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<SEC-DOCUMENT>0000950131-98-001790.txt : 19980319
<SEC-HEADER>0000950131-98-001790.hdr.sgml : 19980319
ACCESSION NUMBER: 0000950131-98-001790
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 17
CONFORMED PERIOD OF REPORT: 19971231
FILED AS OF DATE: 19980318
SROS: CSX
SROS: NYSE
SROS: PCX
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FMC CORP
CENTRAL INDEX KEY: 0000037785
STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800]
IRS NUMBER: 940479804
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-02376
FILM NUMBER: 98568291
BUSINESS ADDRESS:
STREET 1: 200 E RANDOLPH DR
CITY: CHICAGO
STATE: IL
ZIP: 60601
BUSINESS PHONE: 3128616000
FORMER COMPANY:
FORMER CONFORMED NAME: BEAN SPRAY PUMP CO
DATE OF NAME CHANGE: 19670706
FORMER COMPANY:
FORMER CONFORMED NAME: FOOD MACHINERY & CHEMICAL CORP
DATE OF NAME CHANGE: 19670706
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<DESCRIPTION>ANNUAL REPORT ON FORM 10-K
<TEXT>
<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
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 1-2376
FMC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
- ------------------------------------------ -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 312/861-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------- ----------------------
Common Stock, $0.10 par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
<PAGE>
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [_]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [_]
THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 6, 1998, WAS $2,483,388,496. THE NUMBER OF SHARES OF
REGISTRANT'S COMMON STOCK, $0.10 PAR VALUE, OUTSTANDING AS OF THAT DATE WAS
34,702,372.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT FORM 10-K REFERENCE
- -------- -------------------
Portions of 1997 Annual Report to Part I, Item 1; Part II; and Part IV,
Stockholders Items 14(a)(1) and (2)
Portions of Proxy Statement for 1998 Part III
Annual Meeting of Stockholders
_____________________________________________________________________
<PAGE>
PART I
FMC Corporation was incorporated in 1928 under Delaware law and has its
principal executive offices at 200 East Randolph Drive, Chicago, Illinois
60601. As used in this report, except where otherwise stated or indicated by
the context, "FMC", "the Company" or "the Registrant" means FMC Corporation and
its consolidated subsidiaries and their predecessors.
The Company is one of the world's leading producers of chemicals and machinery
for industry and agriculture. The Company employs 16,805 people at 104
manufacturing facilities and mines in 25 countries. The Company divides its
businesses into three main segments: Machinery and Equipment, Industrial
Chemicals, and Performance Chemicals. Machinery and Equipment businesses provide
specialized machinery to the food, petroleum, transportation and material
handling industries. Industrial Chemicals businesses manufacture a wide variety
of chemicals including soda ash, phosphates and hydrogen peroxide. Major
customers include detergent, glass and paper producers, as well as other
chemical companies. Performance Chemicals develops, manufactures and markets
proprietary specialty chemicals for the agricultural, food and pharmaceutical
industries.
ITEM 1. BUSINESS
Incorporated by Reference From:
------------------------------
(a) General Development of Business - Annual Report to Stockholders, pages
2-4 and 57, and Notes 2, 3 and 4 to
the consolidated financial statements
on pages 39-42
(b) Financial Information About - Annual Report to Stockholders, page 5
Industry Segments
(c) Narrative Description of Business - Annual Report to Stockholders, pages
6-9
Source and availability of raw materials
----------------------------------------
FMC's natural resource requirements are primarily mineral-oriented.
Substantial portions of requirements for ores and other raw materials,
especially trona and phosphate rock, are produced from mines in the United
States on property held by
<PAGE>
FMC under long-term leases which are subject to periodic adjustments of
royalty rates. The Company also owns land, including mineral rights,
relating to an Argentine salar from which it produces lithium. Machinery
operations obtain raw materials, principally steel and castings, from many
foreign and domestic sources. No one source is considered essential to any
of the machinery operations. The Company uses oil, gas, coal, coke,
hydroelectric power and nuclear power to meet its energy needs.
Patents
-------
Although FMC's patents, trademarks and licenses are cumulatively important
to its business, FMC does not believe that the loss of any one or group of
related patents, trademarks or licenses would have a material adverse effect
on the overall business of FMC or on any of its business segments.
Seasonality
-----------
FMC's businesses are not generally considered to be seasonal, although there
has been a bias in the Performance Chemicals segment towards lower
profitability in the fourth quarter primarily due to seasonality in the
markets served by the agricultural products businesses.
Competitive Conditions
----------------------
FMC competes on the basis of price and product performance and is among the
market leaders in most products it manufactures. FMC is the world's largest
producer of natural soda ash, a leading North American producer of hydrogen
peroxide, a leading North American producer of industrial phosphorus
chemicals and a world leader in the mining and processing of lithium
products. FMC manufactures Furadan, one of the largest selling insecticides
in the world. FMC is also the largest worldwide producer of carrageenan,
microcrystalline cellulose, and phosphate ester flame retardants. FMC also
participates in many machinery businesses, including food processing,
material handling and energy equipment, where FMC has a significant market
share. Products are sold in highly competitive markets worldwide.
Research and Development Expenses
---------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------
In Millions 1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Machinery and Equipment $ 46.7 $ 41.5 $ 49.0
Industrial Chemicals 18.2 20.4 16.2
Performance Chemicals 109.1 113.1 109.2
Corporate -- 1.5 1.0
------ ------ ------
Total $174.0 $176.5 $175.4
====== ====== ======
</TABLE>
<PAGE>
Expenses increased in Machinery & Equipment primarily as a result of the
inclusion of a full year of operating results of Frigoscandia Equipment,
which was acquired on June 30, 1996, as well as increased spending in the
Company's energy transportation and measurement, and petroleum equipment and
systems businesses. Decreased expenses in Industrial Chemicals primarily
reflect process improvements implemented in 1996 in conjunction with the
completion of the expansion of the Company's Bayport, Texas hydrogen
peroxide plant. Expenses also decreased in Performance Chemicals, due
primarily to the absence of costs associated with the development of several
new herbicides which were introduced in 1997.
Not included in these amounts are costs associated with discontinued
operations, primarily the Company's Defense Systems operations which were
divested in October 1997.
Environmental
-------------
Incorporated by Reference From:
------------------------------
Compliance with environmental laws - Annual Report to Stockholders,
and regulations Note 15 to the consolidated
financial statements on
pages 50-51
Employees
---------
FMC employs 16,805 people in its domestic and foreign operations.
Approximately 2,540 such employees are represented by collective
bargaining agreements in the United States. In 1998, eight of the Company's
17 contracts will expire. Certain of those contracts are under negotiation
at the present time. FMC maintains good employee relations and has
successfully concluded virtually all of its recent negotiations without a
work stoppage. In those rare instances where a work stoppage has occurred,
there has been no material effect on consolidated sales and earnings.
However, FMC cannot predict the outcome of future contract negotiations.
Incorporated by Reference From:
------------------------------
(d) Financial Information About Foreign - Annual Report to Stockholders,
and Domestic Operations and page 34
Export Sales
<PAGE>
Forward Looking Statements - Safe Harbor Provisions
---------------------------------------------------
The Company and its representatives may from time to time make written or
oral forward-looking statements with respect to long-term objectives or
expectations of the Company, including statements contained in the Company's
filings with the Securities and Exchange Commission and in its reports to
stockholders.
The words or phrases "will likely result", "are expected to", "will
continue", "is anticipated", "is predicted", "forecast", "estimate",
"project", or similar expressions identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The
Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. In
connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby identifying important
factors that could affect the Company's financial performance and could
cause the Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future periods in
any current statements.
Among the factors that could have an impact on the Company's ability to
achieve its operating results and growth plan goals are:
. significant price competition, particularly among the Company's
competitors in chemical businesses
. the impact of unforeseen economic and political changes in the
international markets where the Company competes including currency
exchange rates, inflation rates, recessions, foreign ownership
restrictions, and other external factors over which the Company has no
control
. the impact of significant changes in domestic interest rates or taxation
rates
. high ingredient or raw material prices compared to historical levels, or
shortages of ingredients or raw materials
. the inherent risks in the marketplace associated with new product
introductions and technologies, particularly in agricultural and
specialty chemicals
. the risks associated with developing new manufacturing processes,
particularly with respect to complex chemical products
. the ability of the Company to integrate possible future acquisitions
into its existing operations
. the impact of freight transportation delays beyond the control of the
Company
. the inability of the Company or its suppliers or customers to remedy
potential problems with information systems related to the arrival of the
year 2000
. risks associated with joint venture, partnership or limited endeavors in
which the Company may be responsible at least in part for the acts or
omissions of its partners
. risks derived from unforeseen developments in industries served by the
Company such as weather patterns in the agricultural sector, political or
economic changes in the energy industries, and other external factors
over which the Company has no control
<PAGE>
. environmental liabilities which may arise in the future and which are not
covered by insurance or indemnity
The Company cautions that the foregoing list of important factors may not be
all inclusive and it specifically declines to undertake any obligation to
publicly revise any forward-looking statements that have been made to
reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
ITEM 2. PROPERTIES
FMC leases executive offices in Chicago and administrative offices in
Philadelphia. The Company operates 104 manufacturing facilities and mines in 25
countries. The major research facility is in Princeton, NJ. FMC holds mining
leases on shale and ore deposits in Idaho to supply its phosphorus plant in
Pocatello, and owns substantial phosphatic ore deposits in Rich County, Utah.
Trona ore, used for soda ash production in Green River, WY, is mined primarily
from property held under long-term lease. FMC owns the land and mineral rights
to the Salar del Hombre Muerto lithium reserves in Argentina. Many of FMC's
chemical plants require the basic raw materials which are provided by these FMC-
owned or -leased mines, without which other sources would have to be obtained.
With regard to FMC's mining properties operated under long-term leases, no
single lease or related group of leases is material to the businesses of the
Company as a whole.
Most of FMC's plant sites are owned, with an immaterial number of them being
leased. FMC believes its properties and facilities meet present requirements
and are in good operating condition and that each of its significant
manufacturing facilities is operating at a level consistent with the industry in
which it operates. FMC's production properties for continuing operations are:
<TABLE>
<CAPTION>
Latin
America
United and Western
States Canada Europe Other Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Machinery and Equipment 21 5 15 6 47
Industrial Chemicals 12 2 14 1 29
Performance Chemicals 13 5 6 4 28
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
Environmental Proceedings
- -------------------------
An environmental inspection was conducted in July 1993 at FMC's Phosphorus
Chemicals Division ("PCD") plant in Pocatello, Idaho. In August 1994, the
United States Environmental Protection Agency (Region 10) ("EPA") formally
notified FMC of a number of alleged violations of the Resource Conservation and
Recovery Act and related environmental regulations governing the management of
hazardous waste generated by the plant, including the operations of hazardous
waste storage and treatment units without interim status, the failure to submit
timely closure plans, the failure to comply with related reporting requirements
and the existence of several other improper treatment and disposal practices.
Although there are no legal proceedings pending at this time, FMC has been
advised that the matter has been referred to the United States Department of
Justice for an evaluation of whether to file a civil enforcement action. If
such a civil action is filed, the government is likely to demand both injunctive
relief and civil penalties. FMC has had extensive discussions with the
Department of Justice and the EPA concerning substantial proposed environmental
projects involving pond closure and remediation, changes to waste handling
practices and additional air control in an effort to settle this matter in
advance of litigation. See Note 4 to the 1997 consolidated financial statements
(pages 41-42 of the 1997 Annual Report to Stockholders) for a discussion of an
expected increase in capital costs for environmental compliance, which
contributed to an impairment in the value of PCD's assets during the fourth
quarter of 1997.
In a separate matter, the EPA issued a draft Risk Assessment on August 17, 1995
for the Eastern Michaud Flats Superfund site, which includes FMC's Pocatello
phosphorus facility, identifying potential risks from contamination potentially
associated with FMC. Release of the Risk Assessment allowed FMC to complete a
draft of the Remedial Investigation documenting the nature and extent of
contamination from the site. The company submitted its draft Remedial
Investigation to the EPA on September 28, 1995. On April 21, 1997, the EPA
issued for public comment its proposed remediation plan for the site. The EPA's
preferred remediation alternative is a combination of capping, surface runoff
controls and institutional controls for soils, and extraction and recycling for
hydraulic control of groundwater. While the company is still reviewing the
EPA's proposed plans, FMC believes its reserve at December 31, 1997 of $66.1
million for future environmental costs at the Eastern Michaud Flats site
adequately provides for the estimated costs of the proposed Superfund
remediation plan for the site.
See Note 15 to the 1997 consolidated financial statements (pages 50-51 of the
1997 Annual Report to Stockholders) for a discussion of legal proceedings
against other Potentially Responsible Parties and insurers for contribution
and/or coverage with respect to environmental remediation costs.
Other
- -----
A former employee of FMC brought a qui tam lawsuit in 1986 in federal district
court in San Jose, California, claiming that FMC had not produced the Bradley
Fighting Vehicle
<PAGE>
in accordance with Government specifications. The Department of Justice declined
to intervene in the case, in which the plaintiff has alleged substantial
monetary damages. FMC management believes that the claims in this case are
without merit and the Company continues to defend this matter vigorously. The
trial in this case began in January 1998.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The Executive Officers of FMC Corporation, together with the offices in FMC
Corporation presently held by them, their business experience since January 1,
1993, and their ages as of March 1, 1998, are as follows:
<TABLE>
<CAPTION>
Age Office, year of election and
Name 3/1/98 other information for past 5 years
- ---- ------ -----------------------------------
<S> <C> <C>
Robert N. Burt 60 Chairman of the Board and Chief Executive Officer
(91); President (90-93)
Larry D. Brady 55 President (93) and Director (89); Executive Vice
President (89-93)
William F. Beck 59 Executive Vice President (94); Vice President (86)
and General Manager-Chemical Products Group (86)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Michael J. Callahan 59 Executive Vice President and Chief Financial
Officer (94); Executive Vice President and Chief
Financial Officer, Whirlpool Corporation (91-94)
William J. Kirby 60 Senior Vice President (94); Vice
President-Administration (85)
J. Paul McGrath 57 Senior Vice President (96), General Counsel (96)
and Corporate Secretary (97); Associate General
Counsel-Litigation, Allied Signal Inc. (92-96)
Charles H. Cannon, Jr. 45 Vice President and General Manager-FMC Food Tech
(formerly Food Machinery Group) (94); Manager,
Food Processing Systems Division (92-94)
W. Reginald Hall 61 Vice President (91) and President, FMC
Asia-Pacific (97); General Manager-Specialty
Chemicals Group (92)
Robert I. Harries 54 Vice President (92) and General Manager-Chemical
Products Group (94)
Henry Kahn 51 Vice President and Treasurer (96); Assistant
Treasurer (93) and Corporate Finance Director
(89), The Dow Chemical Company
Ronald D. Mambu 48 Vice President and Controller (95); Director,
Financial Planning (94-95); Director, Strategic
Planning (93-94); Director, Financial Control
(87-93)
James A. McClung 60 Vice President-Worldwide Marketing (91)
Joseph H. Netherland 51 Vice President (87) and General Manager-Energy
and Transportation Equipment Group (93)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
William H. Schumann 47 Vice President and General Manager-Agricultural
Products Group (95); Director, North American
Operations, Agricultural Products Group (93-95);
Executive Director, Corporate Development (91-93)
William J. Wheeler 55 Vice President-Chemical Development (91)
</TABLE>
Each of the Company's executive officers has been employed by the Company in a
managerial capacity for the past five years except for Messrs. Callahan, McGrath
and Kahn. No family relationships exist among any of the above-listed officers
and there are no arrangements or understandings between any of them and any
other person pursuant to which they are selected as an officer. All officers are
elected to hold office for one year and until their successors are elected and
qualified.
PART II
<TABLE>
<CAPTION>
Incorporated by Reference From:
-------------------------------
<S> <C> <C>
ITEM 5. MARKET FOR REGISTRANT'S COMMON Annual Report to Stockholders,
EQUITY AND RELATED STOCKHOLDER pages 28, 35 and 57, and Notes 11
MATTERS and 12 to the consolidated financial
statements on pages 46-48
ITEM 6. SELECTED FINANCIAL DATA Annual Report to Stockholders, pages
54-55
ITEM 7. MANAGEMENT'S DISCUSSION AND Annual Report to Stockholders,
ANALYSIS OF FINANCIAL CONDITION pages 15, 19 and 24-29
AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE Annual Report to Stockholders, page
DISCLOSURES ABOUT MARKET RISK 29
ITEM 8. FINANCIAL STATEMENTS AND Annual Report to Stockholders,
SUPPLEMENTARY DATA (INCLUDING ALL pages 5 and 30-52
SCHEDULES REQUIRED UNDER ITEM 14
OF PART IV)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ITEM 9. CHANGES IN AND DISAGREEMENTS None
WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
</TABLE>
PART III
<TABLE>
<CAPTION>
Incorporated by Reference From:
------------------------------
<S> <C> <C>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS Part I; Proxy Statement for 1998
OF THE REGISTRANT Annual Meeting of Stockholders,
pages 2-9
ITEM 11. EXECUTIVE COMPENSATION Proxy Statement for 1998 Annual
Meeting of Stockholders, pages 16-23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN Proxy Statement for 1998 Annual
BENEFICIAL OWNERS AND MANAGEMENT Meeting of Stockholders, pages 13-14
ITEM 13. CERTAIN RELATIONSHIPS AND Proxy Statement for 1998 Annual
RELATED TRANSACTIONS Meeting of Stockholders, pages 12-13
</TABLE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed with this Report
1. Consolidated financial statements of FMC Corporation and its
subsidiaries are incorporated under Item 8 of this Form 10-K.
2. All required financial statement schedules are included in the
consolidated financial statements or notes thereto as
incorporated under Item 8 of this Form 10-K.
3. Exhibits: See attached Index of Exhibits
<PAGE>
(b) Reports on Form 8-K
During the quarter ended December 31, 1997, Registrant filed reports
on Form 8-K or Form 8-K/A as follows:
Date Subject
---- -------
October 8, 1997 Announcement of completion of sale of
defense operations
October 16, 1997 Inclusion of additional information,
exhibits and pro forma financial information
related to sale of defense operations
December 11, 1997 Announcement of lower earnings expectations
for fourth quarter of 1997, gain on sale of
defense operations and recording of asset
impairments and other charges
December 23, 1997 Inclusion of full text of two exhibits
related to sale of defense operations
(c) Exhibits
See Index of Exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FMC CORPORATION
(Registrant)
By: /s/ Michael J. Callahan
-----------------------
Michael J. Callahan
Executive Vice President and
Chief Financial Officer
Date: March 17, 1998
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C> <C>
Michael J. Callahan Executive Vice President and /s/ Michael J. Callahan
-----------------------
Chief Financial Officer Michael J. Callahan
March 17, 1998
--------------
Ronald D. Mambu Vice President, Controller and )
Principal Accounting Officer )
Robert N. Burt Chairman of the Board and )
Chief Executive Officer )
Larry D. Brady Director )
B.A. Bridgewater, Jr. Director ) By: /s/ Michael J. Callahan
-----------------------
Patricia A. Buffler Director ) Michael J. Callahan
Albert J. Costello Director ) March 17, 1998
--------------
Paul L. Davies, Jr. Director )
Jean A. Francois-Poncet Director )
Edward C. Meyer Director )
Edward J. Mooney Director )
William F. Reilly Director )
James R. Thompson Director )
Clayton Yeutter Director )
</TABLE>
<PAGE>
PAGE 1
INDEX OF EXHIBITS FILED WITH OR
INCORPORATED BY REFERENCE INTO
FORM 10-K OF FMC CORPORATION
FOR YEAR ENDED DECEMBER 31, 1997
Exhibit
No.
This
10-K Exhibit Description
- ---- -------------------
2.1 Purchase Agreement, dated as of August 25, 1997, by and among FMC
Corporation, Harsco Corporation, Harsco UDLP Corporation and Iron
Horse Acquisition Corp. (incorporated by reference from Exhibit 2.1
to the Form 8-K/A filed on October 16, 1997)
3.1 Restated Certificate of Incorporation, as filed on July 1, 1986
(incorporated by reference from Exhibit 3.1 to the Form SE filed on
March 25, 1993)
3.2 Amendment to Restated Certificate of Incorporation filed on April 30,
1987 (incorporated by reference from Exhibit 3.2 to the Form SE filed
on March 25, 1993)
3.3 Restated By-Laws of the Company, amended as of February 20, 1998
4.1 Amended and Restated Rights Agreement, dated as of February 19, 1988,
between Registrant and Harris Trust and Savings Bank (incorporated by
reference from Exhibit 4 to the Form SE filed on March 25, 1993)
4.2 Amendment to Amended and Restated Rights Agreement, dated February 9,
1996 (incorporated by reference from Exhibit 1 to the Form 8-K filed
on February 9, 1996)
4(iii)(A) Registrant undertakes to furnish to the Commission upon request, a
copy of any instrument defining the rights of holders of long-term
debt of the Registrant and its consolidated subsidiaries and for
any of its unconsolidated subsidiaries for which financial
statements are required to be filed
<PAGE>
10.1* FMC 1997 Compensation Plan for Non-Employee Directors, as amended
April 18, 1997 (incorporated by reference from Exhibit 10.1 to the
Quarterly Report on Form 10-Q filed May 15, 1997)
10.2* FMC 1981 Incentive Share Plan, as amended, effective May 28, 1986
(incorporated by reference from Exhibit 10.1 to the Form SE filed
on March 25, 1993)
10.3* FMC 1990 Incentive Share Plan (incorporated by reference from Exhibit
10.1 to the Form SE filed on March 26, 1991)
10.3.a* Amendment dated April 18, 1997 to FMC 1990 Incentive Share Plan
(incorporated by reference from Exhibit 10.3.a to the Quarterly
Report on Form 10-Q filed on May 15, 1997)
10.4* FMC Corporation Salaried Employees' Retirement Plan, as amended and
restated effective January 1, 1995 (incorporated by reference from
Exhibit 10.4 to the Annual Report on Form 10-K for 1994)
10.4.a* Amendment dated March 3, 1998 to FMC Corporation Salaried Employees'
Retirement Plan
10.4.b* Amendment dated March 28, 1996 to FMC Corporation Salaried Employees'
Retirement Plan
10.5* FMC Employees' Thrift and Stock Purchase Plan, as revised and
restated as of April 1, 1991 (incorporated by reference from Exhibit
10.3 to the Form SE filed on March 27, 1992)
10.6* Amendments to the FMC Employees' Thrift and Stock Purchase Plan
through December 31, 1994 (incorporated by reference from Exhibit
10.6 to the Annual Report on Form 10-K for 1994)
10.6.a* Amendment dated March 28, 1996 to FMC Employees' Thrift and Stock
Purchase Plan
10.6.b* Amendments effective April 1 and June 1, 1995 to FMC Employees'
Thrift and Stock Purchase Plan
10.6.c* Amendment dated October 1, 1997 to the FMC Employees' Thrift and
Stock Purchase Plan
<PAGE>
10.7* FMC Salaried Employees' Equivalent Retirement Plan (incorporated by
reference from Exhibit 10.4 to the Form SE filed on March 27, 1992)
10.8* FMC Corporation Non-Qualified Retirement and Thrift Plan
10.9* FMC 1995 Management Incentive Plan, as amended as of October 17, 1997
10.10* FMC 1995 Stock Option Plan, as amended April 18, 1997 (incorporated
by reference from Exhibit 10.10 to the Form 10-Q filed on May 15,
1997)
10.11* FMC Corporation Executive Severance Plan, as amended as of April 18,
1997
10.12* Master Trust Agreement Between FMC Corporation and Fidelity
Management Trust Company, dated June 1, 1997
10.14* FMC Master Trust Agreement between FMC and Bankers Trust Company
(incorporated by reference from Exhibit 10.9 to the Form SE filed on
March 27, 1992)
10.15 Fiscal Agency Agreement between FMC Corporation and Union Bank of
Switzerland, Fiscal Agent, dated as of January 16, 1990 (incorporated
by reference from Exhibit 10.4 to the Form SE filed on March 28,
1990)
10.17* Consulting Agreement dated as of September 1, 1990 between the
Company and Edward C. Meyer (incorporated by reference from Exhibit
10.16 to Form 10-K-A filed on April 5, 1994)
10.18 Supplemental Agreement No. 1 to Purchase Agreement, dated as of
August 25, 1997, by and among FMC Corporation, Harsco Corporation,
Harsco UDLP Corporation and Iron Horse Acquisition Corp.
(incorporated by reference from Exhibit 10.1 to the Form 8-K/A filed
on December 23, 1997)
10.19 Allocation and Contribution Agreement, by and among FMC
Corporation, Harsco Corporation and Harsco UDLP Corporation
(incorporated by reference from Exhibit 10.1 to the Form 8-K/A
filed on December 23, 1997)
<PAGE>
12 Statement re Computation of Ratios of Earnings to Fixed Charges
13 Annual Report to Stockholders for the year ended December 31, 1997,
is included as an Exhibit to this report for the information of the
Securities and Exchange Commission and, except for those portions
thereof specifically incorporated by reference elsewhere herein, such
Annual Report should not be deemed filed as a part of this report.
21 List of Significant Subsidiaries of Registrant
23 Consent of Auditors
24 Powers of Attorney
27 Financial Data Schedule
- -------------------------------
* Indicates a management contract or compensatory plan or arrangement.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>2
<DESCRIPTION>RESTATED BY-LAWS OF THE COMPANY
<TEXT>
<PAGE>
Exhibit 3.3
RESTATED
BY-LAWS
OF
FMC CORPORATION
(as of February 20, 1998)
ARTICLE I
LOCATION OF OFFICES
Section 1. Principal Delaware Office. The principal office of the Corporation
-------------------------
in the State of Delaware shall be in the City of Wilmington, County of New
Castle, and the name and address of the Resident Agent in charge thereof shall
be the Corporation Trust Company, 100 West Tenth Street, Wilmington, Delaware.
Section 2. Principal Illinois Office. The Corporation shall also have and
-------------------------
maintain an office or principal place of business in the State of Illinois at
200 East Randolph Drive, Chicago, Illinois, the location of such office to be
subject to change by resolution of the Board of Directors.
Section 3. Other Offices. The Corporation may also have offices in such other
-------------
places, both within and without the State of Delaware, as the Board of Directors
from time to time may designate or the business of the Corporation require.
ARTICLE II
CORPORATE SEAL
The corporate seal shall be circular in form and have inscribed thereon the
following: "FMC Corporation, Incorporated Delaware 1928."
<PAGE>
ARTICLE III
STOCKHOLDERS
Section 1. Meetings of Stockholders.
------------------------
(a) Annual Meetings.
The annual meeting of the stockholders of the Corporation shall be held on
such date and at such time as may be fixed by resolution of the Board of
Directors. At the annual meeting stockholders shall elect Directors and
transact such other business as properly may be brought before the meeting.
(b) Special Meetings.
Special meetings of stockholders of the Corporation may be called only by
the Board of Directors pursuant to a resolution approved by a majority of
the entire Board of Directors.
(c) Place of Meetings.
Unless otherwise directed by the Board of Directors, all meetings of
stockholders shall be held at the office of the Corporation at 200 East
Randolph Drive, Chicago, Illinois.
(d) Notice of Meetings.
Unless otherwise provided by statute, written notice of any meeting shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed,
notice is given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his or her address as it appears on the
records of the Corporation. Any previously scheduled meeting of the
stockholders may be postponed, and any special meeting of the stockholders
may be cancelled, by resolution of the Board of Directors upon public
notice given prior to the date previously scheduled for such meeting of
stockholders. Only such business shall be conducted at a special meeting
of stockholders as shall have been brought before the meeting pursuant to
the Corporation's notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors.
<PAGE>
Section 2. Quorum of Stockholders. The holders of a majority of the total
----------------------
number or shares issued and outstanding, and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum at all meetings of
the stockholders for the transaction of business, except as otherwise provided
by law, by the certificate of incorporation, or by these By-Laws. The presiding
officer of the meeting or a majority of the shares so represented may adjourn
the meeting from time to time, whether or not there is such a quorum, without
notice other than by announcement at the meeting, until the requisite number of
shares of stock entitled to vote shall be present. At any such adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally noticed.
When a quorum is present at any meeting of stockholders, a majority of the
number of shares of the stock entitled to vote which is represented thereat
shall decide any question brought before such meeting, unless the question is
one upon which by express provision of law or the certificate of incorporation
or of these By-Laws a larger or different vote is required, in which case such
express provision shall govern and control the decision of such question.
Section 3. Voting by Stockholders. Each stockholder of record entitled to vote
----------------------
at any meeting may do so in person or by proxy appointed by instrument in
writing, subscribed by such stockholder or his duly authorized attorney, and
filed with the Secretary.
Section 4.
[RESERVED]
Section 5. Business Brought Before a Meeting. At an annual meeting of the
---------------------------------
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly
<PAGE>
brought before the meeting by a stockholder. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation, not less than sixty days nor
more than ninety days prior to the meeting; provided, however, that in the event
that less than seventy days' notice or prior public disclosure of the date of
the meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the tenth day
following the date on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting, (b) the name and address, as they appear on
the Corporation's books, of the stockholder proposing such business, (c) the
class and number of shares of the Corporation which are beneficially owned by
the stockholder, and (d) any material interest of the stockholder in such
business. Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the procedures
set forth in this Section. The presiding officer of an annual meeting shall, if
the facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this Section; and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
Section 6. Inspectors of Elections; Opening and Closing the Polls. The Board
------------------------------------------------------
of Directors by resolution shall appoint one or more inspectors, which inspector
or inspectors may include individuals who serve the Corporation in other
capacities, including, without limitation, as officers, employees, agents or
representatives, to act at the meetings of stockholders and make a written
report thereof. One or more persons may be designated as alternate inspectors
to replace any inspector who fails to act. If no inspector or alternate has
been appointed to act or is able to act at a meeting of stockholders, the
presiding officer of the meeting shall appoint one or more inspectors to act at
the meeting. Each inspector, before discharging his or her duties, shall
<PAGE>
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability. The inspector
shall have the duties prescribed by law. The presiding officer of the meeting
shall fix and announce at the meeting the date and time of the opening and the
closing of the polls for each matter upon which the stockholders will vote at a
meeting.
ARTICLE IV
DIRECTORS
Section 1. Election, Number and Term of Office. Directors shall be chosen by
-----------------------------------
ballot at the annual meeting of the stockholders. The number of Directors of
this Corporation which shall constitute the whole Board shall be fixed by
resolution adopted by affirmative vote of a majority of the whole Board except
that such number shall not be less than three (3) nor more than fifteen (15),
the exact number to be eleven (11) until otherwise determined by resolution
adopted by affirmative vote of a majority of the whole Board. Each director
shall hold office until his respective successor is elected and qualified or
until his earlier resignation or removal.
Section 2. Nomination of Directors. Subject to the rights of holders of any
-----------------------
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of Directors may be
made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election of Directors
generally. However, any stockholder entitled to vote in the election of
Directors generally may nominate one or more persons for election as Directors
at a meeting only if written notice of such stockholder's intent to make such
nomination or nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Corporation not
later than (i) with respect to an election to be held at an annual meeting of
stockholders, ninety days prior to the anniversary date of the immediately
preceding annual meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of Directors, the close of
business on the tenth day following the date on which notice of such meeting is
first given to stockholders. Each such notice shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the person
or persons to be nominated; (b) a representation that the
<PAGE>
stockholder is a holder of record of stock of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission; and (e) the consent of each nominee
to serve as a Director of the Corporation if so elected. The presiding officer
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedure.
Section 3. Removal of Directors. Subject to the rights of any class or series
--------------------
of stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances, any director may
be removed from office with or without cause and only by the affirmative vote of
the holders of 80% of the combined voting power of the then outstanding shares
of stock entitled to vote generally in the election of directors, voting
together as a single class.
Section 4. Vacancies on Board. Vacancies on the Board of Directors may be
------------------
filled by a majority of the Directors then in office, although less than a
quorum, or by a sole remaining Director. At any special meeting of stockholders
called for the purpose of removing Directors pursuant to Section 3 of this
ARTICLE, the vacancy or vacancies on the Board caused by such removal may be
filled by the stockholders. Any Director elected to fill a vacancy resulting
from an increase in the number of Directors shall hold office for a term that
shall coincide with the remaining term of the class of Directors to which he is
elected. A Director elected to fill a vacancy not resulting from an increase in
the number of Directors shall have the same remaining term as that of his
predecessor.
Section 5. Powers of Directors.
-------------------
(a) General Powers.
The Board of Directors shall have the entire management of the business of
this Corporation. In addition to such powers as are herein and in
<PAGE>
the certificate of incorporation expressly conferred upon it, the Board of
Directors shall have and may exercise all the powers of the Corporation,
subject to the provisions of the laws of Delaware, the certificate of
incorporation and these By-Laws.
(b) Appointment of Committees.
The Board of Directors may designate two or more of their number to
constitute an Executive Committee, which Committee shall have and may
exercise, when the Board is not in session, all of the powers of the Board
in the management of the business and affairs of the Corporation, including
the power to appoint Assistant Secretaries and Assistant Treasurers, and to
authorize the seal of the Corporation to be affixed to all papers which may
require it. The Executive Committee may make rules for the calling,
holding and conduct of its meetings and the keeping of records thereof.
The Board of Directors may also appoint other committees from their own
number, the number (not less than two) composing such committees, and the
powers conferred upon them, to be determined by such resolution or
resolutions.
In the absence or disqualification of any member of the Executive Committee
or any other committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or
disqualified member.
Meetings of any Committee designated by the Board of Directors may be
called by the Board of Directors or by the Chairman of the Committee at any
time or place upon at least twenty-four (24) hours notice. One third of
the members of a Committee, but not less than two members, shall constitute
a quorum of a Committee for the transaction of business.
(c) Delegation of Duties of Directors.
The Board of Directors may delegate for the time being the powers or duties
of any officer of the Corporation, in case of his absence, disability,
death or removal, or for any other reason, to any other officer or to any
Director.
<PAGE>
Section 6. Meeting of Directors.
--------------------
(a) Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place
within or without the State of Delaware, and at such times, as the Board by
vote may determine from time to time, and if so determined no notice
thereof need be given.
After each election of Directors the newly constituted Board shall meet
without notice for the purpose of electing officers and transacting such
other business as lawfully may come before it.
(b) Special Meetings.
Special meetings of the Board of Directors may be held at any time or
place, within or without the State of Delaware, whenever called by the
Chairman of the Board, the President, the Chief Financial Officer, the
Secretary or a majority of the whole Board of Directors.
(c) Notice of Meetings.
Notice of any special meeting of directors shall be given to each director
at his or her business or residence in writing by hand delivery, first-
class or overnight mail or courier service, telegram or facsimile
transmission, or orally by telephone. If mailed by first-class mail, such
notice shall be deemed adequately delivered when deposited in the United
States mails so addressed, with postage thereon prepaid, at least five (5)
days before such meeting. If by telegram, overnight mail or courier
service, such notice shall be deemed adequately delivered when the telegram
is delivered to the telegraph company or the notice is delivered to the
overnight mail or courier service company at least twenty-four (24) hours
before such meeting. If by facsimile transmission, such notice shall be
deemed adequately delivered when the notice is transmitted at least twelve
(12) hours before such meeting. If by telephone or by hand delivery, the
notice shall be given at least twelve (12) hours prior to the time set for
the meeting. Such notice need not state the purposes of such meeting.
<PAGE>
Section 7. Quorum of Directors. Subject to Section 4 of this Article, a
-------------------
whole number of directors equal to a majority of the whole Board of Directors
shall constitute a quorum of the Board for the transaction of business, but a
majority of directors present may adjourn the meeting from time to time until a
quorum is present.
When a quorum is present at any meeting of Directors, a majority of the members
present thereat shall decide any question brought before such meeting, except as
otherwise provided by law, the certificate of incorporation or these By-Laws.
Section 8. Compensation of Directors. Directors other than those who are full-
-------------------------
time salaried officers or other employees of the Corporation may be paid
compensation for their services as Directors and may also be paid additional
compensation for their services as members of any committee appointed by the
Board of Directors, in such amounts as the Board of Directors by resolution
shall from time to time determine to be appropriate. Directors may be paid
their expenses, if any, incurred for attendance at each meeting of the Board of
Directors or of any committee of which they may be members. No Director shall
be precluded from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE V
BOOKS AND RECORDS
Unless otherwise required by the laws of Delaware, the books and records of the
Corporation may be kept at the office of the Corporation in the City of Chicago,
State of Illinois, or at any other place or places outside the State of
Delaware, as the Board of Directors from time to time may designate.
ARTICLE VI
OFFICERS
Section 1. Number and Titles. The officers of the Corporation shall be a
-----------------
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents, a Secretary, a Treasurer, and a Controller, all of whom shall be
elected by the Board of Directors. The Board of Directors or the Chief
Executive Officer may appoint such other officers, including one or more
Assistant Secretaries, Assistant Treasurers and Assistant Controllers as
<PAGE>
either of them shall deem necessary, who shall have such authority and perform
such duties as may be prescribed in such appointment. The Chairman of the Board,
the Vice Chairman of the Board and the President shall be members of the Board
of Directors, but the other officers need not be members of such Board.
Any two or more offices, other than the offices of President and Secretary, may
be held by the same person.
Section 2. Tenure of Office. Officers of the Corporation shall hold their
----------------
respective offices at the pleasure of the Board of Directors and, in the case of
officers who were appointed by the Executive Committee or by the Chief Executive
Officer, also at the pleasure of such appointing authority.
Section 3. Duties of Officers.
------------------
(a) Chairman of the Board.
The Chairman of the Board shall preside at all meetings of the Board of
Directors, of the Executive Committee and of the stockholders of the
Corporation. He shall perform such other duties as may from time-to-time
be assigned to him by the Board of Directors.
(b) Chief Executive Officer.
The Chief Executive Officer of the Corporation shall be in general charge
and supervision of the affairs of the Corporation.
(c) President.
The President shall perform such duties as from time-to-time may be
assigned to him by the Board of Directors or the Chief Executive Officer of
the Corporation.
(d) Vice Presidents.
Each Vice President shall have such powers and shall perform such duties as
may be assigned to him by the senior officers of the Corporation or by the
Board of Directors. The Board of Directors may designate one or more Vice
Presidents as Executive Vice Presidents or Senior Vice Presidents, or make
such other designations of Vice Presidents as it may deem appropriate.
<PAGE>
(e) Secretary.
The Secretary shall attend and record all proceedings of the meetings of
the Board of Directors, the stockholders, and the Executive Committee;
shall be custodian of the corporate seal and affix such seal to all
documents requiring the same; shall cause to be maintained a stock transfer
book, and a stock ledger, and such other books as the Board of Directors
may direct; shall serve all notices required by law, or by these By-Laws,
or by resolution of the Board of Directors; and shall perform such other
duties as pertain to the office of Secretary, subject to the control of the
Board of Directors.
(f) Assistant Secretaries.
The Assistant Secretaries shall assist the Secretary in the performance of
his duties, and shall perform such other duties as the Board of Directors
or the Chief Executive Officer from time to time may prescribe. If at any
time the Secretary shall be unable to act, an Assistant Secretary may
perform his duties.
(g) Treasurer.
The Treasurer shall perform all duties commonly incident to that office
(including, but without limitation, the care and custody of the funds and
securities of the Corporation which from time to time may come into his
hands and the deposit of the funds of the Corporation in such banks or
trust companies as the Board of Directors may authorize or direct) and, in
addition, such other duties as the Board of Directors from time to time may
prescribe.
(h) Assistant Treasurers.
Assistant Treasurers shall assist the Treasurer in the performance of his
duties, and shall discharge such other duties as the Board of Directors or
the Chief Executive Officer from time to time may prescribe.
(i) Controller.
The Controller shall be the principal accounting officer of the
Corporation, and shall maintain adequate records of all assets, liabilities
and
<PAGE>
transactions of the Corporation; and shall cause adequate audits of the
Corporation's accounting records to be currently and regularly made; and
shall perform such other duties as the Board of Directors from time to time
may prescribe.
(j) Assistant Controllers.
Assistant Controllers shall assist the Controller in performance of his
duties, and shall discharge such other duties as the Board of Directors or
the Chief Executive Officer from time to time may prescribe.
ARTICLE VII
STOCK CERTIFICATES
Section 1. Stock Certificates. Every holder of stock shall be entitled to have
------------------
a certificate or certificates duly numbered, certifying the number and class of
shares in the Corporation owned by him, in such form as may be prescribed by the
Board of Directors. Each such certificate shall be signed in the name of the
Corporation by the Chairman of the Board, the President or a Vice President, and
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer. If any such certificate is countersigned (1) by a transfer agent
other than the Corporation or its employee, or (2) by a registrar other than the
Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue. All
certificates shall be countersigned and registered in such manner as the Board
of Directors may from time to time prescribe and there shall be impressed
thereon the seal of the Corporation or imprinted thereon a facsimile of such
seal. Any transfer agent may countersign by facsimile signature.
No registrar of any stock of the Corporation appointed pursuant to this Section
1 shall be the Corporation or its employee.
Section 2. Lost Certificates. In the case of the loss, mutilation or
-----------------
destruction of a stock certificate, a duplicate certificate may be issued
<PAGE>
upon such terms and conditions as the Board of Directors from time to time may
prescribe.
Section 3. Transfers of Stock. Transfer of shares of stock of the Corporation
------------------
shall be made on the books of the Corporation only by the person named in the
certificate evidencing such stock or by any attorney lawfully constituted in
writing, and upon surrender and cancellation of such certificate, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of authenticity of the signatures and authority of the
signatories as the Corporation or its agents may reasonably require, except that
a new certificate may be issued in the name of an appropriate state officer or
office, without the surrender of the former certificate for shares presumed
abandoned under the provisions of applicable state escheat or abandoned property
laws. The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof, and accordingly is not
bound to recognize any equitable or other claim or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, save as expressly otherwise provided by the laws of the
State of Delaware.
ARTICLE VIII
DEPOSITARIES AND CHECKS
Depositaries of the funds of the Corporation shall be designated by the Board of
Directors; and all checks on such funds shall be signed by such officers or
other employees of the Corporation as the Board from time to time may designate.
ARTICLE IX
WAIVER OF NOTICE
Any notice required to be given by law, by the certificate of incorporation, or
by these By-Laws, may be waived by the person entitled thereto, either before or
after the time stated in such notice.
ARTICLE X
AMENDMENT OF BY-LAWS
Subject to Section (c) of ARTICLE EIGHTH and Section (a) of ARTICLE TENTH of the
Certificate of Incorporation of the Corporation these By-Laws may be
<PAGE>
amended, repealed or added to at any regular or special meeting of the Board of
Directors or of the stockholders, by the affirmative vote of a majority of the
whole Board of Directors, or by the affirmative vote of a majority of the stock
issued and outstanding and entitled to vote, as the case may be.
ARTICLE XI
INDEMNIFICATION OF OFFICERS, DIRECTORS AND EMPLOYEES
(a) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceedings, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans maintained
or sponsored by the Corporation, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that except as provided in paragraph (c) of this Article XI, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the whole Board of
Directors. The right to indemnification conferred in this Article XI shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such
<PAGE>
proceeding in advance of its final disposition, such advances to be paid by the
Corporation within 20 days after the receipt by the Corporation of a statement
or statements from the claimant requesting such advance or advances from time to
time; provided, however, that if the General Corporation Law of the State of
Delaware requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Corporation of an undertaking by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Article XI or otherwise.
(b) To obtain indemnification under this Article XI, a claimant shall
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this Paragraph (b), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (1) if requested by the claimant,
by Independent Counsel (as hereinafter defined), or (2) if no request is made by
the claimant for a determination by Independent Counsel, (i) by the Board of
Directors by a majority vote of a quorum consisting of Disinterested Directors
(as hereinafter defined), or (ii) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if obtainable,
such quorum of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered to
the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the
stockholders of the Corporation. In the event the determination of entitlement
to indemnification is to be made by Independent Counsel at the request of the
claimant, the Independent Counsel shall be selected by the Board of Directors
unless there shall have occurred within two years prior to the date of the
commencement of the action, suit or proceeding for which indemnification is
claimed a "Change of Control" as defined in the Executive Severance Plan of FMC
Corporation (as
<PAGE>
amended as of April 18, 1997), in which case the Independent Counsel shall be
selected by the claimant unless the claimant shall request that such selection
be made by the Board of Directors. If it is so determined that the claimant is
entitled to indemnification, payment to the claimant shall be made within 10
days after such determination.
(c) If a claim under Paragraph (a) of this Article XI is not paid in full
by the Corporation within thirty days after a written claim pursuant to
Paragraph (b) of this Article XI has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition whether the required undertaking, if any is required,
has been tendered to the Corporation) that the claimant has not met the standard
of conduct which makes it permissible under the General Corporation Law of the
State of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
Independent Counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Corporation (including its Board of Directors, Independent
Counsel or stockholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(d) If a determination shall have been made pursuant to Paragraph (b) of
this Article XI that the claimant is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to Paragraph (c) of this Article XI.
(e) The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to Paragraph (c) of this Article XI that the
procedures and presumptions of this Article XI are not valid, binding and
enforceable and shall stipulate in
<PAGE>
such proceeding that the Corporation is bound by all the provisions of this
Article XI.
(f) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article XI shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-Laws, agreement, vote of stockholders or Disinterested
Directors or otherwise. No repeal or modification of this Article XI shall in
any way diminish or adversely affect the rights of any director, officer,
employee or agent of the Corporation hereunder in respect of any occurrence or
matter arising prior to any such repeal or modification.
(g) The Corporation may, but shall not be obligated to, purchase and
maintain insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Corporation against any liability, cost or expense.
(h) The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification, and rights to be paid by
the Corporation the expenses incurred in defending any proceeding in advance of
its final disposition, to any employee or agent or class of employees or agents
of the Corporation (including the heirs, executors, administrators or estate of
each such person) to the fullest extent of the provisions of this Article XI
with respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
(i) If any provisions or provision of this Article XI shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (1) the validity,
legality and enforceability of the remaining provisions of this Article XI
(including, without limitation, each provision of any paragraph of this Article
XI containing any such provision held to be invalid, illegal or unenforceable,
that is not itself held to be invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (2) to the fullest extent possible,
the provisions of this Article XI including, without limitation, each such
portion of any paragraph of this Article XI containing any such provision held
to be invalid, illegal or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
<PAGE>
(j) For purposes of this Article XI:
(1) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the matter in respect of which
indemnification is sought by the claimant.
(2) "Independent Counsel" means a law firm, a member of a law firm,
or an independent practitioner, that is experienced in matters of
Corporation law and shall include any person who, under the
applicable standards of professional conduct then prevailing,
would not have a conflict of interest in representing either the
Corporation or the claimant in an action to determine the
claimant's rights under this Article XI.
(k) Any notice, request or other communication required or permitted to be
given to the Corporation under this Article XI shall be in writing and either
delivered in person or sent by telecopy, telex, telegram, overnight mail or
courier service, or certified or registered mail, postage prepaid, return
receipt requested, to the Secretary of the Corporation and shall be effective
only upon receipt by the Secretary.
ARTICLE XII
EMERGENCY BY-LAWS
The Emergency By-Laws provided in this Article XII shall be operative during any
emergency in the conduct of the business of the Corporation resulting from an
attack on the United States or on a locality in which the Corporation does
business or customarily holds meetings of its board of directors or stockholders
or during any nuclear or atomic disaster or during the existence of any
catastrophe or other similar emergency condition as a result of which a quorum
of the board of directors or a standing committee thereof cannot readily be
convened for action notwithstanding any different provision in the preceding
Articles of these By-Laws or in the Certificate of Incorporation of the
Corporation or in the General Corporation Law of the State of Delaware. To the
extent not inconsistent with the provisions of this Article, the By-Laws
provided in the preceding Articles shall remain in effect during such emergency
<PAGE>
and upon its termination the Emergency By-Laws shall cease to be operative.
During any such emergency:
(a) A meeting of the Board of Directors or a committee thereof may be called
by any officer or director of the Corporation. Notice of the time and place of
the meeting shall be given by the person calling the meeting to such of the
directors as it may be feasible to reach by any available means of
communication. Such notice shall be given at such time in advance of the
meeting as circumstances permit in the judgment of the person calling the
meeting.
(b) At any such meeting of the Board of Directors, a quorum shall consist of
the director or directors in attendance at the meeting.
(c) The Board of Directors, either before or during any such emergency, may
provide, and from time to time modify, lines of succession in the event that
during such an emergency any or all officers or agents of the Corporation shall
for any reason be rendered incapable of discharging their duties.
(d) To the extent required to constitute a quorum at any meeting of the
Board of Directors during such an emergency, the officers of the Corporation who
are present shall, unless otherwise provided in Emergency By-Laws, be deemed, in
order of rank and within the same rank in order of seniority, directors for such
meeting.
(e) The Board of Directors, either before or during any such emergency, may,
effective in the emergency, change the head office or designate several
alternative head offices or regional offices or authorize the officers so to do.
No officer, director or employee acting in accordance with these Emergency By-
Laws shall be liable except for willful misconduct.
These Emergency By-Laws shall be subject to repeal or change by further action
of the Board of Directors or by action of the stockholders, but no such repeal
or change shall modify the provisions of the next preceding paragraph with
regard to action taken prior to the time of such repeal or change. Any
amendment of these Emergency By-Laws may make any further or different provision
that may be practical and necessary for the circumstances of the emergency.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4.A
<SEQUENCE>3
<DESCRIPTION>FMC SALARIED EMPLOYEES' RETIREMENT PLAN AMENDMENT
<TEXT>
<PAGE>
EXHIBIT 10.4.a
AMENDMENT
The FMC Corporation Salaried Employees' Retirement Plan is amended effective
January 1, 1991, as follows:
Section 6(b). Revise to read:
- ------------
(b) Calculation of Normal Retirement Benefit. Subject to Section 6(c), a
----------------------------------------
Participant's monthly Normal Retirement Benefit shall be equal to the
product of (i) multiplied by (ii) below:
(i) One-twelfth (1/12) of the sum of (A) and (B) below:
(A) The sum of (I) one percent (1%) of the Participant's Final
Average Yearly Earnings up to the Social Security Covered
Compensation Base and (II) one and one-half percent (1-1/2%)
of the Participant's Final Average Yearly Earnings in excess
of the Social Security Covered Compensation Base multiplied
by the Participant's expected Years of Credited Service at
age 65 (up to 35).
(B) One and one-half percent (1-1/2%) of the Participant's Final
Average Yearly Earnings multiplied by the Participant's
expected Years of Credited Service at age 65 in excess of
35.
(ii) The ratio of actual Years of Credited Service to expected Years
of Credited Service.
Dated: 3/3/98 FMC CORPORATION
By: /s/ David J. Kostelansky
---------------------------------
, Employee Welfare
Benefits Plan Committee
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4.B
<SEQUENCE>4
<DESCRIPTION>FMC SALARIED EMPLOYEES' RETIREMENT PLAN AMENDMENT
<TEXT>
<PAGE>
EXHIBIT 10.4.b
AMENDMENT
OF THE
FMC CORPORATION SALARIED EMPLOYEES' RETIREMENT PLAN
WHEREAS, FMC and Snap-On Incorporated ("Snap-On") will be parties to an
Acquisition Agreement under which FMC will sell and assign the assets and
liabilities of its Automotive Service Equipment Division (the "Business") to
Snap-On, and employees of the Business will be offered employment by Snap-On;
and
WHEREAS, the Acquisition Agreement provides that FMC will amend the FMC
Employees' Thrift and Stock Purchase Plan (the "Thrift Plan") and the FMC
Corporation Salaried Employees' Retirement Plan (the "Salaried Plan") with
respect to employees who accept offers of employment with Snap-On (the
"Transferred Employees" as defined in the Acquisition Agreement;
NOW, THEREFORE, IT IS RESOLVED, effective as of the "Closing Date" as defined in
the Acquisition Agreement, the Salaried Plan is amended as follows:
1. Each Transferred Employee's eligible wages with Snap-On and its
subsidiaries shall be recognized in determining the Transferred Employee's
Final Average Monthly Earnings under this Plan so that each Transferred
Employee's benefit under the Plan shall be determined, to the extent
applicable, using eligible wages received from the Company, Snap-On, and
its subsidiaries.
2. A Transferred Employee will not be considered to have terminated
employment with the Company until employment is terminated with Snap-On and
its subsidiaries, but such employment with Snap-On and its subsidiaries
shall not otherwise be taken into account for purposes of accrual of
benefits under the Plan.
Dated: March 28, 1996
FMC CORPORATION
By /s/ Michael J. Callahan
------------------------------
Member, FMC Employee Welfare
Benefits Plan Committee
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6.A
<SEQUENCE>5
<DESCRIPTION>FMC EMPLOYEES' THRIFT & STOCK PURCHASE PLAN AMEND.
<TEXT>
<PAGE>
EXHIBIT 10.6.a
AMENDMENT
OF THE
FMC EMPLOYEES' THRIFT AND STOCK PURCHASE PLAN
WHEREAS, FMC and Snap-On Incorporated ("Snap-On") will be parties to an
Acquisition Agreement under which FMC will sell and assign the assets and
liabilities of its Automotive Service Equipment Division (the "Business") to
Snap-On, and employees of the Business will be offered employment by Snap-On;
and
WHEREAS, the Acquisition Agreement provides that FMC will amend the FMC
Employees' Thrift and Stock Purchase Plan (the "Thrift Plan") and the FMC
Corporation Salaried Employees' Retirement Plan (the "Salaried Plan") with
respect to employees who accept offers of employment with Snap-On (the
"Transferred Employees" as defined in the Acquisition Agreement;
NOW, THEREFORE, IT IS RESOLVED, effective as of the "Closing Date" as defined in
the Acquisition Agreement, the Thrift Plan is amended as follows:
1. Each Transferred Employee is fully vested in his or her entire Plan
Benefit.
2. Any outstanding loan from the Plan to a Transferred Employee shall
remain outstanding pursuant to the terms of the applicable loan agreement,
but not beyond the date of the Transferred Employee's termination of
employment with Snap-On Incorporated, notwithstanding such Transferred
Employee's termination of employment with FMC; provided, however, that such
loans shall remain outstanding only for such period as Snap-On Incorporated
facilitates loan repayments by payroll deduction.
Dated: March 28, 1996
FMC CORPORATION
By /s/ Michael J. Callahan
----------------------------
Member, FMC Employee Welfare
Benefits Plan Committee
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6.B
<SEQUENCE>6
<DESCRIPTION>FMC EMPLOYEES' THRIFT & STOCK PURCHASE PLAN AMEND.
<TEXT>
<PAGE>
EXHIBIT 10.6.b
AMENDMENT
The FMC Employees' Thrift and Stock Purchase Plan is amended as follows:
A. Effective as of April 1, 1995:
Section 9(b)(ii). Revise to read:
- -----------------
(ii) Installments. A Participant entitled to elect to defer
------------
distribution of his Plan Benefit under Subsection 9(b)(i) may elect to have
the distribution paid in cash over an installment period of not more than
10 years, over a period equal to the life expectancy of the Participant as
of the date distribution commences, or a period equal to the joint life
expectancy of the Participant and the Participant's Beneficiary as of such
date. Such election must be filed with FMC on the prescribed form before
the date employment terminates, before the Participant dies, or before FMC
determines that the Participant is permanently and totally disabled, as the
case may be, and shall, except as provided in Subsection 9(f), be
irrevocable. The election shall specify the number of annual installments
or whether the Participant's or joint life expectancy is to be used, which
life expectancy will be determined by FMC. If an installment election is
made, the Plan Benefit shall be distributed in annual installments as
follows: The amount of each annual installment shall be paid during the
first month of the year. The value of Stock and/or cash to be distributed
in each installment shall be determined by dividing the amount of Stock
and/or cash credited to the Participant's Plan Benefit account as of the
date the installment is being paid by the total number of annual
installments elected or determined minus the number of annual installments
which have previously been paid. The amount payable with respect to the
Stock portion of the installment shall be determined as of the Valuation
Date immediately preceding the date payment is made.
<PAGE>
B. Effective as of June 1, 1995:
Section 3(d). Revise to read:
- -------------
(d) Investment of Employee-Elected Company Contributions. A
----------------------------------------------------
Participant's Employee-Elected Company Contributions included in his Basic
Contributions shall be invested (i) entirely in the Stock Fund, the Fixed
Income Fund, or the Equity Fund, or (ii) in two or more of those Funds in
multiples of 25%, as he shall elect by filing the prescribed application
form. A Participant's Employee-Elected Company Contributions not included
in his Basic Contributions shall be invested (i) entirely in the Stock
Fund, the Fixed Income Fund, or the Equity Fund, or (ii) in two or more of
those Funds in multiples of 25%, as he shall separately elect on the
prescribed application form. A Participant may change either of such
elections prospectively by filing the prescribed form prior to the month in
which the change is to become effective.
Section 3(g)(v). Revise to read:
- ----------------
(v) Investment of Special Employee Contributions. The portion of a
--------------------------------------------
Participant's Special Employee Contributions included in Basic
Contributions shall be invested in the same manner as his Employee-Elected
Company Contributions included in Basic Contributions (if any) as elected
under Subsection 3(d). If the Participant has no currently effective
election of Employee-Elected Company Contributions, or to the extent of his
Special Employee Contributions not included in Basic Contributions, he may
separately elect to invest his Special Employee Contributions in the manner
provided in Section 3(d).
<PAGE>
Section 6(d). Revise the third sentence to read:
- -------------
Monthly loan payments of principal and interest will be credited to the
accounts of a Participant from which deducted in reverse of the order
provided in Subsection 6(a), but allocated among investment funds in
proportion to the amounts originally deducted from those funds.
Dated: FMC CORPORATION
--------------------------
By:
-----------------------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6.C
<SEQUENCE>7
<DESCRIPTION>FMC EMPLOYEES' THRIFT & STOCK PURCHASE PLAN AMEND.
<TEXT>
<PAGE>
Exhibit 10.6.c
AMENDMENT
TO THE
FMC EMPLOYEES' THRIFT AND STOCK PURCHASE PLAN
WHEREAS, FMC Corporation (the "Company") sponsors and maintains the FMC
Employees' Thrift and Stock Purchase Plan (the "Plan") for the benefit of its
employees, and
WHEREAS, the Company deems it desirable to amend the Plan to provide for
multiple investment fund options under the Plan and to make certain other
administrative changes.
NOW, THEREFORE, pursuant to the power of amendment contained in Section
15(a) of the Plan, the Company hereby amends the Plan, effective the 7th day of
July, 1997, by amending the Plan in the following particulars:
1. By substituting the phrase "Investment Funds (as defined herein in
Section 13(e) of the Plan)" for the phrase "Stock, Equity Fund or Fixed Income
Fund" where such latter phrase appears in Section 2(b) of the Plan.
2. By substituting the following for the second sentence in Section
3(a)(ii) of the Plan:
"The Active Participation of any Participant who makes such an election
shall be suspended. Active Participation shall be resumed as soon as
administratively feasible following the Participant's election to
resume Employee-Elected Company Contribution is received by FMC in the
local Human Resources office on the prescribed application form."
3. By substituting the following for Section 3(d) of the Plan:
"(d) Investment of Employee-Elected Company Contributions. At such time
as FMC establishes Investment Funds in accordance with Section
<PAGE>
13(e), FMC shall establish uniform rules concerning Participants'
investment elections. In general, as of the date an employee becomes a
Participant and as of any change date thereafter, each Participant may
elect, by giving written notice to FMC at least 30 days (or such other
period as FMC may establish) in advance, in accordance with uniform rules
established by FMC and on a form provided by it for this purpose, or by
authorized telephonic voice response, to have future contributions made by
such Participant or on the Participant's behalf (prior to any subsequent
election such Participant may make), other than Company Contributions,
invested in accordance with such Participant's election entirely in one of
the Investment Funds or partially in each of two or more of the Investment
Funds."
4. By substituting the following for Section 3(e) of the Plan:
"(e) Transfer of Funds. As of any change date, each Participant may
elect, by giving written notice to FMC at least 30 days (or such other
periods as FMC may establish on a uniform and nondiscriminatory basis) in
advance, in accordance with uniform rules established by FMC and on a form
provided by it for this purpose, or by authorized telephonic voice
response, to have such Participant's account balances, other than his
Company Contributions Account as of that date (after all adjustments as of
that date have been made) invested in accordance with such Participant's
election entirely in one of the Investment Funds or partially in each of
two or more of the Investment Funds, provided, however, that any such
transfer must be in an amount at least equal to the lesser of the aggregate
balance of such accounts or $250. Any investment election made by a
Participant shall be deemed to be a continuing election until changed.
During any period for which a Participant has not made either or both of
the above elections, such Participant will be considered to have elected to
have the Participant's account balances or future contributions, or both,
as the case may be, invested entirely in such fund as is prescribed by FMC.
FMC shall from time to time notify each trustee or insurance company with
custody of an Investment Fund of the aggregate amounts to be invested in
each Investment Fund in accordance with Participants' elections.
Notwithstanding anything to the contrary, (i) Company Contributions shall
be invested in the Stock Fund and no amount of Company Contributions shall
be invested in any other Investment Fund and (ii) only Participants who are
at least age 55 may transfer funds out of the Stock Fund and such
Participants may only do so annually."
<PAGE>
5. By substituting the phrase "an Investment Fund selected by FMC" for the
phrase "Fixed Income Fund" where such latter phrase appears in Sections 3(f) and
6(a) of the Plan.
6. By substituting the phrase "Investment Funds other than the Stock Fund"
for the phrase "Fixed Income Fund and Equity Fund" where such latter phrase
appears in Sections 4(a) and 9(a)(i) of the Plan.
7. By substituting the word "week" for the phrase "calendar month" and the
word "month" whereby such phrase or word appears in Section 4(a) and 4(b) of the
Plan.
8. By substituting the following for the last sentence in Section 4(b) of
the Plan.
"All Company Contributions allocated to Company Contributions Accounts
shall be invested in FMC stock as part of the FMC Stock Fund. Forfeitures
shall be invested in an Investment Fund selected by FMC.
9. By substituting the phrase "all or part of" for the words "his entire"
where it appears in the first sentence of Section 5(e) of the Plan.
10. By substituting the phrase "Investment Funds" for the phrase "Stock
Equity, or Fixed Income Funds" where such latter phrase (or a similar phrase
referring to all such investment funds) appears in Sections 5(h), 9(a)(ii),
14(a), 14(b) of the Plan.
11. By substituting the following sentence for the fifth sentence of
Section 6(a) of the Plan:
"The period of repayment for any loan shall be from one (1) five (5) years
in six-month increments."
<PAGE>
12. By substituting the phrase "Investment Funds other than the Stock
Fund" for the phrase "Fixed Income Fund and Equity Fund" where such latter
phrase appears in Section 9(a)(i) of the Plan.
13. By substituting the following sentence for the second sentence in
Section 13(d).
"The trustee shall pay all expenses of the Plan out of the Trust Fund,
except that Participants shall be charged a participation fee in the amount
of $25.00 per year per Participant and a loan processing fee in the amount
of $75.00 per loan application, and FMC shall pay expenses not covered by
the participation fee and that cannot be charged to the Trust under
applicable law."
14. By substituting the following for Section 13(e) of the Plan:
"(e) Investment Funds. From time to time, FMC may cause one or more
investment funds ("Investment Funds") to be established within the Trust
for the investment of Participants' accounts, including a fund consisting
of qualifying employer securities (as defined in Section 407(d)(5) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). FMC
may, in its discretion, establish pass through voting procedure regarding
the voting and tendering of qualifying employer securities with respect to
a fund of qualifying employer securities. The Plan may invest in
qualifying employer securities to the maximum extent permitted by ERISA (or
to 100% in common stock in the case of a profit sharing plan). The
continued availability of any Investment Fund is necessarily conditioned
upon the terms and conditions of the applicable investment management
agreements, and the continued availability of Investment Funds established
cannot be assured on the same terms and conditions as may apply from time
to time. Participants will be informed from time to time of the
availability of Investment Funds as they are established or superseded.
Any Investment Fund may be partially or entirely invested in any common,
commingled or collective trust fund, pooled investment from or mutual fund
which is invested in property of the kind specified for that Investment
Fund."
15. By substituting the phrase "Stock Fund Units" for the phrase "Stock
Credits" or "shares of Stock" and for the words "Stock" or "shares" standing
alone where any such phrases or words appear in Section 14(c)(i and (ii).
<PAGE>
16. By deleting Sections 19(v) and 19(x) and redesignating Section 19(w)
as Section 19(v), Section 19(y) through 19(bb) as Sections 19(w) through 19(z).
17. By inserting the following new section as Section 19(aa) and by
redesignating Sections 19(cc) through 19(tt) as Section 19(bb) through (ss):
"(aa). An "Investment Fund" means an investment fund established and
maintained by the Trustee as part of the Trust Fund. Any contributions to the
Plan placed in Investment Funds shall be invested and reinvested in property of
the kind specified for that investment Fund, including in any common, commingled
or collective trust fund, pooled investment fund or mutual fund which is
invested in property of the kind specified for that Investment Fund."
18. By substituting the following as Section 19(ff):
"(ff) "Plan Year" means the period of nine consecutive months
beginning on April 1, 1997 and ending on December 31, 1997 and each period
of 12 consecutive months beginning on January 1 thereafter."
19. By substituting the following for Section 19(qq) of the Plan:
"(qq) "Valuation Date" means any business day or any Valuation Date
otherwise prescribed for specific purposes in the Plan."
* * *
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as
of the effective date herein.
FMC CORPORATION
By:
--------------------------
Title:
--------------------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>8
<DESCRIPTION>FMC NON-QUALIFIED RETIREMENT & THRIFT PLAN
<TEXT>
<PAGE>
EXHIBIT 10.8
FMC CORPORATION
NON-QUALIFIED RETIREMENT AND THRIFT PLAN
----------------------------------------
(Amended and Restated Effective as of September 1, 1997)
<PAGE>
CERTIFICATE
-----------
I, _______________________, the_____________________ of FMC Corporation, do
hereby certify that the attached is a true and correct copy of the FMC
Corporation Non-Qualified Retirement and Thrift Plan (As Amended and Restated
Effective as of September 1, 1997).
By:___________________________________
Title:________________________________
Dated this ____ day of _______________, 1997.
<PAGE>
FMC CORPORATION
NON-QUALIFIED RETIREMENT AND THRIFT PLAN
----------------------------------------
(Amended and Restated Effective as of September 1, 1997)
<TABLE>
<CAPTION>
Table of Contents
-----------------
<S> <C>
ARTICLE I 1
Introduction 1
Section 1.1. Name; Purpose 1
Section 1.2. Administration of the Plan 1
ARTICLE II 2
Definitions 2
Section 2.1. "Account" 2
Section 2.2. "Account Balance" 2
Section 2.3. "Accounting Date" 2
Section 2.4. "Adopting Affiliate" 2
Section 2.5. "Affiliated Group" 2
Section 2.6. "Board" 2
Section 2.7. "Code" 2
Section 2.8. "Committee" 2
Section 2.9. "Company" 2
Section 2.10. "Company Stock" 3
Section 2.11. "Compensation" 3
Section 2.12. "Deferral Contributions" 3
Section 2.13. "Deferral Contributions Account" 3
Section 2.14. "Effective Date" 3
Section 2.15. "Employer" 3
Section 2.16. "ERISA" 3
Section 2.17. "Excess Compensation" 3
Section 2.18. "Matching Contributions" 3
</TABLE>
i
<PAGE>
FMC CORPORATION
NON-QUALIFIED RETIREMENT AND THRIFT PLAN
(Amended and Restated Effective as of September 1, 1997)
Table of Contents
<TABLE>
<S> <C>
ARTICLE I 1
Introduction 1
Section 1.1. Name; Purpose 1
Section 1.2. Administration of the Plan 1
ARTICLE II 2
Definitions 2
Section 2.1. "Account" 2
Section 2.2. "Account Balance" 2
Section 2.3. "Accounting Date" 2
Section 2.4. "Adopting Affiliate" 2
Section 2.5. "Affiliated Group" 2
Section 2.6. "Board" 2
Section 2.7. "Code" 2
Section 2.8. "Committee" 2
Section 2.9. "Company" 2
Section 2.10. "Company Stock" 3
Section 2.11. "Compensation" 3
Section 2.12. "Deferral Contributions" 3
Section 2.13. "Deferral Contributions Account" 3
Section 2.14. "Effective Date" 3
Section 2.15. "Employer" 3
Section 2.16. "ERISA" 3
Section 2.17. "Excess Compensation" 3
Section 2.18. "Matching Contributions" 3
Section 2.19. "Matching Contributions Account" 3
Section 2.20. "Participant" 4
Section 2.21. "Permitted Investment" 4
Section 2.22. "Plan" 4
Section 2.23. "Plan Year" 4
Section 2.24. "Supplemental Retirement Benefit" 4
Section 2.25. "Tax-Qualified Plans" 4
Section 2.26. "Tax-Qualified Retirement Plan" 4
Section 2.27. "Tax-Qualified Thrift Plan" 4
Section 2.28. "Year of Service" 4
ARTICLE III 4
Plan Participation 4
Section 3.1. Eligibility 4
Section 3.2. Participation 5
ARTICLE IV 6
Deferral Plan Contributions 5
Section 4.1. Deferral Contributions 5
Section 4.2. Deferral Contributions Account 5
ARTICLE V 6
Matching Contributions 6
Section 5.1. Matching Contributions 6
Section 5.2. Matching Contributions Account 6
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI 6
Deemed Earnings on Account Balances 6
Section 6.1. 6
(a) Permitted Investments 6
(b) Receipts 7
(c) Disposition 7
(d) Elections 7
(e) Actual Investment Not Required 7
Section 6.2. Crediting of Deferrals 7
Section 6.3. Statement of Accounts 8
ARTICLE VII 8
Supplemental Retirement Benefits 8
Section 7.1. Amount of Benefits 8
Section 7.2. No Supplemental Retirement Benefit Account. 8
ARTICLE VIII 9
Establishment of Trust 9
Section 8.1. Establishment of Trust 9
Section 8.2. Status of Trust 9
ARTICLE IX 9
Distribution of Account Balances 9
Section 9.1. Distribution of Accounts 9
Section 9.2. Emergency Payments 10
Section 9.3. Distribution of Supplemental Retirement Benefits 11
Section 9.4. Distribution of Accounts of Certain Former Employees 11
Section 9.5. Involuntary Distributions 11
Section 9.6. Forfeitures 12
Section 9.7. Designation of Beneficiaries 12
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE X 13
Amendment and Termination 13
Section 10.1. Amendment 13
Section 10.2. Plan Termination 13
ARTICLE XI 13
General Provisions 13
Section 11.1. Non-Alienation of Benefits 13
Section 11.2. Withholding for Taxes 13
Section 11.3. Immunity of Committee Members 14
Section 11.4. Plan Not to Affect Employment Relationship 14
Section 11.5. Action by the Employers 14
Section 11.6. Effect on Other Employee Benefit Plans 14
Section 11.7. Assumption of Employer Liability 14
Section 11.8. Notices 15
Section 11.9. Gender and Number; Headings 15
Section 11.10. Controlling Law 15
Section 11.11. Successors 15
Section 11.12. Severability 15
</TABLE>
iv
<PAGE>
FMC CORPORATION
NON-QUALIFIED RETIREMENT AND THRIFT PLAN
----------------------------------------
(Amended and Restated Effective as of September 1, 1997)
ARTICLE I
Introduction
------------
Section 1.1. Name; Purpose. The Company established the FMC Deferred
-------------
Compensation Equivalent Retirement and Thrift Plan effective as of January 1,
1977. This document constitutes an amendment and restatement of such plan, which
is renamed the "FMC Corporation Non-Qualified Retirement and Thrift Plan,"
effective as of September 1, 1997. Unless otherwise expressly provided herein,
the capitalized terms used in the Plan shall have the meanings set forth in
Article II. This Plan shall constitute an unfunded non-qualified deferred
compensation arrangement established for the purpose of providing deferred
compensation to a select group of management or highly compensated employees (as
defined for purposes of Title I of ERISA) of the Company. The Plan is intended
to be maintained and administered in connection with the Tax-Qualified
Retirement Plan and the Tax-Qualified Thrift Plan for the benefit of selected
employees of the Company whose employee pre-tax contributions and benefits that
would have been provided to such employees under the terms of the Tax-Qualified
Plans but for the exclusion of deferred compensation from creditable
compensation thereunder for purposes of computing benefits and contributions,
the limitations of Section 401(a)(17) of the Code and, effective as of January
1, 1998, the limitations of Section 402(g) of the Code.
Section 1.2. Administration of the Plan. The Plan shall be administered
-------------------------
by the Committee. The duties and authority of the Committee under the Plan
shall include (i) the interpretation of the provisions of the Plan, (ii) the
adoption of any rules and regulations which may become necessary or advisable in
the operation of the Plan, (iii) the making of such determinations as may be
permitted or required pursuant to the Plan, and (iv) the taking of such other
actions as may be required for the proper administration of the Plan in
accordance with its terms. Any decision of the Committee with respect to any
matter within the authority of the Committee shall be final, binding and
conclusive upon the Company and each Participant, former Participant, designated
beneficiary, and each person claiming under or through any Participant or
designated beneficiary; and no additional authorization or ratification by the
Board shall be required. Any action taken by the Committee with respect to any
one or more Participants shall not be binding on the Committee as to any action
to be taken with respect to any other Participant. A member of the Committee may
be a Participant, but no member of
1
<PAGE>
the Committee may participate in any decision directly affecting his rights or
the computation of his benefits under the Plan. Each determination required or
permitted under the Plan shall be made by the Committee in the sole and absolute
discretion of the Committee.
ARTICLE II
Definitions
-----------
Section 2.1. "Account" means a bookkeeping account maintained by the
Company for a Participant under the Plan, including the Deferral Contributions
Account and the Matching Contributions Account of a Participant.
Section 2.2. "Account Balance" means the value, as of a specified date,
of any of the Accounts of a Participant.
Section 2.3. "Accounting Date" means the last day of each Plan Year, or
such other date or dates as the Committee may establish under the Plan.
Section 2.4. "Adopting Affiliate" means an entity that, together with the
Company, is considered as a single employer for purposes of Sections 414(b), (c)
or (m) of the Code and that has adopted the Tax-Qualified Plans pursuant to the
applicable provisions of such plans.
Section 2.5. "Affiliated Group" has the same meaning as under the Tax-
Qualified Plans.
Section 2.6. "Board" means the Board of Directors of the Company.
Section 2.7. "Code" means the Internal Revenue Code of 1986, as amended.
Section 2.8. "Committee" means the Employee Welfare Benefits Plan
Committee of the Company or its delegate.
Section 2.9. "Company" means FMC Corporation.
Section 2.10. "Company Stock" means common stock of the Company.
Section 2.11. "Compensation" has the same meaning as the term "Earnings"
2
<PAGE>
under the Tax-Qualified Thrift Plan; provided that any amounts contributed on
--------
behalf of a Participant under this Plan or a salary reduction arrangement under
Sections 125 or 401(k) of the Code shall be included in Compensation. Any
Compensation paid or payable to a Participant which is in excess of $150,000 (or
such other amount as may then be in effect under Section 401(a)(17) of the Code)
shall be referred to herein as "Excess Compensation" and shall not be considered
for any purpose under this Plan except as specifically provided in Section 4.1
hereof.
Section 2.12. "Deferral Contributions" means the contributions made on
behalf of a Participant pursuant to Section 4.1 of the Plan.
Section 2.13. "Deferral Contributions Account" means the account
maintained on behalf of each Participant which will represent the amount of the
Deferral Contributions made on behalf of such Participant pursuant to Section
4.1 of the Plan.
Section 2.14. "Effective Date" means September 1, 1997.
Section 2.15. "Employer" means, both collectively and individually as
determined by the context of the applicable provision, the Company and any
Adopting Affiliate.
Section 2.16. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
Section 2.17. "Excess Compensation" has the meaning set forth in Section
2.11 of the Plan.
Section 2.18. "Matching Contributions" means the contributions made on
behalf of a Participant pursuant to Section 5.1 of the Plan.
Section 2.19. "Matching Contributions Account" means the account
maintained on behalf of each Participant which will represent the amount of the
Matching Contributions made on behalf of such Participant pursuant to Section
5.1 of the Plan.
Section 2.20. "Participant" means any eligible employee of the Company who
is participating under the Plan pursuant to Article III.
Section 2.21. "Permitted Investment" means such fund or type of investment
as may be approved by the Committee from time to time for purposes of the Plan.
3
<PAGE>
Section 2.22. "Plan" means this "FMC Corporation Non-Qualified Retirement
and Thrift Plan," as amended from time to time.
Section 2.23. "Plan Year" means the calendar year.
Section 2.24. "Supplemental Retirement Benefit" has the meaning set forth
in Section 7.1 of the Plan.
Section 2.25. "Tax-Qualified Plans" means the Tax Qualified Retirement
Plan and the Tax-Qualified Thrift Plan, as amended from time to time.
Section 2.26. "Tax-Qualified Retirement Plan" means the FMC Corporation
Salaried Employees' Retirement Plan, as amended from time to time.
Section 2.27. "Tax-Qualified Thrift Plan" means the FMC Employees' Thrift
and Stock Purchase Plan, as amended from time to time.
Section 2.28. "Year of Service" means, with respect to a Participant, the
Participant's number of calendar months of employment by the Affiliated Group
(including any interruption of employment up to 12 months) divided by 12. A
partial month shall be counted as a whole month, and any fractional year of
service shall be ignored. "Year of Service" shall not include (i) any period in
excess of 12 months for which the Participant does not receive Compensation,
including (without limitation) any leave of absence without pay or (ii) any
other interruption if employment in excess of 12 months.
ARTICLE III
Plan Participation
------------------
Section 3.1. Eligibility. The Committee shall designate each employee
-----------
of the Company who is eligible to participate in this Plan; provided, that only
--------
those employees of the Company who are in a select group of management or are
highly compensated (within the meaning of Title I of ERISA) may be designated as
eligible to participate in this Plan. The Committee shall not designate any
employee of the Company as eligible to participate in the Plan for a Plan Year
unless such employee: (i) is eligible to participate in one or both of the Tax-
Qualified Plans for such Plan Year; and (ii) is expected to receive Compensation
for such Plan Year under such Tax-Qualified Plan (or Tax-Qualified Plans,
4
<PAGE>
as the case may be) in an amount that equals or exceeds the amount determinable
under Section 401(a)(17) of the Code for such Plan Year.
Section 3.2. Participation. Each employee of the Company who has been
-------------
designated by the Committee as eligible to participate in this Plan for a Plan
Year shall become a Participant hereunder by timely executing and filing with
the Committee a deferral election form in accordance with the requirements of
Article IV.
ARTICLE IV
Deferral Contributions
----------------------
Section 4.1. Deferral Contributions. Each Participant who has made an
----------------------
election under the Tax-Qualified Thrift Plan to defer a portion of his
Compensation for a Plan Year may elect to defer hereunder an additional amount
for such Plan Year. Such additional amount shall be an amount that could not be
deferred under the Tax-Qualified Thrift Plan because the following exclusion and
limitations would prevent such amounts from being contributed to the Tax-
Qualified Thrift Plan: (i) the exclusion of deferred compensation from
creditable compensation for purposes of computing contributions, (ii) the
limitations set forth in Section 401(a)(17) of the Code and (iii) effective as
of January 1, 1998, the limitations set forth in Section 402(g) of the Code. Any
amounts deferred by a Participant pursuant to this Section 4.1 shall be credited
to such Participant's Deferral Contributions Account within a reasonable period
following the date such amounts would have been contributed to the Tax-Qualified
Thrift Plan if such amounts would have been otherwise allowed thereunder.
Section 4.2. Deferral Contributions Account. The Committee shall
------------------------------
establish and maintain an account (the "Deferral Contributions Account") with
respect to each Participant who has elected to make Deferral Contributions under
this Article IV. The Participant's Deferral Contributions Account shall be a
bookkeeping account maintained by the Company and shall reflect the amount of
Compensation the Participant has elected to defer under the Plan. The amount of
any deemed investment earnings and losses on the amounts reflected in a
Participant's Deferral Contributions Account shall be credited or charged to his
Deferral Contributions Account in accordance with Article VI.
5
<PAGE>
ARTICLE V
Matching Contributions
----------------------
Section 5.1. Matching Contributions. For each Plan Year, a matching
----------------------
contribution shall be credited to the Participant's Matching Contributions
Account in an amount equal to the matching contributions that would have been
made with respect to the Deferral Contributions of such Participant if such
Deferral Contributions had been made under the Tax-Qualified Thrift Plan. The
amount of such matching contributions shall be credited to this Plan on such
Participants' behalf as a "Matching Contribution."
Section 5.2. Matching Contributions Account. The Committee shall
------------------------------
establish and maintain an account (the "Matching Contributions Account") with
respect to each Participant who is entitled to receive Matching Contributions
under this Article V. The Participant's Matching Contributions Account shall be
a bookkeeping account maintained by the Company and shall reflect the amount of
the Matching Contributions credited hereunder on behalf of the Participant. The
amount of any deemed investment earnings and losses on the amounts reflected in
a Participant's Matching Contributions Account shall be credited or charged to
his Matching Contributions Account in accordance with Article VI.
ARTICLE VI
Deemed Earnings on Account Balances
-----------------------------------
Section 6.1.
(a) Permitted Investments. Each Participant may designate from time to
---------------------
time, in such manner as may be satisfactory to the Committee, that all or a
portion of his Deferral Contributions Account be deemed to be invested in one or
more Permitted Investments. Such amounts shall be deemed to be invested as
specified by the Participant either (i) on the day following the later of (A)
the date such Participant makes such designation, or (B) the date such amounts
are credited to the Participant's Accounts, or (ii) on such other dates as may
be reasonably determined by the Committee. All amounts credited to Participants'
Matching Contributions Accounts shall be deemed to be invested in Company Stock.
(b) Receipts. Each Account shall be deemed to receive all interest,
--------
dividends, earnings and other property which would have been received with
respect to a Permitted Investment (or Company Stock as the case may be) deemed
to be held in such Account if the Company actually owned such Permitted
Investment (or Company Stock as the case may be). Cash deemed received with
respect to a Permitted Investment (or
6
<PAGE>
Company Stock) shall be credited to the Account as of the date it would have
been available for reinvestment if the Company actually owned the Permitted
Investment (or Company Stock).
(c) Disposition. Each Participant may elect from time to time, at such
-----------
time and in such manner as may be satisfactory to the Committee, to dispose of
any one or more Permitted Investments deemed to be held in his Account. Such
election shall be exercised in accordance with guidelines established by the
Committee.
(d) Elections. All elections to be made by a Participant pursuant to this
---------
Article VI shall be made only by such Participant; provided, that if such
--------
Participant dies before his entire Account Balance is distributed pursuant to
the terms of the Plan, or if the Committee determines that such Participant is
legally incompetent or otherwise incapable of managing his own affairs, the
Committee shall have the authority to itself make the elections pursuant to this
Section 6.1 on behalf of such Participant, or designate such Participant's
designated beneficiary, legal representative or some near relative of such
Participant to make the elections pursuant to this Section 6.1 on behalf of such
Participant.
(e) Actual Investment Not Required. The Company need not actually make
------------------------------
any Permitted Investment. If the Company should from time to time make any
investment similar to a Permitted Investment, such investment shall be solely
for the Company's own account and the Participant shall have no right, title or
interest therein. Accordingly, each Participant is solely an unsecured creditor
of the Company with respect to any amount distributable to him under the Plan.
Section 6.2. Crediting of Deferrals. The Company shall credit all
----------------------
Deferral Contributions to a Participant's Deferral Contributions Account within
a reasonable period following the date such deferred amounts would have been
paid to the Participant if the Participant had not made a deferral election
under Article IV. The Company shall credit all Matching Contributions made on
behalf of a Participant pursuant to Article V to such Participant's Matching
Contributions Account within a reasonable period following the date such amounts
would have been contributed to the Tax-Qualified Thrift Plan if such amounts
would have been otherwise permitted to be contributed thereunder.
Section 6.3. Statement of Accounts. At the end of each Plan Year, each
---------------------
Participant will be furnished a statement showing the value of his Accounts.
7
<PAGE>
ARTICLE VII
Supplemental Retirement Benefits.
--------------------------------
Section 7.1. Amount of Benefits. If a Participant becomes entitled to
------------------
receive a retirement benefit under the Tax-Qualified Retirement Plan, and such
retirement benefit has been limited because of the exclusion of deferred
compensation from creditable compensation under the Tax-Qualified Retirement
Plan or limited as a result of the maximum compensation limitation imposed by
Section 401(a)(17)(as such exclusion and limitations are incorporated in the
Tax-Qualified Retirement Plan), such Participant shall be entitled to receive
under this Plan the portion of his retirement benefit under the Tax-Qualified
Retirement Plan, determined without regard to the exclusion of deferred
compensation from the definition of creditable compensation thereunder and
without regard to the maximum compensation limitation thereunder, which exceeds
the benefit payable to him under the Tax-Qualified Retirement Plan after
applying such exclusion and maximum compensation limitations. Such benefit
under this Plan shall be referred to hereinafter as a Participant's
"Supplemental Retirement Benefit."
Section 7.2. No Supplemental Retirement Benefit Account.
------------------------------------------
The amount of a Participant's Supplemental Retirement Benefit, if any, shall be
determined at the time such Participant becomes entitled to receive a retirement
benefit under the Tax-Qualified Retirement Plan, or such other time as the
Committee shall determine in its sole discretion. The Company shall not be
required to segregate on its books or otherwise any amount to be used for
payment of Supplemental Retirement Benefits under this Plan and Supplemental
Retirement Benefits shall not be credited to any Participant's Accounts, or
otherwise deemed invested or credited with deemed earnings.
ARTICLE VIII
Establishment of Trust
----------------------
Section 8.1. Establishment of Trust. The Company may, in its sole
----------------------
discretion, establish a grantor trust (as described in Section 671 of the Code)
for the purpose of accumulating assets to provide for the obligations hereunder.
The assets and income of such trust shall be subject to the claims of the
general creditors of an Employer hereunder, but only to the extent that such
assets and income are attributable to the contributions of that individual
Employer. The establishment of such a trust shall not affect the Employers'
liability to pay benefits hereunder except that any such liability shall be
offset by any payments actually made to a Participant under such a trust. In
the event such a trust is established, the amount to be contributed thereto
shall be determined by the Company and the investment of such assets shall be
made in accordance with the trust document.
8
<PAGE>
Section 8.2. Status of Trust. Participants shall have no direct or secured
---------------
claim in any asset of the trust or in specific assets of their Employer and will
have the status of general unsecured creditors of their Employer for any amounts
due under this Plan. The assets and income of the trust will be subject to the
claims of an Employer's creditors, but only to the extent that such assets and
income are attributable to the contributions of that individual Employer.
ARTICLE IX
Distribution of Account Balances
--------------------------------
Section 9.1. Distribution of Accounts. Each Participant shall at all
------------------------
times have a one hundred percent (100%) vested and nonforfeitable interest in
his Deferral Contributions Account and shall have a vested and nonforfeitable
interest in his Matching Contributions Account on the first day following
completion of a given Year of Service in accordance with the following schedule:
Years of Service
Percentage of Matching Contributions
-------------
Account Vested
--------------
Less than 2
0%
2 but less than 3
20%
3 but less than 4
40%
4 but less than 5
60%
5
100%
With respect to each Participant who, as of the Effective date, is an employee
of the Company or an Adopting Affiliate, such Participant's Accounts shall be
paid to him (or in the event of his death, to his beneficiary) in cash in a
single lump sum on the last day of the sixth (6th) calendar month following the
calendar month in which occurs such Participant's termination of employment with
the Company and all Adopting Affiliates. Notwithstanding the immediately
preceding sentence, such a Participant may make an irrevocable election, subject
to the Committee's approval, to have his Accounts paid to him (or in the event
of his death, to his beneficiary) in any distribution form permitted under the
Tax-Qualified Thrift Plan at any time after the last day of the sixth (6th)
calendar month following the
9
<PAGE>
calendar month in which occurs the Participant's termination of employment, but
not later than ninety (90) days after the date of his death. Such election must
be made no later than the last day of the first calendar month following the
calendar month in which occurs such Participant's termination of employment with
the Company and all Adopting Affiliates. Notwithstanding anything in this
Article IX to the contrary, the Committee may establish a minimum amount of any
installment payment to be made under the Plan.
Section 9.2. Emergency Payments. A Participant may from time to time
------------------
request, in such manner as may be satisfactory to the Committee, that the
Committee authorize an emergency payment to such Participant of amounts credited
to his Accounts. Any such distribution shall be for the sole purpose of enabling
such Participant to meet his immediate and heavy financial needs arising as a
result of personal injury, sickness, disability, substantial damage to real or
personal property, or other unforeseen and extraordinary emergency of such
Participant or a member of his immediate family. Children's educational expenses
and the purchase and improvement of a residence are specifically excluded as
events deemed to constitute an emergency for purposes of this Section 9.2. If an
emergency payment is authorized, the Committee shall distribute to such
Participant, within a reasonable time, an amount determined by the Committee to
be sufficient to alleviate the financial hardship, but not in excess of the
Participant's Account Balance as of such date. In determining the amount to be
distributed, the Committee may take into account amounts reasonably available
from other resources of the Participant.
Section 9.3. Distribution of Supplemental Retirement Benefits. A
------------------------------------------------
Participant's Supplemental Retirement Benefit shall be paid to him (or in the
event of his death, to his beneficiary) at the same time and in the same manner
as payment of his retirement benefit under the Tax-Qualified Retirement Plan is
made.
Section 9.4. Distribution of Accounts of Certain Former Employees. The
----------------------------------------------------
Accounts of each Participant who terminated employment with the Company and all
Adopting Affiliates prior to the Effective Date shall be paid to him (or in the
event of his death, to his beneficiary) in cash in a single lump sum on April 1,
1998. Notwithstanding the immediately preceding sentence, each such Participant
who terminated employment prior to the Effective Date may make an irrevocable
election prior to January 1, 1998, to have his Accounts paid to him (or in the
event of his death, to his beneficiary) in any distribution form permitted under
the Tax-Qualified Thrift Plan at any time after April 1, 1998, but no later than
ninety (90) days after the date of his death;
10
<PAGE>
provided, that to the extent any such Participant filed an approved irrevocable
- --------
election with the Committee prior to the Effective Date to have his Accounts
paid to him (or in the event of his death, to his beneficiary) at a time or in a
manner other than as provided in this Section 9.4, his Accounts shall be
distributed in accordance with such election. Notwithstanding anything in this
Article IX to the contrary, the Committee may establish a minimum amount of any
installment payment to be made under the Plan.
Section 9.5. Involuntary Distributions. Notwithstanding the foregoing
-------------------------
provisions of this Article IX, the Committee may on its own initiative authorize
the Company to distribute to any Participant (or to a designated beneficiary in
the event of the Participant's death) all or any portion of the Participant's
Account Balance or Supplemental Retirement Benefit if there is a change in tax
law, a published ruling or similar announcement issued by the Internal Revenue
Service, a regulation issued by the Secretary of the Treasury, a decision by a
court of competent jurisdiction involving a Participant or a beneficiary, or a
closing agreement made under Section 7121 of the Code that is approved by the
Internal Revenue Service and involves a Participant, and the Committee
determines that a Participant has or will recognize income for federal income
tax purposes with respect to amounts deferred under this Plan prior to the time
such amounts are paid to the Participant.
Section 9.6. Forfeitures. The extent to which a Participant's Matching
-----------
Contributions Account is not fully vested pursuant to Section 9.1 above shall be
a "forfeiture." Except as provided below, a forfeiture shall be treated in the
same manner as the Participant's other Accounts under the Plan until the earlier
of (i) the Accounting Date on which the Participant with respect to whom the
forfeiture arose incurs a one (1) year break in service (as defined in the Tax-
Qualified Thrift Plan), or (ii) the Accounting Date as of which the Participant
receives a total distribution of his Accounts under the Plan. Forfeitures shall
be applied to reduce the obligations of the Participant's Employer to this Plan
for the Plan Year coincident with or next following the date the forfeiture
arose.
Section 9.7. Designation of Beneficiaries. Each Participant may name any
----------------------------
person (who may be named concurrently, contingently or successively) to whom the
Participant's Account Balance under the Plan is to be paid if the Participant
dies before such Account Balance is fully distributed. Each such beneficiary
designation will revoke all prior designations by the Participant, shall not
require the consent of any previously named beneficiary, shall be in a form
either prescribed by or acceptable to the Committee and will be effective only
when filed with the Committee during the Participant's lifetime. If a
Participant fails to designate a beneficiary before his death, as provided
above, or if the
11
<PAGE>
beneficiary designated by a Participant dies before the date of the
Participant's death or before complete payment of the Participant's Account
Balance, the Committee, in its discretion, may pay the Participant's Account
Balance to either (i) one or more of the Participant's relatives by blood,
adoption or marriage and in such proportions as the Committee determines, or
(ii) the legal representative or representatives of the estate of the last to
die of the Participant and his designated beneficiary. A Participant's
beneficiary for purposes of the Tax-Qualified Retirement Plan shall be the
beneficiary of his Supplemental Retirement Benefit.
ARTICLE X
Amendment and Termination
-------------------------
Section 10.1. Amendment. The Company shall have the right to amend the
---------
Plan by action of the Board (or a duly appointed delegate thereof) from time to
time, except that no such amendment shall, without the consent of the
Participant to whom deferred compensation has been credited to any Account under
this Plan, adversely affect the right of the Participant (or his beneficiary) to
receive payments of such deferred compensation under the terms of this Plan.
Section 10.2. Plan Termination. The Plan may be terminated with respect to
----------------
the Company or any Employer at any time by action in its sole discretion. The
Plan shall be automatically terminated (i) with respect to any Employer upon the
termination of the Tax-Qualified Plans with respect to such Employer pursuant to
the applicable provisions of the Tax-Qualified Plans; and (ii) with respect to
any Adopting Affiliate upon such Adopting Affiliate's withdrawal from
participation in the Tax-Qualified Plans pursuant to the applicable provisions
of the Tax-Qualified Plans. Notwithstanding the foregoing, no termination of
this Plan shall alter the right of a Participant (or his beneficiary) to
payments of deferred compensation previously credited to such Participant's
Accounts or to payments of Supplemental Retirement Benefits accrued under the
Plan.
12
<PAGE>
ARTICLE XI
General Provisions
------------------
Section 11.1. Non-Alienation of Benefits. A Participant's rights to the
--------------------------
amounts credited to his Accounts and to any Supplemental Retirement Benefit
under the Plan shall not be grantable, transferable, pledgeable or otherwise
assignable, in whole or in part, by the voluntary or involuntary acts of any
person, or by operation of law, and shall not be liable or taken for any
obligation of such person. Any such attempted grant, transfer, pledge or
assignment shall be null and void and without any legal effect.
Section 11.2. Withholding for Taxes. Notwithstanding anything contained
---------------------
in this Plan to the contrary, each Employer shall withhold from any distribution
made under the Plan such amount or amounts as may be required for purposes of
complying with the tax withholding provisions of the Code or any State income
tax act for purposes of paying any estate, inheritance or other tax attributable
to any amounts distributable or creditable under the Plan.
Section 11.3. Immunity of Committee Members. The members of the
-----------------------------
Committee may rely upon any information, report or opinion supplied to them by
any officer of an Employer or any legal counsel, independent public accountant
or actuary, and shall be fully protected in relying upon any such information,
report or opinion. No member of the Committee shall have any liability to the
Company or any Participant, former Participant, designated beneficiary, person
claiming under or through any Participant or designated beneficiary or other
person interested or concerned in connection with any decision made by such
member of the Committee pursuant to the Plan which was based upon any such
information, report or opinion if such member of the Committee relied thereon in
good faith.
Section 11.4. Plan Not to Affect Employment Relationship. Neither the
------------------------------------------
adoption of the Plan nor its operation shall in any way affect the right and
power of an Employer to dismiss or otherwise terminate the employment or change
the terms of the employment or amount of compensation of any Participant at any
time for any reason or without cause. By accepting any payment under this Plan,
each Participant, former Participant, designated beneficiary and each person
claiming under or through such person, shall be conclusively bound by any action
or decision taken or made under the Plan by the Committee.
Section 11.5. Action by the Employers.
-----------------------
13
<PAGE>
Any action required or permitted of an Employer under the Plan shall be by
resolution of its Board of Directors or by a duly authorized committee of its
Board of Directors, or by a person or persons authorized by resolution of its
Board of Directors or such Committee.
Section 11.6. Effect on Other Employee Benefit Plans. Any compensation
--------------------------------------
deferred or accrued under this Plan (including any Supplemental Retirement
Benefit), and any amount credited to a Participant's Accounts under this Plan,
shall not be included in the Participant's compensation or earnings for purposes
of computing benefits under any other employee benefit plan maintained or
contributed to by the Employer except as may otherwise be required under the
terms of such employee benefit plans or applicable law.
Section 11.7. Assumption of Employer Liability. The obligations of an
--------------------------------
Employer under the Plan may be assumed by any other Employer with the consent of
the board of directors of the Company (or a duly appointed delegate thereof), in
which case such Employer shall be obligated to satisfy all of the previous
Employer's obligations under the Plan and the previous Employer shall be
released from any continuing obligation under the Plan. At the Company's
request, a Participant or designated beneficiary shall sign such documents as
the Company may require in order to effectuate the purposes of this Section.
Section 11.8. Notices. Any notice required to be given by the Company or
-------
the Committee hereunder shall be in writing and shall be delivered in person or
by registered mail, return receipt requested. Any notice given by registered
mail shall be deemed to have been given upon the date of delivery, correctly
addressed to the last known address of the person to whom such notice is to be
given.
Section 11.9. Gender and Number; Headings. Wherever any words are used
---------------------------
herein in the masculine gender they shall be construed as though they were also
used in the feminine gender in all cases where they would so apply; and wherever
any words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
Headings of sections and subsections of the Plan are inserted for convenience of
reference and are not part of the Plan and are not to be considered in the
construction thereof.
Section 11.10. Controlling Law. The Plan shall be construed with respect
---------------
to each Employer in accordance with the internal laws of the State where the
principal place of business of such Employer is located, to the extent not
preempted by any applicable federal law.
14
<PAGE>
Section 11.11. Successors. The Plan is binding on all persons entitled
----------
to benefits hereunder and their respective heirs and legal representatives, on
the Committee and its successor and on any Employer and its successor, whether
by way of merger, consolidation, purchase or otherwise.
Section 11.12. Severability. If any provision of the Plan shall be held
------------
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be enforced as
if the invalid provisions had never been set forth therein.
15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>9
<DESCRIPTION>FMC 1995 MANAGEMENT INCENTIVE PLAN
<TEXT>
<PAGE>
Exhibit 10.9
FMC 1995 MANAGEMENT INCENTIVE PLAN
----------------------------------
1. PURPOSE OF THE PLAN
The purpose of the FMC 1995 Management Incentive Plan is to promote the long-
term performance of FMC by (i) providing long-term incentives in cash and common
stock of FMC to key management employees of FMC and its subsidiaries, (ii)
assisting in attracting and retaining as employees persons whose abilities,
experience and judgment have contributed and will continue to contribute to the
financial success and progress of FMC, and (iii) aligning the identity of
interests of those employees and FMC's shareholders.
2. DEFINITIONS
(a) "Award" means a Stated Year Incentive Award or an Incentive Benefit.
(b) "Board of Directors" means the Board of Directors of FMC as it may be
constituted from time to time.
(c) "CEO" means the Chief Executive Officer of FMC.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation and Organization Committee of the Board
of Directors.
(f) "Common Stock" means the common stock of FMC.
(g) "Date of Grant" means the date which is designated by the Committee as the
date of grant of an Award.
(h) "Disability" means complete and permanent inability by reason of illness or
accident to perform the duties of the occupation at which a Participant was
employed when such disability commenced.
(i) "Employee" means any person employed by the FMC Companies.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" means the closing price of a share of Common Stock on a
specified date as reported in the New York Stock Exchange Composite
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<PAGE>
Transactions for such date, or such other measurement of value as may be
specified by the Committee from time to time.
(l) "Financial Objective" means Net Contribution.
(m) "FMC" means FMC Corporation.
(n) "FMC Company" or "FMC Companies" means FMC and each Subsidiary Company.
(o) "Incentive Benefit" means an Award granted pursuant to Section 8.
(p) "Net Contribution" means for a business unit, operating profit after tax
less the product of 11.5% (the capital charge) and the unit's Capital Employed
(operating working capital plus net property, plant and equipment).
(q) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(r) "Parent Corporation" means a corporation which, with respect to another
corporation, is a parent corporation within the meaning of Section 424(e)
of the Code.
(s) "Participant" means an Employee who has received an Award which has not
been exercised, paid, cancelled or forfeited and which has not expired.
(t) "Plan" means the FMC 1995 Management Incentive Plan.
(u) "Plan Year" means each calendar year commencing on or after January 1,
1995.
(v) "Restricted Stock" means Common Stock payable as part of an Award which is
subject to a restriction period before it is paid to a Participant, and such
other restrictions as may be specified by the Committee at the time the Award is
granted.
(w) "Stated-Year Incentive Award" means an award payable in cash and either
Common Stock or Restricted Stock based on achievement of a Participant's
unit's Financial Objectives over a Stated-Year Period.
(x) "Stated-Year Incentive Target Bonus" means the target bonus established for
each Participant which is the basis for the Participant's Stated-Year
Incentive Award.
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<PAGE>
(y) "Stated-Year Period" means a period of the number of years in the Incentive
Award period determined by the Committee and commencing on January 1 of
each Plan Year.
(z) "Subsidiary Company" means (i) any corporation the majority of the voting
power of all classes of stock entitled to vote or the majority of the total
value of shares of all classes of stock of which is owned, directly or
indirectly, by FMC, or (ii) any trade or business other than a corporation
the majority of the profits interest, capital interest or actuarial
interest of which is owned, directly or indirectly, by FMC.
(aa) "Subsidiary Corporation" means a corporation or other entity that, with
respect to another corporation, is a subsidiary corporation within the
meaning of Section 424(f) of the Code.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the Board of
Directors, the Committee shall have the authority and discretion to interpret
the Plan, to establish and revise rules and regulations relating to the Plan,
and to make any other determinations that it believes necessary or advisable for
the administration of the Plan. Decisions and determinations by the Committee
shall be final and binding on all persons. Notwithstanding anything to the
contrary contained in the Plan, the Board of Directors shall also have all power
and authority to perform any act granted to the Committee pursuant to the Plan.
4. PARTICIPATION
Participants shall be determined by the Committee, in its sole discretion, from
Employees who, in the Committee's judgment, have a significant opportunity to
influence the growth of FMC or whose outstanding performance or potential merit
further incentive and reward for continued employment and accomplishment.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment pursuant to Section 9, at no time may the sum of (a) the
number of shares of Common Stock issued in payment of Awards and subject to
outstanding Awards under this Plan and (b) the number of shares of Common Stock
issued or subject to outstanding options under the FMC 1995 Stock Option Plan
exceed 3.0 million. In the event that any outstanding Award for any
Page 3
<PAGE>
reason expires, terminates, is cancelled or forfeited, without having been
exercised or otherwise realized in full, the shares of Common Stock allocable to
the expired, terminated, cancelled or forfeited portion of such Award shall
(unless the Plan shall have been terminated) become available for subsequent
grants of Awards.
6. STATED-YEAR INCENTIVE AWARDS
(a) Financial Objectives. The Committee shall determine the number of years in
each Incentive Award period. The Committee, after consultation with the
CEO, shall establish the Financial Objective for each unit for each Stated-
Year Period. A Stated Year Incentive Target Bonus shall be established by
the CEO for each Participant.
(b) Individual Awards. Following the close of each Stated-Year Period, the
Committee shall evaluate the performance of each unit against the unit's
Financial Objective for the Stated-Year Period, and certify a rating of
zero to three for the unit. A Participant's Stated-Year Incentive Award
shall be the product of the rating for the Participant's unit and Stated-
Year Incentive Target Bonus.
(c) Form and Time of Payment
(i) Form. Each Stated-Year Incentive Award will be paid partly in cash and
partly in either Common Stock that is not Restricted Stock or Restricted Stock,
as elected by the Participant; provided, however, that if a Participant is
covered by FMC's Stock Ownership Policy and such Participant does not own a
sufficient amount of Common Stock under the Stock Ownership Policy guidelines,
such Participant shall receive the stock portion of the Stated-Year Incentive
Award in Restricted Stock. The number of shares of stock payable shall be equal
to (A) the quotient of the stock portion of the Participant's Stated-Year
Incentive Award divided by the Fair Market Value on the last day of the Stated-
Year Period to which the award relates plus (B) 20 percent of the quotient in
(A) provided that, if the Participant receives Common Stock that is not
restricted, the number of shares payable shall be reduced by one-sixth. The
portion of the Stated-Year Incentive Award to be paid in cash and in stock shall
be as determined by the Committee at the date of grant of the Award.
(ii) Timing. Payment of the portion of each Stated-Year Incentive Award
payable in cash or Common Stock that is not Restricted Stock shall be made,
without interest, as soon as practicable after the close of the Stated-Year
Period to which such award relates. Payment of any portion of a Stated-Year
Incentive Award payable in Restricted Stock will be made as soon as practicable
Page 4
<PAGE>
following the close of the restricted period for that Restricted Stock and the
ending, or fulfillment, of other restrictions applicable to the Restricted
Stock.
(d) Special Rules for Transition Period. Each Participant in the 1995 and/or
1996 Plan Years shall receive a draw against the Stated-Year Incentive Award
otherwise payable for the Stated-Year Periods beginning January 1, 1995 and/or
January 1, 1996. The amount of such draw shall be paid in cash and shall equal
the target bonus amount under the BPF portion of the prior plan. Such
Participant's Stated-Year Incentive Award, if any, for the Stated-Year Periods
beginning in 1995 and/or in 1996 shall be reduced (but not below zero) by the
amount of such draw.
(e) Transfers Between Units. If a Participant transfers employment from one
unit to another during a Stated-Year Period, the Participant's Stated-Year
Incentive Award shall be prorated based on the proportion of time spent in each
unit in which the Participant has spent at least six months.
7. TERMINATION OF EMPLOYMENT
(a) During Award Period. Subject to meeting the performance goals, a
Participant shall be entitled to receive payment of a Stated-Year Incentive
Award only if employment with the FMC Companies continues uninterrupted from the
first day of participation in the Award to the earlier of: (i) the last day of
the applicable Stated-Year Period, (ii) retirement under the terms of any formal
retirement plan of any FMC Company, (iii) death, or (iv) Disability; provided
that if termination occurs before the last day of the applicable Stated-Year
Period for any of the reasons contained in (ii), (iii) or (iv) the Award shall
be prorated. Termination of employment before the last day of the applicable
Stated-Year Period for any reason other than the reasons contained in (ii),
(iii) or (iv) will result in automatic cancellation and forfeiture of the Award,
provided that the Committee may, if it believes circumstances warrant such
action, authorize payment of all or any portion of any Award that otherwise
would be forfeited pursuant to this section.
(b) During Restriction Period for Restricted Stock. Notwithstanding paragraph
(a) of this section, if a Participant receives Restricted Stock and employment
with the FMC Companies is terminated for any reason contained in (ii), (iii) or
(iv) of paragraph (a) or involuntary termination prior to the conclusion of the
restriction period for Restricted Stock, the Participant shall receive a number
of shares equal to the sum of (A) five-sixths of the number of shares of
Restricted Stock payable under Section 6(c)(i) and (B) the product of one-sixth
of the number of shares of Restricted Stock payable under Section 6(c)(i) and a
fraction, the numerator of which is the number of days between the commencement
of the restriction period for the Restricted Stock and the
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<PAGE>
termination of employment and the denominator of which is 365 times the number
of years in the restriction period for the Restricted Stock, and the balance of
the stock portion of the Award shall be forfeited. If, prior to the conclusion
of the restriction period for Restricted Stock, the Participant otherwise
voluntarily terminates employment with the FMC Companies, any of the FMC
Companies terminates the Participant's employment for good cause (as defined in
Section 12(e)), or the Committee determines, in its sole discretion, that the
Participant has engaged or may engage in employment or activities competitive
with, or contrary to the best interests of, the FMC Companies, the Participant
shall receive a number of shares equal to five-sixths of the number of shares of
Restricted Stock payable under Section (c)(1).
8. INCENTIVE BENEFITS
In addition to Stated-Year Incentive Awards, the Committee may, at its
discretion, create and grant such Incentive Benefits as it believes are
desirable (including by way of illustration and not by way of limitation, stock
appreciation rights, stock bonus and restricted stock awards), provided that:
(a) any Incentive Benefits shall be governed by the terms of the Plan
as in effect on the Date of Grant of such Incentive Benefits, and for such
purpose, notwithstanding the provisions of Section 15, the Committee may amend
the Plan to create and describe Incentive Benefits and the governing terms
thereof;
(b) the creation of Incentive Benefits may not, without stockholder
approval, (i) increase the total number of shares of Common Stock issuable under
the Plan, or (ii) materially modify the requirements as to eligibility for
participation in the Plan;
(c) the Committee shall not have the power to create and grant
Incentive Benefits that would result in the grant of a prohibited tandem stock
option or other prohibited tandem arrangement, with respect to any Incentive
Stock Options, as described in applicable regulations under Section 422 of the
Code, and
(d) with respect to grants and awards to persons subject to Section
16(b) of the Exchange Act, Incentive Benefits granted or awarded shall have such
terms and conditions as will comply with Rule 16b-3 or other similar rules.
9. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock by reason
of any stock dividend or split, recapitalization, merger, consolidation,
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<PAGE>
spinoff, reorganization, combination or exchange of shares or other similar
corporate change, the Committee shall make such adjustments, if any, as it in
its sole discretion deems equitable (a) in the number of shares of Common Stock
that may be issued under the Plan in payment of any Award, or (b) in the
Financial Objectives during any Stated-Year Period from which the requisite
performance levels are calculated, such adjustments to be conclusive and binding
upon all parties concerned. The Committee may also make adjustments, to the
extent it deems appropriate, in a unit's performance goals during and after any
Stated-Year Period to compensate for or reflect any significant changes that may
have occurred during such Stated-Year Period in accounting practices, tax laws
or other laws or regulations which alter or affect the unit's performance,
actual economic conditions, such as inflation, when contrasted with the
assumptions underlying the unit's performance goals or changes resulting from
corporate restructuring including without limitation, acquisitions and
divestitures.
10. CHANGE OF CONTROL
If a Change of Control of the Company occurs while any Awards remain outstanding
under the Plan, then from and after the date of such Change of Control, the full
value of each outstanding Award shall become exercisable and/or fully vested and
shall be paid in full to the Participant as soon as practicable following the
date of such Change. A "Change of Control" of the Company shall be deemed to
have occurred as of the first day that any one or more of the following
conditions is satisfied:
(a) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Company Voting
Securities") is acquired by a Person (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or an affiliate thereof, any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company); provided, however, that any acquisition from
the Company or any acquisition pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of paragraph (c) of this Section 10 shall not be a
Change of Control under this paragraph (a); or
(b) Individuals who, as of the date hereof, constitute the Board of Directors
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board of Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
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<PAGE>
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors; or
(c) Consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets or stock of another entity (a
"Business Combination"), in each case, unless immediately following such
Business Combination: (i) more than 60% of the combined voting power of then
outstanding voting securities entitled to vote generally in the election of
directors of (x) the corporation resulting from such Business Combination (the
"Surviving Corporation"), or (y) if applicable, a corporation which as a result
of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries (the
"Parent Corporation"), is represented, directly or indirectly by Company Voting
Securities outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Company Voting
Securities, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the then outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) except to the extent that such ownership
of the Company existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation) were members of
the Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
However, in no event shall a Change of Control be deemed to have occurred, with
respect to the Executive, if the Executive is part of a purchasing group which
consummates the Change of Control transaction. The Executive shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if the
Executive is an equity participant in the purchasing company or group (except
for: (i) passive ownership of less than three percent (3%) of the stock of the
purchasing company, or (ii) ownership of equity participation in the purchasing
company or group which is otherwise not significant, as determined
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<PAGE>
prior to the Change of Control by a majority of the nonemployee continuing
Directors).
11. CANCELLATION OF AWARDS
The Committee may cancel all or any part of an Award with the written consent of
the Participant holding such Award. In the event of any cancellation, all rights
of the former Participant in respect of such cancelled Award shall terminate.
12. MISCELLANEOUS PROVISIONS
(a) Assignment and Transfer. Awards shall not be transferable other than by
will or the laws of descent and distribution and Awards may be exercised or
otherwise realized, during the lifetime of the grantee, only by the grantee or
by his or her guardian or legal representative.
(b) No Right to Awards or Employment. No Employee or other person shall have
any claim or right to be granted an Award, nor shall any Participant have a
right to receive payment of an Award in any form other than as the Committee
shall approve. Neither the Plan nor any action taken hereunder shall be
construed as giving any Employee or Participant any right to be retained in the
employ of any FMC Company.
(c) Taxes. The FMC Companies shall have the right to deduct from payment of an
Award any taxes required by law to be withheld from an Employee with respect to
such payment and, in the case of Awards paid in Common Stock the Employee or
other person receiving such stock shall be required to pay to the FMC Companies
the amount of any taxes required to be withheld from an Employee with respect to
such stock.
(d) Securities Laws. Each Award shall be subject to the condition that such
Award may not be exercised or paid if the Committee determines that the sale of
securities upon exercise or payment of such Award may violate the Securities Act
of 1933 or any other law or requirement of any governmental authority. FMC shall
not be deemed by any reason of the granting of any Award to have any obligation
to register the shares subject to such Award under the Securities Act of 1933 or
to maintain in effect any registration of such shares which may be made at any
time under the Securities Act of 1933.
(e) Good Cause. For purposes of this Plan, "good cause" means: (i) the
Employee's willful and continued failure to substantially perform his duties
with the Company (other than any such failure resulting from Disability), after
a written demand for substantial performance is delivered to the Employee that
specifically identifies the manner in which the Company believes that the
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<PAGE>
Employee has willfully failed to substantially perform his duties, and after the
Employee has failed to resume substantial performance of his duties on a
continuous basis within thirty (30) calendar days of receiving such demand; (ii)
the Employee's willfully engaging in conduct (other than conduct covered under
(i) above) that is demonstrably and materially injurious to the Company,
monetarily or otherwise, or (iii) the Employee's having been convicted of, or
plead guilty or nolo contendere to, a felony. For purposes of this paragraph, no
act, or failure to act, on the Employee's part shall be deemed "willful" unless
done, or omitted to be done, by the Employee not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors or upon the instructions of
the chief executive officer or a senior officer of the Company or based upon the
advice of counsel for the company shall be conclusively presumed to be done, or
omitted to be done, by the employee in good faith and in the best interests of
the Company.
(f) Severability. Whenever possible, each provision in the Plan and in every
Award shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Plan or any Award shall be held to
be prohibited by or invalid under applicable law then (i) such provision shall
be deemed amended to, and to have contained from the outset such language shall
be necessary to, accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (ii) all other provisions of
the Plan and every Award shall remain in full force and effect.
(g) No Strict Construction. No rule of strict construction shall be applied
against FMC, the Committee or any other person in the interpretation of any of
the terms of the Plan, any Award or any rule or procedure established by the
Committee.
(h) Stockholder Rights. A Participant shall not have any dividend, voting or
other stockholder rights by reason of an Award prior to the issuance of any
Common Stock pursuant to such Award.
(i) Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the United States of America and, to the extent not
inconsistent therewith, by the laws of the State of Illinois.
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<PAGE>
13. AMENDMENT AND TERMINATION
(a) Amendment. The Board of Directors may at any time amend, suspend or
terminate the Plan, provided that no such action shall adversely affect any
rights under any Award theretofore granted or change the objectives or other
measure of performance applicable to an Award in a manner adverse to
Participants in accordance with Section 9. No amendment may, without stockholder
approval in accordance with Section 14, increase the total number of shares of
Common Stock issuable under the Plan.
(b) Termination. The right to grant further Awards shall terminate
automatically upon the granting of such Awards which, together with shares of
Common Stock previously issued and/or subject to outstanding Awards, equals the
maximum authorized under the Plan, subject to additional shares of Common Stock
becoming available for Awards by reason of forfeitures or cancellations of
earlier Awards.
14. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective as of January 1, 1995, subject to approval by
the affirmative vote of the holders of a majority of the securities of FMC
present, or represented, and entitled to vote at the next annual meeting of the
stockholders of FMC.
Page 11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>10
<DESCRIPTION>FMC CORPORATION EXECUTIVE SEVERANCE PLAN
<TEXT>
<PAGE>
Exhibit 10.11
FMC CORPORATION
EXECUTIVE SEVERANCE PLAN
------------------------
(As Amended and Restated Effective April 18, 1997)
1. Statement of Purpose. The purpose of the FMC Corporation Executive
Severance Plan ("Plan") is to assure FMC Corporation ("Company") that it will
have the continued dedication and the availability of objective advice and
counsel from key executives of the Company notwithstanding the possibility,
threat or occurrence of a bid to take over control of the Company.
In the event the Company receives any proposals from a third person
concerning a possible business combination with the Company, or acquisition of
the Company's equity securities, the Board of Directors believes it imperative
that the Company and the Board of Directors be able to rely upon key executives
to continue in their positions and be available for advice without concern that
those individuals might be distracted by their own personal financial situation
and risks created by such a proposal.
Should the Company receive any such proposal, key executives will be called
upon to assist in the assessment of the proposal, advise management and the
Board of Directors as to whether the proposal would be in the best interest of
the Company and its stockholders and to take such other actions as the Board of
Directors might determine appropriate.
2. Eligible Executives. Participants under this Plan shall consist of the
Chairman of the Board, the President, the Executive and Senior Vice Presidents,
Group and Regional Managers, other officers (except Assistant Secretaries and
Assistant Treasurers) and Division Managers of the Company and those other key
executives of the Company and its Subsidiaries who are from time to time
designated to be included within this Plan by the Committee in its sole
discretion. A Participant shall cease to be a Participant in the Plan upon the
determination of the Committee. No determination that a Participant has ceased
to be a Participant shall be made, and if made shall have no effect, during any
period of time when the Company has knowledge that any Person, as that term is
defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of
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<PAGE>
1934, as amended ("Exchange Act"), has taken steps reasonably calculated to
effect a Change In Control of the Company (as defined below) until, in the
opinion of the Board of Directors, the Person has abandoned or terminated its
efforts to effect a Change In Control. Any decision by the Board of Directors
that the Person has abandoned or terminated its efforts to effect a Change In
Control shall be conclusive and binding on the Participants.
3. Terms of the Plan. The terms of the Plan are as set forth in the forms of
agreement attached to this Plan, with:
. Form IA applicable to Tier IA Participants;
. Form I applicable to Tier I Participants;
. Form II applicable to Tier II Participants; and
. Form III applicable to Tier III Participants.
The Company shall enter into Executive Severance Agreements (the
"Agreements") with each Participant containing the terms set forth in the
applicable form. Even though the Company or a Participant has not executed an
Agreement, the Participant shall be entitled to participate in the Plan on the
terms and conditions set forth in the form of agreement applicable to the
Participant.
4. Certain Definitions. Capitalized terms used in this Plan but not defined
above shall have the meaning set forth below:
a. Board of Directors means the duly elected Board of Directors of FMC
Corporation as it is constituted from time to time.
b. Change In Control of the Company shall be deemed to have occurred as of
the first day that any one or more of the following conditions is satisfied:
(1) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Company Voting Securities") is acquired by a Person (other than the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the
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<PAGE>
Company); provided, however, that any acquisition from the Company or any
acquisition pursuant to a transaction which complies with clauses (i), (ii)
and (iii) of paragraph (3) of this section shall not be a Change in Control
under this paragraph; or
(2) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(3) Consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock of another
entity (a "Business Combination"), in each case, unless immediately
following such Business Combination: (i) more than 60% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"), or (y) if
applicable, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries (the "Parent Corporation"), is
represented, directly or indirectly by Company Voting Securities
outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination),
and such voting power among the holders thereof is in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Company Voting Securities, (ii) no Person (excluding
any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of
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the then outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) except to the extent that such ownership of the Company
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination; or
(4) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to a Participant, if the Participant is part of a purchasing group
which consummates the Change-in-Control transaction. The Participant shall be
deemed "part of a purchasing group" for purposes of the preceding sentence if
the Participant is an equity participant in the purchasing Company or group
(except for: (i) passive ownership of less than three percent (3%) of the stock
of the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which in otherwise not significant, as determined
prior to the Change in Control by a majority of the nonemployee continuing
Directors).
c. Committee shall mean the Compensation and Organization Committee of
the Board of Directors or such other Committee of the Board of Directors as on
the Date of Termination has the duties and responsibilities presently delegated
to the Compensation and Organization Committee.
d. Participant means one of the Tier IA Participants, Tier I
Participants, Tier II Participants, or Tier III Participants.
e. Subsidiary means any domestic or foreign corporation, a majority of
whose voting shares is owned directly or indirectly by the Company or by one or
more other Subsidiaries or by a combination thereof.
f. Tier IA Participants means the Chairman of the Board and Chief
Executive Officer and the President.
g. Tier I Participants means the Executive Vice Presidents, Senior Vice
Presidents, Group Managers, International Regional Managers and such other
employees of
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the Company or a Subsidiary as are designated by the Committee to
be Participants.
h. Tier II Participants means all officers of the Company (other
than Assistant Secretaries and Assistant Treasurers) and such other employees of
the Company or a Subsidiary as are designated by the Committee to be
Participants.
i. Tier III Participants means Division Managers and such other
employees of the Company or a Subsidiary as are designated by the Committee to
be Participants.
5. Trust. As soon as practical, the Company shall create a trust in accordance
with the terms of the forms of Agreement. The trust shall have such assets as
the forms of Agreement provide. Any assets contained in the trust shall, at all
times, be specifically subject to the claims of the Company's general creditors
in the event of bankruptcy or insolvency; such terms to be specifically defined
within the provisions of the trust, along with the required procedure for
notifying the Trustee of any bankruptcy or insolvency.
6. Termination and Amendment of this Plan. The Board of Directors or the
Committee shall have power at any time, in their discretion, to amend, abandon
or terminate this Plan, in whole or in part; except that, no amendment,
abandonment or termination shall modify, waive or discharge any provisions of
the Agreements unless such modification, waiver or discharge is agreed in
writing and signed by the Executive and by an authorized member of the Committee
or a person to whom the Committee has delegated signature authority or by the
respective parties' legal representatives and successors.
7. Governing Law. The validity, interpretation, construction and enforcement
of this Plan shall be governed by the laws of the State of Illinois, without
giving effect to the principles of conflicts of laws thereof, to the extent not
pre-empted by the laws of the United States. To the extent so pre-empted, the
laws of the United States shall control.
8. Administration by the Committee. The Committee shall be responsible for the
general operation and administration of the Plan and for carrying out the
provisions thereof. The Committee shall administer the Plan in accordance with
its terms and shall have all powers necessary to carry out the provisions of the
Plan. The Committee shall interpret the Plan and shall determine all questions
arising in the administration, interpretation, and application of the Plan,
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including but not limited to, questions of eligibility and the status and
rights of employees, Participants and other persons. Any such determination by
the Committee shall presumptively be conclusive and binding on all persons. The
regularly kept records of the Company and any Subsidiary shall be conclusive and
binding upon all persons with respect to a Participant's date and length of
service, amount of compensation and the manner of payment thereof, type and
length of any absence from work and all other matters contained therein relating
to Participants. All rules and determinations of the Committee shall be
uniformly and consistently applied to all persons in similar circumstances.
9. Incapacity of Recipient. If any person entitled to a distribution under the
Plan is deemed by the Company or its designee to be incapable of personally
receiving and giving a valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or other legal
representative of such person, the Company or its designee may provide for such
payment or any part thereof to be made to any other person or institution then
contributing toward or providing for the care and maintenance of such person.
Any such payment shall be a payment for the account of such person and a
complete discharge of any liability of the Company, its designee and the Plan
therefor.
10. Indemnification. The Company and each Subsidiary shall indemnify and hold
harmless each member of the Committee, or any employee of the Company or any
Subsidiary (to the extent not indemnified or saved harmless under any liability
insurance or any other indemnification arrangement) from any and all claims,
losses, liabilities, costs and expenses (including attorneys' fees) arising out
of any actual or alleged act or failure to act made in good faith pursuant to
the provisions of the Plan or the trust, including expenses reasonably incurred
in the defense of any claim relating thereto with respect to the administration
of the Plan or the trust, except that no indemnification or defense shall be
provided to any person with respect to any conduct that has been judicially
determined, or agreed by the parties, to have constituted willful misconduct on
the part of such person, or to have resulted in his or her receipt of personal
profit or advantage to which he or she is not entitled.
11. Limitations on Liability. Notwithstanding any of the preceding provisions
of the Plan, neither the Company nor any individual acting as employee or agent
of the Company shall be liable to any Participant, former Participant, or
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other person for any claim, loss, liability or expense incurred in connection
with the Plan.
12. Unclaimed Benefit. In the event that all, or any portion, of the
distribution payable to a Participant hereunder shall, at the expiration of five
years after it shall become payable, remain unpaid solely by reason of the
inability of the Committee, after sending a registered letter, return receipt
requested, to the last known address, and after further diligent effort, to
ascertain the whereabouts of such Participant, the amount so distributable shall
be treated as a forfeiture and shall be retained by the Company as part of its
general assets.
13. Effective Date. The Company previously adopted an Executive
Severance Plan effective as of February 19, 1982 and last Amended and Restated
effective as of February 16, 1990. This Plan shall be an amendment and
restatement of that previous plan, effective as of April 18, 1997.
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Form IA
Executive Severance
Agreement for
FMC Corporation
<PAGE>
<TABLE>
<CAPTION>
Contents
- -------------------------------------------------------
<S> <C>
Page
Article 1. Establishment, Term, and Purpose 3
Article 2. Definitions 3
Article 3. Severance Benefits 8
Article 4. Form and Timing of Severance Benefits 11
Article 5. Excise Tax Equalization Payment 11
Article 6. Establishment of Trust 13
Article 7. The Company's Payment Obligation 13
Article 8. Legal Remedies 14
Article 9. Outplacement Assistance 14
Article 10. Successors and Assignment 14
Article 11. Miscellaneous 15
</TABLE>
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FMC Corporation
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the ___ day of ______, ____,
by and between FMC Corporation (hereinafter referred to as the "Company") and
________________ (hereinafter referred to as the "Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control;
WHEREAS, should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Executive and the Company desire that the terms of this
Agreement shall completely replace and supersede the provisions set forth in the
FMC Corporation Executive Severance Plan [and the Executive Severance Agreement,
entered into by and between the Company and the Executive on ____________],
setting forth the terms and provisions with respect to the Executive's
entitlement to payments and benefits following a Change in Control of the
Company.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
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Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue in
effect for three (3) full years. However, at the end of such three (3) year
period and, if extended, at the end of each additional year thereafter, the term
of this Agreement shall be extended automatically for one (1) additional year,
unless the Committee delivers written notice six (6) months prior to the end of
such term, or extended term, to each Executive, that the Agreement will not be
extended. In such case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in Control occurs during the original or any
extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.
2.1 "Base Salary" means the salary of record paid to an Executive as
annual salary, excluding amounts received under incentive or other bonus plans,
whether or not deferred.
2.2 "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.3 "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 11.2 herein.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such failure
resulting from Disability or occurring after issuance by the Executive of a
Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has willfully failed to
substantially perform his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis within thirty (30)
calendar days of receiving such demand; (b) the Executive's willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (c) the
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Executive's having been convicted of, or plead guilty or nolo contendere to, a
felony. For purposes of this subparagraph, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the action
or omission was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the chief executive officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for such purpose, (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (a) or (b) above, and specifying the particulars
thereof in detail. The Executive shall not be precluded from contesting such
resolution pursuant to an arbitration proceeding under Section 8.2 of this
Agreement.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the following conditions is satisfied:
(a) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Company Voting Securities") is acquired by a Person (other than
the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company); provided, however that any acquisition from the
Company or any acquisition pursuant to a transaction which complies
with clauses (i), (ii), and (iii) of paragraph (c) of this Section 2.6
shall not be a Change in Control under this paragraph (a); or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at
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least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation by the Company of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets or stock or
another entity (a "Business Combination"), in each case, unless
immediately following such Business Combination: (i) more than 60% of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, a corporation which as a result
of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries (the "Parent Corporation"), is represented, directly or
indirectly by Company Voting Securities outstanding immediately prior
to such Business Combination (or, if applicable, is represented by
shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Company Voting Securities, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of the combined voting power of the then
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) except to the extent that such ownership of the
Company existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing group
which consummates the Change-in-Control transaction. The Executive shall be
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deemed "part of a purchasing group" for purposes of the preceding sentence if
the Executive is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than three percent (3%) of the stock
of the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the nonemployee continuing
Directors).
2.7 "Code" means the United States Internal Revenue Code of 1986, as
amended, and any successors thereto.
2.8 "Committee" means the Compensation and Organization Committee of the
Board or any other committee appointed by the Board to perform the functions of
the Compensation and Organization Committee.
2.9 "Company" means FMC Corporation, a Delaware corporation, or any
successor thereto as provided in Article 10 herein.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth above.
2.12 "Effective Date of Termination" means the date on which a Qualifying
Termination occurs which triggers the payment of Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent with
the Executive's authorities, duties, responsibilities, and status
(including offices and reporting requirements) as an employee of the
Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from those in
effect immediately preceding the Change in Control;
(b) The Company's requiring the Executive to (i) be based at a location
which is at least twenty-five (25) miles from the office where the
Executive is located at the time of the Change in Control, (not
including
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for this clause (i) required travel on the Company's business to an
extent substantially consistent with the Executive's business
immediately prior to the Change in Control) or (ii) travel on Company
business to an extent substantially greater than the travel
obligations of the Executive immediately prior to the Change in
Control;
(c) A reduction by the Company in the Executive's Base Salary as in effect
immediately prior to the Change in Control or as the same shall be
increased from time to time;
(d) The failure of the Company to (i) continue in effect any employee
benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in which the Executive is participating
immediately prior to such Change in Control or the taking of any
action by the Company which would adversely affect the Executive's
participation in or reduce the Executive's benefits under any such
plan, unless the Executive is permitted to participate in other plans
providing Executive with at least substantially equivalent benefits in
the aggregate (at substantially equivalent cost with respect to
welfare benefit plans), or (ii) provide the Executive with paid
vacation in accordance with the most favorable vacation policies of
the Company and its affiliated companies as in effect for the
Executive immediately prior to such Change in Control, including the
crediting of all service for which the Executive had been credited
under such vacation policies prior to the Change in Control;
(e) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 10 herein; or
(f) Any termination of Executive's employment by the Company that is not
effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
The Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
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2.16 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as provided in Section 13(d).
2.17 "Qualifying Termination" means any of the events described in Section
3.2 herein, the occurrence of which triggers the payment of Severance Benefits
hereunder.
2.18 "Retirement" means the Executive's voluntary termination of employment
in a manner which qualifies the Executive to receive immediately payable
retirement benefits under the Company's tax-qualified retirement plan or under
the successor or replacement of such retirement plan if it is then no longer in
effect; provided, that a termination for Good Reason which otherwise constitutes
Retirement shall be treated as Good Reason for purposes of being a Qualifying
Termination under this Agreement.
2.19 "Severance Benefits" means the payment of severance compensation as
provided in Section 3.3 herein.
2.20 "Trust" means the Company grantor trust to be created pursuant to
Article 6 of this Agreement.
Article 3. Severance Benefits
3.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3 herein,
if there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months following the Change in Control, a Qualifying Termination
of the Executive has occurred.
The Executive shall not be entitled to receive Severance Benefits if he is
terminated for Cause, or if his employment with the Company ends due to death,
Disability, or Retirement or due to a voluntary termination of employment by the
Executive without Good Reason other than during the thirteenth (13th) calendar
month following the month in which a Change in Control occurs.
3.2 Qualifying Termination. The occurrence of any one or more of the
following events shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24) calendar
months following the month in which a Change in Control of the Company
occurs;
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(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the month in which a Change
in Control of the Company occurs pursuant to a Notice of Termination
delivered to the Company by the Executive;
(c) A voluntary termination by the Executive during the thirteenth
(13/th) calendar month following the month in which a Change in
Control occurs pursuant to a Notice of Termination delivered to the
Company by the Executive; or
(d) The Company or any successor company breaches any of the provisions of
this Agreement following a Change in Control.
3.3 Description of Severance Benefits. In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company shall pay to the Executive and provide him with the
following:
(a) An amount equal to three (3) times the highest rate of the Executive's
annualized Base Salary in effect at any time [during the 36-month
period immediately] prior to the Effective Date of Termination.
(b) An amount equal to three (3) times the highest of the Executive's
target annual [Total] Management Incentive Award established [for any
plan year] [the three (3) plan years] up to and including the plan
year in which the Executive's Effective Date of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary, and unused and
accrued vacation pay, through the Effective Date of Termination.
(d) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage
for three (3) full years after the Effective Date of Termination.
These benefits shall be provided to the Executive (and to the
Executive's covered spouse and dependents) at the same premium cost,
and at the same coverage level, as in effect as of the Executive's
Effective Date of Termination.
The continuation of these welfare benefits shall be discontinued prior
to the end of the three (3) year period in the event the Executive has
available substantially similar benefits at a comparable cost from a
subsequent employer, as determined by the Committee.
Incentive awards granted under the FMC 1995 Management Incentive Plan, FMC
1995 Stock Option Plan, and other incentive arrangements adopted by the Company
shall be treated pursuant to the terms of the applicable plan.
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The aggregate benefits accrued by the Executive as of the Effective Date of
Termination under the FMC Corporation Salaried Employees' Retirement Plan, the
FMC Employees' Thrift and Stock Purchase Plan, the FMC Salaried Employees'
Equivalent Retirement Plan, and other savings and retirement plans sponsored by
the Company shall be distributed pursuant to the terms of the applicable plan.
For purposes of the Company's nonqualified retirement plans, such benefits shall
be calculated under the assumption that the Executive's employment continued
following the Effective Date of Termination for three (3) full years (i.e.,
three (3) additional years of age and service credits shall be added); provided,
however, that for purposes of determining "final average pay" under such
programs, the Executive's actual pay history as of the Effective Date of
Termination shall be used.
Compensation which has been deferred under the Deferred Compensation Plan
of FMC, FMC Deferred Compensation Equivalent Retirement and Thrift Plan or other
plans sponsored by the Company, as applicable, together with all interest that
has been credited with respect to any such deferred compensation balances, shall
be distributed pursuant to the terms of the applicable plan.
3.4 Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary through the Effective Date of
Termination, at which point in time the Executive's benefits shall be determined
in accordance with the Company's disability, retirement, insurance, and other
applicable plans and programs then in effect. In the event the Executive's
employment is terminated due to Disability, the Executive shall not be entitled
to the Severance Benefits described in Section 3.3.
3.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of his
Retirement or death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance, and other
applicable programs of the Company then in effect. In the event the Executive's
employment is terminated by reason of his Retirement or death, the Executive
shall not be entitled to the Severance Benefits described in Section 3.3.
3.6 Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment is
terminated either: (a) by the Company for Cause; or (b) by the Executive (other
than for Retirement, Good Reason, or under circumstances giving rise to a
Qualifying Termination described in Section 3.2(c) herein), the Company shall
pay the Executive his full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus all other
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amounts to which the Executive is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
3.7 Notice of Termination. Any termination of employment by the Company or
by the Executive for Good Reason or during the thirteenth (13th) calendar month
following the month in which a Change in Control occurs shall be communicated by
a Notice of Termination.
Article 4. Form and Timing of Severance Benefits
4.1 Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), and 3.3(c) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
4.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be required
(including, without limitation, any United States federal taxes and any other
state, city, or local taxes).
Article 5. Excise Tax Equalization Payment
5.1 Excise Tax Equalization Payment. In the event that the Executive
becomes entitled to Severance Benefits or any other payment or benefit under
this Agreement, or under any other agreement with or plan of the Company (in the
aggregate, the "Total Payments"), if all or any part of the Total Payments will
be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the Company shall pay to the
Executive in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of any Excise Tax upon the
Total Payments and any federal, state, and local income tax, penalties,
interest, and Excise Tax upon the Gross-Up Payment provided for by this Section
5.1 (including FICA and FUTA), shall be equal to the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practical
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.
5.2 Tax Computation. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive's termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement, or agreement with
the
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Company, or with any Person whose actions result in a Change in
Control of the Company or any Person affiliated with the Company or
such Persons) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel as
supported by the Company's independent auditors and acceptable to the
Executive, such other payments or benefits (in whole or in part) do
not constitute parachute payments, or unless such excess parachute
payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
(b) The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of: (i) the total amount
of the Total Payments; or (ii) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (a)
above); and
(c) The value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
5.3 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 5.2 herein so that the
Executive did not receive the greatest net benefit, the Company shall reimburse
the Executive for the full amount necessary to make the Executive whole, plus a
market rate of interest, as determined by the Committee.
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<PAGE>
Article 6. Establishment of Trust
As soon as practicable following the Effective Date hereof, the Company
shall create a Trust (which shall be a grantor trust within the meaning of
Sections 671-678 of the Internal Revenue Code) for the benefit of the Executive
and Beneficiaries, as appropriate. The Trust shall have a Trustee as selected by
the Company, and shall have certain restrictions as to the Company's ability to
amend the Trust or cancel benefits provided thereunder. Any assets contained in
the Trust shall, at all times, be specifically subject to the claims of the
Company's general creditors in the event of bankruptcy or insolvency; such terms
to be specifically defined within the provisions of the Trust, along with the
required procedure for notifying the Trustee of any bankruptcy or insolvency.
At any time following the Effective Date hereof, the Company may, but is
not obligated to, deposit assets in the Trust in an amount equal to or less than
the aggregate Severance Benefits which may become due to the Executive under
Sections 3.3(a), (b), and (c), and 5.1 of this Agreement.
Upon a Change in Control, the Company shall deposit assets in such Trust in
an amount equal to the estimated aggregate Severance Benefits which may become
due to the Executive under Sections 3.3(a), (b), and (c), 5.1, and 8.1 of this
Agreement. Such deposited amounts shall be reviewed and increased, if necessary,
every six (6) months following a Change in Control to reflect the Executive's
estimated aggregate Severance Benefits at such time.
Article 7. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or anyone else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(d) herein.
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Article 8. Legal Remedies
8.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict (including conflicts related to the calculation of parachute
payments) between the parties pertaining to this Agreement.
8.2 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company.
Article 9. Outplacement Assistance
Following a Qualifying Termination, other than a voluntary termination by
the Executive during the thirteenth (13th) calendar month following the month in
which a Change in Control occurs (as described in Section 3.2 herein), the
Executive shall be reimbursed by the Company for the costs of all outplacement
services obtained by the Executive within the two (2) year period after the
Effective Date of Termination; provided, however, that the total reimbursement
shall be limited to an amount equal to fifteen percent (15%) of the Executive's
Base Salary as of the Effective Date of Termination.
Article 10. Successors and Assignment
10.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. The date on which any such succession becomes effective shall
be deemed to be the date of the Change in Control.
10.2 Assignment by the Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
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payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's Beneficiary. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive's devisee,
legatee, or other designee, or if there is no such designee, to the Executive's
estate.
Article 11. Miscellaneous
11.1 Employment Status. Except as may be provided under any other
agreement between the Executive and the Company, the employment of the Executive
by the Company is "at will," and may be terminated by either the Executive or
the Company at any time, subject to applicable law.
11.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
11.3 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
11.4 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
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11.5 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Illinois shall be the controlling law in all
matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ________
day of ___________, 1997.
FMC Corporation Executive:
By:
____________________________ _____________________________________
Its:
___________________________
Attest:
________________________
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FORM I
Executive Severance
Agreement for
--------------------
FMC Corporation
<PAGE>
Contents
- --------------------------------------------------------------------------------
Page
Article 1. Establishment, Term, and Purpose 2
Article 2. Definitions 2
Article 3. Severance Benefits 7
Article 4. Form and Timing of Severance Benefits 10
Article 5. Excise Tax Equalization Payment 10
Article 6. Establishment of Trust 11
Article 7. The Company's Payment Obligation 12
Article 8. Legal Remedies 12
Article 9. Outplacement Assistance 13
Article 10. Successors and Assignment 13
Article 11. Miscellaneous 14
<PAGE>
FMC Corporation
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the _____ day of _________,
____, by and between FMC Corporation (hereinafter referred to as the "Company")
and ____________________ (hereinafter referred to as the "Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control;
WHEREAS, should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Executive and the Company desire that the terms of this
Agreement shall completely replace and supersede the provisions set forth in the
FMC Corporation Executive Severance Plan, [and the Executive Agreement entered
into by and between the Company and the Executive on ____________], setting
forth the terms and provisions with respect to the Executive's entitlement to
payments and benefits following a Change in Control of the Company.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
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Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue in
effect for three (3) full years. However, at the end of such three (3) year
period and, if extended, at the end of each additional year thereafter, the term
of this Agreement shall be extended automatically for one (1) additional year,
unless the Committee delivers written notice six (6) months prior to the end of
such term, or extended term, to each Executive, that the Agreement will not be
extended. In such case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in Control occurs during the original or any
extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.
2.1 "Base Salary" means the salary of record paid to an Executive as
annual salary, excluding amounts received under incentive or other bonus plans,
whether or not deferred.
2.2 "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.3 "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 11.2 herein.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such failure
resulting from Disability or occurring after issuance by the Executive of a
Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has willfully failed to
substantially perform his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis within thirty (30)
calendar days of receiving such demand; (b) the Executive's willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (c) the
Executive's having been convicted of, or plead guilty or nolo contendere to, a
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felony. For purposes of this subparagraph, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the action
or omission was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the chief executive officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for such purpose, (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (a) or (b) above, and specifying the particulars
thereof in detail. The Executive shall not be precluded from contesting such
resolution pursuant to an arbitration proceeding under Section 8.2 of this
Agreement.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the following conditions is satisfied:
(a) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Company Voting Securities") is acquired by a Person (other than
the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company); provided, however that any acquisition from the
Company or any acquisition pursuant to a transaction which complies
with clauses (i), (ii), and (iii) of paragraph (c) of this Section 2.6
shall not be a Change in Control under this paragraph (a); or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the
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Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(c) Consummation by the Company of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets or stock or
another entity (a "Business Combination"), in each case, unless
immediately following such Business Combination: (i) more than 60% of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries
(the "Parent Corporation"), is represented, directly or indirectly by
Company Voting Securities outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such
Business Combination), and such voting power among the holders thereof
is in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Company Voting
Securities, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or
more of the combined voting power of the then outstanding voting
securities eligible to elect directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation) except to
the extent that such ownership of the Company existed prior to the
Business Combination and (iii) at least a majority of the members of
the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) were members of the
Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination;
or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing group
which consummates the Change-in-Control transaction. The Executive shall be
deemed "part of a purchasing group" for purposes of the preceding
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sentence if the Executive is an equity participant in the purchasing company or
group (except for: (i) passive ownership of less than three percent (3%) of the
stock of the purchasing company; or (ii) ownership of equity participation in
the purchasing company or group which is otherwise not significant, as
determined prior to the Change in Control by a majority of the nonemployee
continuing Directors).
2.7 "Code" means the United States Internal Revenue Code of 1986, as
amended, and any successors thereto.
2.8 "Committee" means the Compensation and Organization Committee of the
Board or any other committee appointed by the Board to perform the functions of
the Compensation and Organization Committee.
2.9 "Company" means FMC Corporation, a Delaware corporation, or any
successor thereto as provided in Article 10 herein.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth above.
2.12 "Effective Date of Termination" means the date on which a Qualifying
Termination occurs which triggers the payment of Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent with
the Executive's authorities, duties, responsibilities, and status
(including offices and reporting requirements) as an employee of the
Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from those in
effect immediately preceding the Change in Control;
(b) The Company's requiring the Executive to (i) be based at a location
which is at least twenty-five (25) miles from the office where the
Executive is located at the time of the Change in Control, (not
including for this clause (i) required travel on the Company's
business to an extent substantially consistent with the Executive's
business
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immediately prior to the Change in Control) or (ii) travel on Company
business to an extent substantially greater than the travel
obligations of the Executive immediately prior to the Change in
Control;
(c) A reduction by the Company in the Executive's Base Salary as in effect
immediately prior to the Change in Control or as the same shall be
increased from time to time;
(d) The failure of the Company to (i) continue in effect any employee
benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in which the Executive is participating
immediately prior to such Change in Control or the taking of any
action by the Company which would adversely affect the Executive's
participation in or reduce the Executive's benefits under any such
plan, unless the Executive is permitted to participate in other plans
providing Executive with at least substantially equivalent benefits in
the aggregate (at substantially equivalent cost with respect to
welfare benefit plans), or (ii) provide the Executive with paid
vacation in accordance with the most favorable vacation policies of
the Company and its affiliated companies as in effect for the
Executive immediately prior to such Change in Control, including the
crediting of all service for which the Executive had been credited
under such vacation policies prior to the Change in Control;
(e) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 10 herein; or
(f) Any termination of Executive's employment by the Company that is not
effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
The Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
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2.16 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as provided in Section 13(d).
2.17 "Qualifying Termination" means any of the events described in Section
3.2 herein, the occurrence of which triggers the payment of Severance Benefits
hereunder.
2.18 "Retirement" means the Executive's voluntary termination of employment
in a manner which qualifies the Executive to receive immediately payable
retirement benefits under the Company's tax-qualified retirement plan or under
the successor or replacement of such retirement plan if it is then no longer in
effect; provided, that a termination for Good Reason which otherwise constitutes
Retirement shall be treated as Good Reason for purposes of being a Qualifying
Termination under this Agreement.
2.19 "Severance Benefits" means the payment of severance compensation as
provided in Section 3.3 herein.
2.20 "Trust" means the Company grantor trust to be created pursuant to
Article 6 of this Agreement.
Article 3. Severance Benefits
3.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3 herein,
if there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months following the Change in Control, a Qualifying Termination
of the Executive has occurred.
The Executive shall not be entitled to receive Severance Benefits if he is
terminated for Cause, or if his employment with the Company ends due to death,
Disability, or Retirement or due to a voluntary termination of employment by the
Executive without Good Reason.
3.2 Qualifying Termination. The occurrence of any one or more of the
following events shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24) calendar
months following the month in which a Change in Control of the Company
occurs;
(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the month in which a
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Change in Control of the Company occurs pursuant to a Notice of
Termination delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the provisions of
this Agreement following a Change in Control.
3.3 Description of Severance Benefits. In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company shall pay to the Executive and provide him with the
following:
(a) An amount equal to three (3) times the highest rate of the Executive's
annualized Base Salary in effect at any time [during the 36-month
period immediately] prior to the Effective Date of Termination.
(b) An amount equal to three (3) times the highest of the Executive's
target annual [Total] Management Incentive Award established [for any
plan year] [the three (3) plan years] up to and including the plan
year in which the Executive's Effective Date of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary, and unused and
accrued vacation pay, through the Effective Date of Termination.
(d) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage
for three (3) full years after the Effective Date of Termination.
These benefits shall be provided to the Executive (and to the
Executive's covered spouse and dependents) at the same premium cost,
and at the same coverage level, as in effect as of the Executive's
Effective Date of Termination.
The continuation of these welfare benefits shall be discontinued prior
to the end of the three (3) year period in the event the Executive has
available substantially similar benefits at a comparable cost from a
subsequent employer, as determined by the Committee.
Incentive awards granted under the FMC 1995 Management Incentive Plan, FMC
1995 Stock Option Plan, and other incentive arrangements adopted by the Company
shall be treated pursuant to the terms of the applicable plan.
The aggregate benefits accrued by the Executive as of the Effective Date of
Termination under the FMC Corporation Salaried Employees' Retirement Plan, the
FMC Employees' Thrift and Stock Purchase Plan, the FMC Salaried Employees'
Equivalent Retirement Plan, and other savings and retirement plans sponsored by
the Company shall be distributed pursuant to the terms of
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the applicable plan. For purposes of the Company's nonqualified retirement
plans, such benefits shall be calculated under the assumption that the
Executive's employment continued following the Effective Date of Termination for
three (3) full years (i.e., three (3) additional years of age and service
credits shall be added); provided, however, that for purposes of determining
"final average pay" under such programs, the Executive's actual pay history as
of the Effective Date of Termination shall be used.
Compensation which has been deferred under the Deferred Compensation Plan
of FMC, FMC Deferred Compensation Equivalent Retirement and Thrift Plan or other
plans sponsored by the Company, as applicable, together with all interest that
has been credited with respect to any such deferred compensation balances, shall
be distributed pursuant to the terms of the applicable plan.
3.4 Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary through the Effective Date of
Termination, at which point in time the Executive's benefits shall be determined
in accordance with the Company's disability, retirement, insurance, and other
applicable plans and programs then in effect. In the event the Executive's
employment is terminated due to Disability, the Executive shall not be entitled
to the Severance Benefits described in Section 3.3.
3.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of his
Retirement or death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance, and other
applicable programs of the Company then in effect. In the event the Executive's
employment is terminated by reason of his Retirement or death, the Executive
shall not be entitled to the Severance Benefits described in Section 3.3.
3.6 Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment is
terminated either: (a) by the Company for Cause; or (b) by the Executive (other
than for Retirement, Good Reason, or under circumstances giving rise to a
Qualifying Termination described in Section 3.2(c) herein), the Company shall
pay the Executive his full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Executive is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
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3.7 Notice of Termination. Any termination of employment by the Company or
by the Executive for Good Reason shall be communicated by a Notice of
Termination.
Article 4. Form and Timing of Severance Benefits
4.1 Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), and 3.3(c) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
4.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be required
(including, without limitation, any United States federal taxes and any other
state, city, or local taxes).
Article 5. Excise Tax Equalization Payment
5.1 Excise Tax Equalization Payment. In the event that the Executive
becomes entitled to Severance Benefits or any other payment or benefit under
this Agreement, or under any other agreement with or plan of the Company (in the
aggregate, the "Total Payments"), if all or any part of the Total Payments will
be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the Company shall pay to the
Executive in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of any Excise Tax upon the
Total Payments and any federal, state, and local income tax, penalties,
interest, and Excise Tax upon the Gross-Up Payment provided for by this Section
5.1 (including FICA and FUTA), shall be equal to the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practical
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.
5.2 Tax Computation. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive's termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement, or agreement with
the Company, or with any Person whose actions result in a Change in
Control of the Company or any Person affiliated with the Company or
such Persons) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as
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subject to the Excise Tax, unless in the opinion of tax counsel as
supported by the Company's independent auditors and acceptable to the
Executive, such other payments or benefits (in whole or in part) do
not constitute parachute payments, or unless such excess parachute
payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
(b) The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of: (i) the total amount
of the Total Payments; or (ii) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (a)
above); and
(c) The value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
5.3 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 5.2 herein so that the
Executive did not receive the greatest net benefit, the Company shall reimburse
the Executive for the full amount necessary to make the Executive whole, plus a
market rate of interest, as determined by the Committee.
Article 6. Establishment of Trust
As soon as practicable following the Effective Date hereof, the Company
shall create a Trust (which shall be a grantor trust within the meaning of
Sections 671-678 of the Internal Revenue Code) for the benefit of the Executive
and Beneficiaries, as appropriate. The Trust shall have a Trustee as selected by
the Company, and shall have certain restrictions as to the Company's ability to
amend the Trust or cancel benefits provided thereunder. Any assets contained in
the Trust shall, at all times, be specifically subject to the claims of the
Company's general creditors in the event of bankruptcy or
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insolvency; such terms to be specifically defined within the provisions of the
Trust, along with the required procedure for notifying the Trustee of any
bankruptcy or insolvency.
At any time following the Effective Date hereof, the Company may, but is
not obligated to, deposit assets in the Trust in an amount equal to or less than
the aggregate Severance Benefits which may become due to the Executive under
Sections 3.3(a), (b), and (c), and 5.1 of this Agreement.
Upon a Change in Control, the Company shall deposit assets in such Trust in
an amount equal to the estimated aggregate Severance Benefits which may become
due to the Executive under Sections 3.3(a), (b), and (c), 5.1, and 8.1 of this
Agreement. Such deposited amounts shall be reviewed and increased, if necessary,
every six (6) months following a Change in Control to reflect the Executive's
estimated aggregate Severance Benefits at such time.
Article 7. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or anyone else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(d) herein.
Article 8. Legal Remedies
8.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict (including conflicts related to the calculation of parachute
payments) between the parties pertaining to this Agreement.
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8.2 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company.
Article 9. Outplacement Assistance
Following a Qualifying Termination (as described in Section 3.2 herein),
the Executive shall be reimbursed by the Company for the costs of all
outplacement services obtained by the Executive within the two (2) year period
after the Effective Date of Termination; provided, however, that the total
reimbursement shall be limited to an amount equal to fifteen percent (15%) of
the Executive's Base Salary as of the Effective Date of Termination.
Article 10. Successors and Assignment
10.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. The date on which any such succession becomes effective shall
be deemed to be the date of the Change in Control.
10.2 Assignment by the Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's Beneficiary. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive's devisee,
legatee, or other designee, or if there is no such designee, to the Executive's
estate.
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Article 11. Miscellaneous
1.1 Employment Status. Except as may be provided under any other agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will," and may be terminated by either the Executive or the
Company at any time, subject to applicable law.
11.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
11.3 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
11.4 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
11.5 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Illinois shall be the controlling law in all
matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
__________ day of ____________________, 1997.
FMC Corporation Executive:
By:_________________________ ___________________________
Its:________________________ ___________________________
Attest:_____________________ ___________________________
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FORM II
EXECUTIVE SEVERANCE
AGREEMENT FOR _____________
FMC Corporation
<PAGE>
<TABLE>
<CAPTION>
Contents
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Page
<S> <C>
Article 1. Establishment, Term, and Purpose 2
Article 2. Definitions 2
Article 3. Severance Benefits 7
Article 4. Form and Timing of Severance Benefits 10
Article 5. Excise Tax Equalization Payment 10
Article 6. Establishment of Trust 11
Article 7. The Company's Payment Obligation 12
Article 8. Legal Remedies 12
Article 9. Outplacement Assistance 13
Article 10. Successors and Assignment 13
Article 11. Miscellaneous 13
</TABLE>
<PAGE>
FMC Corporation
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the ____ day of
_____________, 19__, by and between FMC Corporation (hereinafter referred to as
the "Company") and _________________ (hereinafter referred to as the
"Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control;
WHEREAS, should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Executive and the Company desire that the terms of this
Agreement shall completely replace and supersede the provisions set forth in the
FMC Corporation Executive Severance Plan, setting forth the terms and provisions
with respect to the Executive's entitlement to payments and benefits following a
Change in Control of the Company.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
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Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue in
effect for three (3) full years. However, at the end of such three (3) year
period and, if extended, at the end of each additional year thereafter, the term
of this Agreement shall be extended automatically for one (1) additional year,
unless the Committee delivers written notice six (6) months prior to the end of
such term, or extended term, to each Executive, that the Agreement will not be
extended. In such case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in Control occurs during the original or any
extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.
2.1 "Base Salary" means the salary of record paid to an Executive as
annual salary, excluding amounts received under incentive or other bonus plans,
whether or not deferred.
2.2 "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.3 "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 11.2 herein.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such failure
resulting from Disability or occurring after issuance by the Executive of a
Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has willfully failed to
substantially perform his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis within thirty (30)
calendar days of receiving such demand; (b) the Executive's willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (c) the
Executive's having been convicted of, or plead guilty or nolo contendere to, a
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felony. For purposes of this subparagraph, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the action
or omission was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the chief executive officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose, (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (a) or (b) above, and specifying the
particulars thereof in detail. The Executive shall not be precluded from
contesting such resolution pursuant to an arbitration proceeding under Section
8.2 of this Agreement.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the following conditions is satisfied:
(a) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Company Voting Securities") is acquired by a Person (other than
the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company); provided, however that any acquisition from the
Company or any acquisition pursuant to a transaction which complies
with clauses (i), (ii), and (iii) of paragraph (c) of this Section 2.6
shall not be a Change in Control under this paragraph (a); or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a
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member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(c) Consummation by the Company of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets or stock or
another entity (a "Business Combination"), in each case, unless
immediately following such Business Combination: (i) more than 60% of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, a corporation which as a result
of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries (the "Parent Corporation"), is represented, directly or
indirectly by Company Voting Securities outstanding immediately prior
to such Business Combination (or, if applicable, is represented by
shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Company Voting Securities, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of the combined voting power of the then
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) except to the extent that such ownership of the
Company existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing group
which consummates the Change-in-Control transaction. The Executive shall be
deemed "part of a purchasing group" for purposes of the preceding sentence if
the Executive is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than three percent (3%) of the
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stock of the purchasing company; or (ii) ownership of equity participation in
the purchasing company or group which is otherwise not significant, as
determined prior to the Change in Control by a majority of the nonemployee
continuing Directors).
2.7 "Code" means the United States Internal Revenue Code of 1986, as
amended, and any successors thereto.
2.8 "Committee" means the Compensation and Organization Committee of the
Board or any other committee appointed by the Board to perform the functions of
the Compensation and Organization Committee.
2.9 "Company" means FMC Corporation, a Delaware corporation, or any
successor thereto as provided in Article 10 herein.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth above.
2.12 "Effective Date of Termination" means the date on which a Qualifying
Termination occurs which triggers the payment of Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent with
the Executive's authorities, duties, responsibilities, and status
(including offices and reporting requirements) as an employee of the
Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from those in
effect immediately preceding the Change in Control;
(b) The Company's requiring the Executive to (i) be based at a location
which is at least twenty-five (25) miles from the office where the
Executive is located at the time of the Change in Control, (not
including for this clause (i) required travel on the Company's
business to an extent substantially consistent with the Executive's
business immediately prior to the Change in Control) or (ii) travel on
Company business to an extent substantially greater than the travel
obligations of
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the Executive immediately prior to the Change in Control;
(c) A reduction by the Company in the Executive's Base Salary as in effect
immediately prior to the Change in Control or as the same shall be
increased from time to time;
(d) The failure of the Company to (i) continue in effect any employee
benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in which the Executive is participating
immediately prior to such Change in Control or the taking of any
action by the Company which would adversely affect the Executive's
participation in or reduce the Executive's benefits under any such
plan, unless the Executive is permitted to participate in other plans
providing Executive with at least substantially equivalent benefits in
the aggregate (at substantially equivalent cost with respect to
welfare benefit plans), or (ii) provide the Executive with paid
vacation in accordance with the most favorable vacation policies of
the Company and its affiliated companies as in effect for the
Executive immediately prior to such Change in Control, including the
crediting of all service for which the Executive had been credited
under such vacation policies prior to the Change in Control;
(e) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 10 herein; or
(f) Any termination of Executive's employment by the Company that is not
effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
The Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
2.16 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as provided in Section 13(d).
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2.17 "Qualifying Termination" means any of the events described in Section
3.2 herein, the occurrence of which triggers the payment of Severance Benefits
hereunder.
2.18 "Retirement" means the Executive's voluntary termination of
employment in a manner which qualifies the Executive to receive immediately
payable retirement benefits under the Company's tax-qualified retirement plan or
under the successor or replacement of such retirement plan if it is then no
longer in effect; provided, that a termination for Good Reason which otherwise
constitutes Retirement shall be treated as Good Reason for purposes of being a
Qualifying Termination under this Agreement.
2.19 "Severance Benefits" means the payment of severance compensation as
provided in Section 3.3 herein.
2.20 "Trust" means the Company grantor trust to be created pursuant to
Article 6 of this Agreement.
Article 3. Severance Benefits
3.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3 herein,
if there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months following the Change in Control, a Qualifying Termination
of the Executive has occurred.
The Executive shall not be entitled to receive Severance Benefits if he is
terminated for Cause, or if his employment with the Company ends due to death,
Disability, or Retirement or due to a voluntary termination of employment by the
Executive without Good Reason.
3.2 Qualifying Termination. The occurrence of any one or more of the
following events shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24) calendar
months following the month in which a Change in Control of the Company
occurs;
(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the month in which a Change
in Control of the Company occurs pursuant to a Notice of Termination
delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the provisions of
this Agreement following a Change in Control.
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3.3 Description of Severance Benefits. In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company shall pay to the Executive and provide him with the
following:
(a) An amount equal to three (3) times the highest rate of the Executive's
annualized Base Salary in effect at any time during the [36-month
period immediately] prior to the Effective Date of Termination.
(b) An amount equal to three (3) times the highest of the Executive's
target annual [Total] Management Incentive Award established [for any
plan year][the three (3) plan years] up to and including the plan year
in which the Executive's Effective Date of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary, and unused and
accrued vacation pay, through the Effective Date of Termination.
(d) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage
for three (3) full years after the Effective Date of Termination.
These benefits shall be provided to the Executive (and to the
Executive's covered spouse and dependents) at the same premium cost,
and at the same coverage level, as in effect as of the Executive's
Effective Date of Termination.
The continuation of these welfare benefits shall be discontinued prior
to the end of the three (3) year period in the event the Executive has
available substantially similar benefits at a comparable cost from a
subsequent employer, as determined by the Committee.
Incentive awards granted under the FMC 1995 Management Incentive Plan, FMC
1995 Stock Option Plan, and other incentive arrangements adopted by the Company
shall be treated pursuant to the terms of the applicable plan.
The aggregate benefits accrued by the Executive as of the Effective Date of
Termination under the FMC Corporation Salaried Employees' Retirement Plan, the
FMC Employees' Thrift and Stock Purchase Plan, the FMC Salaried Employees'
Equivalent Retirement Plan, and other savings and retirement plans sponsored by
the Company shall be distributed pursuant to the terms of the applicable plan.
For purposes of the Company's nonqualified retirement plans, such benefits shall
be calculated under the assumption that the Executive's employment continued
following the Effective Date of Termination for three (3) full years (i.e.,
three (3) additional years of age and service credits shall be added); provided,
however, that for purposes of determining "final average pay" under such
programs, the Executive's actual pay history as of the Effective Date of
Termination shall be used.
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Compensation which has been deferred under the Deferred Compensation Plan
of FMC, FMC Deferred Compensation Equivalent Retirement and Thrift Plan or other
plans sponsored by the Company, as applicable, together with all interest that
has been credited with respect to any such deferred compensation balances, shall
be distributed pursuant to the terms of the applicable plan.
3.4 Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary through the Effective Date of
Termination, at which point in time the Executive's benefits shall be determined
in accordance with the Company's disability, retirement, insurance, and other
applicable plans and programs then in effect. In the event the Executive's
employment is terminated due to Disability, the Executive shall not be entitled
to the Severance Benefits described in Section 3.3.
3.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of his
Retirement or death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance, and other
applicable programs of the Company then in effect. In the event the Executive's
employment is terminated by reason of his Retirement or death, the Executive
shall not be entitled to the Severance Benefits described in Section 3.3.
3.6 Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment is
terminated either: (a) by the Company for Cause; or (b) by the Executive (other
than for Retirement, Good Reason, or under circumstances giving rise to a
Qualifying Termination described in Section 3.2(c) herein), the Company shall
pay the Executive his full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Executive is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
3.7 Notice of Termination. Any termination of employment by the Company or
by the Executive for Good Reason shall be communicated by a Notice of
Termination.
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Article 4. Form and Timing of Severance Benefits
4.1 Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), and 3.3(c) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
4.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be required
(including, without limitation, any United States federal taxes and any other
state, city, or local taxes).
Article 5. Excise Tax Equalization Payment
5.1 Excise Tax Equalization Payment. In the event that the Executive
becomes entitled to Severance Benefits or any other payment or benefit under
this Agreement, or under any other agreement with or plan of the Company (in the
aggregate, the "Total Payments"), if all or any part of the Total Payments will
be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the Company shall pay to the
Executive in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of any Excise Tax upon the
Total Payments and any federal, state, and local income tax, penalties,
interest, and Excise Tax upon the Gross-Up Payment provided for by this Section
5.1 (including FICA and FUTA), shall be equal to the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practical
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.
5.2 Tax Computation. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive's termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement, or agreement with
the Company, or with any Person whose actions result in a Change in
Control of the Company or any Person affiliated with the Company or
such Persons) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel as
supported by the Company's independent auditors and acceptable to the
Executive, such other payments or benefits (in whole or in part) do
not constitute parachute payments, or unless such excess parachute
payments (in whole or in part) represent reasonable compensation for
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services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
(b) The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of: (i) the total amount
of the Total Payments; or (ii) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (a)
above); and
(c) The value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
5.3 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 5.2 herein so that the
Executive did not receive the greatest net benefit, the Company shall reimburse
the Executive for the full amount necessary to make the Executive whole, plus a
market rate of interest, as determined by the Committee.
Article 6. Establishment of Trust
As soon as practicable following the Effective Date hereof, the Company
shall create a Trust (which shall be a grantor trust within the meaning of
Sections 671-678 of the Internal Revenue Code) for the benefit of the Executive
and Beneficiaries, as appropriate. The Trust shall have a Trustee as selected by
the Company, and shall have certain restrictions as to the Company's ability to
amend the Trust or cancel benefits provided thereunder. Any assets contained in
the Trust shall, at all times, be specifically subject to the claims of the
Company's general creditors in the event of bankruptcy or insolvency; such terms
to be specifically defined within the provisions of the Trust, along with the
required procedure for notifying the Trustee of any bankruptcy or insolvency.
At any time following the Effective Date hereof, the Company may, but is
not obligated to, deposit assets in the Trust in an amount equal to or less than
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the aggregate Severance Benefits which may become due to the Executive under
Sections 3.3(a), (b), and (c), 5.1 of this Agreement.
Upon a Change in Control, the Company shall deposit assets in such Trust in
an amount equal to the estimated aggregate Severance Benefits which may become
due to the Executive under Sections 3.3(a), (b), and (c), and 5.1, and 8.1 of
this Agreement. Such deposited amounts shall be reviewed and increased, if
necessary, every six (6) months following a Change in Control to reflect the
Executive's estimated aggregate Severance Benefits at such time.
Article 7. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or anyone else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(d) herein.
Article 8. Legal Remedies
8.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict (including conflicts related to the calculation of parachute
payments) between the parties pertaining to this Agreement.
8.2 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
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Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company.
Article 9. Outplacement Assistance
Following a Qualifying Termination (as described in Section 3.2 herein),
the Executive shall be reimbursed by the Company for the costs of all
outplacement services obtained by the Executive within the two (2) year period
after the Effective Date of Termination; provided, however, that the total
reimbursement shall be limited to an amount equal to fifteen percent (15%) of
the Executive's Base Salary as of the Effective Date of Termination.
Article 10. Successors and Assignment
10.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. The date on which any such succession becomes effective shall
be deemed to be the date of the Change in Control.
10.2 Assignment by the Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's Beneficiary. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive's devisee,
legatee, or other designee, or if there is no such designee, to the Executive's
estate.
Article 11. Miscellaneous
1.1 Employment Status. Except as may be provided under any other agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will," and may be terminated by either the Executive or the
Company at any time, subject to applicable law.
11.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
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11.3 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
11.4 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
11.5 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Illinois shall be the controlling law in all
matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
__________ day of ____________________, 1997.
FMC Corporation Executive:
By:
---------------------------- ---------------------------
Its:
---------------------------
Attest:
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FORM III
Executive Severance
Agreement for
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FMC Corporation
<PAGE>
Contents
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Page
Article 1. Establishment, Term, and Purpose 2
Article 2. Definitions 2
Article 3. Severance Benefits 7
Article 4. Form and Timing of Severance Benefits 9
Article 5. Excise Tax Equalization Payment 10
Article 6. Establishment of Trust 11
Article 7. The Company's Payment Obligation 12
Article 8. Legal Remedies 12
Article 9. Outplacement Assistance 13
Article 10. Successors and Assignment 13
Article 11. Miscellaneous 13
<PAGE>
FMC Corporation
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the ____ day of ____________,
____, by and between FMC Corporation (hereinafter referred to as the "Company")
and (ename) (hereinafter referred to as the "Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board should
be able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control;
WHEREAS, should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its shareholders, and to take such other actions as the Board might
determine to be appropriate; and
WHEREAS, the Executive and the Company desire that the terms of this
Agreement shall completely replace and supersede the provisions set forth in the
FMC Corporation Executive Severance Plan, setting forth the terms and provisions
with respect to the Executive's entitlement to payments and benefits following a
Change in Control of the Company.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control of
the Company, and to induce the Executive to remain in the employ of the Company,
and for other good and valuable consideration, the Company and the Executive
agree as follows:
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Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue in
effect for three (3) full years. However, at the end of such three (3) year
period and, if extended, at the end of each additional year thereafter, the term
of this Agreement shall be extended automatically for one (1) additional year,
unless the Committee delivers written notice six (6) months prior to the end of
such term, or extended term, to each Executive, that the Agreement will not be
extended. In such case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in Control occurs during the original or any
extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.
2.1 "Base Salary" means the salary of record paid to an Executive as
annual salary, excluding amounts received under incentive or other bonus plans,
whether or not deferred.
2.2 "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.3 "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 11.2 herein.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such failure
resulting from Disability or occurring after issuance by the Executive of a
Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive that specifically identifies the
manner in which the Company believes that the Executive has willfully failed to
substantially perform his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis within thirty (30)
calendar days of receiving such demand; (b) the Executive's willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (c) the
Executive's having been convicted of, or plead guilty or nolo contendere to, a
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felony. For purposes of this subparagraph, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the action
or omission was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the chief executive officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for such purpose, (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (a) or (b) above, and specifying the particulars
thereof in detail. The Executive shall not be precluded from contesting such
resolution pursuant to an arbitration proceeding under Section 8.2 of this
Agreement.
2.6 "Change in Control" of the Company shall be deemed to have occurred as
of the first day that any one or more of the following conditions is satisfied:
(a) The "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities representing more than 20 percent (20%) of
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Company Voting Securities") is acquired by a Person (other than
the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or an affiliate thereof, any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company); provided, however that any acquisition from the
Company or any acquisition pursuant to a transaction which complies
with clauses (i), (ii), and (iii) of paragraph (c) of this Section 2.6
shall not be a Change in Control under this paragraph (a); or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a
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member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(c) Consummation by the Company of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets or stock or
another entity (a "Business Combination"), in each case, unless
immediately following such Business Combination: (i) more than 60% of
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, a corporation which as a result
of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries (the "Parent Corporation"), is represented, directly or
indirectly by Company Voting Securities outstanding immediately prior
to such Business Combination (or, if applicable, is represented by
shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Company Voting Securities, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of the combined voting power of the then
outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) except to the extent that such ownership of the
Company existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
However, in no event shall a Change in Control be deemed to have occurred,
with respect to the Executive, if the Executive is part of a purchasing group
which consummates the Change-in-Control transaction. The Executive shall be
deemed "part of a purchasing group" for purposes of the preceding sentence if
the Executive is an equity participant in the purchasing company or
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group (except for: (i) passive ownership of less than three percent (3%) of the
stock of the purchasing company; or (ii) ownership of equity participation in
the purchasing company or group which is otherwise not significant, as
determined prior to the Change in Control by a majority of the nonemployee
continuing Directors).
2.7 "Code" means the United States Internal Revenue Code of 1986, as
amended, and any successors thereto.
2.8 "Committee" means the Compensation and Organization Committee of the
Board or any other committee appointed by the Board to perform the functions of
the Compensation and Organization Committee.
2.9 "Company" means FMC Corporation, a Delaware corporation, or any
successor thereto as provided in Article 10 herein.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth above.
2.12 "Effective Date of Termination" means the date on which a Qualifying
Termination occurs which triggers the payment of Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent with
the Executive's authorities, duties, responsibilities, and status
(including offices and reporting requirements) as an employee of the
Company, or a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from those in
effect immediately preceding the Change in Control;
(b) The Company's requiring the Executive to (i) be based at a location
which is at least twenty-five (25) miles from the office where the
Executive is located at the time of the Change in Control, (not
including for this clause (i) required travel on the Company's
business to an extent substantially consistent with the Executive's
business immediately prior to the Change in Control) or (ii) travel on
Company business to an extent substantially greater than the travel
obligations of
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the Executive immediately prior to the Change in Control;
(c) A reduction by the Company in the Executive's Base Salary as in effect
immediately prior to the Change in Control or as the same shall be
increased from time to time;
(d) The failure of the Company to (i) continue in effect any employee
benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in which the Executive is participating
immediately prior to such Change in Control or the taking of any
action by the Company which would adversely affect the Executive's
participation in or reduce the Executive's benefits under any such
plan, unless the Executive is permitted to participate in other plans
providing Executive with at least substantially equivalent benefits in
the aggregate (at substantially equivalent cost with respect to
welfare benefit plans), or (ii) provide the Executive with paid
vacation in accordance with the most favorable vacation policies of
the Company and its affiliated companies as in effect for the
Executive immediately prior to such Change in Control, including the
crediting of all service for which the Executive had been credited
under such vacation policies prior to the Change in Control;
(e) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 10 herein; or
(f) Any termination of Executive's employment by the Company that is not
effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
The Executive's continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
2.16 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as provided in Section 13(d).
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2.17 "Qualifying Termination" means any of the events described in Section
3.2 herein, the occurrence of which triggers the payment of Severance Benefits
hereunder.
2.18 "Retirement" means the Executive's voluntary termination of employment
in a manner which qualifies the Executive to receive immediately payable
retirement benefits under the Company's tax-qualified retirement plan or under
the successor or replacement of such retirement plan if it is then no longer in
effect; provided, that a termination for Good Reason which otherwise constitutes
Retirement shall be treated as Good Reason for purposes of being a Qualifying
Termination under this Agreement.
2.19 "Severance Benefits" means the payment of severance compensation as
provided in Section 3.3 herein.
2.20 "Trust" means the Company grantor trust to be created pursuant to
Article 6 of this Agreement.
Article 3. Severance Benefits
3.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3 herein,
if there has been a Change in Control of the Company and if, within twenty-four
(24) calendar months following the Change in Control, a Qualifying Termination
of the Executive has occurred.
The Executive shall not be entitled to receive Severance Benefits if he is
terminated for Cause, or if his employment with the Company ends due to death,
Disability, or Retirement or due to a voluntary termination of employment by the
Executive without Good Reason.
3.2 Qualifying Termination. The occurrence of any one or more of the
following events shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24) calendar
months following the month in which a Change in Control of the Company
occurs;
(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the month in which a Change
in Control of the Company occurs pursuant to a Notice of Termination
delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the provisions of
this Agreement following a Change in Control.
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3.3 Description of Severance Benefits. In the event the Executive becomes
entitled to receive Severance Benefits, as provided in Sections 3.1 and 3.2
herein, the Company shall pay to the Executive and provide him with the
following:
(a) An amount equal to the highest rate of the Executive's annualized Base
Salary in effect at any time [during the 36-month period immediately]
prior to the Effective Date of Termination.
(b) An amount equal to the highest of the Executive's target annual
[Total] Management Incentive Award established for [any plan year]
[the three (3) plan years] up to and including the plan year in which
the Executive's Effective Date of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary, and unused and
accrued vacation pay, through the Effective Date of Termination.
(d) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage
for three (3) full years after the Effective Date of Termination.
These benefits shall be provided to the Executive (and to the
Executive's covered spouse and dependents) at the same premium cost,
and at the same coverage level, as in effect as of the Executive's
Effective Date of Termination.
The continuation of these welfare benefits shall be discontinued prior
to the end of the three (3) year period in the event the Executive has
available substantially similar benefits at a comparable cost from a
subsequent employer, as determined by the Committee.
Incentive awards granted under the FMC 1995 Management Incentive Plan, FMC
1995 Stock Option Plan, and other incentive arrangements adopted by the Company
shall be treated pursuant to the terms of the applicable plan.
The aggregate benefits accrued by the Executive as of the Effective Date of
Termination under the FMC Corporation Salaried Employees' Retirement Plan, the
FMC Employees' Thrift and Stock Purchase Plan, the FMC Salaried Employees'
Equivalent Retirement Plan, and other savings and retirement plans sponsored by
the Company shall be distributed pursuant to the terms of the applicable plan.
For purposes of the Company's nonqualified retirement plans, such benefits shall
be calculated under the assumption that the Executive's employment continued
following the Effective Date of Termination for three (3) full years (i.e.,
three (3) additional years of age and service credits shall be added); provided,
however, that for purposes of determining "final average pay" under such
programs, the Executive's actual pay history as of the
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Effective Date of Termination shall be used.
Compensation which has been deferred under the Deferred Compensation Plan
of FMC, FMC Deferred Compensation Equivalent Retirement and Thrift Plan or other
plans sponsored by the Company, as applicable, together with all interest that
has been credited with respect to any such deferred compensation balances, shall
be distributed pursuant to the terms of the applicable plan.
3.4 Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary through the Effective Date of
Termination, at which point in time the Executive's benefits shall be determined
in accordance with the Company's disability, retirement, insurance, and other
applicable plans and programs then in effect. In the event the Executive's
employment is terminated due to Disability, the Executive shall not be entitled
to the Severance Benefits described in Section 3.3.
3.5 Termination for Retirement or Death. Following a Change in Control of
the Company, if the Executive's employment is terminated by reason of his
Retirement or death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance, and other
applicable programs of the Company then in effect. In the event the Executive's
employment is terminated by reason of his Retirement or death, the Executive
shall not be entitled to the Severance Benefits described in Section 3.3.
3.6 Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment is
terminated either: (a) by the Company for Cause; or (b) by the Executive (other
than for Retirement, Good Reason, or under circumstances giving rise to a
Qualifying Termination described in Section 3.2(c) herein), the Company shall
pay the Executive his full Base Salary and accrued vacation through the
Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Executive is entitled under any compensation plans of the
Company, at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
3.7 Notice of Termination. Any termination of employment by the Company or
by the Executive for Good Reason shall be communicated by a Notice of
Termination.
Article 4. Form and Timing of Severance Benefits
4.1 Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), and 3.3(c) herein shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
-9-
<PAGE>
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.
4.2 Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be required
(including, without limitation, any United States federal taxes and any other
state, city, or local taxes).
Article 5. Excise Tax Equalization Payment
5.1 Excise Tax Equalization Payment. In the event that the Executive
becomes entitled to Severance Benefits or any other payment or benefit under
this Agreement, or under any other agreement with or plan of the Company (in the
aggregate, the "Total Payments"), if all or any part of the Total Payments will
be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the Company shall pay to the
Executive in cash an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive after deduction of any Excise Tax upon the
Total Payments and any federal, state, and local income tax, penalties,
interest, and Excise Tax upon the Gross-Up Payment provided for by this Section
5.1 (including FICA and FUTA), shall be equal to the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practical
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.
5.2 Tax Computation. For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amounts of such Excise Tax:
(a) Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive's termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement, or agreement with
the Company, or with any Person whose actions result in a Change in
Control of the Company or any Person affiliated with the Company or
such Persons) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel as
supported by the Company's independent auditors and acceptable to the
Executive, such other payments or benefits (in whole or in part) do
not constitute parachute payments, or unless such excess parachute
payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
-10-
<PAGE>
(b) The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of: (i) the total amount
of the Total Payments; or (ii) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (a)
above); and
(c) The value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence on the
Effective Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
5.3 Subsequent Recalculation. In the event the Internal Revenue Service
adjusts the computation of the Company under Section 5.2 herein so that the
Executive did not receive the greatest net benefit, the Company shall reimburse
the Executive for the full amount necessary to make the Executive whole, plus a
market rate of interest, as determined by the Committee.
Article 6. Establishment of Trust
As soon as practicable following the Effective Date hereof, the Company
shall create a Trust (which shall be a grantor trust within the meaning of
Sections 671-678 of the Internal Revenue Code) for the benefit of the Executive
and Beneficiaries, as appropriate. The Trust shall have a Trustee as selected by
the Company, and shall have certain restrictions as to the Company's ability to
amend the Trust or cancel benefits provided thereunder. Any assets contained in
the Trust shall, at all times, be specifically subject to the claims of the
Company's general creditors in the event of bankruptcy or insolvency; such terms
to be specifically defined within the provisions of the Trust, along with the
required procedure for notifying the Trustee of any bankruptcy or insolvency.
At any time following the Effective Date hereof, the Company may, but is
not obligated to, deposit assets in the Trust in an amount equal to or less than
the aggregate Severance Benefits which may become due to the Executive under
Sections 3.3(a), (b), and (c), and 5.1 of this Agreement.
Upon a Change in Control, the Company shall deposit assets in such Trust
-11-
<PAGE>
in an amount equal to the estimated aggregate Severance Benefits which may
become due to the Executive under Sections 3.3(a), (b), and (c), 5.1, and 8.1 of
this Agreement. Such deposited amounts shall be reviewed and increased, if
necessary, every six (6) months following a Change in Control to reflect the
Executive's estimated aggregate Severance Benefits at such time.
Article 7. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements provided
for herein shall be absolute and unconditional, and shall not be affected by any
circumstances, including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have against the
Executive or anyone else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the
Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this
Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(d) herein.
Article 8. Legal Remedies
8.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company's
refusal to provide the Severance Benefits to which the Executive becomes
entitled under this Agreement, or as a result of the Company's contesting the
validity, enforceability, or interpretation of this Agreement, or as a result of
any conflict (including conflicts related to the calculation of parachute
payments) between the parties pertaining to this Agreement.
8.2 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration, conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel for the Executive, shall be borne by the Company.
-12-
<PAGE>
Article 9. Outplacement Assistance
Following a Qualifying Termination (as described in Section 3.2 herein),
the Executive shall be reimbursed by the Company for the costs of all
outplacement services obtained by the Executive within the two (2) year period
after the Effective Date of Termination; provided, however, that the total
reimbursement shall be limited to an amount equal to fifteen percent (15%) of
the Executive's Base Salary as of the Effective Date of Termination.
Article 10. Successors and Assignment
10.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. The date on which any such succession becomes effective shall
be deemed to be the date of the Change in Control.
10.2 Assignment by the Executive. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If the Executive dies while any amount would still be payable to him
hereunder had he continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's Beneficiary. If the Executive has not named a Beneficiary, then such
amounts shall be paid to the Executive's devisee, legatee, or other designee, or
if there is no such designee, to the Executive's estate.
Article 11. Miscellaneous
1.1 Employment Status. Except as may be provided under any other agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will," and may be terminated by either the Executive or the
Company at any time, subject to applicable law.
11.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
11.3 Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed
-13-
<PAGE>
and enforced as if the illegal or invalid provision had not been included.
Further, the captions of this Agreement are not part of the provisions hereof
and shall have no force and effect.
11.4 Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the
Committee, or by the respective parties' legal representatives and successors.
11.5 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Illinois shall be the controlling law in all
matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this ____
day of ______________, 1997.
FMC Corporation Executive:
By: ------------ ----------------------
Its: ------------
Attest: ------------
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>11
<DESCRIPTION>MASTER TRUST AGREEMENT, FIDELITY MANAGEMENT TRUST
<TEXT>
<PAGE>
Exhibit 10.12
MASTER TRUST AGREEMENT
Between
- --------------------------------------------------------------------------------
FMC CORPORATION
And
FIDELITY MANAGEMENT TRUST COMPANY
- --------------------------------------------------------------------------------
FMC CORPORATION MASTER TRUST
Dated as of June 1, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
1 Definitions 2
2 Trust 3
3 Exclusive Benefit and Reversion of
Sponsor Contributions 4
4 Disbursements 4
(a) Administrator Directed Disbursements
(b) Participant Withdrawal Requests
(c) Limitations
5 Investment of Trust 5
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Sponsor Stock
(f) Harsco Stock
(g) Notes
(h) Guaranteed Investment Contracts
(i) Participation in Commingled Pools
(j) Reliance of Trustee Directions
(k) Trustee Powers
6 Recordkeeping and Administrative Services to Be Performed 25
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
(f) Allocation of Plan Interests
7 Compensation and Expenses 27
8 Directions and Indemnification 23
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Sponsor or Administrator
(c) Directions from Named Fiduciaries
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
9 Resignation or Removal of Trustee 29
(a) Resignation
(b) Removal
10 Successor Trustee 29
(a) Appointment
(b) Acceptance
(c) Corporate Action
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
(Continued)
Section Page
- ------- ----
<S> <C>
11 Termination 30
12 Resignation, Removal, and Termination Notices 30
13 Duration 31
14 Amendment or Modification 31
15 General 31
(a) Performance by Trustee, its Agents or Affiliates
(b) Delegation by Employer
(c) Entire Agreement
(d) Waiver
(e) Successors and Assigns
(f) Partial Invalidity
(g) Section Headings
16 Governing Law 33
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
17 Plan Qualification 33
Schedules
- ---------
A. Administrative Services
B. Fee Schedule
C. Investment Options
D. Administrator's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Existing GICs
H. Telephone Exchange Guidelines
I. Investment Guidelines for GIC Management
J. Plan Designation Form
K. Operational Guidelines for Non-Fidelity Mutual Funds
</TABLE>
iii
<PAGE>
TRUST AGREEMENT, dated as of the first day of June, 1997, between FMC
CORPORATION, a Delaware corporation, having an office at 200 East Randolph
Drive, Chicago, Illinois 60601 (the "Sponsor"), and FIDELITY MANAGEMENT TRUST
COMPANY, a Massachusetts trust company, having an office at 82 Devonshire
Street, Boston, Massachusetts 02109 (the "Trustee ").
WITNESSETH:
WHEREAS, the Sponsor, or one of its affiliates, is the sponsor of the FMC
Corporation Employees' Thrift and Stock Purchase Plan, the United Defense
Limited Partnership Salaried Employees' Plan, the FMC Corporation 401(k) Plan
for Employees Covered by a Collective Bargaining Agreement, the United Defense
Limited Partnership Louisville Union Employees' Thrift Plan and the United
Defense Limited Partnership York Plan (individually and collectively, the
"Plan") and other Plans which may be added by mutual agreement of the Sponsor
and Trustee; and
WHEREAS, certain affiliates and subsidiaries of the Sponsor maintain, or
may in the future maintain, qualified defined contribution plans for the benefit
of their eligible employees; and
WHEREAS, the Sponsor desires to establish a master trust to hold all of
the assets of the Plan and/or such other tax-qualified defined contribution
plans maintained by the Sponsor, or any of its subsidiaries or affiliates, as
are designated by the Sponsor as being eligible to participate therein; and
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust pursuant to the provisions of this Trust Agreement, which trust
shall constitute a continuation, by means of an amendment and restatement, of
each of the prior trusts from which plan assets are transferred to the Trustee;
and
<PAGE>
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Trustee is willing to perform recordkeeping and administrative
services for the Plan if the services are purely ministerial in nature and are
provided within a framework of plan provisions, guidelines and interpretations
conveyed in writing to the Trustee by the Administrator.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements set forth below, the Sponsor and the Trustee agree as
follows:
Section 1. Definitions. The following terms as used in this Trust Agreement have
the meaning indicated unless the context clearly requires otherwise:
(a) "Administrator" shall mean, with respect to the Plan, the person or entity
which is the "administrator" of such Plan within the meaning of section
3(16)(A) of ERISA.
(b) "Agreement" shall mean this Trust Agreement, as the same may be amended and
in effect from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or may
be amended from time to time.
(d) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it has been or may be amended from time to time.
(e) "FBSI" shall mean Fidelity Brokerage Services, Inc., an affiliate of the
Trustee.
(f) "GICs" shall mean guaranteed investment contracts.
(g) "Existing GICs" shall mean each guaranteed annuity contract heretofore
entered into by the Sponsor, any other Employer or any predecessor trustee
and specifically identified on Schedule "G" attached hereto.
(h) "Mutual Fund" shall mean securities issued by the investment companies
advised by Fidelity Management & Research Company and certain securities
issued by investment companies not advised by Fidelity Management &
Research Company.
(i) "Named Fiduciary" shall mean, with respect to the application of any
provision of this Agreement to any Plan, the person or entity which is the
relevant fiduciary under such Plan with respect to such matter (within the
meaning of section 402(a) of the Employee Retirement Income Security Act of
1974, as amended); and
2
<PAGE>
(j) "Participant" shall mean, with respect to the Plan, any employee (or former
employee) with an account under the Plan, which has not yet been fully
distributed and/or forfeited, and shall include the designated
beneficiary(ies) with respect to the account of any deceased employee (or
deceased former employee) until such account has been fully distributed
and/or forfeited.
(k) "Participant Recordkeeping Reconciliation Period" shall mean the period
beginning on the date of the initial transfer of assets to the Trust and
ending on the date of the completion of the reconciliation of participant
records.
(l) "Plan" shall mean the FMC Corporation Employees' Thrift and Stock Purchase
Plan, the United Defense Limited Partnership Salaried Employees' Plan, the
FMC Corporation 401(k) Plan for Employees Covered by a Collective
Bargaining Agreement, the United Defense Limited Partnership Louisville
Union Plan, the United Defense Limited Partnership York Union Plan and such
other tax-qualified, defined contribution plans which are maintained by the
Sponsor or any of its subsidiaries or affiliates for the benefit of their
eligible employees as may be designated by the Sponsor in writing to the
Trustee as a Plan hereunder, such writing to be in the form of the Plan
Designation Form attached hereto as Schedule "J". Each reference to "a
Plan" or "the Plan" in this Agreement shall mean and include the Plan or
Plans to which the particular provision of this Agreement is being applied
or all Plans, as the context may require.
(m) "Reporting Date" shall mean the last day of each calendar quarter, the date
as of which the Trustee resigns or is removed pursuant to Section 9 hereof
and the date as of which this Agreement terminates pursuant to Section 11
hereof.
(n) "Sponsor Stock" shall mean the Common Stock of the Sponsor, or such other
publicly-traded stock of the Sponsor, or such other publicly-traded stock
of the Sponsor's affiliates as meets the requirements of section 407(d)(5)
of ERISA with respect to the Plan.
(o) "Sponsor" shall mean FMC Corporation, a Delaware corporation, or any
successor to all or substantially all of its businesses which, by
agreement, operation of law or otherwise, assumes the responsibility of the
Sponsor under this Agreement.
(p) "Trust" shall mean the FMC Corporation Master Trust, being the trust
established by the Sponsor and the Trustee pursuant to the provisions of
this Agreement.
(q) "Trustee" shall mean Fidelity Management Trust Company, a Massachusetts
trust company and any successor to all or substantially all of its trust
business as described in Section lO(c). The term Trustee shall also include
any successor trustee appointed pursuant to Section 10 to the extent such
successor agrees to serve as Trustee under this Agreement.
(r) "Trustee's fiduciary duty" shall mean: the Trustee shall discharge its
duties with respect to the Plans solely in the interest of the participants
and beneficiaries and with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
Section 2. Trust. The Sponsor hereby establishes the Trust with the Trustee. The
Trust shall consist of an initial contribution of money or other property
acceptable to the Trustee in its sole discretion, made by the Sponsor or
transferred from a previous trustee under the Plan, such additional sums of
money and Sponsor Stock as shall from time to time be delivered to the Trustee
under a Plan, all investments made
3
<PAGE>
therewith and proceeds thereof, and all earnings and profits thereon, less the
payments that are made by the Trustee as provided herein, without distinction
between principal and income. The Trustee hereby accepts the Trust on the terms
and conditions set forth in this Agreement. In accepting this Trust, the Trustee
shall be accountable for the assets received by it, subject to the terms and
conditions of this Agreement.
Section 3. Exclusive Benefit and Reversion of Sponsor Contributions. Except as
provided under applicable law, no part of the Trust allocable to a Plan may be
used for, or diverted to, purposes other than the exclusive benefit of the
participants in the Plan or their beneficiaries prior to the satisfaction of all
liabilities with respect to the participants and their beneficiaries.
Disbursements from the forfeiture account may be made, as directed by the
Sponsor, to offset contributions or legitimate Plan expenses.
Section 4. Disbursements.
(a) Administrator Directed Disbursements. The Trustee shall make
disbursements in the amounts and in the manner that the Administrator directs
from time to time in writing. The Trustee shall have no responsibility to
ascertain such direction's compliance with the terms of the Plan or of any
applicable law or the direction's effect for tax purposes or otherwise; nor
shall the Trustee have any responsibility to see to the application of any
disbursement.
(b) Participant Withdrawal Requests. The Sponsor hereby directs that,
pursuant to the Plan, a participant withdrawal request (in-service or full
withdrawal) may be made by the participant by telephone, and the Trustee shall
process such request only after the identity of the participant is verified by
use of a personal identification number ("PIN") and social security number. The
Trustee shall process such withdrawal in accordance with written guidelines
provided by the Sponsor and documented in the Plan Administrative Manual. For
withdrawals which require spousal consent, the Trustee shall forward the
withdrawal document to the participant for execution and submission to the
Trustee. The Trustee shall have the responsibility for approving
4
<PAGE>
the withdrawal in accordance with written guidelines provided by the Sponsor and
documented in the Plan Administrative Manual.
(c) Limitations. The Trustee shall not be required to make any disbursement
in excess of the net realizable value of the assets of the Trust at the time of
the disbursement. The Trustee shall be required to make all disbursements in
cash in accordance with the hierarchy of investments to be converted to cash as
detailed in the Plan Administrative Manual unless the Administrator has provided
written directions to the contrary.
Section 5. Investment of Trust.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any participant in connection with the selection
of such options.
(b) Available Investment Options. The Named Fiduciary with respect to a
Plan shall direct the Trustee as to what investment options: the Trust shall be
invested during the Participant Recordkeeping Reconciliation Period, and the
investment options in which Plan participants may invest in, subject to the
following limitations. The Named Fiduciary may determine to offer as investment
options only (i) Mutual Funds, (ii) Sponsor Stock, (iii) Harsco Stock, (iv)
notes evidencing loans to Participants in accordance with the terms of the Plan,
(v) Stable Value Investments chosen by the Trustee as set forth in the
Investment Guidelines attached hereto, (vi) Existing GICs, and (vii) collective
investment funds maintained by the Trustee for qualified plans; provided,
however, that the Named Fiduciary hereby directs the Trustee to continue to hold
such Existing GICs as set forth in Section A of Schedule "G" until the Named
Fiduciary directs otherwise, it being expressly understood that such direction
is given in accordance with Section 403(a) of ERISA; and provided, further, that
the Trustee shall be considered a fiduciary with investment discretion only with
respect to Plan assets that are invested in existing GICs set forth in Section B
of Schedule "G" chosen by the Trustee or in collective investment funds
maintained by the Trustee for qualified plans. The investment options initially
selected
<PAGE>
by the Named Fiduciary are identified on Schedules "A" and "C" attached hereto.
The Named Fiduciary may add additional investment options with the consent of
the Trustee and upon mutual amendment of this Trust Agreement and the Schedules
thereto to reflect such additions.
(c) Participant Direction. Each Participant shall direct the Trustee in
which investment option(s) to invest the assets in the participant's individual
accounts. Such directions may be made by Participants by use of the telephone
exchange system maintained for such purposes by the Trustee or its agent, in
accordance with written Telephone Exchange Guidelines attached hereto as
Schedule "H". In the event that the Trustee fails to receive a proper direction,
the assets shall be invested in the securities of the investment option set
forth for such purpose on Schedule "C", until the Trustee receives a proper
direction.
(d) Mutual Funds. The Sponsor hereby acknowledges that it has received
from the Trustee a copy of the prospectus for each Mutual Fund selected by the
Named Fiduciary as a Plan investment option. All transactions involving Mutual
Funds not advised by Fidelity Management & Research Company (Non-Fidelity Mutual
Funds) shall be done in accordance with the Operational Guidelines attached
hereto as Schedule "K". Trust investments in Mutual Funds shall be subject to
the following limitations:
(i) Execution of Purchases and Sales. Purchases and sales of Mutual
Funds (other than for exchanges) shall be made on the date on which the Trustee
receives from the Sponsor in good order all information and documentation
necessary to accurately effect such purchases and sales (or in the case of a
purchase, the subsequent date on which the Trustee has received a wire transfer
of funds necessary to make such purchase). Exchanges of Mutual Funds shall be
made in accordance with the Telephone Exchange Guidelines attached hereto as
Schedule "H".
6
<PAGE>
(ii) Voting. At the time of mailing of notice of each annual or
special stockholders' meeting of any Mutual Fund, the Trustee shall send a copy
of the notice and all proxy solicitation materials to each Participant who has
shares of the Mutual Fund credited to the Participant's accounts, together with
a voting direction form for return to the Trustee or its designee. The Sponsor
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote the mutual fund shares held in any short-term investment fund or
liquidity reserve. The Participant shall have the right to direct the Trustee as
to the manner in which the Trustee is to vote the shares credited to the
Participant's accounts (both vested and unvested). The Trustee shall vote the
shares as directed by the Participant. The Trustee shall not vote shares for
which it has received no directions from the Participant. During the participant
recordkeeping reconciliation period, the Sponsor shall have the right to direct
the Trustee as to the manner in which the Trustee is to vote the shares of the
Mutual Funds in the Trust including Mutual Fund shares held in any short-term
investment fund for liquidity reserve. With respect to all rights other than the
right to vote, the Trustee shall follow the directions of the Participant and if
no such directions are received, the directions of the Named Fiduciary. The
Trustee shall have no duty to solicit directions from Participants or the
Sponsor.
(e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via the
FMC Stock Fund (the "FMC Stock Fund"). Investments in the FMC Stock Fund shall
consist primarily of shares of Sponsor Stock. In order to satisfy daily
participant exchange or withdrawal requests for transfers and payments, the FMC
Stock Fund shall also include cash or short-term liquid investments in
accordance with this paragraph. Such holdings will include Fidelity
Institutional Cash Portfolios: Money Market Portfolio: Class I or such other
Mutual Fund or commingled money market pool as agreed to by the Sponsor and
Trustee. The Named Fiduciary shall, after consultation with the Trustee,
establish and communicate to the Trustee in writing a target percentage and
drift allowance for such short-term liquid investments. The Trustee shall be
responsible for ensuring that the actual cash held in the FMC Stock Fund falls
within the agreed upon range over time. Each participant's proportional interest
in the FMC Stock Fund shall be measured in units of participation, rather than
shares of Sponsor Stock. Such units shall represent a proportionate interest in
all of the assets of the FMC Stock Fund, which includes shares of Sponsor Stock,
short-term investments and at times, receivables for dividends and/or Sponsor
7
<PAGE>
Stock sold and payables for Sponsor Stock purchased. The Trustee shall determine
a daily net asset value ("NAV") for each unit outstanding of the FMC Stock
Fund. Valuation of the FMC Stock Fund shall be based upon the 4:00 p.m. New York
Stock Exchange ("NYSE") closing price of the stock, or if unavailable, the
latest available price as reported by the principal national securities exchange
on which the Sponsor Stock is traded. The NAV shall be adjusted by dividends
paid on the shares of Sponsor Stock held by the FMC Stock Fund, gains or losses
realized on sales of Sponsor Stock, appreciation or depreciation in the market
price of those shares owned, and interest on the short-term investments held by
the FMC Stock Fund, expenses that, pursuant to Sponsor direction, the Trustee
accrues from the FMC Stock Fund, and commissions on purchases and sales of
Sponsor Stock. Investments in Sponsor Stock shall be subject to the following
limitations:
(i) Fiduciary Duty of Named Fiduciary. The Trustee shall have no
responsibility for monitoring the suitability under the fiduciary duty rules of
section 404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA) of the
Sponsor acquiring and holding Sponsor Stock. The Trustee shall not be liable for
any loss, or by reason of any breach, which arises from the directions of the
Named Fiduciary with respect to the acquisition and holding of Sponsor Stock,
unless it is clear on their face that the actions to be taken under those
directions would be prohibited by the foregoing fiduciary duty rules or would be
contrary to the terms of this Agreement.
(ii) Purchase and sales of Sponsor Stock shall be made on the open
market as necessary to maintain the target cash percentage and drift allowance
for the FMC Stock Fund, provided that:
(1) If the Trustee is unable to purchase or sell the total number
of shares required to be purchased or sold on such day as a result of market
conditions; or
(2) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory body from
purchasing or selling any or all of the shares required to be purchased or sold
on such day, then the Trustee shall purchase or sell such shares as soon as
possible thereafter. The
8
<PAGE>
Trustee may follow directions from the Administrator or Named Fiduciary to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the Administrator or Named Fiduciary.
(iii) Execution of Purchases and Sales. (A) Purchases and sales of units in
the FMC Stock Fund (other than for exchanges) shall be made on the date on which
the Trustee receives from the Administrator in good order all information,
documentation, and wire transfers of funds (if applicable), necessary to
accurately effect such transactions. Exchanges of units in the FMC Stock Fund
shall be made in accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "H". The Trustee may follow directions from the Administrator
or Named Fiduciary to deviate from the above purchase and sale procedures
provided that such direction is made in writing by the Administrator or Named
Fiduciary.
(B) Purchases and Sales from or to Sponsor. If directed by the Sponsor in
writing prior to the trading date, the Trustee may purchase or sell Sponsor
Stock from or to the Sponsor if the purchase or sale is for adequate
consideration (within the meaning of section 3(18) of ERISA) and no commission
is charged. If Sponsor contributions (employer) or contributions made by the
Sponsor on behalf of the participants (employee) under the Plan are to be
invested in Sponsor Stock, the Sponsor may transfer Sponsor Stock in lieu of
cash to the Trust. In either case, the number of shares to be transferred will
be determined by dividing the total amount of Sponsor Stock to be purchased or
sold by the 4:00 p.m. NYSE closing price of the Sponsor Stock on the trading
date.
(C) Use of an Affiliated Broker. The Sponsor hereby directs the Trustee to
use Fidelity Brokerage Services, Inc. ("FBSI") to provide brokerage services in
connection with any purchase or sale of Sponsor Stock in accordance with
directions from Plan participants. FBSI shall execute such directions directly
or through its affiliate, National Financial Services Company ("NFSC"). The
provision of brokerage services shall be subject to the following:
(1) As consideration for such brokerage services, the Sponsor agrees
that FBSI shall be entitled to remuneration under this authorization provision
in the amount of three and one-half cents ($.035)
9
<PAGE>
commission on each share of Sponsor Stock. Any change in such remuneration may
be made only by a signed agreement between Sponsor and Trustee.
(2) Following the procedures set forth in Department of Labor
Prohibited Transaction Class Exemption 86-128 (PTCE 86-128), the Trustee will
provide the Sponsor with the following documents: (1) a description of FBSI's
brokerage placement practices; (2) a copy of PTCE 86-128; and (3) a form by
which the Sponsor may terminate this authorization to use a broker affiliated
with the Trustee. The Trustee will provide the Sponsor with this termination
form annually, as well as quarterly and annual reports which summarize all
securities transaction related charges incurred by the Plan.
(3) Any successor organization of FBSI, through reorganization,
consolidation, merger or similar transactions, shall, upon consummation of such
transaction, become the successor broker in accordance with the terms of this
authorization provision.
(4) The Trustee and FBSI shall continue to rely on this
authorization provision until notified to the contrary. The Sponsor reserves the
right to terminate this authorization upon sixty (60) days written notice to
FBSI (or its successor) and the Trustee, in accordance with Section 11 of this
Agreement.
(iv) Securities Law Reports. The Named Fiduciary shall be responsible
for filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of Sponsor Stock, including, without
limitation, any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock pending the filing of
any report. The Trustee shall provide to the Named Fiduciary such information on
the Trust's ownership of Sponsor Stock as the Named Fiduciary may reasonably
request in order to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other provision of
this Agreement the provisions of this Section shall govern the voting and
tendering of Sponsor Stock. The Sponsor, after consultation with
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<PAGE>
the Trustee, shall provide and pay for all printing, mailing, tabulation and
other costs associated with the voting and tendering of Sponsor Stock.
(A) Voting.
------
(1) When the issuer of Sponsor Stock prepares for any
annual or special meeting, the Sponsor shall notify the Trustee at least thirty
(30) days in advance of the intended record date and shall cause a copy of all
proxy solicitation materials to be sent to the Trustee. If requested by the
Trustee, the Sponsor shall certify to the Trustee that the aforementioned
materials represents the same information that is distributed to shareholders of
Sponsor Stock. Based on these materials the Trustee shall prepare a voting
instruction form and shall provide a copy of all proxy solicitation materials to
be sent to each Plan participant with an interest in Sponsor Stock held in the
Trust, together with the foregoing voting instruction form to be returned to the
Trustee or its designee. The form shall show the proportional interest in the
number of full and fractional shares of Sponsor Stock credited to the
participant's accounts held in the FMC Stock Fund.
(2) Each participant with an interest in the FMC Stock Fund
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote (including not to vote) that number of shares of Sponsor Stock
reflecting such participant's proportional interest in the FMC Stock Fund (both
vested and unvested). Directions from a participant to the Trustee concerning
the voting of Sponsor Stock shall be communicated in writing, or by mailgram or
similar means as is agreed upon by the Trustee and the Sponsor. These directions
shall be held in confidence by the Trustee and shall not be divulged to the
Sponsor, or any officer or employee thereof, or any other person except to the
extent that the consequences of such directions are reflected in reports
regularly communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. Upon its receipt of the
directions, the Trustee shall vote the shares of Sponsor Stock reflecting the
participant's proportional interest in the FMC Stock Fund as directed by the
participant.
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<PAGE>
(3) For all undirected shares of Sponsor Stock, both
allocated and unallocated shares, the Trustee shall vote as directed by the
Sponsor, which may delegate to a fiduciary independent of the Trustee and the
Sponsor, the authority to so direct the Trustee. All fees associated with the
appointment of an independent fiduciary will be borne by the Sponsor.
(B) Tender Offers.
(1) Upon commencement of a tender offer for any securities
held in the Trust that are Sponsor Stock, the Sponsor shall timely notify the
Trustee in advance of the intended tender date and shall cause a copy of all
materials to be sent to the Trustee. The Sponsor shall certify to the Trustee
that the aforementioned materials represent the same information distributed to
shareholders of Sponsor Stock. Based on these materials and after consultation
with the Sponsor the Trustee shall prepare a tender instruction form and shall
provide a copy of all tender materials to be sent to each plan participant,
together with the foregoing tender instruction form, to be returned to the
Trustee or its designee. The tender instruction form shall show the number of
full and fractional shares of Sponsor Stock that reflect the participants
proportional interest in the FMC Stock Fund (both vested and unvested).
(2) Each participant shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of Sponsor Stock
reflecting such participant's proportional interest in the FMC Stock Fund (both
vested and unvested). Directions from a participant to the Trustee concerning
the tender of Sponsor Stock shall be communicated in writing, or by mailgram or
such similar means as is agreed upon by the Trustee and the Sponsor. These
directions shall be held in confidence by the Trustee and shall not be divulged
to the Sponsor, or any officer or employee thereof, or any other person except
to the extent that the consequences of such directions are reflected in reports
regularly communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. The Trustee shall tender or not
tender shares of Sponsor Stock as directed by the participant. Except as
otherwise required by law, the Trustee shall not tender shares of Sponsor Stock
reflecting a participant's proportional interest in the FMC Stock Fund for which
it has received no direction from the participant.
12
<PAGE>
(3) Except as otherwise required by law, the Trustee shall
tender that number of shares of Sponsor Stock not credited to participants'
accounts in the same proportion as the total number of shares of Sponsor Stock
credited to participants' accounts for which it has received instructions from
Participants.
(4) A participant who has directed the Trustee to tender
some or all of the shares of Sponsor Stock reflecting the participant's
proportional interest in the FMC Stock Fund may, at any time prior to the tender
offer withdrawal date, direct the Trustee to withdraw some or all of the
tendered shares reflecting the participant's proportional interest, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Sponsor Stock not credited to participants' accounts have been
tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 5(e)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the tender offer
the number of shares of Sponsor Stock not credited to participants' accounts
necessary to reduce the amount of tendered Sponsor Stock not credited to
participants' accounts to the amount so redetermined. A participant shall not be
limited as to the number of directions to tender or withdraw that the
participant may give to the Trustee.
(5) A direction by a participant to the Trustee to tender
shares of Sponsor Stock reflecting the participant's proportional interest in
the FMC Stock Fund shall not be considered a written election under the Plan by
the participant to withdraw, or have distributed, any or all of his withdrawable
shares. The Trustee shall credit to each proportional interest of the
participant from which the tendered shares were taken the proceeds received by
the Trustee in exchange for the shares of Sponsor Stock tendered from that
interest. Pending receipt of directions (through the Administrator) from the
participant or the Named Fiduciary, as provided in the Plan, as to which of the
remaining investment options the proceeds should be invested in, the Trustee
shall invest the proceeds in the investment option described in Schedule "C".
(vi) General. With respect to all rights other than the right to
vote, the right to tender, and the right to withdraw shares previously tendered,
in the case of Sponsor Stock credited to a participant's proportional
13
<PAGE>
interest in the FMC Stock Fund, the Trustee shall follow the directions of the
participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no duty to solicit directions from
participants. With respect to all rights other than the right to vote and the
right to tender, in the case of Sponsor Stock not credited to participants'
accounts, the Trustee shall follow the directions of the Named Fiduciary.
(vii) Conversion. All provisions in this Section 5(e) shall also
apply to any securities received as a result of a conversion of Sponsor Stock.
(f) Harsco Stock. Trust investments in Harsco Stock shall be made via the
Harsco Stock Fund (the "Harsco Stock Fund"). Investments in the Harsco Stock
Fund shall consist primarily of shares of Harsco Stock. In order to satisfy
daily participant exchange or withdrawal requests for transfers and payments,
the Harsco Stock Fund shall also include cash or short-term liquid investments
in accordance with this paragraph. Such holdings will include Fidelity
Institutional Cash Portfolios: Money Market Portfolio: Class I or such other
Mutual Fund or commingled money market pool as agreed to by the Sponsor and
Trustee. The Named Fiduciary shall, after consultation with the Trustee,
establish and communicate to the Trustee in writing a target percentage and
drift allowance for such short-term liquid investments. The Trustee shall be
responsible for ensuring that the actual cash held in the Harsco Stock Fund
falls within the agreed upon range over time. Each participant's proportional
interest in the Harsco Stock Fund shall be measured in units of participation,
rather than shares of Harsco Stock. Such units shall represent a proportionate
interest in all of the assets of the Harsco Stock Fund, which includes shares of
Harsco Stock, short-term investments and at times, receivables for dividends
and/or Harsco Stock sold and payables for Harsco Stock purchased. The Trustee
shall determine a daily net asset value ("NAV") for each unit outstanding of the
Harsco Stock Fund. Valuation of the Harsco Stock Fund shall be based upon the
4:00 p.m. New York Stock Exchange ("NYSE") closing price of the stock, or if
unavailable, the latest available price as reported by the principal national
securities exchange on which the Harsco Stock is traded. The NAV shall be
adjusted by dividends paid on the shares of Harsco Stock held by the Harsco
Stock Fund, gains or losses realized on sales of Harsco Stock, appreciation or
depreciation in the market price of those shares owned, and interest on the
short-term investments held by the Harsco Stock Fund, expenses that, pursuant
to Sponsor direction, the Trustee accrues from the Harsco Stock Fund, and
14
<PAGE>
commissions on purchases and sales of Harsco Stock. Investments in Harsco Stock
shall be subject to the following limitations:
(i) Fiduciary Duty of Named Fiduciary. The Trustee shall have no
duty to monitor the suitability under the fiduciary duty rules of section
404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA) of the Sponsor
acquiring and holding Harsco Stock. The Trustee shall not be liable for any
loss, or by reason of any breach, which arises from the directions of the Named
Fiduciary with respect to the acquisition and holding of Harsco Stock, unless it
is clear on their face that the actions to be taken under those directions would
be prohibited by the foregoing fiduciary duty rules or would be contrary to the
terms of this Agreement.
(ii) Purchase and sales of Harsco Stock shall be made on the open
market as necessary to maintain the target cash percentage and drift allowance
for the Harsco Stock Fund, provided that:
(1) If the Trustee is unable to purchase or sell the total
number of shares required to be purchased or sold on such day as a result of
market conditions; or
(2) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory body from
purchasing or selling any or all of the shares required to be purchased or sold
on such day, then the Trustee shall purchase or sell such shares as soon as
possible thereafter. The Trustee may follow directions from the Administrator or
Named Fiduciary to deviate from the above purchase and sale procedures provided
that such direction is made in writing by the Administrator or Named Fiduciary.
(iii) Execution of Purchases and Sales. (A) Purchases and sales of
units in the Harsco Stock Fund (other than for exchanges) shall be made on the
date on which the Trustee receives from the Administrator in good order all
information, documentation, and wire transfers of funds (if applicable),
necessary to accurately effect such transactions. Exchanges of units in the
Harsco Stock Fund shall be made in accordance with the Telephone Exchange
Guidelines attached hereto as Schedule "H". The Trustee may follow directions
from the Administrator or Named
15
<PAGE>
Fiduciary to deviate from the above purchase and sale procedures provided that
such direction is made in writing by the Administrator or Named Fiduciary.
(B) Purchases and Sales from or to Sponsor. If directed by the
Sponsor in writing prior to the trading date, the Trustee may purchase or sell
Harsco Stock from or to the Sponsor if the purchase or sale is for adequate
consideration (within the meaning of section 3(18) of ERISA) and no commission
is charged. If Sponsor contributions (employer) or contributions made by the
Sponsor on behalf of the participants (employee) under the Plan are to be
invested in Harsco Stock, the Sponsor may transfer Harsco Stock in lieu of cash
to the Trust. In either case, the number of shares to be transferred will be
determined by dividing the total amount of Harsco Stock to be purchased or sold
by the 4:00 p.m. NYSE closing price of the Harsco Stock on the trading date.
(C) Use of an Affiliated Broker. The Sponsor hereby directs the
Trustee to use Fidelity Brokerage Services, Inc. ("FBSI") to provide brokerage
services in connection with any purchase or sale of Harsco Stock in accordance
with directions from Plan participants. FBSI shall execute such directions
directly or through its affiliate, National Financial Services Company ("NFSC").
The provision of brokerage services shall be subject to the following:
(1) As consideration for such brokerage services, the
Sponsor agrees that FBSI shall be entitled to remuneration under this
authorization provision in the amount of three and one-half cents ($.035)
commission on each share of Harsco Stock. Any change in such remuneration may be
made only by a signed agreement between Sponsor and Trustee.
(2) Following the procedures set forth in Department of
Labor Prohibited Transaction Class Exemption 86-128 (PTCE 86-128), the Trustee
will provide the Sponsor with the following documents: (1) a description of
FBSl's brokerage placement practices; (2) a copy of PTCE 86-128; and (3) a form
by which the Sponsor may terminate this authorization to use a broker affiliated
with the Trustee. The Trustee will provide the Sponsor with this termination
form annually, as well as quarterly and annual reports which summarize all
securities transaction related charges incurred by the Plan.
16
<PAGE>
(3) Any successor organization of FBSI, through
reorganization, consolidation, merger or similar transactions, shall, upon
consummation of such transaction, become the successor broker in accordance with
the terms of this authorization provision.
(4) The Trustee and FBSI shall continue to rely on this
authorization provision until notified to the contrary. The Sponsor reserves the
right to terminate this authorization upon sixty (60) days written notice to
FBSI (or its successor) and the Trustee, in accordance with Section 11 of this
Agreement.
(iv) Securities Law Reports. The Named Fiduciary shall be responsible
for filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of Harsco Stock, including, without limitation,
any reports required under section 13 or 16 of the Securities Exchange Act of
1934, and shall immediately notify the Trustee in writing of any requirement to
stop purchases or sales of Harsco Stock pending the filing of any report. The
Trustee shall provide to the Named Fiduciary such information on the Trust's
ownership of Harsco Stock as the Named Fiduciary may reasonably request in order
to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other provision of
this Agreement the provisions of this Section shall govern the voting and
tendering of Harsco Stock. The Sponsor, after consultation with the Trustee,
shall provide and pay for all printing, mailing, tabulation and other costs
associated with the voting and tendering of Harsco Stock.
(A) Voting
(l) When the issuer of Harsco Stock prepares for any annual
or special meeting, the Sponsor shall notify the Trustee at least thirty (30)
days in advance of the intended record date and shall cause a copy of all proxy
solicitation materials to be sent to the Trustee. If requested by the Trustee,
the Sponsor shall certify to the Trustee that the aforementioned materials
represents the same information that is distributed to shareholders of Harsco
17
<PAGE>
Stock. Based on these materials the Trustee shall prepare a voting instruction
form and shall provide a copy of all proxy solicitation materials to be sent to
each Plan participant with an interest in Harsco Stock held in the Trust,
together with the foregoing voting instruction form to be returned to the
Trustee or its designee. The form shall show the proportional interest in the
number of full and fractional shares of Harsco Stock credited to the
participant's accounts held in the Harsco Stock Fund.
(2) Each participant with an interest in the Harsco Stock
Fund shall have the right to direct the Trustee as to the manner in which the
Trustee is to vote (including not to vote) that number of shares of Harsco Stock
reflecting such participant's proportional interest in the Harsco Stock Fund
(both vested and unvested). Directions from a participant to the Trustee
concerning the voting of Harsco Stock shall be communicated in writing, or by
mailgram or similar means as is agreed upon by the Trustee and the Sponsor.
These directions shall be held in confidence by the Trustee and shall not be
divulged to the Sponsor, or any officer or employee thereof, or any other person
except to the extent that the consequences of such directions are reflected in
reports regularly communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. Upon its receipt of the
directions, the Trustee shall vote the shares of Harsco Stock reflecting the
participant's proportional interest in the Harsco Stock Fund as directed by the
participant.
(3) For all undirected shares of Sponsor Stock, both
allocated and unallocated shares, the Trustee shall vote as directed by the
Sponsor, which may delegate to a fiduciary independent of the Trustee and
Sponsor, the authority to so direct the Trustee. All fees associated with the
appointment of an independent fiduciary will be borne by the Sponsor.
(B) Tender Offers.
(1) Upon commencement of a tender offer for any securities
held in the Trust that are Harsco Stock, the Sponsor shall timely notify the
Trustee in advance of the intended tender date and shall cause a copy of all
materials received by the Sponsor to be sent to the Trustee. The Sponsor shall
certify to the Trustee that the
18
<PAGE>
aforementioned materials represent the same information distributed to
shareholders of Harsco Stock. Based on these materials and after consultation
with the Sponsor the Trustee shall prepare a tender instruction form and shall
provide a copy of all tender materials to be sent to each plan participant,
together with the foregoing tender instruction form, to be returned to the
Trustee or its designee. The tender instruction form shall show the number of
full and fractional shares of Harsco Stock that reflect the participants
proportional interest in the Harsco Stock Fund (both vested and unvested).
(2) Each participant shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of Harsco Stock
reflecting such participant's proportional interest in the Harsco Stock Fund
(both vested and unvested). Directions from a participant to the Trustee
concerning the tender of Harsco Stock shall be communicated in writing, or by
mailgram or such similar means as is agreed upon by the Trustee and the Sponsor.
These directions shall be held in confidence by the Trustee and shall not be
divulged to the Sponsor, or any officer or employee thereof, or any other person
except to the extent that the consequences of such directions are reflected in
reports regularly communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. The Trustee shall tender or not
tender shares of Sponsor Stock as directed by the participant. Except as
otherwise required by law, the Trustee shall not tender shares of Harsco Stock
reflecting a participant's proportional interest in the Harsco Stock Fund for
which it has received no direction from the participant.
(3) Except as otherwise required by law, the Trustee shall
tender that number of shares of Harsco Stock not credited to participants'
accounts in the same proportion as the total number of shares of Harsco Stock
credited to participants' accounts for which it has received instructions from
Participants.
(4) A participant who has directed the Trustee to tender
some or all of the shares of Harsco Stock reflecting the participant's
proportional interest in the Harsco Stock Fund may, at any time prior to the
tender offer withdrawal date, direct the Trustee to withdraw some or all of the
tendered shares reflecting the participant's proportional interest, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Harsco Stock not credited to
19
<PAGE>
participants' accounts have been tendered, the Trustee shall redetermine the
number of shares of Harsco Stock that would be tendered under Section
5(f)(v)(B)(3) if the date of the foregoing withdrawal were the date of
determination, and withdraw from the tender offer the number of shares of Harsco
Stock not credited to participants' accounts necessary to reduce the amount of
tendered Harsco Stock not credited to participants' accounts to the amount so
redetermined. A participant shall not be limited as to the number of directions
to tender or withdraw that the participant may give to the Trustee.
(5) A direction by a participant to the Trustee to tender
shares of Harsco Stock reflecting the participant's proportional interest in the
Harsco Stock Fund shall not be considered a written election under the Plan by
the participant to withdraw, or have distributed, any or ail of his withdrawable
shares. The Trustee shall credit to each proportional interest of the
participant from which the tendered shares were taken the proceeds received by
the Trustee in exchange for the shares of Harsco Stock tendered from that
interest. Pending receipt of directions (through the Administrator) from the
participant or the Named Fiduciary, as provided in the Plan, as to which of the
remaining investment options the proceeds should be invested in, the Trustee
shall invest the proceeds in the investment option described in Schedule "C".
(vi) General. With respect to all rights other than the right to
vote, the right to tender, and the right to withdraw shares previously tendered,
in the case of Harsco Stock credited to a participant's proportional interest in
the Harsco Stock Fund, the Trustee shall follow the directions of the
participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no duty to solicit directions from
participants. With respect to all rights other than the right to vote and the
right to tender, in the case of Harsco Stock not credited to participants'
accounts, the Trustee shall follow the directions of the Named Fiduciary.
(vii) Conversion. All provisions in this Section 5(f) shall also
apply to any securities received as a result of a conversion of Harsco Stock.
20
<PAGE>
(g) Notes. For Plans which allow loans, the Administrator shall act as
the Trustee's agent for participant loan notes and as such shall (i) collect and
remit all principal and interest payments to the Trustee and (ii) keep the
proceeds of such loans separate from the other assets of the Administrator and
clearly identify such assets as Plan assets. To originate a participant loan,
the Plan participant shall direct the Trustee as to the term and amount of the
loan to be made from the participant's individual account. Such directions shall
be made by Plan participants by use of the telephone exchange system maintained
for such purpose by the Trustee or its agent. The Trustee shall determine, based
on the current value of the participant's account on the date of the request and
any guidelines provided by the Sponsor, the amount available for the loan. Based
on the interest rate supplied by the Sponsor in accordance with the terms of the
Plan, the Trustee shall advise the participant of such interest rate, as well as
the installment payment amounts. The Trustee shall distribute the loan note with
the proceeds check to the participant. The Trustee also shall distribute truth-
in-lending disclosure to the participant. To facilitate recordkeeping, the
Trustee may destroy the original of any promissory note made in connection with
a loan to a participant under the Plan, provided that the Trustee first creates
a duplicate by a photographic or optical scanning or other process yielding a
reasonable facsimile of the promissory note and the Plan participant's signature
thereon, which duplicate may be reduced or enlarged in size from the actual size
of the original promissory note.
(ii) For loans which require spousal consent, the Administrator shall
act as the Trustee's agent for the purpose of holding all trust investments in
participant loan notes and related documentation and as such shall (i) hold
physical custody of and keep safe the notes and other loan documents, (ii)
collect and remit all principal and interest payments to the Trustee, (iii) keep
the proceeds of such loans separate from the other assets of the Administrator
and clearly identify such assets as Plan assets, and (iv) cancel and surrender
the notes and other loan documentation when a loan has been paid in full. To
originate a participant loan, the Plan participant shall direct the Trustee as
to the type of loan to be made from the participant's individual account. Such
directions shall be made by Plan participants by use of the telephone exchange
system maintained for such purpose by the Trustee or
21
<PAGE>
its agent. The Trustee shall determine, based on the current value of the
participant's account, the amount available for the loan. Based on the interest
rate supplied by the Sponsor in accordance with the terms of the Plan, the
Trustee shall advise the participant of such interest rate, as well as the
installment payment amounts. The Trustee shall forward the loan document to the
participant for execution and submission for approval to the Administrator. The
Administrator shall have the responsibility for approving the loan and
instructing the Trustee to send the loan proceeds to the Administrator or to the
participant if so directed by the Administrator. In all cases, such instruction
by the Administrator shall be made within thirty (30) days of the participant's
initial request (the origination date).
(h) Guaranteed Investment Contracts. Trust investments in GICs shall be
subject to the following limitations:
(i) Commingled Pool Investments. To the extent that the Named
Fiduciary selects as an investment option the Managed Income Portfolio of the
Fidelity Group Trust for Employee Benefit Plans (the "Group Trust"), the Sponsor
hereby (A) agrees to the terms of the Group Trust and adopts said terms as a
part of this Agreement and (B) acknowledges that it has received from the
Trustee a copy of the Group Trust, the Declaration of Separate Fund for the
Managed Income Portfolio of the Group Trust, and the Circular for the Managed
Income Portfolio.
(ii) Individually-Managed Investments. To the extent that the Named
Fiduciary selects GICs chosen by the Trustee as an investment option, the
Sponsor hereby directs the Trustee to choose such GICs in accordance with the
Investment Guidelines for GIC Management attached hereto as Schedule "I".
(iii) In order to provide the necessary monies for exchanges or
redemptions from the GIC investment option, if any, under the Plan, the Sponsor
agrees that the Plan shall maintain a liquidity reserve allocated to such
investment option in Fidelity Institutional Cash Portfolios: Money
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<PAGE>
Market Portfolio: Class I or such other Mutual Fund or commingled money market
pool as agreed to by the Sponsor and the Trustee.
(i) Participation in Commingled Pools. To the extent that the Named
Fiduciary selects as an investment option the U.S. Equity Index Commingled Pool
of the Fidelity Group Trust for Employee Benefit Plans (the "Group Trust"), the
Sponsor hereby (A) agrees to the terms of the Group Trust and adopts said terms
as a part of this Agreement and (B) acknowledges that it has received from the
Trustee a copy of the Group Trust, the Declaration of Separate Fund for the U.S.
Equity Index Commingled Pool of the Group Trust, and the Circular for the U.S.
Equity Index Commingled Pool.
(j) Reliance of Trustee on Directions. (i) The Trustee shall not be
liable for any loss, or by reason of any breach, which arises from any
Participant's exercise or non-exercise of rights under this Agreement over the
assets in the Participant's accounts.
(ii) The Trustee shall not be liable for any loss, or by reason of
any breach, which arises from the Named Fiduciary's exercise or non-exercise of
rights under this Section 5, unless it was clear on their face that the actions
to be taken under the Named Fiduciary's directions were prohibited by the
fiduciary duty rules of Section 404(a) of ERISA or were contrary to the terms of
the Plan or this Agreement.
(k) Trustee Powers. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b), (c), (d) and (e) of this Section 5, to
sell, exchange, convey, transfer, or otherwise dispose of any property held in
the Trust, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or other
property delivered to the Trustee or to inquire into the validity, expediency,
or propriety of any such sale or other disposition.
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<PAGE>
(ii) Subject to paragraphs (b) and (c) of this Section 5, to invest
in GICs and short term investments (including interest bearing accounts with the
Trustee or money market mutual funds advised by affiliates of the Trustee) and
in collective investment funds maintained by the Trustee for qualified plans, in
which case the provisions of each collective investment fund in which the Trust
is invested shall be deemed adopted by the Sponsor and the provisions thereof
incorporated as a part of this Trust as long as the fund remains exempt from
taxation under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986,
as amended.
(iii) To cause any securities or other property held as part of the
Trust to be registered in the Trustee's own name, in the name of one or more of
its nominees, or in the Trustee's account with the Depository Trust Company of
New York and to hold any investments in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part of the
Trust.
(iv) To keep that portion of the Trust in cash or cash balances as
the Named Fiduciary or Sponsor may, from time to time, deem to be in the best
interest of the Trust.
(v) To borrow funds from a bank not affiliated with the Trustee in
order to provide sufficient liquidity to process Plan transactions in a timely
fashion, provided that the cost of borrowing shall be allocated in a reasonable
fashion to the investment fund(s) in need of liquidity.
(vi) To make, execute, acknowledge, and deliver any and all documents
of transfer or conveyance and to carry out the powers herein granted.
(vii) To settle, compromise, or submit to arbitration any claims,
debts, or damages due to or arising from the Trust; to commence or defend suits
or legal or administrative proceedings; to
24
<PAGE>
represent the Trust in all suits and legal and administrative hearings; and to
pay all reasonable expenses arising from any such action, from the Trust if not
paid by the Sponsor.
(viii) To employ legal, accounting, clerical, and other assistance as
may be required in carrying out the provisions of this Agreement and to pay
their reasonable expenses and compensation from the Trust if not paid by the
Sponsor.
(ix) To do all other acts although not specifically mentioned
herein, as the Trustee may deem necessary to carry out any of the foregoing
powers and the purposes of the Trust.
Section 6. Recordkeeping and Administrative Services to Be Performed.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in Schedule "A" attached hereto. These
recordkeeping and administrative functions shall be performed within the
framework of the Named Fiduciary's written directions regarding the Plan's
provisions, guidelines and interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of each Reporting
Date. Within thirty (30) days following each Reporting Date or within sixty (60)
days in the case of a Reporting Date caused by the resignation or removal of the
Trustee, or the termination of this Agreement, the Trustee shall file with the
Sponsor a written account setting forth all investments, receipts,
disbursements, and other transactions effected by the Trustee between the
Reporting Date and the prior Reporting Date, and setting forth the value of the
Trust as of the Reporting Date. Except as otherwise required under ERISA, upon
the expiration of one year from the date of filing such account with the
Sponsor, the Trustee shall have no liability or further accountability to anyone
with respect to the propriety of its acts or transactions shown in such account,
except with respect
25
<PAGE>
to such acts or transactions as to which the Sponsor shall within such one year
period file with the Trustee written objections.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours prior to the termination of this
Agreement, by the Administrator or any person designated by the Administrator.
Upon the resignation or removal of the Trustee or the termination of this
Agreement, the Trustee shall provide to the Administrator, at no expense to the
Sponsor, (i) test data in the format available from Fidelity's Participant
Recordkeeping System (FPRS) (via diskette or tape, with corresponding hard copy
reports and file layout information) containing a file dump of plan data,
including a statement of each participant's accounts, which statement shall
include at least the name, address, social security number, date of hire, date
of birth, vesting, account balances by participant and source, forfeiture
balances and any other indicative data maintained on FPRS, and (ii) a final file
dump in the same format as the test data as of the final date specified in the
notice of resignation, removal, or termination of the Trustee or the termination
of this Agreement. The Sponsor will be responsible for any cost associated with
providing the Administrator or the Plan's new recordkeeper with additional
records which are not routinely prepared by Fidelity in recordkeeping the Plan.
Such costs shall be communicated to the Sponsor in advance, and the Sponsor's
written approval of such costs shall be obtained before such costs are incurred.
(d) Effect of Plan Amendment. A confirmation of the current qualified
status of each Plan is attached hereto as Schedule "F". The Trustee's provision
of the recordkeeping and administrative services set forth in this Section 6
shall be conditioned on the Sponsor delivering to the Trustee a copy of any
amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested due to an issue of the Plans'
qualification status, an IRS determination letter or an opinion of counsel
substantially in the form of Schedule "F" covering such amendment, and on the
Sponsor providing the Trustee on a timely basis with all the information the
Sponsor deems necessary for the Trustee to perform the recordkeeping and
administrative services and such other information as the Trustee may reasonably
request.
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<PAGE>
(e) Returns, Reports and Information. The Sponsor shall be responsible
for the preparation and filing of all returns, reports, and information required
of the Trust or Plan by law. The Trustee shall provide the Sponsor with such
information as the Sponsor may reasonably request to make these filings. The
Sponsor shall also be responsible for making any disclosures to Participants
required by law including, without limitation, such disclosures as may be
required by law, except such disclosure as may be required under federal or
state truth-in-lending laws with regard to Participant loans, which shall be
provided by the Trustee.
(f) Allocation of Plan Interests. All transfers to, withdrawals from, or
other transactions regarding the Trust shall be conducted in such a way that the
proportionate interest in the Trust of each Plan and the fair market value of
that interest may be determined at any time. Whenever the assets of more than
one Plan are commingled in the Trust or in any investment option, the undivided
interest therein of each such Plan shall be debited or credited (as the case may
be) (i) for the entire amount of every contribution received on behalf of such
Plan, every benefit payment, or other expense attributable solely to such Plan,
and every other transaction relating only to such Plan; and (ii) for its
proportionate share of every item of collected or accrued income, gain or loss,
and general expense, and of any other transactions attributable to the Trust or
that investment option as a whole.
Section 7. Compensation and Expenses. Within thirty (30) days of receipt of
the Trustee's bill, which shall be computed and billed in accordance with
Schedule "B" attached hereto and made a part hereof, as amended from time to
time, the Sponsor shall send to the Trustee a payment in such amount or the
Sponsor may direct the Trustee to deduct such amount from Participants' account.
All expenses of the Trustee relating directly to the acquisition and disposition
of investments constituting part of the Trust, and all taxes of any kind
whatsoever that may be levied or assessed under existing or future laws upon or
in respect of the Trust or the income thereof, shall be a charge against and
paid from the appropriate Participants' accounts.
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<PAGE>
Section 8. Directions and Indemnification.
(a) Identity of Sponsor and Named Fiduciaries. The Trustee shall be fully
protected in relying on the fact that the Sponsor and the Named Fiduciaries
under a Plan are the individuals or persons named as such on the Authorization
Letters in the form of Schedules "D" and "E" attached hereto or on a Plan
Designation Form in accordance with Schedule "J" attached hereto or such other
individuals or persons as the Sponsor may notify the Trustee in writing.
(b) Directions from Sponsor or Administrator. Whenever the Sponsor or
Administrator provides a direction to the Trustee, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from the direction if
the direction is contained in a writing (or is oral and immediately confirmed in
a writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Sponsor in the form
attached hereto as Schedule "D", provided the Trustee reasonably believes the
signature of the individual to be genuine. Such direction may also be made via
EDT in accordance with procedures agreed to by the Sponsor and the Trustee;
provided, however, that the Trustee shall be fully protected in relying on such
direction as if it were a direction made in writing by the Sponsor. The Trustee
shall have no responsibility to ascertain any direction's (i) accuracy, (ii)
compliance with the terms of the Plan or any applicable law, or (iii) effect for
tax purposes or otherwise.
(c) Directions from Named Fiduciary. Whenever a Named Fiduciary provides
a direction to the Trustee, the Trustee shall not be liable for any loss, or by
reason of any breach, arising from the direction (i) if the direction is
contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Named Fiduciary in the form attached
hereto as Schedule "E" and (ii) if the Trustee reasonably believes the signature
of the individual to be genuine, unless it is clear on the direction's face that
the actions to be taken under the direction would be prohibited by the fiduciary
duty rules of section 404(a) of ERISA or would be contrary to the terms of the
Plan or this Agreement.
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<PAGE>
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA. Without limiting the foregoing, the Trustee shall have no
liability for the acts or omissions of any predecessor or successor trustee.
(e) Indemnification. The Sponsor shall indemnify the Trustee against, and
hold the Trustee harmless from, any and all loss, damage, penalty, liability,
cost, and expense, including without limitation, reasonable attorneys' fees and
disbursements, that may be incurred by, imposed upon, or asserted against the
Trustee by reason of any claim, regulatory proceeding, or litigation arising
from any act done or omitted to be done by any individual or person with respect
to the Plan or Trust, excepting only any and all loss, etc., arising solely from
the Trustee's negligence, bad faith, violations of law, terms of this Agreement
or error.
(f) Survival. The provisions of this Section 8 shall survive the
termination of this Agreement.
Section 9. Resignation or Removal of Trustee.
(a) Resignation. The Trustee may resign at any time upon sixty (60) days'
notice in writing to the Sponsor, unless a shorter period of notice is agreed
upon by the Sponsor.
(b) Removal. The Sponsor may remove the Trustee at any time upon thirty
(30) days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
Section 10. Successor Trustee.
(a) Appointment. If the office of Trustee becomes vacant for any reason,
the Sponsor may in writing appoint a successor trustee under this Agreement. The
successor trustee shall have all of the
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<PAGE>
rights, powers, privileges, obligations, duties, liabilities, and immunities
granted to the Trustee under this Agreement. The successor trustee and
predecessor trustee shall not be liable for the acts or omissions of the other
with respect to the Trust.
(b) Acceptance. When the successor trustee accepts its appointment under
this Agreement, title to and possession of the Trust assets shall immediately
vest in the successor trustee without any further action on the part of the
predecessor trustee. The predecessor trustee shall execute all instruments and
do all acts that reasonably may be necessary or reasonably may be requested in
writing by the Sponsor or the successor trustee to vest title to all Trust
assets in the successor trustee or to deliver all Trust assets to the successor
trustee.
(c) Corporate Action. Any successor of the Trustee or successor trustee,
through sale or transfer of the business or trust department of the Trustee or
successor trustee, or through reorganization, consolidation, or merger, or any
similar transaction, shall, upon consummation of the transaction, become the
successor trustee under this Agreement.
Section 11. Termination. This Agreement may be terminated at any time by the
Sponsor upon thirty (30) days' notice in writing to the Trustee. On the date of
the termination of this Agreement, the Trustee shall forthwith transfer and
deliver to such individual or entity as the Sponsor shall designate, all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Trustee shall be reimbursed by the Sponsor for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
Section 12. Resignation, Removal, and Termination Notices. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being
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<PAGE>
given by certified or registered mail, return receipt requested, to the Sponsor
c/o Directors of Benefits, FMC Corporation, 200 East Randolph Drive, Chicago,
Illinois 60601, and to the Trustee c/o John M. Kimpel, Fidelity Investments, 82
Devonshire Street, Boston, Massachusetts 02109, or to such other addresses as
the parties have notified each other of in the foregoing manner.
Section 13. Duration. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
Section 14. Amendment or Modification. This Agreement may be amended or modified
at any time and from time to time only by an instrument executed by both the
Sponsor and the Trustee (whose consent shall not be unreasonably withheld or
delayed). Notwithstanding the foregoing, and not prior to June 1, 2000, to
reflect increased operating costs the Trustee may once each calendar year amend
Schedule "B" with the Sponsor's consent, which consent shall not be unreasonably
withheld or delayed, upon seventy-five (75) days written notice to the Sponsor.
Section 15. General
(a) Performance by Trustee, its Agents or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company, Inc. or its successor,
and that certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Delegation by Employer. By authorizing the assets of any Plan as to
which it is an Employer to be deposited in the Trust, each Employer, other than
the Sponsor, hereby irrevocably delegates and grants to the Sponsor full and
exclusive power and authority to exercise all of the powers conferred upon the
Sponsor and each Employer by the terms of this Agreement, and to take or refrain
from taking any and all action which such Employer might otherwise take or
refrain from talking with
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<PAGE>
respect to this Agreement, including the sole and exclusive power to exercise,
enforce or waive any rights whatsoever which such Employer might otherwise have
with respect to the Trust, and irrevocably appoints the Sponsor as its agent for
all purposes under this Agreement. The Trustee shall have no obligation to
account to any such Employer or to follow the instructions of or otherwise deal
with any such Employer, the intention being that the Trustee shall deal solely
with the Sponsor.
(c) Entire Agreement. This Agreement contains all of the terms agreed upon
between the parties with respect to the subject matter hereof.
(d) Waiver. No waiver by either party of any failure or refusal to comply
with an obligation hereunder shall be deemed a waiver of any other or subsequent
failure or refusal to so comply.
(e) Successors and Assigns. The stipulations in this Agreement shall inure
to the benefit of, and shall bind, the successors and assigns of the respective
parties.
(f) Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(g) Section Headings. The headings of the various sections and subsections
of this Agreement have been inserted only for the purposes of convenience and
are not part of this Agreement and shall not be deemed in any manner to modify,
explain, expand or restrict any of the provisions of this Agreement.
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<PAGE>
Section 16. Governing Law.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the Plan, and
in the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall control.
Section 17. Plan Qualification. The Sponsor shall be responsible for verifying
that while any assets of a particular Plan are held in the Trust, the Plan (i)
is qualified within the meaning of section 401(a) of the Code; (ii) is permitted
by existing or future rulings of the United States Treasury Department to pool
its funds in a group trust; and (iii) permits its assets to be commingled for
investment purposes with the assets of other such plans by investing such assets
in this Trust. If any Plan ceases to be qualified within the meaning of section
401(a) of the Code, the Sponsor shall notify the Trustee as promptly as is
reasonable. Upon receipt of such notice, the Trustee shall promptly segregate
and withdraw from the Trust, the assets which are allocable to such disqualified
Plan, and shall dispose of such assets in the manner directed by the Sponsor.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FMC CORPORATION
/s/ W.R. Cooper /s/ David J. Kostelansky
Attest: _______________ By: ________________________________
Secretary David J. Kostelansky
Name: ______________________________
Director Benefits and
Information Technology
Title: _____________________________
5/30/97
Date: ______________________________
FIDELITY MANAGEMENT TRUST
COMPANY
/s/ Douglas O. Kent /s/ Lucy B. Lewis
Attest: ___________________ By: ________________________________
Assistant Clerk Lucy B. Lewis
Name: ______________________________
Vice President
Title: _____________________________
6/11/97
Date: ______________________________
34
<PAGE>
Schedule "A"
ADMINISTRATIVE SERVICES
------------------------
Administration
- --------------
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the following plan investment options:
- Fidelity Retirement Government Money Market Portfolio
- Stable Value Fund
- Fidelity Puritan Fund
- Fidelity U.S. Equity Index Commingled Pool
- Mutual Qualified Fund (class Z)
- Fidelity Low Priced Stock Fund
- Sequoia Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Diversified International Fund
- Clipper Fund
- FMC Stock Fund
- Harsco Stock Fund (United Defense Limited Partnership Salaried
Employees' Plan and United Defense Limited Partnership York Plan)
* Maintenance of the following money classifications:
- Basic Pre-Tax
- Supplemental Pre-Tax
- Pre-Tax Match
- Basic After-Tax
- Supplemental After-Tax
- After-Tax Match
- Rollover
- Prior Plan Company Match
- Harsco Company Rollover (United Defense Limited Partnership Salaried
Employees' Plan and United Defense Limited Partnership York Plan)
* Processing of mutual fund trades.
The Trustee will provide only the recordkeeping and administrative services
set forth on this Schedule "A" and as detailed in the Plan Administrative
Manual and no others.
A) Provide Participant Telephone Services
1. Fidelity registered representatives are available from 8:30 a.m. -
12:00 midnight ET to provide toll free telephone service for
participant inquiries and transactions, including hearing impaired
participants and accepting collect calls from international
participants. Additionally, participants have 24 hour account balance
inquiry and transaction capability access utilizing our automated
voice response system.
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<PAGE>
2. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of a
Personal Identification Number (PIN) and/or any other indicative data
resident on the system.
3. Through our telephone services, Fidelity provides the following
services:
. Provide investment option information.
. Maintain plan and GIC specific provisions.
. Process exchanges (transfers) between investment options on a daily
basis
. Maintain and process changes to participants' contribution
allocations for all money sources.
. Allow participants to change their deferral and after-tax
percentages and provide updates via EDT for customer to apply to its
payrolls accordingly.
. Consult with participants in various loan scenarios and generate all
documentation.
. Process all participant loan and withdrawal requests via Fidelity's
toll-free telephone service according to plan provisions on a daily
basis.
. Process in-service and hardship withdrawals via telephone due to
certain circumstances previously approved by the Sponsor.
. Enroll new participants via telephone; provide confirmation of
enrollment within five (5) days of the request.
. Literature fulfillment.
B) Plan Accounting
1. Process payroll contributions according to payroll frequency via
electronic data transfer (EDT). The data format will be provided by
Fidelity.
2. Provide plan and participant level accounting for up to fifteen (15)
money classifications for the Plan.
3. Audit and reconcile the plan and participant accounts daily.
4. Provide daily plan and participant level accounting for all investment
options.
5. Reconcile and process participant withdrawal requests as approved and
directed by the Sponsor. All requests are paid based on the current
market values of participants' accounts, not advanced or estimated
values. A distribution report will accompany each check.
6. Track individual participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive
reports to plan sponsor to assist in the administration of participant
loans.
7. Fidelity's Guaranteed Investments Daily Equity System (GUIDE) is an
automatic GIC daily portfolio accounting system. GUIDE provides the
Sponsor with daily valuation of their plan assets whether individually
managed or in our Managed Income Portfolio.
8. Maintain and process changes to participants' prospective and existing
investment mix elections via Fidelity's toll-free telephone service.
C) Participant Reporting
1. Mail confirmation to participants of all transactions initiated via
Fidelity Telephone Services within three (3) calendar days of the
transaction.
2. Prepare and mail via first class to each plan participant a quarterly
detailed participant statement reflecting all activity for the period.
Statements will be mailed no later than twenty (20) calendar days
after each quarter end.
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<PAGE>
D) Plan Reporting
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) days after the end of
each month in the absence of unusual circumstances.
2. Prepare, reconcile and deliver a Quarterly Administrative Report
presenting both on a participant and a total plan basis all money
classes, investment positions and a summary of all activity of the
participant and plan as of the last business day of the quarter. The
report will be delivered not later than twenty (20) days after the end
of each quarter in the absence of unusual circumstances.
E) Government Reporting
Process year-end tax reports for participants - 1099R, as well as
financial reporting to assist in the preparation of Form 5500.
F) Communication Services
On a fee for service basis (as requested by the Sponsor), employee
communications describing available investment options, including
multimedia informational materials and group presentations.
G) Other
Performance of non-discrimination limitation testing upon request. In
order to obtain this service, the client shall be required to provide
the information identified in the Fidelity Discrimination Testing
Package Guidelines.
Monitor and process required minimum distribution amounts as follows:
the Trustee will notify the MRD participant and, upon notification
from the MRD participant, will use the MRD participant's information
to process their distributions. If the MRD participant does not
respond to the Trustee's notification, the Sponsor directs the Trustee
to automatically begin the required distributions for the participant.
Determine whether domestic relations orders ("DRO"), issued by a court
of competent jurisdiction, are "qualified" under section 414(p) of the
Internal Revenue Code and section 206(d) of ERISA. In conjunction with
making this determination, the Trustee shall provide the following
services in accordance with the Sponsor's written administrative
guidelines for processing QDROs:
. Upon receipt of the DRO, the Trustee will notify the
Participant, alternate payee(s) and their legal
representatives, if any, will segregate that portion of a
member's account necessary to satisfy the DRO while the
determination is made;
. After completing a review, the Trustee will provide
notification to the affected parties of whether the DRO is
qualified and, if not qualified, the reason(s) for the DRO's
failure to be qualified;
. If the DRO is determined to be a good QDRO, the alternate
payee(s) will be notified, which notification shall also
include information regarding distribution of the account
balance;
. Distribution of that portion of the account balance, as
specified in the QDRO, to the alternate payee(s) and the
appropriate federal and state withholding and reporting on
such distribution.
37
<PAGE>
FMC CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ David J. Kostelansky 5/30/97 By: /s/ Lucy B. Lewis 6/11/97
--------------------------------- ---------------------------
Director Date Vice President Date
Benefits Information Technology
38
<PAGE>
Schedule "B"
FEE SCHEDULE
------------
Annual Participant Fee: $25.00 per participant*, billed
and payable quarterly.
Enrollments by Phone: $5.00 per non-active employee
residing on Fidelity's participant
recordkeeping system.
Loan Fee: Establishment fee of $75.00 per
loan account.
In-Service Withdrawals by Phone: $20.00 per withdrawal.
Return of Excess Contribution Fee: $25.00 per participant, one-time
charge per calculation and check
generation.
Plan Sponsor Workstation (PSW): $5.00 per hour per PSW for on-line
usage (no charge if accessed via
another internet service provider.)
Three PSW provided free of charge.
QDRO Qualification: $750.00 per order (to be paid by the
Sponsor or deducted from participant
balances as a plan expense.)
Minimum Require Distributions: $25.00 per MRD participant per year.
Non-Fidelity Mutual Funds: .10% service fee on Clipper Fund, .05%
service fee on Mutual Qualifed Fund
and 0% on Sequoia Fund (to be paid by
the Non-Fidelity Mutual Fund vendor.)
* This fee will be imposed pro rata for each calendar quarter, or any part
thereof, that it remains necessary to keep a participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture, top-heavy
and terminated participants who must remain on file through calendar year-
end for 1099-R reporting purposes.
GIC Fees
- --------
. To the extent that assets are invested in GICs chosen by the Trustee:
.12% basis points on first 100 million.
.10% basis points on next 100 million.
.07% basis points on assets in excess of 200 million.
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<PAGE>
Trustee Fee
- -----------
. To the extent that assets are invested in Sponsor Stock, .10% of such
assets in the Trust payable pro rata quarterly on the basis of such assets
as of the calendar quarter's last valuation date, but no less than $10,000
nor more than $100,000 per year.
Other Fees
- ----------
Separate charges for optional non-discrimination testing, extraordinary
expenses resulting from large numbers of simultaneous manual transactions
or from errors not caused by Fidelity, or for reports not contemplated in
this Agreement. The Administrator may withdraw reasonable administrative
fees from the Trust by written direction to the Trustee.
All communications will be fee for service, excluding STAGES and postage
for literature fulfillment and quarterly statements. Fees for the Super 800
telephone service will be passed through to the Sponsor at cost following
installation. No fee will be charged for customizing the Voice Response
System (VRS) for deferrals; additional VRS customization which occurs after
the phone opening may require additional fees.
Note: These fees have been negotiated and accepted based on the following Plan
characteristics: eight (8) Plans in the relationship, current plan assets of
$892 million, current participation of 13,944 participants, current GIC assets
of $245 million, stock assets of $532 million and projected net cash flows of
$25 million per year. Fees will be subject to revision if these Plan
characteristics change significantly by either falling below or exceeding
current or projected levels. Fees also have been based on the use of up to
twelve (12) investment options, and such fees will be subject to revision if
additional investment options are added.
FMC CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ David J. Kostelansky 5/30/97 By: /s/ Lucy B. Lewis 6/11/97
--------------------------------- ---------------------------
Date Vice President Date
40
<PAGE>
Schedule "C"
INVESTMENT OPTIONS
------------------
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:
- Fidelity Retirement Government Money Market Portfolio
- Stable Value Fund
- Fidelity Puritan Fund
- Fidelity U.S. Equity Index Commingled Pool
- Mutual Qualified Fund (class Z)
- Fidelity Low Priced Stock Fund
- Sequoia Fund
- Fidelity Blue Chip Growth Fund
- Fidelity Diversified International Fund
- Clipper Fund
- FMC Stock Fund
- Harsco Stock Fund (United Defense Limited Partnership Salaried
Employees' Plan and United Defense Limited Partnership York Plan)
The investment option referred to in Section 4(c) and Section
4(e)(v)(B)(5) shall be the FMC Stock Fund.
FMC CORPORATION
By: /s/ David J. Kostelansky 5/30/97
---------------------------------
Date
41
<PAGE>
FMC Corporation
Executive Offices
200 East Randolph Drive
Chicago, Illinois 60601
312 861 6000
Schedule "D" [FMC LOGO]
June 2, 1997
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
FMC Master Trust
***NOTE: This schedule should contain names and signatures for
ALL individuals who will be providing directions to Fidelity
representatives in connection with the Plan.
Fidelity representatives will be unable to accept directions from
any individual whose name does not appear on this schedule.***
Dear Ms. Redden:
This letter is sent to you in accordance with Section 8(b) of the Trust
Agreement dated as June 2, 1997 between FMC Corporation and Fidelity
Management Trust Company. I hereby designate David J. Kostelansky, Henry Kahn
and Yasmin J. Kwentus, as the individuals who may provide directions upon which
Fidelity Management Trust Company shall be fully protected in relying. Only one
such individual need provide any direction. The signature of each designated
individual is set forth below and certified to be such.
You may reply upon each designation and certification set forth in this letter
until I deliver to you written notice of the termination of authority of a
designated individual.
Very truly yours,
/s/ David J. Kostelansky
David J. Kostelansky
Director
Benefits and Information Technology
/s/ David J. Kostelansky
------------------------
David J. Kostelansky
Director, Benefits and Information Technology
------------------------
Henry Kahn
Vice President and Treasurer
/s/ Yasmin J. Kwentus
------------------------
Yasmin J. Kwentus
Sr. Human Resources Analyst
<PAGE>
FMC Corporation
Executive Offices
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
Schedule "E" [LOGO]
June 2, 1997
Ms. Carol Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street- MM3H
Boston, Massachusetts 02109
FMC Master Trust
Dear Ms. Redden:
This letter is sent to you in accordance with Section 8(c) of the Trust
Agreement dated as June 2, 1997 between FMC Corporation and Fidelity Management
Trust Company. I hereby designate David J. Kostelansky, J. Paul McGrath and
Henry Kahn, as the individuals who may provide directions upon which Fidelity
Management Trust Company shall be fully protected in relying. Only one such
individual need provide any direction. The signature of each designated
individual is set forth below and certified to be such.
You may reply upon each designation and certification set forth in this letter
until I deliver to you written notice of the termination of authority of a
designated individual.
Very truly yours,
/s/ David J. Kostelansky
David J. Kostelansky
Director
Benefits and Information Technology
/s/ David J. Kostelansky
- -------------------------
David J. Kostelansky
Director Benefits and Information Technology
/s/ J. Paul McGrath
- -------------------------
J. Paul McGrath
General Counsel
- -------------------------
Henry Kahn
Vice President and Treasurer
<PAGE>
FMC Corporation
Executive Offices
200 East Randolph Drive
Chicago Illinois 60601
312 861 6000
May 29, 1997 [FMC LOGO]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inv.
82 Devonshire Street
Boston, Massachusetts 02109
Dear Ms. Redden:
This letter is sent to you in accordance with Section 8(a) of the Trust
Agreement dated as of the second day of June, 1997 between FMC Corporation and
Fidelity Management Trust Company.
Each of the plans identified below is a tax-qualified defined contribution plan
which meets the requirements of Section 17 of said Trust Agreement and which is
maintained by the undersigned, or one of its subsidiaries or affiliates, for the
benefit of their eligible employees. Each such plan is hereby designated as
a "Plan" for purposes of said Trust Agreement. FMC Corporation is the
Administrator and Named Fiduciary of said Plan(s).
Plans
-----
FMC Corporation Employees Thrift and Stock Purchase Plan
UDLP Salaried Employees Thrift and Stock Purchase Plan
FMC Corporation 401(k) Plan for Employees covered by a Collective
Bargaining Agreement
UDLP Louisville Union Employees Thrift Plan
UDLP York Plan
We hereby further certify that each Employer with respect to each of the
foregoing Plan(s) has authorized the assets of such Plan to be deposited in the
Trust and, as a result, is bound by Section 15(b) of said Trust Agreement.
You may reply upon the foregoing designations and certifications until we
deliver to you written notice of a change in any of the information set forth
therein.
Very truly yours,
/s/ David J. Kostelansky
David J. Kostelansky
Director
Benefits and Information Technology
<PAGE>
Schedule "G"
EXISTING GICs
-------------
A.
In accordance with Section 5(b), the Named Fiduciary hereby directs the
Trustee to continue to hold the following Existing GICs until such time as the
Named Fiduciary directs otherwise:
- Contract Issuer: Allstate Life Insurance
- Contract Number: GA-5168
- Contract Issuer: Metropolitan Life Insurance Company
- Contract Number: 13156
- Contract Issuer: The Prudential Insurance Company of America
- Contract Number: GA-5632-213
- Contract Issuer: The Prudential Insurance Company of America
- Contract Number: GA-5632-214
- Contract Issuer: The Prudential Insurance Company of America
- Contract Number: GA-5646
B.
In accordance with a separate Investment Management Agreement between the
Sponsor and the Trustee, dated , 1997, the Trustee became Investment
Manager of the following GICs:
- Contract Issuer: Citibank, N.A.
- Contract Number: 120217
- Contract Issuer: Commonwealth Life Insurance Company
- Contract Number: ADA00023TR
- Contract Issuer: Commonwealth Life Insurance Company
- Contract Number: ADA00023TR-1
- Contract Issuer: Commonwealth Life Insurance Company
- Contract Number: ADA00577FR
- Contract Issuer: Commonwealth Life Insurance Company
- Contract Number: ADA00774FR
- Contract Issuer: John Hancock
- Contract Number: 7787 GAC
- Contract Issuer: Metropolitan Life Insurance Company
- Contract Number: 13156
45
<PAGE>
- Contract Issuer: SEI Stable Asset Fund
- Contract Number: GIC Fund
FMC CORPORATION
By /s/ David J. Kostelansky 5/30/97
----------------------------------
Date
<PAGE>
Schedule "H"
TELEPHONE EXCHANGE GUIDELINES
-----------------------------
The following telephone exchange guidelines are currently employed by Fidelity
Investments Institutional Operations Company, Inc. (FIIOC).
Telephone exchange hours are 8:30 a.m. (ET) to 12:00 midnight (ET) on each
business day. A "business day" is any day on which the New York Stock Exchange
is open.
FIIOC reserves the right to change these telephone exchange guidelines at its
discretion upon ninety (90) days prior written notice.
Investment Options
------------------
Exchanges Between Investment Options
------------------------------------
Participants may call on any business day to exchange between the
investment options. If the request is received before 4:00 p.m. (ET), it
will receive that day's trade date. Calls received after 4:00 p.m. (ET)
will be processed on a next day basis.
Exchange Restrictions
- ---------------------
Investments in the Sponsor Stock Fund will consist primarily of shares of
Sponsor Stock. Investments in the Harsco Stock Fund will consist primarily
of shares of Harsco Stock. In order to satisfy daily participant requests
for exchanges, loans and withdrawals, the Stock Funds will also hold cash
or other short-term liquid investments in an amount that has been agreed
to in writing by the Sponsor and the Trustee. The Trustee will be
responsible for ensuring that the percentage of these investments falls
within the agreed upon range over time. However, if there is insufficient
liquidity in the Stock Funds to allow for such activity, the Trustee will
sell shares of the appropriate Stock in the open market.
Participants may not exchange out of the FMC Stock held in employee
contribution sources until they have attained age 55. Participants who have
attained age 55 may exchange out of the FMC Stock Fund once each year.
Participants may not exchange out of the FMC Stock held in employer
contribution sources.
Participants will not be permitted to make direct transfers between the
Stable Value Fund and a competing fund. Participants who wish to exchange
between the Stable Value Fund and a competing fund must first exchange into
a non-competing fund for a period of 90 days.
FMC CORPORATION
By: /s/ 5/30/97
--------------------------------
Date
47
<PAGE>
SCHEDULE "I"
------------
INVESTMENT GUIDELINES
---------------------
Set forth below are the objectives and guidelines to be followed by Fidelity
Management Trust Company for the administration of the stable value investment
option (the "Account") within the FMC Employees' Thrift and Stock Purchase Plan
(the "Plan"), established by FMC Corporation (the "Sponsor").
I. INVESTMENT OBJECTIVES
The primary objective is to seek the preservation of capital. The secondary
objective is to attempt to provide over time a competitive level of income
consistent with the preservation of capital.
II. PORTFOLIO GUIDELINES
The Account shall be invested in the following classes of assets.
A. Universe
1. Investment Contracts. Investment Contracts ("Contracts") are issued by
insurance companies, banks or other financial-services institutions (the
"Issuer(s)") and evidence debt obligations of the applicable Contract
Issuer(s) to the Plan. Contracts are either collateralized by the general
underlying assets, or certain specific underlying assets, of the Contract
Issuer(s).
All Contracts, at the time of purchase, shall be benefit-responsive, which
means that they shall provide for benefit withdrawals and investment
exchanges to be paid at full book-value (i.e., principal plus accrued
interest). However, withdrawals prompted by an employer-initiated-event,
such as withdrawals resulting from the sale of a division of the Sponsor, a
corporate layoff or the addition of Plan investment options, for example,
may be paid at the Contract's market-value, which may be more or less than
book-value.
The interest rate of a particular Contract may be either fixed or adjusted
periodically according to an index or to reflect the performance of certain
assets of the Contract Issuer. Maturity dates of Contracts may or may not
be fixed. Contracts may include, but are not limited to, the following:
. Fixed-rate contracts
. Indexed-rate contracts
. Participating-rate contracts
. Structured contracts
. Separate-account contracts
2. Synthetic Investment Products. Synthetic investment contract products
("Synthetic Products") are comprised of both an investment component and a
contractual component. The investment component consists of one or more
securities or shares or units of a pooled portfolio of fixed-income
securities ("Underlying Investment(s)").
48
<PAGE>
Underlying Investments may include, but are not limited to, the following:
. Asset-backed securities
. Mortgage-backed securities
. Commercial mortgage-backed securities
. Collateralized mortgage obligations
. U.S. Treasuries
. Securities issued or backed by U.S. government agencies,
government-sponsored enterprises or similar U.S. government
entities or instrumentalities
. Securities issued by supranational organizations
. Structured notes and similar arrangements
. Corporate bonds
. Yankees
. Private placements (including Rule 144a securities)
. Units of commingled pools primarily invested in the above
. Shares of mutual funds primarily invested in the above
. Money market instruments
This investment component is "wrapped" by one or more contracts ("Wrap
Contract(s)") issued by insurance companies, banks or other financial-
services institutions (the "Wrap Contract Issuers"). Wrap Contracts, at the
time of purchase, shall be benefit-responsive, which means that they shall
provide for benefit withdrawals and investment exchanges to be paid at the
full book-value of the Underlying Investment(s) (i.e., principal plus
accrued interest). In this manner, Wrap Contracts are designed to decrease
the normal market fluctuations associated with the performance of the
Underlying Securities. However, certain withdrawals, similar to those
described above with respect to Contracts, may be paid at the market-value
of the Underlying Investment(s) (which may be more or less than book-
value).
The interest rate of a particular Synthetic Product may be either fixed or
adjusted periodically and is in either case tied to the performance of the
Underlying Investment(s). The maturity date of a particular Synthetic
Product may be a fixed date or an indeterminate date.
3. Money Market Investments. Investments may be shares of mutual funds or
units of commingled pools which are invested primarily in money-market
instruments.
B. Credit and Diversification Limitations
1. At the time of purchase, Contract Issuers, Wrap Contract Issuers and
issuers of the Underlying Investments ("Securities Issuers"), whether
domestic or foreign, must be deemed to be creditworthy by Fidelity
Management Trust Company ("FMTC").
2. At the time of purchase, Contract Issuers and Securities Issuers must meet
the then-current diversification requirements established by FMTC.
C. Investment Contract Disclosures
Detailed investment contract disclosures are attached as Appendix A.
49
<PAGE>
D. Special Limitations and Restrictions Imposed by the Sponsor
Notwithstanding anything herein to the contrary, the Sponsor hereby imposes
special limitations and restrictions as set forth below:
1. Prior to purchasing for the Plan any class of assets not contemplated by
the then-existing Investment Guidelines, the Investment Manager shall
provide, and the Sponsor shall review, the contractual terms and conditions
to investments in said class of assets that may apply with respect to the
determination at various times of (i) market value, (ii) book value and
(iii) the consequences, if any, of termination prior to maturity. If such
terms and conditions are deemed in the Sponsor's sole discretion to be
acceptable, the Investment Guidelines shall be amended, upon the mutual
written consent of the parties, to permit the Account to be invested in
that class of assets.
These Investment Guidelines are effective as of March 1, 1997 and supersede all
prior written and oral agreements regarding investments of the Account. Any
deviation from or amendment to these Investment Guidelines must be approved in
writing by both the Trustee and Sponsor prior to implementation thereof.
FMC CORPORATION FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ David J. Kostelansky By: /s/ Lucy B. Lewis
-------------------------------- --------------------------------
Name: David J. Kostelansky Name: Lucy B. Lewis
------------------------------ ------------------------------
Title: Director of Benefits and Title: Vice President
----------------------------- -----------------------------
Information Technology Date: 6/11/97
----------------------------- ------------------------------
Date: 5/30/97
------------------------------
50
<PAGE>
Appendix A
Investment Contract Disclosures
-------------------------------
1. FUNDING COMMITMENTS
The terms of each investment contract are based upon the information in the
bidding specifications given to potential bidders. Often detailed information
about expected deposits and withdrawals is necessary to receive the best rate
from an issuer on a given placement day.
Some investment contracts obligate the Plan to give a designed lump sum deposit
to the issuer by a specific date. Other contracts require a Plan to direct all
cash flow, including other contract maturities, to the issuer over a set period
(the funding "window"). At the end of the window, the issuer expects a certain
dollar amount to be received and may refuse to accept additional cash flow. In
either case the funding date may be several months following the commitment
("advance commitment" contracts).
If the Plan fails to fulfill its contractual funding obligations, there may be
financial consequences for Plan participants. This is because the issuer
conducts its financial affairs in reliance on receiving the deposits as
promised. Consequently, issuers may include shortfall funding provisions in
their contracts (particularly advance commitment contracts) in order to protect
their financial position.
The responsibility for a funding shortfall will vary depending on the underlying
cause. If participant activity (e.g. increased transfers out of the Account)
causes the shortfall, issuers will generally either assume the risk or extend
the funding date indefinitely. However, if a shortfall is caused by an employer-
initiated event (e.g. an unexpected layoff, plan termination, or a change in
funding policy, the issuer will seek to be made whole under the terms of the
contract. If the contract has not yet been funded, the issuer may seek
reimbursement from the contractholder if the issuer incurs a financial loss.
As contractholder, FMTC intends to honor all funding commitments made on behalf
of the Plan. In the event of a shortfall, however, FMTC would only assume
responsibility to the extent that FMTC has been given funds by the Plan for
deposit and subsequently fails to remit the funds to the issuer.
11. PLAN WITHDRAWALS AND INVESTMENT EXCHANGES
An investment contract generally imposes ongoing contractual commitments on the
Plan to maintain the issuer's promise to pay the book value of the contract. If
the sponsoring employer changes Plan rules in a manner which changes
significantly the amount of "benefit-responsive" withdrawals from a contract,
the insurer may be authorized to lower the interest rate or assess a monetary
penalty. Alternatively, the insurer may refuse to pay withdrawals prompted by
the plan change. Employer-initiated events such as a large scale layoff or a
sale of part of the business may cause the same consequences. Early advance
notice to FMTC of a coming Plan change or corporate event is critical to provide
FMTC sufficient time to try to minimize any financial consequences to the Plan.
A request by the Plan contractholder (sponsoring employer or trustee) to
withdraw funds prior to the contract maturity date may also result in the
assessment of a market value adjustment on the amount withdrawn. Some contracts
don't allow such pre-maturity withdrawals without issuer consent.
51
<PAGE>
Due to the potential financial consequences to Plan participants in these types
of situations, funding and withdrawal decisions must be carefully weighed by
Plan sponsors, managers and trustees.
The undersigned hereby acknowledges and agrees that it has read and understood
the foregoing disclosures.
FMC Corporation
BY: /s/ David J. Kostelansky
---------------------------
Name:
Title: Director, Benefits
and Information
Technology
Date: 5/30/97
-----------------------
52
<PAGE>
Schedule "J"
[Sponsor's Letterhead]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street
Boston, Massachusetts 02109
[Name of Plan]
Dear Ms. Redden:
This letter is sent to you in accordance with Section 8(a) of the Trust
Agreement dated as of the [_] day of [_], 199X, between [_] and Fidelity
Management Trust Company.
Each of the plans identified below is a tax-qualified defined contribution
plan which meets the requirements of Section 17 of said Trust Agreement and
which is maintained by the undersigned, or one of its subsidiaries or
affiliates, for the benefit of their eligible employees. Each such plan is
hereby designated as a "Plan" for purposes of said Trust Agreement. The
following individuals or entities are the Administrator and Named Fiduciary
(ies) of said Plan(s).
Plans Administrator Named Fiduciary(ies)
- ----------------------------------------
We hereby further certify that each Employer with respect to each of the
foregoing Plan(s) has authorized the assets of such Plan to be deposited in the
Trust and, as a result, is bound by Section 15(b) of said Trust Agreement.
You may rely upon the foregoing designations and certifications until we
deliver to you written notice of a change in any of the information set forth
therein.
Very truly yours,
[SPONSOR]
By
-----------------------------
53
<PAGE>
Schedule "K"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
----------------------------------------------------
Pricing
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Fund Vendor will input
the following information ("Price Information") into the Fidelity Participant
Recordkeeping System ("FPRS") via the remote access price screen that Fidelity
Investments Institutional Operations Company ("FIIOC"), an affiliate of the
Trustee, has provided to the Fund Vendor: (1) the net asset value for each Fund
at the Close of Trading, (2) the change in each Fund's net asset value from the
Close of Trading on the prior Business Day, and (3) in the case of an income
fund or funds, the daily accrual for interest rate factor ("mil rate"). FIIOC
must receive Price Information each Business Day. If on any Business Day the
Fund Vendor does not provide such Price Information to FIIOC, FIIOC shall pend
all associated transaction activity in the Fidelity Participant Recordkeeping
System ("FPRS") until the relevant Price Information is made available by Fund
Vendor.
Trade Activity and Wire Transfers
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus One"),
FIIOC will provide, via facsimile, to the Fund Vendor a consolidated report of
net purchase or net redemption activity that occurred in each of the Funds up to
4:00 p.m. ET on the prior Business Day. The report will reflect the dollar
amount of assets and shares to be invested or withdrawn for each Fund. FIIOC
will transmit this report to the Fund Vendor each Business Day, regardless of
processing activity. In the event that data contained in the 7:00 a.m. ET
facsimile transmission represents estimated trade activity, FIIOC shall provide
a final facsimile to the Fund Vendor by no later than 9:00 a.m. ET. Any
resulting adjustments shall be processed by the Fund Vendor at the net asset
value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms for
all daily activity in each of the Funds. The Fund Vendor shall also send via
regular mail to FIIOC, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to notify
the Fund Vendor of any balance discrepancies within twenty (20) Business Days of
receipt of the monthly statement.
For purposes of wire transfers, FIIOC shall transmit a daily wire for aggregate
purchase activity and the Fund Vendor shall transmit a daily wire for aggregate
redemption activity, in each case including all activity across all Funds
occurring on the same day.
54
<PAGE>
Prospectus Delivery
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The Fund
Vendor shall be responsible for all materials and production costs, and hereby
agrees to provide the Required Materials to the third-party vendor selected by
FIIOC. The Fund Vendor shall bear the costs of mailing annual Fund reports to
Plan participants. FIIOC shall bear the costs of mailing prospectuses to Plan
participants.
Proxies
Participants shall have the right to direct the Trustee as to the manner in
which the Trustee is to vote the shares of the Non-Fidelity Mutual Funds
credited to the participant's accounts (both vested and unvested). The Trustee
shall vote the shares as directed by the participant. The Trustee shall not vote
shares for which it has received no directions from the participant. During the
participant recordkeeping reconciliation period, the Sponsor shall have the
right to direct the Trustee as to the manner in which the Trustee is to vote the
shares of the Non-Fidelity Mutual Funds in the Trust. With respect to all rights
other than the right to vote, the Trustee shall follow the directions of the
participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no further duty to solicit directions from
participants or the Sponsor.
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a third-party
vendor to handle proxy solicitation mailings and vote tabulation. Expenses
associated with such services shall be billed directly to the Fund Vendor by the
third-party vendor.
Participant Communications
The Fund Vendor shall provide internally-prepared fund descriptive information
approved by the Funds' legal counsel for use by FIIOC in its written participant
communication materials. FIIOC shall utilize historical performance data
obtained from third-party vendors (currently Morningstar, Inc., FACTSET Research
Systems and Lipper Analytical Services) in telephone conversations with plan
participants and in quarterly participant statements. The Sponsor hereby
consents to FIIOC's use of such materials and acknowledges that FIIOC is not
responsible for the accuracy of such third-party information. FIIOC shall seek
the approval of the Fund Vendor prior to retaining any other third-party vendor
to render such data or materials under this Agreement.
Compensation
FIIOC shall be entitled to fees as set forth in a separate agency agreement
with the Fund Vendor.
55
<PAGE>
Indemnification
The Fund Vendor shall be responsible for compensating participants and/or FIIOC
in the event that losses occur as a result of (1) the Fund Vendor's failure to
provide FIIOC with Price Information or (2) providing FIIOC with incorrect Price
Information.
56
<PAGE>
FIRST AMENDMENT TO MASTER TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
FMC CORPORATION
THIS FIRST AMENDMENT, dated as of the fifteenth day of July, 1997, by and
between Fidelity Management Trust Company (the "Trustee") and FMC Corporation
(the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated June 1, 1997, with regard to the FMC Corporation Employees'
Thrift and Stock Purchase Plan, the United Defense Limited Partnership Salaried
Employees' Plan, the FMC Corporation 401(k) Plan for Employees Covered by a
Collective Bargaining Agreement, the United Defense Limited Partnership
Louisville Union Employees' Thrift Plan and the United Defense Limited
Partnership York Plan (individually and collectively, the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and the
Sponsor hereby amend the Trust Agreement by:
(1) Amending Section "B" of Schedule "G" "Existing GICs" by deleting from
said section any reference to Metropolitan Life Insurance Company
Contract Number 13156.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this First
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
FMC CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ D. J. Kostelansky By: /s/ Lucy B. Lewis 7/25/97
---------------------------- -----------------------------
Date Vice President Date
<PAGE>
SECOND AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
FMC CORPORATION
THIS SECOND AMENDMENT, dated as of the sixth day of October, 1997, by and
between Fidelity Management Trust Company (the "Trustee") and FMC Corporation
(the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated June 1, 1997, with regard to the FMC Corporation Employees'
Thrift and Stock Purchase Plan, the United Defense Limited Partnership Salaried
Employees' Plan, the FMC Corporation 401(k) Plan for Employees Covered by a
Collective Bargaining Agreement, the United Defense Limited Partnership
Louisville Union Employees' Thrift Plan and the United Defense Limited
Partnership York Plan (individually and collectively, the "Plan"); and
WHEREAS, the Sponsor has notified the Trustee that effective October 6,
1997 the United Defense Limited Partnership Salaried Employees' Plan, the United
Defense Limited Partnership Louisville Union Employees' Thrift Plan and the
United Defense Limited Partnership York Plan will no longer be part of the FMC
Corporation Master Trust; and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and the
Sponsor hereby amend the Trust Agreement by:
(1) Deleting all references to the United Defense Limited Partnership
Salaried Employees' Plan, the United Defense Limited Partnership
Louisville Union Employees' Thrift Plan and the United Defense Limited
Partnership York Plan.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
FMC CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ David J. Kostelansky 10/7/97 By: /s/ 11/4/97
-------------------------------- -----------------------------
Date Vice President Date
<PAGE>
THIRD AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
FMC CORPORATION
THIS THIRD AMENDMENT, dated as of the thirtieth day of November, 1997, by
and between Fidelity Management Trust Company (the "Trustee") and FMC
Corporation (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Master Trust
Agreement dated June 1, 1997, with regard to the FMC Corporation Employees'
Thrift and Stock Purchase Plan and the FMC Corporation 401(k) Plan for Employees
Covered by a Collective Bargaining Agreement (individually and collectively, the
"Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and the
Sponsor hereby amend the Trust Agreement by:
(1) Amending Schedule "G", Existing GICs, by removing the following from
subsection B and adding it to subsection A:
- Contract Issuer: John Hancock
- Contract Number: 7787 GAC
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Third
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
FMC CORPORATION FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ David J. Kostelansky 11/14/97 By: /s/ 11/26/97
--------------------------------- ------------------------------
Date Vice President Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>12
<DESCRIPTION>STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS
<TEXT>
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
FMC CORPORATION
---------------
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
--------------------------------------------------
(AMOUNTS IN MILLIONS)
Years ended December 31,
--------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings:
Income (loss) from continuing
operations before income
taxes, extraordinary items and
cumulative effect of a
change in accounting principle $ (59.7) $ 235.8 $ 152.7 $ 150.9 $ (79.9)
Minority interests 8.9 9.6 5.1 1.6 0.5
Undistributed (earnings) loss
of affiliates (2.0) (6.7) 1.9 4.0 0.3
Interest expense and amortization
of debt discount, fees and
expenses 118.3 103.0 84.0 64.1 70.4
Amortization of capitalized interest 7.0 7.5 7.7 7.5 7.4
Interest included in rental expense 16.6 15.2 16.7 17.8 18.0
-------------------------------------------------
Total earnings $ 89.1 $ 364.4 $ 268.1 $ 245.9 $ 16.7
=================================================
Fixed charges:
Interest expense and amortization
of debt discount, fees and
expenses $ 118.3 $ 103.0 $ 84.0 $ 64.1 $ 70.4
Interest capitalized as part of
fixed assets 6.6 15.5 10.2 2.7 0.6
Interest included in rental expense 16.6 15.2 16.7 17.8 18.0
-------------------------------------------------
Total fixed charges $ 141.5 $ 133.7 $ 110.9 $ 84.6 $ 89.0
=================================================
Ratio of earnings to fixed charges 0.6 2.7 2.4 2.9 0.2
=================================================
(A) (B) (C)
</TABLE>
(A) The ratio of earnings to fixed charges for the year ended December 31, 1997
before asset impairments and restructuring and other charges was 2.5x.
(B) The ratio of earnings to fixed charges for the year ended December 31, 1995
before the gain on the sale of FMC Wyoming stock, asset impairments,
restructuring and other charges, and write-off of acquired in-process
research and development costs was 2.9x.
(C) The ratio of earnings to fixed charges for the year ended December 31, 1993
before asset impairments and restructuring and other charges was 1.6x
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>13
<DESCRIPTION>ANNUAL REPORT TO STOCKHOLDERS
<TEXT>
<PAGE>
Exhibit 13
[LOGO OF FMC]
1997 Annual Report
Shareholder Value
People
Superb Execution
Growth
[PHOTOS APPEAR HERE]
<PAGE>
[LOGO OF FMC]
As one of the world's
leading producers
of chemicals and machinery
for industry and agriculture,
FMC participates on a worldwide
basis in three broad markets:
Machinery and Equipment,
Industrial Chemicals and
Performance Chemicals.
FMC operates 104 manufacturing
facilities and mines in 26 countries.
About the cover: From Argentina to Maine, from
Norway to Wyoming, FMC employees around the
world are developing new products and technologies,
improving production processes, providing solutions
to customers, and serving the communities in which
we operate. Together, we're charting a successful
course into the 21st Century.
<PAGE>
<TABLE>
<CAPTION>
Financial Summary
(In millions, except per share, common stock price, employee and stockholder data) 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sales
In the United States $ 1,818.3 $ 1,754.7
Outside the United States, including exports 2,440.7 2,196.0
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $ 4,259.0 $ 3,950.7
================================================================================================================================
Income (loss) (after tax)
Income (loss) from continuing operations before
cumulative effect of change in accounting principle $ (24.5) $ 162.8
- --------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before asset
impairments, restructuring and other charges and
cumulative effect of change in accounting principle(1) $ 156.4 $ 162.8
- --------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share from continuing operations before
cumulative effect of change in accounting principle:
Basic $ (0.67) $ 4.40
Diluted $ (0.67) $ 4.28
- --------------------------------------------------------------------------------------------------------------------------------
Earnings per share from continuing operations before
asset impairments, restructuring and other charges
and cumulative effect of change in accounting principle:(1)
Basic $ 4.25 $ 4.40
Diluted $ 4.13 $ 4.28
================================================================================================================================
FINANCIAL AND OTHER DATA
Common stock price range $ 90 5/8-59 5/8 $ 77 3/4-62 1/4
- --------------------------------------------------------------------------------------------------------------------------------
Capital expenditures excluding acquisitions $ 316.7 $ 485.1
- --------------------------------------------------------------------------------------------------------------------------------
Research and development expense $ 174.0 $ 176.5
- --------------------------------------------------------------------------------------------------------------------------------
At December 31 Working capital $ 251.1 $ 172.0
Operating working capital(2) $ 410.4 $ 627.4
Number of employees 16,805 16,731
Number of stockholders 10,523 11,339
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As described further in Notes 1 and 3 to the consolidated financial statements,
FMC's Defense Systems segment has been reclassified as a discontinued operation
and results of prior years have been restated for comparative purposes.
(1) Supplemental financial information. Income from continuing operations before
asset impairments, restructuring and other charges and cumulative effect of
change in accounting principle, and earnings per share from continuing
operations before asset impairments, restructuring and other charges and
cumulative effect of change in accounting principle, should not be
considered in isolation nor as an alternative for income from continuing
operations or earnings per share determined in accordance with generally
accepted accounting principles, nor as the sole measure of the company's
profitability.
(2) Operating working capital includes trade receivables (net), inventories,
other current assets, accounts payable, accrued payroll, other current
liabilities, and the current portion of accrued pension and other
postretirement benefits.
-1-
<PAGE>
Message to Shareholders
[Photo of Robert N. Burt]
ROBERT N. BURT
In early 1997, FMC Chairman and CEO Bob Burt visited Brazil, where the company's
new sulfentrazone herbicide was first sold commercially under the tradename
Boral.
In 1997, we saw our investments and confidence in our machinery and equipment
businesses pay off with record profits. This superior performance, however, was
not enough to overcome difficult market conditions throughout our chemical
businesses, as well as start-up problems with our new herbicide plant. As a
result, operating earnings per share were down 3 percent from 1996, and our
stock under-performed the market.
Sales from continuing operations were $4.3 billion, up 8 percent from $4
billion in 1996. After-tax income from continuing operations, before the charges
detailed below, was $156 million, or $4.13 per share on a diluted basis,
compared with $163 million, or $4.28 per share, in 1996. In the 1997 fourth
quarter, we announced charges of $310 million before income taxes, or $208
million after income taxes, for asset impairments and restructuring and other
costs, as well as environmental reserves related to discontinued operations.
Although earnings were disappointing, our traditional emphasis on cash flow
produced $350 million (before financing activities) from continuing operations.
We reduced operating working capital, exceeding our $100 million target. And we
sold our defense business to The Carlyle Group, which resulted in an after-tax
gain of $180 million and after-tax cash flow of approximately $375 million for
our 60 percent share of the business. Given reduced capital expenditure needs
and the uneconomically high price of acquisitions, our cash flow exceeded our
forecast needs. Therefore, we announced a $500 million, three-year stock buyback
program, and purchased 2.7 million shares in 1997 for $209 million.
Our major strategic initiative in 1997 was the sale of our defense business.
Our decision to exit defense was influenced by the outlook for profitability for
the next several years, as well as the significant budget pressures that we
believe will lead to further declines in defense budgets after the turn of the
century. The stagnant or declining profits in our defense business have
significantly affected our profit growth, as shown in the table below:
<TABLE>
<CAPTION>
(In millions) 1997 1993 Annual Growth
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Operating profit (excluding defense) $ 314 $ 105 32 percent
Operating profit (with defense) $ 390* $ 265 10 percent
</TABLE>
*Estimated
-2-
<PAGE>
[Photo of Larry D. Brady]
Larry D. Brady
In Japan, FMC President Larry Brady visited a Fresh'n Squeeze orange juice
display at a local grocery store. FMC equipment processes 75 percent of the
world's orange juice.
In the future, we expect a similar pattern of significantly greater growth
without defense. This should translate into growth in our price/earnings ratio
at the same time our stock repurchase program reduces and eventually eliminates
the dilution from the lack of defense earnings.
Although 1997 was disappointing, that's water under the bridge. We are moving
on and concentrating on plans to improve earnings and enter the new century with
strong momentum.
In 1998 our highest priority is a significant increase in profits, which
translates into 25-plus percent growth in earnings per share. At the same time,
we will continue to focus on improving our working capital efficiency. Where
market conditions have deteriorated, we will aggressively reduce expenses, as
we've already done in both our industrial chemicals and agricultural products
businesses. We will not neglect the need to invest in areas critical to our
long-term success, including research and development, strategic acquisitions
and, most important, training and development for our employees.
The review of operations reports on the strategies, key events and outlook for
our businesses and highlights representative FMC employees who are helping us
achieve our goals.
Management changes. In 1997 we were pleased to welcome Ted Mooney to our board
of directors. As chairman and chief executive officer of Nalco Chemical Company,
Ted brings well-honed management and related industry experience to help chart
our future path.
We're sorry to report that Pehr Gyllenhammar has resigned from our board due
to increased time commitments in Europe. Pehr brought us broad-ranging
experience in international business and finance, and we'll miss his wise
counsel.
We're also pleased to announce several management changes. We brought Bill
Wheeler home to Philadelphia from Tokyo to help direct our development and
shared services efforts in the chemicals businesses. Reg Hall moved to Asia to
take Bill's place in heading our efforts in Asia-Pacific--no small challenge
given recent events. Replacing Reg as head of our specialty chemicals businesses
is recently elected FMC Vice President Bill Walter, who brings to his new
assignment 24 years of experience with FMC operations. We elected Gene
McCluskey, whose expertise on tax issues is an invaluable asset, as vice
president--tax. And given the importance of information technology to our future
success, we elected Craig Watson as FMC vice president and chief information
officer.
-3-
<PAGE>
In 1997 we also bid farewell to FMC Corporate Secretary and Associate General
Counsel Bob Day. Bob took early retirement after 25 years of guiding us through
corporate governance issues, providing us with sound legal advice and
safeguarding our ethical values.
Building on core values. Inherent in the success of any company is what some
call ethics, others call corporate responsibility, and we call core values. At
FMC, core values are the heart of our company. These values center on valuing
the diversity and skills of our employees and providing for their development;
protecting the environment and the health and safety of our employees; and
improving the communities in which we operate. We value our relationships with
our customers. We take an analytical approach to decision-making. And we work to
continuously improve everything we do while maintaining the highest ethical
standards.
As in the past, we believe our future success in creating superior shareholder
value is built on these values. No report to shareholders is complete without
reinforcing our commitment to maintaining these values.
Outlook. Our overriding priority in 1998 is producing strong operating earnings
that exceed the financial expectations of our investors and increase our stock
price.
Although market conditions in some of our chemicals businesses still will be
unfavorable, we expect to achieve significant growth from crop protection
chemicals, which should snap back from low pest infestations in 1997 and from
improved operations at our Authority herbicide plant. We also expect continued
strength in our machinery businesses after a record-breaking 1997 performance.
Over the past five years, we've established a strong trend of growth in
operating earnings from our continuing businesses. We will continue to run our
businesses well--both in terms of productivity and controlling costs. We will
maintain our financial discipline, while continuing to look for growth
opportunities. We believe double-digit growth in earnings per share through the
turn of the century will favorably affect our stock price. These accomplishments
will be due to the efforts of terrific FMC employees who bring their enthusiasm,
commitment and know-how to work every day.
/s/ Robert N. Burt /s/ Larry D. Brady
Robert N. Burt Larry D. Brady
Chairman of the Board and President
Chief Executive Officer
February 25, 1998
-4-
<PAGE>
Industry Segment Data
<TABLE>
<CAPTION>
(In millions) Year ended December 31
--------------------------------------------------