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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 (No Fee Required) for the fiscal year ended August
31, 1996; or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
For the transition period from ______________ to _______________
Commission File Number 1-6403
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Iowa 42-0802678
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 152, Forest City, Iowa 50436
(Address of Principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 582-3535
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
- --------------------------------- --------------------------------------
Common Stock ($.50 par value) The New York Stock Exchange, Inc.
Chicago Stock Exchange, Inc.
The Pacific Stock Exchange, Inc.
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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Annual Report on Form
10-K or any amendment to this Annual Report on Form 10-K __X__.
Aggregate market value of the common stock held by non-affiliates of the
Registrant on October 14, 1996: $108,994,466 (14,063,802 shares at closing price
on New York Stock Exchange of $7.75).
Common stock outstanding on November 18, 1996, 25,405,679 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1. The Winnebago Industries, Inc. Annual Report to Shareholders for the fiscal
year ended August 31, 1996, portions of which are incorporated by reference
into Part II hereof.
2. The Winnebago Industries, Inc. Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held December 18, 1996, portions of which are
incorporated by reference into Part III hereof.
WINNEBAGO INDUSTRIES, INC.
FORM 10-K
Report for the Fiscal Year Ended August 31, 1996
PART I
ITEM 1. Business
GENERAL
Winnebago Industries, Inc. is a leading U.S. manufacturer of motor homes,
self-contained recreation vehicles used primarily in leisure travel and outdoor
recreation activities. Motor home sales by the Company represented more than 87
percent of its revenues in each of the past five fiscal years. The Company's
motor homes are sold through dealer organizations primarily under the Winnebago,
Itasca, Vectra, Rialta and Luxor brand names.
Other products manufactured by the Company consist principally of extruded
aluminum, commercial vehicles, and a variety of component products for other
manufacturers. Finance revenues consisted of revenues from floor plan unit
financing of the Company's products in dealer inventories.
The Company was incorporated under the laws of the state of Iowa on February 12,
1958, and adopted its present name on February 28, 1961. The Company's executive
offices are located at 605 West Crystal Lake Road in Forest City, Iowa. Unless
the context indicates otherwise, the term "Company" refers to Winnebago
Industries, Inc. and its subsidiaries.
PRINCIPAL PRODUCTS
The Company determined it was appropriate to define its operations into two
business segments for fiscal 1996 (See Note 18, "Business Segment Information"
in the Company's Annual Report to Shareholders for the year ended August 31,
1996). However, during each of the last five fiscal years, at least 91% of the
revenues of the Company were derived from recreational vehicle products.
The following table sets forth the respective contribution to the Company's net
revenues by product class for each of the last five fiscal years (dollars in
thousands):
BY-LAWS
OF
WINNEBAGO INDUSTRIES INC.
AS AMENDED
ARTICLE I. OFFICES
The principal office of the Corporation in the State of Iowa,
shall be located in the City of Forest City, County of Winnebago, State of Iowa.
The Corporation may have such other offices, either within or
without of the State of Iowa, as the Board of Directors may designate or as the
business of the Corporation may require from time to time
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting
The Annual Meeting of the Shareholders shall be held on a date in
the month of December of each year, commencing with the December, 1987 meeting,
to be annually set by the Board of Directors with written notice thereof to be
given not less than ten (10) days prior thereto by the Secretary, to be held in
Forest City, Iowa, at such place as may be designated by the Board of Directors,
for the purpose of electing directors and for the transaction of such other
business as may come before the meeting.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers
The business and affairs of this Corporation shall be managed by its
Board of Directors.
Section 2. Number Tenure and Qualifications
The number of directors constituting the Board of Directors of the
Corporation shall be eight (8) until increased or decreased by proper amendment
thereto. Each director shall hold office until the next annual meeting of the
shareholders and until his successor shall have been elected and qualified
Directors need not be residents of the State of Iowa nor shareholders of the
Corporation.
Section 3. Regular Meetings
The regular meeting of the Board of Directors shall be held without
other notice than these By-Laws, immediately after, and at the same place as,
the Annual Meeting of the Shareholders. The Board of Directors may provide, by
resolution, the time and place, either within or without the State of Iowa, for
the holding of additional regular meetings without other notice than such
resolution.
Section 4. Special Meetings
Special meetings of the Board of Directors may be called by or at the
request of the President or any one director. The persons or person authorized
to call special meetings of the Board of Directors may fix the time for holding
any special meetings of the Board of Directors so called, but the place shall be
the same as the regular meeting place unless another place is unanimously agreed
upon at the time and ratified by appropriate resolution.
Section 5. Notice of Meetings
Notice of any special meeting of the Board of Directors shall be
given at least five (5) days previously thereto by written notice delivered
personally or mailed to each director at his business address, or by telegram.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with sufficient postage thereon prepaid. If
notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegraph company; any director may waive
notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the expressed purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 6. Committees
The Board of Directors may, by resolution adopted by a majority of
the whole board, designate from among its members an Executive Committee and one
or more other committees. Any such committee, to the extent provided in the
resolution, shall have and may exercise all the authority of the Board of
Directors; provided, however, that no such committee shall have such authority
in reference to any matter for which such authority is specifically reserved to
the full Board of Directors by the terms of the Iowa Business Corporation Act,
as amended. Each such committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
ARTICLE IV. OFFICERS
Section 1. Number
The officers of the Corporation shall be a President, Vice President, a
Secretary and a Treasurer. Such other officers, assistant officers and acting
officers as may be deemed necessary, may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person if so
nominated and elected.
Section 2. Election and Term of Office
The officers of the Corporation to be elected by the Board of
Directors shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be. The
officers of the Corporation shall hold office until their successors are chosen
and qualify or until their death or resignation. Any officer elected by the
Board of Directors may be removed at any time by the affirmative vote of a
majority of the Board of Directors in office. Any vacancy occurring in any
office in the Corporation shall be filled by the Board of Directors.
ARTICLE V. FISCAL YEAR
The fiscal year of this Corporation shall begin on the 1st day of
September and end on the last day of August, in each year.
ARTICLE VI. AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.
September 9, 1996
RV EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN
Group II
Fiscal Period 1996-1997
Winnebago Industries, Inc.
Forest City, Iowa
PURPOSE
The purpose of this plan is to provide greater incentive to employees in
managerial positions, who contribute to the success of the Company, by enabling
them to participate in that success, and to aid in attracting and retaining
employees who will contribute to the progress and profitability of the Company.
It is the purpose of this plan to attract, obtain, develop, motivate, and retain
capable managerial personnel, stimulate constructive and imaginative thinking,
and otherwise contribute to the growth and profits of the corporation.
ADMINISTRATION
The plan prior to each new fiscal year must meet the approval of the Human
Resource Committee of the Board of Directors. The Human Resource Committee may
establish such rules and regulations as it deems necessary for proper
administration of this plan and may amend or revoke any rule or regulation so
established.
PARTICIPANTS
Recommendation of a participant must be made by the Vice President that has the
responsibility for the specific unit or group which the proposed participant is
a member. The Vice President must justify direct dependence of recommended
employee's influence, performance and achievements, which could determine the
success of that unit or group and employee must be considered a direct link to
the success and profitability of the corporation.
Minimum Qualifications Required of Participants:
1. Participant must be in Labor Grade Number 70 or above.
2. Participant must be in the capacity of a staff supervisor or manager of a
specific unit or group with specific responsibilities which can impact
the corporation.
3. Participants must be employed for the entire fiscal year to be eligible
for the bonus and in addition, participant must be employed at the time
the bonus is paid except as waived by the Human Resource Committee.
Appointment of participants to the "Executive Management Incentive Compensation
Plan" will be recommended by the President to the Human Resource Committee for
approval based on meeting the aforementioned qualifications and upon
recommendation of the respective Vice President.
NATURE OF THE PLAN
The incentive award is based on the performance of the CORPORATION.
This is a bonus based upon the Company's attainment of a predetermined profit
goal for the fiscal quarter. The profit goal is to be recommended by the Human
Resource Committee and approved by the Board of Directors each quarter at the
beginning of the fiscal quarter.
The profit goal, for purposes of this plan, will be the "Incentive Compensation
Profit" which shall mean the combined gross income from the operation of the
Company less the combined expenses, deductions and credits of the Company
attributable to such operations. In computing the incentive compensation profit,
no deduction shall be taken or allowance made for federal or state income taxes,
or any expenses associated with retirement plans or incentive compensation
plans. Incentive awards are determined in proportion to the actual operating
profit generated for the quarter in relation to the profit goal that was set. If
the operating profit achieved is less than 80 percent of goal set, no bonus is
paid and the maximum bonus paid at 120 percent of the profit goal.
METHOD OF PAYMENT
The quarterly amount of a participant's incentive compensation for the quarter
shall be the percentage of the total amount of base salary received by the
individual the fiscal quarter when he was a participant in the plan. 60% of the
quarterly amount of the earned bonus will be paid within 45 days after the close
of the fiscal quarter and the remainder of the bonus due will be paid after the
books have been audited at the end of the fiscal year providing the Company has
made its objective in each quarter.
Bonuses will be paid as follows:
Number of Quarters Amount of the Bonus
Objective was made Holdback to be Paid
-------------------------- --------------------------
1 25%
2 50%
3 75%
4 100%
The attached quarterly bonus formula developed for the Executive Group II of
Winnebago Industries provides a 30 percent bonus calculation for a 100 percent
achievement of operating profit.
A participant who leaves the Company for any reason will forfeit all rights to
incentive payments that particular fiscal quarter and fiscal year.
September 9, 1996
RV OFFICER INCENTIVE COMPENSATION PLAN
Group I
Fiscal Period 1996-1997
Winnebago Industries, Inc.
Forest City, Iowa
PURPOSE
The purpose of this plan is to provide greater incentive to employees in officer
positions, who contribute to the success of the Company, by enabling them to
participate in that success, and to aid in attracting and retaining employees
who will contribute to the progress and profitability of the Company.
It is the purpose of this plan to attract, obtain, develop, motivate, and retain
capable officer personnel, stimulate constructive and imaginative thinking, and
otherwise contribute to the growth and profits of the corporation
ADMINISTRATION
The plan prior to each new fiscal year must meet the approval of the Human
Resource Committee of the Board of Directors. The Human Resource Committee may
establish such rules and regulations as it deems necessary for proper
administration of this plan and may amend or revoke any rule or regulation so
established.
PARTICIPANTS
Recommendation of a participant must be made by the President of Winnebago
Industries, Inc.
Minimum Qualifications Required of Participants:
1. Participant must be an officer with specific responsibilities which can
impact the corporation
2. Participants must be employed for the entire fiscal year to be eligible
for the bonus and in addition, participant must be employed at the time
the bonus is paid except as waived by the Human Resource Committee.
NATURE OF THE PLAN
The incentive award is based on the performance of the CORPORATION.
This is a bonus based upon the Company's attainment of a predetermined profit
goal for the fiscal quarter. The profit goal is to be recommended by the Human
Resource Committee and approved by the Board of Directors each quarter at the
beginning of the fiscal quarter.
The profit goal, for purposes of this plan, will be the "Incentive Compensation
Profit" which shall mean the combined gross income from the operation of the
Company less the combined expenses, deductions and credits of the Company
attributable to such operations. In computing the incentive compensation profit,
no deduction shall be taken or allowance made for federal or state income taxes,
or any expenses associated with retirement plans or incentive compensation
plans. Incentive awards are determined in proportion to the actual operating
profit generated for the quarter in relation to the profit goal that was set. If
the operating profit achieved is less than 80 percent of goal set, no bonus is
paid and the maximum bonus paid at 120 percent of the profit goal.
METHOD OF PAYMENT
The quarterly amount of a participant's incentive compensation for the quarter
shall be the percentage of the total amount of base salary received by the
individual the fiscal quarter when he was a participant in the plan. 60% of the
quarterly amount of the earned bonus will be paid within 45 days after the close
of the fiscal quarter and the remainder of the bonus due will be paid after the
books have been audited at the end of the fiscal year providing the Company has
made its objective in each quarter.
Bonuses will be paid as follows:
Number of Quarters Amount of the Bonus
Objective was made Holdback to be Paid
--------------------------- --------------------------
1 25%
2 50%
3 75%
4 100%
The attached quarterly bonus formula developed for the Officers Group I of
Winnebago Industries provides a 40 percent bonus calculation for a 100 percent
achievement of operating profit.
A participant who leaves the Company for any reason will forfeit all rights to
incentive payments that particular fiscal quarter and fiscal year.
September 9, 1996
RV MANAGEMENT INCENTIVE COMPENSATION PLAN
GROUP III
FISCAL PERIOD 1996-1997
WINNEBAGO INDUSTRIES, INC.
FOREST CITY, IOWA
PURPOSE
The purpose of this plan is to provide greater incentive to employees in
managerial positions, who contribute to the success of the Company, by enabling
them to participate in that success, and to aid in attracting and retaining
employees who will contribute to the progress and profitability of the Company.
It is the purpose of this plan to attract, obtain, develop, motivate, and retain
capable managerial personnel, stimulate constructive and imaginative thinking,
and otherwise contribute to the growth and profits of the corporation
ADMINISTRATION
The plan prior to each new fiscal year must meet the approval of the Human
Resource Committee of the Board of Directors. The Human Resource Committee may
establish such rules and regulations as it deems necessary for proper
administration of this plan and may amend or revoke any rule or regulation so
established.
PARTICIPANTS
Recommendation of a participant must be made by the Vice President member that
has the responsibility for the specific unit or group which the proposed
participant is a member. The Vice President must justify direct dependence of
recommended employee's influence, performance and achievements, which could
determine the success of that unit or group and employee must be considered a
direct link to the success and profitability of the corporation.
MINIMUM QUALIFICATIONS REQUIRED OF PARTICIPANTS:
1. Participant must be in the capacity of a manager of a specific unit or
group with budget responsibilities and specific responsibilities which
significantly can impact the corporation.
2. Participants must be employed for the entire fiscal year to be eligible
for the bonus and in addition, participant must be employed at the time
the bonus is paid except as waived by the Human Resource Committee.
Appointment of participants to the "Management Incentive Compensation Plan" will
be recommended by the President to the Human Resource Committee for approval
based on meeting the aforementioned qualifications and upon recommendation of
the respective Vice President.
NATURE OF THE PLAN
The incentive award is based on the performance of the CORPORATION.
This is a bonus based upon the Company's attainment of a predetermined profit
goal for the fiscal quarter. The profit goal is to be recommended by the Human
Resource Committee and approved by the Board of Directors each quarter at the
beginning of the fiscal quarter.
The profit goal, for purposes of this plan, will be the "Incentive Compensation
Profit" which shall mean the combined gross income from the operation of the
Company less the combined expenses, deductions and credits of the Company
attributable to such operations. In computing the incentive compensation profit,
no deduction shall be taken or allowance made for federal or state income taxes,
or any expenses associated with retirement plans or incentive compensation
plans.
METHOD OF PAYMENT
The quarterly amount of a participant's incentive compensation for the quarter
shall be the percentage of the total amount of base salary received by the
individual the fiscal quarter when he was a participant in the plan. 60% of the
quarterly amount of the earned bonus will be paid within 45 days after the close
of the fiscal quarter and the remainder of the bonus due will be paid after the
books have been audited at the end of the fiscal year providing the Company has
made its objective in each quarter.
Bonuses will be paid as follows:
NUMBER OF QUARTERS AMOUNT OF THE BONUS
OBJECTIVE WAS MADE HOLDBACK TO BE PAID
-------------------------- ----------------------------
1 25%
2 50%
3 75%
4 100%
A participant who leaves the Company for any reason will forfeit all rights to
incentive payments that particular fiscal quarter and fiscal year.
Incentive awards are determined in proportion to the actual operating profit
generated for the quarter in relation to the profit goal that was set. If the
operating profit achieved is less than 80 percent of goal set, no bonus is paid
and the maximum bonus paid at 120 percent of the profit goal.
The attached quarterly bonus formula developed for the Management Group III of
Winnebago Industries provides a 20 percent bonus calculation for a 100 percent
achievement of operating profit.
SUMMARY PLAN DESCRIPTION
FOR THE
WINNEBAGO INDUSTRIES, INC.
EMPLOYEES' STOCK BONUS PLAN
MAY, 1993
PARTICIPATING EMPLOYERS:
WINNEBAGO INDUSTRIES, INC.
CYCLE-SAT, INC.
NORTH IOWA ELECTRONICS, INC.
WINNEBAGO REALTY CORP.
Winnebago R.V., Inc.
Winnebago Acceptance Corp.
Winnebago Products, Inc.
Winnebago International Corp.
TABLE OF CONTENTS
(1) General .......................................................... 1
(2) Identification of Plan ........................................... 1
(3) Type of Plan ..................................................... 1
(4) Plan Administrator ............................................... 1
(5) Trustee/Trust Fund ............................................... 2
(6) Hours of Service ................................................. 2
(7) Eligibility to Participate ....................................... 3
(8) Employer's Contributions ......................................... 3
(9) Employee Contributions ........................................... 4
(10) Vesting in Employer Contributions ................................ 4
(11) Payments of Benefits After Termination of Employment ............. 5
(12) Payment of Benefits Prior to Termination of Employment ........... 6
(13) Disability Benefits .............................................. 6
(14) Payment of Benefits Upon Death ................................... 6
(15) Disqualification of Participant Status - Loss or Denial of
Benefits ...................................................... 7
(16) Claims Procedure ................................................. 7
(17) Retired Participant, Separated Participant with Vested Benefit,
Beneficiary Receiving Benefits ................................ 7
(18) Participant's Rights under ERISA ................................. 8
(19) Federal Income Taxation of Benefits Paid ......................... 9
SUMMARY PLAN DESCRIPTION
(1) General. The legal name, address and Federal employer identification
number of the Employer are:
Winnebago Industries, Inc. EIN: 42-0802678
605 West Crystal Lake Road
Forest City, Iowa 50436
The Employer has established a retirement plan ("Plan") to supplement your
income upon retirement. In addition to retirement benefits, the Plan may provide
benefits in the event of your death or disability or in the event of your
termination of employment prior to normal retirement. If after reading the
summary you have any question, please ask the Plan Administrator. We emphasize
this summary is a highlight of the more important provisions of the Plan. If
there is conflict between a statement in this summary plan description and in
the Plan, the terms of the Plan control.
Winnebago Industries, Inc. is the principal employer sponsoring this Plan.
However, more than one employer may sponsor and contribute to this Plan. Upon
written request, the Plan Administrator will furnish you or your beneficiary
information as to whether a particular employer is a sponsor of the Plan, and if
a Plan sponsor, the sponsor's address.
(2) IDENTIFICATION OF PLAN. The Plan is known as:
Winnebago Industries, Inc. Employees' Stock Bonus Plan
The Employer has assigned 002 as the Plan identification number. The Plan
Year is the period on which the Plan maintains its records: September 1 through
August 31.
(3) TYPE OF PLAN. The Plan is commonly known as a stock bonus plan. Section
(8), "Employer's Contributions," explains how you share in the Employer's annual
contribution(s) to the trust fund and the extent to which the Employer has an
obligation to make annual contribution(s) to the trust fund.
Under this Plan, there is no fixed dollar amount of retirement benefits.
Your actual retirement benefit will depend on the amount of your account balance
at the time of retirement. Your account balance will reflect the annual
allocations, the period of time you participate in the Plan and the success of
the Plan in investing and reinvesting the assets of the trust fund. A
governmental agency known as the Pension Benefit Guaranty Corporation (PBGC)
insures the benefits payable under plans which provide for fixed and
determinable retirement benefits. This Plan does not provide a fixed and
determinable retirement benefit. Therefore, the PBGC does not include this Plan
within its insurance program.
(4) PLAN ADMINISTRATOR. The Employer is the Plan Administrator. The
Employer's telephone number is (515) 582-3535. The Employer has designated the
Human Resource Director to assist the Employer with the duties of Plan
Administrator. You may contact the Human Resource Director at the Employer's
address. The Plan Administrator is responsible for providing you and other
participants information regarding your rights and benefits under the Plan. The
Plan Administrator also has the primary authority for filing the various
reports, forms and returns with the Department of Labor and the Internal Revenue
Service.
The name of the person designated as agent for service of legal process and
the address where a processor may serve legal process upon the Plan are:
Ray Beebe
c/o Winnebago Industries, Inc.
605 West Crystal Lake Road
Forest City, Iowa 50436
A legal processor also may serve the Trustee of the Plan or the Plan
Administrator.
The Plan permits the Employer to appoint an Administrative Committee to
assist in the administration of the Plan. The Administrative Committee has the
responsibility for making all discretionary determinations under the Plan and
for giving distribution directions to the Trustee. If the Employer does not
appoint an Administrative Committee, the Plan Administrator assumes these
responsibilities. The members of the Administrative Committee may change from
time to time. You may obtain the names of the current members of the
Administrative Committee from the Plan Administrator.
(5) TRUSTEE/TRUST FUND. The Employer has appointed:
Norwest Bank Iowa, N A.
666 Walnut Street
Des Moines, Iowa 50304
to hold the office of Trustee. The Trustee will hold all amounts the
Employer contributes to it in a trust fund. Upon the direction of the
Administrative Committee, the Trustee will make all distribution and benefit
payments from the trust fund to participants and beneficiaries. The Trustee will
maintain trust fund records on a Plan Year basis.
The Trustee will invest the trust fund primarily in common stock issued by
the Employer. In most instances, the Employer will contribute its own stock to
the Trustee in the years it makes a contribution to the trust fund. If the
Employer contributes cash, the Trust will purchase common stock of the Employer
for investment under the trust fund. The Trustee will pay your benefits under
the Plan attributable to Employer contributions in common stock of the Employer.
The Trustee will pay any fractional shares to you in cash.
(6) HOURS OF SERVICE. The Plan and this summary plan description include
references to hours of service. To become eligible to participate in the Plan,
to advance on the vesting schedule, or to share in Employer contributions for a
Plan Year, the Plan requires you to complete a minimum number of hours of
service during a specified period. The sections covering eligibility to
participate, vesting and employer contributions explain this aspect of the Plan
in the context of those topics. However, hour of service has the same meaning
for all purposes of the Plan.
The Department of Labor, in its regulations, has prescribed various methods
under which the Employer may credit hours of service. The Employer has selected
the "actual" method for crediting hours of service. Under the actual method, you
will receive credit for each hour for which the Employer pays you, directly or
indirectly, or for which you are entitled to payment, for the performance of
your employment duties. You also will receive credit for certain hours during
which you do not work if the Employer pays you for those hours, such as paid
vacation.
If an employee's absence from employment is due to maternity or paternity
leave, the employee will receive credit for unpaid hours of service related to
his leave, not to exceed 501 hours. The Administrative Committee will credit
these hours of service to the first period during which the employee otherwise
would incur a one-year break in service as a result of the unpaid absence.
The Employer is a member of a related group of business organizations. The
law treats all members of this related group as a single employer for purposes
of crediting hours of service. If you work for more than one member of the
related group, you will receive hours of service credit under this Plan to the
same extent as if you had worked the other hours for the Employer.
(7) ELIGIBILITY TO PARTICIPATE. To become a participant, an employee must
complete one year of service. You do not have to complete any form for entry
into the Plan. You will become a participant on the September l, December 1,
March 1 or June 1 following your completion of the service requirement.
The Plan defines "year of service" as a 12-month period in which you work
at least 1,000 hours for the Employer. The 12-month period starts on your first
day of employment with the Employer. For example, if you begin work on February
15 of a particular Plan Year and work 1,000 hours from that February 15 through
the following February 14, you would enter the Plan on the March 1 immediately
following the completion of the one year of service.
If you terminate employment after becoming a participant in the Plan and
later return to employment, you will reenter the Plan on your reemployment
date. Also, if you terminate employment after satisfying the Plan's service
condition but before actually becoming a participant in the Plan, you will
become a participant in the Plan on the later of your scheduled entry date
or your reemployment date.
(8) EMPLOYER'S CONTRIBUTIONS. The Plan as adopted by the Employer is a
stock bonus plan. Each Plan Year, the Employer will contribute to the Plan the
amount determined by the Employer at its discretion. The Employer may choose not
to contribute to the Plan for a particular Plan Year.
For each Plan Year the Employer contributes to the Plan, the Administrative
Committee will allocate this contribution to the separate accounts maintained
for participants. The Administrative Committee will base your allocation upon
your proportionate share of the total units accumulated through the close of the
Plan Year by all participants in the Plan. You will receive one unit for each
Plan Year in which you work at least 1,000 hours for the Employer. If you work
less than 1,000 hours for the Employer during a Plan Year, you will not receive
a unit for that Plan Year. For example, if you have accumulated ten units
through the close of a particular Plan Year and the units accumulated by all
participants in the Plan for the Plan Year is 1,000, the Administrative
Committee will allocate 1% of the total Employer contribution for the Plan Year
to your separate account.
Allocation of forfeitures. The Plan allocates participant forfeitures as if
the forfeitures were additional Employer contributions for the Plan Year in
which the forfeiture occurs.
Conditions for allocation. With limited exceptions, to be entitled to an
allocation of Employer contributions, you must complete 1,000 hours of service
during the Plan Year and you must be employed by the Employer on the last day of
the Plan Year.
The law limits the amount of "additions" (other than trust earnings) which
the Plan may allocate to your account under the Plan. Your additions may never
exceed 25% of your compensation for a particular Plan Year, but may be less if
25% of your compensation exceeds a dollar amount announced by the Internal
Revenue Service each year. The Plan may need to reduce this limitation if you
participate (or have participated) in any other plans maintained by the
Employer. The discussion of Plan allocations in this Section (8) is subject to
this limitation.
(9) EMPLOYEE CONTRIBUTIONS. The Plan does not permit you to make voluntary
contributions to the trust fund. The only source of contributions under the Plan
is the annual Employer contribution.
(10) VESTING IN EMPLOYER CONTRIBUTIONS. Your interest in the contributions
the Employer makes to the Plan for your benefit becomes 100% vested when you
attain the normal retirement age of 62. Prior to normal retirement age, your
interest in the contributions the Employer makes on your behalf becomes vested
in accordance with the following schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
Less than 2 ............................................. None
2 .................................................. 20%
3 .................................................. 40%
4 .................................................. 60%
5 .................................................. 80%
6 or more .......................................... 100%
Special vesting rule for death or disability. If you die or become disabled
while still employed by the Employer, your entire plan interest becomes 100%
vested, even if you otherwise would have a vested interest less than 100%.
Year of service. To determine your percentage under a vesting
schedule, a year of service means a 12-month vesting service period in
which you complete at least 1,000 hours of service. The Plan measures the
vesting service period as the Plan Year. If you complete at least 1,000
hours during a Plan Year, you will receive credit for a year of service
even though you are not employed by the Employer on the last day of that
Plan Year. You will receive credit for years of service with the Employer
prior to the time the Employer established the Plan and for years of
service prior to the time you became a participant in the Plan.
The Plan provides two methods of vesting forfeiture which may apply before
a participant becomes 100% vested in his entire interest under the Plan. The
primary method of vesting forfeiture is the "forfeiture break in service" rule.
The secondary method of forfeiture is the "cash out" rule. Also, see Section
(15) relating to loss or denial of benefits.
Forfeiture Break in Service Rule. Termination of employment alone will not
result in a forfeiture under the Plan unless you do not return to
employment with the Employer before incurring a "forfeiture break in
service." A "forfeiture break in service" is a period of five consecutive
vesting service periods in which you do not work more than 500 hours in
each vesting service period comprising the five-year period.
Example. Assume you are 60% vested in your account balance. After working
400 hours during a particular vesting service period, you terminate employment
and perform no further service for the Employer during the next four vesting
service periods. Under this example, you would have a "forfeiture break in
service" during the fourth vesting service period following the vesting service
period in which you terminated employment because you did not work more than 500
hours during each of five consecutive vesting service periods. Consequently, you
would forfeit the 40% nonvested portion of your account. If you had returned to
employment with the Employer at any time during the five vesting service periods
and worked at least 501 hours during any vesting service period within that
five-year period, you would not incur a forfeiture under the "forfeiture break
in service" rule.
Cash-Out Rule. The cash-out rule becomes operative if you terminate
employment and receive a total distribution of the vested portion of your
account balance prior to your incurring a forfeiture break in service. For
example, assume you terminated employment during a particular vesting service
period after completing 800 hours of service. Assume further the total value of
your account balance is $6,000 in which you have a 60% vested interest. Before
you incur a forfeiture break in service, you receive a distribution of the
$3,600 vested portion ($6,000 x 60%) of your account balance. Upon payment of
the $3,600 vested portion of your account balance, you would forfeit the $2,400
nonvested portion. If you return to employment before you incur a "forfeiture
break in service," you may have the Plan restore your "cash-out" forfeiture by
repaying the amount of the distribution you received attributable to Employer
contributions. This repayment right applies only if you do not incur a
"forfeiture break in service." You must make this repayment no later than the
date five years after you return to employment with the Employer. Upon your
reemployment with the Employer, you may request the Administrative Committee to
provide you a full explanation of your rights regarding this repayment option.
If the vested portion of your account balance does not exceed $3,500, the Plan
will distribute that vested portion to you in a lump sum, without your consent.
This involuntary cash-out distribution will result in the forfeiture of your
nonvested account balance, in the same manner as an employee who voluntarily
elects a cash-out distribution. Also, upon reemployment you would have the same
repayment option as an employee who elected a cash-out distribution, if you
return to employment before incurring a "forfeiture break in service."
(11) PAYMENT OF BENEFITS AFTER TERMINATION OF EMPLOYMENT. After you
terminate employment with the Employer, the time at which the Plan will commence
distribution to you depends on whether your vested account balance exceeds
$3,500. If you receive a distribution from the Plan before you attain age 59
1/2, the law imposes a 10% penalty on the amount of the distribution you must
include in your gross income, unless you qualify for an exception from the
penalty. You should consult a tax advisor regarding this 10% penalty.
If the vested portion of your account balance does not exceed $3,500, the
Trustee will distribute that portion to you, in lump sum, as soon as
administratively practicable following your termination of employment with the
Employer without any election on your part. If the vested portion of your
account balance exceeds $3,500, the Trustee will commence distribution to you,
in lump sum, at the time you elect. The Plan permits you to elect distribution
as of any date following your termination with the Employer. No later than 30
days prior to the date the Trustee expects to make distribution to you, the
Administrative Committee will provide you a notice explaining your right to
elect distribution from the Plan and the forms necessary to make your election.
If you fail to elect commencement of payment of your vested account balance, the
Administrative Committee will direct the Trustee to commence distribution to you
no later than the 60th day following the close of the Plan Year in which the
later of two events occurs: (1) your attainment of normal retirement age; or (2)
your termination of employment with the Employer. If you already have attained
normal retirement age (age 62) when you terminate employment, the Trustee must
make this distribution no later than the 60th day following the close of the
Plan Year in which you terminate employment with the Employer.
To determine whether the vested portion of your account balance exceeds
$3,500, the Plan normally looks to the last valuation of your account prior to
the schedule distribution date. However, if you previously received a
distribution from the Plan when your vested account balance exceeded $3,500, the
Plan treats you as if your vested account balance always exceeds $3,500 for
purposes of any later distributions to you.
With limited exceptions, you may not commence distribution of your vested
account balance later than April 1 of the calendar year following the calendar
year in which you attain age 70 1/2, even if you have not terminated employment
with the Employer. This required distribution date overrides any contrary
distribution date described in this summary.
Method of Payment. The Administrative Committee will maintain an employer
securities account to reflect your interest in employer securities and a general
investments account to reflect your interest in the trust fund investments other
than employer securities. The Trustee will distribute your vested interest in
your employer securities account in whole shares of employer securities. The
Trustee will distribute your vested interest in your general investment account
and any fractional shares in your employer securities account in cash. For
purposes of making a distribution from your general investment account, the Plan
refers to the latest valuation of your account balance. The Plan requires
valuation of the trust fund, and adjustment of the participant accounts, as of
the last day of each quarter of the Plan Year. For the general investment
accounts, the Plan allocates trust fund earnings, gains or losses for a
valuation period on the basis of each participant's opening general investments
account balance at the beginning of the valuation period, less any distributions
and charges to each participant's general investment account during the
valuation period.
(12) PAYMENT OF BENEFITS PRIOR TO TERMINATION OF EMPLOYMENT. Other than the
post-age 70 1/2 distribution requirement described in Section (11), the Plan
does not permit you to receive payment of any portion of your account balance
for any other reason, unless you terminate employment with the Employer.
(13) DISABILITY BENEFITS. If you terminate employment because of
disability, the Plan will pay your vested account balance to you in lump sum as
soon as administratively practicable following your termination of employment.
However, if your vested account balance exceeds $3,500, the disability
distribution rules are subject to any election requirements described in Section
(11). In general, disability under the Plan means because of a physical or
mental disability you are unable to perform the duties of your customary
position of employment for an indefinite period which, in the opinion of the
Administrative Committee, will be of long continued duration. The Administrative
Committee also considers you disabled if you terminate employment because of a
permanent loss or loss of use of a member or function of your body or a
permanent disfigurement. The Administrative Committee may require a physical
examination in order to confirm the disability.
(14) PAYMENT OF BENEFITS UPON DEATH. If you die prior to receiving all of
your benefits under the Plan, the Plan will pay the balance of your account to
your beneficiary. The Administrative Committee will provide you with an
appropriate form for naming a beneficiary. If you are married, your spouse must
consent to the designation of any nonspouse beneficiary. If your vested account
balance payable to your designated beneficiary does not exceed $3,500, the Plan
will pay the benefit, in lump sum, to your designated beneficiary as soon as
administratively practicable after your death. If your vested account balance
payable to your designated beneficiary exceeds $3,500, the Plan will pay the
benefit to your designated beneficiary, in the form and at the time elected by
the beneficiary, unless, prior to your death, you specify the timing and form of
the beneficiary's distribution. The benefit payment election generally must
complete distribution of your account balance within five years of your death,
unless distribution commences within one year of your death to your designated
beneficiary or unless benefits had commenced prior to your death under the
mandatory post-age 70 1/2 distribution requirements described in Section (11).
(15) DISQUALIFICATION OF PARTICIPANT STATUS - LOSS OR DENIAL OF BENEFITS.
There are no specific Plan provisions which disqualify you as a participant or
which cause you to lose Plan benefits, except as provided in Sections (7) and
(10). However, if you become disabled and do not receive compensation from the
Employer, you will not receive an allocation of the Employer's contribution to
the Plan during the period of disability. In addition, if your Plan benefits
become payable after termination of employment and the Administrative Committee
is unable to locate you at your last address of record, you may forfeit your
benefits under the Plan. Therefore, it is very important that you keep the
Employer apprised of your mailing address even after you have terminated
employment. Finally, if the Employer terminates the Plan, which it has the right
to do, you would receive benefits under the Plan based on your account balance
accumulated to the date of the termination of the Plan. Termination of the Plan
could occur before you attain normal retirement age. If the Employer terminates
the Plan, your account will become 100% vested, if not already 100% vested,
unless you forfeited the nonvested portion prior to the termination date.
The fact that the Employer has established this Plan does not confer any
right to future employment with the Employer. Furthermore, you may not assign
your interest in the Plan to another person or use your Plan interest as
collateral for a loan from a commercial lender.
(16) CLAIMS PROCEDURE. You need not file a formal claim with the
Administrative Committee in order to receive your benefits under the Plan. When
an event occurs which entitles you to a distribution of your benefits under the
Plan, the Administrative Committee automatically will notify you regarding the
distribution of your benefits. However, if you disagree with the Administrative
Committee's determination of the amount of your benefits under the Plan or with
respect to any other decision the Administrative Committee may make regarding
your interest in the Plan, the Plan contains the appeal procedure you should
follow. In brief, if the Administrative Committee of the Plan determines it
should deny benefits to you or to your beneficiary making a claim for benefits,
the Plan Administrator will give you or your beneficiary adequate notice in
writing setting forth specific reasons for the denial and referring you or your
beneficiary to the pertinent provisions of the Plan supporting the
Administrative Committee's decision. If you or your beneficiary disagrees with
the Administrative Committee, you or your beneficiary, or a duly authorized
representative, must appeal the adverse determination in writing to the
Administrative Committee within 75 days after the receipt of the notice of
denial of benefits. If you or your beneficiary fails to appeal a denial within
the 75-day period, the Administrative Committee's determination will be final
and binding.
If you or your beneficiary appeals to the Administrative Committee, you, or
your duly authorized representative, must submit the issues and comments you
feel are pertinent to permit the Administrative Committee to reexamine all facts
and make a final determination with respect to the denial. The Administrative
Committee, in most cases, will make a decision within 60 days of a request on
appeal unless special circumstances would make the rendering of a decision
within the 60-day period unfeasible. In any event, the Administrative Committee
must render a decision within 120 days after its receipt of a request for
review.
(17) RETIRED PARTICIPANT, SEPARATED PARTICIPANT WITH VESTED BENEFIT,
BENEFICIARY RECEIVING BENEFITS. If you are a retired participant or beneficiary
receiving benefits, the benefits you presently are receiving will continue in
the same amount and for the same period provided in the mode of settlement
selected at retirement. If you are a separated participant with a vested
benefit, you may obtain a statement of the dollar amount of your vested benefit
upon request to the Plan Administrator. There is no Plan provision which
reduces, changes, terminates, forfeits, or suspends the benefits of a retired
participant, a beneficiary receiving benefits or a separated participant's
vested benefit amount, except as provided in Section (15).
(18) PARTICIPANT'S RIGHTS UNDER ERISA. As a participant in this Plan, you
are entitled to certain rights and protections under the Employee Retirement
Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants
shall be entitled to:
(a) Examine, without charge, at the Plan Administrator's office and at
other specified locations (such as work sites) all Plan documents,
including insurance contracts and copies of all documents filed by the Plan
with the U S. Department of Labor, such as detailed annual reports and plan
descriptions.
(b) Obtain copies of all Plan documents and other Plan information upon
written request to the Plan Administrator. The Plan Administrator may make
a reasonable charge for the copies.
(c) Receive a summary of the Plan's annual financial report. ERISA requires
the Plan Administrator to furnish each participant with a copy of this
summary annual report.
(d) Obtain a statement telling you that you have a right to receive a
retirement benefit at the normal retirement age under the Plan and what
your benefit could be at normal retirement age if you stop working under
the Plan now. See the second paragraph of Section (3). If you do not have a
right to a retirement benefit, the statement will advise you of the number
of additional years you must work to receive a retirement benefit. You must
request this statement in writing. The law does not require the Plan
Administrator to give this statement more than once a year. The Plan must
provide the statement free of charge.
In addition to creating rights for Plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate this Plan, called "fiduciaries" of the Plan, have a
duty to do so prudently and in the interest of you and other Plan participants
and beneficiaries. No one, including your Employer, your union or any other
person may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a retirement benefit or from exercising your rights under
ERISA.
If your claim for a retirement benefit is denied in whole or in part, you
must receive a written explanation of the reason for the denial. You have the
right to have the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive the
materials within 30 days, you may file suit in a Federal court. In such a case,
the court may require the Plan Administrator to provide the materials and pay
you up to $100 a day until you receive the materials, unless the materials were
not sent because of reasons beyond the control of the Plan Administrator. If you
have a claim for benefits which is denied or ignored, in whole or in part, you
may file suit in a state or Federal court. If it should happen that Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a Federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
(19) FEDERAL INCOME TAXATION OF BENEFITS PAID. Existing Federal income tax
laws do not require you to report currently as income amounts the Employer
contributes to the Plan and which the Administrative Committee allocates to your
account. However, when the Trustee ultimately distributes your account balance
to you, such as upon your retirement, you must report as income the Plan
distributions you receive. The Federal tax laws may permit you to report a Plan
distribution under a special averaging provision. Also, it may be possible for
you to defer Federal income taxation of a distribution by making a "roll-over"
contribution to your own rollover individual retirement account or to another
qualified plan. Mandatory income tax withholding rules apply to some
distributions you do not rollover directly to an individual retirement account
or to another qualified plan. At the time you receive a distribution, you also
will receive a notice explaining the withholding requirements and the options
available to you. We emphasize you should consult your own tax adviser with
respect to the proper method of reporting any distribution you receive from the
Plan. See Section (14).
December 16, 1993
Norwest Bank Iowa, N.A.
P.O. Box 837
Des Moines, IA 50304
Attention: Janet J. Jenkins
Vice President
RE: Winnebago Industries, Inc. Employees
Stock Bonus Plan and Trust
Dear Janet:
Pursuant to your letter of November 22, 1993, I enclose herewith two copies of
the Winnebago Industries, Inc. Stock Bonus Plan and Trust Agreement (together
with an extra signature page) which have been executed by the Presidents of
Winnebago Industries, Inc. and its various subsidiaries. The Amendment and
Restatement of such Plan has been approved by the Board of Directors this date.
Please execute the Plan on behalf of Norwest Bank lowa, N.A. and provide me with
a fully executed copy.
Very truly yours,
WINNEBAGO INDUSTRIES, INC.
Raymond M. Beebe
Vice President, General Counsel
and Secretary
RMB/kcj
Enclosures
c: Jon Green
WINNEBAGO INDUSTRIES, INC.
EMPLOYEES' STOCK BONUS PLAN
AND
TRUST AGREEMENT
WINNEBAGO INDUSTRIES, INC.
EMPLOYEES' STOCK BONUS PLAN
AND TRUST AGREEMENT
WINNEBAGO INDUSTRIES, INC., a corporation organized under the laws of the
State of Iowa, makes this Agreement with NORWEST BANK IOWA, NA, as Trustee.
WITNESSETH:
WINNEBAGO INDUSTRIES, INC. continues, within this Trust Agreement, a Plan
for the administration and distribution of contributions made by the Employer
for the purpose of providing retirement benefits for eligible Employees. This
Plan is an amended plan, in restated form, the original plan being established
as of September 1, 1980. The provisions of this Plan, as amended, apply solely
to an Employee whose employment with the Employer terminates on or after the
restated Effective Date of the Employer's Plan. If an Employee's employment with
the Employer terminates prior to the restated Effective Date, that Employee is
entitled to benefits under the Plan as the Plan existed on the date of the
Employee's termination of employment.
Now, therefore, in consideration of their mutual covenants, the Employer
and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Plan" means the retirement plan established and continued by the
Employer in the form of this Agreement, designated as the Winnebago Industries,
Inc. Employees' Stock Bonus Plan. The Employer has designed this Plan to invest
primarily in Employer Securities.
1.02 "Employer" means WINNEBAGO INDUSTRIES, INC. or any other employer who
with the written consent of Winnebago Industries, Inc. adopts this Plan.
1.03 "Trustee" means Norwest Bank Iowa, NA, or any successor in office who
in writing accepts the position of Trustee.
1.04 "Plan Administrator" is Winnebago Industries, Inc. unless Winnebago
Industries, Inc. designates another person to hold the position of Plan
Administrator. In addition to his other duties, the Plan Administrator has full
responsibility for compliance with the reporting and disclosure rules under
ERISA as respects this Agreement.
1.05 "Administrative Committee" means the Employer's Administrative
Committee as from time to time constituted.
1.06 "Employee" means any employee of the Employer.
1.07 "Highly Compensated Employee" means an Employee who, during the Plan
Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code ss.318, and applying the principles of Code ss.318,
for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year) and is part of the top-paid 20%
group of employees (based on Compensation for the relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code ss.415(b)(1)(A) (relating to defined benefit plans) and is an officer
of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in the
Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code ss.414(q) exclusions) of Employees, but no
more than 50 officers. If no Employee satisfies the Compensation requirement in
clause (d) for the relevant year, the Administrative Committee will treat the
highest paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.07, "Compensation" means Compensation as
defined in Section 1.10, except no exclusions from Compensation apply other than
the exclusions described in paragraphs (a), (b), (c) and (d) of Section 1.10,
and Compensation must include "elective contributions" (as defined in Section
1.10). The Administrative Committee must make the determination of who is a
Highly Compensated Employee, including the determinations of the number and
identity of the top paid 20% group, the top 100 paid Employees, the number of
officers includible in clause (d) and the relevant Compensation, consistent with
Code ss.414(q) and regulations issued under that Code section. The Employer may
make a calendar year election to determine the Highly Compensated Employees for
the Plan Year, as prescribed by Treasury regulations. A calendar year election
must apply to all plans and arrangements of the Employer. For purposes of
applying any nondiscrimination test required under the Plan or under the Code,
in a manner consistent with applicable Treasury regulations, the Administrative
Committee will treat a Highly Compensated Employee and all family members (a
spouse, a lineal ascendant or descendant, or a spouse of a lineal ascendant or
descendant) as a single Highly Compensated Employee, but only if the Highly
Compensated Employee is a more than 5% owner or is one of the 10 Highly
Compensated Employees with the greatest Compensation for the Plan Year. This
aggregation rule applies to a family member even if that family member is a
Highly Compensated Employee without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.07 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.
1.08 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.09 "Beneficiary" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a Beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Administrative Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "Compensation" means the Participant's wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, compensation paid salesman, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), except Compensation does not include reimbursements
or other expense allowances, fringe benefits (cash and noncash), moving
expenses, welfare benefits and director's fees. Compensation excludes elective
contributions made by the Employer on the Employee's behalf. "Elective
contributions" are amounts excludable from the Employee's gross income under
Code ss.ss.125, 402(a)(8), 402(h) or 403(b), and contributed by the Employer, at
the Employee's election, to a Code ss.401(k) arrangement, a Simplified Employee
Pension, cafeteria plan or tax-sheltered annuity. A Compensation payment
includes Compensation paid by the Employer to an Employee through another person
under the common paymaster provisions of Code ss.ss.3121(s) and 3306(p). The
term "Compensation" does not include:
(a) Employer contributions (other than "elective contributions") to a plan
of deferred compensation to the extent the contributions are not included
in the gross income of the Employee for the taxable year in which
contributed, on behalf of an Employee to a Simplified Employee Pension Plan
to the extent such contributions are excludable from the Employee's gross
income, and any distributions from a plan of deferred compensation,
regardless of whether such amounts are includible in the gross income of
the Employee when distributed.
(b) Amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a stock option described in Part II, Subchapter D, Chapter 1
of the Code.
(d) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee), or contributions made by
an Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code ss.403(b) (whether or not
the contributions are excludable from the gross income of the Employee),
other than "elective contributions."
Any reference in this Plan to Compensation is a reference to the definition
in this Section 1.10, unless the Plan reference specifies a modification to this
definition. The Administrative Committee will take into account only
Compensation actually paid for the relevant period.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Administrative Committee must take into account only the
first $200,000 (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement) applies only if
the Plan is top heavy for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS. The
$200,000 Compensation limitation applies to the combined Compensation of the
Employee and of any family member aggregated with the Employee under Section
1.07 who is either (i) the Employee's spouse; or (ii) the Employee's lineal
descendant under the age of 19. If, for a Plan Year, the combined Compensation
of the Employee and such family members who are Participants entitled to an
allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation,
"Compensation" for each such Participant, for purposes of the contribution and
allocation provisions of Article III, means his Adjusted Compensation. Adjusted
Compensation is the amount which bears the same ratio to the $200,000 (or
adjusted) limitation as the affected Participant's Compensation (without regard
to the $200,000 Compensation limitation) bears to the combined Compensation of
all the affected Participants in the family unit.
(B) NONDISCRIMINATION. FOR PURPOSES OF DETERMINING WHETHER the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10 except any exclusions from
Compensation, other than the exclusions described in paragraphs (a), (b), (c)
and (d), do not apply. The Employer also may elect to use an alternate
nondiscriminatory definition, in accordance with the requirements of Code
ss.414(s) and the regulations issued under that Code section. In determining
Compensation under this Section 1.10(B), the Employer may elect to include all
elective contributions made by the Employer on behalf of the Employees. The
Employer's election to include elective contributions must be consistent and
uniform with respect to Employees. The Employer may make this election to
include elective contributions for nondiscrimination testing purposes,
irrespective of whether this Section 1.10 includes elective contributions in the
general Compensation definition applicable to the Plan.
1.11 "Account" means the separate account(s) which the Administrative
Committee or the Trustee maintains for a Participant under the Plan.
1.12 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions.
1.13 "Nonforfeitable" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's Accrued
Benefit.
1.14 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month
period ending every August 31.
1.15 "Effective Date" of this Plan, as restated, is September 1, 1987,
except the following special effective dates apply: (1) The semiannual Plan
Entry Dates under Section 2.01 are effective for Plan Years beginning after
September 1, 1990, and the quarterly Plan Entry Dates under Section 2.01 are
effective beginning March 1, 1993. (2) The method of allocation of Section 3.04
is effective for Plan Years beginning after August 31, 1992. (3) The Normal
Retirement Age provision of Section 5.01 is effective for Plan Years beginning
after August 31, 1991. (4) The distribution provision under Section 6.05 is
effective for Plan Years beginning after August 31, 1993.
1.16 "Plan Entry Date" means the dates prescribed by Section 2.01.
1.17 "Accounting Date" is the last day of the Plan Year. Unless otherwise
specified in the Plan, the Administrative Committee will make all Plan
allocations for a particular Plan Year as of the Accounting Date of that Plan
Year.
1.18 "Trust" means the separate Trust created under the Plan.
1.19 "Trust Fund" means all property of every kind held or acquired by the
Trustee under the Plan. This Plan creates a single Trust for all Employers
participating under the Winnebago Industries, Inc. Employees' Stock Bonus Plan.
However, the Trustee will maintain separate records of account in order to
reflect property each Participant's Accrued Benefit derived from each
participating Employer.
1.20 "Nontransferable Annuity" means an annuity which by its terms provides
that it may not be sold, assigned, discounted, pledged as collateral for a loan
or security for the performance of an obligation or for any purpose to any
person other than the insurance company If the Plan distributes an annuity
contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.22 "Code" means the Internal Revenue Code of 1986, as amended.
1.23 "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of absence
authorized by the Employer under a uniform, nondiscriminatory policy applicable
to all Employees. "Separation from Service" means the Employee no longer has an
employment relationship which the Employer maintaining this Plan.
1.24 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Administrative Committee
credits Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties, irrespective
of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Administrative Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(s) to
which the award or the agreement pertains rather than for the computation
period in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during a
computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Administrative Committee will credit no more than 501
Hours of Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single computation
period). The Administrative Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. 2530.200b-2, which the Plan, by this reference, specifically
incorporates in full within this paragraph (c).
The Administrative Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.24 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the
Administrative Committee is measuring an Employee's Hours of Service. The
Administrative Committee will resolve any ambiguity with respect to the
crediting of an Hour of Service in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer will credit every
Employee with Hours of Service on the basis of the "actual" method. For purposes
of the Plan, "actual" method means the determination of Hours of Service from
records of hours worked and hours for which the Employer makes payment or for
which payment is due from the Employer.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Administrative Committee must credit Hours of Service during an Employee's
unpaid absence period due to maternity or paternity leave. The Administrative
Committee considers an Employee on maternity or paternity leave if the
Employee's absence is due to the Employee's pregnancy, the birth of the
Employee's child, the placement with the Employee of an adopted child, or the
care of the Employee's child immediately following the child's birth or
placement. The Administrative Committee credits Hours of Service under this
paragraph on the basis of the number of Hours of Service the Employee would
receive if he were paid during the absence period or, if the Administrative
Committee cannot determine the number of Hours of Service the Employee would
receive, on the basis of 8 hours per day during the absence period. The
Administrative Committee will credit only the number (not exceeding 501) of
Hours of Service necessary to prevent an Employee's Break in Service. The
Administrative Committee credits all Hours of Service described in this
paragraph to the computation period in which the absence period begins or, if
the Employee does not need these Hours of Service to prevent a Break in Service
in the computation period in which his absence period begins, the Administrative
Committee credits these Hours of Service to the immediately following
computation period.
1.25 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Administrative Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Administrative Committee determines the
Participant satisfies the definition of disability. The Administrative Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Administrative Committee will apply the provisions of
this Section 1.25 in a nondiscriminatory, consistent and uniform manner.
1.26 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the plan
of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code ss.414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code ss.414(c))
or an affiliated service group (as defined in Code ss.414(m) or in Code
ss.414(o)). If the Employer is a member of a related group, the term "Employer"
includes the related group members for purposes of crediting Hours of Service,
determining Years of Service and Breaks in Service under Articles II and V,
applying the limitations on allocations in Part 2 of Article III, applying the
top heavy rules and the minimum allocation requirements of Article III, the
definitions of Employee, Highly Compensated Employee, Compensation and Leased
Employee, and for any other purpose required by the applicable Code section or
by a Plan provision. However, only an Employer described in Section 1.02 may
contribute to the Plan and only an Employee employed by an Employer described in
Section 1.02 is eligible to participate in this Plan. For Plan allocation
purposes, "Compensation" does not include Compensation received from a related
employer that is not participating in this Plan.
1.28 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of
the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
ss.144(a)(3)) on a substantially full time basis for at least one year and who
performs services historically performed by employees in the Employer's business
field. If a Leased Employee is treated as an Employee by reason of this Section
1.28, "Compensation" includes Compensation from the leasing organization which
is attributable to services performed for the Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code ss.415(c)(3) plus elective contributions (as
defined in Section 1.10).
(B) OTHER REQUIREMENTS. The Administrative Committee must apply this Section
1.28 in a manner consistent with Code ss.ss.414(n) and 414(o) and the
regulations issued under those Code sections. The Administrative Committee will
reduce a Leased Employee's allocation of Employer contributions under this Plan
by the Leased Employee's allocation under the leasing organization's plan, but
only to the extent that allocation is attributable to the Leased Employee's
service provided to the Employer.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio is
a fraction, the numerator of which is the sum of the present value of Accrued
Benefits of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees. The Administrative
Committee must include in the top heavy ratio, as part of the present value of
Accrued Benefits, any contribution not made as of the Determination Date but
includible under Code ss.416 and the applicable Treasury regulations, and
distributions made within the Determination Period. The Administrative Committee
must calculate the top heavy ratio by disregarding the Accrued Benefit (and
distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was
formerly a Key Employee, and by disregarding the Accrued Benefit (including
distributions, if any, of the Accrued Benefit) of an individual who has not
received credit for at least one Hour of Service with the Employer during the
Determination Period. The Administrative Committee must calculate the top heavy
ratio, including the extent to which it must take into account distributions,
rollovers and transfers, in accordance with Code ss.416 and the regulations
under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Administrative Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Administrative Committee must take into
account distributions to a Participant, the Administrative Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Administrative Committee will calculate the present value of Accrued
Benefits under defined benefit plans or simplified employee pension plans
included within the group in accordance with the terms of those plans, Code
ss.416 and the regulations under that Code section. If a Participant in a
defined benefit plan is a Non-Key Employee, the Administrative Committee will
determine his Accrued Benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by the Employer or,
if there is no uniform method, in accordance with the slowest accrual rate
permitted under the fractional rule accrual method described in Code
ss.411(b)(1)(C). To calculate the present value of benefits from a defined
benefit plan, the Administrative Committee will use the actuarial assumptions
(interest and mortality only) prescribed by the defend benefit plan(s) to value
benefits for top heavy purposes. If an aggregated plan does not have a valuation
date coinciding with the Determination Date, the Administrative Committee must
value the Accrued Benefits in the aggregated plan as of the most recent
valuation date falling within the twelve-month period ending on the
Determination Date, except as Code ss.416 and applicable Treasury regulations
require for the first and second plan year of a defined benefit plan. The
Administrative Committee will calculate the top heavy ratio with reference to
the Determination Dates that fall within the same calendar year.
DEFINITIONS. For purposes of applying the provisions of this Section 1.29:
(a) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year in
the Determination Period: (i) has Compensation in excess of 50% of the
dollar amount prescribed in Code ss.415(b)(1)(A) (relating to defined
benefit plans) and is an officer of the Employer; (ii) has Compensation in
excess of the dollar amount prescribed in Code ss.415(c)(1)(A) (relating to
defined contribution plans) and is one of the Employees owning the ten
largest interests in the Employer; (iii) is a more than 5% owner of the
Employer; or (iv) is a more than 1% owner of the Employer and has
Compensation of more than $150,000. The constructive ownership rules of
Code ss.318 (or the principles of that section, in the case of an
unincorporated Employer,) will apply to determine ownership in the
Employer. The number of officers taken into account under clause (i) will
not exceed the greater of 3 or 10% of the total number (after application
of the Code ss.414(q) exclusions) of Employees, but no more than 50
officers. The Administrative Committee will make the determination of who
is a Key Employee in accordance with Code ss.416(i)(1) and the regulations
under that Code section.
(b) "Non-Key Employee" is an employee who does not meet the definition of
Key Employee.
(c) "Compensation" means Compensation as determined under Section 1.07 for
purposes of identifying Highly Compensated Employees.
(d) "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates at any time during
the Determination Period; and (2) any other qualified plan of the Employer
which enables a plan described in clause (1) to meet the requirements of
Code ss.401(a)(4) or of Code ss.410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group plus
any other qualified plans maintained by the Employer, but only if such
group would satisfy in the aggregate the requirements of Code ss.401(a)(4)
and of Code ss.410. The Administrative Committee will determine the
Permissive Aggregation Group.
(f) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the Plan, the
Accounting Date of that Plan Year. The "Determination Period" is the
five-year period ending on the Determination Date.
1.30 "Employer Securities" means common stock issued by the Employer, or by
a corporation which is a member of the same controlled group of corporations.
1.31 "Plan Maintained By More Than One Employer."
(a) TREATMENT OF EMPLOYERS. If more than one employer maintains this Plan,
then for purposes of determining Service and Hours of Service, the
Administrative Committee will treat all Employers maintaining this Plan as
a single employer.
(b) PLAN ALLOCATIONS. The Administrative Committee must allocate all
Employer contributions and forfeitures to each Participant in the Plan, in
accordance with Article III, without regard to which contributing Employer
employs the Participant. A Participant's Compensation includes Compensation
from all participating Employers, irrespective of which Employers are
contributing to the Plan.
* * * * * * * * * * *
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan on the
Plan Entry Date (if employed on that date) immediately following the date on
which he completes one Year of Service. "Plan Entry Date" means the Effective
Date and March 1, June 1, September 1, and December 1. Each Employee who was a
Participant in the Plan on the day before the Effective Date of this restated
Plan continues as a Participant in the Plan.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan takes into account all of
his Years of Service with the Employer. "Year of Service" means an eligibility
computation period during which the Employee completes not less than 1,000 Hours
of Service. The initial eligibility computation period is the first 12
consecutive month period measured from the Employment Commencement Date. The
Plan measures subsequent periods by reference to the Plan Year, beginning with
the Plan Year which includes the first anniversary of the Employee's Employment
Commencement Date. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in the
Plan, the Plan does apply any Break in Service rule.
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment with
the Employer terminates will reenter the Plan as a Participant on the date of
his reemployment. An Employee who satisfies the Plan's eligibility conditions
but who terminates employment with the Employer prior to becoming a Participant
will become a Participant on the later of the Plan Entry Date on which he would
have entered the Plan had he not terminated employment or the date of his
reemployment. Any Employee who terminates employment prior to satisfying the
Plan's eligibility conditions becomes a Participant in accordance with the
provisions of Section 2.01.
* * * * * * * * * * *
ARTICLE: III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
Part 1. Amount of Employer Contributions and Plan Allocations: Sections 3.01
through 3.06
3.01 AMOUNT. For each Plan Year, the Employer will contribute to the Trust
the amount which the Employer may from time to time deem advisable. The Employer
may contribute to this Plan irrespective of whether it has net profits. The
Employer intends the Plan to be a stock bonus plan for all purposes of the Code.
The Employer may not make a contribution to the Trust for any Plan Year to the
extent the contribution would exceed the Participants' Maximum Permissible
Amounts. See Part 2 of this Article III.
The Employer contributes to this Plan on the condition its contribution is
not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's contribution
made by the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code ss.404. The Trustee will not
return any portion of the Employer's contribution under the provisions of this
paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only to
the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution
for each Plan Year in one or more installments without interest. The Employer
must make its contribution to the Plan within the time prescribed by the Code or
applicable Treasury regulations. Subject to the consent of the Trustee, the
Employer may make its contribution in property (including Employer Securities)
rather than cash, provided the contribution of property is not a prohibited
transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. The Administrative Committee will allocate and credit
each annual Employer contribution (and Participant forfeitures, if any) to the
Account of each Participant who satisfies the conditions of Section 3.06. The
Administrative Committee will allocate the annual Employer contributions (and
Participant forfeitures, if any) in the same ratio that each Participant's
number of Years of Service (as defined under Section 5.06) completed as of the
last day of the Plan Year bears to the total number of Years of Service
completed by all Participants as of the last day of the Plan Year. In
determining the number of Years of Service a Participant accumulated as of
August 31, 1992, Years of Service means "Full Years of Continuous Service" as
defined in the Plan prior to this restatement.
(B) TOP HEAVY MINIMUM ALLOCATION.
(1) MINIMUM ALLOCATION. If the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed by the
Employer on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether he
satisfies the Hours of Service condition under Section 3.06; and
(b) The top heavy minimum allocation is the lesser of 3% of the Non-Key
Employee's Compensation for the Plan Year or the highest contribution
rate for the Plan Year made on behalf of any Key Employee. However, if
a defined benefit plan maintained by the Employer which benefits a Key
Employee depends on this Plan to satisfy the antidiscrimination rules
of Code ss.401(a)(4) or the coverage rules of Code ss.410 (or another
plan benefiting the Key Employee so depends on such defined benefit
plan), the top heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key Employees.
(2) SPECIAL DEFINITIONS. For purposes of clause (1)(b), "Compensation"
means Compensation as defined in Section 1.10, except: (i) Compensation
does not include elective contributions; (ii) any exclusions from
Compensation (other than the exclusion of elective contributions and the
exclusions described in paragraphs (a), (b), (c) and (d) of Section 1.10)
do not apply; and (iii) any modification to the definition of Compensation
in Section 3.06 does not apply.
(3) DETERMINING CONTRIBUTION RATES. For purposes of this Section 3.04(B), a
Participant's contribution rate is the sum of Employer contributions (not
including Employer contributions to Social Security) and forfeitures
allocated to the Participant's Account for the Plan Year divided by his
Compensation for the entire Plan Year. However, for purposes of satisfying
a Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, a Participant's contribution rate does not include any
elective contributions under a Code ss.401(k) arrangement nor any Employer
matching contributions necessary to satisfy the nondiscrimination
requirements of Code ss.401(k) or of Code ss.401(m). To determine a
Participant's contribution rate, the Administrative Committee must treat
all qualified top heavy defined contribution plans maintained by the
Employer (or by any related Employers described in Section 1.27) as a
single plan.
(4) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Key Employee, the Plan does
not require any top heavy minimum allocation for the Plan Year, unless a
top heavy minimum allocation applies because of the maintenance by the
Employer of more than one plan.
(5) METHOD OF COMPLIANCE. The Plan will satisfy the top heavy minimum
allocation in accordance with this Section 3.04(B)(5). The Employer
guarantees the top heavy minimum allocation in the Winnebago Industries,
Inc. Profit Sharing and Deferred S&I Plan it maintains. This Plan does not
provide the top heavy minimum allocation. However, the Employer will
contribute an additional amount for the Account of any Participant who is
entitled under this Section 3.04(B) to a top heavy minimum allocation but
who is not a Participant in the Winnebago Industries, Inc. Profit Sharing
and Deferred S&I Plan, if that Participant's contribution rate for the Plan
Year is less than the top heavy minimum allocation. The additional amount
is the amount necessary to increase the Participant's contribution rate to
the top heavy minimum allocation. The Administrative Committee will
allocate the additional contribution to the Account of the Participant on
whose behalf the Employer makes the contribution.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant forfeiture. Subject to any restoration
allocation required under Section 9.14, the Administrative Committee will
allocate a Participant forfeiture in accordance with Section 3.04, as an
Employer contribution for the Plan Year in which the forfeiture occurs, as if
the Participant forfeiture were an additional Employer contribution for that
Plan Year. The Administrative Committee will continue to hold the undistributed,
non-vested portion of a terminated Participant's Accrued Benefit in his Account
solely for his benefit until a forfeiture occurs at the time specified in
Section 5.09, or, if applicable, until the time specified in Section 9.14.
Except as provided under Section 5.04, a Participant will not share in the
allocation of a forfeiture of any portion of his Accrued Benefit. In making a
forfeiture allocation under this Section 3.05, the Administrative Committee,
shall base forfeitures of Employer Securities upon the fair market value of the
Employer Securities as of the Accounting Date of the forfeitures.
3.06 ACCRUAL OF BENEFIT. The Administrative Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year.
(A) COMPENSATION TAKEN INTO ACCOUNT. [Reserved]
(B) HOURS OF SERVICE REQUIREMENT. Subject to the top heavy minimum allocation
requirement of Section 3.04(B), the Administrative Committee will not allocate
any portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete a minimum of 1,000 Hours of Service
during the Plan Year, unless the Participant terminates employment during the
Plan Year because of death or disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan Year.
(C) EMPLOYMENT REQUIREMENT. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under this Section 3.06 will share in
the allocation of Employer contributions and Participant forfeitures, if any,
for that Plan Year only if employed by the Employer on the Accounting Date of
that Plan Year, unless the Participant terminates employment during the Plan
Year because of death or disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan Year.
(D) SUSPENSION OF ACCRUAL REQUIREMENTS. [Reserved]
Part 2. Limitations on Allocations: Sections 3.07 and 3.08
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount of
Annual Additions which the Administrative Committee may allocate under this Plan
on a Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce the amount of
its contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.07(B)) to the
Participant's Account, the Administrative Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Administrative Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account otherwise
would receive the Excess Amount is not eligible for an allocation of Employer
contributions.
(A) ESTIMATION OF COMPENSATION. Prior to the determination of the Participant's
- - actual Compensation for a Limitation Year, the Administrative Committee may
determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Administrative
Committee must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Administrative Committee must reduce any
Employer contributions (including any allocation of forfeitures) based on
estimated annual Compensation by any Excess Amount carried over from prior
years. As soon as is administratively feasible after the end of the Limitation
Year, the Administrative Committee will determine the Maximum Permissible Amount
for such Limitation Year on the basis of the Participant's actual Compensation
for such Limitation Year.
(B) DISPOSITION OF EXCESS AMOUNT. If, pursuant to Section 3.07(A), or because of
the allocation of forfeitures, there is an Excess Amount with respect to a
Participant for a Limitation Year, the Administrative Committee will dispose of
such Excess Amount as follows:
(a) The Administrative Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return would
reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Administrative Committee will use the Excess Amount(s) to
reduce future Employer contributions (including any allocation of
forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. The
Participant may elect to limit his Compensation for allocation purposes to
the extent necessary to reduce his allocation for the limitation Year to
the Maximum Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Administrative Committee will hold the Excess
Amount unallocated in a suspense account. The Administrative Committee will
apply the suspense account to reduce Employer Contributions (including
allocation of forfeitures) for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year if necessary.
Neither the Employer nor any Employee may contribute to the Plan for any
Limitation Year in which the Plan is unable to allocate fully a suspense
account maintained pursuant to this paragraph (c).
(d) The Administrative Committee will not distribute any Excess Amount(s)
to Participants or to former Participants.
(C) MORE THAN ONE PLAN. The Employer contributes under a 401(k) profit sharing
plan in addition to its contributions under this Plan. If the Administrative
Committee allocated an Excess Amount to a Participant's Account on an allocation
date of this Plan which coincides with an allocation date of the 401(k) profit
sharing plan, the Administrative Committee will attribute the total Excess
Amount allocated as of such date to the 401(k) profit sharing plan.
(D) DEFINED BENEFIT PLAN LIMITATION. The Employer does not maintain and never
has maintained a defined benefit plan covering any Participant in this Plan.
Accordingly, a special defined plan limitation does not apply under this Plan.
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III, the following
terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year: (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee contributions.
Except to the extent provided in Treasury regulations, Annual Additions
include excess contributions described in Code ss.401(k), excess aggregate
contributions described in Code ss.401(m) and excess deferrals described in
Code ss.402(g), irrespective of whether the plan distributes or forfeits
such excess amounts. Annual Additions also include Excess Amounts reapplied
to reduce Employer contributions under Section 3.07. Amounts allocated
after March 31, 1984, to an individual medical account (as defined in Code
ss.415(1)(2)) included as part of a defined benefit plan maintained by the
Employer are Annual Additions. Furthermore, Annual Additions include
contributions paid or accrued after December 31, 1985, for taxable years
ending after December 31, 1985, attributable to postretirement medical
benefits allocated to the separate account of a key employee (as defined in
Code ss.419A(d)(3)) under a welfare benefit fund (as defined in Code
ss.419(e)) maintained by the Employer, but only for purposes of the dollar
limitation applicable to the Maximum Permissible Amount.
(b) "Compensation - For purposes of applying the limitations of Part 2 of
this Article III, "Compensation" means Compensation as defined in Section
1.10, except Compensation does not include elective contributions and any
exclusion from Compensation (other than the exclusion of elective
contributions and the exclusions described in paragraphs (a), (b), (c) and
(d) of Section 1.10) does not apply.
(c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
ss.415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for the
Limitation Year. If there is a short Limitation Year because of a change in
Limitation Year, the Administrative Committee will multiply the $30,000
limitation (or larger limitation) by the following fraction:
Number of months in the short Limitation Year
12
(d) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.27. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Administrative Committee
will determine related employers described in Section 1.27 by modifying
Code ss.414(b) and (c) in accordance with Code ss.415(h).
(e) "Excess Amount" - The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(f) "Limitation Year" - The Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for which
the Employer makes the amendment, creating a short Limitation Year.
(g) "Defined contribution plan" - A retirement plan which provides for an
individual account for each participant and for benefits based solely on
the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account. The
Administrative Committee must treat all defined contribution plans (whether
or not terminated) maintained by the Employer as a single plan. Solely for
purposes of the limitations of Part 2 of this Article III, the
Administrative Committee will treat employee contributions made to a
defined benefit plan maintained by the Employer as a separate defined
contribution plan. The Administrative Committee also will treat as a
defined contribution plan an individual medical account (as defined in Code
ss.415(1)(2)) included as part of a defined benefit plan maintained by the
Employer and, for taxable years ending after December 31, 1985, a welfare
benefit fund under Code ss.419(e) maintained by the Employer to the extent
there are postretirement medical benefits allocated to the separate account
of a key employee (as defined in Code ss.419A(d)(3)).
(h) "Defined benefit plan" - A retirement plan which does not provide for
individual accounts for Employer contributions. The Administrative
Committee must treat all defined benefit plans (whether or not terminated)
maintained by the Employer as a single plan.
* * * * * * * * * * *
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit nor
require Participant voluntary contributions.
4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS. The Plan does not permit
Participant rollover contributions.
* * * * * * * * * * *
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 62
years of age. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment with
the Employer terminates as a result of death or disability, the Participant's
Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable.
5.03 VESTING SCHEDULE.
(A) VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for each
Year of Service, a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions equals the percentage in the
following vesting schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
Less than 2 ............................................. None
2 .................................................. 20%
3 .................................................. 40%
4 .................................................. 60%
5 .................................................. 80%
6 or more .......................................... 100%
(B) SPECIAL VESTING SCHEDULE. If the Trustee makes a distribution (other than a
cash-out distribution described in Section 5.04) to a partially-vested
Participant, and the Participant has not incurred a Forfeiture Break in Service
at the relevant time, the Administrative Committee will establish a separate
Account for the Participant's Accrued Benefit. At any relevant time following
the distribution, the Administrative Committee will determine the Participant's
Nonforfeitable Accrued Benefit derived from Employer contributions in accordance
with the following formula: P(AB + (R x D)) - (R x D)
To apply this formula, "P" is the Participant's current vesting percentage
at the relevant time, "AB" is the Participant's Employer-derived Accrued Benefit
at the relevant time, "R" is the ratio of "AB" to the Participant's
Employer-derived Accrued Benefit immediately following the earlier distribution
and "D" is the amount of the earlier distribution. If, under a restated Plan,
the Plan has made distribution to a partially-vested Participant prior to its
restated Effective Date and is unable to apply the cash-out provisions of
Section 5.04 to that prior distribution, this special vesting formula also
applies to that Participant's remaining Account.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS RESTORATION OF
FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture Break
in Service (as defined in Section 5.08), the cash-out distribution will result
in an immediate forfeiture of the nonvested portion of the Participant's Accrued
Benefit derived from Employer contributions. See Section 5.09. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Administrative Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code ss.4.11(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations. The Administrative
Committee will not restore a re-employed Participant's Accrued Benefit under
this paragraph if:
(1) Five years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined in
Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break in
Service and that Forfeiture Break in Service would result in a complete
forfeiture of the amount the Administrative Committee other vise would
restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Administrative
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Administrative Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the
Administrative Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain for
the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent made
under a discretionary formula.
To the extent the amounts described in Clauses (1), (2), and (3) are
insufficient to enable the Administrative Committee to make the required
restoration, the Employer must contribute, without regard to any requirement or
condition of Section 3.01, the additional amount necessary to enable the
Administrative Committee to make the required restoration. If, for a particular
Plan Year, the Administrative Committee must restore the Accrued Benefit of more
than one re-employed Participant, then the Administrative Committee will make
the restoration allocation(s) to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed Participants. The
Administrative Committee will not take into account the allocation under this
Section 5.04 in applying the limitation on allocations under Part 2 of Article
III.
(C) 0% VESTED PARTICIPANT. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. If the Participant's Account is not entitled to an
allocation of Employer contributions or Participant forfeitures for the Plan
Year in which he has a Separation from Service, the Advisory Committee will
apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the date of the Participant's Separation from Service.
If the Participant's Account is entitled to an allocation of Employer
contributions or Participant forfeitures for the Plan Year in which he has a
Separation from Service, the Advisory Committee will apply the deemed cash-out
rule as if the 0% vested Participant received a cash-out distribution on the
first day of the first Plan Year beginning after his Separation from Service.
For Purposes of applying the restoration provisions of this Section 5.04, the
Advisory Committee will treat the 0% vested Participant as repaying his cash-out
"distribution" on the first date of his re-employment with the Employer.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. The Trustee shall invest the
cash-out amount the Participant has repaid in a segregated Account maintained
solely for that Participant. The Trustee must invest the amount in the
Participant's segregated Account in Federally insured interest bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. Until commingled with the balance of the Trust Fund on the
date the Administrative Committee directs, the Participant's segregated Account
remains a part of the Trust, but it alone shares in any income it earns and it
alone bears any expense or loss it incurs. The Administrative Committee will
direct the Trustee to repay to the Participant as soon as is administratively
practicable the full amount of the Participant's segregated Account if the
Administrative Committee determines either of the conditions of Section 5.04(A)
prevents restoration as of the applicable Accounting Date, notwithstanding the
Participant's repayment. The Administrative Committee shall direct the Trustee
to commingle the Participant's segregated account with the balance of the Trust
Fund as of the second Accounting Date immediately following the date of the
Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section 5.03,
Year of Service means any Plan Year during which an Employee completes not less
than 1,000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
5.08 INCLUDED YEARS OF SERVICE - VESTING.
(A) INCLUDED YEARS OF SERVICE. For purposes of determining "Years of Service"
under Section 5.06, the Plan takes into account all Years of Service an Employee
completes with the Employer.
(B) FORFEITURE BREAK IN SERVICE. For the sole purpose of determining a
Participant's Nonforfeitable percentage of his Accrued Benefit derived from
Employer contributions which accrued for his benefit prior to a Forfeiture Break
in Service, the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs five consecutive Breaks in Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his Accrued
Benefit derived from Employer contributions occurs under the Plan on the earlier
of:
(a) The last day of the Plan Year in which the Participant first incurs a
Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Administrative Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant will not forfeit any
portion of his Accrued Benefit for any other reason or cause except as expressly
provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * * *
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section 6.03,
the Participant or the Beneficiary elects in writing to a different time or
method of payment, the Administrative Committee will direct the Trustee to
commence distribution of a Participant's Nonforfeitable Accrued Benefit in
accordance with this Section 6.01. A Participant must consent, in writing, to
any distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution to
the Participant, exceeds $3,500 and the Participant has not attained Normal
Retirement Age. A distribution date under this Article VI, unless otherwise
specified within the Plan, is every day of the Plan Year or as soon as
administratively practicable following a distribution date. For purposes of the
consent requirements under this Article VI, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $3,500, the Administrative Committee must treat that present value as
exceeding $3,500 for purposes of all subsequent Plan distributions to the
Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500. If
the Participant's Separation from Service is for any reason other than death,
the Administrative Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum, no later than the
first administratively practicable distribution date following the Participant's
Separation from Service, but in no event later than the 60th day following the
close of the Plan Year in which the Participant attains Normal Retirement Age.
If the Participant has attained Normal Retirement Age when he separates from
Service, the distribution under this paragraph will occur no later than the 60th
day following the close of the Plan Year in which the Participant's Separation
from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If the
Participant's Separation from Service is for any reason other than death, the
Administrative Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a form and at the time elected by the
Participant, pursuant to Section 6.03. In the absence of an election by the
Participant, the Administrative Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in a lump sum on the 60th day
following the close of the Plan Year in which the later of the following events
occurs: (a) the Participant attains Normal Retirement Age; or (b) the
Participant separates from Service.
(3) DISABILITY. If the Participant's Separation from Service is because of
disability, the Administrative Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, on the first
administratively practicable distribution date beginning after the Participant's
Separation from Service, subject to the notice and consent requirements of this
Article VI and to the applicable mandatory commencement dates described in
paragraph (1) or in paragraph (2).
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Administrative Committee instead must direct the Trustee to
make distribution on the Participant's Required Beginning Date. A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988,
and, for the five Plan Year period ending in the calendar year in which he
attained age 70 1/2 and for all subsequent years, the Participant was not a more
than 5% owner, the Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant separates from Service or, if
earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who was
not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date
was April 1, 1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum unless the Participant, pursuant to the
provisions of this Article VI, makes a valid election to receive an alternative
form of payment.
(C) DEATH OF THE PARTICIPANT. The Administrative Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT EXCEED
$3,500. The Administrative Committee must direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit in a single sum, as soon
as administratively practicable following the Participant's death or, if later,
the date on which the Administrative Committee receives notification of or
otherwise confirms the Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
The Administrative Committee will direct the Trustee to distribute the deceased
Participant's Nonforfeitable Accrued Benefit at the time and in the form elected
by the Participant or, if applicable by the Beneficiary, as permitted under this
Article VI. In the absence of an election the Administrative Committee will
direct the Trustee to distribute the Participant's undistributed Nonforfeitable
Accrued Benefit in a lump sum on the first distribution date following the close
of the Plan Year in which the Participant's death occurs or, if later, the first
distribution date following the date the Administrative Committee receives
notification of or otherwise confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form this
Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. A Participant or Beneficiary may
elect distribution only by payment in a lump sum. See Section 10.08.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Administrative
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code ss.401(a)(9) and the applicable Treasury
regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code ss.401(a)(9)regulations).
TheAdministrative Committee will increase the Participant's Nonforfeitable
Accrued Benefit, as determined on the relevant valuation date, for contributions
or forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by distributions made
after the valuation date and by December 31 of the valuation calendar year. For
purposes of this valuation, the Administrative Committee will treat any portion
of the minimum distribution for the first distribution calendar year made after
the close of that year as a distribution occurring in that first distribution
calendar year. In computing a minimum distribution, the Administrative Committee
must use the unisex life expectancy multiples under Treas. Reg. ss.1.72-9. The
Administrative Committee, only upon the Participant's written request, will
compute the minimum distribution for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Administrator
Committee may not redetermine the joint life and last survivor expectancy of the
Participant and a nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the Participant s life
expectancy.
If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Administrative
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code ss.401(a)(9) for distributions made on or
after the Participant's Required Beginning Date and before the Participant's
death. To satisfy the MDIB requirement, the Administrative Committee will
compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Administrative Committee will compute the minimum distribution
required by this Section 6.02(A) solely on the basis of the applicable life
expectancy factor and will disregard the MDIB factor. For Plan Years beginning
prior to January 1, 1989, the Plan satisfies the incidental benefits requirement
if the distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries. The Administrative Committee must determine
whether benefits to the Beneficiary are incidental as of the date the Trustee is
to commence payment of the retirement benefits to the Participant, or as of any
date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due by
the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date falls, is due by December 31 of that year.
If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code ss.401(a)(9) and the applicable
Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9) and
the applicable Treasury regulations. If the Participant's death occurs after his
Required Beginning Date, the method of payment to the Beneficiary must provide
for completion of payment over a period which does not exceed the payment period
which had commenced for the Participant. If the Participant's death occurs prior
to his Required Beginning Date, the method of payment to the Beneficiary must
provide for completion of payment to the Beneficiary over a period not
exceeding: (i) Five years after the date of the Participant's death; or (ii) if
the Beneficiary is a designated Beneficiary, the designated Beneficiary's life
expectancy. The Administrative Committee may not direct payment of the
Participant's Nonforfeitable Accrued Benefit over a period described in clause
(ii) unless the Trustee will commence payment to the designated Beneficiary no
later than the December 31 following the close of the calendar year in which the
Participant's death occurred or, if later, and the designated Beneficiary is the
Participant's surviving spouse, December 31 of the calendar year in which the
Participant would have attained age 70 1/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum distribution for a
calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the
latest valuation date preceding the beginning of the calendar year divided by
the designated Beneficiary's life expectancy. The Administrative Committee must
use the unisex life expectancy multiples under Treas. Reg. ss.1.72-9 for
purposes of applying this paragraph. The Administrative Committee will not
recalculate the life expectancy of any Beneficiary, including the Participant's
surviving spouse. The Administrative Committee will apply this paragraph by
treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Administrative Committee must direct the Trustee to
accelerate payment of all, or any portion, of the Participant's unpaid Accrued
Benefit, as soon as administratively practicable following the effective date of
that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's distribution date, the Administrative
Committee must provide a benefit notice to a Participant who is eligible to make
an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan. including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains Normal Retirement Age.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Administrative Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
election. Any election under this Section 6.03 is subject to the requirements of
Section 6.02. The Participant or Beneficiary must make an election under this
Section 6.03 by filing his election form with the Administrative Committee at
any time before the Trustee otherwise would commence to pay a Participant's
Accrued Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value of
a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect to
have the Trustee commence distribution as of any distribution date, but not
earlier than the first administratively practicable distribution date beginning
after the Participant's Separation from Service. The Participant may reconsider
an election at any time prior to the stated distribution date and elect to
commence distribution as of any other distribution date, but not earlier than
the first administratively practicable distribution date beginning after the
Participant's Separation from Service.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. During his
employment with the Employer, the Participant does not have any right to
commence distribution of his Nonforfeitable Accrued Benefit for any reason,
unless required by Section 6.01(B).
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's Beneficiary may
elect to have the Trustee distribute the Participant's Nonforfeitable Accrued
Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.
6.04 ANNUALLY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The
joint and survivor annuity requirements of the Code do not apply to this Plan.
The Plan does not provide any life annuity distributions to Participants. A
transfer agreement described in Section 13.05 may not permit a plan which is
subject to the provisions of Code ss.417 to transfer assets to this Plan.
6.05 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the
Administrative Committee, from complying with the provisions of a qualified
domestic relations order (as defined in Code ss.414(p)). This Plan specifically
permits distribution to an alternate payee under a qualified domestic relations
order at any time, irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code ss.414(p)) under the Plan. A
distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (1) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $3,500, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.05 gives a Participant a right to receive distribution at a time
otherwise not permitted under the Plan nor does it permit the alternate payee to
receive a form of payment not otherwise permitted under the Plan.
The Administrative Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Administrative Committee promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Administrative Committee must determine the
qualified status of the order and must notify the Participant and each alternate
payee, in writing, of its determination. The Administrative Committee must
provide notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent with
Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Administrative Committee is making its
determination of the qualified status of the domestic relations order, the
Administrative Committee must make a separate accounting of the amounts payable.
If the Administrative Committee determines the order is a qualified domestic
relations order within 18 months of the date amounts first are payable following
receipt of the order, the Administrative Committee will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrative Committee does not make its determination of the qualified status
of the order within the 18 month determination period, the Administrative
Committee will direct the Trustee to distribute the payable amounts in the
manner the Plan would distribute if the order did not exist and will apply the
order prospectively if the Administrative Committee later determines the order
is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Administrative Committee may direct the Trustee to
invest any partitioned amount in a segregated subaccount or separate account and
to invest the account in Federally insured, interest-bearing savings account(s)
or time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated subaccount remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
The Trustee will make any payments or distributions required under this Section
6.05 by separate benefit checks or other separate distribution to the alternate
payee(s).
* * * * * * * * * * *
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current information
to the Administrative Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date of
termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information which
the Administrative Committee considers necessary. The Employer's records as to
the current information the Employer furnishes to the Administrative Committee
are conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to
any of its Employees, Participants or Beneficiaries for any act of, or failure
to act, on the part of its Administrative Committee (unless the Employer is the
Administrative Committee), the Trustee or the Plan Administrator (unless the
Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Administrative Committee,
and each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Administrative Committee, or the members of
the Administrative Committee, may be subjected by reason of any act or conduct
(except willful misconduct or gross negligence) in their official capacities in
the administration of this Trust or Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide such
defense. The indemnification provisions of this Section 7.03 do not relieve the
Plan Administrator or any Administrative Committee member from any liability he
may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan
Administrator and the Administrative Committee members and the Employer may
execute a letter agreement further delineating the indemnification agreement of
this Section 7.03, provided the letter agreement must be consistent with and
must not violate ERISA. The indemnification provisions of this Section 7.03
extend to the Trustee solely to the extent provided by a letter agreement
executed by the Trustee and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to direct
the Trustee with respect to the investment and reinvestment of assets comprising
the Trust Fund only if the Trustee consents in writing to permit such direction.
If the Trustee consents to Employer direction of investment, the Trustee and the
Employer must execute a letter agreement as a part of this Plan containing such
conditions, limitations and other provisions they deem appropriate before the
Trustee will follow any Employer direction as respects the investment or
re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right
to amend the vesting schedule at any time, the Administrative Committee will not
apply the amended vesting schedule to reduce the Nonforfeitable percentage of
any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule, each
Participant having at least Three Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least Five Years of Service with the Employer. The
Participant must file his election with the Administrative Committee within 60
days of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt of a copy of the amendment.
The Administrative Committee, as soon as practicable, must forward a true copy
of any amendment to the vesting schedule to each affected Participant, together
with an explanation of the effect of the amendment, the appropriate form upon
which the Participant may make an election to remain under the vesting schedule
provided under the Plan prior to the amendment and notice of the time within
which the Participant must make an election to remain under the prior vesting
schedule. The election described in this Section 7.05 does not apply to a
Participant if the amended vesting schedule provides for vesting at least as
rapid at all times as the vesting schedule in effect prior to the amendment. For
purposes of this Section 7.05, an amendment to the vesting schedule includes any
Plan amendment which directly or indirectly affects the computation of the
Nonforfeitable percentage of an Employee's rights to his Employer derived
Accrued Benefit.
* * * * * * * * * * *
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit in the event of his
death and the Participant may designate the form and method of payment. The
Administrative Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Administrative
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent. The spousal
consent requirements of this paragraph do not apply if: (1) the Participant and
his spouse are not married throughout the one-year period ending on the date of
the Participant's death; (2) the Participant's spouse is the participant's sole
primary beneficiary; (3) the Plan Administrator is not able to locate the
Participant's spouse; (4) the Participant is legally separated or has been
abandoned (within the meaning of State law) and the Participant has a court
order to that effect; or (5) other circumstances exist under which the Secretary
of the Treasury will excuse the consent requirement. If the Participant's spouse
is legally incompetent to give consent, the spouse's legal guardian (even if the
guardian is the Participant) may give consent.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02
in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in
equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Administrative Committee will direct the Trustee as to the method
and to whom the Trustee will make payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Administrative Committee such evidence,
data or information as the Administrative Committee considers necessary or
desirable for the purpose of administering the Plan. The provisions of this Plan
are effective for the benefit of each Participant upon the condition precedent
that each Participant will furnish promptly full, true and complete evidence,
data and information when requested by the Administrative Committee, provided
the Administrative Committee advises each Participant of the effect of his
failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Administrative Committee from time to
time, in writing, his post office address and any change of post office address.
Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Administrative
Committee, or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code ss.414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LIMITATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary
may examine copies of the Plan description, latest annual report, any bargaining
agreement, this Plan and Trust, contract or any other instrument under which the
Plan was established or is operated. The Plan Administrator will maintain all of
the items listed in this Section 8.08 in his office, or in such other place or
places as he may designate from time to time in order to comply with the
regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or Beneficiary the Plan
Administrator will furnish him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the requesting
person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Administrative Committee a written
claim for benefits, if the Participant or Beneficiary determines the
distribution procedures of the Plan have not provided him his proper
Nonforfeitable Accrued Benefit. The Administrative Committee must render a
decision on the claim within 60 days of the Claimant's written claim for
benefits. The Plan Administrator must provide adequate notice in writing to the
Claimant whose claim for benefits under the Plan the Administrative Committee
has denied. The Plan Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Administrative Committee based its denial;
(c) A description of any additional material and information needed for the
Claimant to perfect his claim and an explanation of why the material or
information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Administrative Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the Claimant
that his failure to appeal the action to the Administrative Committee in
writing within the 75-day period will render the Administrative Committee's
determination final binding and conclusive.
If the Claimant should appeal to the Administrative Committee, he, or his
duly authorized representative, may submit, in writing whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Administrative Committee will reexamine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Administrative Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Administrative Committee render a decision respecting a denial for a claim
for benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Administrative Committee and the name and address of
the Administrative Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right to
direct the Trustee with respect to the investment or reinvestment of the assets
comprising the Participant's individual Account only if the Trustee consents in
writing to permit such direction. If the Trustee consents to Participant
direction of investment, the Trustee will accept direction from each Participant
on a written election form (or other written agreement), as a part of this Plan,
containing such conditions, limitations and other provisions the parties deem
appropriate. The Trustee or, with the Trustee's consent, the Administrative
Committee, may establish written procedures, incorporated specifically as part
of this Plan, relating to Participant direction of investment under this Section
8.10. The Trustee will maintain a segregated investment Account to the extent a
Participant's Account is subject to Participant self-direction. The Trustee is
not liable for any loss, nor is liable for any breach, resulting from a
Participant's direction of the investment of any part of his directed Account.
* * * * * * * * * * *
ARTICLE IX
ADVISORY COMMITTEE DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION EXPENSES. The Employer must appoint an
Administrative Committee to administer the Plan, the members of which may or may
not be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Administrative Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the
Administrative Committee. The members of the Administrative Committee will serve
without compensation for services as such, but the Employer will pay all
expenses of the Administrative Committee, except to the extent the Trust
properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Administrative Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Administrative
Committee, the remaining members of the Administrative Committee may exercise
any and all of the powers, authority, duties and discretion conferred upon the
Administrative Committee pending the filling of the vacancy.
9.04 GENERAL. The Administrative Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Administrative
Committee;
(b) To determine the rights of eligibility of an Employee to participate in
the Plan, the value of a Participant's Accrued Benefit and the
Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the proper
and efficient administration of the Plan provided the rules are not
inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution of the
Trust;
(f) To review and render decisions respecting a claim for (or denial of a
claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may require
for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to assist it
with the performance of its duties; and
(i) To engage the services of an Investment Manager or Managers (as defined
in ERISA ss.3(38)), each of whom will have full power and authority to
manage, acquire or dispose (or direct the Trustee with respect to
acquisition or disposition) of any Plan asset under its control.
The Administrative Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.05 FUNDING POLICY. The Administrative Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Administrative Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members appointed
and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Administrative Committee may authorize
any one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters or
other documents. The Administrative Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Administrative Committee may
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Administrative Committee
9.09 INDIVIDUAL ACCOUNTS. The Administrative Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple separate
Accounts, in the name of each Participant to reflect the Participant's Accrued
Benefit under the Plan. The Administrative Committee must maintain one Account
designated as the Employer Securities Account to reflect a Participant's
interest in Employer Securities held by the Trust and another Account designated
as the General Investments Account to reflect the Participant's interest in the
Trust Fund attributable to assets other than Employer Securities. If a
Participant reenters the Plan subsequent to his having a Forfeiture Break in
Service (as defined in Section 5.07(B)), the Administrative Committee, or the
Trustee, must maintain a separate Account for the Participant's pre-Forfeiture
Break in Service Accrued Benefit and a separate Account for his post-Forfeiture
Break in Service Accrued Benefit unless the Participant's entire Accrued Benefit
under the Plan is 100% Nonforfeitable.
The Administrative Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Administrative Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Administrative Committee shall maintain
records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account bears to the total net credit balance in the Accounts of all
Participants. For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution.
9.11 ALLOCATION TO PARTICIPANTS' ACCOUNTS. A "valuation date" under this
Plan is each Accounting Date and each interim valuation date determined under
Section 10.14. As of each valuation date the Administrative Committee must
adjust General Investment Accounts to reflect net income, gain or loss since the
last valuation date. The valuation period is the period beginning the day after
the last valuation date and ending on the current valuation date.
[A] EMPLOYER SECURITIES ACCOUNT. As of the Accounting Date of each Plan Year,
the Administrative Committee first will reduce Employer Securities Accounts for
any forfeitures arising under Section 5.09 and then will credit the Employer
Securities Account maintained for each Participant with the Participant's
allocable share of Employer Securities (including fractional shares) purchased
and paid for by the Trust or contributed in kind to the Trust, with any
forfeitures of Employer Securities and with any stock dividends on Employer
Securities allocated to his Employer Securities Account. The Administrative
Committee will base allocations to the Participants' Accounts on dollar values
expressed as shares of Employer Securities or on the basis of actual shares
where there is a single class of Employer Securities. In making a forfeiture
reduction under this Section 9.11, the Administrative Committee, to the extent
possible, first must forfeit from a Participant's General Investments Account
before making a forfeiture from his Employer Securities Account.
[B] GENERAL INVESTMENTS ACCOUNT.
TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant General Investment Accounts other than segregated investment
Accounts. The Administrative Committee first will adjust the Participant General
Investment Accounts, as those Accounts stood at the beginning of the current
valuation period, by reducing the Accounts for any forfeitures arising under
Section 5.09 or under Section 9.14, for amounts charged during the valuation
period to the Accounts in accordance with Section 9.13 (relating to
distributions) and for the amount of any General Investment Account which the
Trustee has fully distributed since the immediately preceding valuation date.
The Administrative Committee then, subject to the restoration allocation
requirements of Section 9.14, will allocate the net income, gain or loss pro
rata to the adjusted Participant General Investment Accounts. The allocable net
income gain or loss is the net income (or net loss), including the increase or
decrease in the fair market value of assets, since the last valuation date. In
making its allocations under this Section 9.11[B], the Administrative Committee
will exclude Employer Securities. The Administrative Committee will include as
income any cash dividends on Employer Securities.
SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives
all income it earns and bears all expense or loss it incurs. As of the valuation
date, the Administrative Committee must reduce a segregated Account for any
forfeiture arising under Section 5.09 after the Administrative Committee has
made all other allocations, changes or adjustments to the Account for the Plan
Year.
ADDITIONAL RULES. An excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11[B]. This Section 9.11[B] applies solely to the
allocation of net income, gain or loss of the Trust. The Administrative
Committee will allocate the Employer contributions and Participant forfeitures,
if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date
of each Plan Year, but within the time prescribed by ERISA and the regulations
under ERISA, the Plan Administrator will deliver to each Participant (and to
each Beneficiary) a statement reflecting the condition of his Accrued Benefit in
the Trust as of that date and such other information ERISA requires be furnished
the Participant or Beneficiary. No Participant, except a member of the
Administrative Committee, has the right to inspect the records reflecting the
Account of any other Participant.
9.13 ACCOUNT CHARGED. The Administrative Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, or to his Beneficiary or to an alternate payee. The Administrative
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Administrative Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Administrative
Committee, by certified or registered mail addressed to his last known address
of record with the Administrative Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Administrative Committee within six months from the date of
mailing of the notice, the Administrative Committee will treat the Participant's
or Beneficiary's unclaimed payable Accrued Benefit as forfeited and will
reallocate the unclaimed payable Accrued Benefit in accordance with Section
3.05. A forfeiture under this paragraph will occur at the end of the notice
period or, if later, the earliest date applicable Treasury regulations would
permit the forfeiture. Pending forfeiture, the Administrative Committee,
following the expiration of the notice period, may direct the Trustee to
segregate the Nonforfeitable Accrued Benefit in a segregated Account and to
invest that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other fixed
income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.14
makes a claim, at any time, for his forfeited Accrued Benefit, the
Administrative Committee must restore the Participant's or Beneficiary's
forfeited Accrued Benefit to the same dollar amount as the dollar amount of the
Accrued Benefit forfeited, unadjusted for any gains or losses occurring
subsequent to the date of the forfeiture. The Administrative Committee will make
the restoration during the Plan Year in which the Participant or Beneficiary
makes the claim, first from the amount, if any, of Participant forfeitures the
Administrative Committee otherwise would allocate for the Plan Year, then from
the amount, if any, of the Trust Fund net income or gain for the Plan Year and
then from the amount, or additional amount, the Employer contributes to enable
the Administrative Committee to make the required restoration. The
Administrative Committee must direct the Trustee to distribute the Participant's
or Beneficiary's restored Accrued Benefit to him not later than 60 days after
the close of the Plan Year in which the Administrative Committee restores the
forfeited Accrued Benefit. The forfeiture provisions of this Section 9.14 apply
solely to the Participant's or to the Beneficiary's Accrued Benefit derived from
Employer contributions.
* * * * * * * * * * *
ARTICLE X
TRUSTEE, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan and
agrees to perform the obligations imposed. The Trustee must provide bond for the
faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer
for the funds contributed to it by the Employer, but does not have any duty to
see that the contributions received comply with the provisions of the Plan. The
Trustee is not obliged to collect any contributions from the Employer, nor is
obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
10.03 FULL INVESTMENT POWERS.
TRUSTEE POWERS. The Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset subject to Employer, Participant or Administrative Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Administrative Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest the Trust Fund primarily in Employer Securities ("primarily"
meaning the authority to hold and to acquire not more than 100% of the
Trust Fund in Employer Securities) and to invest any part or all of the
Trust Fund in any common or preferred stocks, open-end or closed-end mutual
funds, put and call options traded on a national exchange, United States
retirement plan bonds, corporate bonds, debentures, convertible debentures,
commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct
or indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States, limited
partnerships, insurance contracts of any type, mortgages, notes or other
property of any kind, real or personal and to buy or sell options on common
stock on a nationally recognized exchange with or without holding the
underlying common stock, and to make any other investments the Trustee
deems appropriate, as a prudent man would do under like circumstances with
due regard for the purposes of this Plan. Any investment made or retained
by the Trustee in good faith is proper but must be of a kind (with the
exception of Employer Securities) constituting a diversification considered
by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem advisable to
satisfy liquidity needs of the Plan and to deposit any cash held in the
Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial institution
supervised by the United States or by a State, in any type of deposit of
the Trustee (or of a bank related to the Trustee within the meaning of Code
ss.414(b)) at a reasonable rate of interest or in a common trust fund (the
provisions of which govern the investment of such assets and which the Plan
incorporates by this reference) as described in Code ss.584 which the
Trustee (or its affiliate, as defined in Code ss.1504) maintains
exclusively for the collective investment of money contributed by the bank
(or the affiliate) in its capacity as trustee and which conforms to the
rules of the Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Trustee decides.
(e) To credit and distribute the Trust as directed by the Administrative
Committee. The Trustee is not obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making any
payment or distribution. The Trustee is accountable only to the
Administrative Committee for any payment or distribution made by it in good
faith on the order or direction of the Administrative Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and encumber
by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands, in its
discretion.
(h) To vote all voting stock held by the Trust Fund;
(i) To lease for oil, gas and other mineral purposes and to create mineral
severances by grant or reservation; to pool or unitize interests in oil,
gas and other minerals; and to enter into operating agreements and to
execute division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee or
its nominee, with depositories or agent depositories or in another form as
it may deem best, with or without disclosing the trust relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(1) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the
Administrative Committee an annual statement of account showing the
condition of the Trust Fund and all investments, receipts, disbursements
and other transactions effected by the Trustee during the Plan Year covered
by the statement and also stating the assets of the Trust held at the end
of the Plan Year, which accounts are conclusive on all persons, including
the Employer, the Plan Administrator and the Administrative Committee,
except as to any act or transaction concerning which the Employer, the Plan
Administrator or the Administrative Committee files with the Trustee
written exceptions or objections within 90 days after the receipt of the
accounts or for which ERISA authorizes a longer period within which to
object.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not obliged
or required to do so unless indemnified to its satisfaction.
The Trustee will allocate any insurance proceeds received from the purchase
of insurance contracts under paragraph (a) to Participants' Accounts in the same
manner as the allocation under Section 304(A) of the Employer contribution for
the Plan Year in which the death of the insured Participant occurs.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the
Plan must be open to the inspection of the Plan Administrator, Administrative
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or
Administrative Committee may specify in writing. The Trustee must furnish the
Plan Administrator or Administrative Committee with whatever information
relating to the Trust Fund the Plan Administrator or Administrative Committee
considers necessary.
10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. The Trustee will pay all fees and expenses reasonably incurred
by it in its administration of the Plan from the Trust Fund, unless the Employer
pays the fees and expenses. The Administrative Committee will not treat any fee
or expense paid, directly or indirectly, by the Employer as an Employer
contribution, provided the fee or expense relates to the ordinary and necessary
administration of the Fund. No person who is receiving full pay from the
Employer may receive compensation for services as Trustee.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, only
the Employer, the Plan Administrator, the Administrative Committee, and the
Trustee are necessary parties to any court proceeding involving the Trustee or
the Trust Fund. No Participant, or Beneficiary, is entitled to any notice of
process unless required by ERISA. Any final judgment entered in any proceeding
will be conclusive upon the Employer, the Plan Administrator, the Administrative
Committee, the Trustee, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other persons
to advise the Trustee as in its opinion may be necessary. The Trustee may
delegate to any agent, attorney, accountant or other person selected by it any
non-Trustee power or duty vested in it by the Plan, and the Trustee may act or
refrain from acting on the advice or opinion of any agent, attorney, accountant
or other person so selected.
10.08 DISTRIBUTION OF TRUST FUND. Subject to Section 13.06, the Trustee
will make all distributions of benefits under the Plan in Employer Securities
valued at fair market value at the time of distribution. The Trustee will pay in
cash any fractional security share to which a Participant or his Beneficiary is
entitled. In the event the Trustee is to make a distribution in shares of
Employer Securities, the Trustee may apply any balance in a Participant's
General Investments Account to provide whole shares of Employer Securities for
distribution at the then fair market value.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
made from the Trust, the Trustee must promptly notify the Administrative
Committee and then dispose of the payment in accordance with the subsequent
direction of the Administrative Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee is
obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee may resign at any time as Trustee of the
Plan by giving 30 days' written notice in advance to the Employer and to the
Administrative Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee.
10.12 REMOVAL. The Employer, by giving 30 days written notice in advance to
the Trustee, may remove any Trustee. In the event of the resignation or removal
of a Trustee, the Employer must appoint a successor Trustee if it intends to
continue the Plan. If two or more persons hold the position of Trustee, in the
event of the removal of one such person, during any period the selection of a
replacement is pending, or during any period such person is unable to serve for
any reason, the remaining person or persons will act as the Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee succeeds
to the title to the Trust vested in his predecessor by accepting in writing his
appointment as successor Trustee and filing the acceptance with the former
Trustee and the Administrative Committee without the signing or filing of any
further statement. The resigning or removed Trustee, upon receipt of acceptance
in writing of the Trust by the successor Trustee, must execute all documents and
do all acts necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Agreement upon his predecessor. A successor
Trustee is not personally liable for any act or failure to act of any
predecessor Trustee, except as required under ERISA. With the approval of the
Employer and the Administrative Committee, a successor Trustee, with respect to
the Plan, may accept the account rendered and the property delivered to it by a
predecessor Trustee without incurring any liability or responsibility for so
doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each
Accounting Date and as of each November 30, February 28, and May 31 to determine
the fair market value of each Participant's Accrued Benefit in the Trust. The
Trustee also must value the Trust Fund on such other valuation dates as directed
in writing by the Administrative Committee. With respect to activities carried
on by the Plan, an independent appraiser meeting requirements similar to those
prescribed by Treasury regulations under Code ss.170(a)(1) must perform all
valuations of Employer Securities which are not readily tradeable on an
established securities market. The valuation requirement of the immediately
preceding sentence applies solely to Employer Securities acquired by the Plan
after December 31, 1986.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER APPOINTED. The
Trustee is not liable for the acts or omissions of any Investment Manager or
Managers the Administrative Committee may appoint, nor is the Trustee under any
obligation to invest or otherwise manage any asset of the Plan which is subject
to the management of a properly appointed Investment Manager. The Administrative
Committee, the Trustee and any properly appointed Investment Manager may execute
a letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect to any
part of the Trust Fund under the control of the Investment Manager.
10.16 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
* * * * * * * * * * *
ARTICLE XI
REPURCHASE OF EMPLOYER SECURITIES
11.01 [Reserved]
* * * * * * * * * * *
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Administrative Committee and the Trustee are fully protected in acting and
relying upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Administrative Committee has any obligation or responsibility with respect to
any action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Administrative Committee to collect any contribution required under the Plan, or
to determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Administrative Committee need inquire into or be responsible
for any action or failure to act on the part of the others, or on the part of
any other person who has any responsibility regarding the management,
administration or operation of the Plan, whether by the express terms of the
Plan or by a separate agreement authorized by the Plan or by the applicable
provisions of ERISA. Any action required of a corporate Employer must be by its
Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Administrative Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Administrative Committee and the Trustee to make any payment from the Trust
Fund at any time and all times is limited to the then available assets of the
Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice, unless the Code or Treasury regulations prescribe the notice
or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to benefits
under the Plan, their respective heirs and legal representatives, upon the
Employer, its successors and assigns, and upon the Trustee, the Administrative
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
includes the singular and the singular includes the plural.
12.07 STATE LAW. Iowa law will determine all questions arising with respect
to the provisions of this Agreement except to the extent superseded by Federal
law.
12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
* * * * * * * * * * *
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer
has no beneficial interest in any asset of the Trust and no part of any asset in
the Trust may ever revert to or be repaid to an Employer, either directly or
indirectly; nor, prior to the satisfaction of all liabilities with respect to
the Participants and their Beneficiaries under the Plan, may any part of the
corpus or income of the Trust Fund, or any asset of the Trust, be (at any time)
used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend this Agreement in any manner it deems necessary or advisable
in order to qualify (or maintain qualification of) this Plan and the Trust
created under it under the appropriate provisions of Code ss.401(a); and
(b) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration expenses) to be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates. No amendment may cause or permit any portion
of the Trust Fund to revert to or become a property of the Employer. The
Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the Administrative
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Administrative Committee. The
Employer must make all amendments in writing. Each amendment must state the date
to which it is either retroactively or prospectively effective.
(A) CODE SS.411(D)(6) PROTECTED BENEFITS. An amendment (including the adoption
of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
ss.412(c)(8), and may not reduce or eliminate Code ss.411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
ss.411(d)(6) protected benefits if the amendment has the effect of either (1)
eliminating or reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury regulations), or (2) except as provided by Treasury
regulations, eliminating an optional form of benefit. The Administrative
Committee must disregard an amendment to the extent application of the amendment
would fail to satisfy this paragraph. If the Administrative Committee must
disregard an amendment because the amendment would violate clause (1) or clause
(2), the Administrative Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan must continue for
the affected Participants.
13.03 DISCONTINUANCE. The Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan, and to terminate, at any time,
this Plan and the Trust created under this Agreement. The Plan will terminate
upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor makes
provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of the
Plan resulting from this paragraph (b) is not effective until compliance
with any applicable notice requirements under ERISA.
13.04 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the Plan an affected Participant's right to his Accrued
Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
13.05 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a party
to, any merger or consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger, consolidation
or transfer, the surviving Plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer. The
Trustee possesses the specific authority to enter into merger agreements or
direct transfer of assets agreements with the trustees of other retirement plans
described in Code ss.401(a), including an elective transfer, and to accept the
direct transfer of plan assets, or to transfer plan assets, as a party to any
such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts a direct transfer of plan assets, the
Administrative Committee and Trustee must treat the Employee as a Participant
for all purposes of the Plan except the Employee is not a Participant for
purposes of sharing in Employer contributions or Participant forfeitures under
the Plan until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred assets.
Unless a transfer of assets to this Plan is an elective transfer, the Plan will
preserve all Code ss.411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 13.02. A transfer is an
elective transfer if: (1) the transfer satisfies the first paragraph of this
Section 13.05; (2) the transfer is voluntary, under a fully informed election by
the Participant; (3) the Participant has an alternative that retains his Code
ss.411(d)(6) protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (4) the transfer satisfies
the applicable spousal consent requirements of the Code; (5) the transferor plan
satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (6) the
Participant has a right to immediate distribution from the transferor plan, in
lieu of the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan for which
the Participant is eligible or the present value of the Participant's accrued
benefit under the transferor plan payable at that plan's normal retirement age;
(8) the Participant has a 100% Nonforfeitable interest in the transferred
benefit; and (9) the transfer otherwise satisfies applicable Treasury
regulations. An elective transfer may occur between qualified plans of any type.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SS.401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code ss.401(k)
arrangement, the distribution restrictions of Code ss.ss.401(k)(2) and (10)
continue to apply to those transferred elective contributions.
(C) ELIGIBLE ROLLOVER DISTRIBUTION. For distributions made after December 31,
1992, a Participant may elect, at the time and in the manner prescribed by the
Administrative Committee, to have any portion of his eligible rollover
distribution paid directly to an eligible retirement plan specified by the
Participant in his direct rollover designation. For purposes of this Section
13.05(C), a Participant includes a Participant's surviving spouse and the
Participant's spouse or former spouse who is an alternate payee under a
qualified domestic relations order.
(D) DEFINITIONS.
(1) "Eligible rollover distribution." An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
Participant, except an eligible rollover distribution does not include: any
distribution which is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent required under Code
ss.401(a)(9); and the portion of any distribution which is not includible in
gross income (determined without regard to the exclusion of net unrealized
appreciation with respect to employer securities).
(2) "Eligible retirement plan." An eligible retirement plan is an
individual retirement account described in Code ss.408(a), an individual
retirement annuity described in Code ss.408(b), an annuity plan described in
Code ss.403(a), or a qualified trust described in Code ss.401(a), which accepts
the Participant's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(3) "Direct rollover." A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the Participant.
13.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Administrative Committee will direct
the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the Plan
terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition to
the distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as soon
as administratively practicable after the Plan terminates.
To liquidate the Trust, the Administrative Committee will purchase a
deferred annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to paragraph (2).
If this paragraph applies, in lieu of the preceding provisions of this
Section 13.06 and the distribution provisions of Article VI, the Administrative
Committee will direct the Trustee to distribute each Participant's
Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively
practicable after the termination of the Plan, irrespective of the present value
of the Participant's Nonforfeitable Accrued Benefit and whether the Participant
consents to that distribution. This paragraph applies only if: (1) the Plan does
not provide an annuity option; (2) the Plan is a defined contribution plan at
the time of its termination date; and (3) as of the period between the Plan
termination date and the final distribution of assets, the Employer does not
maintain any other defined contribution plan (other than an ESOP).
The Trust will continue until the Trustee in accordance with the direction
of the Administrative Committee has distributed all of the benefits under the
Plan. On each valuation date, the Administrative Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the conditions
of the Treasury regulations permitting such a revision. A resolution or
amendment to freeze all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section
13.06.
IN WITNESS WHEREOF, the Trustee has executed this Plan and Trust in
Forest City, Iowa this _______ day of May, 1993.
WINNEBAGO INDUSTRIES, INC.
By:
--------------------------------------
Fred G. Dohrmann, President
NORWEST BANK IOWA, N.A.
By:
--------------------------------------
Janet J. Jenkins, Vice-President/Trust
Officer
"TRUSTEE"
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 131)
The undersigned Employers ("Participating Employers"), by execution of this
Participation Agreement, hereby adopt and agree to be bound by all provisions,
conditions and limitations of the Winnebago Industries, Inc. Employees' Stock
Bonus Plan ("Plan"), as amended from time to time, and as fully as if each
Participating Employer were an original party to the Plan as made by Winnebago
Industries. Inc.
Dated this _____ day of May, 1993.
NAMES OF PARTICIPATING EMPLOYERS:
WINNEBAGO INDUSTRIES, INC. CYCLE-SAT, INC.
Signed: Fred G. Dohrmann Signed: Loren A. Swenson
------------------------------ -------------------------------
Fred G. Dohrmann, President Loren A. Swenson, President
NORTH IOWA ELECTRONICS, INC. WINNEBAGO REALTY CORP.
Signed: /s/ Fred G. Dohrmann Signed: Fred G. Dohrmann
------------------------------ -------------------------------
Fred G. Dohrmann, President Fred G. Dohrmann, President
WINNEBAGO RV, INC. WINNEBAGO ACCEPTANCE CORP.
Signed: Fred G. Dohrmann Signed: Fred G. Dohrmann
------------------------------ -------------------------------
Fred G. Dohrmann, President Fred G. Dohrmann, President
WINNEBAGO PRODUCTS, INC. WINNEBAGO INTERNATIONAL CORP.
Signed: Fred G. Dohrmann Signed: Fred G. Dohrmann
------------------------------ -------------------------------
Fred G. Dohrmann, President Fred G. Dohrmann, President &
COO
WINNEBAGO INDUSTRIES, INC.
[LOGO:WINNEBAGO INDUSTRIES] 1996 ANNUAL REPORT
JOHN K. HANSON
1913 - 1996
John K. Hanson, Winnebago Industries founder and former chairman of the
board died on June 27, 1996 at the age of 83.
Hanson was paramount to the success of Winnebago Industries throughout its
history and helped the company achieve its dominance in the recreation vehicle
(RV) industry. An avid outdoor camping enthusiast, Hanson began his career in
the RV industry by becoming a travel trailer dealer in 1957. Convinced that
travel trailer manufacturing was an attractive opportunity for the community, he
convinced local investors to lure Modernistic Industries, a California travel
trailer manufacturing firm, to open a branch facility in Forest City. In 1959,
Hanson became president of the new firm, Modernistic Industries of Iowa.
Immediately, he began to explore methods for improving the company's
trailers. Hanson identified the potential for new products and implemented
effective cost-cutting measures. He ultimately brought mass production to motor
home assembly and led the company -- renamed Winnebago Industries, Inc. -- to
dominance in the motor home field, resulting in a revolution in the RV industry.
Today, the word "Winnebago" is synonymous with "motor home."
In 1970 Hanson led the company as it was listed on the New York Stock
Exchange. In 1971 the stock was the hit of Wall Street as it appreciated by 462
percent -- more than any other company on the exchange.
Hanson was an innovative leader in the RV industry and instrumental in the
formation of RV industry manufacturing standards. He won numerous awards for
professional, civic and fraternal activities. In 1965, Hanson was selected as
Iowa Small Businessman of the Year. In 1983, he was inducted into the RV Hall of
Fame and the Iowa Business Hall of Fame, and in 1984, he was named to the Babson
College Academy of Distinguished Entrepreneurs and received the People of Vision
Award from the Iowa Society to Prevent Blindness. Hanson was also honored as a
native son of Norway by the King of Norway on June 23, 1984 at the opening of
the "Promise of America" exhibit in Oslo, Norway.
Hanson received the Distinguished Achievement Award from the Recreation
Vehicle Industry Association in 1988 for contributions to the long-term growth
and prosperity of the RV industry. In 1990, he was inducted into the
Scandinavian-American Hall of Fame in Minot, North Dakota. In 1995, Hanson was
honored by the Recreation Vehicle Dealers Association (RVDA) as an industry
pioneer. He also received an Honorary Doctor of Laws degree from Waldorf
College, Forest City, for a lifetime of achievement in business and of service
to the college, the church, the community, the nation, and the world. Hanson
also received the 1st Annual Meredith Wilson Humanitarian Award in 1995 from the
city of Mason City, Iowa, due to his tremendous humanitarian contributions to
the North Iowa community.
Indeed, John K. Hanson left a great legacy when founding Winnebago
Industries 38 years ago. One of the world's largest manufacturers of motor
homes, Winnebago Industries is a major industrial operation for the state of
Iowa and now employs over 3,150 employees with annual revenues exceeding $480
million.
WINNEBAGO INDUSTRIES, INC.
TO OUR SHAREHOLDERS
MANAGEMENT
Winnebago Industries experienced a great loss this year in the death of
John K. Hanson, the Company's founder. The management team at Winnebago
Industries has led the Company since 1993 when John K. Hanson stepped down from
the daily task of running the Company. This experienced team brought the Company
back to profitability during the last three years, produced record revenues in
fiscal 1996 and will continue to pursue excellence in recreation vehicle
manufacturing.
[PHOTO]
CHAIRMAN AND CHIEF EXECUTIVE OFFICER FRED DOHRMANN (LEFT), AND
PRESIDENT AND CHIEF OPERATING OFFICER BRUCE HERTZKE LEAD THE EXPERIENCED
WINNEBAGO INDUSTRIES MANAGEMENT TEAM.
With an average of 21 years of service at Winnebago Industries, this
management team is continuing to direct the future development of the Company.
Fred G. Dohrmann continues to serve in the position of chief executive officer
and now also serves as chairman of the board. Bruce D. Hertzke has been named
president in addition to his duties as chief operating officer. To enhance the
seasoned management team, another long-term employee has been added. In August
1996, Robert J. Olson was named vice president of manufacturing. In addition,
John V. Hanson, son of John K. Hanson, was named to the board of directors.
FINANCIAL RESULTS
For the fifth consecutive year, revenues have risen for Winnebago
Industries. Revenues for fiscal 1996 set an all-time high of $484.8 million,
compared to net revenues of $460.1 million last year. Income from continuing
operations before income taxes for fiscal 1996 was $21.1 million, compared to
$20.0 million for fiscal 1995.
Due to the strong pretax earnings growth Winnebago Industries experienced
during the past four years, fiscal 1996 results reflect the full impact of
income tax expense of $6.6 million. During fiscal 1995, the Company recognized
tax credits of $7.9 million, resulting from reductions of its deferred tax asset
valuation allowance.
Net income for fiscal 1996 was $12.4 million, or 49 cents per share,
compared to $27.8 million, or $1.10 per share, for fiscal 1995. Fiscal 1995
results reflect the previously mentioned tax credits.
RE-FOCUS ON CORE BUSINESS
Two strategic moves in 1996 will allow Winnebago Industries the ability to
more completely focus on the future of its core business, the manufacturing of
high quality motor homes. In August 1996, Winnebago Industries' board of
directors, along with additional Cycle-Sat shareholders, made a decision to sell
Cycle-Sat, Inc. On September 9, 1996, WilTech Group, a subsidiary of the
Williams Companies, Inc., Tulsa Okla., announced that a letter of understanding
had been signed for the purchase of Cycle-Sat, pending a due diligence review.
During the fourth quarter of fiscal 1996, Winnebago Industries' board of
directors decided to discontinue the Company's financial support of the buyer of
its former North Iowa Electronics business and to exit future involvement with
this business. A provision for expected losses under loan guarantees of $4.1
million was recorded in connection with this action.
Financial results of Cycle-Sat and the loss provisions in connection with
North Iowa Electronics are reported as discontinued operations.
PAGE 1
DIVIDEND POLICY
Cash dividends aggregating to 30 cents per share were paid to shareholders
during fiscal 1996. On October 17, 1996, the board of directors announced its
intention to pay bi-annual cash dividends of ten cents per share in January and
July. A cash dividend will be paid to shareholders of record as of December 6,
1996 for payment on January 6, 1997. It is the board of directors' strong belief
that re-investing profits for long-term growth will be of greater benefit to
shareholders in the long term.
PRODUCTS
Winnebago Industries successfully launched its new 1997 product line to
dealers in August at a national meeting in Las Vegas, Nevada. The Company has a
proud history of innovation and product development and this year the Company
continued to excel in this area. Please see page 4 for an overview of Winnebago
Industries' exciting product developments and comprehensive service offerings.
[PHOTO]
SHOWN ABOVE IS A FULLY-EQUIPPED MEDICAL UNIT THAT WAS CREATED TO SUPPLY
RESIDENTS OF WESTERN HAWAII A CONVENIENT WAY TO SEEK MEDICAL ATTENTION. THE
SPECIAL INTERIOR WAS DESIGNED TO PROVIDE PRIMARY MEDICAL, DENTAL AND SOCIAL
SERVICES.
OEM, COMMERCIAL VEHICLES AND OTHER PRODUCTS
Winnebago Industries sells a major portion of the production of its
component manufacturing to original equipment manufacturers (OEM). In fiscal
1996, OEM sales accounted for $28.3 million in revenue. Due to a decrease in
aluminum prices, OEM revenues declined from $32.2 million in fiscal 1995.
Aluminum is purchased for our Creative Aluminum Products Company (CAPCO), which
produces aluminum extrusions. CAPCO accounts for nearly 90 percent of Winnebago
Industries' current OEM business.
The Plastics and Fiberglass Manufacturing (PFM) department experienced a 92
percent increase in Other Product sales during fiscal 1996. This is primarily
due to the new production of molded plastic docks for marine applications.
The Company continues to aggressively market its commercial vehicles for
specialized niche markets. Commercial vehicle sales were $5.8 million in fiscal
1996, an increase of 18 percent over sales of $4.9 million in fiscal 1995.
QUALITY
One of the Company's ad campaigns for 1996 read, "In a world where
expediency has replaced quality, it takes a certain kind of person to build a
motor home the way we build ours. Where integrity and quality aren't merely
words, they're beliefs." Our employees are a critical element in the equation
that results in quality products. We firmly believe that no one knows our
products better than the people who build them. So we involve our employees in
helping us continually improve those products through a variety of programs.
Employee empowerment is standard practice at Winnebago Industries. We
welcome employee feedback and ideas on products and processes that result in
cost and time savings, as well as weight savings. Since the employee cost
savings suggestion program was initiated five years ago, approximately 1,400
ideas have been implemented, resulting in an aggregate cost savings of more than
$2.6 million.
We're proud of the quality of work our employees produce and of their
commitment to the Company. That quality and commitment has resulted in numerous
honors and awards for Winnebago Industries and its employees. Please see page 7
for examples of our excellence in quality section.
PAGE 2
OUTLOOK
The long-term outlook for motor home sales continues to appear very
favorable. The population of people ages 50 and older will grow dramatically
during the next 20 years with the maturing of the "baby boom" market . Studies
of this market segment have shown that they have more time and discretionary
income to enjoy leisure travel and outdoor recreation than ever before.
Winnebago Industries will continue to develop specific new products for this
growing market while focusing on niche markets defined by consumers' special
interests and hobbies.
Winnebago Industries long-term intent is to focus resources, financial and
otherwise, on building three things: quality RVs, marketshare, and
profitability. We believe our renewed focus on what we do best -- which is to
build RVs -- will improve our financial performance to higher levels in the
future.
/s/ Fred G. Dohrmann /s/ Bruce D. Hertzke
Fred G. Dohrmann Bruce D. Hertzke
Chairman and President and
Chief Executive Officer Chief Operating Officer
November 11, 1996
[PHOTO]
A SPECTACULAR NEW 36WQ MODEL (SHOWN ABOVE) JOINS THE VECTRA GRAND TOUR LINEUP
FOR 1997 AND IS AVAILABLE WITH OR WITHOUT A SLIDEOUT ROOM EXTENSION FEATURING A
UNIQUE NEW SECTIONAL SOFA WITH RECLINER.
PAGE 3
NEW PRODUCTS
Winnebago Industries' top-of-the-line Luxor has been completely redesigned
for 1997. Built as an alternative to the high-line coach market, the Luxor has a
definite market price advantage. A front entry door, and splashy new exterior
styling and graphics, provide the Luxor with the look and feel of a high-line
bus at a more reasonable cost. The forward entry door incorporates a mechanical
check system that is operable from either inside or outside the motor home. The
interior entry step well is covered for front passenger seating by a sliding
filler panel that is switch activated. The Luxor offers two convenient
floorplans for 1997.
A host of other changes enhance the Luxor for 1997. Built on a Freightliner
chassis, the Luxor utilizes a powerful 325 h.p. Cummins diesel engine for
improved driving performance. The gross vehicle weight rating has been increased
by 1,400 pounds to 27,410 pounds, while the gross combined weight rating
improves by 2,410 pounds to 32,410 pounds for increased load carrying and towing
capacity.
More than any one single driving force within the RV industry within the
last few years, the slideout room expansion system has had the most impact.
Winnebago Industries developed an excellent slideout system with HWH Corporation
early on and was able to take full advantage of the growing popularity of that
option. The Company is further taking advantage of this trend by expanding the
1997 models available with this popular option.
The wide-body Vectra Grand Tour is positioned as a step up from our popular
conventional-width Vectra line, enlarging the width by an additional 5 1/2
inches. A new 36WQ model joins the 1997 Vectra Grand Tour lineup and is
available with or without a slideout room extension featuring a unique sectional
sofa with recliner. This model features a unique new booth-styled dinette with a
table that adjusts positioning forward and backward for comfortable seating and
dining. A deluxe home theater system will also be offered in the Vectra Grand
Tour for 1997 to meet the needs and desires of today's audio - knowledgeable
buyers. A new 35WQ diesel pusher model was also introduced in 1997 with a new
275 h.p. Caterpillar engine for increased performance.
A special Richard Petty signature edition Vectra Grand Tour is available
with exterior race-inspired motif that appeals to members of the Winnebago
Motorsports Team. Racing enthusiasts are an excellent niche market and Winnebago
Industries products are the official motor homes of NASCAR.
The Vectra line includes two slideout models for 1997, including a diesel
pusher, enhancing the interior livability of the motor home when parked.
Spacious cabinets are available with a beautiful new maple or rich cherry
finish. A roll-out pantry provides ample storage space within the kitchen of the
Vectra slideout models and has been redesigned with a new locking slide system
and adjustable shelving.
Our most popular Class A models, the Winnebago Adventurer and Itasca
Suncruiser series, feature conventional, slideout and wide-body models in each
line for 1997. Both the Adventurer and Suncruiser are available in two new
wide-body models, the 34WK "pusher" with a standard slideout room extension and
the 35WQ, with optional slideout and panoramic side windows. The Suncruiser's
wide-body lineup has expanded to include additional 30-, 32-, and 34-foot
models.
[PHOTO]
THE POPULARITY OF THE SLIDEOUT ROOM EXPANSION SYSTEM HAS LED WINNEBAGO
INDUSTRIES TO INCLUDE THE OPTION ON 75 PERCENT OF THE 1997 CLASS A PRODUCT
LINEUP. THE NEW WINNEBAGO ADVENTURER 35WQ WIDEBODY MODEL WITH SLIDEOUT IS SHOWN
ABOVE.
The Winnebago Brave also underwent extensive change for 1997 and now
features a bus-style appearance and a bright white exterior. Most of the lower
exterior compartment doors are fully-hinged panels with a single paddle latch
and gas strut supports for easy access to storage. A brand new 33RQ model has
been added to the model lineup and features an optional slideout room extension
with sofa-bed for increased interior space within the motor home. This is the
first time a slideout has been offered in this market segment.
PAGE 4
The Itasca Sunrise has increased product offerings for 1997, including four
new models, three of which are basement-styled units. The four new models
include a 33RQ conventional unit with optional slideout and three new basement
models for increased underfloor storage: the 28RQ, 30RQ and 32RQ. The Sunrise
has a new contemporary appearance with a one-piece fiberglass front and
integrated bumper.
[PHOTO]
THE ITASCA SUNRISE EXPANDED ITS LINEUP FOR 1997 BY ADDING FOUR NEW MODELS, THREE
OF WHICH ARE BASEMENT-STYLED FOR ADDED STORAGE CAPABILITIES. THE NEW 33RQ MODEL
ALSO FEATURES AN AVAILABLE SLIDEOUT ROOM THAT ADDS APPROXIMATELY 63 CUBIC FEET
OF ADDITIONAL INTERIOR SPACE TO LET THE FAMILY STRETCH OUT IN.
The Winnebago Warrior is positioned as an entry-level Class A motor home
for first-time buyers that competes with used products. The Warrior now features
a one-piece fiberglass roof for increased durability and water resistance. A new
front end design provides a sleek exterior look with integrated front bumper and
striking new graphics. With one conventional and two basement models available,
the Warrior has a multitude of floor plan options available.
Winnebago Industries has experienced growth of 25 percent in Class C market
share within the last year. This is due in part to the popularity of the
Winnebago Minnie Winnie and Itasca Sundancer models. Building on this
popularity, the Minnie Winnie and Sundancer have several new standard features
for 1997. Built in 29- and 31-foot lengths on the Ford Super-Duty, 14,050 pound
gross vehicle weight rated chassis, the Minnie Winnie and Sundancer are all
widebody, basement models for 1997 with increased exterior storage capacity.
These products are now also being manufactured with a new Ford V-10 engine.
The Winnebago Minnie and Itasca Spirit model lineups have also expanded,
now offering six affordable models ranging from 21 to 31 feet in length. These
value-driven units are built to high quality standards on both Ford and
Chevrolet chassis.
In a class by itself, the fun and sporty Rialta features a brand new
Volkswagen chassis for 1997. Introduced only to dealers at this time, the new
Rialta has a VR6, 2.8L engine for greater pulling power, quicker acceleration
and quieter operation. The new Rialta will also provide VW-installed dual air
bags for improved driver and front passenger safety. Ten extra inches in the
rear of the Rialta allow Winnebago Industries engineers to increase sleeping
space, while improving exterior storage by more than 350 percent and interior
storage by more than 10 percent.
[PHOTO]
THE WINNEBAGO MINNIE IS A PROVEN VALUE LEADER IN THE CLASS C MARKET. THE COMPACT
21RB MODEL SHOWN ABOVE IS A VERSATILE MOTOR HOME THAT WORKS GREAT FOR FAMILY
VACATIONS OR FOR A SOLO TRIP. SLEEPING SPACE IS PLENTIFUL WITH A CONVERTIBLE
DINETTE, A COUCH/BED AND IN THE OVERHEAD CAB.
PAGE 5
Originally designed and positioned to younger first-time buyers as
convenient, multi-purpose vehicles, the Rialta has found an excellent market
with seasoned motor home veterans who are scaling back in size.
The EuroVan Camper project has been very successful. Winnebago Industries
builds the camping conversion for the Class B EuroVan Camper which is sold
through select Volkswagen dealers in the U.S. and Canada. Similar to the Rialta,
the 1997 EuroVan Camper also received a new look, vehicle enhancements and
improved performance as a result of the new VW VR6 chassis. Introduced in
September, initial response to this 1997 product has been excellent.
EXHIBIT 21
List of Subsidiaries
JURISDICTION PERCENT
OF OF
NAME OF CORPORATION INCORPORATION OWNERSHIP
- ------------------------------------ -------------------- ---------------
Winnebago Industries, Inc. Iowa Parent
Winnebago International Corporation Iowa 100%
Winnebago Realty Corporation Iowa 100%
Winnebago Acceptance Corporation Iowa 100%
Winnebago R.V., Inc. Delaware 100%
Winnebago Industries Europe GmbH Germany 100%
Cycle-Sat, Inc. Iowa 80%
EXHIBIT 23
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
2-40316, No. 2-73221, No. 2-82109, No. 33-21757, and No. 33-59930 of Winnebago
Industries, Inc. on Form S-8 of our reports dated October 17, 1996 appearing in
and incorporated by reference in the Annual Report on Form 10-K for Winnebago
Industries, Inc. for the year ended August 31, 1996.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
November 21, 1996