the Distributee and the Distributee's Beneficiary, or for a specified period of ten years or more; (b) the portion of a distribution that is required to be made under Code Section 401(a)(9); (c) the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation for employer securities); or (iv) effective January 1, 1999, a "hardship distribution" within the meaning of Code Section 402(c)(4). Employee means (a) a common law employee of the Company or an Affiliate who is paid as an employee from the payroll of the Company or an Affiliate and treated as an employee, or (b) a Leased Employee. -5- Employment Commencement Date means the date on which the Employee first performs an Hour of Service. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a specific provision of ERISA includes the provision, any successor provision and any valid regulation promulgated under the provision or successor provision. Forfeiture means the portion (if any) of a Participant's Company Contribution Account that is forfeited under Section 4.3. Funding Agent means any legal reserve life insurance company or Trustee selected by the Administrator or the Committee to receive Plan contributions and pay Plan benefits. Harsco Stock Account means an account maintained as to each eligible Participant to hold Harsco stock and all earnings and losses attributable thereto; effective October 6, 1997 no further investments in this account were permitted. Highly Compensated Employee means, effective April 1, 1997, an Employee who: (a) at any time during the Plan Year or the preceding Plan Year owns (or is considered under Code Section 318 to own) more than five percent of the Company or an Affiliate; or (b) had more than $80,000, as adjusted, in Compensation from the Company and the Affiliates during the preceding Plan Year. A former Employee of the Company or an Affiliate is a Highly Compensated Employee for a given Plan Year if he or she separated from service (or was deemed to have separated) before the Plan Year, performs no service for a Participating Employer during the Plan Year, and was a Highly Compensated Employee for the Plan Year during which he or she separated from service (or was deemed to have separated) or for any Plan Year ending on or after his or her 55th birthday. The Secretary of the Treasury or its delegate will adjust the $80,000 limit from time to time, to reflect increases in the cost of living. Employees who are nonresident aliens and receive no earned income (within the meaning of Code Section 911(d)(2)) from the Company and its Affiliates that constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)) are not treated as Employees for purposes of this definition. In determining who was a Highly Compensated Employee for the short Plan Year from April 1, 1997 through December 31, 1997, the Plan Year Compensation limit was adjusted -6- to $60,000. In determining who was a Highly Compensated Employee for the 1998 Plan Year, the "preceding Plan Year" was deemed to be the 1997 calendar year. Hour of Service means each hour for which an Employee is directly or indirectly paid or entitled to payment by the Company or an Affiliate for the performance of duties. Investment Fund means an investment fund, if any, established or selected by the Administrator pursuant to Section 10.3. Leased Employee means, effective January 1, 1997, an individual who performs services for the Company or an Affiliate on a substantially full-time basis, for a period of at least one year, under the primary direction or control of the Company or Affiliate, and under an agreement between the Company or Affiliate and a leasing organization. The leasing organization can be a third party or the Leased Employee himself or herself. Nonhighly Compensated Employee means an Employee who is not a Highly Compensated Employee. Participant means an Eligible Employee who has begun but not ended his or her participation in the Plan pursuant to the provisions of Article II. Participating Employer means the Company and each other Affiliate that adopts the Plan with the consent of the Board, as provided in Section 13.12. Period of Separation means a continuous period of time when the Employee is not employed by the Company or an Affiliate. A Period of Separation begins on the date an Employee retires, dies, separates from service due to Disability, quits or is discharged, or, if earlier, on the 12-month anniversary of the date the Employee was otherwise first absent from service. Notwithstanding the foregoing, a Period of Separation does not begin if the Employee is: (a) on a leave of absence authorized by the Company or an Affiliate in accordance with standard personnel policies applied in a nondiscriminatory manner to all similarly situated Employees, and returns to active employment with the Company or Affiliates as soon as the leave expires; (b) on a military leave while the Employee's reemployment rights are protected by law, and returns to active employment with the Company or Affiliate within 90 days after his or her discharge or release (or such longer period as may be prescribed by law); or (c) on a layoff, and returns to work with the Company or an Affiliate within the period of time and in the manner necessary to maintain seniority -7- according to the rules of the Company or Affiliate in effect at the time of the return. Plan means, effective January 1, 2000, the FMC Corporation Savings and Investment Plan. For periods beginning before January 1, 2000, the Plan was known as the FMC Employees' Thrift and Stock Purchase Plan. The Plan is a single employer plan. Plan Year means the 12-month period beginning on each January 1 and ending on the next December 31. For periods beginning before January 1, 1998, Plan Year meant each 12-month period beginning on April 1 and ending on the next March 31. The period from April 1, 1997 through December 31, 1997 was a short Plan Year. Pre-Tax Contribution means the amount that otherwise would have been paid as Compensation that is, before taxes, converted to a Participating Employer contribution in accordance with Section 3.1. A Participant's Pre-Tax Contribution may be made up of Basic Contributions, Supplemental Contributions, or both. Pre-Tax Contribution Account means the Account established for a Participant pursuant to Section 3.6.1. Pre-Tax Contribution Election means the Participant's election to make Pre-Tax Contributions in accordance with Section 3.3.1. Required Beginning Date is defined in Section 5.2.3. Rollover Contribution means an amount received from a deferred compensation plan that is qualified under Code Section 401 or 403(a), and which is rolled over to the Plan pursuant to Code Section 402(c). A Rollover Contribution can be either a Direct Rollover or an amount distributed to a Participant and then rolled over. In addition, if an Employee had deposited an Eligible Rollover Distribution into an individual retirement account as defined in Code Section 408, he or she may transfer the amount of the distribution plus earnings from the individual retirement account to the Plan, if the rollover amount is deposited with the Trustee within 60 days after receipt from the individual retirement account, and the rollover meets the other requirements of Code Section 408(d)(3)(A)(ii). Rollover Contribution Account means the Account established for a Participant pursuant to Section 3.6.3. Stock means the common stock of the Company. Stock Fund means an Investment Fund established and maintained by the Trustee as part of the Trust Fund to invest in Stock. All Plan contributions placed in or directed to the Stock Fund and all dividends, other earnings and appreciation on those contributions must -8- be invested only in Stock, except as and to the extent it is deemed necessary or advisable to maintain cash and cash equivalents to meet the Stock Fund's liquidity needs. Supplemental Contributions means a Participant's Pre-Tax Contributions and After-Tax Contributions in excess of five percent of his or her annualized Compensation. Surviving Spouse means the person legally married to a Participant on the date of his or her death or on his or her Annuity Starting Date, whichever is earlier. Trust means the trust established under the Plan, to which Plan contributions are made and in which Plan assets are held. Trust Fund means the assets of the Trust held by or in the name of the Trustee. Trustee means the institution appointed as Trustee pursuant to Article XI of the Plan, and any successor Trustee. Valuation Date means each business day of the Plan Year. For periods beginning before July 7, 1997, the Valuation Date was the last business day of each calendar month. Year of Service means the total number of calendar months during which the Employee is employed by the Company or an Affiliate, divided by 12, including any Period of Separation that does not constitute a Break in Service. A partial month of employment counts as a whole month. An Employee's Years of Service do not include any Breaks in Service. -9- ARTICLE II Participation ------------- 2.1 Admission as A Participant -------------------------- 2.1.1 An Employee becomes a Participant as of the date he or she satisfies all of the following requirements: (a) the Employee is an Eligible Employee; (b) the Employee either (i) is a permanent, full-time Employee, (ii) is a permanent, part-time employee eligible for benefits, or (iii) has completed at least 1,000 Hours of Service in a 12-month period beginning on his or her Employment Commencement Date or an anniversary of his or her Employment Commencement Date; (c) the Employee has filed with the Administrator a form on which he or she makes a Pre-Tax Contribution Election or After-Tax Contribution Election; and (d) the Employee's election has become effective according to uniform and nondiscriminatory rules established by the Administrator. In place of the form, the Administrator may substitute a telephonic or electronic means of enrollment. 2.1.2 A Participant or Eligible Employee who is rehired as an Eligible Employee after a Period of Separation becomes an active Participant by filing with the Administrator a form on which he or she makes his or her Pre-Tax Contribution Election or After-Tax Contribution Election. When the form becomes effective, the Participant or Eligible Employee will again become an active Participant. In place of the form, the Administrator may substitute a telephonic or electronic means of reenrollment. 2.2 Provision of Information ------------------------ Each Participant must execute the forms or follow the telephonic or electronic procedures required by the Administrator and make available to the Administrator any information it reasonably requests. As a condition of participating in the Plan, an Employee agrees, on his or her own behalf and on behalf of all persons who may have or claim any right by reason of the Employee's participation in the Plan, to be bound by all provisions of the Plan and by any agreement entered into pursuant to it. -10- 2.3 Termination of Participation ---------------------------- A Participant ceases to be a Participant when he or she dies or, if earlier, when his or her entire Account Balance has been paid to him or her. 2.4 Special Rules Relating to Veterans' Reemployment Rights ------------------------------------------------------- Effective December 12, 1994, the following special provisions will apply to an Eligible Employee or Participant who is reemployed in accordance with the reemployment provisions of the Uniformed Services Employment and Reemployment Rights Act ("USERRA") following a period of qualifying military service (as determined under USERRA). 2.4.1 Each period of qualifying military service served by an Eligible Employee or Participant will, upon his or her reemployment as an Eligible Employee, be deemed to constitute service with the Participating Employer for all Plan purposes. 2.4.2 The Participant will be permitted to make up Pre-Tax and/or After-Tax Contributions missed during the period of qualifying military service, so long as he or she does so during the period of time beginning on the date of the Participant's reemployment with the Participating Employer following his or her period of qualifying military service and extending over the lesser of (a) three times the length of the Participant's period of qualifying military service, and (b) five years. 2.4.3 The Participating Employer will not credit earnings to a Participant's Account with respect to any Pre-Tax or After-Tax Contribution before the contribution is actually made. 2.4.4 A reemployed Participant will be entitled to accrued benefits attributable to Pre-Tax or After-Tax Contributions only if they are actually made. 2.4.5 For all Plan purposes, including the Participating Employer's liability for making contributions on behalf of a reemployed Participant as described above, the Participant will be treated as having received Compensation from the Participating Employer based on the rate of Compensation the Participant would have received during the period of qualifying military service, or if that rate is not reasonably certain, on the basis of the Participant's average rate of Compensation during the 12-month period immediately preceding the period of qualifying military service. 2.4.6 If a Participant makes a Pre-Tax or After-Tax Contribution in accordance with the foregoing provisions of this Section 2.4: (a) those contributions will not be subject to any otherwise applicable limitation under Code Section 402(g), 404(a) or 415, and will not be taken into account in applying those limitations to other contributions under the Plan or any other plan, for the year in which the contributions are made; -11- the contributions will be subject to the above-referenced limitations only for the year to which the contributions relate and only in accordance with regulations prescribed by the Internal Revenue Service; and (b) the Plan will not be treated as failing to meet the requirements of Code Section 401(a)(4), 401(a)(26), 401(k)(3), 410(b) or 416 by reason of the contributions. -12- ARTICLE III Contributions and Account Allocations ------------------------------------- 3.1 Pre-Tax Contributions --------------------- The Company will transmit to the Funding Agent the Pre-Tax Contributions for the Participants. To determine the amount it must transmit for each Participant, the Company will multiply the percentage elected by the Participant in his or her Pre-Tax Contribution Election by the Participant's Compensation. 3.2 After-Tax Contributions ----------------------- The Company will transmit to the Funding Agent the After-Tax Contributions for the Participants. To determine the amount it must transmit for each Participant, the Company will multiply the percentage elected by the Participant in his or her After-Tax Contribution Election by the Participant's Compensation. 3.3 Rules Applicable to Both Pre-Tax and After-Tax Contributions ------------------------------------------------------------ 3.3.1 In making his or her Pre-Tax Contribution Election and After- Tax Contribution Election, a Participant must choose to defer or contribute between 2% and 20% (15% before October 1, 1999) of his or her Compensation, in 1% increments. For periods beginning on or after October 1, 1999, the Participant's Pre-Tax Contribution Election and After-Tax Contribution Election cannot together total more than 20% of his or her Compensation. For periods beginning before October 1, 1999, the Participant's Pre-Tax Contribution Election and After-Tax Contribution Election cannot together total more than 15% of his or her Compensation. The Administrator may reduce the amount of any Pre- Tax Contribution Election, or make such other modifications it deems necessary, so that the Plan complies with the provisions of Code Section 401(k). Pre-Tax and After-Tax Contributions will be made on a payroll deduction basis and in accordance with uniform and nondiscriminatory rules and procedures established by the Administrator. A Participant's Salary Deferral Election will apply only to Compensation paid to the Participant while he or she is an Eligible Employee. 3.3.2 A Participant may change his or her Pre-Tax or After-Tax Contribution Election percentage or discontinue making Pre-Tax Contributions or After-Tax Contributions, as frequently as permitted by the Administrator, by completing the form or following any other election change procedure prescribed by the Administrator. An election change will become effective according to the uniform and nondiscriminatory rules established by the Administrator. 3.3.3 Pre-Tax and After-Tax Contributions will be delivered to the Funding Agent as of the earliest date they are known and can reasonably be segregated from the general assets of the Participating Employer. In no event will that date be later than the 15th business day of the month following the month they would have been paid to the Participant if he or she had not chosen to defer their payment or contribute them to the Plan. -13- 3.3.4 Notwithstanding any other provision of the Plan, the amount contributed by the Participating Employers as Pre-Tax Contributions and by Participants as After-Tax Contributions must not exceed, in the aggregate, 15% of the total Compensation for the Plan Year for those Participants employed by the Participating Employers eligible for an allocation for that Plan Year. In addition, the amount contributed by the Participating Employers to this Plan or any other qualified plan maintained by the Participating Employers pursuant to a Participant's Pre-Tax Contribution Election must not exceed the Code Section 402(g) limit applicable for that calendar year. 3.4 Company Contributions --------------------- 3.4.1 For each contribution period, as defined in Section 3.4.2, the Company will make a Company Contribution equal to: (a) the applicable percentage of all Basic Contributions made for that contribution period and initially invested in the Stock Fund; plus (b) the applicable percentage of all Basic Contributions made for that contribution period and initially invested in any Investment Funds other than the Stock Fund; less (c) any Forfeitures credited against the Company Contribution for that contribution period. No Company Contribution will be made with respect to Supplemental Contributions. The applicable percentage for a Plan Year will be determined by the Company before the start of the Plan Year. It is currently anticipated that the applicable percentage will be different for Basic Contributions initially invested in the Stock Fund than for Basic Contributions initially invested in other Investment Funds. The Company will communicate the applicable percentages for each Plan Year as soon as possible after they are determined. 3.4.2 The Company Contribution for each contribution period will be paid to the Funding Agent as soon as practicable. The Company Contribution will be allocated to each Participant who made Basic Contributions during that contribution period, by multiplying the Participant's own Basic Contributions for the contribution period by the applicable percentages determined for the Participant, as described above. All Company Contributions will be invested in the Stock Fund. For periods beginning on or after July 7, 1997, each calendar week will be a contribution period. For periods beginning before July 7, 1997, each calendar month was a contribution period. Subject to the special provisions of Section 3.13 through 3.15, all Company Contributions for a Plan Year will be allocated to Participants' Company Contribution Accounts no later than the due date (including all extensions) of the Company's federal tax return for the fiscal year of the Company ending with or within the Plan Year. -14- 3.5 Rollover Contributions ---------------------- Effective January 1, 1986, with the approval of the Administrator, a Participant or Eligible Employee may make a Rollover Contribution to the Plan. A Participant's Rollover Contribution will be allocated to his or her Rollover Contribution Account no later than the first day of the month following the month in which the contribution is made. A Rollover Contribution must be made in cash. If an Employee makes a contribution that was intended to be a Rollover Contribution and the Funding Agent later discovers it was not a Rollover Contribution, the Funding Agent will distribute the balance of the Participant's Rollover Contribution Account to him or her as soon as practicable. 3.6 Establishment of Accounts ------------------------- 3.6.1 Each Participant to whom Pre-Tax Contributions are allocated will have a Pre-Tax Contribution Account. The Pre-Tax Contribution Account will be credited with the Pre-Tax Contributions allocable to the Participant and the income on those contributions, and will be debited with expenses, losses, withdrawals and distributions chargeable to those contributions. 3.6.2 Each Participant who makes After-Tax Contributions will have an After-Tax Contribution Account. The After-Tax Contribution Account will be credited with the After-Tax Contributions the Participant makes and the income on those contributions, and will be debited with expenses, losses, withdrawals and distributions chargeable to those contributions. 3.6.3 Each Participant who makes a Rollover Contribution to the Plan pursuant to Section 3.5 will have a Rollover Contribution Account. The Rollover Contribution Account will be credited with all Rollover Contributions made by the Participant and the income on those contributions, and will be debited with expenses, losses, withdrawals and distributions chargeable to those contributions. 3.7 Limitation on Annual Additions to Accounts ------------------------------------------ Notwithstanding any provision of the Plan to the contrary, the total annual additions allocated for any Plan Year to the Account of a Participant and to his or her accounts under any other defined contribution plan maintained by the Company or an Affiliate must not exceed $30,000 or 25% of the Participant's Compensation. For purposes of this Section 3.7, "annual additions" include all Pre-Tax Contributions, After-Tax Contributions, Company Contributions and Forfeitures allocated to the Participant's Accounts for the Plan Year, except for Excess Pre-Tax Contributions (as described in Section 3.10.5) distributed to the Participant by April 15 following the year for which they were contributed to the Plan. "Annual additions" also include any employer and employee contributions and forfeitures allocated for the Plan Year under other defined contribution plans of the Company and the Affiliates. For Plan Years beginning before January 1, 1998, for purposes of this Section 3.7, a Participant's Compensation was adjusted by subtracting from it any Pre-Tax Contributions made for the Participant for the Plan Year, any Code Section 401(k) contributions made for the Participant to another plan for the 15 Plan Year, and any contributions made on the Participant's behalf under a Code Section 125 cafeteria plan. For the Short Plan Year running from April 1, 1997 through December 31, 1997, the $30,000 limit of this Section 3.7 was adjusted to $22,500. 3.8 Reduction of Annual Additions ----------------------------- If the annual additions allocated to a Participant's Accounts for the Plan Year exceed the limitation described in Section 3.7, annual additions, with their earnings, will be returned to the Participant in the minimum amount necessary to meet the limitation on annual additions. Supplemental Contributions (both After-Tax Contributions and Pre-Tax Contributions, in that order) will be returned first, and if there are not enough to satisfy the limitation on annual additions, Basic Contributions (both After-Tax Contributions and Pre-Tax Contributions, in that order) will be returned. If, after all of the Participant's Supplemental and Basic Contributions have been returned, the annual additions allocated to the Participant's Account for the Plan Year still exceed the limitation described in Section 3.7, the excess amounts attributable to Company Contributions will be held in a suspense account containing the excess amounts attributable to Company Contributions for all Participants, and will be used to reduce the Company Contributions for the following Plan Year (and later Plan Years, if necessary), before any Company Contributions that would be annual additions for the next Plan Year (or later Plan Years, if necessary) are made to the Plan. 3.9 Combined Plan Fraction ---------------------- For Plan Years beginning before January 1, 2000, if a Participant was (or had been) a participant in any defined benefit plan (whether or not terminated) maintained by the Company or an Affiliate, the sum of the Participant's defined benefit plan fraction and defined contribution plan fraction could not exceed 1. If the sum exceeded 1, the Participant's defined contribution plan fraction was reduced until the sum equaled 1. The defined benefit plan fraction and defined contribution plan fraction were defined in Code Section 415(e). 3.10 Limitations on Pre-Tax Contributions, After-Tax Contributions and Company ------------------------------------------------------------------------- Contributions - Definitions - --------------------------- For purposes of Sections 3.10 through 3.15, the terms defined below have the meanings ascribed to them in this Section 3.10. 3.10.1 Actual Contribution Percentage means the sum of the After-Tax Contributions and Company Contributions allocated to the Eligible Participant for the Plan Year, plus any of the Eligible Participant's Pre-Tax Contributions treated as Company Contributions for the Plan Year, divided by the Eligible Participant's Plan Year Compensation, and stated as a percentage. All after-tax employee contributions and employer matching contributions made on behalf of a Highly Compensated Employee under all plans of the Company and its Affiliates will be aggregated to determine the Highly Compensated Employee's Actual Contribution Percentage. A Company Contribution that is treated as a Pre-Tax Contribution under Section -16- 3.13.7 is subject to Section 3.13 and is not taken into account in calculating an Eligible Participant's Actual Contribution Percentage. A Company Contribution that is forfeited to correct Excess Aggregate Contributions, or because the contribution to which it relates is treated as an Excess Contribution, Excess Pre-Tax Contribution or Excess Aggregate Contribution is not taken into account in calculating the Eligible Participant's Actual Contribution Percentage. The Actual Contribution Percentage of an Eligible Participant who does not make a Pre-Tax Contribution Election or an After-Tax Contribution Election is 0.0%. Effective April 1, 1997, the Actual Contribution Percentage of an Eligible Participant will be determined without taking into account any amounts allocated to the accounts of his or her family members. 3.10.2 Actual Deferral Percentage means the amount of Pre-Tax Contributions allocated to the Eligible Participant for the Plan Year, divided by his or her Plan Year Compensation, stated as a percentage. In calculating the Actual Deferral Percentage, Pre-Tax Contributions include Excess Pre-Tax Contributions for Highly Compensated Employees (whether they were made under plans of unrelated employers or plans of the same or related employers) but do not include Excess Pre-Tax Contributions for Nonhighly Compensated Employees. The Actual Deferral Percentage of an Eligible Participant who does not make a Pre-Tax Contribution Election is 0.0%. Effective April 1, 1997, the Actual Deferral Percentage of an Eligible Participant will be determined without taking into account any amounts allocated to the accounts of his or her family members. 3.10.3 Aggregate Limit means the greater of: (a) the sum of: (i) 1.25 times the Average Actual Deferral Percentage or the Average Actual Contribution Percentage of the group, whichever is larger; and (ii) two percentage points plus the Average Actual Deferral Percentage or the Average Actual Contribution Percentage of the group, whichever is less, but in no event more than twice the lesser of the group's Average Actual Deferral Percentage and its Average Actual Contribution Percentage; and (b) the sum of: (i) 1.25 times the Average Actual Deferral Percentage or the Average Actual Contribution Percentage of the group, whichever is less; and (ii) two percentage points plus the Average Actual Deferral Percentage or the Average Actual Contribution Percentage of the group, whichever is larger, but in no event more than twice the larger of the group's Average Actual Deferral -17- Percentage and its Average Actual Contribution Percentage. For purposes of this Section 3.10.3, the "group" is the group of Eligible Participants who are Nonhighly Compensated Employees for the preceding Plan Year. 3.10.4 Average Actual Contribution Percentage means the average of the Actual Contribution Percentages of the Eligible Participants in a group. 3.10.5 Average Actual Deferral Percentage means the average of the Actual Deferral Percentages of the Eligible Participants in a group. 3.10.6 Eligible Participant means any Employee who is eligible to make a Pre-Tax Contribution Election or an After-Tax Contribution Election any time during the Plan Year. 3.10.7 Excess Aggregate Contributions means, for any Plan Year, the excess of the Company and After-Tax Contributions (and any Pre-Tax Contributions or pre-tax salary deferrals under other plans taken into account in determining the Actual Contribution Percentages) actually made on behalf of Highly Compensated Employees for the Plan Year, over the maximum amount of Company and After-Tax Contributions permitted under Section 3.14 for the Plan Year. Effective April 1, 1997, the amount of the Excess Aggregate Contribution for any given Eligible Participant is determined by making bookkeeping reductions (as opposed to actual reductions) in contributions. The reductions will be made by reducing the Company and After-Tax contributions for the Highly Compensated Employee with the highest combined dollar amount of Company and After-Tax Contributions by the lesser of: (a) the amount necessary for the dollar amount of that Highly Compensated Employee's combined Company and After-Tax Contributions to equal the combined dollar amount of the Company and After-Tax Contributions of the Highly Compensated Employee with the next highest combined dollar amount of Company and After-Tax Contributions; and (b) the amount necessary for the Plan to satisfy the Actual Contribution Percentage Test. The Administrator will repeat this bookkeeping procedure until the Plan satisfies the Actual Contribution Percentage Test of Section 3.14. For each Highly Compensated Employee's reductions, the Administrator will begin by making reductions in his or her Company Contributions, and will reduce the Highly Compensated Employee's After-Tax Contributions only if his or her Company contributions for the Plan Year have been reduced to zero and it is still necessary to reduce his or her Plan Year contributions. The amount of any Highly Compensated Employee's Excess Aggregate Contributions is calculated after determining the Excess Contribution to be recharacterized as After-Tax Contributions for the Plan Year. 3.10.8 Excess Contributions means for any Plan Year, the excess of the Pre-Tax Contributions (and any Company contributions taken into account in determining the Actual Deferral Percentages) that are made on behalf of Highly Compensated Employees for the Plan Year, over the maximum amount of Pre-Tax Contributions permitted under Section 3.13 for the Plan Year. Effective April 1, 1997, the amount of the Excess Contribution for any given Eligible -18- Participant is determined by making bookkeeping reductions (as opposed to actual reductions) in contributions. The reduction will be made by reducing the Pre- Tax Contributions for the Highly Compensated Employee with the highest dollar amount of Pre-Tax Contributions by the lesser of: (a) the amount necessary for the dollar amount of that Highly Compensated Employee's Pre-Tax Contributions to equal the dollar amount of the Pre-Tax Contributions for the Highly Compensated Employee with the next highest dollar amount of Pre-Tax Contributions, and (b) the amount necessary for the Plan to satisfy the Actual Deferral Percentage Test. The Administrator will repeat this bookkeeping procedure until the Plan satisfies the Actual Deferral Percentage Test set forth in Section 3.13. 3.10.9 Excess Pre-Tax Contribution means the amount of Pre-Tax Contributions for a calendar year that are includible in a Participant's gross income under section 402(g) of the Code because the Participant's elective deferrals exceed the dollar limitation under section 402(g) of the Code as determined under Sections 3.11 and 3.12. 3.11 Maximum Amount of Pre-Tax Contributions --------------------------------------- The total amount of Pre-Tax Contributions, 401(k) contributions under another qualified plan, and deferrals under a Code Section 403(b) annuity, a simplified employee pension and/or a simple retirement account allocated to a Participant in any calendar year cannot exceed the dollar limitation in effect under Code Section 402(g) for that year. 3.12 Correction of Excess Pre-Tax Contributions ------------------------------------------ 3.12.1 Excess Pre-Tax Contributions, as adjusted per Section 3.12.2, will be distributed to each Participant on whose behalf they were made no later than the first April 15 following the close of the taxable year of the Participant for which they were allocated. In no event may the amount distributed under this Section 3.12 exceed the Participant's total Pre-Tax Contributions (as adjusted under Section 3.12.2 for income and losses allocable to them) for the taxable year for which he or she had Excess Pre-Tax Contributions. 3.12.2 The Excess Pre-Tax Contributions to be distributed to a Participant will be adjusted for income or losses through the close of the Plan Year for which they were made. Income and losses allocable to a Participant's Excess Pre-Tax Contributions will be determined in a nondiscriminatory manner (within the meaning of Code Section 401(a)(4)) consistent with the valuation of Participant Accounts under Section 10.4. 3.12.3 If a Participant has Excess Pre-Tax Contributions, but only when taking into account his or her pre-tax contributions under another plan, in order to receive a distribution of Excess Pre-Tax Contributions, he or she must make a written claim to the Administrator no later than the March 15 following the taxable year of the Participant for which the contributions were made. The claim must specify the amount of the Participant's Excess Pre-Tax Contributions for the preceding taxable year and be accompanied by the Participant's written statement that if those amounts are not distributed, the Participant's Pre-Tax Contributions, when -19- added to amounts deferred under other plans or arrangements described in Code Sections 401(k), 402(h)(1)(B) (a simplified employee pension), 403(b) (an annuity plan) or 408(p)(2)(A)(i) (a simple retirement plan) will exceed the limit imposed on the Participant by Code Section 402(g) for the year in which the deferral occurred. 3.12.4 Excess Pre-Tax Contributions distributed prior to the first April 15 following the close of the Participant's taxable year will not be treated as Annual Additions under Section 3.7 for the preceding Limitation Year. 3.12.5 Any Pre-Tax Contributions that are properly distributed under Section 3.8 as excess Annual Additions are disregarded in determining if there are any Excess Pre-Tax Contributions. 3.13 Actual Deferral Percentage Test ------------------------------- 3.13.1 The Average Actual Deferral Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year may not exceed the greater of: (a) the Average Actual Deferral Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25; and (b) the lesser of: (i) the Average Actual Deferral Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by two and (ii) the Average Actual Deferral Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year plus two percentage points. 3.13.2 The provisions of Code Section 401(k)(3) are incorporated by reference. 3.13.3 If this Plan satisfies the requirements of Code Sections 401(a)(4), 401(k), and 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of those Code sections only if aggregated with this Plan, then this Section 3.13 is applied by determining the Actual Deferral Percentages of Eligible Participants as if all the plans were a single plan. 3.13.4 The Administrator also may treat one or more plans as a single plan with the Plan whether or not the aggregated plans must be aggregated to satisfy Code Sections 401(a)(4) and 410(b). However, those plans must then be treated as one plan under Code Sections 401(a)(4), 401(k), and 410(b). Plans may be aggregated under this Section 3.13.4 only if they have the same plan year. -20- 3.13.5 Pre-Tax Contributions may be considered made for a Plan Year if made no later than the end of the 12-month period beginning on the day after the close of the Plan Year. 3.13.6 The determination and treatment of the Pre-Tax Contributions and Actual Deferral Percentage of any Participant must satisfy all requirements prescribed by the Secretary of the Treasury, including, without limitation, record retention requirements. 3.13.7 The Administrator will limit the election and allocation of Pre-Tax Contributions in order to avoid the creation of Excess Contributions. If and to the extent necessary or desirable, the Administrator will recharacterize Excess Contributions as After-Tax Contributions, or will distribute Excess Contributions. Recharacterized Excess Contributions will be treated as required in Treasury Regulations Section 1.401(k)-1(f)(3). The Administrator will recharacterize Excess Contributions within two and one-half months after the close of the Plan Year in which they arose. A distribution of Excess Contributions will normally be made within the same time frame. At all events, a corrective distribution of Excess Contributions must be made within 12 months after the end of the Plan Year in which they arose, and will include income allocable the Excess Contributions for the Plan Year in which they arose. The method used to determine the income allocable to Excess Contributions that are distributed will not violate Code Section 401(a)(4), and will be applied consistently for all Participants and all corrective distributions for any Plan Year. Any distribution to a Participant of less than the entire amount of his or her Excess Contributions will be treated as a pro rata distribution of Excess Contributions and income. The Administrator may combine the correction methods described in this Section 3.13.7. The amount of Excess Contributions to be recharacterized or distributed to a Participant under this Section 3.13.7 will be reduced by any Excess Pre-Tax Contributions previously distributed to the Participant for his or her taxable year ending with or within the Plan Year. Similarly, the amount of Excess Pre-Tax Contributions to be distributed for a Participant's taxable year will be reduced by the amount of any Excess Contributions previously distributed or recharacterized as to that Participant for the Plan Year beginning with or within the Participant's taxable year. 3.14 Actual Contribution Percentage Test ----------------------------------- 3.14.1 The Average Actual Contribution Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year may not exceed the greater of: (a) the Average Actual Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25; and (b) the lesser of: (i) the Average Actual Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by two; and -21- (ii) the Average Actual Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year plus two percentage points. 3.14.2 The provisions of Code Section 401(m)(2) are incorporated by reference. 3.14.3 If this Plan satisfies the requirements of Code Section 401(a)(4), 401(k) and 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of those Code sections only if aggregated with this Plan, then this Section 3.14 is applied by determining the Actual Contribution Percentage of Eligible Participants as if all the plans were a single plan. 3.14.4 The Administrator also may treat one or more plans as a single plan with the Plan, whether or not the aggregated plans must be aggregated to satisfy Code Sections 401(a)(4) and 410(b). However, those plans must then be treated as one plan under Code Sections 401(a)(4), 401(m) and 410(b). Plans may be aggregated under this Section 3.14.4 only if they have the same plan year. 3.14.5 An After-Tax Contribution is considered made for a Plan Year if it is deducted from the Participant's Compensation during the Plan Year and transmitted to the Trustee within a reasonable period after that. A Company Contribution is considered made for a Plan Year if it is allocated to a Participant's Account as of a date within the Plan Year, is actually paid to the Trust no later than 12 months after the Plan Year, and is made on account of the Participant's Basic Contributions for the Plan Year. A Pre-Tax Contribution may be considered made under this Section 3.14 for a Plan Year if it is recharacterized for purposes of Section 3.13, and if it is includible in the gross income of the Participant as of a date during that Plan Year. A recharacterized Pre-Tax Contribution is includible in a Participant's gross income as of the date it would have been paid to the Participant, had the Participant not elected to defer it into the Plan. 3.14.6 The determination and treatment of After-Tax and Company Contributions and the Actual Contribution Percentage of any Participant must satisfy all requirements prescribed by the Secretary of Treasury, including, without limitation, record retention requirements. 3.14.7 The Administrator will limit the making of After-Tax Contributions in order to avoid the creation of Excess Aggregate Contributions. If and to the extent necessary or desirable, the Administrator will forfeit any Excess Aggregate Contributions that were Company Contributions and that were not vested, will distribute to the Participant who made them any Excess Aggregate Contributions that were After-Tax Contributions, and will distribute to the Participant to whom they were allocated any Excess Aggregate Contributions that were Company Contributions and were vested. A distribution of Excess Aggregate Contribution will normally be made within two and one-half months after the close of the Plan Year in which they arose. At all events a corrective distribution of Excess Aggregate Contributions must be made no later than 12 months after the close of the Plan Year in which they arose, and will include -22- income allocable to the Excess Aggregate Contributions for the Plan Year in which they arose. The method used to determine the income allocable to any Excess Aggregate Contributions that are distributed will not violate Code Section 401(a)(4), and will be applied consistently for all Participants and all corrective distributions for any Plan Year. Any distribution to a Participant of less than the entire amount of his or her Excess Aggregate Contributions will be treated as a pro rata distribution of Excess Aggregate Contributions and income. The Administrator may combine the correction methods described in this Section 3.14.7. 3.15 Multiple Use of Alternative Limitation -------------------------------------- 3.15.1 Multiple use of the alternative limitation occurs if all of the following conditions are satisfied. (a) The sum of the Average Actual Contribution Percentage for Eligible Participants who are Highly Compensated Employees and the Average Actual Deferral Percentage for Eligible Participants who are Highly Compensated Employees is greater than the Aggregate Limit for the preceding Plan Year. (b) The Average Actual Deferral Percentage for Eligible Participants who are Highly Compensated Employees exceeds the amount described in Section 3.13.1(a). (c) The Average Actual Contribution Percentage for Eligible Participants who are Highly Compensated Employees exceeds the amount descried in Section 3.14.1(a) 3.15.2 The Average Actual Deferral and Contribution Percentages for Eligible Participants who are Highly Compensated Employees will be determined for purposes of this Section 3.15 after corrective measures have been taken under Sections 3.13.7 and 3.14.7. 3.15.3 The Administrator will limit the making of After-Tax Contributions or, if that is not sufficient, the election and allocation of Pre- Tax Contributions, in order to avoid multiple use of the alternative limitation. If and to the extent necessary or desirable, the Administrator will eliminate multiple use of the alternative limitation by reducing the Average Actual Contribution Percentage of the Eligible Participants who are Highly Compensated Employees in the manner described in Section 3.10.7 above. The amount of the required reduction will be Excess Aggregate Contributions, and will be forfeited or distributed to Highly Compensated Employees as described in Section 3.14.7 above. -23- ARTICLE IV Vesting ------- 4.1 Vesting in After-Tax, Pre-Tax and Rollover Contributions Accounts ----------------------------------------------------------------- A Participant is always 100% vested in the balance of his or her After-Tax Contribution Account, Pre-Tax Contribution Account and Rollover Contribution Account. 4.2 Vesting in Company Contribution and Contingent Accounts ------------------------------------------------------- 4.2.1 A Participant becomes vested in the balance of his or her Company Contribution Account and Contingent Account according to the following Schedule: Years of Service Percent Vested ---------------- -------------- Fewer than 2 0% 2 but fewer than 3 20% 3 but fewer than 4 40% 4 but fewer than 5 60% 5 or more 100% 4.2.2 Notwithstanding the foregoing, a Participant will become 100% vested in the balance of his or her Company Contribution Account and Contingent Account if: (a) he or she reaches age 55 while employed by the Company or one of its Affiliates; (b) he or she separates from service due to Disability; (c) he or she dies while employed by the Company or one of its Affiliates; (d) he or she ceases to be an Employee because of the permanent shutdown of a single site of employment or of one or more facilities or operating unites within a single site of employment; or (e) he or she is employed by the Company or one of its Affiliates involved in a transaction and the Committee, in its discretion, fully vests the Participant in connection with the transaction. 4.2.3. If a Participant is hired by the Company or one of its Affiliates as a result of an acquisition, the Committee (or its delegatee) may, in its discretion, give the Participant and all other Participants hired under the same circumstances as a result of the same acquisition credit for service with a prior employer for purposes of vesting. -24- 4.3 Forfeitures ----------- 4.3.1 A Participant forfeits the non-vested portion of his or her Company Contribution and Contingent Accounts on the date a Period of Separation begins. The non-vested portion so forfeited is a "Forfeiture." If the Period of Separation is shorter than one year, the Forfeiture is restored, and the Period of Separation counts towards the Participant's Year of Service. If the Period of Separation is longer than one year but shorter than five years, the Forfeiture will be restored, and service before and after the Period of Separation will count in determining the Participant's Year of Service for purposes of Section 4.2. If the Period of Separation is five years or longer, the Forfeiture will not be restored. If a Participant begins a Period of Separation by way of a maternity or paternity leave, this Section 4.3.1 will be read by substituting the number "six" for the number of "five" wherever the latter number appears. A "maternity or paternity leave" is an absence from work because of the Participant's pregnancy, the birth of a child or placement of a child for adoption with the Participant, or the need to care for the Participant's child immediately following its birth to or placement with the Participant. 4.3.2 Amounts that become Forfeitures during a month will be used to restore Forfeitures to rehired Participants as provided in Section 4.3.1. Any remaining Forfeitures during a month will be used to pay the administrative expenses of the Plan in the following order: Trustee's fees, communications to Participants, nondiscrimination testing, qualified domestic relations order administration, enrollment fees, required minimum distribution fees, auditors' fees, consulting and legal fees and other similar administrative expenses. Any remaining Forfeitures during a month will be debited against the appropriate Company Contribution and Contingent Accounts, and credited toward the Company's obligation to make Company Contributions in succeeding months. Any remaining Forfeitures during a month will be used to pay fees associated with Participant communications to Participants involved in an acquisition or divestiture and Participant Account adjustments, as determined by the Committee or its delegatee. While awaiting allocation, Until such time as the Company applies Forfeitures to the purposes described above, they will be invested in a default fund selected by the Company. For periods beginning before July 7, 1997, while awaiting allocation as Company Contributions, Forfeitures were invested in the Stock Fund. 4.4 Special Vesting Rules for Participants Transferred to Snap-On Incorporated -------------------------------------------------------------------------- In 1996, the Company sold and assigned the assets and liabilities of its Automotive Service Equipment Division to Snap-On Incorporated. Effective as of the Closing Date of that transaction (as defined in the asset purchase agreement), each Participant who was transferred to Snap-On Incorporated as part of the transaction and was a Transferred Employee, as defined in the asset purchase agreement (a "Snap-On Transferred Employee"), was made fully vested in his or her Plan Account. Further, any Plan loan to a Snap-On Transferred Employee that was outstanding as of the Closing Date remains outstanding, notwithstanding the Snap-On Transferred Employee's termination of employment with the Company and all Affiliates, as if the Transferred Employee were still employed by the Company, until the earliest of: -25- (a) the date the Snap-On Transferred Employee fully repays the loan; (b) the date the Snap-On Transferred Employee defaults on the loan; (c) the date the Snap-On Transferred Employee fails to repay the loan in full after separating from service with Snap-On Incorporated and its affiliates under Code Sections 414(b), (c), (m) and (o) and being given the opportunity to repay the loan; and (d) a date that is no later than 90 days after the date Snap-On Incorporated ceases to facilitate loan repayments for Snap-On Transferred Employees by payroll deduction. 4.5 Special Vesting Rules for Participants Transferred to Great Lakes Chemical -------------------------------------------------------------------------- Pursuant to that certain U.S. Asset Purchase and Framework Agreement (the "Agreement") dated May 4, 1999 by and between the Company and Great Lakes Chemical Corporation ("Great Lakes"), the Company sold and assigned certain assets and liabilities to Great Lakes. As part of that transaction, certain individuals were offered employment by Great Lakes and became Transferred Employees, as defined in the Agreement. Each such individual is a "Great Lakes Transferred Employee" for purposes of this Section 4.5. Effective immediately before the Closing Date, as defined in the Agreement (the "Closing Date"), each Participant who was a Great Lakes Transferred Employee was made fully vested in all of his or her Account. Moreover, any Plan loan that was outstanding on the Closing Date to a Great Lakes Transferred Employee remains outstanding under this Plan, notwithstanding the Great Lakes Transferred Employee's termination of employment with the Company and all Affiliates, as if the Great Lakes Transferred Employee were still employed by the Company, until the earliest of: (a) the date the Great Lakes Transferred Employee fully repays the loan; (b) the date the Great Lakes Transferred Employee defaults on the loan; (c) the date the Great Lakes Transferred Employee fails to repay the loan in full after separating from service with Great Lakes and its affiliates under Code Sections 414(b), (c), (m) and (o) and being given the opportunity to repay the loan; (d) the date that is no later than 90 days after the date Great Lakes ceases to facilitate loan repayments for Great Lakes Transferred Employees by payroll deduction; and (e) the date the loan is transferred with the rest of the Great Lakes Transferred Employee's Accounts to a defined contribution plan of Great Lakes or a Great Lakes affiliate under Code Section 414(b), (c), (m) or (o). -26- 4.6 Special Vesting Rules for Participants Transferred to Cambrex ------------------------------------------------------------- Pursuant to that asset purchase agreement (the "Agreement") dated June 3, 1999 by and between the Company and Cambrex Corporation ("Cambrex"), the Company sold and assigned certain assets and liabilities of its BioProducts Division to Cambrex. As part of that transaction, certain individuals were offered employment by Cambrex and became Transferred Employees, as defined in the Agreement. Each such individual is a "Cambrex Transferred Employee" for purposes of this Section 4.6. Effective immediately before the Closing Date, as defined in the Agreement (the "Closing Date"), each Participant who was a Cambrex Transferred Employee was made fully vested in all of his or her Account. Moreover, any Plan loan that was outstanding on the Closing Date to a Cambrex Transferred Employee remains outstanding under this Plan, notwithstanding the Cambrex Transferred Employee's termination of employment with the Company and all Affiliates, as if the Cambrex Transferred Employee were still employed by the Company, until the earliest of: (a) the date the Cambrex Transferred Employee fully repays the loan; (b) the date the Cambrex Transferred Employee defaults on the loan; (c) the date the Cambrex Transferred Employee fails to repay the loan in full after separating from service with Cambrex and its affiliates under Code Sections 414(b), (c), (m) and (o) and being given the opportunity to repay the loan; (d) the date that is no later than 90 days after the date Cambrex ceases to facilitate loan repayments for Cambrex Transferred Employees by payroll deduction; and (e) the date the loan is transferred with the rest of the Cambrex Transferred Employee's Accounts to a defined contribution plan of Cambrex or a Cambrex affiliate under Code Section 414(b), (c), (m) or (o). -27- ARTICLE V Timing of Distributions to Participants --------------------------------------- 5.1 Separation from Service ----------------------- Upon his or her separation from service with the Company and all Affiliates for any reason, a Participant will be entitled to receive the vested portion of his or her Account Balance, determined in accordance with the provisions of Article IV and the valuation rules established for each Investment Fund. The date as of which the Participant's Account Balance is determined will be the Valuation Date preceding the date of distribution. 5.2 Start of Benefit Payments ------------------------- 5.2.1 Except as provided in Sections 5.2.2 and 5.2.3, unless a Participant otherwise elects, payment of benefits will begin no later than the 60th day after the close of the Plan Year in which the latest of the following events occurs: (a) the Participant's 65th birthday; (b) the 10th anniversary of the year in which the Participant commenced participation; and (c) the Participant's separation from service. If the amount of benefits payable to or in respect of a Participant cannot be determined by the benefit commencement date described in the preceding sentence, or if the Administrator cannot locate the Participant (or, if the Participant has died, his or her Beneficiary) after making a reasonable effort to do so, benefit payments will begin no later than 60 days after the amount of the Participant's benefits can first be determined or the Participant (or his or her Beneficiary) is located, in the amount necessary to bring the payments up to date, as if they had begun on the benefit commencement date described in the preceding sentence. 5.2.2 The Participant's Account Balance will be distributed as soon as practicable after the Participant elects a distribution following the Participant's separation from service. Notwithstanding the foregoing, if (at the time of his or her separation from service) the Participant's total Account Balance exceeds $5,000 (or, for Plan Years beginning before 1998, $3,500) the Participant may elect to defer distribution of his or her Account Balance until a date no later than his or her Required Beginning Date, and the Participant's Account Balance may be distributed before the Participant's Required Beginning Date only if the notice and consent rules of this Section 5.2.2 are met. At least 30, but no more than 90, days before the Annuity Starting Date, the Administrator will furnish the Participant with a notice containing information regarding his or her right to defer distribution of his or her Account Balance. The Administrator will give the Participant an election period of at least 30 days to decide whether to take distribution. Notwithstanding the foregoing, the election period may end immediately after the -28- Participant makes an affirmative election to take distribution of his or her Account Balance. Notices and elections under this Section 5.2.2 may be made electronically or telephonically. 5.2.3 Notwithstanding any other provision of this Plan, a Participant must begin to receive his or her benefit no later than his or her Required Beginning Date. The amount to be distributed each year will be the minimum amount required to satisfy Code Section 401(a)(9) and the regulations promulgated thereunder, determined with no recalculation of life expectancy. The Required Beginning Date of a Participant who reaches age 70-1/2 on or after January 1, 2000 is April 1 of the calendar year following the calendar year in which the Participant reaches age 70-1/2 or, if later, retires. The Required Beginning Date of a Participant who reaches age 70-1/2 before January 1, 2000 is April 1 of the calendar year following the calendar year in which the Participant reaches age 70-1/2. Notwithstanding any other provision of this Section 5.2.3, if a Participant is a 5% owner (as defined in Section 416) for the Plan Year ending in the calendar year in which he or she reaches age 70-1/2, his or her Required Beginning Date is April 1 of the following calendar year, and he or she cannot defer distribution until after he or she retires. 5.2.4 Notwithstanding any other provision of this Plan, all Plan distributions will comply with Code Section 401(a)(9), including Department of Treasury Regulation Section 1.401(a)(9)-2. In addition, the benefit payments distributed to any Participant will satisfy the incidental death benefit provisions under Code Section 401(a)(9)(G) and the regulations promulgated under it. 5.2.5 If the Participant dies after beginning distribution of his or her Account Balance, the remainder of the Account Balance will be payable in accordance with Section 7.1. Notwithstanding the foregoing, the Participant's Account Balance must continue to be distributed at least as rapidly as under the method of distribution in effect before the Participant died. 5.2.6 If the Participant dies before beginning distribution of his or her Account Balance, the Participant's Account Balance will be distributed as provided under Section 7.1, but distribution must be completed within five years after the Participant dies. Notwithstanding the foregoing, the Participant's Beneficiary may receive the Account Balance over his or her life or over a period not extending beyond his or her life expectancy, so long as distribution begins within one year after the participant dies, or, if the Beneficiary is the Participant's Surviving Spouse, by the date the Participant would have reached age 70-1/2. Furthermore, if the Participant's Surviving Spouse is the Beneficiary and dies before distribution begins, the next Beneficiary to take may receive benefits over his or her life or a period not exceeding his or her life expectancy, so long as distribution begins by the date the Surviving Spouse would have reached age 70-1/2. 5.3 Additional Distribution Events ------------------------------ A Participant is eligible to receive a lump sum distribution of his or her Account Balance under any of the sets of circumstances described below. -29- (a) The Plan is terminated and another defined contributions plan is not established in its place. Neither an employee stock ownership plan (as described in Code Section 4975(e) or 409) nor a simplified employee pension plan (as defined in Code Section 408(k)) counts as another defined contribution plan for this purpose. (b) A Participating Employer that is a corporation disposes of substantially all of the assets used in a trade or business to an unrelated corporation, and the Participating Employer continues to maintain this Plan after the disposition. In such a case, only Employees who continue employment with the corporation acquiring the assets may receive a lump sum distribution. (c) A Participating Employer that is a corporation disposes of its interest in a subsidiary to an unrelated entity, and the Participating Employer continues to maintain this Plan. In such a case, only Employees who continue employment with the subsidiary may receive a lump sum distribution. For purposes of this Section 5.3, a lump sum distribution has the meaning given by Code Section 402(d)(4), without regard to Subsections (i), (ii), (iii) and (iv) of Subsections (A), (B), or (F) thereof. 5.4 Transfers from the Plan for Changes in a Participant's Employment Status ------------------------------------------------------------------------ If, as a result of a change in employment status, a Participant ceases to be a Participant in this Plan but becomes a participant in the FMC Corporation Savings and Investment Plan for Bargaining Unit Employees pursuant to the terms of that plan, his or her Account will be transferred to that plan as soon as reasonably feasible after the date he or she becomes a participant in that plan. -30- ARTICLE VI Forms of Benefit, In-Service Withdrawals and Loans -------------------------------------------------- 6.1 Cashout of Small Amounts ------------------------ Notwithstanding any other Plan provision, if a Participant's Account Balance is not larger than $5,000 (or, for Plan Years beginning before 1998, $3,500) the Account Balance will be paid in one lump sum as soon as practicable after the Participant's separation from service, without his or her consent or the consent of his or her spouse. 6.2 Medium of Distribution ---------------------- A Participant's Account Balance will be distributed by check to the Participant or Beneficiary entitled to it (or to his or her designated agent). Alternatively, as to any amount invested in the Stock Fund at the time of distribution, the Participant or, where applicable, his or her Beneficiary, may request a certificate representing the whole shares of Stock held for him or her, and a check representing any fractional share. The Administrator will establish uniform and nondiscriminatory rules governing the timing, content and manner of elections under this Section 6.2. 6.3 Forms of Benefit ---------------- 6.3.1 A Participant or Beneficiary may elect to have his or her Account Balance distributed in any of the forms described below. (a) Lump Sum: This form of benefit pays the entire Account Balance in one payment. (b) Installments for a Fixed Period: The Participant or Beneficiary may elect to receive annual, quarterly or monthly installments over a fixed period of 20 years or less, or, for periods beginning before June 1, 1997, 10 years or less. (c) Installments over Life Expectancy: The Participant or Beneficiary may elect to receive annual, quarterly or monthly installments over his or her life expectancy or over the joint life expectancy of the Participant and his or her Beneficiary. 6.3.2 If the Participant chooses to receive installments, the size of each installment will be calculated by dividing the Account Balance determined as of the date described in Section 5.1 by the total number of installments remaining to be paid. 6.3.3 The Administrator will establish uniform and nondiscriminatory rules governing the timing, content and manner of elections under this Section 6.3. -31- 6.3.4 No installment election under this Plan will permit payments to be made over a period longer than the Participant's life expectancy or the joint life expectancy of the Participant and his or her Beneficiary. A Participant may not elect any stream of installments providing payments to a Beneficiary who is other than his or her spouse, unless the amount distributed each year equals or exceeds the quotient obtained by dividing the Participant's Account Balance by the divisor determined under Department of Treasury Regulation Section 1.401(a)(9)-2. Further, the amount of the periodic payment made to a Beneficiary cannot under any circumstances be larger than the amount of the periodic payment made to the Participant. 6.4 Change in Form, Timing or Medium of Benefit Payment Any former Employee who has chosen to defer payment of his or her Account Balance may request a change in the form, timing or medium in which his or her Account Balance will be paid, so long as the revised election conforms to Section 6.3. Once benefit payments have begun, no Participant may change the form, timing or medium of payment of his or her Account Balance. 6.5 Direct Rollover of Eligible Rollover Distributions 6.5.1 Notwithstanding any provision of the Plan, effective for distributions on or after January 1, 1993, a Distributee may elect, at the time and in the manner prescribed below, to have any portion of an Eligible Rollover Distribution paid in a Direct Rollover to an Eligible Retirement Plan specified by the Distributee. 6.5.2 At least 30, but no more than 90, days before the Annuity Starting Date, the Administrator will furnish the Participant with a notice containing information regarding his or her right to take distribution directly or to elect a Direct Rollover, and some of the federal tax consequences of the alternative types of distribution. The notice must meet the requirements of Code Section 402(f). The Administrator will give the Participant an election period of at least 30 days to decide whether to elect a Direct Rollover. Notwithstanding the foregoing, the election period may end immediately after the Participant makes an affirmative election as to whether to receive the distribution directly or in the form of a Direct Rollover, so long as the Participant is properly informed of his or her right to a full 30-day election period, and waives the remainder of the election period. 6.6 In-service and Hardship Withdrawals 6.6.1 An active Participant who has reached age 59-1/2 may elect to withdraw all or any part of his or her Account. For periods beginning before January 1, 2000, a Participant was permitted to make only one in-service withdrawal during his or her lifetime. The Administrator will establish uniform and nondiscriminatory procedures for requesting, granting and processing in- service withdrawals under this Section 6.6.1, which may include telephonic or electronic procedures, as and to the extent permitted by applicable law or regulation. -32- 6.6.2 An active Participant who has not reached age 59 1/2 may make a withdrawal of the following portions of the Participant's Account Balance in the order listed below: (a) all or part of the After-Tax Contributions he or she made after March 31, 1986 and before January 1, 1987; (b) all earnings or appreciation attributable to After-Tax Contributions he or she made after March 31, 1986 and before January 1, 1987; (c) all or part of the After-Tax Contributions he or she made after December 31, 1986; (d) all or part of his or her After-Tax Contributions made before April 1, 1982, or, if less, the amount in the Participant's After-Tax Contribution Account allocable to those contributions; (e) any amount remaining in the Participant's After-Tax Contribution Account that is allocable to After-Tax Contributions made before April 1982; (f) all the vested value of his or her Contingent Account; (g) all earnings or appreciation attributable to the After-Tax Contributions he or she made after December 31, 1986; (h) all of the current value of vested Company Contributions made as to After-Tax Contributions he or she made after December 31, 1986. For periods beginning on or after January 1, 2000, the above order should be revised to move Subsection (f) after Subsection (g). For periods beginning before January 1, 2000, a Participant who made a withdrawal under Subsection (d), (e), (f), (g) or (h) was suspended from making Pre-Tax Contributions from the effective date of the withdrawal until the first day of the payroll period coincident with or next following the first day of the seventh calendar month after the withdrawal is effective. The Administrator will establish uniform and nondiscriminatory procedures for requesting, granting and processing in-service withdrawals under this Section 6.6.2, which may include electronic or telephonic procedures, as and to the extent permitted by applicable law or regulation. 6.6.3 An active Participant may make a hardship withdrawal from his or her Pre-Tax Contribution Account if he or she demonstrates to the Administrator that the withdrawal is necessary to satisfy the Participant's immediate and heavy financial need. A hardship withdrawal cannot exceed the total Pre-Tax Contributions made to the Plan on behalf of the Participant by the date of the withdrawal, reduced by the amounts of any previous hardship or other in-service withdrawals. In addition, the minimum hardship withdrawal permitted is $500, -33- or, if less, the total amount of Pre-Tax Contributions, made for the Participant, minus any previous hardship or in-service withdrawals. (a) A distribution is on account of an immediate and heavy financial need if it is for: (1) medical expenses as described in Code Section 213(d) incurred by the Participant, his spouse or dependents; (2) costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments); (3) tuition payments, or related education expenses, for the next 12 months of post-secondary education for the Participant or the Participant's spouse or dependents; (4) payments necessary to prevent the Participant's eviction from his or her principal residence, or foreclosure on the mortgage on the Participant's residence; (5) expenses incurred for the funeral of a member of the Participant's immediate family; (6) legal expenses incurred by the Participant in obtaining a divorce; (7) expenses incurred by the Participant in remedying an uninsured property loss; (8) expenses incurred by the Participant in adopting or attempting to adopt a child; (9) emergency expenses of the Participant in personal bankruptcy; or (10) other expenses deemed by the Administrator to constitute hardships justifying a hardship withdrawal, and formally adopted under rules of the Administrator as eligible for hardship withdrawal. (b) A withdrawal will be permitted only if the Participant certifies in writing to the Administrator that the "immediate and heavy financial need" cannot be met from other resources reasonably available to the Participant and the Participant further represents to the Administrator, in such manner and form as the Administrator may require, that the Participant's immediate and heavy financial need cannot be relieved: -34- (1) through reimbursement or compensation by insurance or otherwise; (2) by reasonable liquidation of the Participant's assets, to the extent liquidation would not itself cause an immediate and heavy financial need; (3) by the Participant's ceasing to have Pre-Tax Contributions made for him or her under the Plan; or (4) by other distributions from plans maintained by a Participating Employer or any other employer, or by borrowing from commercial sources on reasonable commercial terms. If the Participating Employer or the Administrator knows that the representation required by the preceding sentence would not be true, the hardship withdrawal request will not be granted. (c) A hardship withdrawal under this Section 6.6.3 cannot exceed the amount required to relieve the financial need, including any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. 6.6.4 The Administrator will establish uniform and nondiscriminatory procedures for requesting, granting and processing hardship withdrawals. 6.7 Loans 6.7.1 An active Participant may submit an application to the Administrator to borrow from his or her Account (on such uniform and nondiscriminatory terms and conditions as the Administrator shall prescribe) an amount, when added to the amount of any then outstanding loan, does not exceed the lesser of: (a) $50,000, reduced by the excess (if any) of the Participant's highest outstanding Plan loan balance during the one-year period ending on the day before the loan is made over the Participant's outstanding Plan loan balance on the day the loan is made; and (b) 50% of the Participant's Account as of the Valuation Date coincident with or immediately preceding the date the Administrator receives the application. In calculating the Participant's loan limit, all loans from qualified plans of the Company and all Affiliates will be aggregated. -35- 6.7.2 Each loan granted under the Plan will meet the following requirements: (a) it must be evidenced by a negotiable promissory note; (b) the rate of interest payable on the unpaid balance of the loan will be reasonable; (c) the amount of the loan must be at least $1,000; (d) the loan, by its terms, must require repayment within five years; (e) the loan will be secured by the Participant's interest in the Account Balance of his or her Account, but not to exceed 50% of such Account; and (f) the loan must be repaid through payroll deduction, or, if the loan has been outstanding for at least three months, the Participant may make one payment by check or money order of the full amount of principal and interest then outstanding. 6.7.3 If a Participant is granted a loan, a "Loan Account" will be established for the Participant. All Loan Accounts will be held by the Funding Agent, as part of the Trust Fund. The loan amount will be transferred from a Participant's other Accounts according to uniform and nondiscriminatory ordering rules adopted by the Administrator, and will be disbursed from the Loan Account. The promissory note executed by the Participant will be deposited in his or her Loan Account. 6.7.4 Principal and interest payments of a loan will be credited initially to the Loan Account of the Participant, and will be transferred as soon as reasonably practicable thereafter to the other Accounts of the Participant. Any loss caused by nonpayment or other default on a loan obligations will be borne solely by the Loan Account of the Participant. Although a default will constitute a taxable event to the Participant, necessitating certain reporting obligations on the Administrator's part, notwithstanding any other provision of the Plan, the note evidencing a loan in default will not be executed upon until the Participant experiences a distributable event. A Participant's loan repayments will, at his or her request, be suspended during the time he or she is absent as a result of qualifying military service (as determined under USERRA), as permitted under Code Section 414(u)(4). 6.7.5 A Participant may not have more than two loans outstanding at any given time. For periods beginning before January 1, 2000, a Participant could not receive more than one Plan loan in any 12-month period, and could not have more than two loans outstanding at any given time. 6.7.6 Upon termination of employment, a Participant who has an outstanding loan under the Plan must repay his or her loan in a lump sum or the loan will be in default. -36- Notwithstanding the above, the Committee (or its delegatee) may, in its sole discretion, allow terminated Participants to continue to repay loans under such uniform and nondiscriminatory rules as the Committee (or its delegate) determines, where the Participant has been terminated due to a transaction or a permanent reduction in force. 6.7.7 All fees and expenses incurred in connection with a loan obligation of a Participant will be borne solely by the Participant's Account. 6.7.8 The Administrator will establish uniform and nondiscriminatory procedures for requesting, granting and processing Plan loans. -37- ARTICLE VII Death Benefits -------------- 7.1 Payment of Account Balance 7.1.1 Subject to the provisions of Section 5.2, if a Participant dies before payment of his or her Account Balance has begun, his or her Account Balance will be paid to the Participant's Beneficiary in the form of benefit chosen by the Beneficiary under Sections 6.2 and 6.3. The Beneficiary of a Participant who is married on the date of his or her death will be the Participant's Surviving Spouse, unless the Participant has designated another Beneficiary and the Surviving Spouse consented to the designation, both as provided in Section 7.3. 7.2 Failure to Name a Beneficiary If a Participant fails to name a Beneficiary and dies before payment of his or her Account Balance begins, or if no designated Beneficiary survives the Participant, the Administrator will pay any amounts due after the Participant's death to the Participant's surviving spouse or, if there is no surviving spouse, to the Participant's surviving children, in equal shares. If the Participant leaves behind no surviving spouse or children, the Administrator will pay any amounts then due to the Participant's estate. 7.3 Waiver of Spousal Beneficiary Rights 7.3.1 A Participant may designate someone other than his or her Surviving Spouse as his or her primary Beneficiary only if the designation or election meets the requirements of this Section 7.3 outlined below. 7.3.2 The Administrator will provide each Participant with a written explanation of: (a) the right of the Participant to name someone other than his or her Surviving Spouse as a Beneficiary; (b) the right of the Participant's spouse to be named as the primary Beneficiary for all of the Participant's Account Balance and the effect of waiving that right; and (c) the Participant's right to revoke a previous designation of someone other than the Surviving Spouse as a Beneficiary, and the effect of such a revocation. 7.3.3 A designation of someone other than the Surviving Spouse as a primary Beneficiary will be effective only if it is made in writing and consented to by the Participant's spouse, with the spouse's consent witnessed by a notary public or the Administrator, Any -38- subsequent change of Beneficiary to an individual who is not the Participant's Surviving Spouse must also be in writing and consented to by the Participant's spouse, with the spouse's consent witnessed by a notary public or the Administrator. Spousal consent is not necessary if the Participant establishes to the satisfaction of a Plan representative that the Participant does not have a spouse, or that the Participant's spouse cannot be located. Spousal consent is also unnecessary if the Participant produces a court order to the effect that the Participant is legally separated from his or her spouse or has been abandoned by the spouse, within the meaning of the law of the Participant's state of residence, unless a qualified domestic relations order requires otherwise. If the Participant's spouse is legally incompetent to give consent, the spouse's legal guardian may give the spouse's consent, even if the legal guardian is the Participant. A spouse's consent will be valid only as to that spouse, and an election deemed effective without the spouse's consent will be valid only as to the spouse designated as to that election. A Participant may revoke a prior waiver of the 50% preretirement life annuity or a prior designation of someone other than the Surviving Spouse as a primary Beneficiary without the consent of his or her spouse, and may revoke such a waiver or designation an unlimited number of times. 7.3.4 A Participant's former spouse will be treated as the spouse or Surviving Spouse only to the extent provided under a qualified domestic relations order as described in Code Section 414(p). -39- ARTICLE VIII Special Forms of Benefit and Special Death Benefit Provisions Applicable to --------------------------------------------------------------------------- Certain Transferred Participants -------------------------------- 8.1 Applicability The provisions of this Article VIII apply, instead of Sections 6.3, 6.4, 7.1, 7.2 and 7.3, to the entire Account Balance of each Participant who was: (a) a participant in the FMC Corporation 401(k) Plan for Employees Covered by a Collective Bargaining Agreement immediately before his or her collective bargaining unit became covered under this Plan, and whose account balance in that plan was transferred to this Plan; or (b) transferred to the Company as part of its acquisition from Stein, Inc. or Frigoscandia Equipment Holding AB. Sections 6.1, 6.2, 6.5, 6.6 and 6.7 continue to apply to the Account Balances of Participants described in the preceding sentence, but this Article VIII does not apply to any other Participant. 8.2 Forms of Benefit for Certain Transferred Participants 8.2.1 The normal form of benefit for a Participant to whom this Article VIII applies is the 50% Joint and Survivor-Ten Year Certain Annuity with the Participant's spouse as the Beneficiary, if the Participant is married on the Annuity Starting Date. If the Participant is not married on the Annuity Starting Date, the normal form of benefit is the Life and Ten Year Certain Annuity. If the Participant fails to make an election under Section 8.4, his or her Account Balance will be paid in the normal form of benefit. A Participant covered by this Article VIII who is married on the Annuity Starting Date may elect a benefit other than the normal form of benefit only if his or her spouse consents to the election within the time frame and in the manner required by Section 8.4. 8.2.2 Subject to Sections 8.2.1 and 8.4, and except as otherwise provided herein, a Participant covered by this Article VIII may elect to have his or her benefit under this Plan paid in the form of a lump sum distribution or a fixed dollar annuity purchased on his or her behalf. A Plan annuity is a fixed dollar annuity if it provides a stream of monthly payments that do not vary in amount. 8.2.3 If a Participant to whom this Article VIII applies elects to have a fixed dollar annuity purchased on his or her behalf, he or she may select any of forms of annuity described in this Section 8.2.3. (a) Life and Ten Year Certain Annuity: This form of annuity pays the Participant a fixed amount each month beginning with the month in which the Annuity Starting Date occurs and ending when the Participant dies. If the Participant dies before 120 monthly payments have been made, payments will continue to the Participant's Beneficiary until 120 monthly payments have been made to the Participant and Beneficiary under the annuity. -40- (b) Joint and Survivor-Ten Year Certain Annuity: This form of annuity pays the Participant a fixed amount each month beginning with the month in which the Annuity Starting Date occurs and ending when the Participant dies. If the Participant's Beneficiary survives the Participant, payments will continue to the Participant's primary Beneficiary until the Beneficiary dies. If the Participant and Beneficiary both die before 120 monthly payments have been made to the Participant and Beneficiary under the annuity, payments will continue to the Participant's contingent Beneficiary until 120 monthly payments in all have been made under the annuity. The monthly payment payable to the primary or contingent Beneficiary before 120 payments have been made under the annuity equals the monthly payment made during the Participant's lifetime. The monthly payment payable to the primary Beneficiary after 120 payments have been made under the annuity equals 100% or 50% of the monthly payment made during the Participant's lifetime, as specified in the Participant's election. Both the primary and contingent Beneficiaries must be named at the time this annuity is elected. (c) Period Certain Annuity: This form of annuity pays the Participant a fixed amount each month beginning with the month in which the Annuity Starting Date occurs and ending when the specified number of monthly payments have been made to the Participant and, if he or she dies before receiving the specified number of payments, to the Participant's Beneficiary. The Participant may specify 60, 120 or 180 monthly payments. The Participant specifies the number of monthly payments and names his or her Beneficiary at the time he or she elects the annuity. (d) Other: This form of payment includes any other alternative form of distribution, including installment distributions, provided for by the Funding Agent. Notwithstanding the foregoing, a Participant may not elect any form of distribution providing only for the payment of interest or income earned on his or her Accounts. 8.2.4 An annuity under this Plan must provide that payments will be made over a period no longer than the life of the Participant, the lives of the Participant and his or her Beneficiary, the Participant's life expectancy or the life expectancy of the Participant and his or her Beneficiary. A Participant to whom this Article VIII applies may not elect any form of annuity providing monthly payments to a Beneficiary who is other than his or her spouse, unless the amount distributed each year equals or exceeds the quotient obtained by dividing the Participant's Account Balances by the divisor determined under Department of Treasury Regulation Section 1.401(a)(9)-2. Further, the amount of the monthly payment made to a Beneficiary cannot under any circumstances be larger than the amount of the monthly payment made to the Participant. -41- 8.3 Change in Form, Timing or Medium of Benefit Payment for Certain Transferred Participants Any former Employee who is a Participant to whom this Article VIII applies and who has chosen to defer payment of his or her Account Balance may request a change in the form, timing or medium in which his or her Account Balances will be paid, so long as the revised election conforms to Sections 8.2 through 8.4. 8.4 Waiver of Normal Form of Benefit for Certain Transferred Participants 8.4.1 The Account Balance of a Participant to whom this Article VIII applies will be distributed in the normal form of benefit, regardless of what form of benefit the Participant chooses, unless the Participant makes an effective waiver under this Section 8.4 and, if the Participant is married on the Annuity Starting Date, unless the Participant's spouse consents to the Participant's choice of another form of benefit in the manner described in this Section 8.4. No sooner than 30, and no more than 90, days before the Annuity Starting Date, the Administrator will provide the Participant with a written explanation of: (a) the terms and conditions of the normal form of benefit; (b) the Participant's right to waive the normal form of benefit and the effect of waiving the normal form of benefit; (c) the right of the Participant's spouse to consent or withhold his or her consent to the Participant's choice of another form of benefit; and (d) the Participant's right to revoke a waiver of the normal form of benefit, and the effect of revoking the waiver. A Participant may revoke his or waiver of the normal form of benefit at any time before the payment begins, without his or her spouse's consent. For purposes of the previous sentence, if the Participant's Account Balance is to be paid in the form of an annuity, payment will be deemed to begin when the annuity has been purchased. 8.4.2 A Participant's waiver of the normal form of benefit will be effective only if: (a) the Participant's spouse consents in writing to the waiver; (b) the waiver includes an election of a form of benefit that cannot be changed without the spouse's consent, or the spouse's consent specifically permits the Participant to make other elections of forms of benefit; (c) the spouse's consent acknowledges the effect of the waiver; and -42- (d) the spouse's consent is witnessed by a notary public or the Administrator. Spousal consent to the Participant's waiver of the normal form of benefit is not necessary if the Participant establishes to the satisfaction of a Plan representative that the Participant does not have a spouse, or that the Participant's spouse cannot be located. Spousal consent is also unnecessary if the Participant produces a court order to the effect that the Participant is legally separated from his or her spouse or has been abandoned by the spouse, within the meaning of the law of the Participant's state of residence, unless a qualified domestic relations order requires otherwise. If the Participant's spouse is legally incompetent to give consent, the spouse's legal guardian may give the spouse's consent, even if the legal guardian is the Participant. A spouse's consent will be valid only as to that spouse, and an election deemed effective without the spouse's consent will be valid only as to the spouse designated as to that election. 8.4.3 Notwithstanding the foregoing, the first payment of the Participant's Account Balance may be made as early as seven days after the Participant makes an affirmative election to receive his or her Account Balance in a particular form of payment, even if that means the Participant has fewer than 30 days to decide on a form of payment, if the Annuity Starting Date is after the date of the Participant's affirmative election and, if the Participant is married on the Annuity Starting Date, the Participant's spouse consents to the form of payment in the manner required by Section 8.4.2. 8.4.4 If the Administrator believes that any spouse might, under the law of any jurisdiction, have any interest in any benefit that might become payable to a Participant, the Administrator may, as a condition precedent to the Participant's making any distribution or withdrawal election, require a written release or releases, or other documents that it believes are necessary, desirable, or appropriate to prevent or avoid any conflict or multiplicity of claims regarding payment of any Plan benefits. 8.5 Payment of Account Balances of Certain Transferred Participants Who Die Before Payment Begins 8.5.1 If a Participant to whom this Article VIII applies dies before payment of his or her Account Balance has begun, his or her Account Balance will be paid to the Participant's Beneficiary in one lump sum within 90 days after the Administrator receives notice of the Participant's death. The Beneficiary of a Participant to whom this Article VIII applies, and who is married on the date of his or her death, will be the Participant's Surviving Spouse, unless the Participant has designated another Beneficiary and the Surviving Spouse consented to the designation, both as provided in Section 8.7. 8.5.2 If a Participant to whom this Article VIII applies dies before payment of his or her Account Balance has begun, 50% of the Participant's Account Balance will be paid to his or her Surviving Spouse in the form of a life annuity, and the remainder will be paid to any Beneficiary chosen by the Participant (including the Participant's Surviving Spouse). -43- (a) The Participant may choose a form of benefit other than the life annuity for the 50% of his or her Account Balance that will be paid to the Surviving Spouse, so long as the Participant's election meets the requirements of Section 8.7 and his or her Spouse consents in the time and manner required by Section 8.7. The Participant may also designate a Beneficiary other than his or her Surviving Spouse as the primary Beneficiary to receive some or all of his or her Account Balance, so long as the Surviving Spouse consents to the designation in the time and manner required by Section 8.7. (b) Unless the Participant has chosen a form of benefit for his or her Beneficiary or Surviving Spouse, the Beneficiary or Surviving Spouse may choose to have any amounts payable to him or her paid in any of the forms of benefit described under Section 8.2 other than the Joint and Survivor-Ten Year Certain Annuity. Payments to a Surviving Spouse must begin no later than the April 1 following the year in which the Participant would have reached age 70-1/2, and payments to a Beneficiary who is not the Surviving Spouse must begin no later than one year after the Participant's death. Amounts payable to a Beneficiary or Surviving Spouse must be made within five years after the Participant's death, or over a period not exceeding the life or life expectancy of the Surviving Spouse. A Participant's Surviving Spouse who chooses to waive his or her right to receive 50% of the Participant's Account Balances in the form of a life annuity must waive the right in the time and manner described in Section 8.7. (c) Notwithstanding Subsection (b) above, if at the time the Participant dies his or her Account Balance does not exceed $5,000 (or, for Plan Years beginning before January 1, 1998, $3,500) the Account will be distributed in the form of a single sum payment. In addition, if more than one Beneficiary is concurrently entitled to receive annuity payments, or if the monthly annuity payment to any Beneficiary would be less than $50 (or another amount established from time to time by the Administrator), the Administrator may choose to pay the value of the annuity in a single sum, so long as the single sum would not exceed the dollar limit of the previous sentence. 8.6 Failure to Name a Beneficiary for Certain Transferred Participants If a Participant to whom this Article VIII applies fails to name a Beneficiary and dies before payment of his or her Account Balance begins, or if no designated Beneficiary survives the Participant, the Administrator will pay any amounts due after the Participant's death to the Participant's Surviving Spouse or, if there is no Surviving Spouse, to the Participant's -44- surviving children in equal shares. If the Participant leaves behind no Surviving Spouse or surviving children, the Administrator will pay any amounts then due to the Participant's estate. 8.7 Waiver of Preretirement Survivor Annuity for Certain Transferred Participants 8.7.1 A Participant to whom this Article VIII applies may designate someone other than his or her Surviving Spouse as a primary Beneficiary to receive any portion of his or her Account Balance payable after his or her death, or the Participant or his or her Surviving Spouse may choose a form of benefit other than the life annuity for the 50% of the Account Balances that will automatically be paid to the Surviving Spouse as a life annuity only if the designation or election meets the requirements of this Section 8.7 outlined below. 8.7.2 The Administrator will provide each Participant with a written explanation of: (a) the 50% preretirement life annuity payable to the Participant's Surviving Spouse; (b) the Participant's right to waive that annuity and the effect of such a waiver; (c) the right of the Participant's spouse to the 50% preretirement life annuity and the effect of waiving that right; and (d) the Participant's right to revoke a previous waiver and the effect of such a revocation; (e) the right of the Participant to name someone other than his or her Surviving Spouse as a Beneficiary; (f) the right of the Participant's spouse to be named as the primary Beneficiary for all of the Participant's Account Balance and the effect of waiving that right; and (g) the Participant's right to revoke a previous designation of someone other than the Surviving Spouse as a Beneficiary, and the effect of such a revocation. The Administrator will provide the above explanation to the Participant during the period that begins on the first day of the Plan Year in which the Participant reaches age 32 and ends on the last day of the Plan Year in which the Participant reaches age 34. If a Participant first becomes a Participant after the start of that period, the Administrator will provide the explanation no later than the end of the second Plan Year after the Participant first becomes a Participant. -45- 8.7.3 A designation of someone other than the Surviving Spouse as a primary Beneficiary, or the election of a form of benefit other than the 50% preretirement life annuity will be effective only if it is made in writing and consented to by the Participant's spouse, with the spouse's consent witnessed by a notary public or the Administrator. Moreover, the election must be made during the period that begins on the first day of the Plan Year in which the Participant reaches age 35 (or, if earlier, the date the Participant separates from service) and ends on the date of the Participant's death. Any subsequent change of Beneficiary to an individual who is not the Participant's Surviving Spouse must also be in writing and consented to by the Participant's spouse, with the spouse's consent witnessed by a notary public or the Administrator. Spousal consent is not necessary if the Participant establishes to the satisfaction of a Plan representative that the Participant does not have a spouse, or that the Participant's spouse cannot be located. Spousal consent is also unnecessary if the Participant produces a court order to the effect that the Participant is legally separated from his or her spouse or has been abandoned by the spouse, within the meaning of the law of the Participant's state of residence, unless a qualified domestic relations order requires otherwise. If the Participant's spouse is legally incompetent to give consent, the spouse's legal guardian may give the spouse's consent, even if the legal guardian is the Participant. A spouse's consent will be valid only as to that spouse, and an election deemed effective without the spouse's consent will be valid only as to the spouse designated as to that election. A Participant may revoke a prior waiver of the 50% preretirement life annuity or a prior designation of someone other than the Surviving Spouse as a primary Beneficiary without the consent of his or her spouse, and may revoke such a waiver or designation an unlimited number of times. 8.7.4 A Participant's former spouse will be treated as the spouse or Surviving Spouse only to the extent provided under a qualified domestic relations order as described in Code Section 414(p). -46- ARTICLE IX Fiduciaries ----------- 9.1 Named Fiduciaries ----------------- 9.1.1 The Company is the Plan sponsor and a "named fiduciary," as that term is defined in ERISA Section 402(a)(2), with respect to control over and management of the Plan's assets only to the extent that it (a) appoints the members of the Committee which administers the Plan at the Administrator's direction; (b) delegates its authorities and duties as "plan administrator" (as defined under ERISA) to the Committee; and (c) continually monitors the performance of the Committee. 9.1.2 The Company as Administrator, and the Committee, which administers the Plan at the Administrator's direction, are "named Fiduciaries" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to control and manage the operation and administration of the Plan. The Administrator is also the "administrator" and "plan administrator" of the Plan, as those terms are defined in ERISA Section 3(16)(A) and Code Section 414(g), respectively. 9.1.3 The Trustee is a "named fiduciary" of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority to manage and control all Trust assets, except to the extent that authority is allocated under the Plan and Trust to the Administrator or is delegated to an Investment Manager, an insurance company, or the Plan Participants at the direction of the Administrator or the Committee. 9.1.3 The Company, Committee, Administrator and Trustee are the only named fiduciaries of the Plan. 9.2 Employment of Advisers ---------------------- A named fiduciary, and any fiduciary appointed by a named fiduciary, may employ one or more persons to render advice regarding any of the named fiduciary's or fiduciary's responsibilities under the Plan. 9.3 Multiple Fiduciary Capacities ----------------------------- Any named fiduciary and any other fiduciary may serve in more than one fiduciary capacity with respect to the Plan. 9.4 Payment of Expenses ------------------- All Plan expenses, including expenses of the Administrator, the Committee, the Trustee, any Investment Manager and any insurance company, will be paid by the Trust Fund, unless a Participating Employer elects to pay some or all of those expenses. All or a portion of -47- the recordkeeping costs or charges imposed or incurred (if any) in maintaining the Plan will be charged on a per capita basis to the Account of each Participant. In addition, all charges imposed or incurred (if any) for an Investment Fund or a transfer between Investment Funds will be charged to the Account of the Participant directing that investment. In addition, all charges imposed or incurred for a Participant loan will be charged to the Account of the Participant requesting the loan. 9.5 Indemnification --------------- To the extent not prohibited by state or federal law, each Participating Employer agrees to, and will indemnify and save harmless the Administrator, any past, present, additional or replacement member of the Committee, and any other Employee, officer or director of that Participating Employer, from all claims for liability, loss, damage (including payment of expenses to defend against any such claim) fees, fines, taxes, interest, penalties and expenses which result from any exercise or failure to exercise any responsibilities with respect to the Plan, other than willful misconduct or willful failure to act. -48- ARTICLE X Plan Administration ------------------- 10.1 Powers, Duties and Responsibilities of the Administrator and the Committee -------------------------------------------------------------------------- 10.1.1 The Administrator and the Committee have full discretion and power to construe the Plan and to determine all questions of fact or interpretation that may arise under it. An interpretation of the Plan or determination of questions of fact regarding the Plan by the Administrator or Committee will be conclusively binding on all persons interested in the Plan. 10.1.2 The Administrator and the Committee have the power to promulgate such rules and procedures, to maintain or cause to be maintained such records and to issue such forms as they deem necessary or proper to administer the Plan. 10.1.3 Subject to the terms of the Plan, the Administrator and/or the Committee will determine the time and manner in which all elections authorized by the Plan must be made or revoked. 10.1.4 The Administrator and the Committee have all the rights, powers, duties and obligations granted or imposed upon them elsewhere in the Plan. 10.1.5 The Administrator and the Committee have the power to do all other acts in the judgment of the Administrator or Committee necessary or desirable for the proper and advantageous administration of the Plan. 10.1.6 The Administrator and the Committee will exercise all of their responsibilities in a uniform and nondiscriminatory manner. 10.2 Investment Powers, Duties and Responsibilities of the Administrator and - ----------------------------------------------------------------------------- the Committee ------------- 10.2.1 The Administrator and the Committee have the power to make and deal with any investment of the Trust in any manner it deems advisable and which is consistent with the Plan. Notwithstanding the foregoing, the power to make and deal with Trust investments does not extend to any assets subject to the direction and control of Plan Participants as described in Section 10.3.2. 10.2.2 The Administrator and/or the Committee will establish and carry out a funding policy and method consistent with the objectives of the Plan and the requirements of ERISA. 10.2.3 The Administrator and the Committee have the power to direct that assets of the Trust be held in a master trust consisting of assets of plans maintained by a Participating Employer which are qualified under Code Section 401(a). -49- 10.2.4 The Administrator and the Committee have the power to select Annuity Contracts. 10.3 Investment of Accounts ---------------------- 10.3.1 The Administrator or, as delegated by the Administrator, the Committee, may establish such different Investment Funds as it from time to time determines to be necessary or advisable for the investment of Participants' Accounts, including Investment Funds pursuant to which Accounts can be invested in "qualifying employer securities," as defined in Part 4 of Title I of ERISA. Each Investment Fund will have the investment objective or objectives established by the Administrator or Committee. Except to the extent investment responsibility is expressly reserved in another person, the Administrator or the Committee, in its sole discretion, will determine what percentage of the Plan assets is to be invested in qualifying employer securities. The percentage designated by the Administrator can exceed ten percent of the Plan's assets, up to a maximum of all of the Plan's assets. 10.3.2 Except as provided in Section 10.3.3, the Administrator or, as delegated by the Administrator, the Committee, may in its sole discretion permit Participants to determine the portion of their Accounts that will be invested in each Investment Fund. The frequency with which a Participant may change his or her investment election concerning future Pre-Tax Contributions or his or her existing Account will be governed by uniform and nondiscriminatory rules established by the Administrator or the Committee. To the extent permitted under ERISA, effective June 1, 1997, the Plan is intended to comply with and be governed by Section 404(c) of ERISA. 10.3.3 Notwithstanding Section 10.3.2, Company Contributions must be invested in the Stock Fund, and may not be invested in any other Investment Fund. Also notwithstanding Section 10.3.2, a Participant may transfer amounts out of the Stock Fund only if he or she is at least 55 years old, and no more frequently than once per year. Effective October 1, 1999, a Participant may transfer Basic Contributions out of the Stock Fund only if he or she is at least 50 years old, and no more frequently than once per year. Also effective October 1, 1999, a Participant may transfer Supplemental Contributions and Rollover Contributions out of the Stock Fund as frequently as he or she may transfer those contributions out of any other Investment Fund. Prior to June 1, 1997, a Participant was not permitted to transfer amounts out of any Investment Funds until the Participant reached age 55. Prior to June 1, 1993, Rollover Contributions were required to be invested in the Fixed Income Fund. 10.4 Valuation of Accounts --------------------- A Participant's Accounts will be revalued at fair market value on each Valuation Date. On each Valuation Date, the earnings and losses of the Trust will be allocated to each Participant's Account in the ratio that his or her total Account Balance bears to all Account Balances. Notwithstanding the foregoing, if the Administrator or Committee establishes Investment Funds pursuant to Section 10.3, the earnings and losses of the particular Investment -50- Funds will be allocated in the ratio that the portion of each Participant's Account Balance invested in a particular Investment Fund bears to the total amount invested in that fund. If and to the extent the rules of any Investment Fund require a different method of valuation, those rules will be followed. 10.5 The Insurance Company --------------------- The Administrator or the Committee may appoint one or more insurance companies as Funding Agents, and may purchase insurance contracts, Annuity Contracts or policies from one or more insurance companies with Plan assets. Neither the Administrator nor the Committee, nor any other Plan fiduciary will be liable for any act or omission of an insurance company with respect to any duties delegated to any insurance company. 10.6 Compensation ------------ Each person providing services to the Plan will be paid such reasonable compensation as is from time to time agreed upon between the Company and that service provider, and will have his, her or its expenses reimbursed. Notwithstanding the foregoing, no person who is an Employee will be paid any compensation for his or her services to the Plan. 10.7 Delegation of Responsibility ---------------------------- The Administrator and the Committee may designate by written instrument one or more actuaries, accountants or consultants as fiduciaries to carry out, where appropriate, their administrative responsibilities, including their fiduciary duties. The Committee may from time to time allocate or delegate to any subcommittee, member of the Committee and others, not necessarily employees of the Company, any of its duties relative to compliance with ERISA, administration of the Plan and other related matters, including those involving the exercise of discretion. The Company's duties and responsibilities under the Plan will be carried out by its directors, officers and employees, acting on behalf of and in the name of the Company in their capacities as directors, officers and employees, and not as individual fiduciaries. No director, officer or employee of the Company will be a fiduciary with respect to the Plan unless he or she is specifically so designated and expressly accepts such designation. 10.8 Committee Members ----------------- The Committee will consist of at least three people, who need not be directors, and will be appointed by the Chief Executive Officer of the Company. Any Committee member may resign and the Chief Executive Officer may remove any Committee member, with or without cause, at any time. A majority of the members of the Committee will constitute a quorum for the transaction of business, and the act of a majority of the Committee members at a meeting at which a quorum is present will be an act of the Committee. The Committee can act by written consent signed by all of its members. Any member of the Committee who is an Employee cannot receive compensation for his or her services for the Committee. No -51- Committee member will be entitled to act on or decide any matter relating solely to his or her status as a Participant. -52- ARTICLE XI Appointment of Trustee ---------------------- The Committee or its authorized delegatee will appoint the Trustee and either may remove it. The Trustee accepts its appointment by executing the trust agreement. A Trustee will be subject to direction by the Committee or its authorized delegatee or, to the extent specified by the Company, by an Investment Manager or other Funding Agent, and will have the degree of discretion to manage and control Plan assets specified in the trust agreement. Neither the Administrator nor the Committee, nor any other Plan fiduciary will be liable for any act or omission to act of a Trustee, as to duties delegated to the Trustee. Any Trustee appointed under this Article XI will be an institution. -53- ARTICLE XII Plan Amendment or Termination ----------------------------- 12.1 Plan Amendment or Termination ----------------------------- The Company may amend, modify or terminate this Plan at any time by resolution of its Board or by resolution of or other action recorded in the minutes of the Administrator or the Committee. Execution and delivery by the Chairman of the Board, the President, any Vice President of the Company or the Committee of an amendment to the Plan is conclusive evidence of the amendment, modification or termination. 12.2 Limitations on Plan Amendment ----------------------------- No Plan amendment can: (a) authorize any part of the Trust Fund to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries; (b) decrease the accrued benefits of any Participant or his or her Beneficiary under the Plan; or (c) except to the extent permitted by law, eliminate or reduce an early retirement benefit or retirement-type subsidy (as defined in Code Section 411) or an optional form of benefit with respect to service prior to the date the amendment is adopted or effective, whichever is later. 12.3 Right to Terminate Plan or Discontinue Contributions ---------------------------------------------------- The Participating Employers intend and expect to continue this Plan in effect and to make the contributions provided for in this Plan. However, the Company reserves the right to terminate the Plan at any time in the manner set forth in Section 12.1. In addition, each Participating Employer reserves the right to completely discontinue contributions to the Plan for its Employees at any time. Upon termination of the Plan, each affected Participant's Account Balance will be vested and nonforfeitable and the Trust will continue until the Trust Fund has been distributed. 12.4 Bankruptcy ---------- If the Company is ever judicially declared bankrupt or insolvent, and no provisions to continue the Plan are made in the bankruptcy or insolvency proceeding, the Plan will to the extent permissible under federal bankruptcy law, be completely terminated. -54- ARTICLE XIII Miscellaneous Provisions ------------------------ 13.1 Subsequent Changes ------------------ All benefits to which any Participant, Surviving Spouse or Beneficiary may be entitled under this Plan will be determined under the Plan as in effect when the Participant ceases to be an Eligible Employee, and will not be affected by any subsequent change in the provisions of the Plan, unless either the Participant again becomes an Eligible Employee or the subsequent change expressly applies to the Participant. 13.2 Merger or Transfer of Assets ---------------------------- 13.2.1 Neither the merger or consolidation of a Participating Employer with any other person, nor the transfer of the assets of a Participating Employer to any other person, nor the merger of the Plan with any other plan will constitute a termination of the Plan. 13.2.2 The Plan may not merge or consolidate with, or transfer any assets or liabilities to, any other plan, unless each Participant would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he or she would have been entitled to receive immediately before the merger, consolidation or transfer (if the Plan had then terminated). 13.3 Benefits Not Assignable ----------------------- 13.3.1 A Participant's Account Balance may not be assigned or alienated either voluntarily or involuntarily. 13.3.2 Notwithstanding the foregoing, a Participant may pledge his or her Pre-Tax Account as security for a loan under Section 6.7. In addition, the Administrator or Committee will comply with the terms of any qualified domestic relations order, as defined in Code Section 414(p). Notwithstanding any other provision of the Plan, the Funding Agent has all powers that would otherwise be assigned to the Administrator, regarding the interpretation of and compliance with qualified domestic relations orders, including the power make and enforce rules regarding segregations of or holds on a Participant's Account to comply with a qualified domestic relations order, or when a domestic relations order is reasonably expected, or is under examination of its status. 13.3.3 In addition, effective August 5, 1997, the prohibition of Section 13.3.1 will not apply to any offset of a Participant's Account Balance against an amount the Participant is ordered or required to pay to the Plan under a judgment, order, decree or settlement agreement that meets the requirements of this Section 13.3.3. The requirement to pay must arise under a judgment of conviction for a crime involving the Plan, under a civil judgment (including a -55- consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or pursuant to a settlement agreement between the Secretary of Labor and the Participant in connection with a violation (or alleged violation) of that part 4. In addition, the judgment, order, decree or settlement agreement must expressly provide for the offset of all or part of the amount that must be paid to the Plan against the Participant's Account Balance. 13.4 Exclusive Benefit of Participants --------------------------------- Notwithstanding any other provision of the Plan, no part of the Trust Fund must ever be used for, or diverted to, any purpose other than the exclusive providing benefits to Participants and their Beneficiaries and defraying the reasonable expenses of the Plan, except that, upon the direction of the Administrator: (a) any contribution made by a Participating Employer by a mistake of fact will be returned within one year after payment of the contribution; (b) any contribution made by a Participating Employer that was conditioned upon its deductibility shall be returned to the extent disallowed as a deduction under Code Section 404 within one year after the deduction is disallowed; and (c) any contribution that was initially conditioned on the Plan's satisfying the requirements of Code Section 401(a) will be returned to the Participating Employer who made it, if the Plan is initially determined not to satisfy the requirements of Code Section 401(a). Any amount a Participating Employer seeks to recover under paragraph (a) or (b) will be reduced by the amount of any losses attributable to it, but will not be increased by the amount of any earnings attributable to it. 13.5 Benefits Payable to Minors, Incompetents and Others --------------------------------------------------- If any benefit is payable to a minor, an incompetent, or a person otherwise under a legal disability, or to a person the Administrator reasonably believes to be physically or mentally incapable of handling and disposing of his or her property, whether because of his or her advanced age, illness, or other physical or mental impairment, the Administrator has the power to apply all or any part of the benefit directly to the care, comfort, maintenance, support, education, or use of the person, or to pay all or any part of the benefit to the person's parent, guardian, committee, conservator, or other legal representative, wherever appointed, to the individual with whom the person is living or to any other individual or entity having the care and control of the person. The Plan, the Administrator and any other Plan fiduciary will have fully discharged their responsibilities to the Participant, Surviving Spouse or Beneficiary entitled to a payment by making payment under the preceding sentence. -56- 13.6 Plan Not A Contract of Employment --------------------------------- The Plan is not a contract of Employment, and the terms of Employment of any Employee will not be affected in any way by the Plan or any related instruments, except as specifically provided in the Plan or related instruments. 13.7 Source of Benefits ------------------ Plan benefits will be paid or provided for solely from the Trust or applicable insurance or Annuity Contracts, and the Participating Employers assume no liability for Plan benefits. 13.8 Proof of Age and Marriage ------------------------- Participants and Beneficiaries must furnish proof of age and marital status satisfactory to the Administrator or Committee when and if the Administrator or Committee reasonably requests it. The Administrator or Committee may delay the payment of any benefits under the Plan until all pertinent information regarding age and marital status has been presented to it, and then, if appropriate, make payment retroactively. 13.9 Controlling Law --------------- The Plan is intended to qualify under Code Section 401(a) and to comply with ERISA, and its terms will be interpreted accordingly. If any Plan provision is subject to more than one construction, the ambiguity will be resolved in favor of the interpretation or construction consistent with that intent. Similarly, if there is a conflict between any Plan provisions, or between any Plan provision and any Plan administrative form submitted to the Administrator, the Plan provisions necessary to retain qualified status under Code Section 401(a) will govern. Otherwise, to the extent not preempted by ERISA or as expressly provided herein, the laws of the State of Illinois (other than its conflict of laws provisions) will control the interpretation and performance of the Plan. 13.10 Income Tax Withholding ---------------------- The Administrator or Committee may direct that any amounts necessary to comply with applicable employment tax law be withheld from any payment due under this Plan. 13.11 Claims Procedure ---------------- 13.11.1 Any application for benefits under the Plan and all inquiries concerning the Plan shall be submitted to the Company at such address as may be announced to Participants from time to time. Applications for benefits shall be in writing on the form prescribed by the Company and shall be signed by the Participant or, in the case of a benefit payable after the death of the Participant, by the Participant's Surviving Spouse or Beneficiary, as the case may be. -57- 13.11.2 The Company shall give written notice of its decision on any application to the applicant within 90 days. If special circumstances require a longer period of time the Company shall so notify the applicant within 90 days, and give written notice of its decision to the applicant within 180 days after receiving the application. In the event any application for benefits is denied in whole or in part, the Company shall notify the applicant in writing of the right to a review of the denial. Such written notice shall set forth, in a manner calculated to be understood by the applicant, specific reasons for the denial, specific references to the Plan provisions on which the denial is based, a description of any information or material necessary to perfect the application, an explanation of why such material is necessary and an explanation of the Plan's review procedure. 13.11.3 The Company shall appoint a "Review Panel," which shall consist of three or more individuals who may (but need not) be employees of the Company. The Review Panel shall be the named fiduciary which has the authority to act with respect to any appeal from a denial of benefits under the Plan. 13.11.4 Any person (or his authorized representative) whose application for benefits is denied in whole or in part may appeal the denial by submitting to the Review Panel a request for a review of the application within 60 days after receiving written notice of the denial. The Company shall give the applicant or such representative an opportunity to review, by written request, pertinent materials (other than legally privileged documents) in preparing such request for review. The request for review shall be in writing and addressed as follows: "Review Panel of the Employee Welfare Benefits Plan Committee, 200 East Randolph Drive, Chicago, Illinois 60601." The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the applicant deems pertinent. The Review Panel may require the applicant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. 13.11.5 The Review Panel shall act upon each request for review within 60 days after receipt thereof. If special circumstances require a longer period of time the Review Panel shall so notify the applicant within 60 days, and give written notice of its decision to the applicant within 120 days after receiving the request for review. The Review Panel shall give notice of its decision to the Company and to the applicant in writing. In the event the Review Panel confirms the denial of the application for benefits in whole or in part, such notice shall set forth in a manner calculated to be understood by the applicant, the specific reasons for such denial and specific references to the Plan provisions on which the decision is based. 13.11.6 The Review Panel shall establish such rules and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its responsibilities under this Section 13.11. 13.11.7 No legal or equitable action for benefits under the Plan shall be brought unless and until the claimant (a) has submitted a written application for benefits in accordance with Section 13.10.1, (b) has been notified by the Company that the application is -58- denied, (c) has filed a written request for a review of the application in accordance with Section 13.10.4 and (d) has been notified in writing that the Review Panel has affirmed the denial of the application; provided that legal action may be brought after the Review Panel has failed to take any action on the claim within the time prescribed in Section 13.11.5. A claimant may not bring an action for benefits in accordance with this Section 13.11.7 later than 90 days after the Review Panel denies the claimant's application for benefits. 13.12 Participation in the Plan by An Affiliate ----------------------------------------- 13.12.1 With the consent of the Board, any Affiliate, by appropriate action of its board of directors, a general partner or the sole proprietor, as the case may be, may adopt the Plan. Each Affiliate will determine the classes of its Employees that will be Eligible Employees and the amount of its contribution to the Plan on behalf of its Eligible Employees. 13.12.2 With the consent of the Board, a Participating Employer, by appropriate action, may terminate its participation in the Plan. 13.12.3 With the consent of the Board, a Participating Employer, by appropriate action, may withdraw from the Plan and the Trust. A Participating Employer's withdrawal will be deemed to be an adoption by that Participating Employer of a plan and trust identical to the Plan and the Trust, except that all references to the Company will be deemed to refer to that Participating Employer. At such time and in such manner as the Administrator directs, the assets of the Trust allocable to Employees of the Participating Employer will be transferred to the trust deemed adopted by the Participating Employer. 13.12.4 A Participating Employer will have no power with respect to the Plan except as specifically provided herein. 13.13 Action by Participating Employers --------------------------------- Any action required to be taken by the Company pursuant to any Plan provisions will be evidenced in the manner set forth in Section 12.1. Any action required to be taken by a Participating Employer will be evidenced by a resolution of the Participating Employer's board of directors (or an authorized committee of that board). Participating Employer action may also be evidenced by a written instrument executed by any person or persons authorized to take the action by the Participating Employer's board of directors, any authorized committee of that board, or the stockholders. A copy of any written instrument evidencing the action by the Company or Participating Employer must be delivered to the secretary or assistant secretary of the Company or Participating Employer. 13.14 Dividends --------- Any dividends credited to a group Annuity Contract between the Participating Employer and the Funding Agent will be used to provide additional benefits under the Plan. -59- ARTICLE XIV Top Heavy Provisions -------------------- 14.1 Top Heavy Definitions --------------------- For purposes of this Article XIV and any amendments to it, the terms listed in this Section 14.1 have the meanings ascribed to them below. 14.1.1 Aggregate Employer Contributions means the sum of all Company Contributions and Forfeitures allocated under this Plan for a Participant, and all employer contributions and forfeitures allocated for the Participant to all Related Defined Contributions in the Aggregation group. 14.1.2 Aggregation Group means the group of plans in a Mandatory Aggregation Group, if any, that includes the Plan, unless including additional Related Plans in the group would prevent the Plan for being a Top Heavy Plan, in which case Aggregation Group means the group of plans in a Permissive Aggregation Group, if any, that includes the Plan. 14.1.3 Determination Date means, for a Plan Year, the last day of the preceding Plan Year. If the Plan is part of an Aggregation Group, the Determination Date for each other plan will be, for any Plan Year, the Determination Date for that other plan that falls in the same calendar year as the Determination Date for the Plan. 14.1.4 Key Employee means an employee described in Code Section 416(i)(1) and the regulations promulgated thereunder. Generally, a Key Employee is an Employee or former Employee who, at any time during the Plan Year containing the Determination Date or any of the four preceding Plan Years, is: (a) an officer of the Company or an Affiliate with annual Compensation greater than 50% of the amount in effect under Code Section 415(b)(1)(A); (b) one of the ten Employees of the Company and all Affiliates owning (or considered to own within the meaning of Code Section 318) the largest interests in any of the Company and the Affiliates, but only if the Employee has annual Compensation greater than the limitation in effect under Code Section 415(c)(1)(A); (c) a five percent owner of the Company or an Affiliate; or (d) a one percent owner of the Company or an Affiliate with annual Compensation from the Company and all Affiliates of more than $150,000. -60- For purposes of determining who is a Key Employee, the Plan's definition of Compensation will be applied by taking into account amounts paid by Affiliates who are not Participating Employers, as well as amounts paid by Participating Employers, and without applying the exclusions for amounts paid by a Participating Employer to cover an Employee's nonqualified deferred compensation FICA tax obligations and for gross-up payments on such FICA tax payments. 14.1.5 Mandatory Aggregation Group means each plan (considering the Plan and Related Plans) that, during the Plan Year that contains the Determination Date or any of the four preceding Plan Years: (a) had a participant who was a Key Employee; or (b) was required to be considered with a plan in which a Key Employee participated in order to enable the plan in which the Key Employee participated to meet the requirements of Code Section 401(a)(4) or 410(b). 14.1.6 Non-key Employee means an Employee or former Employee who is not a Key Employee. 14.1.7 Permissive Aggregation Group means the group of plans consisting of the plans in a Mandatory Aggregation Group with the Plan, plus any other Related Plan or Plans that, when considered as a part of the Aggregation Group, does not cause the Aggregation Group to fail to satisfy the requirements of Code Section 401(a)(4) or 410(b). 14.1.8 Present Value of Accrued Benefits means, for any Plan Year, an amount equal to the sum of (a), (b) and (c) for each person who, in the Plan Year containing the Determination Date, was a Key Employee or a Non-key Employee. (a) The value of a person's full Account Balance under the Plan, plus his or her total account balances under each Related Defined Contribution Plan in the Aggregation Group, determined as of the valuation date coincident with or immediately preceding the Determination Date, adjust for contributions due as of the Determination Date, as follows: (i) in the case of a plan not subject to the minimum funding requirements of Code Section 412, by including the amount of any contributions actually made after the valuation but on or before the Determination Date and, in the first plan year of a plan, by including contributions made after the Determination Date that are allocated as of a date in the first plan year; and (ii) in the case of a plan that is subject to the minimum funding requirements of Code Section 412, by including the amount of any contributions that would be allocated as of a date no later than the -61- Determination Date, plus adjustments to those amounts required under applicable rulings, even though those amounts are not yet required to be contributed or allocated (e.g., because they have been waived) and by including the amount of any contributions actually made (or due to be made) after the valuation date but before the expiration of the extended payment period in Code Section 412(c)(10). (b) The sum of the actuarial present value of a person's accrued benefits under each Related Defined Benefit Plan in the Aggregation Group, determined for any person who is employed by a Participating Employer on a Determination Date, expressed as a benefit commencing at normal retirement date (or, if later, the person's attained age). The present value of an accrued benefit under a Related Defined Benefit Plan is determined as of the most recent valuation date that is within the 12-month period ending on the Determination Date. (c) The aggregate value of amounts distributed during the plan year that includes the Determination Date or any of the four preceding plan years, including amounts distributed under a terminated plan which, if it had not been terminated, would have been in the Aggregation Group. 14.1.9 Related Plan means any other defined contribution plan (a "Related Defined Contribution Plan") or defined benefit plan (a "Related Defined Benefit Plan") (both as defined in Code Section 415(k), maintained by the Company or an Affiliate. 14.1.10 A Super Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the Present Value of Accrued Benefits for Key Employees under all plans in the Aggregation Group exceeds 90% of the sum of the Present Value of Accrued Benefits for all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits for all employees, the Present Value of Accrued Benefits for any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. 14.1.11 Super Top Heavy Plan means the Plan when it is described in the second sentence of Section 14.2. 14.1.12 A Top Heavy Aggregation Group exists in any Plan Year for which, as of the Determination Date, the sum of the Present Value of Accrued Benefits for Key Employees under all plans in the Aggregation Group exceeds 60% of the sum of the Present Value of Accrued Benefits for all employees under all plans in the Aggregation Group. In determining the sum of the Present Value of Accrued Benefits for all employees, the Present Value of Accrued Benefits for any Non-key Employee who was a Key Employee for any Plan Year preceding the Plan Year that contains the Determination Date will be excluded. -62- 14.1.13 Top Heavy Plan means the Plan when it is described in the first sentence of Section 14.2. 14.2 Determination of Top Heavy Status --------------------------------- This Plan is a Top Heavy Plan in any Plan Year in which it is a member of a Top Heavy Aggregation Group, including a Top Heavy Aggregation Group that includes only the Plan. The Plan is a Super Top Heavy Plan in any Plan Year in which it is a member of a Super Top Heavy Aggregation Group, including a Super Top Heavy Aggregation Group that includes only the Plan. 14.3 Minimum Allocation for Top Heavy Plan ------------------------------------- 14.3.1 For any Plan Year that the Plan is a Top Heavy Plan, the sum of the Company Contributions and Forfeitures allocated to the Accounts of each Participant who is a Non-key Employee will be at least three percent of the Participant's Compensation. However, if the sum of the Company contributions and Forfeitures allocated to the Accounts of each Participant who is a Key Employee for the Plan Year is less than three percent of his or her Compensation and this Plan is not required to be included in an Aggregation Group to enable a defined benefit plan to meet the requirements of Code Section 401(a)(4) or 410(b), the sum of the Company Contributions and Forfeitures allocated to the Accounts of each Participant who is a Non-key Employee for the Plan Year will be equal to the largest percentage of Compensation allocated to the Accounts of any Participant who is a Key Employee. Notwithstanding the foregoing, no minimum allocation will be required for any Non-key Employee who participates in another defined contribution plan subject to Code Section 412 and included with this Plan in a Mandatory Aggregation Group. 14.3.2 For any Plan Year when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a participant in both this Plan and a defined benefit plan included in a Mandatory Aggregation Group that is top heavy, the extra minimum allocation will be provided only in this Plan, and by substituting four percent for three percent, where the latter percentage appears in Section 14.3.1. 14.3.3 For any Plan Year that the Plan is a Top Heavy Plan, the minimum allocations set forth in this Section 14.3 will be allocated to the Accounts of all Non-key Employees who are Participants and who are employed by the Company on the last day of the Plan Year, regardless of their service during the Plan Year, and whether or not they have made contributions of their own to the Plan. 14.3.4 In lieu of the above, if a Non-key Employee participates in this Plan and a Related Defined Benefit Plan included with this Plan in a Mandatory Aggregation Group that is a Top Heavy Aggregation Group, a minimum allocation of five percent of Compensation will be provided under this Plan. However, for any Plan Year when the Plan is a Top Heavy Plan but not a Super Top Heavy Plan and a Key Employee is a participant in both this Plan and a Related -63- Defined Benefit Plan included with this Plan in a Mandatory Aggregation Group, seven and one-half percent will be substituted for five percent where the latter percentage appears in this Section 14.3.4, and the extra minimum allocation will be provided only in this Plan. 14.4 Adjustment of Combined Plan Fraction ------------------------------------ For any Plan Year beginning before January 1, 2000 in which this Plan was a Super Top Heavy Plan, the combined plan fraction of Section 3.9 was determined by using the figure 1.00, rather than the figure 1.25 in the denominator of each Participant's defined benefit plan fraction and defined contribution plan fraction. Also in any such Plan Year, Code Section 415(e)(7)(B)(i) was applied by substituting the figure $41,500 for the figure $51,875. -64- To record the amendment and restatement of the Plan to read as set forth herein, the Company has caused its authorized member of the Committee to execute the same this ___ day of December, 1999, but to be effective as of January 1, 1999, except as otherwise expressly provided herein. FMC CORPORATION By J. Paul McGrath ------------------------------------- Member, Employee Welfare Benefits Plan Committee -65- APPENDIX A Bargaining Units Covered ------------------------ Until otherwise negotiated, the bargaining units whose members are covered by the Plan, and the effective dates of their coverage, are listed below. Name of Bargaining Unit Effective Date of Coverage - ----------------------- -------------------------- Agricultural Machinery Division, Hoopeston, Illinois, United Paperworkers International Union, AFL-CIO, CLC, Local 7985 January 1, 1997 Peroxygen Chemicals Division, Buffalo, New York, International Chemical Workers Union, Local 706C July 1, 1997 Phosphorus Chemicals Division, Pocatello, Idaho, International Association of Machinists and Aerospace Workers, AFL-CIO, Gate City Mechanics, Local 1933 July 1, 1998 Kemmerer Coke Plant, Kemmerer, Wyoming, District No. 22, United Mine Workers of America, in behalf of Local Union No. 1316, UMWA August 1, 1998 Agricultural Chemicals Division, Lawrence, Kansas, International Chemical Workers Union, Local 605 September 15, 1998 Phosphorus Chemicals Division, Carteret, New Jersey, International Chemical Workers Union, Local 144 October 15, 1998 Agricultural Chemicals Division, Middleport, New York, International Association of Machinists, Local 1180 January 1, 1999 -66- EX-10.9A 8 1995 STOCK OPTION PLAN Amendment --------- to the ------ FMC 1995 Stock Option Plan -------------------------- (As Amended 4/18/97) WHEREAS, FMC Corporation (the "Company") maintains the FMC 1995 Stock Option Plan (the "Plan"); and WHEREAS, the Company previously has amended the Plan and the Company now considers it desirable to further amend the Plan. NOW, THEREFORE, in exercise of the authority delegated to the undersigned officer by Resolution of the Company's Board of Directors and by virtue of the power reserved to the Company under Section 11(a) of the Plan, the Plan, as previously amended, be and is hereby further amended, by substituting the following for Section 10(a) of the Plan, effective as of September 1, 1999: "(a) Assignment and Transfer. Except as provided below, Options shall not be transferable other than by will or the laws of descent and distribution, shall not be subject to execution, attachment or similar process, and may be exercised or otherwise realized, during the grantee's lifetime, only by the grantee or his or her guardian or legal representative. (i) Beginning September 1, 1999, an Option agreement for a grant of Nonqualified Stock Options, may permit or may be amended to permit the Participant who received the Option, at any time prior to the Participant's death, to assign all or any portion of the Option granted to him or her to: (A) the Participant's spouse or lineal descendants; (B) the trustee of a trust for the primary benefit of the Participant, the Participant's spouse or lineal descendants, or any combination thereof; (C) a partnership of which the Participant, the Participant's spouse and/or lineal descendants are the only partners; (D) custodianships under the Uniform Transfers to Minors Act or any other similar statute; or (E) upon the termination of a trust by the custodian or trustee thereof, or the dissolution or other termination of the family partnership or the termination of a custodianship under the Uniform Transfers to Minors Act or other similar statute, to the person or persons who, in accordance with the terms of such trust, partnership or custodianship are entitled to receive Options held in trust, partnership or custody. In such event, the spouse, lineal descendant, -1- trustee, partnership or custodianship will be entitled to all of the Participant's rights with respect to the assigned portion of such Option, and such portion of the Option will continue to be subject to all of the terms, conditions and restrictions applicable to the Option, as set forth herein and in the related option agreement. Any such assignment will be permitted only if: (x) the Participant does not receive any consideration therefor; and (y) the assignment is expressly permitted by the applicable Option agreement and any amendment thereto as approved by the Committee. The Committee's approval of an Option agreement with assignment rights or amendment of an Option agreement to allow for assignment rights for any one Participant shall not require the Committee to include such assignment rights in an Option agreement or any amendment thereto with any other Participant. Any such assignment shall be evidenced by an appropriate written document executed by the Participant, and the Participant shall deliver a copy thereof to the Committee on or prior to the effective date of the assignment. (iii) An assignee or transferee of an Option must sign an agreement with FMC to be bound by the terms of the applicable Option agreement." IN WITNESS WHEREOF, the Company has caused this Amendment of the Plan to be executed this 16th day of September, 1999. FMC Corporation By: /s/ Michael Murray ------------------------------------ Its: Vice President, Human Resources -------------------------------- -2- EX-10.12 9 DEFINED BENEFIT RETIREMENT PLAN TRUST AGREEMENT Between FMC CORPORATION And Bankers Trust Company FMC Corporation Defined Benefit Retirement Trust TRUST Agreement made as of the 31st day of August, 1999, by and between FMC Corporation, a Delaware corporation, ("FMC") and BANKERS TRUST COMPANY, a New York banking corporation ("Trustee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, FMC maintains a master retirement trust known as the FMC Corporation Master Retirement Trust with the Trustee ("Master Trust"); and WHEREAS, the Master Trust serves as the funding medium for several qualified defined benefit retirement plans sponsored by FMC and its subsidiaries and affiliates ("Prior Plans"); and WHEREAS, effective December 31, 1998, all of the Prior Plans have been merged into the defined benefit plan formerly known as the FMC Corporation Salaried Employees' Retirement Plan, but which name has been changed to the FMC Corporation Employees' Retirement Program ("Plan") by appropriate action taken by the FMC Corporation Employee Welfare Benefits Plan Committee ("Committee"); and WHEREAS, as a result of such merger of the Prior Plans into the Plan there is no longer a need to maintain a master retirement trust; and WHEREAS, FMC and the Trustee desire to restate the Master Trust to reflect the merger of the Prior Plans into the Plan and to make such other changes as are incorporated herein; and WHEREAS, the Trustee is willing to continue to act as trustee of such restated trust upon all of the terms and conditions hereinafter set forth. NOW, THEREFORE, FMC and the Trustee declare and agree that the Trustee will receive, hold and administer all sums of money and such other property acceptable to the Trustee as shall from time to time be Page 2 contributed, paid or delivered to it hereunder, IN TRUST, upon all of the following terms and conditions: ARTICLE I Title-Purpose-Policy-Effect --------------------------- 1.1. Name. The qualified defined benefit retirement trust established hereunder shall be known as the FMC Corporation Defined Benefit Retirement Trust and is sometimes hereinafter referred to as the "Trust". 1.2. Definitions. Where used in this Trust Agreement, unless the context otherwise requires or unless otherwise expressly provided, the terms as defined in the recitals and as defined below shall have the meanings as set forth therein: (a) "Account Party" shall mean the Person designated by FMC to represent FMC for this purpose, the Named Fiduciary and any Person to whom the Trustee shall be instructed by the Named Fiduciary to deliver its annual or other periodic account under Section 7.2, except, that with respect to any filings, notices, reports or accountings required to be given under the General Trust, "Account Party" shall be limited to that officer designated herein to represent FMC. (b) "Accounting Period" shall mean either the twelve (12) consecutive month period coincident with the calendar year or the shorter period in any year in which the Trustee accepts appointment as Trustee hereunder or ceases to act as Trustee for any reason. (c) "Agreement" shall mean all of the provisions of this instrument and of all other written instruments amendatory hereof. (d) "Asset Manager" shall mean the Trustee (other than for purposes of Article V), Named Fiduciary or Investment Manager, Page 3 individually or collectively as the context shall require, with respect to those assets held in any Investment Fund established hereunder over which it exercises, or to the extent it is authorized to exercise, discretionary investment authority or control. (e) "Bank Business Day" shall mean a day on which the Trustee is open for business. (f) "Bankers" shall mean Bankers Trust Company. (g) "Board of Directors" shall mean the Board of Directors of FMC. (h) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and Regulations issued thereunder. (I) "Committee" shall mean the FMC Corporation Employee Welfare Benefits Plan Committee or other Person responsible for benefit administration under the Plan, including any representative (designated in writing as such) or designee thereof authorized to act on behalf of such Committee. (j) "Directed Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Named Fiduciary or any Investment Manager. (k) "Discretionary Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Trustee. (l) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and Regulations issued thereunder. Page 4 (m) "General Trust" shall mean the BT Pyramid Trust created by Bankers Trust Company under Declaration of Trust effective June 30, 1991, as heretofore or hereafter amended. (n) "Insurance Contract" shall mean any contract or policy of any kind issued by an insurance company, whether or not providing for the allocation of amounts received by the insurance company thereunder solely to the general account or solely to one or more separate accounts (including separate accounts maintained for the collective investment of qualified retirement plans), or a combination thereof, and whether or not any such allocation may be made in the discretion of the insurance company. (o) "Investment Fund" shall mean each pool of assets in the Trust in which the Plan has an interest during an Accounting Period. The term shall also include for purposes hereof any sub-fund or account into which an Investment Fund shall be divided from time to time at the direction of the Named Fiduciary. (p) "Investment Manager" shall mean a bank, insurance company or investment adviser satisfying the requirements of Section 3(38) of ERISA. (q) "Investment Vehicle" shall mean any common, collective or commingled trust (other than the General Trust or an Investment Fund), investment company, corporation functioning as an investment intermediary, Insurance Contract, partnership, joint venture or other entity or arrangement to which, or pursuant to which, assets of an Investment Fund within the Trust may be transferred or in which the Trust has an interest, beneficial or otherwise (whether or not the underlying assets thereof are deemed to constitute "plan assets" for any purpose under ERISA). (r) "Named Fiduciary" shall mean the Person or its designee with respect to the Plan, who, within the meaning of Section 402(a)(2), 402(c)(3) or 403(a)(1) of ERISA, has the authority to Page 5 perform the separate functions allocated to that "Named Fiduciary" under this Agreement. Unless otherwise specifically provided to the contrary, the Named Fiduciary shall mean the Committee appointed pursuant to the Plan. (s) "Plan" shall mean the FMC Corporation Employees' Retirement Program which is one plan that consists of two parts - - Part I Salaried and Nonunion Hourly Employees' Retirement Plan and Part II Union Hourly Employees Retirement Plan. (t) "Person" shall mean a natural person, trust, estate, corporation of any kind or purpose, mutual company, joint-stock company, unincorporated organization, association, partnership, joint venture, employee organization, committee, board, participant, beneficiary, trustee, partner, or venturer acting in an individual, fiduciary or representative capacity, as the context may require. (u) "Retirement Fund" shall mean all cash and other property contributed, paid or delivered to the Trustee hereunder, all investments made therewith and proceeds thereof and all earnings and profits thereon, less payments, transfers or other distributions which, at the time of reference, shall have been made by the Trustee, as authorized herein. The Retirement Fund shall include all evidences of ownership, interest or participation in an Investment Vehicle, but shall not, solely by reason of the Retirement Fund's investment therein, be deemed to include any assets of such Investment Vehicle. (v) "Section" shall mean any Section of this Agreement. (w) "Trustee" shall mean Bankers Trust Company, as Trustee of the Retirement Trust. (x) "Valuation Date" shall mean the last day of the Accounting Period, calendar quarter or any more frequent date for reporting and/or investment purposes agreed to by the Trustee. Page 6 The plural of any term shall have a meaning corresponding to the singular thereof as so defined and any neuter pronoun used herein shall include the masculine or feminine, as the context may require. 1.3. Purpose. The Trust is established to fund the benefits payable to participants and their beneficiaries under the Plan and to permit the collective investment of the Plan's assets as hereinabove provided. The Trust is intended to constitute a qualified trust as defined under Section 401(a) of the Code and is entitled to tax exemption under Section 501(a) of the Code. 1.4. Exclusive Benefit. Except as may otherwise be permitted by law and the terms of the Plan, at no time prior to the satisfaction of all liabilities with respect to participants and their beneficiaries under the Plan shall any part of the Plan in the Retirement Fund be used for, or diverted to, any purposes other than for the exclusive benefit of such participants and their beneficiaries, and for defraying the reasonable expenses of administering such Plan. Notwithstanding the above, contributions (or portions thereof) may be returned to the Company (or Participating Employers, as defined in the Plan) upon written request of the Company (or Participating Employer) within one year if a contribution: (a) is conditioned upon deductibility under Section 404 of the Code, to the extent the deduction is disallowed; or (b) any portion thereof is made by the Company (or Participating Employers) by a mistake of fact. 1.5. Effect. All Persons at any time interested in the Plan shall be bound by the provisions of this Agreement and, in the event of any conflict between this Agreement and the provisions of the Plan or any instrument or agreement forming part of such Plan other than this Agreement, the provisions of this Agreement shall control. 1.6. Domestic Trust. The Trust shall at all times be maintained as a domestic trust in the United States. Page 7 1.7. Contributions. FMC and its subsidiaries and affiliates shall, from time to time, make contributions to the Retirement Fund as provided in the Plan. The Trustee shall be accountable for all contributions so received. The Named Fiduciary shall be solely responsible for enforcing payment of all contributions to the Plan, for the timing and amount thereof, for the adequacy of the Retirement Fund and the funding standards adopted for the Plan to meet or discharge any pension or other liabilities of such Plan, and the Trustee shall have no responsibility therefor. ARTICLE II Valuation --------- 2.1. Valuations. The Trustee shall determine the value of the assets of the Retirement Fund and each Investment Fund as of each Valuation Date. In addition, for the convenience of FMC and without imposing any obligation on the Trustee, the Named Fiduciary may request the Trustee to include in its periodic reports under this Section 2.1 or its annual account under Section 7.2, assets that do not constitute part of the Retirement Fund. Except in the case of an Investment Fund in which amortized cost is the valuation method designated, assets will be valued at their market values at the close of business on the Valuation Date, or, in the absence of readily ascertainable market values, at such values as the Trustee shall determine in accordance with methods consistently followed and uniformly applied. Anything in this Agreement to the contrary notwithstanding, with respect to assets constituting part of a Directed Fund or assets included at the request of the Named Fiduciary as hereinabove provided, the Trustee may rely for all purposes of this Agreement on the latest valuation and transaction information submitted to it by the Person responsible for the investment of such assets even if such information predates the Valuation Date. The Named Fiduciary will cause such Person to provide the Trustee with all information needed by the Trustee to discharge its obligations to value such assets and to account under this Agreement. Page 8 2.2. Participant Records. Except as the parties may otherwise agree in writing, the Trustee shall not be required to maintain any separate records or accounts with respect to any participant of the Plan, and any records or accounts required to be maintained pursuant to the terms of the Plan or to comply with ERISA or the Code shall be the responsibility of FMC or the Committee. ARTICLE III Administration of the Plan -------------------------- 3.1. Payment of Benefits. On the direction of the Committee or its authorized agent, the Trustee shall pay moneys out of the Plan directly to or for the benefit of participants in such Plan and their beneficiaries, or to an insurance company to provide for the payment of such benefits by the purchase of an Insurance Contract, or to a paying or disbursing agent (which may be the Committee). On the direction of the Committee or its authorized agent, the Trustee shall pay moneys out of the Plan for the reasonable expenses of administering the Plan. Any assets disbursed or paid over by the Trustee pursuant to this Section 3.1 shall no longer be part of the Retirement Fund. FMC has opened a commercial banking account in the name of the Trust in a federally insured banking institution for the exclusive purpose of making benefit payments in accordance with the Plan. FMC has authorized one or more of its officers, or their designees, to sign, manually or by facsimile signature, all checks, drafts and orders, including orders of direction in informal or letter form, against any funds in such checking account. FMC shall keep accurate and detailed records covering all receipts and disbursements made from the account and shall prepare an appropriate account and reconciliation with respect thereto. FMC shall pay, prepare, file and furnish all local, state and federal tax deposits, returns, and reports required by any government agency or authority with respect to distributions from qualified plans. The Trustee shall make deposits from the Retirement Fund to the checking account as directed from time to time by the Committee or its authorized agent in writing. The Trustee shall have no Page 9 duty to question the propriety of any direction by the Committee or its authorized agent. 3.2. Reliance on Committee. Any directions pursuant to Section 3.1 may, but need not, specify the application to be made of moneys so ordered. Each direction to the Trustee under Section 3.1 shall constitute a certification by the Committee that such direction is in accordance with applicable law, the terms of the Plan and the terms of this Agreement, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction, or to see to the application of any moneys paid. 3.3. Trustee Not Responsible for Plan Administration. The Trustee shall not be responsible under this Agreement, or otherwise, in any way respecting the determination, computation, payment or application of any benefit, for the form, terms, payment provisions or issuer of any Insurance Contract that it is directed to purchase to provide for the payment of benefits under the Plan, for performing any functions under any such Insurance Contract that it may be directed to purchase and/or hold as contract holder thereunder (other than the execution of any documents incidental thereto and transfer or receipt of funds thereunder on the directions of the Committee), or for any other matter affecting the administration of the Plan, by FMC or the Committee or any other Person to whom such responsibility is allocated or delegated pursuant to the terms of the Plan. Page 10 ARTICLE IV Investment of Trust Assets -------------------------- 4.1. Asset Managers. Discretionary authority for the management and control of assets of the Plan from time to time held in the Retirement Fund may be retained, allocated or delegated, as the case may be, for one or more purposes, to and among the Asset Managers by the Named Fiduciary, in its absolute discretion. The terms and conditions of appointment, authority and retention of any Asset Manager shall be the sole responsibility of the Named Fiduciary. The Named Fiduciary shall promptly notify the Trustee in writing of the appointment or removal of an Asset Manager. Any notice of appointment pursuant to this Section 4.1 shall constitute a representation and warranty that the Asset Manager has been appointed in accordance with the provisions of the Plan and that any Asset Manager (other than the Trustee or the Named Fiduciary) is an Investment Manager. 4.2. Investment Discretion. The assets of the Trust shall be invested and reinvested, without distinction between principal and income, at such time or times in such investments and pursuant to such investment strategies or courses of action and in such shares and proportions, as the Asset Managers, in their sole discretion, shall deem advisable. 4.3. Limitations on Investment Discretion. The Named Fiduciary may limit, restrict or impose guidelines affecting the exercise of the discretion hereinabove conferred on any Asset Manager. Any limitations, restrictions or guidelines applicable to the Trustee, as Asset Manager, shall be communicated in writing to the Trustee. The Trustee shall have no responsibility with respect to the formulation of any funding policy or any investment or diversification policies embodied therein. The Named Fiduciary shall be responsible for communicating, and monitoring adherence to, any limitations or guidelines imposed on any other Asset Manager. 4.4. Responsibility for Diversification. The Named Fiduciary shall be responsible for determining the diversification policy of the Retirement Fund, for monitoring adherence by the Asset Managers to such policy, and Page 11 for advising the Asset Managers with respect to limitations on employer or other securities or property contained in the Plan or imposed on such Plan by applicable law or by the Named Fiduciary. ARTICLE V Responsibility for Directed Funds --------------------------------- 5.1. Responsibility for Selection of Agents. All transactions of any kind or nature in or from a Directed Fund shall be made upon such terms and conditions and from or through such brokers, dealers and principals and other agents as the Asset Manager shall direct. No such transactions shall be executed through the facilities of the Trustee except where the Trustee shall make available its facilities solely for the purpose of temporary investment of cash reserves of a Directed Fund. However, nothing in the preceding sentence shall confer any authority upon the Trustee to invest the cash balances of any Directed Fund unless and until it receives directions from the Asset Manager. 5.2. Trustee Not Responsible for Investments in Directed Funds. The Trustee shall be under no duty or obligation to review or to question any direction of any Asset Manager, or to review securities or any other property held in any Directed Fund with respect to prudence or proper diversification or compliance with any limitation on the Asset Manager's authority under this Agreement or the terms of the Plan, any agreement entered into between FMC or the Named Fiduciary and the Asset Manager or imposed by applicable law, or to make any suggestions or recommendation to FMC, the Named Fiduciary or the Asset Manager with respect to the retention or investment of any assets of any Directed Fund, and shall have no authority to take any action or to refrain from taking any action with respect to any asset of a Directed Fund unless and until it is directed to do so by the Asset Manager. 5.3. Investment Vehicles. Any Investment Vehicle, or interest therein, acquired by or transferred to the Trustee upon the directions of the Asset Manager shall be allocated to a designated Directed Fund, and the Page 12 Trustee's duties and responsibilities under this Agreement shall not be increased or otherwise affected thereby. The Trustee shall be responsible solely for the safekeeping of the physical evidence, if any, of the Trust's ownership of or interest or participation in such Investment Vehicle. 5.4. Reliance on Asset Manager. The Trustee shall be required under this Agreement to execute documents, to settle transactions, to take action on behalf of or in the name of the Trust and to make and receive payments on the direction of the Asset Manager. Any direction of the Asset Manager shall constitute a certification to the Trustee (a) that the transaction will not constitute a prohibited transaction under ERISA or the Code, (b) that the investment is authorized under the terms of this Agreement and any other agreement or law affecting the Asset Manager's authority to deal with the Directed Fund, (c) that any contract, agency, joinder, adoption, participation or partnership agreement, deed, assignment or other document of any kind which the Trustee is requested or required to execute to effectuate the transaction has been reviewed by the Asset Manager and, to the extent it deems advisable and prudent, its counsel, (d) that such instrument or document is in proper form for execution by the Trustee, (e) that, where appropriate, insurance protecting the Trust against loss or liability has been or will be maintained in the name of or for the benefit of the Trustee, and (f) that all other acts to perfect and protect the Trust's rights have been taken, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction. In addition, the Trustee shall not be liable for the default of any Person with respect to any Investment Vehicle or any investment in a Directed Fund or for the form, genuineness, validity, sufficiency or effect of any document executed by, delivered to or held by it for any Directed Fund on account of such investment, or if, for any reason (other than the negligence or willful misconduct of the Trustee) any rights of the Trust therein shall lapse or shall become unenforceable or worthless. 5.5. Merger of Funds. The Trustee shall not have any discretionary responsibility or authority to manage or control any asset held in a Directed Fund upon the resignation or removal of an Asset Manager unless and until it has been notified in writing by the Named Fiduciary that the Asset Page 13 Manager's authority has terminated and that such Directed Fund's assets are to be integrated with the Discretionary Fund. Such notice shall not be deemed effective until two Bank Business Days after it has been received by the Trustee. The Trustee shall not be liable for any losses to the Retirement Fund resulting from the disposition of any investment made by the Asset Manager or for the retention of any illiquid or unmarketable investment or any investment which is not widely publicly traded or for the holding of any other investment acquired by the Asset Manager if the Trustee is unable to dispose of such investment because of any restrictions imposed by the Securities Act of 1933 or other Federal or state law, or if an orderly liquidation of such investment is impractical under prevailing conditions, or for failure to comply with any investment limitations imposed pursuant to Section 4.3, or for any other violation of the terms of this Agreement, the Plan or applicable law as a result of the addition of Directed Fund assets to the Discretionary Fund. 5.6. Notification of Named Fiduciary in Event of Breach. If the Trustee has knowledge of a breach committed by an Asset Manager, it shall notify the Named Fiduciary thereof, and the Named Fiduciary shall thereafter assume full responsibility to all Persons interested in the Plan to remedy such breach. 5.7. Definition of Knowledge. The parties hereto acknowledge that while the Trustee will perform certain duties (such as custodial, reporting, recording, valuation and bookkeeping functions) with respect to Directed Funds, such duties will not involve the exercise of any discretionary authority to manage or control the assets of the Directed Funds and will be the responsibility of officers or other employees of the Trustee who are unfamiliar with and have no responsibility for investment management. Therefore, in the event that knowledge of the Trustee shall be a prerequisite to imposing a duty upon or to determining liability of the Trustee under this Agreement or any statute regulating the conduct of the Trustee with respect to such Directed Funds or relieving FMC of its undertakings under Section 13.2, the Trustee will not be deemed to have knowledge of, or to have participated in, any act or omission of an Asset Manager involving the investment of assets allocated to the Directed Funds as a result of the Page 14 receipt and processing of information in the course of performing such duties. 5.8. Duty to Enforce Claims. The Trustee shall have no duty to commence or maintain any action, suit or legal proceeding on behalf of the Trust on account of or growing out of any investment made in or for a Directed Fund unless the Trustee has been directed to do so by the Asset Manager or the Named Fiduciary and unless the Trustee is either in possession of funds sufficient for such purpose or has been indemnified to its satisfaction for counsel fees, costs and other expenses and liabilities to which it, in its sole judgment, may be subjected by beginning or maintaining such action, suit or legal proceeding. 5.9. Restrictions on Transfer. Nothing herein shall be deemed to empower any Asset Manager to direct the Trustee to transfer any asset of a Directed Fund to itself except for purposes enumerated in paragraph (j), (l) or (m) of Section 6.1. ARTICLE VI Powers of Asset Managers ------------------------ 6.1. General Powers. Without in any way limiting the powers and discretions conferred upon any Asset Manager by the other provisions of this Agreement or by law, each Asset Manager shall be vested with the following powers and discretions with respect to the assets of the Trust subject to its management and control, and, upon the directions of the Asset Manager of a Directed Fund, the Trustee shall make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to enable such Asset Manager to carry out such powers and discretions: (a) to purchase, sell, exchange, convey, transfer or otherwise acquire or dispose of any property by private contract or at public auction, and no person dealing with the Asset Manager shall be bound to see to the application of the purchase money or to inquire into the Page 15 validity, expediency or propriety of any such purchase, sale or other acquisition or disposition; (b) to acquire and hold qualifying employer securities and qualifying employer real property, as such investments are defined in Section 407(d) of ERISA; (c) to enter into contracts or to make commitments either alone or in company with others to sell or acquire property; (d) to purchase or sell, write or issue, puts, calls or other options, covered or uncovered, to enter into financial futures contracts, forward placement contracts and standby contracts, and in connection therewith, to deposit, hold (or direct Bankers, as Trustee or in its individual capacity, to deposit or hold) or pledge assets of the Retirement Fund; (e) to purchase part interests in real property or in mortgages on real property, wherever such real property may be situated; (f) to lease to others for any term without regard to the duration of the Trust any real property or part interest in real property; (g) to delegate to a manager or the holder or holders of a majority interest in any real property or mortgage on real property or in any oil, mineral or gas properties, the management and operation of any part interest in such property or properties (including the authority to sell such part interests or otherwise carry out the decisions of such manager or the holder or holders of such majority interest); (h) other than with respect to FMC stock, to vote upon any stocks, bonds or other securities (but subject to the suspension of any voting rights as a result of any broker loan or similar agreement); to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options and to make any payments incidental thereto; to Page 16 consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property; (i) with respect to FMC stock, to vote upon any such stock; to give general or special proxies or powers of attorney with or without the power of substitution, to exercise any conversion privileges, subscription rights or other options and to make any payments incidental thereto; to consent or otherwise participate in corporate reorganizations or other changes affecting corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to such FMC stock each in a manner that is consistent with the written direction of the Committee, or to the extent the Trustee has not received the written direction of the Committee as to how the Trustee is to act (or not act) with respect to such FMC stock, to the extent required by law in the Trustee's uncontrolled discretion; (j) to organize corporations under the laws of any state for the purpose of acquiring or holding title to property (or, in the case of a Directed Fund, to direct the Trustee to organize such corporations or to appoint an ancillary trustee acceptable to the Trustee for such purpose); (k) to invest in a fund consisting of securities issued by corporations and selected and retained solely because of their inclusion in, and in accordance with, one or more commonly used indices of such securities, with the objective of providing investment results for the fund which approximate the overall performance of such designated index; (l) to enter into any partnership, as a general or limited partner, or joint venture; Page 17 (m) to purchase units or certificates issued by an investment company or pooled trust or comparable entity; (n) to transfer money or other property to an insurance company issuing an Insurance Contract; (o) to engage in notional principal contracts, including, without limitation, any SWAP or exchange agreement with respect to interest rates, commodities or securities, or any financial contract or derivative products relating thereto; and from time to time, to deliver payments to and receive payments from the counterparties to such contracts; (p) to transfer assets of a Discretionary or Directed Fund to a common, collective or commingled trust fund exempt from tax under the Code maintained by an Asset Manager or an affiliate of an Asset Manager or by another trustee who is designated by the Named Fiduciary, to be held and invested subject to all of the terms and conditions thereof, and such trust shall be deemed adopted as part of the Trust and the Plan to the extent that assets of the Trust are invested therein; provided, however, that any transfer from a Directed Fund to the General Trust may be made only with the prior approval of the Trustee and shall be invested only in one or more short term investment funds or other special purpose funds established from time to time thereunder; and (q) to be reimbursed for the reasonable expenses incurred in exercising any of the foregoing powers or to pay the reasonable expenses incurred by any agent, manager or trustee appointed pursuant hereto. 6.2. Additional Powers of Trustee. In addition, the Trustee is hereby authorized: (a) to register any securities held in the Retirement Fund in its own name or in the name of a nominee and to hold any securities in Page 18 bearer form, and to combine certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary or representative capacities or as agent for customers, or to deposit or to arrange for the deposit of such securities in any qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by other depositors, or to deposit or arrange for the deposit of any securities issued by the United States Government, or any agency or instrumentality thereof, with a Federal Reserve Bank, but the books and records of the Trustee shall at all times show that all such investments are part of the Retirement Fund; (b) to deposit any funds of the Trust in accounts or savings certificates, which bear a reasonable rate of interest issued or maintained by Bankers, in its separate corporate capacity, or in any other institution affiliated with Bankers and to deposit funds in foreign currency, if any, in accordance with the Cash Management Addendum attached hereto; (c) to employ suitable agents, depositories and counsel, domestic or foreign, and to the extent authorized under Section 8.1, to charge their reasonable expenses and compensation against the Retirement Fund, and to confer upon any such depository the powers conferred upon the Trustee by paragraph (a) of this Section 6.2 as well as the power to appoint subagents and depositories, wherever situated, in connection with the retention of securities or other property; (d) to borrow money from any source as may be necessary or advisable to effectuate the purposes of the Trust on such terms and conditions as the Trustee, in its absolute discretion, may deem advisable; (e) to deposit any funds of the Trust in accounts or savings certificates, which bear a reasonable rate of interest, issued or maintained by Bankers Trust Company, in its separate corporate capacity, or in any other institution affiliated with Bankers Trust Company and to deposit funds Page 19 in foreign currency, if any in accordance with the Cash Management Addendum attached hereto; (f) to compromise, compound, submit to arbitration or settle any debt or obligation owing to or from or otherwise adjust all claims in favor of or against the Retirement Fund other than claims solely affecting the right of any Person to benefits under a Participating Plan; to reduce or increase the rate of interest or extend, or otherwise modify, foreclose upon default, or enforce any such debt or obligation; to sue or defend suits or legal proceedings to protect any interest in the Trust and to represent the Trust in all suits or legal proceedings in any court or before any other administrative agency, body or tribunal; (g) to make any distribution or transfer of assets as of a Valuation Date authorized under Article IX or X or to effectuate participants' rights under a Participating Plan in cash or in kind, or partly in cash or kind, and, in furtherance thereof, to value such assets, which valuation shall be conclusive and binding on all Persons; (h) upon the direction of the Named Fiduciary, to maintain and operate one or more market inventory funds as a vehicle to exchange securities among Discretionary and Directed Funds without alienating the property from the Trust; (i) pursuant to the terms of a separate agreement, to loan securities held in the Retirement Fund to brokers or dealers or other borrowers, to secure the same in any manner permitted by law and the provisions of this Agreement, and during the term of any such loan, to permit the loaned securities to be transferred into the name of and voted by the borrowers or others, and, in connection with the exercise of the powers hereinabove granted, to hold any property deposited as collateral by the borrower pursuant to any master loan agreement in bulk, either as provided in paragraph (a) of this Section 6.2 or otherwise, together with the unallocated interests of other lenders, and to retain any such property upon the default of the borrower, whether or not investment in such property is Page 20 authorized under this Agreement, and to receive compensation therefor out of any amounts paid by or charged to the account of the borrower; (j) to hold uninvested cash awaiting investment and such additional cash balances as it shall deem reasonable or necessary, without incurring any liability for the payment of interest thereon; and (k) generally, consistent with the provisions of this Agreement to perform all acts (whether or not expressly authorized herein) which it may deem necessary and prudent for the protection of the assets of the Trust. 6.3. Prior Consent. The discretionary powers conferred under paragraphs (e), (f), and (g) of Section 6.1 and paragraph (d) of Section 6.2 shall be exercised only with the prior written consent of the Named Fiduciary. In addition, any powers conferred on the Trustee or any other Asset Manager thereunder may be suspended at any time by the Named Fiduciary upon notice to the Asset Manager or Trustee, as the case may be. Any oral notice hereunder shall be promptly confirmed in writing to the Trustee, but the Trustee shall have no responsibility hereunder unless and until it has received notice in accordance with Section 12.6. ARTICLE VII Records and Accounts of Trustee ------------------------------- 7.1. Records. The Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements and other transactions in the Retirement Fund and all accounts, books and records relating thereto shall be open to inspection and audit at all reasonable times during normal business hours by any Person designated by the Named Fiduciary. 7.2. Annual Account. Within ninety (90) days following the close of each Accounting Period, the Trustee shall file with the Account Party, in accordance with Section 13.6, a written account setting forth the receipts and disbursements of the Retirement Fund and the investments and other transactions effected by it upon its own authority or pursuant to the Page 21 directions of any Person as herein provided during the Accounting Period. FMC shall promptly review such statement and report any errors in writing to the Trustee. 7.3. Judicial Accountings. Nothing herein shall in any way limit the Trustee's right to bring any action or proceeding in a court of competent jurisdiction to settle its account or for such other relief as it may deem appropriate. 7.4. Necessary Parties. Except to the extent that Sections 502 and 504 of ERISA may provide otherwise, in order to protect the Retirement Fund from the expense of litigation, no Person other than FMC shall be a necessary party in any proceeding under Section 7.4 or may require the Trustee to account or may institute any other action or proceeding against the Trustee or the Trust. ARTICLE VIII Compensation, Taxes and Expenses -------------------------------- 8.1. Compensation and Expenses. (a) Any reasonable expenses and all other proper charges and disbursements of the Trustee incurred by the Trustee in connection with its administration of the Retirement Trust including, but not limited to, fees for legal services rendered to the Trustee (whether or not rendered in connection with a judicial or administrative proceeding); and (b) such compensation to the Trustee as shall be agreed upon from time to time between the Trustee and an officer of FMC shall be paid from the Retirement Fund, unless paid by FMC. Anything in this sentence to the contrary notwithstanding, FMC shall reimburse the Trustee for any such expenses if for any reason such fees and expenses are not paid out of the Retirement Fund. In no event shall the Trustee be entitled to charge the Retirement Fund or to reimbursement from FMC, for the cost of retaining an agent to perform any service for which the Trustee is compensated under the fee agreement, or for any expenses which are which are not permitted under ERISA. The Trustee's entitlement to reimbursement hereunder shall not be affected by the resignation or removal of the Trustee or by the termination of the Trust. FMC agrees to indemnify Page 22 the Trustee from and against any and all agreed upon fees and reasonable expenses that the Trustee is entitled to be reimbursed under this Agreement, notwithstanding that such fees and expenses may be incurred after termination of this Agreement. The Named Fiduciary may direct the Trustee to pay from the Retirement Fund any other administration expenses of the Plan. Each direction to the Trustee under this Section and Section 8.3 shall constitute a certification by the Named Fiduciary that such direction is in accordance with applicable law, the terms of the Plan and the terms of this Agreement, and the Trustee shall have no duty to make any independent inquiry or investigation as to any of the foregoing before acting upon such direction, or to see to the application of any money paid. 8.2. Taxes. All taxes of any and all kinds what so ever that may be levied or assessed under existing or future laws, domestic or foreign, upon the Retirement Fund or the income thereof shall be paid from the Retirement Fund. The Trustee shall notify the Named Fiduciary of any taxes that may be assessed. In the event that the Named Fiduciary shall determine that the taxes are not lawfully assessed, it may elect to direct the Trustee to contest such assessment at the expense of the Trust, or may itself contest such assessment. 8.3. Allocation. Any tax or expense paid from the Retirement Fund hereunder which is determined by the Named Fiduciary to be specifically allocable to one or more Investment Funds shall be charged against such Investment Fund. Any expense which is allocable to all of the Investment Funds shall be charged against the Retirement Fund as a whole, in such proportions as the Named Fiduciary shall direct the Trustee. ARTICLE IX Resignation or Removal of Trustee --------------------------------- 9.1. Resignation or Removal. The Trustee may be removed by FMC at any time upon thirty (30) days' notice in writing to the Trustee. The Trustee may resign at any time upon sixty (60) days' notice in writing to FMC. Page 23 9.2. Designation of a Successor. Upon the removal or resignation of the Trustee, FMC shall either appoint a successor trustee who shall have the same powers and duties as those conferred upon the Trustee hereunder, and upon acceptance of such appointment by the successor trustee, the Trustee shall assign, transfer and pay over the Retirement Fund to such successor trustee, or FMC shall direct the Trustee to assign, transfer and pay over the Retirement Fund to one or more insurance companies pursuant to Insurance Contracts issued to the Plan. If, for any reason, FMC cannot or does not act promptly to appoint a successor trustee or designate an insurance company in the event of the resignation or removal of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor trustee. Any expenses incurred by the Trustee in connection therewith shall be charged to and paid from the Retirement Fund as an expense of administration. ARTICLE X Amendment or Termination ------------------------ 10.1. Amendment. Subject to Section 1.4, FMC reserves the right at any time and from time to time to amend, in whole or in part, any or all of the provisions of this Agreement by notice thereof in writing delivered to the Trustee; provided, however, no amendment that affects the rights, duties or responsibilities of the Trustee may be made without its prior written consent. 10.2. Termination. Subject to Section 1.4, FMC reserves the right to terminate this Agreement by notice in writing thereof delivered to the Trustee. In the event of termination, the Trustee shall dispose of the Retirement Fund, after the payment of or other provision for all of its expenses (including any compensation to which the Trustee may be entitled), all in accordance with the written directions of the Committee. The Committee will direct the Trustee to dispose of the Retirement Fund by allocating the same on an actuarial basis among the participants, joint annuitants and beneficiaries of the Plan in the manner prescribed by Section Page 24 4044 of ERISA. Any residual assets of the Trust Fund remaining after such allocation shall be distributed to FMC if (a) all liabilities of the Plan to participants, joint annuitants and beneficiaries have been satisfied; and (b) such a distribution does not contravene any provision of law. The foregoing notwithstanding, if any remaining assets of the Plan are attributable to employee contributions, such assets shall be equitably distributed to the participants who made such contributions (or to their beneficiaries) in accordance with their rate of contribution. 10.3. Trustee's Authority to Survive Termination. Until the final distribution of the Retirement Fund, the Trustee shall continue to have and may exercise all of the powers and discretions conferred upon it by this Agreement. 10.4. Disqualification. FMC shall promptly notify the Trustee if the Plan has been or is likely to be disqualified under Section 401 of the Code. 10.5. Approval of Appropriate Agencies. The Trustee may, in its absolute discretion, condition delivery, transfer or distribution of any assets withdrawn from the Retirement Fund upon the Trustee's receiving assurances satisfactory to it that any notice that may be required to be given under ERISA or the Code to any Person, the Department of Labor, the Internal Revenue Service or the Pension Benefit Guaranty Corporation has been given, that any filings required to be made under ERISA or the Code have been made, where required, that no notice of noncompliance has been issued by the Pension Benefit Guaranty Corporation pursuant to Section 4041 of ERISA and the time to issue such notice of noncompliance has expired, that a termination has not affected the qualification of the Plan, and that any plan to which such assets are to be transferred is a qualified plan under Section 401(a) of the Code. The Trustee shall not be responsible under the Plan to give or apply for any such notice or make any such filings or maintain any records required under ERISA or the Code, all of which, for purposes of this Agreement, shall be the responsibility of FMC. Page 25 ARTICLE XI Authorities ----------- 11.1. Company. Whenever the provisions of this Agreement specifically require or permit any action to be taken by "FMC", such action must be authorized by the Board of Directors or by any person authorized by the Board of Directors to take such action. Any resolution adopted by the Board of Directors or other evidence of such authorization shall be certified to the Trustee by the Secretary or an Assistant Secretary of FMC, and the Trustee may rely upon any authorization so certified until revoked or modified by a further action of the Board of Directors similarly certified to the Trustee. Each subsidiary or affiliate of the Company appoints the Company as its agent to exercise on its behalf all of the powers and authority conferred upon the Company by this Trust, including without limitation, the power to amend or terminate the Trust. 11.2. Named Fiduciary and Committee. FMC shall furnish the Trustee from time to time with a list of the names and signatures of all Persons (other than FMC) authorized hereunder: (a) to receive accountings under Section 1.2(a); (b) to act as a Named Fiduciary; (c) as members of the Committee; or (d) in any manner authorized to issue orders, notices, requests, instructions and objections to the Trustee pursuant to the provisions of this Agreement. Any such list and the form of the instructions shall be certified to the Trustee by the Secretary or an Assistant Secretary of FMC and may be relied upon for accuracy and completeness by the Trustee. Each such Person shall thereupon furnish the Trustee with a list of the names and signatures of those individuals, if any, who are authorized, jointly or severally or otherwise, to act for such Person hereunder, and the Trustee shall be fully protected in acting upon any notices or directions received from any of them. 11.3. Investment Manager. The Named Fiduciary shall cause each Investment Manager to furnish the Trustee from time to time with the names and signatures of those persons authorized to direct the Trustee on its behalf hereunder. Page 26 11.4. Form of Communications. Any agreement or understanding between FMC and any Person (including an Investment Manager) or any other provision of this Agreement to the contrary notwithstanding, all notices, directions and other communications to the Trustee shall be in writing or in such other form, including transmission by electronic means through the facilities of third parties or otherwise, specifically agreed to in writing by the Trustee. The Trustee shall be fully protected in acting in accordance therewith, but shall not thereby assume responsibility for the failure or breakdown of any such means of communication not due to its own negligence or willful misconduct. 11.5. Continuation of Authority. The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change in the composition or authority of the Named Fiduciary or membership of the Committee or terminating the authority of any Person, including any Investment Manager, has occurred. 11.6. No Obligation to Act on Unsatisfactory Notice. The Trustee shall incur no liability under this Agreement for any failure to act pursuant to any notice, direction or any other communication from any Asset Manager, FMC, the Named Fiduciary, the Committee, or any other Person or the designee of any of them unless and until it shall have received instructions in form specified in this Article XI herein. ARTICLE XII General Provisions ------------------ 12.1. Governing Law. To the extent that state law shall not have been preempted by the provisions of ERISA or any other law of the United States heretofore or hereafter enacted, this Agreement shall be administered, construed and enforced according to the laws of the State of New York. 12.2. Entire Agreement. The Trustee's duties and responsibilities to the Plan or any Person interested therein shall be limited to those Page 27 specifically set forth in this Agreement. No amendment to the Plan or agreement or instrument affecting the Plan or any other document shall affect the Trustee's duties or responsibilities hereunder without its prior written consent. 12.3. Mistake. No mistake made in good faith and in the exercise of due care in connection with the administration of the Retirement Fund shall be deemed to be a breach of the Trustee's duties if, promptly after discovery of the mistake, the Trustee takes whatever action may be practicable in the circumstances to remedy the mistake. 12.4. Reliance on Experts. The Trustee may consult with experts (who may be experts employed by FMC) including legal counsel, appraisers, pricing services, accountants or actuaries, selected by it with due care with respect to the meaning and construction of this Agreement or any provision hereof, or concerning its powers and duties hereunder. 12.5. Successor to the Trustee. Any successor, by merger or otherwise, to substantially all of the trust business of Bankers shall automatically and without further action become the Trustee hereunder, subject to all the terms and conditions and entitled to all the benefits and immunities hereof. 12.6. Notices. All notices, reports, annual accounts and other communications from the Trustee to FMC, the Named Fiduciary, Committee, Investment Manager, or any other Person shall be deemed to have been duly given if mailed, postage prepaid, or delivered in hand to such Person at its address appearing on the records of the Trustee, which address shall be filed with the Trustee at the time of the establishment of the Trust and shall be kept current thereafter by the Named Fiduciary. All directions, notices, statements, objections and other communications to the Trustee shall be deemed to have been given when received by the Trustee at its offices in the form provided in Article XI. 12.7. Plan Documents. The Named Fiduciary shall provide the Trustee with complete, current copies of the Plan and the most recent tax Page 28 qualification letter relative thereto. The Trustee shall be entitled to rely upon the Named Fiduciary's attention to this obligation and shall be under no duty to inquire of any Person as to the existence of any documents not provided hereunder. 12.8. No Waiver; Reservation of Rights. The rights, remedies, privileges and immunities expressed herein are cumulative and are not exclusive, and the Trustee shall be entitled to claim all other rights, remedies, privileges and immunities to which it may be entitled under applicable law. 12.9. Descriptive Headings. The captions in this Agreement are solely for convenience of reference and shall not define or limit the provisions hereof. 12.10. Spendthrift Provision. Except as may be required by law, no interest or claim of interest of any kind of any participant in the Plan under the provisions of this Trust is assignable, nor may any such interest or claim be subject to garnishment, attachment, execution or levy of any kind, and no attempt to transfer, assign, pledge or otherwise encumber or dispose of such interest by act of the Person involved or by operation of law will be recognized. ARTICLE XIII Undertaking by FMC ------------------ 13.1. Undertaking. In consideration of Bankers' agreeing to enter into this Agreement, FMC hereby agrees to hold harmless Bankers, individually and as Trustee, and Bankers' directors, officers, and employees, from and against all amounts, including without limitation taxes, expenses (including reasonable counsel fees), liabilities, claims, damages, actions, suits or other charges, incurred by or assessed against Bankers, individually or as Trustee, or its directors, officers or employees (a) as a direct or indirect result of any act or omission of any predecessor trustee or fiduciary appointed under the Plan; (b) as a direct or indirect result of anything done Page 29 by or on behalf of Bankers in reliance upon the duly authorized directions of any Investment Manager, the Committee, FMC, or the Named Fiduciary, or anything omitted to be done in the absence of such directions, or (c) as a direct result of the failure of FMC, the Committee, or the Named Fiduciary, directly or indirectly or through its appointed agents, to adequately, carefully and diligently discharge its fiduciary responsibilities with respect to the Plan. 13.2. Limitation on Undertaking. Anything hereinabove to the contrary notwithstanding, FMC shall have no responsibility to Bankers under Section 13.1 if Bankers knowingly participated in or knowingly concealed any act or omission of any Person described therein knowing that such act or omission constituted a breach of such Person's fiduciary responsibilities, or if Bankers fails to perform any of the duties specifically undertaken by it under the provisions of this Agreement in the manner herein provided. 13.3. Survival of Undertakings. FMC further agrees that the undertakings made in this Article XIII shall be binding on its successors or assigns and shall survive termination, amendment or restatement of this Agreement, or the resignation or removal of the Trustee, and that this Article shall be construed as a contract between FMC and the Trustee according to the laws of the State of New York in effect from time to time. ARTICLE XIV Undertaking by Trustee ---------------------- FMC has allocated fiduciary responsibilities to various fiduciaries under the Plan and Trust. In carrying out its fiduciary responsibilities under the Trust, the Trustee, any Investment Manager and any other fiduciary hereunder shall act solely in the interest of the participants and beneficiaries 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 with like aims. In determining whether the requirements of prudence and diversification stated in Sections 404(a)(1)(B) and (C), respectively of ERISA Page 30 have been met, all the investments of the Retirement Fund shall be considered in their entirety, provided, however that nothing in this paragraph shall impose any duty or liability upon Bankers for any action taken or omitted by it under the direction of an Asset Manager other than Bankers. Page 31 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized and attested to as of the day and year first above written. FMC CORPORATION By FMC Corporation Employee Welfare Benefits Plan Committee Attest /s/ Lori A. Lenard By: /s/ J. Paul McGrath --------------------- ---------------------- Title Counsel Title: Member ------ STATE OF ILLINOIS ) ) ss. : COUNTY OF COOK ) On the 31st day of August, 1999, before me personally came J. Paul McGrath to me known, who being by me duly sworn, did depose and say: that he resides in Chicago, Illinois; that he is a member of the Employee Welfare Benefits Committee of FMC Corporation, the corporation described in and which executed the above instrument; and that he signed his name thereto by like order. /s/ Karen E. Biege --------------------------------- Notary Public (Corporate Seal) BANKERS TRUST COMPANY Attest /s/ James T. Strag By: /s/ Frank Eipper --------------------- ----------------------- Title Assistant Vice President Title: Vice President STATE OF NEW YORK ) ) ss. : COUNTY OF NEW YORK ) On the 22nd day of September, 1999, before me personally came Frank Eipper to me known, who being by me duly sworn, did depose and say: that he/she resides in Stamford, CT; that he/she is a Vice President of BANKERS TRUST COMPANY, the corporation described in and which executed the above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. /s/ Allison O. Taylor --------------------------------- Notary Public Page 32 EX-12 10 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES EXHIBIT 12 ---------- FMC CORPORATION --------------- STATEMENT RE COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES --------------------------------------------------------------- (In millions, except ratios)
Years ended December 31, ----------------------------------------------------------------- 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Earnings: Income (loss) from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle $ 274.3 $ 249.5 $ (59.7) $ 235.8 $ 152.7 Minority interests 5.1 6.2 8.9 9.6 5.1 Undistributed (earnings) losses of affiliates 1.3 (3.4) (2.0) (6.7) 1.9 Interest expense and amortization of debt discount, fees and expenses 117.1 120.3 118.3 103.0 84.0 Amortization of capitalized interest 3.4 3.5 7.0 7.5 7.7 Interest included in rental expense 15.0 14.8 14.2 12.7 17.7 ----------------------------------------------------------------- Total earnings $ 416.2 $ 390.9 $ 86.7 $ 361.9 $ 269.1 ================================================================= Fixed charges: Interest expense and amortization of debt discount, fees and expenses $ 117.1 $ 120.3 $ 118.3 $ 103.0 $ 84.0 Interest capitalized as part of fixed assets 2.3 4.4 6.6 15.5 10.2 Interest included in rental expense 15.0 14.8 14.2 12.7 17.7 ----------------------------------------------------------------- Total fixed charges $ 134.4 $ 139.5 $ 139.1 $ 131.2 $ 111.9 ================================================================= Ratio of earnings to fixed charges 3.1 2.8 0.6 2.6 2.4 ================================================================= (A) (B) (C)
(A) The ratio of earnings to fixed charges for the year ended December 31,1999, before the gain on the sale businesses, asset impairments, and restructuring and other charges was 2.9x. (B) Earnings did not cover fixed charges by $52.4 million for the year ended December 31, 1997. The ratio of earnings to fixed charges for the year ended December 31, 1997 before asset impairments and restructuring and other charges was 2.5x. (C) The ratio of earnings to fixed charges for the year ended December 31, 1995 before a gain on the sale of FMC Wyoming stock, asset impairments, restructuring and other charges, and a write-off of acquired in-process research and development costs was 2.9x. EX-13 11 1999 ANNUAL REPORT TO STOCKHOLDERS ANNUAL REPORT FOR THE YEAR 1999 In 1999, we exceeded our goal of growing income per share ten percent per year and made progress toward our target of fifteen percent return on investment by the year 2001 [CHART APPEARS HERE] FMC Profile As one of the world's leading producers of chemicals and machinery for industry and agriculture, FMC participates on a worldwide basis in five broad markets: Energy Systems, Food and Transportation Systems, Agricultural Products, Specialty Chemicals, and Industrial Chemicals. FMC operates 97 manufacturing facilities and mines in 26 countries. About the Cover Return on investment is calculated as after-tax income from continuing operations (before asset impairments and restructuring and other charges and gains on sales of businesses) plus after-tax interest expense on debt as a percentage of total average debt and equity. Income per share is based on after-tax income from continuing operations excluding gains on sales of businesses ($1.47 per share) in 1999, and asset impairments and restructuring and other charges in 1999 and 1997 of $(0.83) and $(4.77) per share, respectively. All per share amounts are on a diluted basis and represent supplemental financial information which should not be considered in isolation nor as an alternative for earnings per share determined in accordance with generally accepted accounting principles. FINANCIAL SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------ (In millions, except per share, common stock, return on investment, employee and stockholder data) 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Sales In the United States $ 1,780.2 $ 1,909.1 Outside the United States, including exports 2,330.4 2,469.3 - ----------------------------------------------------------------------------------------------------------------------------------- Total sales $ 4,110.6 $ 4,378.4 - ----------------------------------------------------------------------------------------------------------------------------------- Income (after tax) - ----------------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before cumulative effect of change in accounting principle $ 216.0 $ 185.3 - ----------------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before gains on sales of businesses, asset impairments, restructuring and other charges and cumulative effect of change in accounting principle/(1)/ $ 195.1 $ 185.3 - ----------------------------------------------------------------------------------------------------------------------------------- Earnings per share from continuing operations before cumulative effect of change in accounting principle: Basic $ 6.86 $ 5.45 Diluted $ 6.67 $ 5.30 - ----------------------------------------------------------------------------------------------------------------------------------- Income per share from continuing operations before gains on sales of businesses, asset impairments, restructuring and other charges and cumulative effect of change in accounting principle:/(1)/ Basic $ 6.19 $ 5.45 Diluted $ 6.03 $ 5.30 - ----------------------------------------------------------------------------------------------------------------------------------- Financial and other data - ----------------------------------------------------------------------------------------------------------------------------------- Common stock price range $ 74 5/16 - 39 5/8 $ 82 3/16 - 48 1/4 - ----------------------------------------------------------------------------------------------------------------------------------- Return on investment based on income from continuing operations (adjusted)/(1)/(2)/ 12.5% 12.1% - ----------------------------------------------------------------------------------------------------------------------------------- Capital expenditures excluding acquisitions $ 236.3 $ 265.9 - ----------------------------------------------------------------------------------------------------------------------------------- Research and development expense $ 152.4 $ 157.7 - ----------------------------------------------------------------------------------------------------------------------------------- At December 31 Operating working capital/(3)/ $ 255.2 $ 304.2 Number of employees 15,609 16,216 Number of stockholders of record 9,549 10,036 - -----------------------------------------------------------------------------------------------------------------------------------
(1) Supplemental financial information. Income from continuing operations before gains on sales of businesses, asset impairments, restructuring and other charges and cumulative effect of change in accounting principle; and income per share or return on investment from continuing operations before gains on sales of businesses, asset impairments, restructuring and other charges and cumulative effect of change in accounting principle should not be considered in isolation nor as an alternative for income from continuing operations, net income, earnings per share or return on investment determined in accordance with generally accepted accounting principles, nor as the sole measure of the company's profitability. (2) Return on investment is calculated as income from continuing operations before gains on sales of businesses, asset impairments, restructuring and other charges and cumulative effect of change in accounting principle plus after-tax interest expense on debt as a percentage of total average debt (includes short-term and total long-term debt) and equity, as follows, in millions: ($195.1 + $71.4)/$2,124.1 in 1999 and ($185.3 + $75.0)/$2,156.2 in 1998. (3) Operating working capital includes trade receivables (net), inventories, other current assets, accounts payable, accrued payroll, other current liabilities, and the current portion of accrued pension and postretirement benefits. The calculation excludes the impact of the company's $144.0 million sale of receivables in 1999. See page 28 for more information about operating working capital in the Liquidity and Capital Resources section of Management's Discussion and Analysis. 1 2 MESSAGE TO SHAREHOLDERS [PICTURE OF ROBERT N. BURT APPEARS HERE] Earnings for FMC's continuing operations hit a record high since our 1986 recapitalization. The momentum of the fourth quarter indicates that the improved markets worldwide will drive earnings in 2000 and beyond. Our numbers document our success in 1999 and illustrate our progress against the targets we outlined in 1998. We achieved--and exceeded--our goal of growing earnings per share 10 percent per year and made progress toward our target of 15 percent return on investment by 2001. After-tax income per share from continuing operations, excluding one-time items, was $6.03--an increase of 14 percent from $5.30 in 1998 and 46 percent from $4.13 in 1997. Sales for the full year were $4.1 billion compared with $4.4 billion in 1998. FMC's return on investment increased to 12.5 percent from 12.1 percent in 1998. We made aggressive, strategic acquisitions in 1999. We bought the Norway- based Pronova alginate business and combined it with our complementary pharmaceutical and food ingredients business to create FMC BioPolymer. To expand our soda ash business, we bought our Wyoming neighbor, Tg Soda Ash, from Elf Atochem. In addition, we made six smaller investments that were attractive extensions of our machinery and chemicals businesses. Our total investment in acquisitions and joint ventures was nearly $300 million, excluding an incentive payment that could be as much as $100 million to Elf Atochem for the soda ash business in four years. This month we also acquired Northfield Freezing Systems Group, which manufactures freezing systems for industrial food processing. We found solutions for our problem areas. We announced a phosphorus joint venture with Solutia Inc that will create significant synergies and help that business improve returns and compete more effectively in the marketplace. We expect the joint venture to be cleared by the FTC in the first quarter of 2000. We strengthened the competitive position of our lithium business by continuing to improve operations overall and by negotiating a contract with SQM (Sociedad Quimica y Minera de Chile S.A.) to supply us with lithium carbonate. Returns from our hydrogen peroxide division were above the cost of capital through a combination of reduced costs and improved market dynamics. Finally, we sold our bioproducts and lower-margin process additives businesses. FMC Corporation 3 Overall, our businesses performed well in 1999. We continued to cut costs and improve efficiencies throughout our operations while heightening attention to both quality and safety. Earnings for Industrial Chemicals rose significantly as hydrogen peroxide prices and volumes increased. Soda ash also increased on higher volumes, reflecting the Tg Soda Ash acquisition and increased productivity overall. Agricultural Products reported lower sales and earnings, which were affected primarily by unusually low pest pressure in North America. However, sales of insecticides to Asia were strong, and sales to Latin America were strengthening, signaling continued improvement in 2000. Sales for Specialty Chemicals declined due to the divestitures of the process additives and bioproducts businesses, partially offset by good results from FMC BioPolymer. Countering industry trends, our energy systems business reported a strong year and achieved record profits. Most oil service companies saw 1999 profits drop 50 percent or more from 1998 levels. Our results reflect a lower cost structure and our dominance in the sophisticated technology used in deep-water oil and gas projects. While FMC FoodTech reported increased profits based on improved margins and lower costs, our airport products business saw profit declines from record levels in 1998. We continue to build our leadership team. We welcome two new members to our board of directors. Asbjorn Larsen brings us 25 years of experience with Norway- based Saga Petroleum ASA, where he served for two decades as president and chief executive officer. Enrique J. Sosa joined FMC's board after serving as president of BP Amoco Chemicals, executive vice president of Amoco, and senior vice president of Dow Chemical Company's chemical sector. Their knowledge and experience in the oil field and chemical industries will help guide the future direction of our businesses. In mid-1999 we made a smooth transition to Joe Netherland's leadership as president of FMC and also as a member of our board of directors. Long a respected member of our senior leadership team, Joe brings enthusiasm, experience and no-nonsense pragmatism to his new position. I'm pleased to be working more closely with him. Joe succeeds Larry Brady, who contributed significantly to FMC during his career. We wish Larry a successful future. Three other senior executives retired. Mike Callahan, whose wisdom and experience strengthened our financial reputation in the marketplace, retired in December. Replacing Mike as senior vice president and chief financial officer is Bill Schumann--who has served FMC as treasurer, executive director of corporate development and general manager of the Agricultural Products Group. We're fortunate to have someone of Bill's caliber, experience and skills as part of our management team. HISTORICAL EARNINGS GROWTH CONTINUING OPERATIONS excludes one-time gains and losses [GRAPH APPEARS HERE] nineteen ninety nine annual report 4 Hal Russell retired as head of our Washington, D.C. office. Hal's knowledge and political savvy helped build diverse coalitions and address public policy issues important to FMC. We have a strong successor in Jerry Prout, newly appointed vice president of government affairs. Jerry has a wealth of public affairs experience, broad knowledge of FMC and industry issues, and a solid record of success in Washington, D.C. Bill Wheeler, vice president of shared services, retired after a 31-year career that has literally taken him around the globe for FMC. He has been a stalwart in our chemical businesses and pioneered a role, as head of our Asia/Pacific region, in developing business in that region. We promoted Peter Kinnear to FMC vice president. Peter continues as general manager of Petroleum Equipment and Systems, where his business and industry experience was a driving force behind our ability to develop our subsea business. His broad knowledge of the oil field will help guide our future growth efforts. Congratulations to our new officers and thanks to our retirees for jobs well done. HISTORICAL CHART OF ROI excludes one-time gains and losses [CHART APPEARS HERE] The excellent year we just completed bodes well for our future prospects. We're committed to sustain the back-to-back profit momentum of 1998 and 1999. Specifically, we're committed to growing earnings at least 10 percent per year and achieving a return on investment of 15 percent by 2001. Agricultural Products is poised to rebound from unusually low pest pressures in 1999 in all four of our major North American markets. We expect a continued recovery in Industrial Chemicals, reflecting higher volumes, synergies and cost savings. Food and Transportation Systems should see improved results, reflecting improved market conditions and product mix. Our Specialty Chemicals business is well positioned for growth, particularly given the potential of FMC BioPolymer. And with higher crude prices, oil companies are restoring exploration and production spending, which should continue to drive growth in our Energy Systems business. We will generate strong cash flow, allowing us to pursue profitable growth opportunities. We also expect that our operating earnings will continue to grow. A major objective is to translate our success into a higher stock price. Equally important is continuing to make FMC better--defined as employees being energized by their jobs, customers being well served with quality products and sophisticated technology, and our plant communities viewing FMC as a responsible corporate citizen. /s/ Robert N. Burt Robert N. Burt Chairman of the Board and Chief Executive Officer February 11, 2000 FMC Corporation The story of FMC chronicles the spirit of inquisitiveness and insight, innovation and invention--from our early days in targeted food machinery lines to our presence today as a global competitor offering an array of products and services in machinery and chemicals. This is a story about a company that changed the lives of millions of people--and in the process, earned market shares and leadership positions and profits. This is a story about people looking for new opportunities and new chances to grow--people who have courage, who take risks and who are smart enough, strategic enough and bold enough to keep this company moving forward, rising to the challenges of tomorrow. And this is a story about how FMC will continue to spark growth and provide solutions that will continue to change people's lives around the world. 6 Providing Tomorrow's Technology for Today's Oil Field In the energy equipment arena, our focus on invention demanded dedicated research and development in subsea technology in the 1980s and added acquisitions of technology leaders in the 1990s. Today, the range of our capabilities and the fast-track nature of our technological developments make FMC the undisputed market leader in providing integrated energy systems. The oil and gas industries continue to consolidate, which we believe will lead to further outsourcing by the major oil companies and a more limited number of vendors who can provide a package of related products and services--particularly for deep-water projects. To broaden our capabilities, in 1999 we formed with the Mitsui group a joint-venture company, MODEC International LLC, to provide tension leg platform and floating production system technologies to the offshore Gulf of Mexico, West Africa and Brazil markets. As technologies become more sophisticated, deep-water basins are more available to oil companies. Of the recent large discoveries, 74 percent have been offshore, with increasing activity in the Gulf of Mexico, West Africa and offshore Brazil. FMC is a key player in this market, with a significant portion of our energy systems sales in offshore projects. Heightened use of advanced technologies is continuing to help lower costs--which bodes well for still more deep-water projects. We continue to develop our technology to maintain our leadership in subsea markets, spending more on research and development than at any time in our history. Our Kongsberg, Norway, team continues to introduce products for the subsea market, including the new SmartField control system that allows an exchange of huge amounts of data from the well on the sea floor. Early in 1999 we helped set--once again--a new world-record for a subsea installation. Petrobras, Brazil's state-owned oil company, used FMC systems for a well in 6,080 feet of water in the Roncador field, offshore Brazil. To maintain our lead, we currently are developing subsea completion systems for 10,000 feet of water. We also have programs underway to put subsea processing and other production-related activities on the ocean floor. To expand our gas metering business and to complement our industry-leading liquids measurement business, we also acquired the flow measurement systems of Perry Engineering Company. With this acquisition, FMC offers a full range of advanced gas metering products, including ultrasonic, orifice and coriolis technologies. Also, we acquired Mid-America Engineers to complement our blending systems for the petroleum and chemical industries. FMC Corporation EXPERT CONTROL FMC Kongsberg Subsea is providing French oil company Elf Aquitaine with an advanced, guidelineless, remote-controlled subsea production system to operate at 4,400 feet below sea level off the coast of Angola. FMC engineered the entire system--including subsea trees, HOST 2500 manifolds and expert control systems-- specifically for this deep-water project. Installation begins in the spring of 2000. [PICTURE APPEARS HERE] [PICTURE APPEARS HERE] LET'S GET COOKING FMC FoodTech engineers have developed the largest oven in any USDA application-- the GYRoCOMPACT oven that can cook more than 10,000 pounds per hour. Computerized controls maintain precise humidity levels and other operating parameters, allowing the cooked product to retain flavor and high yield. 9 Offering Solutions to Feed the World Safely Throughout the century, FMC has brought the spirit of invention and breakthrough developments to the food processing industry. Today, FMC FoodTech has rounded out its product portfolio and transformed itself into a global food industry supplier and technology leader. We provide the equipment and expertise wherever food is processed, portioned, squeezed, cooked, sterilized, fried, packaged and frozen. Customers and consumers alike are demanding convenience--and more important--increased food safety. We have a history of adding products and services to become a solutions provider to our customers, with food safety at the forefront of new opportunities. Frigoscandia Equipment, for instance, was the pioneer of fluidization technology that quick-freezes foods to allow for gentle handling and food safety. One of our new cooking technologies, Stein VaporJet--geared toward convenience food makers and fast food restaurants--depends on high humidity to cook poultry and other meats faster. Faster processing produces higher product yields and safer-to-eat foods. Our proprietary software and robotics technology come into play with our DSI waterjet portioning systems, a hygienically sound method of cutting poultry, seafood and other foods during processing. Our broad technology base means that we can offer customers a range of options and fully integrated systems. For the future, we'll be examining new technologies and new equipment to improve food processing and ensure safe foods. Extending Technology for a Travelling World Our transportation business has built clear market leadership in its major product lines by making acquisitions, creating alliances with key customers, continuing our ambitious internal development program and emphasizing global expansion. Flying is easier today thanks to a host of FMC products that are standard equipment for modern airports and airlines. From helping passengers board aircraft to loading cargo to deicing planes, FMC airport products and systems are in the forefront of technology that ensures comfort and safety for passengers and convenience with cargo at airports around the world. We have more exciting projects on the horizon. We are competing to build a new generation of cargo loaders for the U.S. Air Force. We acquired the rights to manufacture towbarless tractors, which increase flexibility and speed in moving aircraft away from the gates. We also are testing passenger boarding bridges for new commuter jets. These projects and more should help improve growth potential and earnings in the future. nineteen ninety nine annual report 10 Providing Innovative Products for a Growing World To help feed the world's people, FMC's Agricultural Products business has delivered on diligent internal research and development efforts for the past 50 years. Our history of product development has resulted in a strong portfolio of insecticides and recent notable successes in discovering new herbicides--with another promising herbicide in the product pipeline. We've been successful in building our specialty--or non-crop--business, including termiticides and lawn and garden products, and we see this business increasing significantly over the next two to three years. Across the board, we continue to develop opportunities for our products in market segments and crop uses throughout the world. FMC has the ability to respond to evolving and changing environments with flexibility, agility and efficiency. We have been an effective global marketer, and we continue to build on our history of progressive strategic partnerships. Our efforts focus on lower application rates, more environmentally compatible products, alternatives to insect-resistant products and products that can be adapted to developing countries. With today's focus on biotechnology, we are one of the first agricultural products companies to dedicate a majority of our discovery efforts to identify compounds with a specific biological function on agricultural pests. This approach is a step-change--a revolutionary approach to discovering new crop protection chemicals. We're learning more about the genetics of major economic pests--allowing us to more effectively uncover important biological sites to target our chemistry. As with the pharmaceutical industry, we expect to discover new breakthrough classes of products from these research and development strategies. As part of this process, in late 1999 we announced a partnership with Devgen, a Brussels-based drug and drug-target discovery company, to discover pesticides. With Devgen's genomics and screening technology, we are able to rapidly identify pesticide target sites. We can then develop tests to screen hundreds of thousands of compounds in a short period of time--dramatically increasing the probability of successfully bringing products to the marketplace. And by targeting a biological function from the pest we want to control, we'll target our applications and ensure that we develop products that are safer for the environment and for humans. FMC Corporation 11 [PICTURE APPEARS HERE] TARGETING BIOTECHNOLOGY FMC is taking a new, state-of-the-art biotech approach to our agricultural products discovery efforts. We're focusing on the genetic make-up of insects to identify target sites and develop pesticides to act on those sites. To advance this work, in 1999 we entered into a partnership with Brussels-based Devgen, a new company that works to identify optimal targets for drug delivery. Devgen's expertise will allow us to test a greater number and higher quality of biochemical target sites for pesticide discovery. nineteen ninety nine annual report [PICTURES APPEAR HERE] EURO-MADE (inset) FMC Foret, our European chemicals business, also boasts advanced processing technology for a range of chemical products. Here, sodium perborate and sodium tripolyphosphate are ready for shipment from Huelva, Spain, to a customer in the Middle East. LEADING THE INDUSTRY FMC is a major supplier of soda ash to Cardinal Glass, a Wisconsin-based flat glass manufacturing company. Our advanced mining and processing technologies give us cost advantages that result in competitive pricing for our customers. FMC Corporation 13 Pioneering Technology in Chemicals In the chemical products business, our spirit of invention lies in harnessing natural resources and processing those resources safely and cost-effectively. In alkali chemicals, we built our reputation as a technology leader by pioneering innovations in mining and processing ore into natural soda ash, leveraging our investments and minimizing costs. Today, our technological strength gives us a competitive edge in the marketplace. In the late 1970s, we introduced the technique of longwall mining to the soda ash industry. In the mid-1990s, we led the industry with another mining innovation: solution mining. This proprietary technology recycles previously unusable trona ore and produces soda ash in an even more cost-effective and environmentally friendly manner, securing our position as the lowest-cost producer in the business. We continue to refine the process to enhance the quality of our product. Our 1999 acquisition of Tg Soda Ash will increase volumes and create mining and processing opportunities as we combine our adjacent operations--and skilled, innovative employees--in Wyoming. FMC claims the lowest-delivered cost for hydrogen peroxide because of efficient process technology and a broader network of plants. For example, our ability to purify hydrogen peroxide makes us a leader in supplying the electronics industry. Advanced technology and low costs also give FMC Foret, our European chemicals business, a strong competitive advantage. Within phosphorus chemicals, we are forming a 50-50 joint venture between FMC and Solutia Inc. The new company--Astaris LLC--will combine the strengths of both companies to streamline production, develop new technical capabilities--and continue to reduce costs. FMC also is building a purified phosphoric acid unit in Idaho in partnership with Nu West Industries. This world-class facility will be designed to produce 80,000 tons of purified phosphoric acid annually, using technology from the FMC Foret phosphate operations in Huelva, Spain. FMC's technology and phosphate ore position, together with Nu West's phosphoric acid manufacturing capabilities, will result in a reliable raw material supply that will have the lowest cost in the industry. This new investment will become part of Astaris when the joint venture begins operation. For the future, we're exploring new market opportunities in important areas such as food safety. Our peracetic acid, which already is used as a biocide to kill bacteria in medical applications and in paper manufacturing, has applications as a disinfectant in food processing. FMC chemical and machinery operations are sharing expertise on these food-safety initiatives. nineteen ninety nine annual report 14 Developing Products and Partnerships for Your Health Since the early 1960s, FMC has built a reputation as the world's technology leader in food texture, structure and stabilization, and in providing solutions to the pharmaceutical industry's tablet binding needs. Today, FMC BioPolymer continues to grow, combining the strengths and potential of our original pharmaceutical and food ingredients businesses with Pronova BioPolymer, a Norway-based alginate business we acquired in mid-1999. Alginates, like a number of FMC BioPolymer products, are derived from seaweed. We share similar markets, customers, product technologies and manufacturing processes. We'll leverage these similarities, and also expect to add new technologies and product lines through ongoing acquisitions and alliances. We developed new products and expanded applications in 1999. In the food sector, our heat-stable Avicel and carrageenan products are replacing gelatin in fruit preparations such as bakery fillings and fruit-at-the-bottom yogurt. We've recently developed a low-moisture Avicel for use in snack bars, power bars and diet preparations. Still in development is an Avicel/carrageenan mix that will perform in many low-pH foods, including yogurt and fruit beverages--appealing to the continuing interest in healthy eating. On the pharmaceutical side, our technological advances are helping our customers speed the tablet production process, add more controlled-release dosages to smaller-sized capsules, and market chewable vitamins and medications for children and elderly consumers who might have difficulty swallowing traditional tablets. Late in 1999, FMC launched LustreClear, an entirely new technology that blends carrageenan with Avicel for the first time to create a new coating for an easier-to-swallow--and more cost-effective--tablet, again geared toward the pediatric and geriatric markets. As people continue to try to reduce their fat intake, our food ingredients business will continue to pursue applications in fat reduction. We expect to explore opportunities to work with a partner to produce better-tasting, low-fat preparations. And we'll look at the quality and safety of foods--examining how to preserve the potency of nutrients in processed foods, and how edible coatings might protect foods from contamination. Our pharmaceutical experts expect to see increased interest in our new EnTec drug delivery technologies. Our four new technologies work to enhance solubility, control release of active ingredients, mask the taste of unpleasant-tasting drugs, and create soft, chewy formulations for those tablets taken without water. Our lithium business has been instrumental in developing custom products and active ingredients for drugs to treat depression and control AIDS. An increasing number of new compounds currently in the pipelines of pharmaceutical companies worldwide are produced using organolithium chemistry. FMC Corporation 15 [PICTURE APPEARS HERE] ACTIVE INGREDIENT FMC's newly acquired business, Norway-based Pronova BioPolymer, produces the sodium alginate that is used as the active ingredient in Reckitt & Coleman's popular anti-reflux medicine, Gaviscon, manufactured in Hull, England. Gaviscon is available in both liquid and tablet forms, and was the most frequently supplied branded medicine in the United Kingdom in 1999. nineteen ninety nine annual report BUSINESS SEGMENT DATA
- ----------------------------------------------------------------------------------------------------------------------------------- (In millions) Year ended December 31 1999 1998 1997 1996 1995 - ----------------------------------------------------------------------------------------------------------------------------------- Sales Energy Systems $1,129.4 $1,320.9 $1,144.3 $ 949.0 $ 769.1 Food and Transportation Systems 826.3 868.2 889.5 738.8 585.4 Agricultural Products 632.4 647.8 637.6 650.2 589.6 Specialty Chemicals 564.5 598.2 604.8 602.0 587.7 Industrial Chemicals 978.4 974.4 1,012.0 1,041.3 976.8 Eliminations (20.4) (31.1) (29.2) (30.6) (26.0) - ----------------------------------------------------------------------------------------------------------------------------------- Total $4,110.6 $4,378.4 $4,259.0 $3,950.7 $3,482.6 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes and cumulative effect of changes in accounting principles Energy Systems $ 97.1 $ 95.2 $ 76.5 $ 33.9 $ 16.1 Food and Transportation Systems 64.2 72.8 63.9 42.0 33.3 Agricultural Products 64.3 76.3 35.1 93.7 96.4 Specialty Chemicals 73.5 77.9 77.2 65.5 67.3 Industrial Chemicals 144.4 117.5 135.7 181.8 153.1 - ----------------------------------------------------------------------------------------------------------------------------------- Segment operating profit/(1)/ 443.5 439.7 388.4 416.9 366.2 Corporate (76.6) (85.1) (86.2) (91.3) (99.0) Other income and expense, net 2.4 3.2 11.8 3.2 12.2 - ----------------------------------------------------------------------------------------------------------------------------------- Operating profit before gains on sales of businesses, asset impairments, restructuring and other charges, gain on sale of FMC Wyoming stock and net interest expense 369.3 357.8 314.0 328.8 279.4 Gains on sales of businesses/(2)/ 55.5 -- -- -- -- Asset impairments/(3)/ (29.1) -- (224.0) -- (26.4) Restructuring and other charges/(4)/ (14.7) -- (40.9) -- (123.6) Gain on sale of FMC Wyoming stock/(5)/ -- -- -- -- 99.7 Net interest expense (106.7) (108.3) (108.8) (93.0) (76.4) - ----------------------------------------------------------------------------------------------------------------------------------- Total $ 274.3 $ 249.5 $(59.7) $ 235.8 $ 152.7 - -----------------------------------------------------------------------------------------------------------------------------------
Business segment results are presented net of minority interests, reflecting only FMC's share of earnings. The corporate line primarily includes staff expenses, and other income and expense consists of all other corporate items, including LIFO inventory adjustments and pension income or expense. (1) Results for all segments are net of minority interests in 1999, 1998, 1997, 1996 and 1995 of $5.1 million, $6.2 million, $8.9 million, $9.6 million and $5.1 million, respectively, the majority of which pertain to Industrial Chemicals. (2) Gains on sales of businesses in 1999 (Note 2 to the consolidated financial statements) relate to the process additives ($35.4 million) and bioproducts ($20.1 million) operations, both of which are attributable to Specialty Chemicals. (3) Asset impairments in 1999 (Note 4 to the consolidated financial statements) are related to Specialty Chemicals ($20.7 million) and Industrial Chemicals ($8.4 million). Asset impairments in 1997 are related to Energy Systems ($18.0 million), Food and Transportation Systems ($9.0 million), Agricultural Products ($9.0 million), Specialty Chemicals ($62.0 million) and Industrial Chemicals ($126.0 million). Asset impairments in 1995 are related to Specialty Chemicals ($23.4 million) and Industrial Chemicals ($3.0 million). (4) Restructuring and other charges in 1999 (Note 4 to the consolidated financial statements) are related to Energy Systems ($1.5 million), Food and Transportation Systems ($7.1 million), Agricultural Products ($2.2 million), Specialty Chemicals ($1.3 million), Industrial Chemicals ($0.6 million) and Corporate ($2.0 million). Restructuring and other charges in 1997 are related to Energy Systems ($17.9 million), Food and Transportation Systems ($10.0 million) and Agricultural Products ($13.0 million). Restructuring and other charges in 1995 are related to Energy Systems ($15.5 million), Specialty Chemicals ($21.6 million), Industrial Chemicals ($74.5 million) and Corporate ($12.0 million). (5) The gain on sale of FMC Wyoming stock (comprising the sale of 20 percent of FMC's soda ash business to minority partners) is attributable to Industrial Chemicals. 16 BUSINESS SEGMENT DATA continued
- --------------------------------------------------------------------------------------------------------------------------- (In millions) December 31 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------- Operating Capital Employed/(1)/ Energy Systems $ 439.3 $ 471.4 $ 550.6 $ 649.5 $ 572.2 Food and Transportation Systems 370.4 384.4 429.3 495.4 279.0 Agricultural Products 552.0 567.3 503.9 546.8 380.8 Specialty Chemicals 652.9 638.8 642.8 630.4 473.4 Industrial Chemicals 818.0 740.8 731.7 920.1 840.4 - --------------------------------------------------------------------------------------------------------------------------- Total operating capital employed 2,832.6 2,802.7 2,858.3 3,242.2 2,545.8 Segment liabilities included in total operating capital employed 1,070.7 1,125.0 1,087.0 917.2 808.8 Corporate and other assets 92.5 238.7 167.8 194.5 214.1 - --------------------------------------------------------------------------------------------------------------------------- Assets of continuing operations 3,995.8 4,166.4 4,113.1 4,353.9 3,568.7 Net assets of discontinued operations/(3)/ -- -- -- 113.5 183.1 - --------------------------------------------------------------------------------------------------------------------------- Total assets $3,995.8 $4,166.4 $4,113.1 $4,467.4 $3,751.8 - --------------------------------------------------------------------------------------------------------------------------- Segment Assets/(2)/ Energy Systems $ 749.4 $ 848.1 $ 829.0 $ 874.2 $ 792.9 Food and Transportation Systems 571.7 618.7 654.2 709.4 394.7 Agricultural Products 735.1 702.3 697.0 646.7 478.1 Specialty Chemicals 732.6 722.8 723.6 714.7 566.9 Industrial Chemicals 1,114.5 1,035.8 1,041.5 1,214.4 1,122.0 - --------------------------------------------------------------------------------------------------------------------------- Total segment assets 3,903.3 3,927.7 3,945.3 4,159.4 3,354.6 Corporate and other assets 92.5 238.7 167.8 194.5 214.1 - --------------------------------------------------------------------------------------------------------------------------- Assets of continuing operations 3,995.8 4,166.4 4,113.1 4,353.9 3,568.7 Net assets of discontinued operations/(3)/ -- -- -- 113.5 183.1 - --------------------------------------------------------------------------------------------------------------------------- Total assets $3,995.8 $4,166.4 $4,113.1 $4,467.4 $3,751.8 - ---------------------------------------------------------------------------------------------------------------------------
(1) Company management views operating capital employed, which consists of assets, net of liabilities, reported by the company's operations (and excludes corporate items such as cash equivalents, debt, pension liabilities, income taxes and LIFO reserves), as its primary measure of segment capital. (2) Segment assets are assets recorded and reported by the segments, and are equal to segment operating capital employed plus segment liabilities (Note 1 to the consolidated financial statements). (3) Net assets of discontinued operations comprise the net assets of FMC's Defense Systems and Precious Metals operations (Note 3 to the consolidated financial statements). 17 18 PRODUCTS & MARKETS
[PICTURE APPEARS HERE] - ------------------------------------------------------------------------------------------- Energy Systems Markets Served - ------------------------------------------------------------------------------------------- FMC Energy Systems supplies Oil and gas exploration, production, oil and gas exploration and refining and transportation. Power production equipment for land generation and mining. and offshore applications; engineering, procurement and construction of subsea oil fields; fluid control and metering products and systems; loading systems; marine terminals and floating production systems; and conveying and processing systems. [PICTURE APPEARS HERE] - ------------------------------------------------------------------------------------------- Food & Transportation Systems Markets Served - ------------------------------------------------------------------------------------------- FMC FoodTech is a global provider of Meat, seafood and poultry processors. integrated systems and equipment for Fruit and vegetable processors. every phase of food harvesting, Convenience food processors, including preparation, processing and preservation. potato and snack food, soups, Leader in citrus, poultry, tomato and sauces and ready meals. vegetable processing systems. Airport Products and Systems is a Global airlines, airports and material global supplier of Jetway passenger handling and services companies within boarding bridges, aircraft loaders, the aviation industry. Industrial manufacturing, deicers, push-back tractors, 400hz mining, warehouses, newsprint, publishing, inverters, pre-conditioned air and chemicals and utilities. automated material handling systems. [PICTURE APPEARS HERE] - ------------------------------------------------------------------------------------------- Agricultural Products Markets Served - ------------------------------------------------------------------------------------------- Agricultural Products provides crop Food and fiber growers and pest control protection and pest control products markets. for worldwide markets. More than 50 percent of sales derived outside the United States. - -------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------------------------- Competitive Advantage Market Opportunities Outlook - -------------------------------------------------------------------------------------------------------------------- FMC Energy Systems combines Continuing opportunities to Strong subsea position and the industry's broadest range build market position and cost reduction initiatives of products, services and long-term customer alliances should help generate solid engineering expertise to by leveraging subsea technologies performance. deliver integrated systems for and systems and integrating recent subsea/floating production, acquisitions. Added capabilities measurement and deep-water in flow measurement systems expand applications. The business is opportunities in the gas metering well positioned in the four market. major regions of offshore exploration. - -------------------------------------------------------------------------------------------------------------------- Competitive Advantage Market Opportunities Outlook - -------------------------------------------------------------------------------------------------------------------- One of the top 10 suppliers of Consumer demand for convenience-- Continued profitable growth. food processing systems in the such as packaged ready meals--and Acquisitions of complementary world, with strong technology industry supply chain consolidation technologies strengthen overall and global support capability. drive higher-value opportunities market position and improve Market-leading positions in for FMC FoodTech. Increased involvement competitive advantage. thermal processing, sterilizing, with global customers interested in cooking, frying and freezing food safety and service. systems. Partnerships with major food processors. Airport Products and Systems Strong growth in towbarless The Commander Loader, the world's provides a broad range of tractors and pre-conditioned air top-selling family of aircraft aviation products with units for the aviation industry. cargo loaders, and Jetway, the global worldwide brand recognition Positioned for future growth in market leader of aviation passenger and market leadership positions. the military loader market, boarding bridges, will continue to Strong and active product aviation services and automated strengthen leading positions. Continued development approach. Global laser-guided vehicle systems. focus on cost improvement. marketing, management and services network. - -------------------------------------------------------------------------------------------------------------------- Competitive Advantage Market Opportunities Outlook - -------------------------------------------------------------------------------------------------------------------- Solid business presence Long-term agreement to supply New herbicide sales and around the world. Direct sulfentrazone herbicide to DuPont continuing cost improvements distribution in key markets. for sales in U.S. soybean market are key to strong performance. Leading global position in took effect in 1999. Success of R&D collaboration with Devgen pyrethroid chemistry. new herbicide carfentrazone-ethyl, in Belgium to expand discovery Attractive portfolio of registered for use in major opportunities. chemistries that complements European cereal markets and other other products and provides countries worldwide, as well as in opportunities for new and U.S. corn markets. Growing established formulation label termiticide, turf and horticultural expansion and volume growth. market segments worldwide. Product Strong insecticide and formulation, sales and distribution growing herbicide product joint venture with Rallis in India. portfolio. Product R&D effort, generating high profitability. Solid product stewardship programs. - --------------------------------------------------------------------------------------------------------------------
20 PRODUCTS & MARKETS
[PICTURE APPEARS HERE] - ------------------------------------------------------------------------------------------ Specialty Chemicals Markets Served - ------------------------------------------------------------------------------------------ FMC BioPolymer is the world's leading Global food, pharmaceutical and specialty producer of alginate, carrageenan and industries. microcrystalline cellulose. Lithium is one of the world's leading Pharmaceutical, agricultural chemical producers of lithium-based products. synthesis, synthetic rubber and plastics, Recognized as the technology leader batteries, air conditioning and refrigeration, in specialty organolithium chemicals construction, pool and spa, lubricating greases, and related technologies. and ceramics and glass. [PICTURE APPEARS HERE] - ------------------------------------------------------------------------------------------ Industrial Chemicals Markets Served - ------------------------------------------------------------------------------------------ Alkali Chemicals is the world's Glass-making, chemicals, detergents, food largest producer of natural soda ash products, animal feed additives, mining, and the market leader in North America. air/water treatment and pulp and paper. Downstream products include sodium bicarbonate, sodium cyanide, sodium sesquicarbonate, caustic soda. FMC is a worldwide producer of Hydrogen Electronics, cosmetics, food, water Peroxide with manufacturing sites in the treatment, textiles, pulp and paper. U.S., Canada, Mexico, Spain, the Netherlands and Thailand. Region leader in North America. Also the world's leading supplier Polymers, electronics, pool and spa, of persulfate products and a major hair care, industrial water treatment, producer of peracetic acid and other paper, pharmaceuticals and Industrial & oxidants. Institutional sanitizers. Phosphorus Chemicals is a major Detergents, cleaning compounds, water worldwide supplier and leading North treatment, food products and other American producer of phosphorus and its industrial applications. derivatives, phosphates and phosphoric acid. Foret is a major European chemical Detergents, pulp and paper, textiles, producer. Products include hydrogen chemicals, tanning, pharmaceuticals, peroxide, perborates, phosphates, ceramics, food and agriculture. silicates, zeolites, and sulfur derivatives. - ------------------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------------------------------------------- Competitive Advantage Market Opportunities Outlook - -------------------------------------------------------------------------------------------------------------------- Worldwide brand recognition New opportunities for Good performances should and strong market positions. alginate technology in food, continue across food, Superior product quality, pharmaceutical and specialty pharmaceutical and specialty research, applications applications. Commercializing new businesses. technology, formulation food ingredient products for dairy, support, global customer convenience foods and meat service and manufacturing applications. Developed and capabilities. introduced LustreClear--a new technology in pharmaceutical coating systems. Leading market position in Growing demand for advanced Improved cost position in diverse specialty products. organolithium reagents in upstream products. Attractive Global manufacturing and pharmaceutical and agricultural growth in key downstream distribution capabilities. chemical synthesis. specialty markets. Strong R&D and manufacturing Commercializing proprietary organizations. polymer initiators for synthetic rubber, plastics and coatings markets. Introduced new products for lithium ion batteries used in laptop computers, personal digital assistants (PDAs), cell phones and handheld devices. Introducing new product line for the construction industry. - -------------------------------------------------------------------------------------------------------------------- Competitive Advantage Market Opportunities Outlook - -------------------------------------------------------------------------------------------------------------------- Mining and production Revitalized sales growth Continuing focus on technology leader, including as overseas economies recover. improving production proprietary, low-cost solution Continued growth tied to efficiencies, cost position mining technology. Multiple improvement in overseas GDP and realizing synergies production facilities result per capita. New products in from Tg Soda Ash in increased flexibility and cleaning compounds, feed acquisition. Capitalizing on reliability. Enhanced additives, and acid waste volume growth due to competitive position as a neutralization. recovering overseas result of the 1999 acquisition economies. of Tg Soda Ash. Process technology and plant Broad-based demand growth. Increased market pricing locations key to low-cost and growth with market. supply network. Defendable Commitment to continued specialty market positions. capital efficiency and cost Sole producer in Mexico. improvement. Maintains lowest cost/capital expansion options as market demand warrants. Capacity share leader, Sales volume tied Continued focus on cost cost competitive plant to market growth and new improvement; growth via locations and process applications. new products and applications. technology. Lowest-cost U.S. producer of Growing diversity of product Focus on pricing and sodium tripolyphosphate--our uses. Introduced new food production efficiencies. largest downstream product-- phosphates for the beverage Expect Astaris joint used in automatic dishwasher and meat segments. venture to compete more detergents. effectively in global markets. Strong market positions. Continuing focus on current Continued good performance Excellent cost positions. market positions. Export based on costs and competitive Strong manufacturing and growth. advantages of the product distributions capabilities. portfolio. Growing export business. - --------------------------------------------------------------------------------------------------------------------
FMC Corporation 21 22 MANAGEMENT'S DISCUSSION AND ANALYSIS Disclosure of Foward-Looking Statements Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: The company and its representatives may from time to time make written or oral statements that are "forward-looking" and provide other than historical information, including statements contained in the Annual Report, in the company's other filings with the Securities and Exchange Commission or in reports to its stockholders. Whenever possible, FMC Corporation ("FMC" or the "company") has identified these forward-looking statements by such words or phrases as "will likely result", "is confident that", "expected", "should", "could", "will continue to", "believes", "anticipates", "predicts", "forecasts", "estimates", "projects" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. The company wishes to caution readers not to place undue reliance on any such forward- looking statements, which speak only as of the date made. In connection with the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, the company is hereby identifying important factors that could affect the company's financial performance and could cause the company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. Among the factors that could have an impact on the company's ability to achieve its operating results and growth plan goals are: .Significant price competition, particularly among competitors in the company's chemical businesses; .The impact of unforeseen economic and political changes in the international markets where the company competes, including currency exchange rates, war, civil unrest, inflation rates, recessions, trade restrictions, foreign ownership restrictions and economic embargoes imposed by the United States or any of the foreign countries in which FMC does business, and other external factors over which the company has no control; .The impact of significant changes in interest rates or taxation rates; .Increases in ingredient or raw material prices compared with historical levels, or shortages of ingredients or raw materials; .Inherent risks in the marketplace associated with new product introductions and technologies, particularly in agricultural and specialty chemicals; .Changes in capital spending by customers in the petroleum exploration and airline industries; .Risks associated with developing new manufacturing processes, particularly with respect to complex chemical products; .The ability of the company to integrate possible future acquisitions or joint ventures into its existing operations; .The impact of freight transportation delays beyond the control of the company; .The effect of previously undetected compliance issues related to the arrival of the year 2000; .Risks associated with joint venture, partnership or limited endeavors in which the company may be responsible at least in part for the acts or omissions of its partners; .Conditions affecting domestic and international capital markets; .Risks derived from unforeseen developments in industries served by the company, such as extreme weather patterns or low insect infestations in the agricultural sector, political or economic changes in the energy industries, and other external factors over which the company has no control; .Risks associated with litigation, including the possibility that current reserves and estimated loss contingencies relating to the company's ongoing litigation may prove inadequate; .Environmental liabilities that may arise in the future that exceed current reserves and estimated loss contingencies; and .Increased competition in the hiring and retention of employees. The company cautions that the foregoing list of important factors may not be all-inclusive, and it specifically declines to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. With respect to forward-looking statements set forth in the notes to consolidated financial statements, including those relating to environmental obligations, contingent liabilities and legal proceedings, as well as the Company's 1999 Annual Report on Form 10-K, some of the factors that could affect the ultimate disposition of those contingencies are changes in applicable laws, the development of facts in individual cases, settlement opportunities and the actions of plaintiffs, judges and juries. [PICTURE APPEARS HERE] SERVICE DELUXE To focus on customer needs, mobilize installations, and test and service equipment, FMC's Energy Systems business operates the world's largest offshore base in Bergen, Norway. [PICTURE APPEARS HERE] FAST FOOD Stein's VaporJet depends on high humidity to cook poultry and other meats faster--producing higher yields and safer-to-eat foods. 23 GENERAL 1999 compared with 1998 Sales of $4.1 billion for 1999 were down from $4.4 billion in 1998. Sales outside the United States, including exports, represented 57 percent of the company's total sales, consistent with 1998. U.S. sales and non-U.S. sales decreased by 7 percent and 6 percent, respectively. After-tax income from continuing operations before asset impairments, restructuring and other charges, and gains on sales of businesses (in 1999) and the cumulative effect of a change in accounting principle (in 1998) was $195.1 million, or $6.03 per share on a diluted basis, in 1999 compared with $185.3 million, or $5.30 per share, in 1998. Average shares outstanding used in the years' diluted earnings per share calculations decreased to 32.4 million in 1999 from 34.9 million in 1998 due to the company's share repurchase program. Income from continuing operations, including one-time items, was $216.0 million, or $6.67 per share on a diluted basis, in 1999 compared with $185.3 million, or $5.30 per share, in 1998. Net loss from discontinued operations (Note 3 to the consolidated financial statements) was $3.4 million in 1999 compared with $42.7 million in 1998, or $0.10 and $1.22 per share on a diluted basis in 1999 and 1998, respectively. In 1999, gains on the sale of real estate used by the company's discontinued defense systems operations were offset by charges recorded primarily for environmental remediation and changes in actuarial estimates of general liability and workers' compensation liabilities. In 1998, the company recorded a $70.0 million pre-tax charge to increase environmental reserves related to discontinued operations (Notes 3 and 14 to the consolidated financial statements). Net income for 1999 was $212.6 million, or $6.57 per share on a diluted basis, compared with $106.5 million, or $3.05 per share on a diluted basis for 1998. The company adopted AICPA Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up Activities," effective January 1, 1998. In conjunction with the adoption, the company charged $46.5 million ($36.1 million after tax, or $1.03 per share on a diluted basis) of previously capitalized start-up costs to expense. This charge was recorded in 1998 as the cumulative effect of a change in accounting principle. 1998 compared with 1997 In 1998, sales were $4.4 billion, up from $4.3 billion in 1997. Sales in the United States increased 5 percent during the year, while sales outside the United States increased 1 percent from 1997. After-tax income from continuing operations before asset impairments, restructuring and other charges (in 1997) and the cumulative effect of changes in accounting principles (in 1998 and 1997) was $185.3 million, or $5.30 per share on a diluted basis, in 1998 compared with $156.4 million, or $4.13 per share, in 1997. Net loss from discontinued operations (Note 3 to the consolidated financial statements) was $42.7 million in 1998, or $1.22 per share on a diluted basis. In 1998, the company recorded a $70.0 million pre-tax charge to increase environmental reserves associated with discontinued operations (Notes 3 and 14 to the consolidated financial statements). Net income from discontinued operations in 1997, primarily related to the sale of the company's defense operations, was $191.4 million, or $5.20 per share. Net income for 1998 was $106.5 million, or $3.05 per share on a diluted basis, compared to $162.4 million, or $4.41 per share, in 1997. In 1998, the company adopted SOP No. 98-5 (discussed above and in Note 1 to the consolidated financial statements). In conjunction with this adoption, a charge of $46.5 million ($36.1 million after tax, or $1.03 per share on a diluted basis) was recorded in 1998 as the cumulative effect of a change in accounting principle. In 1997, the company wrote off business process reengineering costs of $7.6 million ($4.5 million after tax, or $0.12 per share) in conjunction with the requirements of a consensus of the Financial Accounting Standards Board's Emerging Issues Task Force. BUSINESS SEGMENTS Results on a segment basis for the five years ended December 31, 1999 are presented on page 16. As described in Note 1 to the consolidated financial statements, effective for the year ended December 31, 1998, the company adopted Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of an Enterprise and Related Information." Under the provisions of the standard, the company began reporting results based on five segments. Segment data for the periods prior to 1998 have been restated and are presented on a comparable basis. Segment operating profits exclude certain income and expense items as described in Note 1 to the consolidated financial statements. [PICTURE APPEARS HERE] WEEDS, BE GONE FMC created carfentrazone-ethyl, the fastest-acting herbicide for controlling Europe's prolific galium weed. In 1999, we expanded registrations directed at European wheat and barley fields to include other crops, including potatoes. [PICTURE APPEARS HERE] MEDICAL MILESTONES Our lithium business has developed specialty organolithium products used in the manufacture of new prescription drugs--including those used in treating depression and controlling AIDS. 24 ENERGY SYSTEMS 1999 compared with 1998 Energy Systems 1999 sales of $1,129.4 million decreased from 1998 sales of $1,320.9 million, while operating profits increased to $97.1 million (before restructuring and other charges), from $95.2 million in 1998. Backlog at December 31, 1999 and 1998 was $593.4 million and $877.9 million, respectively. Lower sales reflected reduced customer exploration and production spending for 1999 due to price and market uncertainty. Uncertainty surrounding both oil prices and oil company mergers resulted in delays in subsea projects, reflected in reduced backlog in 1999 compared with 1998, and a depressed market for land- based wellheads. Partly offsetting these declines were higher deliveries arising from the Elf Girassol Angola and Terra Nova Canada projects, and higher sales to several of the company's energy systems alliance partners, such as Shell and Exxon. Operating profits increased as a result of improved margins, standardization and cost reductions when compared with 1998. Shipments of marine loading arms in the fourth quarter of 1999 resulted in increased sales and profits when compared with the same period in 1998. 1998 compared with 1997 Energy Systems 1998 sales of $1,320.9 million were up 15 percent from prior-year sales of $1,144.3 million, and operating profits of $95.2 million were up 24 percent from $76.5 million (before asset impairments and restructuring and other charges) in 1997. Demand in the subsea business remained strong with higher sales to Shell, Statoil and Elf Aquitaine, among others. The results also reflect the August 1998 acquisition of CBV, the leading wellhead manufacturer in Brazil. Energy Systems earnings also were favorably affected by cost-saving efforts implemented during the year, including the elimination of approximately 250 positions. During 1998, the company continued to solidify its premier position in subsea systems, receiving a $230 million order for the Terra Nova project on the Grand Banks of Newfoundland and a $200 million order for the Elf Girassol project, offshore Angola. Also during 1998, the company sold Crosby Valve to a subsidiary of Tyco International Ltd., realizing an immaterial gain on the disposition. Outlook for 2000 Industry surveys indicate higher exploration and production budgets for oil companies. However, the timing of project orders remains uncertain as customers continue to respond cautiously to the effects of recent oil price increases and oil company mergers. Until the market improves, competitive pressures are expected to remain intense. Management is confident that the company can retain its leadership position in the energy markets that it serves. FOOD & TRANSPORTATION SYSTEMS 1999 compared with 1998 Food and Transportation Systems sales declined to $826.3 million from $868.2 million in 1998. Operating profits were $64.2 million (before restructuring and other charges), down from $72.8 million in 1998. Backlog of $247.2 million at December 31, 1999 was relatively flat compared with $256.0 million at December 31, 1998. Lower sales and operating profits for the segment primarily reflect a decrease in airport products and systems, down from record levels in 1998. The decline in airport products and systems sales from 1998 was a result of lower domestic sales of loaders purchased for equipment replacement programs by airlines and reduced purchases of ground support equipment by cargo companies. These reductions were partially offset by increased demand from European airports and airlines. Reduced profitability in 1999 was the result of lower sales volumes, particularly for loaders, and lower margins for Jetway projects. FMC FoodTech's sales were slightly lower as a result of lower freezer sales and the 1998 divestiture of a minor product line. Higher margins arising from higher after-market sales, lower costs and a more favorable product mix for FMC FoodTech in 1999 contributed to its increased profitability. 1998 compared with 1997 Food and Transportation Systems 1998 sales of $868.2 million decreased from $889.5 million in 1997, and 1998 operating profits of $72.8 million increased from $63.9 million (before asset impairments and restructuring and other charges) in the prior year. FMC FoodTech's 1998 sales were down from the prior year as a result of the weak business climate in Asia and the divestiture of a minor product line, but were partially offset by increased food processing sales. Operating profits were up compared with 1997, reflecting stronger after-market performance and the benefits of cost reduction activities. Sales and operating profits were up in airport products and systems, as increased sales of Jetway Systems and ground support equipment more than offset lower deicer sales that resulted from a mild winter in 1997. [PICTURE APPEARS HERE] GOING DEEP In 1998 we acquired our licensee CBV, Brazil's leading wellhead producer, to add deep-water capabilities and strengthen our presence offshore Brazil. This wellhead is headed for Petrobras, Brazil's state-owned oil company and a key CBV customer. [PICTURE APPEARS HERE] WHERE'S THE BEEF? FMC's Frigoscandia Equipment engineers designed the Steam Pasteurization System. This USDA-approved equipment uses thermally controlled steam chambers to kill surface bacteria--including E coli, salmonella and listeria--on beef ready for processing. 25 Outlook for 2000 Stable business conditions are expected to prevail for FMC FoodTech's operations as food processors are expected to continue to seek opportunities to invest in improved technologies that lower their costs. The acquisition of Northfield Freezing Systems Group from York International in early 2000 builds on FMC's existing position by increasing the company's range of high-quality specialized freezing solutions for industrial food processing. FMC expects its worldwide market position for freezing equipment to increase in both scale and level of service. Management expects strong performance from Jetway Systems, reflecting the high volume of orders for domestic projects to be executed in 2000. Overall growth of transportation systems depends in part on the growth rate of the airline industry, which can be affected by labor issues and fluctuations in fuel prices. AGRICULTURAL PRODUCTS 1999 compared with 1998 Sales of Agricultural Products were $632.4 million, down from $647.8 million in 1998. Operating profits were $64.3 million (before restructuring and other charges) compared with $76.3 million in 1998. Lower sales and earnings in 1999 resulted from unusually low pest infestation levels in U.S. cotton and corn markets and from difficult economic conditions in Latin America. Partially offsetting these factors were the continued benefits from cost-reduction initiatives and increased profitability from sulfentrazone. 1998 compared with 1997 Sales for Agricultural Products of $647.8 million in 1998 were up from $637.6 million in 1997, and operating profits increased to $76.3 million from $35.1 million (before asset impairments and restructuring and other charges) in the prior year. Sales were up due to improved performance in herbicide markets. The significant increase in operating profits was largely a result of cost reductions implemented during 1998. In 1997, operating profits were negatively affected by difficulties encountered in the start-up process at the company's Baltimore, Maryland, sulfentrazone plant. Outlook for 2000 The company anticipates a strong rebound in Agricultural Products in 2000 as pest infestations are anticipated to return to normal levels in North America. Increased herbicide sales and economic recovery in Brazilian and Asian markets are expected to provide opportunity for growth in this segment. SPECIALTY CHEMICALS 1999 compared with 1998 Specialty Chemicals sales of $564.5 million in 1999 decreased from $598.2 million in 1998, and operating profits of $73.5 million (before gains on sales of businesses and charges for asset impairments and restructuring and other charges) in 1999 decreased $4.4 million from $77.9 million in 1998. Increased sales and operating profits of FMC BioPolymer in 1999 (which includes the Pronova Biopolymer alginate business acquired from Norsk Hydro in the second quarter, as well as FMC's former pharmaceutical and food ingredients businesses) were more than offset by reductions caused by the sale of the process additives and bioproducts businesses in the third quarter. Higher sales of food ingredients to Asia and Europe in 1999 increased revenues and profits for FMC BioPolymer. The increase in profitability was partially offset by higher manufacturing costs in 1999 in the pharmaceutical portion of the business. Although lithium sales declined slightly in 1999 when compared with 1998, the company enhanced its strategic position by executing a long-term sourcing agreement with Sociedad Quimica y Minera de Chile S.A. ("SQM"), a South American manufacturer of lithium carbonate. Costs related to idling production in FMC's lithium carbonate facility in Argentina partially offset the benefits of the SQM sourcing agreement in 1999 earnings. 1998 compared with 1997 Specialty Chemicals 1998 sales were $598.2 million, down slightly from 1997 sales of $604.8 million. Operating profits of $77.9 million were up from $77.2 million (before asset impairments) in 1997. Food ingredient sales were up from the prior year, driven by sales of new products. Operating profits increased on higher sales and the continued reduction of manufacturing and administrative costs. Lithium sales and operating profits were down from the prior year as a result of lower lithium carbonate and lithium hydroxide prices and higher operating costs associated with the start-up of the Argentine production facilities. U.K.-based sales of water additives and flame retardant products were up slightly from the prior year. Operating profits in 1998 increased over 1997 as cost reductions more than offset negative foreign currency effects. Outlook for 2000 Strategic acquisitions and divesting non-core businesses have positioned this segment for growth. A full year's sales from Pronova Biopolymer, acquired in mid-1999, and continued realization of synergies are expected to drive growth for FMC BioPolymer over the next year. In addition, growing demand for the company's specialty lithium applications is expected to continue throughout 2000. The value of certain productive assets for lithium will continue to be assessed in light of both the recent strategic moves to outsource lithium carbonate and other potential changes in the industry structure required to increase profitability in this market. [PICTURE APPEARS HERE] SNOW BLOWER The AirFirst deicer uses forced air to blow snow and ice off the surface of an aircraft. This approach reduces the use of the traditional deicing fluid, as well as operational time and impact on the environment. 26 MANAGEMENT'S DISCUSSION AND ANALYSIS INDUSTRIAL CHEMICALS 1999 compared with 1998 Industrial Chemicals sales of $978.4 million in 1999 were up from $974.4 million in 1998. Operating profits of $144.4 million (net of minority interests and before asset impairments and restructuring and other charges) increased significantly from $117.5 million in 1998. Industrial Chemicals earnings favorability was driven largely by the impact of the company's acquisition of Tg Soda Ash and continued significant cost reductions (including the favorable impact of a change in the estimated useful lives of assets), partially offset by expenses for Y2K-related compliance and higher pension costs. Phosphorus results in 1999 included decreases in sales and profitability when compared with 1998, reflecting lower volumes and increased distribution costs partially offset by higher average prices. Higher sales volumes and profits for soda ash reflect the positive impact of the company's acquisition of Tg Soda Ash in 1999, although the improvements were partially offset by reduced domestic and export prices. Sales from Spain-based FMC Foret were lower in 1999 compared with 1998 as a result of competitive pressures on selling prices and the translation impact of the weakened Spanish peseta against the U.S. dollar. Operating profits were higher in 1999, reflecting lower raw material prices and improved efficiencies, which more than offset the unfavorable effects of currency translation. Hydrogen peroxide sales and operating earnings increased on higher prices and volumes, reflecting improvements in the pulp industry. Lower costs also contributed to increased profitability. 1998 compared with 1997 Industrial Chemicals sales in 1998 were $974.4 million compared with $1,012.0 million in 1997, and operating profits (net of minority interests) were $117.5 compared to $135.7 million (before asset impairments) in the prior year. Sales and operating profits of alkali products in 1998 decreased from the previous year, reflecting lower domestic and export prices, decreased export volumes of soda ash to Asia and lower sodium cyanide sales due to reduced gold mining activity. Cost reductions implemented in the third and fourth quarters of 1998 at the company's Green River, Wyoming facility partially offset the impact of unfavorable market conditions. Hydrogen peroxide sales and operating profits in 1998 were down from 1997, as lower prices more than offset increased volumes and reduced costs. The company shut down an older production line at its Bayport, Texas facility in August 1998, and a competitor also shut down a portion of its production facilities. The combined effect of these actions reduced excess U.S. production capacity by approximately 45 percent. FMC expects to meet current demand levels from its remaining production facilities. Phosphorus sales decreased in 1998 from the prior year due to reduced volumes. Operating profits were essentially even with 1997, as lower sales were offset by reduced depreciation resulting from an asset impairment charge recorded in 1997. Sales from Spain-based FMC Foret increased in 1998 as higher sales volumes more than offset the effects of selling price pressures in the last half of 1998 and the negative translation impact of the Spanish peseta against the U.S. dollar. Operating profits were lower in 1998 as the impact of higher sales volumes was offset by reduced margins in the fourth quarter and by the effect of foreign currency translation. Outlook for 2000 Soda ash results are expected to continue to improve in 2000, reflecting a full year of contributions from Tg Soda Ash and the result of cost-saving initiatives. Average soda ash pricing is expected to be down slightly in 2000, reflecting decreased prices in Asia intended to protect Asian volume, while pricing of hydrogen peroxide in 2000 is expected to exceed 1999 levels. A phosphorus joint venture with Solutia Inc, to be named Astaris LLC, was announced in 1999 and is subject to a governmental approval process that is expected to be completed in the first quarter of 2000. Upon formation of the joint venture, FMC expects to benefit from significant synergies through plant rationalizations and other restructuring activities. [PHOTO APPEARS HERE] FIRED UP Fire ants, among the most destructive insects to invade the United States, destroy grain and vegetable crops and bite people with stings that burn like fire. FMC's pioneering work in synthetic pyrethroids led to the discovery of bifenthrin, which acts to eradicate these pests' nests in huge mounds of earth. Massey Services, a pest control expert, uses FMC's Talstar insecticide to fight the ants at a residence in Florida. 27 OTHER INFORMATION Corporate Expenses, Net Interest Expense and Pension-Related Costs Corporate expenses of $76.6 million (before restructuring and other charges) in 1999 decreased $8.5 million from the prior year reflecting ongoing cost reduction efforts. Compared with 1997, the company's 1998 corporate expenses declined slightly. The company expects 2000 results to benefit from further cost-control measures. Net interest expense for 1999 and 1998 was $106.7 million and $108.3 million, respectively, reflecting lower average rates in 1999. Net interest expense in 1998 was substantially flat compared with 1997. Pension and other postemployment benefit expenses increased $19.4 million in 1999 primarily due to a lower discount rate used to value the company's liabilities and due to increased costs related to certain non-qualified plans. For 2000, an increase in the discount rate is expected to result in a reduction in expenses related to pension and other postemployment benefits; however, this change is not expected to affect the company's cash flow. Under generally accepted accounting principles, the company is required to periodically evaluate the useful lives of its plants and equipment. In the first quarter of 1999, the company extended the depreciable lives of certain equipment used in its chemical and machinery operations to 15 years from an average of 11 to 12 years. This change better reflects the current service lives of its assets. The effect of this change increased pre-tax profits by $24.2 million in 1999. Asset lives used for tax purposes were not affected by this change. Taxes Although FMC's domestic earnings (losses) are generally subject to tax expense (benefit) at the statutory rate of 35 percent, many factors alter the company's consolidated tax rate. These factors include non-deductible or non-benefitable transactions related to goodwill or other items, differing foreign tax rates, state tax increments, depletion, foreign sales corporation benefits, and other permanent differences. The company's effective tax rate of 21.2 percent in 1999 also includes the beneficial impact of the non-taxable portion of a gain on the sale of FMC's process additives business (Note 2 to the consolidated financial statements). The effective tax rate in 1999, excluding special income and expense items, was 25.7 percent, consistent with the effective tax rate in 1998 of 25.7 percent before the cumulative effect of a change in accounting principle. The effective tax benefit rate in 1997, before the cumulative effect of a change in accounting principle, was 59.0 percent, which includes the impact of asset impairments and restructuring and other charges (Note 4 to the consolidated financial statements), a portion of which were not benefited for tax purposes. The 1997 effective tax rate was 23.8 percent excluding these charges. Accounting Changes SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", is effective (as amended) for financial statements for fiscal years beginning after June 15, 2000, but may be adopted in earlier periods. SFAS No. 133 will require the company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be recognized in earnings immediately. The company is evaluating the new standard's provisions and has not yet determined what the effect of SFAS No. 133 will be on the earnings and financial position of the company. The company intends to adopt the standard on January 1, 2001. Discontinued Operations The company recorded losses from discontinued operations of $3.4 million and $42.7 million (net of tax) in 1999 and 1998, respectively, and a gain of $191.4 million (net of tax) in 1997. The loss from discontinued operations in 1999 included gains of $53.7 million ($32.8 million after tax) from the sale of property in California that was formerly used by the company's divested defense business. FMC also recorded charges of $59.4 million ($36.2 million after tax) for environmental remediation and changes in actuarial estimates of general liability and workers' compensation liabilities associated with discontinued businesses. Results of discontinued operations for 1998 consisted of a $70.0 million ($42.7 million after tax) charge for environmental costs (net of anticipated recoveries of $19.8 million), the majority of which related to clean-up work at the discontinued fiber manufacturing site in Front Royal, Virginia (Notes 3 and 14 to the consolidated financial statements). In 1997, results of discontinued operations included gains from the sale of the defense business of $318.4 million ($179.7 million after tax), income from operations of the discontinued defense segment of $64.2 ($38.7 million after tax) and a $45.0 million ($27.0 million after tax) charge for environmental costs related to various discontinued operations (Note 3 to the consolidated financial statements). [PICTURE APPEARS HERE] SOUND ANALYSIS FMC's resourceful developmental work has resulted in a new analytical approach to measuring the chemical components of persulfate products. Incorporating a new analytical method into the process supports product and process safety and delivers more efficient production. 28 MANAGEMENT'S DISCUSSION AND ANALYSIS Asset Impairments and Restructuring and Other Charges In the third quarter of 1999, FMC recorded asset impairments of $29.1 million ($17.8 million after tax), and restructuring and other one-time charges of $14.7 million ($9.0 million after tax). Asset impairments of $20.7 million were required to write off the remaining net book values of two U.S. lithium facilities, which management determined would not be feasible to use as currently configured. Additionally, an impairment charge of $8.4 million was required to write off the remaining net book value of a small caustic soda facility in Green River, Wyoming. Restructuring and other one-time charges of $14.7 million resulted primarily from strategic decisions to divest or restructure a number of businesses and support departments, including certain food machinery, agricultural products, and energy systems operations and certain corporate and shared services support departments. FMC recorded pretax charges of $264.9 million ($180.9 million after tax) in 1997. Of this amount, $224.0 million ($154.0 million after tax) related to asset impairments, primarily in the phosphorus chemicals and process additives businesses, and $40.9 million ($26.9 million after tax) primarily covered smaller restructuring activities in several other businesses. See Note 4 to the consolidated financial statements for further discussion of the asset impairments and restructuring charges. Environmental Obligations FMC, like other industrial manufacturers, is involved with a variety of environmental matters in the ordinary course of conducting its business and is subject to federal, state and local environmental laws. FMC feels strongly that the company has a responsibility to protect the environment, public health and employee safety. This includes cooperating with other parties to resolve issues created by past and present handling of wastes. When issues arise, including notices from the Environmental Protection Agency or other government agencies identifying FMC as a Potentially Responsible Party, FMC's environmental remediation management assesses and manages the issues. When necessary, the company uses multifunctional teams composed of environmental, legal, financial and communications management to ensure that the company's actions are consistent with its responsibilities to the environment and public health, as well as to its employees and shareholders. In the fourth quarter of 1999, the company provided additional environmental reserves related to discontinued operations totaling $25.9 million ($15.8 million after tax). This provision and provisions made in 1998 and 1997 are more fully described in Note 3 to the consolidated financial statements. Additional information regarding the company's environmental accounting policies and potential environmental liability is included in Notes 1 and 14, respectively, to the company's consolidated financial statements. Information regarding environmental obligations associated with the company's discontinued operations is included in Note 3 to the consolidated financial statements. Estimates of 2000 environmental spending are included below in Liquidity and Capital Resources. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents at December 31, 1999 and December 31, 1998 were $64.0 million and $61.7 million, respectively. The company had total borrowings of $1.3 billion and $1.5 billion as of December 31, 1999 and 1998, respectively. Operating working capital, which excludes cash and cash equivalents, short-term and the current portion of long-term debt, income tax balances and the impact of the company's 1999 sale of accounts receivable, decreased $49.0 million to $255.2 million at December 31, 1999, from $304.2 million at December 31, 1998, as follows:
(In millions) December 31 Effect of Change 1999 1998 in Component - --------------------------------------------------------------------------------------------------------------------------- Components of operating working capital: Trade receivables (net)/(1)/ $ 779.4 $ 840.6 $ (61.2) Inventories 457.7 517.7 (60.0) Other current assets 172.6 136.4 36.2 Accounts payable, trade and other (665.5) (685.8) 20.3 Accrued payroll (106.9) (109.3) 2.4 Other current liabilities (371.6) (383.3) 11.7 Current portion of accrued pensions and other postretirement benefits (10.5) (12.1) 1.6 - --------------------------------------------------------------------------------------------------------------------------- $ 255.2 $ 304.2 $ (49.0) - ---------------------------------------------------------------------------------------------------------------------------
(1) For purposes of this calculation, the balance has been adjusted by $144.0 million at December 31, 1999 to exclude the impact of the company's sale of receivables. [PICTURE APPEARS HERE] HOW SWEET IT IS Sulfentrazone, one of two new herbicides FMC has brought to market in the last few years, is a big force for FMC in Latin America, where it is used on sugarcane and soybean crops. Our product, known as Boral and Capaz in Latin America, is performing well on this sugarcane field near Guadalajara, Mexico. 29 Cash provided from operating activities of $558.2 million for the year ended December 31, 1999 increased from $430.0 million in 1998 primarily as a result of the sale of accounts receivable in the fourth quarter of 1999 and a reduction in inventories and other accounts receivable during the year. The company also received $49.1 million related to settlement of insurance coverage issues regarding environmental claims. Sales of receivables, which the company initiated in the fourth quarter of 1999, reduced accounts receivable by $144.0 million at December 31, 1999. Net discounts recognized on receivables sales during 1999 totaling $1.9 million are included in selling, general and administrative expenses in the consolidated statement of income for the year ended December 31, 1999. Proceeds received by the company from the sales of receivables were used to repay short-term debt. Sales of receivables were without recourse and were executed through a wholly owned subsidiary. The agreement for the sale of accounts receivable provides for continuation of the program on a revolving basis for a three-year period. Cash required by investing activities of $255.2 million in 1999 decreased from the 1998 requirement of $351.5 million. During the year ended December 31, 1999, the company received $199.3 million from sales of its process additives and bioproducts businesses, which partly offset funding required for the company's acquisitions of Pronova Biopolymer AS and Tg Soda Ash, Inc. (Note 2 to the consolidated financial statements). In addition to the acquisitions and divestitures described above (Note 2 to the consolidated financial statements), the company completed a number of smaller transactions in 1999 and continues to evaluate potential acquisitions, divestitures and joint ventures on an ongoing basis. Capital spending (excluding acquisitions) of $236.3 million for the year ended December 31,1999 is lower when compared with 1998, reflecting the completion of significant capital projects. This reduction was partially offset by increased spending related to environmental compliance at current operating sites. During 1999, the company entered into an agreement for the sale and leaseback of $29.1 million of certain equipment. The net proceeds received in connection with this transaction were $52.1 million. A non-amortizing deferred credit of $23.4 million was recorded in conjunction with the transaction and is included in other long-term liabilities at December 31, 1999 (Note 8 to the consolidated financial statements). Cash required by financing activities in 1999 of $340.2 million significantly increased from $7.5 million in 1998, largely because of significant net long-term debt repayments during 1999. For the year ended December 31, 1999, the company increased its commercial paper borrowings by $40.9 million (net of discount); increased borrowings under uncommitted U.S. credit facilities by $39.7 million; and received proceeds from issuing $35.0 million of medium-term notes under the universal shelf registration described below. These funds were used primarily to retire higher-cost senior debt and to purchase FMC common stock under the company's open-market stock repurchase program. The company has $800.0 million in committed credit facilities, consisting of a $350.0 million, 364-day non-amortizing revolving credit agreement due in July 2000 and a $450.0 million, five-year non-amortizing revolving credit agreement due in December 2001. As of December 31, 1999, the company had no borrowings under the revolving credit agreements and had commercial paper borrowings (supported by committed credit facilities) of $190.8 million and borrowings under uncommitted U.S. credit facilities of $89.8 million. On August 3, 1998, a new universal shelf registration statement became effective, under which $500.0 million of debt and/or equity securities may be offered. This registration statement incorporated $160.0 million of unused capacity from the company's 1995 shelf registration statement. During 1997, the company issued $70.0 million of medium-term notes at rates ranging from 7.2 percent to 7.32 percent. The net proceeds of $69.7 million were used to retire short-term borrowings. During 1998, the company issued $290.0 million of medium-term notes at rates ranging from 6.6 percent to 7.125 percent. The net proceeds of $288.6 million were used to retire other borrowings and repurchase FMC common stock. During 1999, the company issued $35.0 million of medium-term notes at rates ranging from 6.38 percent to 6.53 percent. The net proceeds of $34.9 million were used to retire other borrowings and repurchase FMC common stock. Unused capacity of $345.0 million remains available under the 1998 shelf registration at December 31, 1999. In 1999, the company borrowed $50.0 million at 6.45 percent interest maturing in 2032 from the proceeds of Power County, Idaho's Solid Waste Industrial Development Revenue Bonds. Undrawn proceeds of $21.1 million at December 31, 1999 will be used to fund phosphorus capital projects related to solid waste disposal (Note 14 to the consolidated financial statements). [PICTURE APPEARS HERE] ADVANCED METERING We're enhancing our capabilities to the gas-producing industry with our 1999 acquisition of the flow measurement systems of Perry Equipment Company, a producer of gas orifice metering equipment. [PICTURE APPEARS HERE] THE MAIN INGREDIENT We are expanding applications for our seaweed-derived products carrageenan and Avicel micro-crystalline cellulose, used as food and pharmaceutical ingredients. Recently, we developed Avicel as a gelatin replacement and as a low-moisture ingredient for use in snack products. 30 MANAGEMENT'S DISCUSSION AND ANALYSIS During 1999, the company completed the common stock open-market repurchase program originally authorized by the Board of Directors on August 28, 1997. Purchases for 1999 totaled 2.5 million shares at a cost of $137.5 million. A total of 7.7 million shares were repurchased during fiscal years 1997 through 1999 at a cost of approximately $503 million. On August 27, 1999, the Board of Directors authorized an additional $50 million of open market repurchases of FMC common stock, which the company had not commenced at December 31, 1999. Depending on market conditions, the company may purchase additional shares of its common stock on the open market from time to time; however, the company has not determined when or if it will make significant repurchases under this authorization. The company expects to meet operating needs, fund capital expenditures and potential acquisitions, and meet debt service requirements for 2000 through cash generated from operations and available credit facilities. FMC expects its cash requirements for 2000 to include approximately $230 million for planned capital expenditures, including approximately $85 million for capital projects related to environmental control facilities. Projected 2000 spending also includes approximately $60 million for environmental compliance at current operating sites, which is an operating expense of the company, plus approximately $60 million of remediation spending and $8 million for environmental study costs at current operating, previously operated and other sites, which has been accrued in prior periods. The company's foreign currency translation adjustment in accumulated other comprehensive loss increased from $134.1 million at December 31, 1998 to $196.0 million at December 31, 1999, primarily as a result of the negative translation impact of the Spanish peseta against the U.S. dollar. The company's ratios of earnings to fixed charges were 3.1x and 2.8x for the years ended December 31, 1999 and 1998, respectively. The increase in the ratio from 1998 is primarily the result of higher 1999 earnings, as gains on the sales of businesses and lower selling, general and administrative expenses more than offset the effect of lower sales, asset impairments and restructuring and other charges on 1999 earnings. DIVIDENDS No dividends were paid in 1999, 1998 and 1997, and no dividends are expected to be paid in 2000. DERIVATIVE FINANCIAL INSTRUMENTS AND MARKET RISKS FMC's primary financial market risks include fluctuations in interest rates and currency exchange rates. The company manages these risks by using derivative financial instruments in accordance with established policies and procedures. FMC does not use derivative financial instruments for trading purposes. At December 31, 1999, the company's derivative holdings consisted primarily of foreign currency forward contracts. When FMC sells or purchases products or services outside the United States, transactions are frequently denominated in currencies other than U.S. dollars. Exposure to variability in currency exchange rates is mitigated, when possible, through the use of natural hedges, whereby purchases and sales in the same foreign currency and with similar maturity dates offset one another. Additionally, FMC initiates hedging activities by entering into foreign exchange forward contracts with third parties when unable to use natural hedges. The maturity dates of the currency exchange agreements that provide hedge coverage are consistent with those of the underlying purchase or sales commitments. To monitor its currency exchange rate risks, the company uses a sensitivity analysis, which measures the impact on earnings of a 10 percent devaluation of the foreign currencies to which it has exposure. Based on its sensitivity analysis at December 31, 1999, such a fluctuation in currency exchange rates in the near term would not materially affect FMC's consolidated operating results, financial position or cash flows. FMC's management believes that its hedging activities have been effective in reducing its risks related to currency exchange rate fluctuations. During September 1998, the company entered into $65.0 million of forward contracts to offset risks associated with the real-denominated portions of FMC's Brazilian investments. During the first quarter of 1999, the Brazilian real devalued. Losses from the decline in value of the company's real-denominated investments during the 1999 devaluation, as well as 1999 economic losses related to the Brazilian economic crisis, were offset by gains on these forward contracts. For more information on derivative financial instruments, see Notes 1 and 7 to the consolidated financial statements. [PICTURE APPEARS HERE] COMBINING CAPABILITIES From longwall mining, shown here, to solution mining to the acquisition of Tg Soda Ash, FMC has leveraged its investments and reduced costs to secure our position as the lowest-cost producer of soda ash. 31 IMPACT OF THE YEAR 2000 Systems-related failures, miscalculations or business interruptions associated with entry into the year 2000 (the "Y2K" issue), either from within the company or from the surrounding environment, had the potential to have a materially adverse effect on the company. FMC devoted substantial resources to planning and executing a strategy aimed at identifying non-compliant systems and programs, fixing problems, testing solutions and developing contingency plans. In addition to the company's critical systems, the systems of key suppliers, customers and business partners were included in the scope of the project. At the time of entry to the year 2000, the company executed a centralized incident reporting and follow-up system to monitor company site conditions at its locations around the world. There were no instances of non-compliance that had a material financial impact on the company. FMC has not yet identified any Y2K issues relating to items having economic, health, safety or environmental implications. The company believes all of its critical systems are Y2K compliant, but there is no guarantee that the company has discovered all possible failure points. Specific factors contributing to any remaining uncertainty include the failure to identify all susceptible systems, non-ready third parties whose systems and operations impact the company and other similar uncertainties. While the company intends to continue to monitor its business for Y2K compliance-related issues, management believes that the resolution of such issues, if any, will not materially affect the financial position, results of operations or cash flows of FMC. In order to address Y2K issues, the company made systems modifications and/or accelerated certain system changes in its IT, manufacturing, and facility systems that might otherwise have been made at a later date. From inception of the Y2K program through December 31, 1999, the company spent approximately $19 million on Y2K compliance, of which approximately $16 million was expensed and $3 million was capitalized. Amounts expensed and capitalized for the year ended December 31, 1999, were $12 million and $2 million, respectively. FMC does not expect remaining costs to be significant. CONVERSION TO THE EURO On January 1, 1999, 11 European Union member states adopted the euro as their common national currency. From that date until January 1, 2002 (the transition period), either the euro or a participating country's present currency will be accepted as legal tender. Beginning on January 1, 2002, euro-denominated bills and coins will be issued, and by July 1, 2002, only euro currency will be used. FMC management continues to address the strategic, financial, legal and systems issues related to the various phases of transition. The company is addressing customer and business needs on a timely basis and attempting to anticipate and prevent complications related to the conversion. Throughout the transition period, minor costs related primarily to information systems will continue to be incurred. The company does not believe the ultimate costs of conversion will be material to its earnings, cash flow or financial position. [PICTURE APPEARS HERE] GRAND SCALE FMC's facility in Bayport, Texas--the largest hydrogen peroxide manufacturing facility in the world--incorporates, new, low-cost technology that delivers greater operating and expansion efficiencies. Consolidated Statements of Income
- ----------------------------------------------------------------------------------------------------------------------------- (In millions, except per share data) Year ended December 31 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------- Sales $4,110.6 $4,378.4 $4,259.0 - ----------------------------------------------------------------------------------------------------------------------------- Costs and expenses Cost of sales 3,008.4 3,244.0 3,136.8 Selling, general and administrative expenses 575.4 612.7 625.3 Research and development 152.4 157.7 174.0 (Gains) on sales of businesses (Note 2) (55.5) -- -- Asset impairments (Note 4) 29.1 -- 224.0 Restructuring and other charges (Note 4) 14.7 -- 40.9 - ----------------------------------------------------------------------------------------------------------------------------- Total costs and expenses 3,724.5 4,014.4 4,201.0 - ----------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before minority interests, interest income, interest expense, income taxes and cumulative effect of changes in accounting principles 386.1 364.0 58.0 Minority interests 5.1 6.2 8.9 Interest income 10.4 12.0 9.5 Interest expense 117.1 120.3 118.3 - ----------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes and cumulative effect of changes in accounting principles 274.3 249.5 (59.7) Provision for (benefit from) income taxes (Note 10) 58.3 64.2 (35.2) - ----------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before cumulative effect of changes in accounting principles 216.0 185.3 (24.5) Discontinued operations, net of income taxes (Note 3) (3.4) (42.7) 191.4 - ----------------------------------------------------------------------------------------------------------------------------- Income before cumulative effect of changes in accounting principles 212.6 142.6 166.9 Cumulative effect of changes in accounting principles, net of income taxes (Note 1) -- (36.1) (4.5) - ----------------------------------------------------------------------------------------------------------------------------- Net income $ 212.6 $ 106.5 $ 162.4 - ----------------------------------------------------------------------------------------------------------------------------- Basic earnings (loss) per common share (Note 1) Continuing operations $ 6.86 $ 5.45 $ (0.67) Discontinued operations (Note 3) (0.11) (1.26) 5.20 Cumulative effect of changes in accounting principles (Note 1) -- (1.06) (0.12) - ----------------------------------------------------------------------------------------------------------------------------- $ 6.75 $ 3.13 $ 4.41 - ----------------------------------------------------------------------------------------------------------------------------- Diluted earnings (loss) per common share (Note 1) Continuing operations $ 6.67 $ 5.30 $ (0.67) Discontinued operations (Note 3) (0.10) (1.22) 5.20 Cumulative effect of changes in accounting principles (Note 1) -- (1.03) (0.12) - ----------------------------------------------------------------------------------------------------------------------------- $ 6.57 $ 3.05 $ 4.41 - -----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 32 Consolidated Balance Sheets
- ------------------------------------------------------------------------------------------------------------------------ (In millions, except share and par value data) December 31 1999 1998 - ------------------------------------------------------------------------------------------------------------------------ Assets Current assets Cash and cash equivalents $ 64.0 $ 61.7 Trade receivables, net of allowances of $14.9 in 1999 and $11.9 in 1998 635.4 840.6 Inventories (Note 5) 457.7 517.7 Other current assets 172.6 136.4 Deferred income taxes (Note 10) 86.8 125.3 - ------------------------------------------------------------------------------------------------------------------------ Total current assets 1,416.5 1,681.7 Investments 206.8 186.5 Property, plant and equipment, net (Note 8) 1,691.9 1,727.5 Goodwill and intangible assets 505.7 399.1 Other assets 88.8 118.9 Deferred income taxes (Note 10) 86.1 52.7 - ------------------------------------------------------------------------------------------------------------------------ Total assets $3,995.8 $4,166.4 - ------------------------------------------------------------------------------------------------------------------------ Liabilities and stockholders' equity Current liabilities Short-term debt (Note 9) $ 347.5 $ 150.6 Accounts payable, trade and other 665.5 685.8 Accrued payroll 106.9 109.3 Other current liabilities 371.6 383.3 Current portion of long-term debt (Note 9) 0.8 4.7 Current portion of accrued pensions and other postretirement benefits (Note 13) 10.5 12.1 Income taxes payable (Note 10) 73.2 66.1 - ------------------------------------------------------------------------------------------------------------------------ Total current liabilities 1,576.0 1,411.9 Long-term debt, less current portion (Note 9) 945.1 1,326.4 Accrued pension and other postretirement benefits, less current portion (Note13) 237.6 228.1 Reserve for discontinued operations and other liabilities (Note 3) 319.2 305.1 Other liabilities 128.1 92.0 Minority interests in consolidated companies 46.2 73.5 Commitments and contingent liabilities (Notes 14 and 15) - ------------------------------------------------------------------------------------------------------------------------ Stockholders' equity (Note 12) Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 1999 or 1998 -- -- Common stock, $0.10 par value, authorized 130,000,000 shares in 1999 and 1998; issued 38,331,817 shares in 1999 and 38,188,586 shares in 1998 3.8 3.8 Capital in excess of par value of common stock 165.8 158.4 Retained earnings 1,288.3 1,075.7 Accumulated other comprehensive loss (203.5) (134.1) Treasury stock, common, at cost; 7,968,230 shares in 1999 and 5,485,947 shares in 1998 (510.8) (374.4) - ------------------------------------------------------------------------------------------------------------------------ Total stockholders' equity 743.6 729.4 - ------------------------------------------------------------------------------------------------------------------------ Total liabilities and stockholders' equity $3,995.8 $4,166.4 - ------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 33 Consolidated Statements of Cash Flows
- ---------------------------------------------------------------------------------------------------------------------------- (In millions) Year ended December 31 1999 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------- Cash provided by operating activities of continuing operations: Income (loss) from continuing operations before cumulative effect of changes in accounting principles $ 216.0 $ 185.3 $ (24.5) Adjustments to reconcile income (loss) from continuing operations before cumulative effect of changes in accounting principles to cash provided by operating activities of continuing operations: Depreciation and amortization 180.7 206.6 238.4 Gains on sales of businesses (Note 2) (55.5) -- -- Asset impairments (Note 4) 29.1 -- 224.0 Restructuring and other charges (Note 4) 14.7 -- 40.9 Deferred income taxes 20.6 27.4 (15.8) Minority interests 5.1 6.2 8.9 Other (0.3) (25.8) (21.2) Changes in operating assets and liabilities: Accounts receivable sold 142.1 -- -- Trade receivables, net 39.4 (9.6) 73.1 Inventories 57.0 8.2 (39.9) Other current assets and other assets 11.5 77.4 (37.8) Accounts payable, accrued payroll, other current liabilities and other liabilities (86.8) (6.5) 97.6 Income taxes payable (1.7) (22.1) 56.8 Accrued pension and other postretirement benefits, net (13.7) (17.1) (12.5) - ---------------------------------------------------------------------------------------------------------------------------- Cash provided by operating activities of continuing operations 558.2 430.0 588.0 - ---------------------------------------------------------------------------------------------------------------------------- Cash provided (required) by discontinued operations (Note 3) 29.1 (61.6) 353.9 - ---------------------------------------------------------------------------------------------------------------------------- Cash provided (required) by investing activities: Acquisitions and joint ventures (286.0) -- -- Capital expenditures (236.3) (277.7) (316.7) Sale of businesses 199.3 -- -- Disposal of property, plant and equipment 62.0 72.9 57.1 (Increase) decrease in investments 5.8 (146.7) 21.2 - ---------------------------------------------------------------------------------------------------------------------------- Cash required by investing activities (255.2) (351.5) (238.4) - ---------------------------------------------------------------------------------------------------------------------------- Cash provided (required) by financing activities: Net proceeds from issuance of (repayment of) commercial paper 23.9 (10.1) (252.3) Net increase (decrease) under uncommitted credit facilities 39.7 (69.9) 60.6 Net increase (decrease) in other short-term debt (83.4) (34.2) (368.3) Increase in long-term debt 84.6 288.6 69.7 Repayment of long-term debt (270.1) (37.3) (18.9) Distributions to minority partners (5.9) (5.3) (8.0) Repurchases of common stock, net (Note 12) (136.4) (156.7) (209.0) Issuances of common stock 7.4 17.4 21.6 - ---------------------------------------------------------------------------------------------------------------------------- Cash required by financing activities (340.2) (7.5) (704.6) - ---------------------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents 10.4 (10.4) (11.0) - ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 2.3 (1.0) (12.1) Cash and cash equivalents, beginning of year 61.7 62.7 74.8 - ---------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of year $ 64.0 $ 61.7 $ 62.7 - ---------------------------------------------------------------------------------------------------------------------------- Supplemental cash flow information: Income taxes paid (including taxes paid related to Defense Systems operations), net of refunds, were $40.8 million, $65.4 million and $46.0 million for 1999, 1998 and 1997, respectively. Interest payments, excluding amounts capitalized (Note 1), for 1999, 1998 and 1997 were $121.0 million, $115.6 million and $112.0 million, respectively. - ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 34 Consolidated Statements of Changes in Stockholders' Equity
- ------------------------------------------------------------------------------------------------------------------------------------ (In millions, except par value) Accumulated Common Capital other stock, $0.10 in excess Retained comprehensive Treasury Comprehensive par value of par earnings income (loss) stock income (loss) - ------------------------------------------------------------------------------------------------------------------------------------ Balance December 31, 1996 $3.7 $120.1 $ 806.8 $ (65.5) $ (9.3) $182.0 ====== Net income 162.4 $162.4 Stock options exercised (Note 11) 0.1 20.3 Purchases of treasury shares (Note 12) (209.0) Shares reissued 0.6 0.6 Foreign currency translation adjustment (Note 6) (70.2) (70.2) - ------------------------------------------------------------------------------------------------------------------------------------ Balance December 31, 1997 3.8 141.0 969.2 (135.7) (217.7) $ 92.2 ====== Net income 106.5 $106.5 Stock options and awards exercised (Note 11) 17.4 Purchases of treasury shares (Note 12) (150.0) Purchases of shares for benefit plan trust (Note 12) (6.7) Foreign currency translation adjustment (Note 6) 1.6 1.6 - ------------------------------------------------------------------------------------------------------------------------------------ Balance December 31, 1998 3.8 158.4 1,075.7 (134.1) (374.4) $108.1 ====== Net income 212.6 $212.6 Stock options and awards exercised (Note 11) 7.4 Purchases of treasury shares (Note 12) (135.9) Net purchases of shares for benefit plan trust (Note 12) (0.5) Foreign currency translation adjustment (Note 6) (61.9) (61.9) Minimum pension liability adjustment (Note 13) (7.5) (7.5) - ------------------------------------------------------------------------------------------------------------------------------------ Balance December 31, 1999 $3.8 $165.8 $1,288.3 $ (203.5) $(510.8) $143.2 - ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. 35 GEOGRAPHIC SEGMENT INFORMATION
- -------------------------------------------------------------------------------------------------------------- Sales Year ended December 31 (In millions) 1999 1998 1997 - -------------------------------------------------------------------------------------------------------------- Third party sales (by location of customer) United States $1,780.2 $1,909.1 $1,823.7 All other countries 2,330.4 2,469.3 2,435.3 - -------------------------------------------------------------------------------------------------------------- Total sales $4,110.6 $4,378.4 $4,259.0 - -------------------------------------------------------------------------------------------------------------- Long-lived assets December 31 (In millions) 1999 1998 - -------------------------------------------------------------------------------------------------------------- United States $1,427.3 $1,431.9 All other countries 560.2 601.0 - -------------------------------------------------------------------------------------------------------------- Total long-lived assets $1,987.5 $2,032.9 - --------------------------------------------------------------------------------------------------------------
OTHER BUSINESS SEGMENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------ Depreciation Research and Capital expenditures and amortization development expense Year ended December 31 Year ended December 31 Year ended December 31 (In millions) 1999 1998 1997 1999 1998 1997 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------ Energy Systems $ 14.7 $ 30.4 $ 35.4 $ 30.7 $ 35.6 $ 36.4 $ 25.7 $ 24.7 $ 20.0 Food and Transportation Systems 26.1 28.9 29.7 27.8 26.6 28.4 26.1 26.0 26.7 Agricultural Products 36.6 37.4 44.5 21.0 26.6 28.5 60.9 60.2 73.9 Specialty Chemicals 40.0 60.5 84.7 33.8 34.9 39.3 21.2 28.0 35.2 Industrial Chemicals 115.5 102.3 112.6 59.5 73.5 92.6 18.5 18.6 18.2 Corporate 3.4 6.4 9.8 7.9 9.4 13.2 -- 0.2 -- - ------------------------------------------------------------------------------------------------------------------------------ Total $236.3 $265.9 $316.7 $180.7 $206.6 $238.4 $152.4 $157.7 $174.0 - ------------------------------------------------------------------------------------------------------------------------------
Descriptions of the company's business segments are on pages 18 through 21 of this annual report. Sales, income (loss) from continuing operations before income taxes and cumulative effect of changes in accounting principles, assets and operating capital employed by business segment are on pages 16 and 17. - -------------------------------------------------------------------------------- Order backlog (unaudited) December 31 (In millions) 1999 1998 1997 - -------------------------------------------------------------------------------- Energy Systems $593.4 $877.9 $749.6 Food and Transportation Systems $247.2 $256.0 $239.2 - -------------------------------------------------------------------------------- Backlog is not reported for Agricultural Products, Specialty Chemicals or Industrial Chemicals due to the nature of these businesses. 36 OTHER SUPPLEMENTAL INFORMATION
- ---------------------------------------------------------------------------------------------------------------------------------- Quarterly financial information (unaudited) (In millions, except per share data and common stock prices) 1999 1998 1st 2nd 3rd 4th 1st 2nd 3rd 4th Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. - ---------------------------------------------------------------------------------------------------------------------------------- Sales $ 974.7 $ 1,070.4 $ 1,034.3 $ 1,031.2 $1,022.4 $ 1,129.4 $ 1,110.7 $1,115.9 Income (loss) from continuing operations before minority interests, net interest expense, income taxes and cumulative effect of change in accounting principle $ 69.3 $ 120.7 $ 98.5 $ 97.6 $ 61.7 $ 120.3 $ 105.8 $ 76.2 Income (loss) from continuing operations before cumulative effect of change in accounting principle $ 30.3 $ 68.9 $ 64.0 $ 52.8 $ 26.8 $ 67.6 $ 55.4 $ 35.5 Income (loss) from discontinued operations, net of income taxes -- 18.0 -- (21.4) -- -- -- (42.7) - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) before cumulative effect of change in accounting principle $ 30.3 $ 86.9 $ 64.0 $ 31.4 $ 26.8 $ 67.6 $ 55.4 $ (7.2) Cumulative effect of change in accounting principle -- -- -- -- (36.1) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- Net income (loss) $ 30.3 $ 86.9 $ 64.0 $ 31.4 $ (9.3) $ 67.6 $ 55.4 $ (7.2) - ---------------------------------------------------------------------------------------------------------------------------------- Basic net income (loss) per common share: Income (loss) before cumulative effect of change in accounting principle $ 0.94 $ 2.73 $ 2.04 $ 1.03 $ 0.77 $ 1.95 $ 1.64 $ (0.22) Cumulative effect of change in accounting principle -- -- -- -- (1.04) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- $ 0.94 $ 2.73 $ 2.04 $ 1.03 $ (0.27) $ 1.95 $ 1.64 $ (0.22) - ---------------------------------------------------------------------------------------------------------------------------------- Diluted net income (loss) per common share: Income (loss) before cumulative effect of change in accounting principle $ 0.92 $ 2.65 $ 1.98 $ 1.00 $ 0.75 $ 1.89 $ 1.60 $ (0.21) Cumulative effect of change in accounting principle -- -- -- -- (1.01) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- $ 0.92 $ 2.65 $ 1.98 $ 1.00 $ (0.26) $ 1.89 $ 1.60 $ (0.21) - ---------------------------------------------------------------------------------------------------------------------------------- Weighted average shares outstanding: Basic 32.3 31.8 31.4 30.5 34.8 34.6 33.8 32.9 Diluted 33.0 32.8 32.3 31.3 35.8 35.7 34.7 33.7 - ---------------------------------------------------------------------------------------------------------------------------------- Common stock prices: High $ 59 3/16 $ 74 5/16 $ 70 1/2 $ 57 5/16 $ 78 5/8 $ 82 3/16 $ 69 7/16 $ 60 1/2 Low $ 48 1/2 $ 49 7/8 $ 46 1/2 $ 39 5/8 $ 62 1/4 $ 66 1/2 $ 50 9/16 $ 48 1/4 - ----------------------------------------------------------------------------------------------------------------------------------
Significant transactions that affected quarterly results in 1999 and 1998 are described in Notes 1, 2, 3 and 4 to the consolidated financial statements. The sum of quarterly earnings per common share may differ from full-year amounts due to changes in the number of shares outstanding during the year. 37 Notes to Consolidated Financial Statements Note 1 Principal Accounting Policies Nature of operations. FMC Corporation ("FMC" or "the company") is a diversified producer of chemicals, machinery and other products for industry and agriculture. Further descriptions of FMC's products, its principal markets and the relative significance of its operations are included in this annual report in Products and Markets on pages 18 through 21 and in the Business Segment Data on pages 16 and 17. Reclassifications. Certain prior period amounts have been reclassified to conform with the current period's presentation. Use of estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results are likely to differ from those estimates, but management does not believe such differences will materially affect the company's financial position, results of operations or cash flows. Consolidation. The consolidated financial statements include the accounts of FMC and all significant majority owned subsidiaries and ventures except those excluded because control is restricted or temporary in nature. All material intercompany accounts and transactions are eliminated in consolidation. Investments. Investments in companies in which FMC's ownership interest is 50 percent or less and in which FMC exercises significant influence over operating and financial policies, and majority owned investments in which FMC's control is restricted or temporary in nature, are accounted for using the equity method after eliminating the effects of any material intercompany transactions. All other investments are carried at their fair values or at cost, as appropriate. Cash equivalents. The company considers investments in all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Accounts receivable. Sales of accounts receivable, which the company initiated in the fourth quarter of 1999, are reflected as a reduction of accounts receivable of $144.0 million on the company's consolidated balance sheet at December 31, 1999. Net discounts recognized on sales of receivables during 1999 totaling $1.9 million are included in selling, general and administrative expenses in the consolidated statement of income for the year ended December 31, 1999. Sales of accounts receivable were without recourse and were executed through a wholly owned subsidiary. The agreement for the sale of accounts receivable provides for continuation of the program on a revolving basis for a three-year period. Inventories. Inventories are stated at the lower of cost or market value. Cost is determined on the last-in, first-out ("LIFO") basis for all domestic inventories, except certain inventories relating to contracts-in-progress which are stated at the actual production cost incurred to date, reduced by amounts identified with recognized revenue. The first-in, first-out ("FIFO") method is used to determine the cost for all other inventories. Inventory costs include those costs directly attributable to products prior to sale, including all manufacturing overhead but excluding costs to distribute. Property, plant and equipment. Property, plant and equipment, including capitalized interest, is recorded at cost. Depreciation for financial reporting purposes is provided principally on the straight-line basis over the estimated useful lives of the assets (land improvements--20 years, buildings--20 to 50 years, and machinery and equipment--three to 18 years). Gains and losses are reflected in income upon sale or retirement of assets. Expenditures that extend the useful lives of property, plant and equipment or increase productivity are capitalized. Under generally accepted accounting principles, the company is required to periodically evaluate the useful lives of its plants and equipment. As a result of a study completed in early 1999, the company extended the depreciable lives of certain assets in the first quarter of 1999. The new lives are within the ranges disclosed above. The change in lives increased pretax income by $24.2 million for the year ended December 31, 1999 but did not affect depreciable lives used for tax purposes. The company periodically evaluates the recoverability of the net book values of property, plant and equipment, particularly in the case of a change in business circumstances or other triggering event, based on expected future undiscounted cash flows for the asset or group of assets. As described further in Note 4, the company recognized significant impairments of certain long-lived assets during the third quarter of 1999 and the fourth quarter of 1997. The company believes that no material unrecognized impairment of long-lived assets exists at December 31, 1999. Capitalized interest. Interest costs of $2.3 million in 1999 ($4.4 million in 1998 and $6.6 million in 1997) associated with the construction of certain long-lived assets have been capitalized as part of the cost of those assets and are being amortized over the assets' estimated useful lives. Deferred costs and other assets. Capitalized software costs totaling $48.8 million and $58.5 million at December 31, 1999 and 1998, respectively, are components of other assets, which also include anticipated environmental recoveries (Note 14), bond discounts and other deferred charges. Software costs are amortized over expected lives ranging from three to seven years. Recoverability of deferred software costs is assessed on an ongoing basis and write downs to net realizable value are recorded as necessary. Goodwill and intangible assets. Goodwill and identifiable intangible assets (such as trademarks) are amortized on a straight-line basis over their estimated useful or legal lives, not exceeding 40 years. At each balance sheet date, the company evaluates the recoverability of goodwill and intangible assets based on expected future undiscounted cash flows for each operation having a significant goodwill balance. The company believes that no goodwill or intangible assets are materially impaired at December 31, 1999. Accounts payable. Amounts advanced by customers as deposits on orders not yet billed and progress payments on contracts-in-progress are recorded as accounts payable ($182.4 million at December 31, 1999 and $175.7 million at December 31, 1998). Revenue recognition. Product sales are recognized upon transfer of title, which is generally upon shipment. Other revenues are recognized upon completion of contractually required performance or upon customer acceptance, depending upon circumstances. A significant portion of production contracts use the percentage-of-completion method. Losses are provided for contracts-in-progress in the period in which such losses become probable. Income taxes. Current income taxes are provided on income reported for financial statement purposes adjusted for transactions that do not enter into the computation of income taxes payable. Deferred tax liabilities and assets are recognized for the expected 38 Notes to Consolidated Financial Statements future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Income taxes are not provided for the equity in undistributed earnings of foreign subsidiaries or affiliates when it is management's intention that such earnings will remain invested in those companies. Taxes are provided in the year the decision is made to repatriate the earnings. Foreign currency translation. Assets and liabilities of most foreign operations are translated at exchange rates in effect at the balance sheet date, and their income statements are translated at the average monthly exchange rates for the period. For operations in non-highly inflationary countries, translation gains and losses are recorded as a component of accumulated other comprehensive loss in stockholders' equity until the foreign entity is sold or liquidated. For operations in highly inflationary countries and where the local currency is not the functional currency, inventories, property, plant and equipment, and other noncurrent assets are converted to U.S. dollars at historical exchange rates, and all gains or losses from conversion are included in net income. Foreign currency effects on cash and cash equivalents and debt in hyperinflationary economies are included in interest income or expense. Derivative financial instruments and foreign currency transactions. The company uses derivative financial instruments selectively to offset exposure to market risks arising from changes in foreign exchange rates and interest rates. Derivative financial instruments currently used by the company primarily include foreign currency forward contracts. Contracts are executed centrally to minimize transaction costs on currency conversions and minimize losses due to adverse changes in foreign currency markets. The company evaluates and monitors consolidated net exposures by currency and maturity, and external derivative financial instruments correlate with that net exposure in all material respects. Gains and losses on hedges of existing assets and liabilities are included in the carrying amounts of those assets or liabilities and are ultimately recognized in income when those carrying amounts are converted. Gains and losses related to hedges of firm commitments also are deferred and included in the basis of the transaction when it is completed. Gains and losses on unhedged foreign currency transactions are included in income as part of cost of sales. Gains and losses on derivative financial instruments that protect the company from exposure in a particular currency, but do not currently have a designated underlying transaction, are also included in income as part of cost of sales. If a hedged item matures, is sold, extinguished, or terminated, or is related to an anticipated transaction that is no longer likely to take place, the derivative financial instrument is closed out and the related gain or loss is included in income as part of cost of sales or interest expense as appropriate in relation to the hedged item. Cash flows from hedging contracts are reported in the statements of cash flows in the same categories as the cash flows from the transactions being hedged. Treasury stock. Shares of common stock repurchased under the company's stock repurchase plans are recorded at cost as treasury stock and result in a reduction of stockholders' equity in the consolidated balance sheet. When the treasury shares are reissued under FMC's stock compensation plans, the company uses a FIFO method for determining cost. The difference between the cost of the shares and the reissuance price is added to or deducted from capital in excess of par value of common stock. Earnings (loss) per common share ("EPS"). Basic EPS is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted EPS is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year plus the weighted average number of additional common shares that would have been outstanding during the year if potentially dilutive common shares had been issued under the company's stock compensation plans. The weighted average numbers of shares outstanding used to calculate the company's annual EPS are as follows: - ------------------------------------------------------------ (In thousands) 1999 1998 1997 - ------------------------------------------------------------ Basic EPS 31,516 34,007 36,805 - ------------------------------------------------------------ Diluted EPS 32,377 34,939 36,805 - ------------------------------------------------------------ The company's loss from continuing operations in 1997 results in an antidilutive effect in the calculation of diluted EPS. Accordingly, the potential common shares that cause the antidilutive effect have been omitted from the calculation of 1997 diluted EPS. At December 31, 1999, common shares outstanding plus dilutive potential common shares totaled 31,260,524 shares. Segment information. The company's determination of its reportable segments on the basis of its strategic business units and the commonalities among the products and services within each segment corresponds to the manner in which the company's management reviews and evaluates operating performance. The company has combined certain similar operating segments that meet applicable criteria established under Statement of Financial Accounting Standards ("SFAS") No. 131. Energy Systems supplies drilling, engineering, metering and subsea products and systems and related services to the oil and gas exploration industry. Food and Transportation Systems businesses provide automated processing and handling equipment to consumer-based industries. Agricultural Products produces crop protection and pest control chemicals for worldwide markets. Specialty Chemicals develops and manufactures highly specialized chemical products used in food, pharmaceutical and personal care products. Industrial Chemicals provides commodity-based chemicals produced in large quantities to industrial consumers. Business segment data are included on pages 16, 17 and 36. Segment operating profit is defined as total revenue less operating expenses. The following items have been excluded in computing segment operating profit: corporate staff expense, interest income and expense associated with corporate debt facilities and investments, income taxes, significant gains or losses on abnormal retirements of assets, gains on sales of businesses (Note 2), restructuring and other charges (Note 4), asset impairments (Note 4), a 1995 gain on the sale of FMC Wyoming stock, LIFO inventory adjustments and other income and expense items. Segment assets and liabilities are those assets and liabilities that are recorded and reported by segment operations. Segment operating capital employed represents segment assets less segment liabilities. Segment assets exclude corporate and other assets, which are principally cash equivalents, LIFO reserves, deferred income tax benefits, eliminations of intercompany receivables, property and equipment not attributable to a specific segment and credits relating to the sale of receivables and the deferred gain on the sale and leaseback of equipment. Segment liabilities exclude substantially all debt, income taxes, pension and other postretirement benefit liabilities, environmental reserves, restructuring reserves, intercompany eliminations and reserves for discontinued operations. 39 Notes to Consolidated Financial Statements Geographic segment sales represent sales by location of the company's customers. Geographic segment long-lived assets include investments, net property, plant and equipment, and other non-current assets. Geographic segment data is included on page 36. Environmental obligations. The company provides for environmental-related obligations when they are probable and amounts can be reasonably estimated. Where the available information is sufficient to estimate the amount of liability, that estimate has been used; where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Estimated obligations to remediate sites that involve the United States Environmental Protection Agency ("EPA"), or similar government agencies, are generally accrued no later than when a Record of Decision ("ROD"), or equivalent, is issued, or upon completion of a Remedial Investigation/Feasibility Study ("RI/FS") that is accepted by FMC and the appropriate government agency or agencies. Estimates are reviewed quarterly by the company's environmental remediation management, as well as by financial and legal management and, if necessary, adjusted as additional information becomes available. The estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, required remediation methods, and other actions by or against governmental agencies or private parties. The company's environmental liabilities for continuing and discontinued operations are principally for costs associated with the remediation and/or study of sites at which the company is alleged to have disposed of hazardous substances. Such costs include, among other items, RI/FS, site remediation, costs of operation and maintenance of the remediation plan, fees to outside law firms and consultants for work related to the environmental effort, and future monitoring costs. Estimated site liabilities are determined based upon existing remediation laws and technologies, specific site consultants' engineering studies or by extrapolating experience with environmental issues at comparable sites. Provisions for environmental costs are reflected in income, net of probable and reasonably estimable recoveries from named Potentially Responsible Parties ("PRPs") or other third parties. Such provisions incorporate inflation and are not discounted to their present values. In calculating and evaluating the adequacy of its environmental reserves, the company has taken into account the joint and several liability imposed by the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and the analogous state laws on all PRPs and has considered the identity and financial condition of each of the other PRPs at each site to the extent possible. The company has also considered the identity and financial condition of other third parties from whom recovery is anticipated, as well as the status of the company's claims against such parties. In general, the company is aware of a degree of uncertainty in disputes regarding the financial contribution by certain named PRPs, which is common to most multi-party sites. Although the company is unable to forecast the ultimate contributions of PRPs and other third parties with absolute certainty, the degree of uncertainty with respect to each party is taken into account when determining the environmental reserve by adjusting the reserve to reflect the facts and circumstances on a site-by-site basis. The company believes that recorded recoveries related to PRPs are realizable in all material respects. Recoveries relating to continuing operations are recorded as other assets at December 31, 1998, and those relating to discontinued operations are recorded in the reserve for discontinued operations and other liabilities at December 31, 1999 and 1998. Accounting standards adopted. The company adopted AICPA Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up Activities", effective January 1, 1998. SOP No. 98-5 requires that costs of start-up activities, including organizational costs, be expensed as incurred. In conjunction with the adoption, the company charged $46.5 million ($36.1 million after tax, or $1.03 per share on a diluted basis) to expense, which was reported as the cumulative effect of a change in accounting principle. The expense represented the write-off of costs related to the start-up of manufacturing at the Salar del Hombre Muerto lithium facility in Argentina; the Baltimore, Maryland, sulfentrazone facility; and the Bayport, Texas, hydrogen peroxide plant expansion. During the quarter ended March 31, 1998, the company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 establishes standards for the reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general-purpose financial statements. Comprehensive income includes all changes in stockholders' equity during the period except those resulting from investments by owners and distributions to owners. The company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", for the period ended December 31, 1998. (See Segment information above.) In the fourth quarter of 1997, the company adopted the requirements of the Emerging Issues Task Force consensus on Issue No. 97-13 ("EITF 97-13"), "Accounting for Costs Incurred in Connection with a Consulting Contract or an Internal Project That Combines Business Process Reengineering and Information Technology Transformation". In conjunction with the adoption, the company charged $7.6 million ($4.5 million after tax, or $0.12 per share on a diluted basis) to expense, which was reported as the cumulative effect of a change in accounting principle. The expense represented the write-off of business process reengineering costs capitalized prior to October 1, 1997. Had the consensus in EITF 97-13 been applied historically by the company, net income in 1997 would have been $166.6 million ($4.53 per share on a diluted basis). Accounting standard not adopted. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", is effective (as amended) for financial statements for fiscal years beginning after June 15, 2000, but may be adopted in earlier periods. The company is evaluating the new standard's provisions and has not yet determined what the effect of SFAS No. 133 will be on the earnings and the financial position of the company. The company intends to adopt the standard on January 1, 2001. Note 2 Business Combinations and Divestitures Acquisitions. On June 30, 1999, FMC acquired the assets of Tg Soda Ash, Inc. ("TgSA") from Elf Atochem North America, Inc. for approximately $51 million in cash and a contingent payment due at year-end 2003. The contingent payment amount, which will be based on the financial performance of the combined soda ash operations between 2001 and 2003, cannot currently be determined but could be as much as $100 million. No goodwill was recorded as a result of this transaction. TgSA's operations are included in the Industrial Chemicals segment. 40 Notes to Consolidated Financial Statements Also on June 30, 1999, the company completed the acquisition of the assets of Pronova Biopolymer AS ("Pronova") from a wholly owned subsidiary of Norsk Hydro for approximately $184 million in cash. The company made an additional payment of $3.3 million in January 2000 as final settlement of the transaction. Pronova, headquartered in Drammen, Norway, is a leading producer of alginates used in the pharmaceutical, food and industrial markets. The company has recorded goodwill (to be amortized over 30 years) and other intangible assets totalling approximately $135.0 million on a preliminary basis related to the acquisition. Pronova's operations are included in the Specialty Chemicals segment. In August 1998, the company acquired a majority of the common stock of CBV Industria Mecanica S.A. ("CBV"), the leading wellhead manufacturer in Brazil. With the acquisition, FMC's previous minority equity position and a subsequent tender offer for the remaining outstanding shares of CBV, the company owns 98 percent of CBV's voting shares. CBV's operations are included in the Energy Systems segment. The company completed a number of smaller acquisitions and joint ventures during the years ended December 31, 1999, 1998 and 1997. All acquisitions were accounted for using the purchase method of accounting and, accordingly, the purchase prices have been allocated to the assets acquired and liabilities assumed based on the estimated fair values of such assets and liabilities at the date of acquisition. The excess of the purchase prices over the fair values of the net tangible assets acquired has been recorded as intangible assets, primarily goodwill, which are amortized over periods ranging from 10 to 40 years. The purchase prices for all the aforementioned acquisitions were satisfied from cash flows from operations and short-term and long-term financing. Results of operations of the acquired companies have been included in the company's consolidated statements of income from the respective dates of acquisition. Divestitures. On July 9, 1999, the company completed the sale of its bioproducts business to Cambrex Corporation for $38.0 million in cash, resulting in a pre-tax gain of $20.1 million ($12.2 million after tax, or $0.38 per share). The bioproducts business was included in the Specialty Chemicals segment and had 1998 sales of approximately $25 million. On July 31, 1999, FMC completed the sale of its process additives business to Great Lakes Chemical Corporation for $161.8 million in cash, resulting in a gain of $35.4 million on both a pre-tax and after-tax basis ($1.09 per share). The process additives business was included in the Specialty Chemicals segment and had 1998 sales of approximately $166 million from its operations in Manchester, England and Nitro, West Virginia. In July 1998, the company completed the sale of Crosby Valve to a subsidiary of Tyco International Ltd. for cash and Tyco International Ltd. ("Tyco") preferred stock. The preferred stock is guaranteed by Tyco and can be sold to either the issuing subsidiary or Tyco three years after issuance. Crosby Valve was included in the Energy Systems segment. The company sold its Defense Systems operations in 1997 (Note 3). The company also completed a number of smaller divestitures during the years ended December 31, 1999, 1998 and 1997. Joint ventures. On April 30, 1999, FMC and Solutia Inc announced an agreement to form a joint venture, which will include the North American and Brazilian phosphorus chemicals operations of both companies. The joint venture, which will be named Astaris LLC, will be a limited liability corporation owned equally by FMC and Solutia Inc. Formation of Astaris LLC is subject to a government approval process, which is expected to be completed in the first quarter of 2000. FMC's portion of the joint venture's results will be included in the company's Industrial Chemicals segment. Beginning in July 1995, Sumitomo Corporation and Nippon Sheet Glass Company, Ltd. ("minority owners") owned 20 percent of the common stock of FMC Wyoming Corporation, FMC's soda ash business. Effective July 1, 1999, in conjunction with the acquisition of TgSA, the interests of the minority owners were diluted to 12.5 percent as a result of FMC's disproportionate investment in TgSA and certain future capital projects. FMC retains management control of FMC Wyoming Corporation. Note 3 Discontinued Operations The company's results of discontinued operations for the years ended December 31, 1999, 1998 and 1997 comprise the following: - ----------------------------------------------------------------------- (In millions) 1999 1998 1997 - ----------------------------------------------------------------------- Provision for liabilities related to previously discontinued operations (net of income tax benefits of $23.2 in 1999, $27.3 in 1998 and $18.0 in 1997) $(36.2) $(42.7) $(27.0) Gain on sale of Defense Systems properties (net of income taxes of $20.9) 32.8 -- -- Gain on sale of Defense Systems operations (net of income taxes of $138.7) -- -- 179.7 Income from operations of Defense Systems segment through August 25, 1997 (net of income taxes of $25.5) -- -- 38.7 - ----------------------------------------------------------------------- Discontinued operations, net of income taxes $ (3.4) $(42.7) $191.4 - ----------------------------------------------------------------------- In the fourth quarter of 1999, FMC provided $59.4 million ($36.2 million after tax) related to previously discontinued and other operations. Of the total, $25.9 million, net of anticipated recoveries of $8.9 million, was recorded to provide for updated estimates of environmental remediation costs, primarily at the company's former Defense Systems sites. An additional $18.1 million related to increased actuarial estimates of the company's long-term liabilities for general liability and workers' compensation, net of a reduction in estimated asbestos-related liabilities of $9.1 million. Interest charges for post employment benefit obligations were $2.7 million, and the remaining charges related to estimated legal defense, property maintenance and other costs, primarily related to the discontinued Defense Systems business. In the fourth quarter of 1998, FMC provided $70.0 million ($42.7 million after tax) for environmental costs net of anticipated recoveries of $19.8 million. The majority of the charge related to an agreement the company reached with the EPA and the U.S. Department of Justice ("DOJ") regarding settlement of past costs and future clean-up work at the discontinued fiber manufacturing site in Front Royal, Virginia (Note 14). 41 Notes to Consolidated Financial Statements In the fourth quarter of 1997, FMC provided $45.0 million ($27.0 million after tax) for environmental costs at a number of sites based on the company's quarterly assessment of future remediation costs. Reserve for discontinued operations and other liabilities. With the exception of certain real estate for which FMC has short-term or long-term remediation obligations, disposal of assets related to discontinued operations has been completed in accordance with plans adopted within one year of the measurement dates. In addition to the 1997 sale of the company's Defense Systems operations, residual liabilities relate to operations discontinued between 1976 and 1984-- primarily the Film and Fiber, Chlor-Alkali, Power Transmission and Construction Equipment businesses. Most residual liabilities are of a long-term nature and will be settled over a number of years. Liabilities remaining with FMC total $319.2 million at December 31, 1999 ($305.1 million at December 31, 1998) and comprise $183.9 million (net of $60.2 million in anticipated third party recoveries) for environmental remediation and study obligations, most of which relate to former chemical plant sites; $63.9 million for product liability, asbestos and other potential claims principally related to the discontinued Construction Equipment and Chlor-Alkali businesses; $59.8 million for retiree medical and life insurance benefits provided to employees of former chemical businesses and the Construction Equipment business; and $11.6 million related to the sale of the Defense Systems operations. The company uses actuarial methods, to the extent practicable, to monitor the adequacy of product liability and retiree benefit reserves on an ongoing basis. The environmental liabilities are subject to the accounting and review practices described in Notes 1 and 14. While the amounts required to settle the company's liabilities for discontinued operations could ultimately differ materially from the estimates used as a basis for recording these liabilities, management believes that changes in estimates or required expenditures for any individual cost component will not have a material adverse impact on the company's liquidity or financial condition in any single year and that, in any event, such costs will be satisfied over many years. Spending in 1999, 1998 and 1997, respectively, included $64.2 million, $52.8 million and $47.7 million for environmental obligations; $12.2 million, $20.1 million and $10.2 million for product liability and other claims; $4.7 million, $6.3 million and $4.5 million for retiree benefits; and $5.2 million related to net settlements of Defense Systems obligations. Environmental recoveries in 1999, 1998 and 1997 were $56.9 million, $4.4 million and $3.3 million, respectively. In 1998, $15.5 million of assets related to Defense Systems were charged against previously-established reserves. Sale of Defense Systems operations. On October 6, 1997, FMC, Harsco Corporation and Harsco UDLP Corporation ("Harsco") sold United Defense, L.P. ("UDLP") and certain other assets comprising FMC's Defense Systems business to an affiliate of The Carlyle Group ("Carlyle") for $850.0 million. FMC was the managing general partner and 60 percent owner of UDLP, and Harsco owned the remaining 40 percent. The gross sale proceeds to FMC and Harsco consisted of $800.0 million cash and a $50.0 million, 8.75 percent note receivable to FMC from Carlyle. Of the estimated proceeds, FMC received $460.0 million in cash (subject to adjustment based on certain closing balance sheet items) and recognized a gain on the transaction of $318.4 million ($179.7 million after tax) during the fourth quarter of 1997. During the third quarter of 1998, all parties to the transaction reached an agreement on closing balance sheet adjustments, and FMC collected the note receivable net of an immaterial cash settlement to reflect those adjustments. The final settlement did not result in any adjustment to FMC's previously recorded gain. FMC used cash proceeds from the sale to retire variable rate debt and commercial paper and contribute toward its common stock repurchase program. During the year ended December 31, 1999, FMC sold several real estate properties formerly used by Defense Systems operations. In the second quarter, FMC received $33.5 million in cash, recognizing a gain of $29.5 million ($18.0 million after tax), and in the fourth quarter, FMC received $31.0 million in cash, recognizing a gain of $24.2 million ($14.8 million after tax), related to property sales. Sales of the Defense Systems segment were $918.9 million for the period from January 1, 1997 through August 25, 1997. Note 4 Asset Impairments and Restructuring and Other Charges In the third quarter of 1999, FMC recorded asset impairments of $29.1 million ($17.8 million after tax, or $0.55 per share on a diluted basis), and restructuring and other one-time charges of $14.7 million ($9.0 million after tax, or $0.28 per share). Asset impairments of $20.7 million were required to write off the remaining net book values of two U.S. lithium facilities. Both facilities were constructed to run pilot and development quantities for new lithium-based products. During the third quarter of 1999, management determined that it would not be feasible to use the facilities as currently configured. Additionally, an impairment charge of $8.4 million was required to write off the remaining net book value of a small caustic soda facility in Green River, Wyoming. Estimated future cash flows related to this facility indicated that an impairment of the full value had occurred. Restructuring and other one-time charges of $14.7 million resulted primarily from strategic decisions to divest or restructure a number of businesses and support departments, including certain food machinery, agricultural products, and energy systems operations and certain corporate and shared service support departments. Of the total charge, $2.9 million related to actions, including headcount reductions, required to achieve planned synergies from recently acquired businesses in Specialty Chemicals and Energy Systems. Restructuring spending under all 1999 programs totaled $4.7 million in 1999 and includes severence payments for approximately 225 individuals. The remaining restructuring reserves related to these programs are $10.0 million at December 31, 1999, and are expected to be utilized by the fourth quarter of 2000. The majority of cost savings related to these programs will be realized in 2000 and beyond. FMC recorded pretax charges of $264.9 million ($180.9 million after tax, or $4.92 per share on a diluted basis) in the fourth quarter of 1997. Of this amount, $224.0 million ($154.0 million after tax, or $4.19 per share) related to asset impairments primarily in the phosphorus chemicals and process additives businesses, and $40.9 million ($26.9 million after tax, or $0.73 per share) was provided to cover restructuring and other activities in several businesses. Restructuring and other reserves related to the 1997 charge totaled $3.5 million and $12.3 million at December 31, 1999 and 1998, respectively. Restructuring spending in 1999, 1998 and 1997 related to these reserves was $8.8 million, $16.9 million and $6.7 million, respectively. 42 Notes to Consolidated Financial Statements In the phosphorus chemicals business, the 1997 asset impairments of $120.0 million were based on increased environmental capital cost estimates and difficult market conditions resulting from increased international competition. The increased capital costs included environmental projects to reduce air emissions and meet waste handling and waste pond treatment requirements at the company's Pocatello, Idaho, facility (Note 14). In the United Kingdom-based process additives business, the 1997 asset impairments of $46.0 million, including the impairment of $19.8 million of goodwill, reflected lower expected future cash flows resulting from increased market competition in the flame retardant and water treatment businesses, as well as the strength of the British pound. Additional asset impairments of $58.0 million primarily related to a partial re-engineering of the Authority herbicide plant, certain assets at both the lithium facility in North Carolina and the food ingredients facility in Cork, Ireland, and unused patents in the airport products business. The fair values of impaired assets were determined using discounted cash flow models and assumptions based on management's estimates. Restructuring and other charges in 1997 of $40.9 million related to the Energy Systems businesses ($17.9 million), the Agricultural Products business ($13.0 million), and the Food and Transportation Systems businesses ($10.0 million). Note 5 Inventories Inventories are recorded at the lower of cost or market value. At December 31, 1999, inventories accounted for under the LIFO method totaled $139.9 million. The current replacement costs of inventories exceeded their recorded values by $299.5 million at December 31, 1999 and $292.9 million at December 31, 1998. During 1999, the company reduced certain LIFO inventories that were carried at lower than prevailing costs, resulting in a reduction of LIFO expense of $3.6 million. There were no reductions in LIFO inventories during 1998 or 1997. Note 6 Foreign Currency Net income for 1999, 1998 and 1997 included aggregate foreign currency gains/(losses) of $6.0 million, $(7.7) million and $0.8 million, respectively. Currency-related gains in 1999 resulted primarily from the rebound of the Brazilian real subsequent to its early 1999 devaluation (Note 7). Weakening European currencies, primarily the Spanish peseta, partially offset the 1999 effects of the stronger Canadian dollar and Japanese yen. European and certain Southeast Asian currencies were fairly stable against the U.S. dollar in 1998 while the Canadian dollar and Mexican peso weakened. Also in 1998, the Japanese yen reversed its previous trend and strengthened. The U.S. dollar strengthened significantly against most currencies in 1997. The following table presents the foreign currency adjustments to key balance sheet categories and the offsetting adjustments to accumulated other comprehensive income or to income at December 31: - ------------------------------------------------------------------------- Gains (Losses) - ------------------------------------------------------------------------- (In millions) 1999 1998 1997 - ------------------------------------------------------------------------- Cash and cash equivalents $ 10.4 $(10.4) $(11.0) Other working capital (26.2) (1.5) (19.5) Property, plant & equipment, net (24.5) 2.5 (38.5) Investments 5.4 (2.4) (3.0) Debt 0.5 1.6 1.5 Other (21.5) 4.1 1.1 - ------------------------------------------------------------------------- $(55.9) $ (6.1) $(69.4) - ------------------------------------------------------------------------- Other comprehensive income (loss) $(61.9) $ 1.6 $(70.2) Gain (loss) in income 6.0 (7.7) 0.8 - ------------------------------------------------------------------------- $(55.9) $ (6.1) $(69.4) - ------------------------------------------------------------------------- Note 7 Financial Instruments Fair value disclosures. The carrying amounts of cash and cash equivalents, trade receivables, other current assets, accounts payable and amounts included in investments and accruals meeting the definition of a financial instrument approximate fair value. The carrying amounts and related estimated fair values for the company's remaining financial instruments are as follows: - ------------------------------------------------------------------------- December 31, 1999 - ------------------------------------------------------------------------- Carrying Estimated (In millions) Amount Fair Value - ------------------------------------------------------------------------- Liabilities - ------------------------------------------------------------------------- Foreign exchange forward contracts $ 14.1 $ 12.0 Total debt $1,293.4 $1,258.3 - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- December 31, 1998 - ------------------------------------------------------------------------- Carrying Estimated (In millions) Amount Fair Value - ------------------------------------------------------------------------- Liabilities - ------------------------------------------------------------------------- Interest rate swap agreement $ -- $ 0.8 Foreign exchange forward contracts $ 3.9 $ 118.3 Total debt $1,481.7 $1,473.5 - ------------------------------------------------------------------------- Fair values of debt have been determined through a combination of management estimates and information obtained from independent third parties using market data, such as bid/ask spreads, available on the last business day of the year. Fair values relating to derivative financial instruments reflect the estimated amounts that the company would receive or pay to terminate the contracts at the reporting date based on quoted market prices of comparable contracts as of December 31. Derivative financial instruments. At December 31, 1999, derivative financial instruments consist primarily of foreign exchange forward contracts. The company entered into these agreements to manage the currency risk associated with purchases and sales denominated in currencies other than the U.S. dollar. Substantially all of the foreign exchange forward contracts relate to receivables, payables and intercompany transactions and are accounted for as hedges. 43 Notes to Consolidated Financial Statements As of December 31, 1999 and 1998, the company held foreign exchange forward contracts with notional amounts of $563.2 million and $610.8 million, respectively, in which foreign currencies (primarily Norwegian krone, British pound and euro in 1999 and Norwegian krone, Belgian franc, British pound and Spanish peseta in 1998) were purchased, and approximately $574.8 million and $886.8 million, respectively, in which foreign currencies (primarily euro, Swedish krona, British pound and Japanese yen in 1999 and Norwegian krone, Swedish krona, Belgian franc, Japanese yen and Brazilian real in 1998) were sold. Notional amounts are used to measure the volume of derivative financial instruments and do not represent potential gain or loss on these agreements. During 1998, the company entered into forward contracts with a notional value of $65.0 million to offset various risks associated with the potential devaluation of the Brazilian real. The contracts matured in 1999, subsequent to the devaluation of the real. Losses from the decline in value of the company's real-denominated investments during the 1999 devaluation, as well as 1999 economic losses related to the Brazilian economic crisis, were offset by gains on the forward contracts. Standby letters of credit and financial guarantees. In the ordinary course of business with customers, vendors and others, the company is contingently liable for performance under letters of credit and other financial guarantees totaling approximately $138 million at December 31, 1999. Management does not believe it is practicable to estimate the fair value of these financial instruments and does not expect any material losses from their resolution since performance is not likely to be required. Note 8 Property, Plant and Equipment Property, plant and equipment consists of the following: - ---------------------------------------------------------------------- December 31 (In millions) 1999 1998 - ---------------------------------------------------------------------- Land and land improvements $ 200.5 $ 181.6 Buildings 534.3 526.7 Machinery and equipment 2,879.4 2,968.7 Construction in progress 109.8 147.7 - ---------------------------------------------------------------------- Total cost 3,724.0 3,824.7 Accumulated depreciation 2,032.1 2,097.2 - ---------------------------------------------------------------------- Net property, plant and equipment $1,691.9 $1,727.5 - ---------------------------------------------------------------------- Depreciation expense was $162.7 million, $189.0 million and $218.3 million in 1999, 1998 and 1997, respectively. In December 1999, the company entered into an agreement for the sale and leaseback of certain equipment. The company has annual purchase options at projected future fair market values under the agreements and may renew the lease annually for up to five years. The leases are classified as operating leases in accordance with SFAS No. 13, "Accounting for Leases". A non-amortizing deferred credit of $23.4 million was recorded in conjunction with the sale transaction and is included in other long-term liabilities at December 31, 1999. Net property, plant and equipment was reduced by $29.1 million as a result of the sale-leaseback, and the company received net cash proceeds of $52.1 million. Note 9 Debt Long-term debt. Long-term debt consists of the following: - ---------------------------------------------------------------------- December 31 (In millions) 1999 1998 - ---------------------------------------------------------------------- Revolving credit facility (effective rate: 1999--n/a; 1998--10.0%)/(1)/ $ -- $ -- Commercial paper (effective rate: 1998--5.8%)/(2)/ -- 149.9 Uncommitted credit facilities (effective rate: 1998--5.8%)/(2)/ -- 50.1 Pollution control and industrial revenue bonds, 3.2% to 7.1%, due 2000 to 2032 204.7 159.3 Senior debt, 6.375%, due 2003, less unamortized discount (1999--$0.4; 1998--$0.5), effective rate 6.4% 199.6 199.5 Senior debt, 7.75%, due 2011, less unamortized discount (1999--$0.9; 1998--$0.9), effective rate 7.9% 99.1 99.1 Senior debt, 8.75%, due 1999 -- 250.0 Medium-term notes, 6.38% to 7.32%, due 2002 to 2008, less unamortized discounts (1999--$1.5, 1998--$1.4), effective rates 6.4% to 7.4% 393.5 358.6 Exchangeable senior subordinated debentures, 6.75%, due 2005 48.4 64.1 Other 0.6 0.5 - ---------------------------------------------------------------------- Total 945.9 1,331.1 Less current portion 0.8 4.7 - ---------------------------------------------------------------------- Long-term portion $ 945.1 $1,326.4 - ---------------------------------------------------------------------- /(1)/ The effective rate for the revolving credit facility is based on average balances outstanding during the year and includes facility fees. During 1999, there were no balances outstanding. Facility fees in 1999 were $0.9 million. /(2)/ The effective rates for commercial paper and uncommitted facilities are based on average balances outstanding during the year. Outstanding balances related to short-term commercial paper and uncommitted facilities were classified as long-term at December 31, 1998. In December 1996, the company entered into a $450.0 million, five-year non- amortizing revolving credit agreement due December 2001. In July 1999, the company renewed a $350.0 million, 364-day non-amortizing revolving credit agreement due July 2000. These agreements provide the company with $800.0 million in committed credit facilities. No amounts were outstanding under these credit facilities as of December 31, 1999 and 1998. Among other restrictions, the credit agreements contain covenants relating to liens, consolidated net worth and cash flow coverage (as defined in the agreements). The company is in compliance with all financial debt covenants. Committed credit available under the revolving credit facilities provides management with the ability to refinance a portion of its debt on a long-term basis. At December 31, 1998, $149.9 million in outstanding commercial paper, which is supported by credit facilities, $250.0 million of senior debt due in 1999 and $50.1 million of borrowings under short-term uncommitted credit facilities were classified as long-term debt. 44 Notes to Consolidated Financial Statements On August 3, 1998, a new universal shelf registration statement became effective, under which $500.0 million of debt and/or equity securities may be offered. This registration statement incorporated $160.0 million of unused capacity from the company's 1995 shelf registration statement. During 1997, the company issued $70.0 million of medium-term notes at rates ranging from 7.2 percent to 7.32 percent. The net proceeds of $69.6 million were used to retire short-term borrowings. During 1998, the company issued $290.0 million of medium-term notes at rates ranging from 6.6 percent to 7.125 percent. The net proceeds of $288.6 million were used to retire other borrowings and repurchase FMC common stock. During 1999, the company issued $35.0 million of medium-term notes at rates ranging from 6.38 percent to 6.53 percent. The net proceeds of $34.9 million were used to retire other borrowings and repurchase FMC common stock. Unused capacity of $345.0 million remains available under the 1998 shelf registration at December 31, 1999. In 1999, the company borrowed $50.0 million at 6.45 percent interest maturing in 2032 from the proceeds of Power County, Idaho's Solid Waste Industrial Development Revenue Bonds. Undrawn proceeds of $21.1 million are included in investments in the consolidated balance sheet at December 31, 1999 and will be used to fund phosphorus capital projects related to solid waste disposal. During 1999, $250.0 million of senior debt matured and was repaid with cash flows from operations and other borrowings. The exchangeable senior subordinated debentures bearing interest at 6.75 percent and maturing in 2005 are exchangeable at any time into Meridian Gold Inc. common stock at an exchange price of $15.125 per share, subject to adjustment. The company may, at its option, pay an amount equal to the market price of Meridian Gold Inc. common stock in lieu of delivery of the shares. However, the market price at December 31, 1999 was substantially below $15.125 per share. The debentures are subordinated in right of payment to all existing and future senior indebtedness of the company. The debentures are redeemable at the option of FMC at prices decreasing from 103.375 percent of the face amount on January 16, 1995, to par on January 16, 2000. The company redeemed $15.7 million of these debentures in 1999. Aggregate maturities and sinking fund requirements over the next five years are (in millions): 2000-$0.8, 2001-$22.8, 2002-$135.5, 2003-$226.4, 2004-$0.5, and thereafter-$559.9. Short-term debt. At December 31, 1999, short-term debt consisted of commercial paper, borrowings under uncommitted credit facilities and foreign borrowings. At December 31, 1998, components of short-term debt were domestic and foreign borrowings. In November 1995, the company commenced a short-term commercial paper program, supported by committed credit facilities, providing for the issuance of up to $500.0 million in aggregate maturity value of commercial paper at any given time. Three-day commercial paper of $190.8 million was outstanding at December 31, 1999. At December 31, 1998, $149.9 million of outstanding commercial paper was classified as long-term debt. Effective interest rates on commercial paper were 5.4 percent and 5.8 percent at December 31,1999 and 1998, respectively. Advances under uncommitted credit facilities were $89.8 million and $68.0 million at December 31, 1999 and 1998, respectively. (As described above, $50.1 million of the outstanding balance at December 31, 1998 was classified as long-term debt.) At December 31, 1999 and 1998, effective interest rates on the uncommitted credit facilities were 5.3 percent and 5.7 percent, respectively. Outstanding foreign short-term borrowings totaled $66.9 million and $132.7 million at December 31, 1999 and 1998, respectively. The weighted average interest rates on outstanding foreign short-term borrowings at December 31, 1999 and 1998 were 10.7 percent and 10.1 percent, respectively. The average interest rates have been adjusted for currency devaluation associated with borrowing in hyperinflationary countries. Compensating balance agreements. FMC maintains informal credit arrangements in many foreign countries. Foreign lines of credit, which include overdraft facilities, typically do not require the maintenance of compensating balances, as credit extension is not guaranteed but is subject to the availability of funds. Note 10 Income Taxes Domestic and foreign components of income (loss) from continuing operations before income taxes and the cumulative effect of changes in accounting principles are shown below: - --------------------------------------------------------------------------- Year Ended December 31 (In millions) 1999 1998 1997 - --------------------------------------------------------------------------- Domestic $ 37.3 $127.9 $(174.2) Foreign 237.0 121.6 114.5 - --------------------------------------------------------------------------- Total $274.3 $249.5 $ (59.7) - --------------------------------------------------------------------------- The provision for (benefit from) income taxes attributable to income (loss) from continuing operations before the cumulative effect of changes in accounting principles consists of: - --------------------------------------------------------------------------- Year Ended December 31 (In millions) 1999 1998 1997 - --------------------------------------------------------------------------- Current: Federal $ 8.9 $ 17.1 $ (33.0) Foreign 29.0 15.6 17.3 State and local (0.2) 4.1 (3.7) - --------------------------------------------------------------------------- Total current 37.7 36.8 (19.4) Deferred 20.6 27.4 (15.8) - --------------------------------------------------------------------------- Total $ 58.3 $ 64.2 $ (35.2) - --------------------------------------------------------------------------- Total income tax provisions (benefits) were allocated as follows: - --------------------------------------------------------------------------- Year Ended December 31 (In millions) 1999 1998 1997 - --------------------------------------------------------------------------- Continuing operations before the cumulative effect of changes in accounting principles $ 58.3 $ 64.2 $ (35.2) Discontinued operations (2.3) (27.3) 146.2 Cumulative effect of changes in accounting principles -- (10.4) (3.1) Items charged directly to stockholders' equity (1.1) (3.0) (7.1) - --------------------------------------------------------------------------- Income tax provision $ 54.9 $ 23.5 $ 100.8 - --------------------------------------------------------------------------- 45 Notes to Consolidated Financial Statements Significant components of the deferred income tax provision (benefit) attributable to income (loss) from continuing operations before income taxes and the cumulative effect of changes in accounting principles are as follows: - -------------------------------------------------------------------------- Year Ended December 31 (In millions) 1999 1998 1997 - -------------------------------------------------------------------------- Deferred tax (exclusive of the valuation allowance) $ 8.4 $ 21.5 $ (10.9) Increase (decrease) in the valuation allowance for deferred tax assets 12.2 5.9 (4.9) - --------------------------------------------------------------------------- Deferred income tax provision (benefit) $ 20.6 $ 27.4 $ (15.8) - --------------------------------------------------------------------------- Significant components of the company's deferred tax assets and liabilities are as follows: - -------------------------------------------------------------------------- Year Ended December 31 (In millions) 1999 1998 - -------------------------------------------------------------------------- Reserves for discontinued operations and restructuring $246.9 $226.8 Accrued pension and other postretirement benefits 85.8 86.8 Other reserves 51.4 59.3 Net operating loss carryforwards 54.8 47.3 Alternative minimum tax credit carryforwards 25.8 19.6 Other 22.3 14.2 - -------------------------------------------------------------------------- Deferred tax assets 487.0 454.0 Valuation allowance (67.5) (55.3) - -------------------------------------------------------------------------- Deferred tax assets, net of valuation allowance $419.5 $398.7 - -------------------------------------------------------------------------- Property, plant and equipment $243.1 $215.6 Other 3.5 5.1 - -------------------------------------------------------------------------- Deferred tax liabilities $246.6 $220.7 - -------------------------------------------------------------------------- Net deferred tax assets $172.9 $178.0 - -------------------------------------------------------------------------- The effective income tax rate applicable to income (loss) from continuing operations before income taxes and the cumulative effect of changes in accounting principles is different from the statutory U.S. federal income tax rate due to the factors listed in the following table: - -------------------------------------------------------------------------- (Percent of income (loss) from continuing operations before income taxes and the cumulative effect of changes in Year Ended December 31 accounting principles) 1999 1998 1997 - -------------------------------------------------------------------------- Statutory U.S. tax rate 35% 35% (35)% - -------------------------------------------------------------------------- Net difference: Foreign sales corporation income subject to different tax rates (4) (3) (13) Percentage depletion (2) (3) (12) State and local income taxes, less federal income tax benefit -- 2 (11) Foreign earnings subject to different tax rates (10) (12) (10) Non-taxable portion of gain on sale of business (5) -- -- Tax on intercompany dividends and deemed dividends for tax purposes 2 2 6 Nondeductible goodwill 1 1 16 Nondeductible expenses 1 3 5 Minority interests 1 1 5 Equity in earnings of affiliates not taxed -- (1) (3) Change in valuation allowance 4 2 (8) Other (2) (1) 1 - -------------------------------------------------------------------------- Total difference (14) (9) (24) - -------------------------------------------------------------------------- Effective tax rate 21% 26% (59)% - -------------------------------------------------------------------------- The effective tax rate in 1999 of 21 percent includes the impact of the non-taxable portion of the gain on the sale of FMC's process additives business. The 1999 effective tax rate excluding this event was 26 percent. The effective tax benefit rate of 59 percent for 1997 includes the impact of asset impairments, restructuring and other charges (Note 4). The 1997 effective tax rate excluding these charges was 24 percent. FMC's federal income tax returns for years through 1994 have been examined by the Internal Revenue Service and substantially all issues have been settled. Management believes that adequate provision for income taxes has been made for the open years 1995 and after and for any unsettled issues prior to 1995. U.S. income taxes have not been provided for the equity in undistributed earnings of foreign consolidated subsidiaries ($668.9 million and $576.8 million at December 31, 1999 and 1998, respectively) or foreign unconsolidated subsidiaries and affiliates ($18.8 million and $17.6 million at December 31, 1999 and 1998, respectively). Restrictions on the distribution of these earnings are not significant. Foreign earnings taxable to the company as dividends were $140.2 million, $21.7 million and $28.1 million in 1999, 1998 and 1997, respectively. 46 Notes to Consolidated Financial Statements Note 11 Incentive Compensation Plans The 1995 Management Incentive Plan (the "Incentive Plan") and the 1995 Stock Option Plan (the "Option Plan"), approved by the stockholders on April 21, 1995, provide certain incentives and awards to key employees. The plans are administered by the Compensation and Organization Committee of the Board of Directors (the "Committee") which, subject to the provisions of the plans, reviews and approves financial targets, times and conditions for payment. The Incentive Plan provides for the grant of multi-year incentive awards payable partly in cash and partly in common stock. The Option Plan (and its predecessor plans) provides for regular grants of common stock options which may be incentive and/or nonqualified stock options. The exercise price for options is not less than the fair market value of the stock at the date of grant. Options are exercisable at the time designated by the Committee in the option (four years for grants prior to 1995 and three years for grants during 1995 and thereafter). Incentive and nonqualified options expire not later than 10 years from the grant date (15 years for grants prior to 1996). Under the plans adopted in 1995, three million shares became available for awards and options granted in 1995 and later years. These shares are in addition to the shares available from the predecessor plans. Cancellation (through expiration, forfeiture or otherwise) of outstanding awards and options granted after 1989 increases the shares available for future awards or grants. At December 31, 1999, 1,018,138 shares were available for future use under these plans. The company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". Accordingly, no compensation cost has been recognized for the Option Plan. Had compensation cost for the Option Plan been determined based on the fair value at the grant date for awards in 1999, 1998 and 1997 consistent with the provisions of SFAS No. 123, the company's net income and diluted earnings per share for the three years ended December 31, 1999 would have been reduced to the pro forma amounts indicated below: - ------------------------------------------------------------------------- Net income in millions 1999 1998 1997 - ------------------------------------------------------------------------- Net income--as reported $212.6 $106.5 $162.4 Net income--pro forma $208.1 $101.7 $157.6 Diluted earnings per share --as reported $ 6.57 $ 3.05 $ 4.41 Diluted earnings per share --pro forma $ 6.42 $ 2.91 $ 4.28 - ------------------------------------------------------------------------- The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 1999, 1998 and 1997, respectively: zero dividend yield for all years; expected volatility of 22.9 percent, 19.7 percent and 17.4 percent; risk-free interest rates of 5.1 percent, 5.5 percent and 6.8 percent; and expected lives of five years for all grants. The weighted average fair value of each stock option granted during the years ended December 31, 1999, 1998 and 1997, calculated using the Black-Scholes option-pricing model, was $15.07, $21.09 and $19.84, respectively. The following summary shows stock option activity for the three years ended December 31, 1999: - ------------------------------------------------------------------------- Number of Weighted- Shares Average (Number of shares Optioned But Exercise Price in thousands) Not Exercised per Share - ------------------------------------------------------------------------- December 31, 1996 (1,200 shares exercisable) 2,926 $47.44 Granted 555 $61.42 Exercised (395) $33.54 Forfeited (169) $63.73 - ------------------------------------------------------------------------- December 31, 1997 (1,012 shares exercisable) 2,917 $51.05 Granted 558 $69.92 Exercised (261) $41.87 Forfeited (60) $67.07 - ------------------------------------------------------------------------- December 31, 1998 (1,734 shares exercisable) 3,154 $54.84 Granted 350 $48.00 Exercised (107) $41.33 Forfeited (157) $62.30 - ------------------------------------------------------------------------- December 31, 1999 (2,023 shares exercisable) 3,240 $54.18 - ------------------------------------------------------------------------- The following tables summarize information about fixed-priced stock options outstanding at December 31, 1999: - ------------------------------------------------------------------------- Options Outstanding - ------------------------------------------------------------------------- Weighted- Weighted- Number Average Average Outstanding at Remaining Exercise Range of December 31, 1999 Contractual Life Price Exercise Prices (in thousands) (in years) per Share - ------------------------------------------------------------------------- $29.50-$31.13 389 5.4 $30.88 $45.00-$48.00 1,276 8.6 $46.64 $57.75-$65.50 720 8.4 $60.69 $69.00-$82.50 855 9.2 $70.53 - ------------------------------------------------------------------------- Total 3,240 7.8 $54.18 - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- Options Exercisable - ------------------------------------------------------------------------- Weighted- Number Average Exercisable at Exercise Range of December 31, 1999 Price Exercise Prices (in thousands) per Share - ------------------------------------------------------------------------- $29.50-$31.13 389 $30.88 $45.00-$46.38 971 $46.21 $59.63-$79.00 663 $66.47 - ------------------------------------------------------------------------- Total 2,023 $49.92 - ------------------------------------------------------------------------- 47 Notes to Consolidated Financial Statements On January 2, 2000, an additional 473,900 shares became exercisable at prices ranging from $61.25 to $82.50 with an expiration date of March 31, 2007. Under a plan adopted in 1995, discretionary awards of restricted stock may be made to selected employees. The awards vest over a period designated by the Committee, with payment conditional upon continued employment. Compensation cost is recognized over the vesting period based on the market value of the stock on the date of the award. Under the FMC Deferred Stock Plan for Non-Employee Directors, a portion of the annual retainer for these directors was deferred and paid in the form of shares of the company's common stock upon retirement or other termination of their directorships. Effective January 1, 1997, the Board of Directors approved a comprehensive compensation plan that terminated the retirement plan for directors and increased the proportion of director compensation paid in common stock of the company. Benefits provided for and earned under the old plan were converted into stock units payable in shares of common stock of the company upon retirement from the Board based on the fair market value of the common stock on December 31, 1996. At December 31, 1999, stock units representing an aggregate of 33,855 shares of stock were credited to the non-employee directors' accounts. Also under the compensation plan, non-employee directors may be granted options to purchase shares of stock at the fair market value of the stock at the date of grant. At December 31, 1999, options had been granted for 30,600 shares at prices ranging from $64.36 to $77.31. These grants vest one year from the grant date and expire after ten years. The company recognizes expense for the directors' options over the one-year vesting period of the options. Note 12 Stockholders' Equity The following is a summary of FMC's capital stock activity over the past three years: - -------------------------------------------------------------------- (Number of shares Common Treasury in thousands) Stock Stock - -------------------------------------------------------------------- December 31, 1996 37,481 300 Stock options 395 -- Stock repurchases -- 2,667 Stock reissued -- (15) - -------------------------------------------------------------------- December 31, 1997 37,876 2,952 Stock options and awards 313 -- Stock for employee benefit trust -- 116 Stock repurchases -- 2,418 - -------------------------------------------------------------------- December 31, 1998 38,189 5,486 Stock options and awards 143 -- Stock for employee benefit trust, net -- 12 Stock repurchases -- 2,470 - -------------------------------------------------------------------- December 31, 1999 38,332 7,968 - -------------------------------------------------------------------- During 1999, 1998 and 1997, approximately 2.5 million, 2.4 million and 2.7 million shares, respectively, were acquired under the company's stock repurchase plans at an aggregate cost of $135.9 million, $150.0 million and $209.0 million, respectively. Shares of common stock repurchased and contributed to a rabbi trust for an employee benefit program totaled 31,353 in 1999 and 116,467 in 1998 at a cost of $1.6 million and $6.7 million respectively. Of these shares, 19,570 were resold for $1.1 million in 1999 as needed to administer the plan. In 1997, 15,000 shares of treasury stock were reissued under the restricted stock award plan and the deferred compensation plan for non-employee directors. At December 31, 1999, 4,718,811 shares of unissued FMC common stock were reserved for stock options and awards. At December 31, 1999, accumulated other comprehensive loss consisted of cumulative foreign currency translation losses of $196.0 million and a minimum pension liability adjustment of $7.5 million. At December 31, 1998, accumulated other comprehensive loss consisted of cumulative foreign currency translation losses. Covenants of the revolving credit facility agreement (Note 9) contain minimum net worth and other requirements. No dividends are expected to be paid on the company's common stock in 2000. On February 22, 1986, the Board of Directors of the company declared a dividend distribution to each recordholder of common stock as of March 7, 1986, of one Preferred Share Purchase Right for each share of common stock outstanding on that date. Each right entitles the holder to purchase, under certain circumstances related to a change in control of the company, one one-hundredth of a share of Junior Participating Preferred Stock, Series A, without par value, at a price of $300 per share (subject to adjustment), subject to the terms and conditions of a Rights Agreement dated February 22, 1986 as amended through February 9, 1996. The rights expire on March 7, 2006, unless redeemed by the company at an earlier date. The redemption price of $.05 per right is subject to adjustment to reflect stock splits, stock dividends or similar transactions. The company has reserved 400,000 shares of Junior Participating Preferred Stock for possible issuance under the agreement. 48 Notes to Consolidated Financial Statements Note 13 Pensions and Postretirement Health Care and Life Insurance Benefits The funded status of the company's pension and postretirement health care and life insurance benefit plans for continuing operations, and the associated liabilities recognized in the company's consolidated financial statements as of December 31 are as follows:
- ----------------------------------------------------------------------------------------------------------------------------- Pensions Other Benefits (In millions) 1999 1998 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------- Accumulated benefit obligation: Plans with unfunded accumulated benefit obligation $ 38.7 $ 28.5 $ -- $ -- - ----------------------------------------------------------------------------------------------------------------------------- Change in benefit obligation: Benefit obligation at January 1 $1,070.0 $ 771.0 $ 119.5 $ 109.7 Service cost 33.2 26.4 2.5 2.5 Interest cost 68.9 66.7 7.7 8.4 Actuarial loss (gain) (98.0) 239.2 (9.3) 15.9 Amendments 1.0 11.8 (1.3) (8.4) Acquisitions and divestitures -- (2.2) -- -- Curtailments and settlements -- (1.9) -- (0.3) Plan participants' contributions 2.0 1.9 4.4 3.0 Benefits paid (47.6) (42.9) (14.6) (11.3) - ----------------------------------------------------------------------------------------------------------------------------- Benefit obligation at December 31 1,029.5 1,070.0 108.9 119.5 - ----------------------------------------------------------------------------------------------------------------------------- Change in fair value of plan assets: Fair value of plan assets at January 1 956.5 860.6 -- -- Actual return on plan assets (5.6) 133.8 -- -- Acquisitions and divestitures -- (2.4) -- -- Curtailments and settlements -- (3.1) -- -- Company contributions 4.1 8.6 10.2 8.3 Plan participants' contributions 2.0 1.9 4.4 3.0 Benefits paid (47.6) (42.9) (14.6) (11.3) - ----------------------------------------------------------------------------------------------------------------------------- Fair value of plan assets at December 31 909.4 956.5 -- -- - ----------------------------------------------------------------------------------------------------------------------------- Funded status of the plan (liability) (120.1) (113.5) (108.9) (119.5) Unrecognized actuarial loss (gain) 51.3 72.0 (1.7) 7.6 Unrecognized prior service cost (income) 23.6 22.2 (39.7) (47.6) Unrecognized transition asset (38.6) (61.4) -- -- - ----------------------------------------------------------------------------------------------------------------------------- Accrued liability for benefit costs at December 31 $ (83.8) $ (80.7) $(150.3) $(159.5) - ----------------------------------------------------------------------------------------------------------------------------- Prepaid benefit cost $ 4.9 $ 46.6 $ -- $ -- Accrued benefit liability (102.7) (127.3) (150.3) (159.5) Intangible asset 6.5 -- -- -- Accumulated other comprehensive income 7.5 -- -- -- - ----------------------------------------------------------------------------------------------------------------------------- Net liability recognized in the balance sheet at December 31 $ (83.8) $ (80.7) $(150.3) $(159.5) - -----------------------------------------------------------------------------------------------------------------------------
49 Notes to Consolidated Financial Statements The following table summarizes the assumptions used and the components of net annual benefit cost (income) for the years ended December 31:
- ----------------------------------------------------------------------------------------------------------------------------- Pensions Other Benefits (In millions) 1999 1998 1997 1999 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------- Assumptions as of December 31: Discount rate 7.50% 6.75% 8.00% 7.50% 6.75% 8.00% Expected return on assets 9.25% 9.20% 9.20% -- -- -- Rate of compensation increase 5.00% 5.00% 5.00% -- -- -- - ----------------------------------------------------------------------------------------------------------------------------- Components of net annual benefit cost (in millions): Service cost $ 33.2 $ 26.4 $ 21.2 $ 2.5 $ 2.5 $ 2.4 Interest cost 68.9 66.7 55.8 7.7 8.4 8.3 Expected return on plan assets (81.3) (76.9) (59.8) -- -- -- Amortization of transition asset (22.8) (22.8) (22.8) -- -- -- Amortization of prior service cost 4.6 4.2 3.1 (9.2) (8.3) (8.3) Recognized net actuarial (gain) loss 0.5 (5.6) (2.8) -- (0.9) 0.1 - ----------------------------------------------------------------------------------------------------------------------------- Net annual benefit cost (income) $ 3.1 $ (8.0) $ (5.3) $ 1.0 $ 1.7 $ 2.5 - -----------------------------------------------------------------------------------------------------------------------------
Effective December 31, 1998, the company merged all union hourly pension plans into the FMC Salaried Employees' Retirement Plan (the "Plan"). At the same time, the Plan name was changed to the FMC Employees' Retirement Plan. Effective December 31, 1999, the company changed the discount rate from 6.75 percent to 7.50 percent for determining the projected benefit obligations. The change decreased the projected benefit obligations by approximately $103 million at December 31, 1999. Effective January 1, 1998, the company changed to the 1983 Group Annuity Mortality Table, which is used to calculate the benefit obligations. In addition, the discount rate was changed from 8.00 percent to 6.75 percent effective December 31, 1998. These changes increased the projected benefit obligation by approximately $239 million at December 31, 1998. For measurement purposes, a six- and seven-percent annual rate increase in the per capita cost of health care benefits was assumed for 1999 and 1998, respectively. The rates were assumed to decrease gradually to 5.0 percent for 2001 and remain at that level thereafter. Assumed health care cost trend rates have an effect on the amounts reported for the health care plan. A one-percentage point change in the assumed health care cost trend rates would have the following effects: - ------------------------------------------------------------------------------ One Percentage One Percentage (In millions) Point Increase Point Decrease - ------------------------------------------------------------------------------ Effect on total of service and interest cost components $ 0.1 $(0.1) Effect on postretirement benefit obligation $ 1.6 $(1.3) - ------------------------------------------------------------------------------ The company has adopted SFAS No. 87, "Employers Accounting for Pensions", for its pension plan for employees in the United Kingdom. The financial impact of compliance with SFAS No. 87 for other non-U.S. pension plans is not materially different from the locally reported pension expense. The cost of providing pension benefits for foreign employees was $10.4 million in 1999, $5.2 million in 1998 and $6.9 million in 1997. As a result of the sale of the process additives division (Note 3), the FMC United Kingdom pension plan will transfer assets to the buyer's pension plan for those participants who elect to transfer their benefits to the buyer's pension plan. The amount of assets to be transferred and the number of participants will be determined in 2000. Employees' Thrift and Stock Purchase Plan. The FMC Employees' Thrift and Stock Purchase Plan is a qualified salary-reduction plan under Section 401(k) of the Internal Revenue Code in which all salaried and non-union hourly employees of the company may participate by contributing a portion of their compensation. The company matches contributions up to specified percentages of each employee's compensation depending on the company's profits and how the employee allocates his or her contributions. Charges against income for FMC's matching contributions, net of forfeitures, were $15.9 million in 1999, $16.7 million in 1998 and $16.2 million in 1997. Note 14 Environmental Obligations FMC is subject to various federal, state and local environmental laws and regulations that govern emissions of air pollutants; discharges of water pollutants; and the manufacture, storage, handling and disposal of hazardous substances, hazardous wastes and other toxic materials. Environmental liabilities consist of obligations relating to waste handling and the remediation and/or study of sites at which the company is alleged to have disposed of hazardous substances. The company is also subject to liabilities arising under CERCLA and similar state laws that impose responsibility on persons who arranged for the disposal of hazardous substances, and on current and previous owners and operators of a facility for the cleanup of hazardous substances released from the facility into the environment. In addition, the company is subject to liabilities under the Resource Conservation and Recovery Act ("RCRA") and analogous state laws that require owners and operators of facilities that treat, store or dispose of hazardous waste to follow certain waste management practices and to clean up releases of hazardous waste constituents into the environment associated with past or present practices. The company has been named a PRP at 29 sites on the government's National Priority List. In addition, the company also has received notice from the EPA or other regulatory agencies that the company may be a PRP, or PRP equivalent, at other sites, including 35 sites at which the company has determined that it is reasonably possible that it has an environmental liability. The company, in cooperation with appropriate government agencies, is currently participating in, or has participated in, RI/FS or their equivalent at most of the identified sites, with the status of each investigation varying from site to site. At certain sites, RI/FS have just begun, providing limited information, if any, relating to cost estimates, 50 Notes To Consolidated Financial Statements timing, or the involvement of other PRPs; whereas, at other sites, the studies are complete, remedial action plans have been chosen, or RODs have been issued. The company has provided reserves for potential environmental obligations that management considers probable and for which a reasonable estimate of the obligation could be made. Accordingly, total reserves of $266.8 million and $294.0 million, respectively, before recoveries, were recorded at December 31, 1999 and 1998. The long-term portion of these reserves is included in reserve for discontinued operations and other liabilities on the consolidated balance sheets and amounted to $244.0 million and $265.7 million at December 31, 1999 and 1998, respectively. In the fourth quarters of 1999 and 1998, FMC provided $25.9 million and $70.0 million, respectively, for environmental costs of discontinued operations (Note 3). The company's total environmental reserves include $255.4 million and $280.6 million for remediation activities and $11.4 million and $13.4 million for RI/FS costs at December 31, 1999 and 1998, respectively. In addition, the company has estimated that reasonably possible environmental loss contingencies may exceed amounts accrued by as much as $80 million at December 31, 1999. In June 1999, the Federal District Court in Idaho approved a Consent Decree signed by the company, the EPA (Region X) and the DOJ settling outstanding alleged violations of RCRA at the company's Phosphorus Chemicals ("PCD") plant in Pocatello, Idaho. The RCRA Consent Decree provides for injunctive relief covering remediation expense for closure of existing ponds, estimated at $50 million, and in excess of $100 million of capital costs for waste treatment and other compliance projects, including supplemental environmental projects. These amounts will be expended over approximately four years. As described in Note 4, an expected increase in capital costs for environmental compliance contributed to an impairment in the value of PCD's assets during the fourth quarter of 1997. The company provided for the estimated expenses related to the Consent Decree in prior periods. In addition, FMC signed a second Consent Decree with the EPA, which was lodged in court on July 21, 1999. The Consent Decree relates to an ROD issued by the EPA in 1998 which addresses previously closed ponds on the FMC portion of the Eastern Michaud Flats Superfund site, including FMC's PCD Pocatello, Idaho, facility. The remedy the EPA selected in the ROD is a combination of capping, surface runoff controls and institutional controls for soils, with a contingency for extraction and recycling for hydraulic control of groundwater. FMC believes its reserves for environmental costs adequately provide for the estimated costs of the Superfund remediation plan for the site and the expenses previously described related to the RCRA Consent Decree. On October 21, 1999 the Federal District Court for the Western District of Virginia approved a Consent Decree signed by the company, the EPA (Region III) and the DOJ regarding past response costs and future clean-up work at the discontinued fiber manufacturing site in Front Royal, Virginia. As part of a prior settlement, government agencies are expected to reimburse FMC for approximately one third of the clean-up costs due to the government's role at the site. FMC's $70 million portion of the settlement was provided for in 1998 and prior years, and no additional charge to earnings was recorded in 1999. Although potential environmental remediation expenditures in excess of the current reserves and estimated loss contingencies could be significant, the impact on the company's future financial results is not subject to reasonable estimation due to numerous uncertainties concerning the nature and scope of contamination at many sites, identification of remediation alternatives under constantly changing requirements, selection of new and diverse clean-up technologies to meet compliance standards, the timing of potential expenditures, and the allocation of costs among PRPs as well as other third parties. The liabilities arising from potential environmental obligations that have not been reserved for at this time may be material to any one quarter's or year's results of operations in the future. Management, however, believes the liability arising from potential environmental obligations is not likely to have a material adverse effect on the company's liquidity or financial condition and may be satisfied over the next 20 years or longer. To ensure FMC is held responsible only for its equitable share of site remediation costs, FMC has initiated, and will continue to initiate, legal proceedings for contributions from other PRPs. FMC has recorded recoveries, representing probable realization of claims against insurance companies, U.S. government agencies and other third parties, of $60.2 million at December 31, 1999 (all of which is recorded as an offset to the reserve for discontinued operations and other liabilities). At December 31, 1998, FMC had recorded recoveries of $85.4 million as an offset to the reserve for discontinued operations and other liabilities and $22.2 million related to continuing operations as other assets. During 1999, FMC collected cash recoveries totalling $56.9 million, the majority of which represented a settlement with a consortium of FMC's general liability insurance carriers. Recoveries for the years 1998 and 1997 were $4.4 million and $3.3 million, respectively. Also during 1999, the company recognized additional receivables for recoveries of $8.9 million, primarily in conjunction with expected contractual recoveries at discontinued Defense Systems properties (Note 3). Regarding current operating sites, the company spent $64.0 million, $33.0 million and $29.9 million for the years 1999, 1998 and 1997, respectively, on capital projects relating to environmental control facilities, and expects to spend additional capital of approximately $85 million and $86 million in 2000 and 2001, respectively. Additionally, in 1999, 1998, and 1997, FMC spent $62.2 million, $56.0 million and $60.1 million, respectively, for environmental compliance costs, which are an operating cost of the company. Regarding current operating, previously operated (including discontinued operations) and other sites for the years 1999, 1998 and 1997, FMC charged $20.9 million, $17.8 million and $29.0 million, respectively, against established reserves for remediation spending, and $43.3 million, $35.0 million and $18.7 million, respectively, against reserves for spending on RI/FS. FMC anticipates that the expenditures for current operating, previously operated and other sites will continue to be significant for the foreseeable future. 51 Notes To Consolidated Financial Statements Note 15 Commitments and Contingent Liabilities On April 14, 1998, a jury returned a verdict against the company in the amount of $125.0 million in conjunction with a federal False Claims Act action, in which Mr. Henry Boisvert filed and ultimately took to trial allegations that the company had filed false claims for payment in connection with its contract to provide Bradley Fighting Vehicles to the U.S. Army between 1981 and 1996. Under law, portions of the jury verdict were subject to doubling or trebling. On December 24, 1998, the U.S. District Court for the Northern District of California entered judgment for Mr. Boisvert in the amount of approximately $87 million. This was approximately $300 million less than the maximum judgment possible under the jury verdict. The reduction resulted from several rulings by the District Court in favor of the company in the post-trial motions. Briefing on cross-appeals by both parties to the U.S. Court of Appeals for the Ninth Circuit has been completed, and it is probable that oral arguments will be heard during 2000. Both sides are asserting arguments on appeal, and a number of the company's arguments, if successful, would alter or eliminate the amount of the existing judgment. Any legal proceeding is subject to inherent uncertainty, and it is not possible to predict how the appellate court will rule. Therefore, the company's management believes based on a review, including a review by outside counsel, that it is not possible to estimate the amount of a probable loss, if any, to the company that might result from some adverse aspects of the judgment ultimately standing against the company. Accordingly, no provision for this matter has been made in the company's consolidated financial statements. FMC leases office space, plants and facilities, and various types of manufacturing, data processing and transportation equipment. Leases of real estate generally provide for payment of property taxes, insurance and repairs by FMC. Capital leases are not significant. Rent expense under operating leases amounted to $45.0 million, $44.4 million and $42.5 million in 1999, 1998 and 1997, respectively. Rent expense is net of credits (received for the use of leased transportation assets) of $20.4 million, $19.5 million and $18.9 million in 1999, 1998 and 1997, respectively. Minimum future rentals under noncancelable leases aggregated approximately $371.4 million as of December 31, 1999 and are estimated to be payable as follows: $53.2 million in 2000, $48.1 million in 2001, $44.1 million in 2002, $41.3 million in 2003, $41.2 million in 2004 and $143.5 million thereafter. Minimum future rentals for transportation assets included above aggregated approximately $171 million, against which the company expects to continue to receive credits to substantially defray its rental expense. The company also has certain other contingent liabilities resulting from litigation, claims, performance guarantees, and other commitments incident to the ordinary course of business. Management believes that the probable resolution of such contingencies will not materially affect the financial position, results of operations or cash flows of FMC. 52 INDEPENDENT AUDITORS' REPORT [KPMG LOGO APPEARS HERE] The Board of Directors and Stockholders, FMC Corporation: We have audited the accompanying consolidated balance sheets of FMC Corporation and consolidated subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of income, cash flows and changes in stockholders' equity for each of the years in the three-year period ended December 31, 1999. These consolidated financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the accompanying consolidated financial statements referred to above present fairly, in all material respects, the financial position of FMC Corporation and consolidated subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1999 in conformity with generally accepted accounting principles. /s/ KPMG LLP KPMG LLP Chicago, Illinois January 19, 2000 MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS The consolidated financial statements and related information have been prepared by management, which is responsible for the integrity and objectivity of that information. Where appropriate, they reflect estimates based on judgments of management. The statements have been prepared in conformity with accounting principles generally accepted in the United States. Financial information included elsewhere in this annual report is consistent with that contained in the consolidated financial statements. FMC maintains a system of internal control over financial reporting and over safeguarding of assets against unauthorized acquisition, use or disposition which is designed to provide reasonable assurance as to the reliability of financial records and the safeguarding of such assets. The system is maintained by the selection and training of qualified personnel, by establishing and communicating sound accounting and business policies, and by an internal auditing program that constantly evaluates the adequacy and effectiveness of such internal controls, policies and procedures. The Audit Committee of the Board of Directors, composed of directors who are not officers or employees of the company, meets regularly with management, with the company's internal auditors, and with its independent auditors to discuss their evaluation of internal accounting controls and the quality of financial reporting. Both independent auditors and the internal auditors have free access to the Audit Committee to discuss the results of their audits. The company's independent auditors have been engaged to render an opinion on the consolidated financial statements. They review and make appropriate tests of the data included in the financial statements. As independent auditors, they also provide an objective, outside review of management's performance in reporting operating results and financial condition. /s/ William H. Schumann III /s/ Ronald D. Mambu William H. Schumann III Ronald D. Mambu Senior Vice President Vice President and Chief Financial Officer and Controller Chicago, Illinois January 19, 2000 53 TEN-YEAR FINANCIAL SUMMARY
- ---------------------------------------------------------------------------------------------------------------------------- (In millions, except share data and per share amounts) 1999 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------- Summary of earnings Sales $4,110.6 4,378.4 4,259.0 - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before net interest expense, minority interests, gain on sale of FMC Wyoming stock, income taxes, extraordinary items and cumulative effect of changes in accounting principles/(1)/ $ 386.1 364.0 58.0 - ---------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before special income and expense items/(4)/, net interest expense, income taxes, extraordinary items and cumulative effect of changes in accounting principles/(5)/ $ 369.3 357.8 314.0 - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before income taxes, extraordinary items and cumulative effect of changes in accounting principles/(1)/(2)/ $ 274.3 249.5 (59.7) Provision (benefit) for income taxes 58.3 64.2 (35.2) - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations before extraordinary items and cumulative effect of changes in accounting principles/(3)/ 216.0 185.3 (24.5) Discontinued operations, net of income taxes (3.4) (42.7) 191.4 Extraordinary items, net of income taxes -- -- -- Cumulative effect of changes in accounting principles, net of income taxes -- (36.1) (4.5) - ---------------------------------------------------------------------------------------------------------------------------- Net income (loss)/(3)/ $ 212.6 106.5 162.4 - ---------------------------------------------------------------------------------------------------------------------------- Special (income) and expense items/(1)/ $ (11.7) -- 264.9 - ---------------------------------------------------------------------------------------------------------------------------- Gain on sale of FMC Wyoming stock/(2)/ $ -- -- -- - ---------------------------------------------------------------------------------------------------------------------------- Total dividends $ -- -- -- - ---------------------------------------------------------------------------------------------------------------------------- Share data Average number of shares used in earnings per share computations (thousands): Basic 31,516 34,007 36,805 Diluted 32,377 34,939 36,805 - ---------------------------------------------------------------------------------------------------------------------------- Basic earnings (loss) per share: Continuing operations/(3)/ $ 6.86 5.45 (0.67) Discontinued operations (0.11) (1.26) 5.20 Extraordinary items -- -- -- Cumulative effect of changes in accounting principles -- (1.06) (0.12) - ---------------------------------------------------------------------------------------------------------------------------- $ 6.75 3.13 4.41 - ---------------------------------------------------------------------------------------------------------------------------- Diluted earnings (loss) per share: Continuing operations/(3)/ $ 6.67 5.30 (0.67) Discontinued operations (0.10) (1.22) 5.20 Extraordinary items -- -- -- Cumulative effect of changes in accounting principles -- (1.03) (0.12) - ---------------------------------------------------------------------------------------------------------------------------- $ 6.57 3.05 4.41 - ---------------------------------------------------------------------------------------------------------------------------- Other information After-tax income per share from continuing operations before special income and expense items/(4)/(5)/ Basic $ 6.19 5.45 4.25 Diluted $ 6.03 5.30 4.13 - ---------------------------------------------------------------------------------------------------------------------------- Financial position at December 31 Total assets $3,995.8 4,166.4 4,113.1 Long-term debt (less current portion) $ 945.1 1,326.4 1,140.2 Stockholders' equity $ 743.6 729.4 760.6 Other data Capital expenditures $ 236.3 265.9 316.7 Depreciation expense $ 162.7 189.0 218.3 Amortization expense $ 18.0 17.6 20.1 - ----------------------------------------------------------------------------------------------------------------------------
(1) Includes pretax gains on sales of businesses of $55.5 million in 1999; pretax asset impairments of $29.1 million in 1999, $224.0 million in 1997, $26.4 million in 1995 and $8.1 million in 1993; pretax restructuring and other charges of $14.7 million in 1999, $40.9 million in 1997, $108.1 million in 1995 and $114.4 million in 1993, and a write-off of acquired in- process research and development of $15.5 million in 1995. (2) Includes a nontaxable gain on the sale of 20 percent of FMC Wyoming stock of $99.7 million in 1995. (3) Includes gains on sales of businesses of $47.7 million after tax in 1999 ($1.51 per share-basic and $1.47 per share-diluted); asset impairments and restructuring and other charges of $(26.7) million after tax in 1999 (($0.84) per share-basic and ($0.83) per share diluted), asset impairments and restructuring and other charges of $(180.9) million after tax in 1997 ($(4.92) per share-basic and diluted); restructuring and other charges, a write-off of acquired in-process research and development and a gain on the sale of FMC Wyoming stock of $3.5 million, net, (after tax in 1995 ($0.10 per share-basic and $0.09 per share-diluted); and restructuring and other charges of $(73.5) million after tax in 1993 ($(2.04) per share-basic and diluted). 54
- ----------------------------------------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 1990 - ----------------------------------------------------------------------------------------------------------------- 3,950.7 3,482.6 2,869.4 2,678.8 2,692.1 2,568.6 2,463.5 - ----------------------------------------------------------------------------------------------------------------- 338.4 134.5 212.0 (17.3) 143.0 172.7 166.5 - ----------------------------------------------------------------------------------------------------------------- 328.8 179.7 210.4 104.7 142.8 171.2 164.9 - ----------------------------------------------------------------------------------------------------------------- 235.8 152.7 150.9 (79.9) 59.9 63.8 36.9 73.0 (2.0) 41.6 (62.8) 9.4 9.4 (4.3) - ----------------------------------------------------------------------------------------------------------------- 162.8 154.7 109.3 (17.1) 50.5 54.4 41.2 47.9 60.9 64.1 58.1 68.9 118.7 114.1 -- -- -- (4.7) (11.4) (9.2) -- -- -- -- -- (183.7) -- -- - ----------------------------------------------------------------------------------------------------------------- 210.7 215.6 173.4 36.3 (75.7) 163.9 155.3 - ----------------------------------------------------------------------------------------------------------------- -- 150.0 -- 122.5 -- -- -- - ----------------------------------------------------------------------------------------------------------------- -- 99.7 -- -- -- -- -- - ----------------------------------------------------------------------------------------------------------------- -- -- -- -- -- -- -- - ----------------------------------------------------------------------------------------------------------------- 37,024 36,615 36,369 35,976 35,595 35,024 34,739 38,058 37,721 37,195 35,976 36,796 36,267 36,075 - ----------------------------------------------------------------------------------------------------------------- 4.40 4.23 3.01 (0.48) 1.42 1.55 1.19 1.29 1.66 1.76 1.62 1.94 3.39 3.28 -- -- -- (0.13) (0.32) (0.26) -- -- -- -- -- (5.16) -- -- - ----------------------------------------------------------------------------------------------------------------- 5.69 5.89 4.77 1.01 (2.12) 4.68 4.47 - ----------------------------------------------------------------------------------------------------------------- 4.28 4.10 2.94 (0.48) 1.37 1.50 1.14 1.26 1.62 1.72 1.62 1.87 3.27 3.16 -- -- -- (0.13) (0.31) (0.25) -- -- -- -- -- (4.99) -- -- - ----------------------------------------------------------------------------------------------------------------- 5.54 5.72 4.66 1.01 (2.06) 4.52 4.30 - ----------------------------------------------------------------------------------------------------------------- 4.40 4.13 3.01 1.56 1.42 1.55 1.19 4.28 4.01 2.94 1.53 1.37 1.50 1.14 - ----------------------------------------------------------------------------------------------------------------- 4,467.4 3,751.8 2,857.1 2,532.1 2,565.3 2,393.6 2,484.8 1,268.4 974.4 901.2 749.8 843.4 928.6 1,158.6 855.8 653.5 416.6 216.9 219.0 309.8 149.6 485.1 427.8 271.0 204.6 179.6 168.7 263.4 205.7 182.6 173.8 172.8 179.9 166.7 159.8 17.7 13.0 6.0 4.3 2.0 1.7 0.8 - -----------------------------------------------------------------------------------------------------------------
(4) Excludes gains on sale of businesses of $55.5 million, or $47.7 after tax in 1999 ($1.51 per share-basic and $1.47 per share-diluted); asset impairments and restructuring and other charges of ($43.8) million, or ($26.7) million after-tax in 1999 (($0.84) per share-basic and ($0.83) per share-diluted), asset impairments and restructuring and other charges of ($264.9) million, or $(180.9) million after tax in 1997 ($(4.92) per share-basic and $(4.77) per share-pro forma diluted); restructuring and other charges, a write-off of acquired in-process research and development and a gain on the sale of FMC Wyoming stock of $50.3 million, or $3.5 million, net, after tax in 1995 ($0.10 per share-basic and $0.09 per share-diluted); and restructuring and other charges of $(122.5) million, or (73.5) million after tax in 1993 ($(2.04) per share-basic and $(1.99) per share-pro forma diluted). (5) Supplemental financial information. Should not be considered in isolation nor as an alternative for income from continuing operations, net income or earnings per share determined in accordance with generally accepted accounting principles, nor as the sole measure of the company's profitability. 55 DIRECTORS AND OFFICERS BOARD OF DIRECTORS Robert N. Burt/1/ Chairman of the Board and Chief Executive Officer Joseph H. Netherland/4/ President B. A. Bridgewater, Jr./1,2,5/ Retired Chairman of the Board, President and Chief Executive Officer, Brown Group, Inc. Patricia A. Buffler/3,4/ Dean Emerita, Professor of Epidemiology, School of Public Health, University of California, Berkeley Albert J. Costello/2,5/ Retired Chairman, President and Chief Executive Officer, W.R. Grace & Co. Paul L. Davies, Jr./1,2/ President, Lakeside Corporation, a private real estate investment company Asbjorn Larsen/3/ Retired President and Chief Executive Officer, Saga Petroleum ASA Edward J. Mooney/2,3/ Chairman of the Board and Chief Executive Officer, Nalco Chemical Company William F. Reilly/1,2,3/ Founder PRIMEDIA Inc. Enrique J. Sosa/3/ Former President, BP Amoco Chemicals James R. Thompson/4,5/ Former Governor of Illinois; Chairman, Chairman of the Executive Committee and Partner, Law Firm of Winston & Strawn Clayton Yeutter /4,5/ Of Counsel, Hogan & Hartson, former U.S. Trade Representative, and former Secretary, U.S. Department of Agriculture /1/ Executive Committee /2/ Compensation and Organization Committee /3/ Audit Committee /4/ Public Policy Committee /5/ Nominating and Board Procedures Committee OFFICERS Robert N. Burt * Chairman of the Board and Chief Executive Officer Joseph H. Netherland * President Thomas P. Hester * Senior Vice President, General Counsel and Corporate Secretary William J. Kirby * Senior Vice President William H. Schumann III * Senior Vice President and Chief Financial Officer Alfredo Bernad Vice President; President, FMC Europe/ Middle East/Africa Patricia D. Brozowski Vice President Communications Charles H. Cannon, Jr.* Vice President; General Manager FMC FoodTech Airport Products W. Kim Foster* Vice President; General Manager Agricultural Products Group Robert I. Harries * Vice President; General Manager Chemical Products Group Stephanie K. Kushner * Vice President and Treasurer Peter D. Kinnear * Vice President; General Manager Petroleum Equipment and Systems Ronald D. Mambu * Vice President and Controller James A. McClung * Vice President Worldwide Marketing Eugene M. McCluskey Vice President Tax Michael W. Murray Vice President Human Resources Gerald R. Prout Vice President Government Affairs William G. Walter * Vice President; General Manager Specialty Chemicals Group Craig M. Watson Vice President and Chief Information Officer Peter E. Weber Vice President; President FMC Latin America *Executive Officer STOCKHOLDER DATA Annual Meeting of Stockholders FMC's annual meeting of stockholders will be held at 2 p.m. on Thursday, April 20, 2000, at 200 E. Randolph Drive, Chicago, Illinois. Notice of the meeting, together with proxy materials, will be mailed approximately 40 days prior to the meeting to stockholders of record as of February 25, 2000. Transfer Agent and Registrar of Stock Harris Trust and Savings Bank P.O. Box 755, Chicago, Illinois 60690 Questions concerning FMC common stock should be sent to the above address, or call (877) 360-5143. Stock Exchange Listing New York Stock Exchange Pacific Stock Exchange Chicago Stock Exchange Stock Exchange Symbol FMC Form 10-K A copy of the company's annual report to the Securities and Exchange Commission on Form 10-K for 1999 is available upon written request to: FMC Corporation Communications Department 200 E. Randolph Drive Chicago, Illinois 60601 However, most information required under Parts II and III of Form 10-K has been incorporated by reference to the annual report to stockholders or the proxy statement. FMC was incorporated in Delaware in 1928. 56 MAJOR OPERATING UNITS Energy Systems Energy Transportation and Measurement Petroleum Equipment and Systems Food and Transportation Systems Airport Products and Systems FMC FoodTech Citrus Systems Food Processing Systems Food Systems and Handling Frigoscandia Freezer Agricultural Products Specialty Chemicals FMC BioPolymer Lithium Industrial Chemicals Active Oxidants Alkali Chemicals FMC Foret, S.A. Hydrogen Peroxide Phosphorus Chemicals EXECUTIVE OFFICES FMC Corporation 200 E. Randolph Drive Chicago, Illinois 60601 Internet: www.fmc.com SUBSIDIARIES AND AFFILIATES IN OTHER NATIONS ANGOLA FMC International, AG ARGENTINA FMC Argentina, S.A. Minera Del Altiplano, S.A. AUSTRALIA FMC (Australia), Ltd. FMC International, AG AUSTRIA FMC Chemikalien Handelsgesellschaft G.m.b.H. BANGLADESH FMC International AG BARBADOS FMC International Sales Corporation BELGIUM FMC Europe N.V. BRAZIL FMC do Brasil Industria e Commercio Ltda. CANADA FMC of Canada, Limited FMC Offshore Canada Company CHILE FMC Corporation, Inc. Chile Limitada Neogel, S.A. CHINA FMC Asia Pacific Inc. FMC Hong Kong Limited Suzhou Fu Mei-Shi Crop Care Company, Ltd. COLOMBIA FMC Latino America, S.A. CZECH REPUBLIC F&N Agro Ceska Republica, S.r.o. DENMARK FMC A/S EGYPT FMC International, AG EQUATORIAL GUINEA FMC Subsea Services, Inc. FRANCE FMC BioPolymer S.A. FMC Europe, S.A. FMC Food Machinery FMC France S.A. FMC Overseas, S.A. Frigoscandia Equipment S.A. GABON FMC Gabon, S.A.R.L. GERMANY FMC BioPolymer G.m.b.H. FMC G.m.b.H. Frigoscandia Equipment G.m.b.H. Jetway G.m.b.H. F.A. Sening G.m.b.H. Smith Meter G.m.b.H. GREECE FMC Hellas, EPE FMC International, AG GUATEMALA FMC Guatemala, S.A. HONG KONG FMC Agricultural Products International, AG FMC Asia Pacific, Inc. FMC Hong Kong Ltd. INDIA FMC Sanmar Limited FMC Asia Pacific, Inc. FMC Rallis India (Pvt.) Ltd. INDONESIA FMC Hong Kong Limited P.T. Bina Guna Kimia Indonesia P.T. FMC Santana Petroleum Equipment Indonesia IRELAND FMC International, AG ITALY FMC Italia, S.p.A. JAPAN Asia Lithium Corporation FMC K.K. Honjo-FMC Energy Systems, Inc. L.H. Company, Ltd. JORDAN FMC International, AG KENYA FMC International, AG KOREA FMC Korea Limited MALAYSIA FMC Wellhead Equipment, Sdn. Bhd. FMC Petroleum Equipment (Malaysia) Sdn. Bhd. Jetway Systems Asia, Inc. MEXICO FMC Agroquimica de Mexico S. de R.L. de C.V. Electro Quimica Mexicana, S.A. de C.V. E.M.D., S.A. de C.V. Fabricacion, Maquinaria y Ceras, S.A. de C.V. FMC Ingredientes Alimenticios FMC Productos y Servicios S.A. de C.V. NETHERLANDS FMC Fluid Control (Nederland) B.V. FMC Industrial Chemicals (Netherlands), B.V. NIGERIA FMC Nigeria Ltd. NORWAY FMC BioPolymer A/S Kongsberg Offshore, A/S OMAN FMC ETEG & Partners LLC PAKISTAN FMC International, S.A. FMC United (Private) Ltd. PANAMA FMC Latino America S.A. PHILIPPINES FMC International, S.A. Marine Colloids (Philippines) Inc. POLAND F&R Agro S.P.Z.O.O. PUERTO RICO FMC International, AG SINGAPORE FMC Singapore Pte. Ltd. FMC Southeast Asia Pte., Ltd. SLOVAKIA F&N Agro Slovensko, S.R.O. SOUTH AFRICA FMC (South Africa)(Proprietary) Ltd. SPAIN Commercial e Industrial de Productos Quimicas, S.A. FMC Airline Equipment Europe, S.A. FMC Foret, S.A. Forel, S.L. Forenato, S.L. Forsean, S.A. Frigoscandia Equipment Iberica, S.A. Peroxidos Organicos, S.A. Sibelco Espanola, S.A. Valentin Herraiz, S.A. SWEDEN Frigoscandia Equipment Holding AB Frigoscandia Equipment AB Frigoscandia Equipment International AB Frigoscandia Equipment Norden AB Frigoscandia Freezer AB Potato Processing Machinery AB SWITZERLAND FMC Agricultural Products International, AG FMC International, AG FMC Kongsberg International AG THAILAND FMC (Thailand) Ltd. Thai Peroxide Company, Ltd. TURKEY FMC A/S UKRAINE FMC International, AG UNITED ARAB EMIRATES FMC International, S.A. (Dubai) UNITED KINGDOM FMC BioPolymer Ltd. FMC Corporation (UK), Ltd. SOFEC, Ltd. VENEZUELA Tripoliven, C.A. FMC Wellhead de Venezuela, S.A. Italicized brand names used throughout this report are the trademarks of FMC Corporation or its subsidiaries. (C) 2000 FMC Corporation. 57 www.fmc.com [FMC LOGO APPEARS HERE] FMC Corporation 200 east randolph drive chicago, illinois 60601 EX-21 12 LIST OF SIGNIFICANT SUBSIDIARIES OF REGISTRANT EXHIBIT 21 LIST OF SIGNIFICANT SUBSIDIARIES OF REGISTRANT December 31, 1999
Organized Under Percent of Voting Company/(1)/ Laws of Securities Owned/(2)/ - ----------- ------- --------------------- FMC Corporation Delaware Registrant AABB Limited England 100% Direct Measurement Corporation Colorado 100% Electro Quimica Mexicana, S.A. de C.V. Mexico 100% FMC A/S Denmark 100% FMC Agroquimica de Mexico, S. de R.L. de C.V. Mexico 100% FMC Airline Equipment Europe, S.A. Spain 100% FMC Argentina, Sociedad Anonyma, Comercial, Industrial Y Financiera Argentina 100% FMC BioPolymer A/S Norway 100% FMC Corporation (UK), Ltd. England 100% FMC de Mexico, S.A. de C.V. Mexico 100% FMC Defense Holding, L.L.C. Wyoming 100% FMC do Brasil Industria e Comercio Ltda. Brazil 100% FMC Europe N.V. Belgium 100% FMC Europe, S.A. France 100% FMC Food Machinery and Chemical Holding Company B.V. The Netherlands 100% FMC Italia, S.p.A. Italy 100% FMC Foret, S.A. Spain 100% FMC Funding Corporation Delaware 100% FMC Holding Norway A/S Norway 100% FMC Industrial Chemicals (Netherlands), B.V. Holland 100% FMC Ingredientes Alimenticios Mexico 100% FMC International Sales Corporation Barbados 100% FMC International, AG Switzerland 100% FMC of Canada, Limited Ontario 100% FMC Offshore Canada Company Canada 100% FMC Petroleum Equipment (Malaysia) Sdn. Bhd. Malaysia 100% FMC Productos y Servicios S.A. de C.V. Mexico 100% FMC Southeast Asia Pte., Ltd. Singapore 100% FMC Wellhead de Venezuela, S.A. Venezuela 100% FMC WFC I, Inc. Wyoming 100% FMC Wyoming Corporation Delaware 87.5% Food Machinery Coordination Center S.C.R.L./C.V.B.A. Belgium 100% Forel, S.L. Spain 60% Forsean, S.A. Spain 70% Frigoscandia Equipment AB Sweden 100% Frigoscandia Equipment Holding AB Sweden 100% Frigoscandia Equipment Inc. Delaware 100% Frigoscandia Freezer AB Sweden 100% Frigoscandia Inc. Maryland 100% Intermountain Research and Development Corporation Wyoming 100% Intertrade Corporation Delaware 100% Kongsberg Offshore, A/S Norway 100% Minera Del Altiplano, S.A. Argentina 100% Moorco International Inc. Delaware 100% P.T. Bina Guna Kimia Indonesia Indonesia 51% Smith Meter G.m.b.H. Germany 100% Smith Meter Inc. Delaware 100% SOFEC, Inc. Texas 100% Tg Soda Ash, Inc. Delaware 87.5% Wyoming Caustic Soda, Inc. Delaware 100%
(1) The names of various active and inactive subsidiaries have been omitted. Such subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. (2) Percentages shown for indirect subsidiaries reflect the percentage of voting securities owned by the parent subsidiary. EX-23 13 CONSENT OF KPMG LLP Exhibit 23 CONSENT OF KPMG LLP The Board of Directors FMC Corporation: We consent to incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-10661, 33-7749, 33-41745, 33-48984, 333-18383, 333-24039, 333-62683 and 333-68905) and the Registration Statement on Form S-3 (No. 333-59543) of FMC Corporation of our report dated January 19, 2000 relating to the consolidated balance sheets of FMC Corporation and consolidated subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of income, cash flows, and changes in stockholders' equity for each of the years in the three- year period ended December 31, 1999, which report is incorporated by reference in the December 31, 1999 annual report on Form 10-K of FMC Corporation. /s/ KPMG LLP Chicago, Illinois March 27, 2000 EX-24 14 POWERS OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Robert N. Burt ------------------ POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Joseph H. Netherland ------------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ B. A. Bridgewater, Jr. --------------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Patricia A. Buffler ------------------------ POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Albert J. Costello ----------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Paul L. Davies, Jr. ------------------------ POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Asbjorn Larsen ------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Edward J. Mooney --------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ William F. Reilly ---------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Enrique J. Sosa -------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ James R. Thompson ---------------------- POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: WHEREAS, FMC CORPORATION, a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended December 31, 1999 under the Securities and Exchange Act of 1934, as amended; and WHEREAS, the undersigned holds and may hereafter from time to time hold one or more positions in the Corporation whether as an Officer, a Director, or both, such that the undersigned may be required or permitted in such capacity or capacities, or on behalf of the Corporation, to sign one or more of such documents; NOW, THEREFORE, the undersigned hereby constitutes and appoints W.H. Schumann III, T.P. Hester, and S.H. Shapiro or any of them, his attorney for him or her and in his or her name, place and stead, and in each of his or her offices and capacities in the Company as may now or hereafter exist, to sign and file said Form 10-K and any and all amendments, schedules and exhibits thereto, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of the 11th day of February, 2000. /s/ Clayton Yeutter -------------------- EX-27 15 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from FMC Corporation's 1999 Annual Report on Form 10-K and is qualified in its entirety by reference to such financial statements. 1,000,000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 64 0 650 15 458 1,417 3,724 2,032 3,996 1,576 945 0 0 4 739 3,996 4,111 4,111 3,008 3,725 0 0 117 274 58 216 3 0 0 213 6.75 6.57 Pretax income from continuing operations is net of $55.5 gain on sale of businesses, $(43.8) one-time charges, and $(5.1) relating to minority interests. Minority interests are primarily partners' share of partnership profits.
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