As filed with the Securities and Exchange Commission on August 1, 2001
Commission File No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
WOODWARD GOVERNOR COMPANY
(Exact name of issuer as specified in its charter)
Delaware 36-1984010
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5001 North Second Street
Rockford, Illinois 61111
(Address of principal executive offices)
WOODWARD GOVERNOR COMPANY EXECUTIVE BENEFIT PLAN
(Full title of the plan)
John A. Halbrook COPIES OF COMMUNICATIONS TO:
Chairman and Chief Executive Officer Steven L. Clark
5001 North Second Street Chapman and Cutler
Rockford, Illinois 61111 111 West Monroe Street
(815) 877-7441 Chicago, Illinois 60603
(Name, address and telephone (312) 845-3000
number of agent for service)
-----------------------------
CALCULATION OF REGISTRATION FEE
===============================================================================================
TITLE OF SECURITIES AMOUNT PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED TO BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED OFFERING AGGREGATE FEE
PRICE PER OFFERING
UNIT(1) PRICE
-----------------------------------------------------------------------------------------------
Deferred Compensation Obligations(2) $20,000,000 100% $20,000,000 $5000.00
===============================================================================================
----------------------------
(1) Estimated pursuant to Rule 457 of the General Rules and Regulations
under the Securities Act of 1933 solely for the purpose of computing
the registration fee.
(2) The Deferred Compensation Obligations are unsecured obligations of the
Registrant to pay deferred compensation in the future in accordance
with the terms of the Woodward Governor Company Executive Benefit Plan.
PART II -- INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents which have been filed with the Commission by
Woodward Governor Company, a Delaware corporation (the "COMPANY"), are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 2000;
(b) The Company's Quarterly Report on Form 10-Q for the period
ended December 31, 2000; and
(c) The Company's Quarterly Report on Form 10-Q for the period
ended March 31, 2001.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of filing such documents.
The Company undertakes to provide without charge to each person to whom
a copy of the Prospectus relating to this Registration Statement has been
delivered, upon the written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated in
such Prospectus by reference, other than exhibits to such documents. Requests
for such copies should be directed to Woodward Governor Company, 5001 North
Second Street, Rockford, Illinois 61111, Attention: Carol J. Manning (815)
877-7441.
Item 4. Description of Securities
The securities being offered hereby are Deferred Compensation
Obligations (the "OBLIGATIONS"). Pursuant to the Woodward Governor Company
Executive Benefit Plan, effective as of January 1, 2001 (the "PLAN"), the
Company will provide individuals selected by the administrator of the Plan
("PARTICIPANTS") the opportunity to defer payment of a specified portion of
their cash compensation. The amount of compensation to be deferred will be
determined by the elections of Participants in accordance with the Plan.
Participants will be able to choose from a variety of hypothetical investment
options including the Company's common stock. However, notwithstanding the
participant's elections, the Company reserves the right to allocate the value of
participant accounts among the various hypothetical investments as deemed
appropriate in its sole discretion. The Company will keep a bookkeeping account
of the value of Participants' deferred compensation and the account will be
indexed to the investment options chosen by each Participant. While the
Obligations will not actually be invested, the accounts will reflect investment
earnings, gains and losses of the selected investment options.
II-1
The Obligations are payable in cash in accordance with a payment
schedule to be selected by individual Participants in accordance with the Plan.
The Obligations will be unsecured obligations of the Company ranking equally
with other unsecured, unsubordinated indebtedness of the Company.
The Company reserves the right to amend or terminate the Plan at any
time, provided that amendment or termination will not result in a reduction of
the account balances of Participants. If the Plan is terminated while a
Participant or Participant's beneficiary is receiving benefits under the Plan,
the balance of Participant's account will be paid out in a lump sum. The Plan
does not provide loans and Participant's rights to the Obligations may not be
used as collateral or assigned.
Item 5. Interest of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL"), sets
forth the conditions and limitations governing the indemnification of officers,
directors, and other persons.
The Certificate of Incorporation and Bylaws of the Company provide for
indemnification by the Company of certain persons (including officers and
directors) in connection with any action, suit or proceeding brought or
threatened against such person by reason of his position with the Company or
service at the request of the Company. The Bylaws further provide that
indemnification shall not be exclusive of any rights to which those indemnified
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 145(g) of the DGCL and Article VII, Section(h) of the Bylaws
also authorize the Company to purchase and maintain insurance on behalf of any
director, officer, employee or agent of the Company against any liability
asserted against or incurred by them in such capacity or arising out of their
status as such whether or not the Company would have the power to indemnify such
director, officer, employee or agent against such liability under the applicable
provisions of the DGCL or the Bylaws. The Company currently maintains a
directors' and officers' liability policy to insure its liability under the
above-described provisions and to insure its individual directors and officers
against certain obligations not covered by such provisions.
Item 8. Exhibits
See List of Exhibits on page II-6 hereof.
Item 9. Undertakings
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
II-2
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"SECURITIES ACT");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rockford, State of Illinois, on July 25, 2001.
WOODWARD GOVERNOR COMPANY
By /s/ John A. Halbrook
------------------------------------
John A. Halbrook
Chairman and Chief Executive Officer
(Principal executive officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, John A. Halbrook
and Stephen P. Carter and each of them, as his true and lawful attorney-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying, and conforming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
/s/ Stephen P. Carter Vice President, Chief Financial Officer and July 25, 2001
--------------------- Treasurer
Stephen P. Carter
/s/ J. Grant Beadle Director July 25, 2001
---------------------
J. Grant Beadle
/s/ Vern H. Cassens Director July 25, 2001
---------------------
Vern H. Cassens
II-4
SIGNATURES TITLE DATE
/s/ Paul Donovan Director July 25, 2001
---------------------
Paul Donovan
/s/ Lawrence E. Gloyd Director July 25, 2001
---------------------
Lawrence E. Gloyd
/s/ John A. Halbrook Director July 25, 2001
---------------------
John A. Halbrook
/s/ Thomas W. Heenan Director July 25, 2001
---------------------
Thomas W. Heenan
/s/ Rodney O'Neal Director July 25, 2001
---------------------
Rodney O'Neal
/s/ J. Peter Jeffrey Director July 25, 2001
---------------------
J. Peter Jeffrey
/s/ Michael H. Joyce Director July 25, 2001
---------------------
Michael H. Joyce
Director _______, 2001
---------------------
Lou L. Pai
/s/ Michael T. Yonker Director July 25, 2001
---------------------
Michael T. Yonker
II-5
EXHIBIT DESCRIPTION PAGE NUMBER IN
NUMBER SEQUENTIAL
NUMBERING SYSTEM
4.1 Woodward Governor Company Executive Benefit Plan..........
4.2 First Amendment to the Woodward Governor Company
Executive Benefit Plan dated April 26, 2001...............
4.3 Specimen Certificate (incorporated by reference from the
Company's Form A-2 (File No. 2-4446) filed with the
Commission on June 28, 1940)..............................
5.1 Opinion of Chapman and Cutler regarding legality of the
Deferred Compensation Obligations.........................
23.1 Consent of Chapman and Cutler (included in Exhibit 5.1)...
23.2 Consent of PricewaterhouseCoopers LLP.....................
25.1 Power of Attorney (set forth on page II-4 of this
Registration Statement)...................................
II-6
EXHIBIT 4.1
WOODWARD GOVERNOR COMPANY
EXECUTIVE BENEFIT PLAN
EFFECTIVE JANUARY 1, 2001
TABLE OF CONTENTS
PAGE
I. PURPOSE AND EFFECTIVE DATE...............................................................1
1.1. Purpose.............................................................................1
1.2. Effective Date......................................................................1
1.3. Continuation and Combination of Two Prior Plan......................................1
II. DEFINITIONS..............................................................................1
2.1. "Account"...........................................................................1
2.2. "Administrator".....................................................................2
2.3. "Affiliate".........................................................................2
2.4. "Base Salary".......................................................................2
2.5. "Beneficiary".......................................................................2
2.6. "Board".............................................................................2
2.7. "Bonus".............................................................................2
2.8. "Change in Control".................................................................2
2.9. "Code"..............................................................................4
2.10. "Company"...........................................................................4
2.11. "Deferral Contribution Amounts".....................................................5
2.12. "Deferral Election".................................................................5
2.13. "Disability"........................................................................5
2.14. "Distribution Election".............................................................5
2.15. "Early Retirement Date".............................................................5
2.16. "Election Period"...................................................................5
2.17. "Eligible Member"...................................................................5
2.18. "Exchange Act"......................................................................5
2.19. "FICA"..............................................................................5
2.20. "Investment Fund or Funds"..........................................................5
2.21. "Normal Retirement Date"............................................................5
2.22. "Participant".......................................................................5
2.23. "Plan"..............................................................................6
2.24. "Plan Year".........................................................................6
2.25. "Prior Account Balance".............................................................6
2.26. "Retirement"........................................................................6
2.27. "Supplemental Benefit Amounts"......................................................6
2.28. "Supplemental MISOP Amount".........................................................6
2.29. "Supplemental RIP Amount"...........................................................6
2.30. "Valuation Date"....................................................................6
III. PARTICIPATION............................................................................7
3.1. Participation.......................................................................7
3.2. ERISA Exemption.....................................................................7
IV. DEFERRAL CONTRIBUTION AMOUNTS............................................................7
4.1. Permissible Deferrals under the Plan................................................7
4.2. Deferral Elections..................................................................8
4.3. Crediting of Deferral Elections.....................................................9
4.4. Vesting.............................................................................9
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.5. Deferred Contribution Amounts Subject to FICA at Time of Deferral...................9
V. SUPPLEMENTAL BENEFIT AMOUNTS.............................................................9
5.1. Computation of Supplemental Benefit Amounts.........................................9
5.2. Vesting............................................................................10
5.3. Crediting of Supplemental Benefit Amounts..........................................10
VI. ACCOUNTS AND INVESTMENTS................................................................10
6.1. Valuation of Accounts..............................................................10
6.2. Hypothetical Investment Funds......................................................11
6.3. Crediting of Investment Return.....................................................11
6.4. Changing Investment Fund Options...................................................11
6.5. Investment Alternatives After Death................................................12
VII. PAYMENT OF BENEFITS.....................................................................12
7.1. Distribution at Specific Future Date...............................................12
7.2. Distribution Upon Retirement or Disability.........................................12
7.3. Distribution On Other Termination of Employment....................................13
7.4. Unscheduled Withdrawal.............................................................13
7.5. Unforeseeable Emergency............................................................13
7.6. Time and Form of Elections.........................................................14
7.7. Form of Payment and Withholding....................................................14
VIII. DEATH BENEFITS..........................................................................14
8.1. Death Prior to Commencement of Benefits............................................14
8.2. Death After Commencement of Benefits...............................................14
8.3. Administrator Discretion Regarding Form............................................14
IX. ADMINISTRATION..........................................................................15
9.1. Authority of Administrator.........................................................15
9.2. Participant's Duty to Furnish Information..........................................15
9.3. Interested Member of Administrator.................................................15
9.4. Indemnification....................................................................15
9.5. Claims Procedure...................................................................15
X. AMENDMENT AND TERMINATION...............................................................16
XI. MISCELLANEOUS...........................................................................16
11.1. No Implied Rights; Rights on Termination of Service................................16
11.2. No Employment Rights...............................................................16
11.3. Nature of the Plan.................................................................17
11.4. Nontransferability.................................................................17
11.5. Successors and Assigns.............................................................17
11.6. Payment with Respect to Incapacitated Persons......................................18
11.7. Arbitration........................................................................18
11.8. Gender and Number..................................................................18
11.9. Headings...........................................................................18
11.10. Severability.......................................................................18
11.11. Effect on Other Employee Benefit Plans.............................................19
11.12. Non-U.S. Participants..............................................................19
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TABLE OF CONTENTS
(CONTINUED)
PAGE
11.13. Applicable Law.....................................................................19
Exhibit A........................................................................................20
INVESTMENT FUNDS UNDER THE WOODWARD GOVERNOR COMPANY EXECUTIVE BENEFIT PLAN........20
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WOODWARD GOVERNOR COMPANY
EXECUTIVE BENEFIT PLAN
I. PURPOSE AND EFFECTIVE DATE.
1.1. PURPOSE. The Woodward Governor Company Executive Benefit Plan
has been established by Woodward Governor Company to attract
and retain certain key members by:
(a) providing a tax-deferred capital accumulation vehicle
to supplement such members' individual retirement
contributions, thereby encouraging savings for
retirement, and
(b) supplementing such members' retirement income,
available under the Woodward Governor Company
Retirement Income Plan (the "RIP") and the Woodward
Governor Company Member Investment and Stock
Ownership Plan (the "MISOP"), which is otherwise
limited pursuant to the rules and regulations of the
Internal Revenue Code of 1986, as amended.
1.2. EFFECTIVE DATE. The Plan shall be effective January 1, 2001
and shall remain in effect until terminated in accordance with
Article X.
1.3. CONTINUATION AND COMBINATION OF TWO PRIOR PLAN. The Plan is
intended to be:
(a) an amendment, restatement and continuation of the
Woodward Governor Company Amended and Restated
Unfunded Deferred Compensation Plan No.1 (the "DC
Plan No. 1"),
(b) an amendment, restatement and continuation of the
Woodward Governor Company Unfunded Deferred
Compensation Plan No. 2 (the "DC Plan No. 2), and
(c) the merger and combination of the DC Plan No. 1 and
the DC Plan No. 2 into this single plan for ease in
the Company's administration.
II. DEFINITIONS.
When used in the Plan and initially capitalized, the following words
and phrases shall have the meanings indicated:
2.1. "ACCOUNT" means the recordkeeping account established for each
Participant in the Plan for purposes of accounting for the
amount of the Participant's:
(a) Deferral Contribution Amounts deferred and credited
in accordance with Article IV each year, if any,
(b) Supplemental Benefit Amounts determined and credited
in accordance with Article V each year, if any, and
(c) account balance, if any, under the prior DC Plan No.
1 and/or prior DC Plan No. 2 on the day immediately
preceding the effective date of this Plan,
all adjusted periodically to reflect the hypothetical
investment return on such amounts in accordance with Article
VI.
2.2. "ADMINISTRATOR" means the Compensation Committee or such other
individual or committee appointed and delegated by the Board
to administer the Plan in accordance with Article IX. To the
extent so delegated, the term "Administrator" hereunder shall
be deemed to refer to such individual or committee. The
Compensation Committee shall take such actions it deems
necessary or desirable to ensure that such individual or
committee has sufficient and appropriate authority for
carrying out the intent and purpose of the Plan.
2.3. "AFFILIATE" means:
(a) any corporation, partnership, joint venture, trust,
association or other business enterprise which is a
member of the same controlled group of corporations,
trades or businesses as the Company within the
meaning of Code Section 414, and
(b) any other entity that is designated as an Affiliate
by the Board.
2.4. "BASE SALARY" means a Participant's base salary in effect for
a given year as reflected in the personnel records of the
Company.
2.5. "BENEFICIARY" means the person or entity designated by the
Participant to receive the Participant's Plan benefits in the
event of the Participant's death. If the Participant does not
designate a Beneficiary, or if the Participant's designated
Beneficiary predeceases the Participant, the Participant's
estate shall be the Beneficiary under the Plan.
2.6. "BOARD" means the Board of Directors of the Company.
2.7. "BONUS" means any incentive compensation awarded to a
Participant for a given year under the Woodward Governor
Company Annual Incentive Compensation Plan and/or the Woodward
Governor Company Long-Term Incentive Compensation Plan.
2.8. "CHANGE IN CONTROL" shall be deemed to have occurred if:
2
(a) any "person" (as defined in Section 13(d) and 14(d)
of the Exchange Act) (excluding for this purpose the
Company or any subsidiary of the Company, or any
employee benefit plan of the Company or any
subsidiary of the Company, or any person or entity
organized, appointed or established by the Company
for or pursuant to the terms of such plan which
acquires beneficial ownership of voting securities of
the Company) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act)
directly or indirectly of securities of the Company
representing fifteen percent (15%) or more of the
combined voting power of the Company's then
outstanding securities; provided, however, that no
Change in Control shall be deemed to have occurred:
(i) as the result of an acquisition of
securities of the Company by the Company
which, by reducing the number of voting
securities outstanding, increases the direct
or indirect beneficial ownership interest of
any person to fifteen percent (15%) or more
of the combined voting power of the
Company's then outstanding securities, but
any subsequent increase in the direct or
indirect beneficial ownership interest of
such a person in the Company shall be deemed
a Change in Control; or
(ii) as a result of the acquisition directly from
the Company of securities of the Company
representing less than fifty percent (50%)
of the voting power of the Company; or
(iii) if the Board determines in good faith that a
person who have become the beneficial owner
directly or indirectly of securities of the
Company representing fifteen percent (15%)
or more of the combined voting power of the
Company's then outstanding securities has
inadvertently reached that level of
ownership interest, and if such person
divests as promptly as practicable a
sufficient amount of securities of the
Company so that the person no longer has a
direct or indirect beneficial ownership
interest in fifteen percent (15%) or more of
the combined voting power of the Company's
then outstanding securities; or
(b) during any period of two (2) consecutive years (not
including any period prior to the effective date (as
set forth in Section 1.2 above) of the Plan),
individuals who at the beginning of such two-year
period constitute the Board and any new director or
directors (except for any director designated by a
person who has entered into an agreement with the
Company to effect a transaction described in
subparagraph (a) above or subparagraph (c) below)
whose election by the Board or nomination for
election
3
was previously so approved, cease for any reason to
constitute at least a majority of the Board (such
individuals and any such new directors being referred
to as the "Incumbent Board"); or
(c) approval by the shareholders of the company of a
complete liquidation or dissolution of the Company;
or
(d) consummation of:
(i) an agreement for the sale or disposition of
the Company or all or substantially all of
the Company's assets,
(ii) a plan of merger or consolidation of the
Company with any other corporation, or
(iii) a similar transaction or series of
transactions involving the Company (any
transaction described in subparagraphs (i)
and (ii) or this paragraph (d) being
referred to as a "Business Combination"), in
each case unless after such a Business
Combination:
(a) the shareholders of the Company
immediately prior to the Business
Combination continue to own,
directly or indirectly, more than
fifty-one percent (51%) of the
combined voting power of the then
outstanding voting securities
entitled to vote generally in the
election of directors of the new
(or continued) entity (including,
but not by way of limitation, an
entity which as a result of such
transaction owns the Company or all
or substantially all of the
Company's former assets either
directly or through one or more
subsidiaries) immediately after
such Business Combination, in
substantially the same proportion
as their ownership in the Company
immediately prior to such Business
Combination, and
(b) at least a majority of the members
of the board of directors of the
entity resulting from such Business
Combination 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.
2.9. "CODE" means the Internal Revenue Code of 1986, as amended.
2.10. "COMPANY" means Woodward Governor Company and any successor
thereto.
4
2.11. "DEFERRAL CONTRIBUTION AMOUNTS" means the amounts of Base
Salary and Bonus deferred by a Participant, if any, and
credited to his or her Account in accordance with Article IV
but such amounts specifically and expressly do not include any
Prior Account Balance of such Participant.
2.12. "DEFERRAL ELECTION" means the written election made by an
Eligible Member to defer such Eligible Member's Base Salary
and/or Bonus for any given year in accordance with Article IV.
2.13. "DISABILITY" means Disability as defined in the Woodward
Governor Company Long-Term Disability Plan.
2.14. "DISTRIBUTION ELECTION" means the written election made by a
Participant regarding the form of payment distribution of his
or her Account in accordance with Article VII.
2.15. "EARLY RETIREMENT DATE" means the date on which any Plan
Participant retires from active employment with the Company or
any Affiliate on or after he has attained age 55 but before he
has attained age 65.
2.16. "ELECTION PERIOD" means the period specified by the
Administrator during which a Deferral Election may be made
with respect to a Participant's Base Salary and/or Bonus
payable for a Plan Year.
2.17. "ELIGIBLE MEMBER" means a member of the Company or an
Affiliate who has been selected by the Administrator to
participate in the Plan in accordance with Article III.
2.18. "EXCHANGE ACT" means the Securities and Exchange Act of 1934.
2.19. "FICA" means the employment tax imposed on a member's income
under the Federal Insurance Contributions Act (Chapter 21 of
the Code) which is comprised of Old-Age, Survivors and
Disability Insurance and Hospital Insurance
2.20. "INVESTMENT FUND OR FUNDS" means the investment funds
designated by the Administrator as the basis for determining
the hypothetical investment return to be credited in
accordance with Article VI to Participants' Accounts.
Initially, the Investment Funds shall mirror the available
investment funds under the MISOP, as set forth on the attached
Exhibit A. Thereafter, the Administrator may change the
Investment Funds at such times as it deems appropriate.
2.21. "NORMAL RETIREMENT DATE" means the date on which any Plan
Participant retires from active employment with the Company or
any Affiliate on or after he has attained age 65.
2.22. "PARTICIPANT" means an Eligible Member who has:
5
(a) been notified by the Administrator of his eligibility
to participate in the Plan, and
(b) either:
(i) completed and submitted a Deferral Election
in accordance with Section 4.2, or
(ii) had credited to his Account, by the Company,
Supplemental Benefit Amounts in accordance
with Article V, or
(iii) had an account balance under the prior DC
Plan No. 1 and/or the prior DC Plan No. 2 on
the day immediately preceding the effective
date of this Plan.
2.23. "PLAN" means the Woodward Governor Company Executive Benefits
Plan, as amended from time to time.
2.24. "PLAN YEAR" means the 12 consecutive month period beginning
each January 1.
2.25. "PRIOR ACCOUNT BALANCE" means an Eligible Member's account
balance(s), if any, under the prior DC Plan No. 1 and/or prior
DC Plan No. 2 which were transferred to this Plan by the
Company and credited to his Account pursuant to Section
3.1(B)(3).
2.26. "RETIREMENT" means termination of employment by a Participant
by reason of retiring from active employment with the Company
or any Affiliate on his Early Retirement Date or Normal
Retirement Date.
2.27. "SUPPLEMENTAL BENEFIT AMOUNTS" means the amounts computed on
behalf of the Participant, if any, and credited to his or her
Account in accordance with Article V which represents the sum
of the Participant's Supplemental MISOP Amounts and
Supplemental RIP Amounts.
2.28. "SUPPLEMENTAL MISOP AMOUNT" means that portion of the
Supplemental Benefit Amounts computed under Section 5.1(b) of
the Plan specifically pertaining to the MISOP and credited to
the Participant's Account in accordance with Article V.
2.29. "SUPPLEMENTAL RIP AMOUNT" means that portion of the
Supplemental Benefit Amounts computed under Section 5.1(a) of
the Plan specifically pertaining to the RIP and credited to
the Participant's Account in accordance with Article V.
2.30. "VALUATION DATE" means a date on which the Investment Funds
are valued and the Participant's Account is adjusted for any
resulting gains or losses. The Administrator shall determine
the Valuation Date and such date shall be at least once every
calendar year.
6
III. PARTICIPATION.
3.1. PARTICIPATION. The Administrator shall select those members
eligible to participate in the Plan. In selecting Eligible
Members, the Administrator shall take into consideration such
factors as it deems relevant in connection with accomplishing
the purposes of the Plan. An Eligible Member shall become a
Participant in the Plan when (A) he is notified in writing by
the Administrator that he is eligible to participate in the
Plan, and (B) he has either (1) completed and submitted a
Deferral Election to the Administrator in accordance with
Article IV, or (2) had credited to his Account, by the
Company, Supplemental Benefit Amounts in accordance with
Article V, or (3) had credited to his Account, by the Company,
his account balance, if any, under the prior DC Plan No. 1
and/or the prior DC Plan No. 2 on the day immediately
preceding the effective date of this Plan.
3.2. ERISA EXEMPTION. It is the intent of the Company that the Plan
be exempt from Parts 2, 3 and 4 of Subtitle B of Title I of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), as an unfunded plan that is maintained by
the Company primarily for the purpose of providing deferred
compensation for a select group of management of highly
compensated employees (the "ERISA Exemption"). Notwithstanding
anything to the contrary in Section 3.1 or in any other
provision of the Plan, the Administrator may in its sole
discretion exclude any one or more members from eligibility to
participate or from participation in the Plan, may exclude any
Participant from continued participation in the Plan, and may
take any further action (including the immediate payment of
the Participant's entire interest under the Plan in a
lump-sum) it considers necessary or appropriate if the
Administrator reasonably determines in good faith that such
exclusion or further action is necessary in order for the Plan
to qualify for, or to continue to qualify for, the ERISA
Exemption.
IV. DEFERRAL CONTRIBUTION AMOUNTS.
4.1. PERMISSIBLE DEFERRALS UNDER THE PLAN. An Eligible Member may
elect to defer:
(a) DEFERRAL OF BASE SALARY: up to 50% of his or her Base
Salary for a Plan Year, in increments of 1%,
provided, however, that any election to defer over
30% of Base Salary must be approved in advance by the
Administrator, and
(b) DEFERRAL OF BONUS: up to 100% of his or her Bonus for
a Plan Year, in increments of 25%,
by filing a Deferral Election in accordance with Section 4.2
below.
7
4.2. DEFERRAL ELECTIONS. A Participant's Deferral Election shall be
in writing, and shall be filed with the Administrator at such
time and in such manner as the Administrator shall provide,
subject to the following:
(a) A Deferral Election pertaining to Base Salary and/or
Bonus shall be made during the election period
established by the Administrator which shall end no
later than December 31 preceding the first day of the
Plan Year in which such Base Salary and/or Bonus
would otherwise be payable.
(b) At the discretion of the Administrator, a Deferral
Election may be made by
(i) newly-hired Eligible Members for the Plan
Year in which they commence employment,
(ii) a member who becomes an Eligible Member
after the beginning of a Plan Year for the
Plan Year in which they become an Eligible
Member.
Notwithstanding the preceding sentence, such Deferral
Elections must be made within thirty (30) days of
their date of hire or the date the member becomes an
Eligible Member, whichever applies. However, such
Deferral Elections shall be prospective and shall
apply only to Base Salary and/or Bonus that would
otherwise be paid to the Eligible Member after the
Deferral Election is made.
(c) Deferral Elections shall be expressed as a percentage
of Base Salary or Bonus, within the limits provided
under the Plan.
Once made, a Deferral Election for:
(A) Base Salary shall remain in effect for all
subsequent Plan Years unless changed or
revoked by the Participant in accordance
with rules established by the Administrator,
and
(B) Bonus shall remain in effect only for the
Plan Year for which such Bonus Deferral
Election was made.
Any such modification or revocation with respect to Base
Salary shall be effective for the Plan Year following the Plan
Year in which it is made. Notwithstanding anything to the
contrary, any revocation for Base Salary and/or Bonus shall
become effective as soon as practicable in the event it is
made because of the Participant's Disability or if the
Administrator, in its sole discretion, determines that the
Participant has suffered a severe financial hardship or a bona
fide administrative mistake was made. If a Deferral Election
is revoked in accordance with any of the foregoing, the
Participant may not make a new Deferral Election
8
until the election period established by the Administrator for
making deferrals for the next Plan Year.
4.3. CREDITING OF DEFERRAL ELECTIONS. The amount of Base Salary and
Bonus that a Participant elects to defer under the Plan shall
be credited by the Company to the Participant's Account as
Deferral Contribution Amounts as of the date such Base Salary
or such Bonus would have been paid to the Participant absent
the Deferral Election.
4.4. VESTING. A Participant's Deferral Contribution Amounts for
each Plan Year shall be fully vested at the time credited to
such Participant's Account.
4.5. DEFERRED CONTRIBUTION AMOUNTS SUBJECT TO FICA AT TIME OF
DEFERRAL. A Participant's Deferred Contribution Amounts are
subject to FICA at the time the amounts are contributed to the
Plan for deferral. The gross amount of the Participant's Base
Salary deferral and Bonus deferral will be contributed to the
Participant's Account and the corresponding FICA tax due will
be deducted from that portion of the Participant's Base Salary
or Bonus not deferred, as the case may be. Notwithstanding the
foregoing, if a Participant has elected to defer a percentage
of his or her Bonus such that contribution of the gross amount
of the Bonus deferred would leave insufficient funds to remit
the applicable FICA tax to the government, then the applicable
Bonus amount contributed to the Participant's Account shall be
made net of the smallest amount of FICA tax needed to satisfy
such liability which cannot be covered from the portion of
Bonus not deferred.
V. SUPPLEMENTAL BENEFIT AMOUNTS.
5.1. COMPUTATION OF SUPPLEMENTAL BENEFIT AMOUNTS. An Eligible
Member designated by the Administrator for participation under
the Plan shall be entitled to a Supplemental Benefit Amount
for each Plan Year that he is an Eligible Member which is
equal to the sum of:
(a) SUPPLEMENTAL BENEFIT RELATING TO THE RIP: the excess,
if any, of:
(i) the benefit the Participant otherwise would
have been entitled to have credited to a
separate account for his benefit under the
RIP for a given year if such benefit was
calculated without regard to the following:
(A) Code Section 415,
(B) Code Section 401(a)(17), and
(C) any Deferral Election made by the
Participant for such given year
under Article IV of this Plan, OVER
9
(ii) the accrued benefit which the Participant is
entitled to have credited to a separate
account for his benefit for such given year
under the RIP, PLUS
(b) SUPPLEMENTAL BENEFIT RELATING TO THE MISOP: the
excess, if any, of:
(i) the benefit the Participant otherwise would
have been entitled to have credited to a
separate account for his benefit under the
MISOP for a given year if such benefit was
calculated without regard to the following:
(A) Code Section 415,
(B) Code Section 401(a)(17),
(C) Code Section 401(k)(3),
(D) Code Section 401(m)(2), and
(E) Code Section 402(g), OVER
(ii) the actual benefit which the Participant is
entitled to have credited to a separate
account for his benefit for such given year
under the MISOP.
5.2. VESTING. A Participant's Supplemental Benefit Amounts
calculated by the Company for each Plan Year shall be fully
vested at the time credited to such Participant's Account.
5.3. CREDITING OF SUPPLEMENTAL BENEFIT AMOUNTS. The Supplemental
Benefit Amounts computed in Section 5.1 above for each Plan
Year shall be credited by the Company to the Participant's
Account as soon as reasonably practicable.
VI. ACCOUNTS AND INVESTMENTS.
6.1. VALUATION OF ACCOUNTS. The Administrator shall establish an
Account for each Participant who:
(a) has filed a Deferral Election to defer Base Salary
and/or Bonus, or
(b) has been credited with a Supplemental Benefit Amount,
or
(c) has a Prior Account Balance on the effective date of
this Plan.
Such Account shall be credited with a Participant's Deferral
Contribution Amounts and Supplemental Benefit Amounts as set
forth in Sections 4.3 and 5.3,
10
respectively, and with the Participant's Prior Account
Balance, if any. As of each Valuation Date, the Participant's
Account shall be adjusted upward or downward to reflect:
(i) the investment return to be credited as of such
Valuation Date pursuant to Section 6.3 below,
(ii) the amount of distributions, if any, to be debited as
of that Valuation Date under Article VII, and
(iii) the amount of forfeitures, if any, to be debited
under Section 7.4(a).
6.2. HYPOTHETICAL INVESTMENT FUNDS. Each Participant generally may
direct the manner in which his or her Deferral Contribution
Amounts, Supplemental MISOP Amounts, if any, and/or Prior
Account Balance, if any, shall be deemed invested in and among
the Investment Funds; provided, however, that each investment
election made by a Participant shall, notwithstanding anything
to the contrary in the Plan, be strictly subject to the
consent of the Administrator which, in its sole discretion,
may elect to honor the Participant's request or have the
Account deemed invested in another manner. Such deemed
investment election shall be made in accordance with such
procedures as the Administrator shall establish and any such
election shall be made in whole percentages. The investment
authority shall remain at all times with the Administrator.
The selection of Investment Funds by a Participant shall be
for the sole purpose of determining the rate of return to be
credited to his or her Account and shall not be treated or
interpreted in any manner whatsoever as a requirement or
direction to actually invest assets in any Investment Fund or
any other investment media.
6.3. CREDITING OF INVESTMENT RETURN. Each Participant's Account
shall be credited on each Valuation Date with his or her
allocable share of investment gains or losses of each
Investment Fund in which his or her Deferral Contribution
Amounts, Supplemental MISOP Amounts, if any, and/or Prior
Account Balance, if any, are hypothetically invested. The
Administrator shall adopt a protocol for allocating the deemed
investment gains and losses similar to that used in the MISOP.
Notwithstanding anything to the contrary, if a Participant
elects to invest in the hypothetical Investment Fund for
Woodward Governor Company Common Stock, such Participant's
Account shall also be credited with any deemed dividends paid
during the period beginning with the immediately preceding
Valuation Date and ending with the current Valuation Date.
6.4. CHANGING INVESTMENT FUND OPTIONS. Subject to any exceptions
set forth on Exhibit A, a Participant may, on a daily basis,
make a new election with respect to the hypothetical
Investments Funds in which his or her Deferral Contribution
Amounts, Supplemental MISOP Amounts, if any, and/or Prior
Account Balance,
11
if any, shall be deemed invested in the future. Any such
election shall be made in the form specified by the
Administrator.
6.5. INVESTMENT ALTERNATIVES AFTER DEATH. For periods after the
Valuation Date coincident with or following a Participant's
death and pursuant to procedures established by the
Administrator, the Participant's Account balance pertaining to
Deferral Contribution Amounts, Supplemental MISOP Amounts, if
any, and/or Prior Account Balance, if any, shall be
reallocated and reinvested among the Investment Funds in
accordance with the Beneficiary's hypothetical investment
direction.
VII. PAYMENT OF BENEFITS.
7.1. DISTRIBUTION AT SPECIFIC FUTURE DATE. At the time an Eligible
Member is notified by the Administrator of his or her
eligibility to participate in the Plan, the Eligible Member
may elect one or more future Valuation Dates as of which all
or a portion of his or her Deferral Contribution Amounts and
earnings thereon shall be determined for payment. Any
distribution as of a specific future date made to an Eligible
Member pursuant to his election shall be paid in a single
lump-sum payment. Any such future date shall be a Valuation
Date in a specific future year which is at least five Plan
Years after the Plan Year for which the initial Deferral
Contribution Amounts were credited to such Participant's
Account; provided, however, that only one distribution per
Plan Year may be elected under this Section 7.1; provided,
further that, if the Participant elects a distribution at one
or more specific future dates and has a termination of
employment prior to any such date, distribution shall commence
pursuant to Sections 7.2, 7.3, 8.1 or 8.2, as applicable. A
distribution election under this Section 7.1 may be revoked or
extended to a Valuation Date in a future Plan Year by filing a
one-time revocation or extension election with the
Administrator at least 12 months prior to the first day of the
Plan Year in which such distribution was scheduled to take
place. Notwithstanding the foregoing, any amounts
distributable under this Section 7.1 shall be paid as soon as
practicable following such relevant Valuation Date.
7.2. DISTRIBUTION UPON RETIREMENT OR DISABILITY. If a Participant
terminates employment with the Company and/or Affiliates by
reason of Retirement or Disability, distribution of the
Participant's Account shall be made by or commence on the
Valuation Date coincident with or next following such
Participant's termination of employment. Distribution under
this Section 7.2 shall be made:
(a) in a lump sum, or
(b) in substantially equal annual, quarterly or monthly
installments for a period up to but not exceeding 10
years
12
as elected by the Participant on his or her Distribution
Election. A Participant may revoke or change his or her
Distribution Election under this Section 7.2 by filing a new
Distribution Election with the Administrator; provided,
however, that any Distribution Election that has not been on
file with the Administrator at least 12 months prior to the
first day of the Plan Year in which the Participant's
termination of employment occurs shall be void and
disregarded. A Participant cannot alter or change his
Distribution Election once he has begun to receive payments
under the Plan. Notwithstanding the foregoing, a Participant
(or his legal representative) whose termination of employment
occurs by reason of Disability may request that the
Administrator distribute the Participant's Account in another
payment form following such termination of employment for
Disability or defer distribution of the Participant's Account
until such Participant is no longer eligible for coverage
under the Woodward Governor Company Long-Term Disability Plan,
in which case the Administrator, in its sole discretion, shall
determine whether to make payment in another form or defer
such distributions after taking into consideration all factors
which it deems relevant. If the Participant does not have a
valid Distribution Election on file with the Administrator at
the time of Retirement or Disability, the Participant's
Account shall be paid in a single sum under paragraph (a)
above.
7.3. DISTRIBUTION ON OTHER TERMINATION OF EMPLOYMENT. If a
Participant's employment with the Company or Affiliates
terminates for any reason other than Retirement, Disability or
death, the Participant's Account shall be paid in a lump sum
payment as of the Valuation Date coincident with or next
following such termination of employment.
7.4. UNSCHEDULED WITHDRAWAL. A Participant may request a withdrawal
of all or a portion of his or her Deferral Contribution
Amounts and earnings thereon by filing a Distribution Election
with the Administrator specifying the amount of the Deferral
Contribution Amounts to be withdrawn. Payment of such amount,
adjusted by the amount forfeited as set forth in Subsection
(a) below, shall be made as of the first Valuation Date
administratively practicable after such request is received,
and shall be subject to the following:
(a) An amount equal to 10% of the withdrawal requested
shall be debited to the Participant's Account and
permanently forfeited.
(b) Any Deferral Election in effect at the time of such
withdrawal shall be void for periods after such
withdrawal.
(c) The Participant shall not be eligible to file a new
Deferral Election until the election period for the
Plan Year commencing at least 12 months after such
withdrawal.
7.5. UNFORESEEABLE EMERGENCY. Prior to the date otherwise scheduled
for payment under the Plan, upon showing an unforeseeable
emergency, a Participant may
13
request that the Administrator accelerate payment of all or a
portion of his or her Deferral Contribution Amounts and
earnings thereon in an amount not exceeding the amount
necessary to meet the unforeseeable emergency. For purposes of
the Plan, an unforeseeable emergency means an unanticipated
emergency that is caused by an event beyond the control of the
Participant and that would result in severe financial or
medical hardship to the Participant if early withdrawal were
not permitted. Severe financial or medical hardship shall be
deemed to exist in the event of the Participant's long and
serious illness, impending bankruptcy or other similar
extraordinary circumstances. The determination of an
unforeseeable emergency shall be made by the Administrator in
its sole discretion, based on such information as the
Administrator shall deem to be necessary and relevant and such
decision shall be final and binding on all parties.
7.6. TIME AND FORM OF ELECTIONS. All Distribution Elections under
this Article VII shall be made at the time and in the form
established by the Administrator and shall be subject to such
other rules and limitations that the Administrator, in its
sole discretion, may establish.
7.7. FORM OF PAYMENT AND WITHHOLDING. All payments under the Plan
shall be made in cash and are subject to the withholding of
all applicable federal, state and local and foreign
governmental taxes.
VIII. DEATH BENEFITS.
8.1. DEATH PRIOR TO COMMENCEMENT OF BENEFITS. If a Participant dies
prior to commencement of payment of his or her Account, the
Participant's Beneficiary shall receive a survivor benefit in
an amount equal to the Participant's Account balance to be
paid in a single lump sum as soon as practicable following the
Participant's death.
8.2. DEATH AFTER COMMENCEMENT OF BENEFITS. If a Participant
terminates employment due to Retirement or Disability, and
dies prior to the time his or her Account balance has been
fully distributed, the Participant's Beneficiary shall receive
the remaining portion of the Participant's Account at the
regularly-scheduled date of payment for any remaining
installment payments of the Participant's Account.
8.3. ADMINISTRATOR DISCRETION REGARDING FORM. Notwithstanding the
foregoing provisions of this Article VIII, a Beneficiary may
request that the Administrator approve an alternate form of
payment of survivor benefits under this Article VIII which
request may be granted in the sole discretion of the
Administrator.
14
IX. ADMINISTRATION.
9.1. AUTHORITY OF ADMINISTRATOR. The Administrator shall have full
power and authority to carry out the terms of the Plan. The
Administrator may establish such rules and regulations as it
may consider necessary or desirable for the effective and
efficient administration of the Plan. The Administrator's
interpretation, construction and administration of the Plan,
including any adjustment of the amount or recipient of the
payments to be made, shall be binding and conclusive on all
persons for all purposes. Neither the Company, including its
officers, members or directors, nor the Administrator or the
Board or any member thereof, shall be liable to any person for
any action taken or omitted in connection with the
interpretation, construction and administration of the Plan.
9.2. PARTICIPANT'S DUTY TO FURNISH INFORMATION. Each Participant
shall furnish to the Administrator such information as it may
from time to time request for the purpose of the proper
administration of this Plan.
9.3. INTERESTED MEMBER OF ADMINISTRATOR. If a member of the
Administrator is also a Participant in the Plan, he or she may
not decide or determine any matter or question concerning his
or her benefits unless such decision or determination could be
made by him or her under the Plan if he or she were not a
member of the Administrator.
9.4. INDEMNIFICATION. No person (including any present or former
member of the Administrator, and any present or former officer
or member of the Company or any Affiliate) shall be personally
liable for any act done or omitted to be done in good faith in
the administration of the Plan. Each present or former officer
or member of the Company or any Affiliate to whom the
Administrator has delegated any portion of its
responsibilities under the Plan and each present or former
member of the Administrator shall be indemnified and saved
harmless by the Company (to the extent not indemnified or
saved harmless under any liability insurance or other
indemnification arrangement with respect to the Plan) from and
against any an all claims of liability to which they are
subjected by reason of any act done or omitted to be done in
good faith in connection with the administration of the Plan,
including all expenses reasonably incurred in their defense if
the Company fails to provide such defense. No member of the
Administrator shall be liable for any act or omission of any
other member of the Administrator, nor for any act or omission
upon his own part, excepting his own willful misconduct or
gross neglect.
9.5. CLAIMS PROCEDURE. If a Participant or Beneficiary ("Claimant")
is denied all or a portion of an expected benefit under this
Plan for any reason, he or she may file a claim with the
Administrator. The Administrator shall notify the Claimant
within 90 days of allowance or denial of the claim, unless the
Claimant receives written notice from the Administrator prior
to the end of the 90-day period stating that
15
special circumstances require an extension (of up to 90
additional days) of the time for decision. The notice of the
decision shall be in writing, sent by mail to Claimant's last
known address, and if a denial of the claim, shall contain the
following information: (a) the specific reasons for the
denial; (b) specific reference to pertinent provisions of the
Plan on which the denial is based; and (c) if applicable, a
description of any additional information or material
necessary to perfect the claim, an explanation of why such
information or material is necessary, and an explanation of
the claims review procedure. A Claimant is entitled to request
a review of any denial of his or her claim by the Board. The
request for review must be submitted within 60 days of mailing
of notice of the denial. Absent a request for review within
the 60-day period, the claim shall be deemed to be
conclusively denied. The Claimant or his or her
representatives shall be entitled to review all pertinent
documents, and to submit issues and comments orally and in
writing. The Board shall render a review decision in writing
within 60 days after receipt of a request for a review,
provided that, in special circumstances the Board may extend
the time for decision by not more than 60 days upon written
notice to the Claimant. The Claimant shall receive written
notice of the Board's review decision, together with specific
reasons for the decision and reference to the pertinent
provisions of the Plan.
X. AMENDMENT AND TERMINATION.
The Board may amend or terminate the Plan at any time; provided,
however, that no such amendment or termination shall have a material
adverse effect on any Participant's rights under the Plan accrued as of
the date of such amendment or termination without such Participant's
written consent. Upon termination of the Plan, the Board may cause a
lump-sum payment of all benefits for all Participants at substantially
the same time.
XI. MISCELLANEOUS.
11.1. NO IMPLIED RIGHTS; RIGHTS ON TERMINATION OF SERVICE. Neither
the establishment of the Plan nor any amendment thereof shall
be construed as giving any Participant, Beneficiary or any
other person, individually or as a member of a group, any
legal or equitable right unless such right shall be
specifically provided for in the Plan or conferred by specific
action of the Board or the Administrator in accordance with
the terms and provisions of the Plan. Except as expressly
provided in this Plan, neither the Company nor any of its
Affiliates shall be required or be liable to make any payment
under the Plan.
11.2. NO EMPLOYMENT RIGHTS. Nothing herein shall constitute a
contract of employment or of continuing service or in any
manner obligate the Company or any Affiliate to continue the
services of any Participant, or obligate any Participant to
continue in the service of the Company or Affiliates, or as a
limitation of the right of the Company or Affiliates to
discharge any of their members, with or without cause.
16
11.3. NATURE OF THE PLAN.
(a) UNFUNDED PLAN. Nothing herein contained shall require
or be deemed to require the Company to segregate,
earmark or otherwise set aside any funds or other
assets to provide for any payments made hereunder.
Benefits hereunder shall be paid from assets which
shall continue, for all purposes, to be part of the
general, unrestricted assets of the Company and its
Affiliates. The obligations of the Company hereunder
shall be an unfunded and unsecured promise to pay
money in the future. However, the Company may
establish one or more trusts to assist in meeting its
obligations under the Plan, the assets of which shall
be subject to the claims of the Company's general
creditors. No current or former Participant,
Beneficiary or other person, individually or as a
member of a group, shall have any right, title or
interest in any account, fund, grantor trust, or any
asset that may be acquired by the Company in respect
of its obligations under the Plan (other than as a
general creditor of the Company with an unsecured
claim against its general assets).
(b) EXCEPTION FOR CHANGE IN CONTROL. Notwithstanding the
provisions of paragraph (a) of this Section 11.3, the
Company shall create a rabbi trust to hold funds to
be used in payment of the obligations of the Company
under the Plan, which trust shall not be funded
except as provided in the following sentence. In the
event of a Change in Control (or prior thereto in the
sole discretion of the Company), the Company shall
fund such trust in an amount equal to not less than
the total value of the Participants' Accounts under
the Plan as of the Valuation Date immediately
preceding the Change in Control, provided that any
funds contained therein shall remain subject to the
claims of the Company's general creditors. In
addition, upon a Change in Control, the trust by its
terms shall become irrevocable.
11.4. NONTRANSFERABILITY. Prior to payment thereof, no benefit under
the Plan shall be assignable or subject to any manner of
alienation, sale, transfer, claims of creditors, pledge,
attachment or encumbrances of any kind, except pursuant to a
domestic relations order awarding benefits to an "alternate
payee" (within the meaning of Code Section 414(p)(8)) that the
Administrator determines satisfies the criteria set forth in
paragraphs (1), (2) and (3) of Code Section 414(p) (a "DRO").
Notwithstanding any provision of the Plan to the contrary, the
Plan benefits awarded to an alternate payee under a DRO shall
be paid in a single lump sum to the alternate payee on the
Valuation Date as soon as administratively practicable
following the date the Administrator determines the order is a
DRO, and such amounts, as adjusted for earnings, gains and
losses, will be deducted from the Participant's Account as of
such Valuation Date.
11.5. SUCCESSORS AND ASSIGNS. The rights, privileges, benefits and
obligations under the Plan are intended to be, and shall be
treated as legal obligations of and binding
17
upon the Company, its successors and assigns, including
successors by merger, consolidation, reorganization or
otherwise.
11.6. PAYMENT WITH RESPECT TO INCAPACITATED PERSONS. Any amounts
payable hereunder to any person who is a minor or under a
legal disability, as determined under applicable state law, or
who is unable to manage properly his or her financial affairs
may be paid (a) to the legal representative of such person,
(b) to anyone acting as the person's agent under a durable
power of attorney, (c) to an adult relative or friend of the
person or (d) to anyone with whom the person is residing. Any
payment of a benefit made in accordance with the provisions of
this section shall be a complete discharge of any liability
for the making of such payment under the Plan. The
Administrator's reliance on the written power of attorney or
other instrument of agency governing a relationship between
the person entitled to benefit the person to whom the
Administrator directs payment of the benefit shall be fully
protected at least to the same extent as though the
Administrator had dealt directly with the person entitled to
the benefit as a fully competent person. In the absence of
actual knowledge to the contrary, the Administrator may assume
that the instrument of agency was validly executed, that the
person was competent at the time of execution and that at the
time of reliance, the agency had not been terminated or
amended.
11.7. ARBITRATION. Any controversy or claim arising out of or
relating to this Plan, or breach hereof, shall be settled by
arbitration in the City of Chicago in accordance with the laws
of the State of Illinois with an arbitrator appointed by the
Company. The arbitration shall be conducted in accordance with
the rules of the American Arbitration Association, except with
respect to the selection of an arbitrator. The arbitrator's
determination shall be final and binding upon all parties and
judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
11.8. GENDER AND NUMBER. Except when otherwise indicated by the
context, words in the masculine gender shall include the
feminine and neuter genders, the plural shall include the
singular, and the singular shall include the plural.
11.9. HEADINGS. The headings of the various Articles and Sections in
the Plan are solely for convenience and shall not be relied
upon in construing any provisions hereof. Any reference to a
Section shall refer to a Section of the Plan unless specified
otherwise.
11.10. SEVERABILITY. Whenever possible, each provision of the Plan
shall be interpreted in such manner as to be effective and
valid under applicable law, but it any provision of the Plan
is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, and the Plan
shall be reformed, construed and enforced in such jurisdiction
so as to best give effect to the intent of the Company under
the Plan.
18
11.11. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. Any benefit paid or
payable under this Plan shall not be included in a
Participant's compensation for purposes of computing benefits
under any employee benefit plan maintained or contributed by
the Company or any Affiliate except as may otherwise be
required under the specific terms of such employee benefit
plan.
11.12. NON-U.S. PARTICIPANTS. With respect to any Affiliate which
employs Participants who reside outside the United States, and
notwithstanding anything herein to the contrary, the
Administrator may, in its sole discretion, amend the terms of
the Plan in order to conform such terms with the requirements
of local law or to meet the objectives of the Plan, and may,
where appropriate, establish one or more sub-plans to reflect
such amended provisions.
11.13. APPLICABLE LAW. This Plan is established under and will be
construed according to the laws of the State of Illinois, to
the extent not preempted by the laws of the United States.
* * *
19
EXHIBIT A
INVESTMENT FUNDS
UNDER
THE WOODWARD GOVERNOR COMPANY EXECUTIVE BENEFIT PLAN
The Investment Funds designated by the Administrator, in its
sole discretion and from time to time, as the basis for determining the
hypothetical investment return to be credited to Participants' Accounts in
accordance with Article 6 of the Woodward Governor Company Executive Benefit
Plan (the "Plan"), if applicable, are currently as follows:
1. Vanguard Treasury Money Market Fund,
2. Vanguard Short-Term Corporate Fund,
3. Vanguard Total Bond Market Index Fund,
4. Vanguard Wellington Fund,
5. Vanguard 500 Index Fund,
6. Vanguard Windsor II Fund,
7. Vanguard U.S. Growth Fund,
8. Vanguard International Growth Fund,
9. Vanguard Explorer Fund, and
10. Woodward Governor Company Common Stock but only if the
Participant's investment election for this Investment Fund is
approved in advance for such Participant by the Board of
Directors of Woodward Governor Company (the "Board").
Notwithstanding anything to the contrary in this Exhibit A or
the Plan, if a Participant is granted permission to elect this
Investment Fund, such Participant may only revoke such
Investment Fund election with the prior approval of the Board.
The applicable value of the common stock as of any Valuation
Date shall be equal to the closing price of such common stock
on NASDAQ quoted by the WALL STREET JOURNAL for the applicable
Valuation Date. The Participant's Account shall also be
credited with deemed dividends, if any, on such common stock.
20
EXHIBIT 4.2
FIRST AMENDMENT
TO
WOODWARD GOVERNOR COMPANY
EXECUTIVE BENEFIT PLAN
WHEREAS, Woodward Governor Company (the "Company") maintains the
Woodward Governor Company Executive Benefit Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, by virtue and in exercise of the amending authority
reserved to the Company in Article X of the Plan, the Plan is hereby amended by
deleting Section 2.7 of the Plan and inserting the following new Section 2.7 as
a part thereof:
"2.7 "BONUS" means any incentive compensation awarded to a
Participant for a given year under the Woodward Governor
Company Annual Incentive Compensation Plan, the Woodward
Governor Company Long-Term Incentive Compensation Plan, the
Woodward Governor Company Retention Incentive Agreement for
FST Executives, and/or any other bonus or incentive
compensation plan designated by the Administrator from time to
time for inclusion within this definition for deferral
purposes."
IN WITNESS WHEREOF, the undersigned officer has caused this amendment
to be executed in the name of and on behalf of the Company this 26th day of
April, 2001.
WOODWARD GOVERNOR COMPANY
By /s/ Carol J. Manning, Secretary
------------------------------------
EXHIBIT 5.1
August 1, 2001
Woodward Governor Company
5001 North Second Street
Rockford, Illinois 61111
Re: Woodward Governor Company
Form S-8 Registration Statement
---------------------------------
Gentlemen:
We have acted as counsel for Woodward Governor Company (the "COMPANY"),
in connection with the registration statement on Form S-8 (the "REGISTRATION
STATEMENT") of the Company which is being filed with the Securities and Exchange
Commission today for the purpose of registering under the Securities Act of
1933, as amended, an aggregate of $20,000,000 Deferred Compensation Obligations
(the "OBLIGATIONS") offered to certain employees of the Company pursuant to the
Woodward Governor Company Executive Benefit Plan (the "PLAN").
As such counsel, we have examined such corporate records and other
documents and matters of law as we have deemed necessary in order to enable us
to express the opinion hereinafter set forth.
Based on the foregoing, we are of the opinion that upon completion of
the actions being taken or contemplated to be taken in administering the Plan,
the Obligations will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, garnishment or other creditors' rights.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 23.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP
The Board of Directors
Woodward Governor Company
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated November 8, 2000 relating
to the financial statements, which appears in the 2000 Annual Report to
Shareholders, which is incorporated by reference in Woodward Governor Company's
Annual Report on Form 10-K for the year ended September 30, 2000. We also
consent to the incorporation by reference of our report dated November 8, 2000
relating to the financial statement schedule, which appears in such Annual
Report on Form 10-K.
PricewaterhouseCoopers LLP
Chicago, Illinois
August 1, 2001