RESOLUTIONS OF THE
BOARD OF DIRECTORS OF CLARK EQUIPMENT COMPANY
---------------------------------------------
WHEREAS, Clark Equipment Company (the
"Corporation") maintains the Clark Equipment Company
Corporate Office Reduction-In-Force Policy, as amended and
restated effective 1 October 1990 (hereinafter referred to
as the "Policy"), to provide for a uniform procedure for
administering eligible salaried employee reductions so that
fair, equitable, and consistent treatment of such employees
can be assured; and
WHEREAS, the fourth paragraph of the Policy under
the caption "REFERENCES" allows the Corporation to amend
the Policy at any time; and
WHEREAS, the Board of Directors of the
Corporation deems it advisable and in the best interests of
the Corporation to amend the Policy in order to address the
concerns of Policy participants regarding job security and,
therefore, further ensure the stability of this essential
portion of the Corporation's workforce.
NOW, THEREFORE, BE IT
RESOLVED, that a new Section VIII is hereby added
to the Policy to read as follows:
"VIII. CHANGE IN CONTROL OF THE COMPANY
--------------------------------
Notwithstanding anything set forth in this Clark
Equipment Company Corporate Office Reduction-in-Force
Policy, as amended and restated effective 1 October 1990
(the "Policy"), to the contrary, in the event of a "Change
in Control" (as defined below), the terms of this Policy
shall be modified and amended to the extent set forth in
one or more appendices to the Policy (individually an
"Appendix" and collectively, the "Appendices"), if any,
that may be approved and adopted by resolution of the Board
of Directors (the "Board") of Clark Equipment Company (the
"Company") from time to time prior to any such Change in
Control. Any such Appendix shall have no force or effect
unless and until there is a Change in Control; provided,
--------
however, in the event of a Change in Control, to the extent
-------
there is any ambiguity or inconsistency between an Appendix
and any other provision of the Policy, such Appendix shall
govern.
For purposes of this Policy (including any Appendix),
"Change in Control" shall mean (i) the acquisition of
beneficial ownership of 25% or more of the shares of common
stock of the Company by or for any person (as such term is
defined in Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Act")), including for purposes of
calculating such person's ownership, all shares
beneficially owned by the affiliates and associates (as
such terms are defined in Rule 12b-2 of the Act) of such
person, provided, however, that the term "person" shall not
-------- -------
include any of the following: the Company, any subsidiary
of the Company, any employee benefit plan or employee stock
plan of the Company or of any subsidiary of the Company,
any dividend reinvestment plan of the Company, any person
or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan, or
any person which becomes the beneficial owner of 25% or
more of such shares then outstanding solely as a result of
the acquisition by the Company or any employee benefit plan
of the Company of shares of the common stock of the
Company, provided that such person does not thereafter
acquire any shares of the common stock of the Company, or
(ii) during any period of 24 consecutive months,
individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason
to constitute a majority thereof, unless the election, or
nomination for election by the Company's stockholders, of
each new director was approved by a vote of at least two-
thirds of the directors then still in office who were
directors at the beginning of such period, or (iii) the
Company's stockholders approve (a) the merger or
consolidation of the Company with or into another
corporation and the Company shall not be the surviving
corporation or (b) an agreement to sell or otherwise
dispose of all or substantially all of the Company's assets
(including a plan of liquidation)." and be it further
RESOLVED, that Appendix A to the Policy is hereby
approved and adopted and made a part of the Policy and
shall read as set forth in Exhibit 1 attached hereto; and
be it further
RESOLVED, that the foregoing resolutions are
hereby approved and adopted as amendments of the Policy;
and be it further
RESOLVED, that such amendments shall be effective
as of April 9, 1995; and be it further
-2-
RESOLVED, that the Chief Executive Officer or any
Vice President of the Corporation be, and hereby are,
authorized and directed to execute, certify, deliver and
file (or cause to be executed, certified, delivered and
filed) all such further agreements, certificates,
instruments and documents, in the name of and on behalf of
the Corporation, and to do all such further acts and things
as in their discretion they shall deem necessary,
advisable, proper and convenient to carry out the purposes
and intent of the foregoing resolutions; and be it further
RESOLVED, that the Corporation reserves the right
to amend in any manner the Policy and Appendix A or
terminate the Policy at any time prior to a Change in
Control; provided that, upon a Change in Control and at any
-------- ----
time following such Change in Control, the Policy and
Appendix A may not be amended in any manner and the Policy
may not be terminated if such amendment or termination
would adversely affect the rights of a Policy participant
or an eligible dependent or surviving spouse of such
participant under the Policy and Appendix A (as they may
have been amended prior to such Change in Control) without
the express written consent of such participant or
dependent or surviving spouse, as the case may be.
-3-
Exhibit 1
Appendix A (this "Appendix") to the Clark Equipment
Company Corporate Office Reduction-in-Force Policy, as
amended and restated effective 1 October 1990 (the
"Policy")
------------------------------------------------------
All capitalized terms not otherwise defined in this
Appendix are defined in the Policy. This Appendix forms a
part of such Policy. As used in this Appendix, "Company"
shall mean (1) Company as defined in Section VIII of the
Policy and (2) any assignee or successor in interest to
Clark Equipment Company, whether by operation of law or
otherwise.
I. Separation Pay, Welfare Benefits
and Outplacement Services
--------------------------------
A. Eligibility
-----------
Notwithstanding any provision of the Policy to the
contrary, except as provided under Paragraph B of this
Section I of this Appendix and under Section IV of this
Appendix, upon a Change in Control, any person employed at
the corporate office of Clark Equipment Company at the time
of such Change in Control, including but not limited to
each person listed on Exhibit 1-A to this Appendix whose
employment with Clark Equipment Company at the corporate
office has not been terminated prior to such Change in
Control, (all such persons referred to collectively as
"Participants" and individually as a "Participant") shall
be entitled to the payments and benefits described in each
of Paragraphs C, D and E of this Section I of this Appendix
if a "Termination Event," as hereinafter defined, occurs
with respect to such Participant within 24 months
immediately after the date of such Change in Control. A
Termination Event is deemed to have occurred with respect
to such Participant if such Participant (i) is terminated
(as a result of a layoff or otherwise) by the Company or
any subsidiary or affiliate of the Company without "Cause"
(as defined in Section V of this Appendix) or (ii)
terminates employment with the Company or any subsidiary or
affiliate of the Company within six months of "Good Reason"
(as defined in Section VI of this Appendix). Any event
described in clauses (i) and (ii) of the immediately
preceding sentence shall be referred to herein as a
"Termination Event"; provided, however, with respect to any
-------- -------
-4-
corporate officer of Clark Equipment Company at its
Corporate Office at the vice president level and above
immediately prior to a Change in Control, the term
"Termination Event" shall mean not only the events
described in clauses (i) and (ii) of the immediately
preceding sentence, but shall also mean any termination of
employment "other than for cause" (as defined in such
officer's employment agreement with the Company as in
effect immediately prior to such Change in Control)
following a Change in Control.
B. Benefits of Certain Corporate Officers
--------------------------------------
Any corporate officer of Clark Equipment Company at
its corporate office at the vice-president level and above
immediately prior to a Change in Control shall not be
eligible to receive the Severance Benefit under Paragraph C
of this Section I of this Appendix or Outplacement Benefits
under Paragraph E of this Section I of this Appendix, and
Section IV of this Appendix shall not be applicable to any
such corporate officer.
C. Separation Pay
--------------
Notwithstanding any provision under Section III of the
Policy to the contrary, if there is a Termination Event
with respect to an eligible Participant, the Company shall
pay to such Participant in a single lump sum an amount (the
"Severance Benefit") equal to: his or her base annual
salary (determined either immediately prior to the Change
in Control or immediately prior to such Termination Event,
whichever results in a higher base annual salary) divided
by fifty-two (52) and multiplied by a number equal to one
(1) plus the number of completed years of service with the
Company and its affiliates as of the date of such Termina-
tion Event and multiplied again by three (3); provided,
--------
however, such amount shall be no less than one (1) times
-------
such base annual salary and shall not exceed two (2) times
the amount of such base annual salary; and provided
--- --------
further, that such Severance Benefit shall be equal to an
-------
amount that is two times the amount of such base annual
salary in the case of (i) any participant in the Clark
Equipment Company Incentive Compensation Plan for Corporate
Office Management ("Incentive Compensation Plan")
(including but not limited to Participants listed on
Exhibit 1-A to this Appendix who are participants in the
Incentive Compensation Plan and denoted as such on such
-5-
Exhibit 1-A by an asterisk) and (ii) such other
Participants listed on Exhibit 1-A designated by an
asterisk. For purposes of the immediately preceding
sentence, a Participant shall be considered a participant
in the Incentive Compensation Plan if such Participant is a
participant in the Incentive Compensation Plan either
immediately prior to the Change in Control or immediately
prior to the Termination Event with respect to such
Participant. Such Severance Benefit shall be paid on the
date of such Termination Event as compensation for services
rendered by such Participant to the Company and its
affiliates. Such Severance Benefit shall replace any other
severance benefit that might have otherwise been provided
to such Participant under Section III of the Policy.
D. Welfare Benefit Continuation
----------------------------
Notwithstanding any provision under Section VII of the
Policy to the contrary, if there is a Termination Event
with respect to an eligible Participant and such
Participant has not attained age 55 as of the date of such
Termination Event, the Company shall provide such
Participant with benefit coverages ("Welfare Benefits")
that are no less than those benefit coverages enumerated in
Paragraphs A and B of Section VII of the Policy (as the
Policy is in effect immediately prior to the Change in
Control) (including any benefits referred to in such
paragraphs (e.g., vacation benefits) as such benefits were
----
in existence immediately prior to the Change in Control)
from the date of such Termination Event until the earliest
to occur of (i) the expiration of the two-year period
immediately following the date of such Termination Event or
(ii) the date such Participant attains age 55, or (iii) the
date such Participant obtains comparable benefit coverages
as the result of comparable employment with another
employer subsequent to such Termination Event (in each
case, the "Welfare Continuation Period"). For such Welfare
Continuation Period, such Welfare Benefits shall be
provided to such Participant at a cost to such Participant
that is no greater than the cost to such Participant
immediately prior to (a) the Change in Control or (b) the
date of such Termination Event, whichever shall result in a
lower cost to such Participant for such Welfare Benefits.
Such Welfare Benefits shall include benefit coverages for
the dependents and surviving spouse of such Participant to
the extent provided in the Company's FlexPlan as such
FlexPlan was in effect immediately prior to such Change in
Control. Welfare Benefits provided under this Paragraph D
-6-
of this Section I of this Appendix shall replace any other
welfare benefit that might have otherwise been provided to
such Participant under Paragraphs A and B of Section VII of
the Policy.
E. Outplacement Services
---------------------
Notwithstanding any provision under Section VI of the
Policy to the contrary, if there is a Termination Event
with respect to an eligible Participant, the Company shall
pay for the cost of all outplacement and/or any other
similar service that such Participant considers necessary,
in his or her sole discretion, to obtain new employment;
provided, however, that the total amount of payments for
-------- -------
such services shall not exceed fifteen (15) percent of such
Participant's base annual salary (as determined under
Paragraph C of Section I of this Appendix) (such payments
being referred to as "Outplacement Benefits"); and provided
--- --------
further, that such Outplacement Benefits must be provided
-------
by established professional outplacement firms that provide
such outplacement and/or other similar service as a regular
part of such entities' business activities. Any such
payment for Outplacement Benefits shall be made within ten
(10) business days of the Company having received a written
invoice for such services. Such Outplacement Benefits
shall replace any other benefit that might have otherwise
been provided to such Participant under Section VI of the
Policy.
II. Retirement Eligibility
----------------------
Notwithstanding any provision under Paragraph D of
Section VII of the Policy to the contrary, if there is a
Termination Event with respect to a Participant at any time
following a Change in Control and such Participant has
attained at least age 53 but not age 55 coincident with or
prior to such Termination Event, such Participant shall be
deemed to be an employee of the Company on layoff status
for up to 24 months after such Termination Event solely for
purposes of the Clark Equipment Company Retirement Program
for Salaried Employees as in effect immediately prior to
the Change in Control (the "Retirement Plan") and shall be
entitled to an early retirement benefit pursuant to Section
2.2 of the Retirement Plan upon reaching age 55 if such
Participant has completed at least ten (10) years of
credited service under the terms of the Retirement Plan as
of the date of such Termination Event; provided, however,
-------- -------
-7-
the period of time between the date of such Termination
Event and the date that such Participant attains age 55
shall not be treated as credited service under the
Retirement Plan. The benefits provided to such a
Participant under this Section II shall be referred to
herein as the "Service Benefit." Such Service Benefit
shall replace any other benefit that might have otherwise
been provided to such Participant under Paragraph D of
Section VII of the Policy.
III. Extended Welfare Benefits for Certain Participants
--------------------------------------------------
A. Eligibility
-----------
Notwithstanding any provision under the Policy or
this Appendix to the contrary, if at any time on or after a
Change in Control, (A) a Termination Event occurs with
respect to a Participant who has attained at least age 50
and has at least 4 years of service with the Company or any
affiliate or subsidiary of the Company on the date
immediately prior to such Change in Control, such
Participant shall be eligible for (i) the Welfare Benefits
provided under Paragraph D of Section I of this Appendix
and (ii) the extended Welfare Benefits provided under
Paragraph B of this Section III of this Appendix and (iii)
the Retiree Benefits Coverage (as hereinafter defined)
provided under Paragraph C of this Section III of this
Appendix and (B) a Participant who has attained at least
age 50 and has at least four years of service with the
Company or any affiliate or subsidiary of the Company on
the date immediately prior to such Change in Control and
whose employment with the Company or any affiliate or
subsidiary of the Company terminates (whether voluntarily
or involuntarily) on or after age 55 for any reason shall
be entitled to the Retiree Benefits Coverage under
Paragraph C of this Section III of this Appendix.
B. Extended Welfare Benefits
-------------------------
A Participant eligible under Paragraph A of this
Section III of this Appendix shall be entitled to Welfare
Benefits for the period from the end of the Welfare
Continuation Period or, if such Participant's Welfare
Benefits were suspended under Paragraph D of Section I of
this Appendix because such Participant had obtained
comparable employment with another employer with comparable
benefit coverages, but such coverage was subsequently
reduced or eliminated, from the date of such coverage
-8-
reduction or elimination ("Benefits Loss Date"), to the
date such Participant attains age 55 (the "Extended Benefit
Period") if such Participant has not attained age 55 as of
the end of the Welfare Continuation Period or the Benefits
Loss Date, whichever is applicable; provided, however, that
-------- -------
if such Participant obtains comparable employment with
another employer with comparable benefit coverages during
the Extended Benefit Period, such extended Welfare Benefits
shall be suspended while such Participant retains such
comparable benefit coverages; and provided further, that
--- -------- -------
during the Extended Benefit Period, such Participant shall
pay the full cost of the Welfare Benefits, the medical
benefits portion of which shall be determined for each year
as described in Exhibit 1-B to this Appendix, for such
period. Such extended Welfare Benefits shall include
benefit coverages for the dependents and surviving spouse
of such Participant to the extent provided in the Company's
FlexPlan as such FlexPlan was in effect immediately prior
to the Change in Control.
C. Retiree Benefits Coverage
-------------------------
Nothwithstanding any provision under the Policy
or this Appendix to the contrary, a Participant who has
attained at least age 50 and has at least four years of
service with the Company or any affiliate or subsidiary of
the Company on the date immediately prior to a Change in
Control shall be entitled to receive upon the later of
attaining age 55 or the termination of employment (for any
reason whether voluntarily or involuntarily) with the
Company and any affiliate or subsidiary of the Company, for
the life of such Participant, retiree medical and life
insurance benefits coverage under the Company's FlexPlan
("Retiree Benefits Coverage") which will be no less than
that which such Participant would have been eligible to
receive under the FlexPlan if such Participant had actually
retired immediately prior to such Change in Control and had
been considered for eligibility purposes under the FlexPlan
to have attained age 55 and to have completed 10 years of
credited service with the Company immediately prior to such
Change in Control, or, if greater, the actual age and/or
number of such Participant's years of credited service at
the time of such Participant's termination of employment
with the Company and its subsidiaries and affiliates. For
purposes of the immediately preceding sentence, the
Company's contribution and the Participant's contribution,
if any, to the costs of the Retiree Benefits Coverage, the
medical benefits portion of which shall be determined for
each year as described in Exhibit 1-B to this Appendix,
-9-
shall be made at the percentage or percentages which would
have been applicable to such Participant's retiree medical
and life insurance benefits coverage under the FlexPlan, as
the FlexPlan was in effect immediately prior to such Change
in Control, and as if such Participant had attained age 62
and completed 30 years of credited service immediately
prior to such Change in Control. Such Retiree Benefits
Coverage shall include benefits coverage for the dependents
and surviving spouse of such Participant to the extent
provided in the Company's FlexPlan as the FlexPlan was in
effect immediately prior to the Change in Control.
Section IV. Certain Reduction of Benefits
-----------------------------
A. Reduced Amount
--------------
Anything in this Appendix or the Policy to the
contrary notwithstanding, in the event it shall be
determined that any payment or distribution provided by the
Company or any affiliate or subsidiary of the Company to or
for the benefit of a Participant in the nature of
compensation (whether paid or payable or distributed or
distributable pursuant to the terms of this Appendix or the
Policy or otherwise) (a "Payment") would be nondeductible
by the Company or the relevant subsidiary or affiliate of
the Company for Federal income tax purposes because of
Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), then the aggregate Present Value (as
hereinafter defined) of amounts payable or distributable as
a Severance Benefit to such Participant under Paragraph C
of Section I of this Appendix shall be reduced to the
Reduced Amount (as hereinafter defined).
B. Definitions
-----------
(1) The "Reduced Amount" shall equal the amount of the
Severance Benefit payable with respect to a Participant
under Paragraph C of Section I of this Appendix (without
regard to this Section IV of this Appendix), reduced by an
amount such that the amount so reduced together with the
aggregate amount of Payments to such Participant would not
cause any Payment with respect to such Participant to be
nondeductible by the Company or the relevant subsidiary or
affiliate because of Section 280G of the Code; provided,
however, that if, after the reduction of the Severance
Benefit provided under Paragraph C of Section I of this
Appendix to zero, any Payment to such Participant would
still be nondeductible by the Company or any subsidiary or
-10-
affiliate of the Company because of Section 280G of the
Code, then the Reduced Amount shall equal zero.
(2) "Present Value" shall mean such value determined
in accordance with Section 280G(d)(4) of the Code.
C. Determinations
--------------
All determinations required to be made under this
Section IV of this Appendix shall be made at the expense of
the Company by the Company's independent auditors which
shall provide, within 5 business days of the date of the
Participant's Termination Event or such earlier time as is
requested by the Company, (i) detailed supporting
calculations both to the Company and the Participant and
(ii) an opinion to the Participant whether he or she has
substantial authority not to report any excise tax on his
or her Federal income tax return with respect to any
Payments. Any such determination by the Company's
independent auditors shall be binding upon the Company and
the Participant. Within 5 business days after such
determination, the Company shall pay, distribute or provide
to or for the benefit of the Participant such benefits as
are then due to the Participant under this Appendix and the
Policy.
D. Overpayments and Underpayments
------------------------------
As a result of the uncertainty in the application of
Section 280G of the Code at the time of the initial
determination by the Company's independent auditors
hereunder, it is possible that Payments will have been made
by the Company or the relevant subsidiary or affiliate of
the Company which should not have been made ("Overpayment")
or that Payments will not have been made by the Company or
the relevant subsidiary or affiliate of the Company which
could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made under
this Section IV of this Appendix. In the event that the
Company's independent auditors, based upon the assertion of
a deficiency by the Internal Revenue Service against the
Participant or the Company or the relevant subsidiary or
affiliate of the Company which the Company's independent
auditors believe has a high probability of success,
determine that an Overpayment has been made, any such
Overpayment paid or distributed by the Company or the
relevant subsidiary or affiliate of the Company to or for
the benefit of the Participant shall be treated for all
purposes as a loan ab initio to the Participant which the
-- ------
-11-
Participant shall repay to the Company or the relevant
subsidiary or affiliate of the Company together with
interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no
such loan shall be deemed to have been made and no amount
shall be payable to the Company or the relevant subsidiary
or affiliate of the Company if and to the extent such
deemed loan and payment would not either reduce the amount
on which the Participant is subject to tax under Section 1
and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Company's independent
auditors, based upon controlling precedent or other
substantial authority, determine that an Underpayment has
occurred, any such Underpayment shall be promptly paid by
the Company or the relevant subsidiary or affiliate of the
Company to or for the benefit of the Participant together
with interest at 120% of the applicable federal rate
provided for in Section 7872(f)(2) of the Code, compounded
semiannually. All determinations required to be made under
this Paragraph D of this Section IV of this Appendix,
including the determination of the amount of interest to be
paid pursuant to this Paragraph D of this Section IV of
this Appendix shall be made by the Company's independent
auditors at the expense of the Company.
Section V. Cause
-----
A. Definition
----------
For purposes of the Policy and this Appendix, "Cause"
shall mean willful and egregious misconduct by the
Participant in the course of his or her employment with the
Company that is demonstrably and materially injurious to
the Company. In the event that the affected Participant
and the Company cannot, within 15 days immediately
following the Termination Event with respect to the
affected Participant, agree on whether there was "Cause"
for such Participant's termination, the determination of
whether alleged grounds for termination qualify as a
termination for "Cause" shall be made by an "Arbitration
Panel" (as defined in Paragraph B of this Section V).
B. Arbitration Panel
-----------------
For purposes of this Appendix and the Policy, the term
"Arbitration Panel" shall mean three (3) independent
arbitrators, one of whom shall be selected by the Company
within 15 days immediately following the relevant
-12-
Termination Event with respect to the affected Participant,
one by the relevant Participant and the third shall be
selected by the two other arbitrators. In the event that
agreement cannot, within 15 days immediately after the two
arbitrators have been selected by the Company and the
relevant Participant, be reached on the selection of the
third arbitrator, such arbitrator shall be selected by the
American Arbitration Association. All arbitrators shall be
selected from a list provided by the American Arbitration
Association. All matters presented to the Arbitration
Panel shall be decided by majority vote. All costs of any
arbitration, including the relevant Participant's
attorneys' fees, if any, shall be paid by the Company.
Section VI. Good Reason
-----------
A. Definition
----------
For purposes of this Appendix and the Policy, "Good
Reason" means, without the relevant Participant's express
written consent, the occurrence of any of the following
events: (1) a reduction by the Company (or the relevant
subsidiary or affiliate of the Company) of the relevant
Participant's rate of annual base salary as in effect
immediately prior to the Change in Control or as such
salary may be increased from time to time thereafter, (2)
any requirement of the Company (or the relevant subsidiary
or affiliate of the Company) that the relevant Participant
(i) be based anywhere more than twenty-five (25) miles from
the facility where such Participant is based immediately
prior to the Change in Control or (ii) travel on business
to an extent substantially more burdensome than the travel
obligations of the Participant immediately prior to such
Change in Control, (3) the failure of the Company (or the
relevant subsidiary or affiliate of the Company) to (i)
continue in effect any employee benefit plan or
compensation plan in which the relevant Participant is
participating immediately prior to the Change in Control,
unless such Participant is permitted to participate in
other plans providing such Participant with substantially
comparable benefits, or (ii) provide such Participant and
such Participant's dependents with vacation, welfare and
fringe benefits (including, without limitation, medical,
prescription drug, dental, disability, salary continuance,
employee life, group life, accidental death and travel
accident insurance plans and programs) in accordance with
the most favorable plans, practices, programs and policies
of the Company, its subsidiaries and its affiliates in
-13-
effect for such Participant immediately prior to the Change
in Control, (4) the taking of any action by the Company (or
the relevant subsidiary or affiliate of the Company) which
would adversely affect such Participant's participation in,
or materially reduce such Participant's benefits under, any
applicable plan, practice, program or policy referred to in
the immediately preceding clause (3), and (5) a change by
the Company (or the relevant subsidiary or affiliate of the
Company) in the Participant's job responsibility existing
immediately prior to the Change in Control.
B. Arbitration
-----------
In the event that the affected Participant and the
Company cannot, within 15 days immediately following the
Termination Event with respect to the affected Participant,
agree on whether there was "Good Reason" for such
Participant's termination, the determination of whether
alleged grounds for termination by such Participant qualify
as termination for "Good Reason" shall be made by an
Arbitration Panel as provided for in Section V of this
Appendix.
Section VII. Termination of Policy and Appendix
----------------------------------
Upon a Change in Control and at any time following
such Change in Control, this Appendix and the Policy may
not be terminated if such termination could have an adverse
effect on the rights of any Participant or his or her
dependent or surviving spouse who is or may thereafter
become eligible for benefits under the Policy and this
Appendix without the express written consent of each such
Participant and each such dependent or surviving spouse, as
the case may be.
Section VIII. Amendment of Policy and Appendix
--------------------------------
This Appendix and the Policy may not be amended in any
manner which could have an adverse effect on the rights of
any Participant or his or her dependent or surviving spouse
who is eligible for benefits under the Policy and this
Appendix without the express written consent of each such
Participant and each such dependent or surviving spouse, as
the case may be.
-14-
Section IX. Contract Right of Participants;
-------------------------------
No Mitigation; No Setoff
------------------------
The Board of Directors of the Company intends this
Appendix and the Policy to constitute an enforceable
contract between the Company and each Participant and
intends this Appendix and the Policy to vest rights in such
Participants as third party beneficiaries. In no event
shall a Participant be obligated to seek other employment
or take any other action by way of mitigation of the
amounts payable or benefits provided to such Participant
under any of the provisions of this Appendix or the Policy
and, except as expressly provided in Paragraph D of Section
I of this Appendix and Paragraph B of Section III of this
Appendix, such amounts or benefits shall not be reduced
whether or not such Participant obtains other employment.
Except as expressly provided in Paragraph D of Section I of
this Appendix and Paragraph B of Section III of this
Appendix, the Company's obligation to make payments or
provide benefits specified by this Appendix or the Policy
to a Participant and otherwise to perform its obligations
under this Appendix or the Policy shall not be affected by
any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against
such Participant or others.
Section X. Successors and Assigns
----------------------
(a) The Appendix and the Policy shall be binding upon
the Company and upon any assignee or successor in interest
to the Company, whether by operation of law or otherwise.
This Appendix and the Policy shall not be terminated by any
merger or consolidation of the Company whereby the Company
is or is not the surviving or resulting corporation or as a
result of any transfer of all or substantially all of the
assets of the Company. In the event of any such merger,
consolidation or transfer of assets, the provisions of this
Appendix and the Policy shall be binding upon the surviving
or resulting corporation or the person or entity to which
such assets are transferred.
(b) This Appendix and the Policy shall inure to the
benefit of and be enforceable by each Participant's
personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees
and legatees. If a Participant dies while any amounts
would be payable to the Participant under this Appendix or
the Policy had the Participant continued to live, all such
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amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Appendix or the Policy to
such person or persons appointed in writing by the
Participant to receive such amounts or, if no person is so
appointed, to the Participant's estate.
Section XI. Resolution of Disputes
----------------------
If and to the extent that any dispute arising under
this Appendix or the Policy between a Participant and the
Company or any subsidiary or affiliate of the Company
cannot be resolved to the mutual satisfaction of such
parties within 15 days of the date such dispute arises,
such dispute shall be decided by an Arbitration Panel, as
provided for in Section V of this Appendix, within 60 days
of such date. The determination of such Arbitration Panel
shall be final and binding on such parties.
Section XII. Governing Law; Validity
-----------------------
This Appendix and the Policy shall be governed by the
law of the State of Indiana (regardless of the law that
might otherwise govern under applicable Indiana principles
of conflict of laws). The invalidity or unenforceability
of any provision of this Appendix or the Policy shall not
affect the validity or enforceability of any other
provision of this Appendix or the Policy, which other
provisions shall remain in full force and effect.
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EXHIBIT 1-A
Soc. Sec. # Name Soc. Sec. # Name
###-##-#### Jones, Matilda C. ###-##-#### Rosenthal, Richard J.*
###-##-#### Olson, Carol L. ###-##-#### Johnson, Robert D.*
###-##-#### Ultsch, Marjorie A. ###-##-#### Handshaw, Robert G.*
###-##-#### Rossow, Jerry C.* ###-##-#### Ruelle, Arnold J.
###-##-#### Koch, Richard C. ###-##-#### Honaker, Martin V.*
###-##-#### Cash, Claude* ###-##-#### Smart, Edward C.
###-##-#### Spenner, David W. ###-##-#### Schuck, Nancy J.
###-##-#### Runyan, Marion E. ###-##-#### Rowe, Bonnie C.
###-##-#### Boose, Nancy L. ###-##-#### Ciesiolka, Donald H.
###-##-#### Beehler, Dennis D.* ###-##-#### Shikany, Robert J.
###-##-#### Wright, Victoria L. ###-##-#### Gabriel, Lynford E.*
###-##-#### Martin, Foster A.* ###-##-#### Rajchel, Carol L.
###-##-#### Money, Johanna W. ###-##-#### West, Deborah D.
###-##-#### Myers, Harold S. ###-##-#### Young, Margaret A.
###-##-#### Dickey, Arlene G. ###-##-#### Brown, Dale A.
###-##-#### Eigeman, Laurence E. ###-##-#### Flynn, Gabriel P.*
###-##-#### Prenkert, Kirby K. ###-##-#### Schingel, Phillip W.
###-##-#### Van Horn, David L. ###-##-#### Boller, Cynthia A.
###-##-#### Morse, Irvin L., Jr.* ###-##-#### Fimbianti, Joseph P.*
###-##-#### Casto, Ruth A. ###-##-#### Hippenmeyer, Virginia A.
###-##-#### Vandenburg, Marlene L. ###-##-#### Miller, James G.
###-##-#### Walorski, Mitchell J.* ###-##-#### Tucker, Brenda S.
###-##-#### Jones, Thomas B., Jr.* ###-##-#### Hanesworth, L. Michael*
###-##-#### Garvey, Peter M.* ###-##-#### Vergon, Judith A.
###-##-#### Fouche', Charles K. ###-##-#### Sanders, Rebecca R.
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EXHIBIT 1-A
Soc. Sec. # Name Soc. Sec. # Name
###-##-#### Busse, Fred Rodney* ###-##-#### Moran, John J. Jr.*
###-##-#### Livingston, John R.* ###-##-#### Gianoli, Anthony J.*
###-##-#### McIntosh, Jacalyn K. ###-##-#### Burns, Denis M.
###-##-#### Perry, Katherine A. ###-##-#### Jones, David L.
###-##-#### Bowles, Paul R.* ###-##-#### Doepker, Thomas L.*
###-##-#### Harper, William N.* ###-##-#### Henely, Bernard D.*
###-##-#### McKernan, Leo J.* ###-##-#### Sims, Frank M.*
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EXHIBIT 1-B
-----------
DETERMINATION OF COST FOR POSTEMPLOYMENT MEDICAL BENEFITS
Cost will mean gross incurred claims from the previous
calendar year on a per capita basis according to former
employee or dependent status after proper separation of
gross incurred claims by Medicare eligibility date.
Specifically, four per capita claims costs will be
identified from the following calculations and used as
costs:
Former Employee, Pre-Medicare Eligibility Cost = A + B
A = Gross incurred claims before Medicare eligibility date
from previous calendar year for all pre-Medicare
eligible retirees only retired after 8/1/86.
B = Number of retirees (after 8/1/86), eligible to file
claims under the plan in the previous year but not
eligible for Medicare, with partial counting of
retirees who become Medicare eligible during the year
or become newly eligible during the year pro rata for
the portion of the year before Medicare eligibility.
Dependent, Pre-Medicare Cost = C + D
C = Gross incurred claims before Medicare eligibility date
from previous calendar year for all pre-Medicare
eligible dependents of retirees after 8/1/86.
D = Number of dependents (of retirees after 8/1/86),
eligible to file claims under the plan in the previous
year but not eligible for Medicare, with partial
counting of dependents who become Medicare eligible
during the year or become newly eligible during the
year pro rata for the portion of the year before
Medicare eligibility.
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EXHIBIT 1-B (continued)
-----------------------
Former Employee, Post-Medicare Eligibility Cost = E + F
E = Gross incurred claims after Medicare eligibility date
from previous calendar year for all post-Medicare
eligible retirees only retired after 8/1/86.
F = Number of retirees (after 8/1/86), eligible to file
claims under the plan and under Medicare in the
previous year with partial counting of retirees who
become Medicare eligible during the year or become
newly eligible during the year pro rata for the
portion of the year after Medicare eligibility.
Dependent, Post-Medicare Cost = G + H
G = Gross incurred claims after Medicare eligibility date
from previous calendar year for all post-Medicare
eligible dependents of retirees after 8/1/86.
H = Number of dependents (of retirees after 8/1/86),
eligible to file claims under the plan and under
Medicare in the previous year with partial counting of
dependents who become Medicare eligible during the
year or become newly eligible during the year pro rata
for the portion of the year after Medicare
eligibility.
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