Cornell University Library HD2781.S7N27 Employee stock-ownership plans. 3 1924 002 225 831 au 781 7 '57 National Association of Corporation Training. Employe stock- ownership plans. HP 1^78/ NZ7 CORNELL UNIVERSITY LIBRARY NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS THE GIFT OF National Association of Corporation Training. CONFIDENTIAL REPORT SERIES REPORT No. 7 Employe Stock - Ownership Plans ISSUED BY THE J^jIATIONAL ASSOCIATION OF CORPORATION TRAINING COMPILED IN THE MANAGING DIRECTOR'S OFFICE Available to Class ''A" Members Only MARCH, 1921 NOTE: The Special Report Service and the Ginfidendal Rqwrt Service are furnished only to CUu "A" memberc of the Association. COPYRIGHT. 1921 NATIONAL ASSOCIATION OF CORPORATION TRAINING Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924002225831 EMPLOYE STOCK-OWNERSHIP PLANS By far the most popular of the numerous m easures xindertaken b y corporations to prQmQ J£„theLhabilLoL- thrift on the part of the employe, and more especially a comprehension of its immediate bear- ing on his own ultimate welfare, is employe ownership of the stock or bonds of the employing company. The purpose of this report is to set forth the various types of employe subscription plans together with the deviations in such plans. Under-rating the Movement It is natural that such undertakings should be both under-rated on the one hand and over-rated on the other; under-rated as a rule by radical thinkers who present the unanswerable argument that, as a certain writer has expressed it: "The owner of a small savings account or a small life insurance policy or a few shares of stock or a $100 bond does not regard • himself in any sense as a capitalist. Because a man happens to own two shares of preferred stock in the United States Steel Corporation he is none the less a puddler and feels none the less one. The fourteen-doUar-a-year dividend that he receives does not and cannot change his point of view. It is too small in pro- portion to his wages. His wages still loom up as the most impor- tant thing. A few dollars a year not only fails to make him a capitalist, but if he wants to change his job and work for a sec- ond company he will not be influenced by a petty saving in the first company. . . . Nor is this attitude true ordy of wage- earners. ... It has always been the hardest kind of job to rouse the interest of small investors. Small stockholders are noto- riously unconcerned about the affairs of their company. Con- cerns engaged in installing thrift systems in industrial plants find it easy to sign men and women up for one dollar a week sav- ings, but as soon as the sum grows to twenty or thirty dollars — in other words, to the price of an article which the worker hap- pens to desire — ^he or she withdraws the account, no matter how great the obstacles put in the way. "And it is undoubtedly true that if a man leans toward Social- 1 ism or Bolshevism, employers cannot wean him away by putting him down for two shares of stock or handing him a fifty-dollar share in the profits at the end of the year. It does not mean so much, as it seems to say that there are as many investors in a company or group of companies as there are employes. For a large nvmiber of investors have only a few dollars a year involved, whereas the employes may have their total livelihood at stake." Evidence of Growth of Movement Nevertheless, and admitting the statement just quoted, evidence is accumulating which goes to show that the exte nt of emp lo ye ow n- ership is reaching a point where it is a far more i mportant and s erious facto r than many pers ons realise, and is no longer to be argued away. I n numbers of large corppH i t^^T^s tfie wage earners alreadvjia v e.^ sjibstantial..,,B£];cent^ is being in- creasingly agitated whether they are not entitled to representation on the board of directors, such as a banking, brokerage or any other dis- tinctively capitalistic group would demand if it had that amount of stock. The Proctor & Gamble Company, The Boston Consolidated Gas Company and The Pittsburgh, Butler & Harmony Railroad and Power Company already have such representatives of employe subscribers on their boards of directors and the management of the Studebaker Corporation has agreed to give its employes a director when they shall have completed the purchase of 20,000 shares of stock. Recently the International Harvester Company set aside $60,000,000 in stock for employes, enough to give them a large representation on its Board. It is the opinion of a number of executives that such an arrange- ment is beneficial not alone from the viewpoint of employes but like- wise from that of management, and they base their argument upon the incontrovertible fact that it is better for their employes to be given correct information about Economics and Industrial Management by representatives in whom they have confidence and who are charged jointly with the problems of control with other members of the board of directors. If such information be not furnished and from legiti- mate sources, the tendency is for employes to secure their theory of Economics and knowledge of company methods from irresponsible . agitators. Regarding percentages of employe stock ownership, we laiow that lO^OpO^of the35,pop_ sharehfilders of one. of the largest xubbex; companies has stertgjd to buy $7,000,000 of its stock ;_thatJsniployes "" " " ''"^ 2 of another rubber company in the same year took $500,000 of stock on their own initiative ; that emplaves of a large laajl^gijder house own 10 per cent of the common stock: that 44 per cent of the shar e- holdCTSjof an explosive§^gpmp.anj:j?X^ are employes ; that a large shoe-manufacturing company, a large sugar refining com- pany, a large electrical apparatus and machinery maker, a large com- bination of automobile makers, one of the largest soap companies, and a large manufacturer of cameras — all have savings and stock-purchas- ing plans of various descriptions; that about 10 per cent of the stock of one of the la rgest steel_com£anies^s_ qwned^by employes ; and so on through an impressive list, inckiding some of the larger railroads. Efforts are under way to distribute the stock of Standard Oil companies among employes, and the recent reduction in par value of the shares of several of these concerns no doubt had that object in view. The movement toward employe ownership gives every indi- cation of spreading out in all directions. Naturally the larger business concerns attract the most attention in this respect as in others, but in the last few years the workers for any number of small concerns have bought stock. The business of a certain automobile accessory maker amounted to almost nothing ten years ago. It has grown rapidly and today 75 per cent of all the employes are stockholders. Of course employe subscription to the stock of the company by which the worker is employed is not invariably feasible because of the speculative nature of the shares of many industrial enterprises or for other good and sufficient reasons. In such contracts, however, and even in the case of companies which offer their own stock to employes, it has been suggested that arrangements might be made to give work- ers expert counsel on saving and investment matters. Obviously if the trend toward employe ownership continues, the statement that a couple of shares of stock do not make a capitalist will lose its point, because the units will be substantially larger. When a man has a stake in an enterprise of as much as $500 or $1000 he begins to take an interest. It then ceases to become a little extra spending money and becomes an investment. The owners of $500 and $1000 Liberty Bonds were not those Avho became tired of their investment. It is well known that when a person once really acquires the habit of saving and investing he does not stop. But the sum has to amount to something before a man begins to feel that it is saved or invested. Once that point is reached, the habit takes a firm hold. 8 TYPICAL PLANS An attempt has been made by the compilers of this report to classify the plans in operation — ^an attempt not altogether successful, since one or more features characteristic of one plan frequently reap- pear in another, the basic idea of which is quite different. However, the classification at least serves to set in high relief certain funda- mental facts distinguishing the subject of employe stock ownership as a whole, and therefore seemed worth while. The Standard Plan By a somewhat arbitrary decree, justified by the fact that an over- whelming majority of companies operating employe stock ownership schemes have accepted it in whole or greater part as a model, a plan including the following features is looked upon as creating a standard: 1. The periodical o ffer of stock for sale, slightly below market value, to personnel as a whole or classified groups of employes. 2. S_ubscriptiomi, paid in monthly instalments, of a fixed min- imum percentage of wage or salary. 3. Interest on deferred payments. 4. Dividends credited to account of subscriber. 5. Total payments and dividends expected to meet fully cost of stock within a stipulated period. 6. Termination of agreement upon failure to make specified periodical payments. 7. Retention of stock by company until fully paid for. 8. Termination of employment by resignation, discharge, or death automatically terminates interest in all company stock or purchase plans ; money paid in by employe being refunded with specified rate of interest added. 9. Right of company to re-purchase under certain conditions, distinctly set forth as inalienable. 10. Assignment, pledge, sale or transfer of stock not fully paid for explicitly forbidden. 11. Retention by company of all rights of alteration or termina- tion of plan and of decision in regard to questions arising, under it. Conspicuous examples of this plan, with slight modifications in a few cases, are offered by: American Light and Traction Co. American Rolling Mill Co. The Bell Telephone and Telegraph System 4 Eastman Kodak Co. Graton and Knight Manufacturing Co. International Nickel Co. National Carbon Co. United_ States Steel Co. United States Rubber Co. Union Switch and Signal Co. Youngstown Sheet and Tube Co. Midvale Steel and Ordnance Co. Montgomery Ward & Co. Percentage of Profits Plans As the title signifies, "Percentage of Profits" plans involve a divi- si on of the profits of a corpo ration by the percentage method — a stip- ulated percentage being set aside for the benefit of the company's employes and occasionally paid, i n some part at least, in stock, which is where such plans "connect up" with employe stockholding. Sub- ordinate features frequently encountered in the general plan which often, also, includes features of the "Standard Plan" are these: 1. Share of employes not necessarily or indeed usually fixed in advance, but determined on basis of year's profits. 2. Employes' share ascertained by method of reserving fixed rates of interest or dividend on capital and dividing entire balance of surplus earnings between stockholders and em- ployes. 3. Specified employe percentages fixed separately in each indi- vidual case and proportioned to duties and responsibilities of position held. 4. Percentage now and then calculated on basis of wages at same rate as dividends on stock for preceding year. 5. As a rule, proportion determined annually. 6. Employes so classified that in a number of instances the rela- tively more important, more efficient, or higher salaried groups receive higher percentage of entire amount allotted. 7. Distribution sometimes in stock, alone; more often in stock and cash. Certain classes of employes, usually the rank and file, frequently receive cash only. 8. In addition to a "Percentage of Profits" plan, a number of companies have introduced some form of the more standard plan. 9. Dividends either paid to employe as they fall due in instal- ments or applied in payment of stock. 10. Stock sometimes issued immediately on death, resignation, or lay-off of employe. Companies operating "Percentage of Profits" plans involving payment in part at least in stock include the following: Boston Consolidated Gas Co. Frost Gear and Forge Co. International Harvester Co. N. O. Nelson Manufacturing Co. Studebaker Corporation Charles Warner Co. Brooklyn Edison Co., Inc. Bonus Plans Save for the unequivocal expression of its central idea, namelyj division of profits, to the strict constructionist there is little to distin- guish the "Percentage of Profits" plan from the "Bonus" plan which is also, of course, essentially a profit sharing scheme. However, a bonus of either stock or cash or both for all practical purposes is an allowance in addition to wages— an extra contribution — involving no possible shadow of claim on the part of the employe. As a rule, but not invariably, t he stock bonus, like any other, is a reward for efficiency, length of service, increased production, punctuality, etc. On the whole, bonus plans are far less regular in application than are the "Percentage of Profits" plans. Otherwise the outstanding features distinguishing the two types of employe share holding plans resemble each other closely. Among the companies which distribute stock in the form of a bonus are: Atlas Powder Co. Baker Manufacturing Co. Julius Kayser & Co. New Haven Gas Light Co. Pittsburgh, Butler & Harmony Consolidated Railway and Power Co. The John B. Stetson Co. Todd Shipj'^ard Corporation United States Rubber Co. Employe Association Plans Employe purchase of stock not infrequently functions through company associations already formed for mutual welfare or incor- porated for the express purpose of furthering employe investment in 6 company stock. Beyond the fact of the substitution of such an agency for the company, the regulations pertaining to the standard plans are usually found to be operating. The employe stock-ovmin g plans of the following companies function through associations pf employes : Great Northern Railway Co. Pennsylvania Railroad Co. Pittsburgh Coal Co. Minneapolis, St. Paul & Sault-Sainte Marie Railway Co. Exceptional Plans In a sense, as has already been observed, all the plans herein listed defy a strict classification. But certain plans differ so radically from others and even each other, or are elaborated to such a degree, as to admit of little" more relationship between them than the com- mon purpose of promoting thrift among company personnel. These plans, of course, have an attraction all their own, due either to the originality of the program or to the unique manner in which it is carried out. Such exceptional plans include those of the: Dennison Manufacturing Co. E. I. du Pont de Nemours & Co. Ford Motor Co. Lever Bros., Ltd. Proctor & Gamble Co. GENERAL PROVISIONS As an introduction to the plans themselves which follow, and like- wise for the benefit of the layman or the over-driven executive who lacks sufficient interest or cannot give the time to study them in detail, a condensation of the more salient points distinguishing the plans as a whole is hereby offered. Offer Company stock offered for subscription is derived from various sources, as treasury stock; stock issued previously; stock purchased from or donated by large stockholder; stock purchased in the open market — the last is the more common source. Usually the offer is limited to a particular class of stock, common or preferred. Certain corporations make their stock offer periodically (in which case a time 7 limit is set for subscription) ; some make it amiually; others reserve a certain quota of every new issue. An increasingly large number of companies maintain a standing offer. Beneficiaries Generally all employes are entitled to subscribe. However, many companies impose a preliminary length of service test — from three months to four yeari^. Various classes of employes are frequently excluded. A salary basis of participation is maintained by many companies. Subscription privileges are sometimes confined to officials ; often production, efficiency, indispensabUity, constitute the acid test. The voluntary character of subscription plans frequently emphasized. Gruarantees A few companies guarantee value of stock — such guarantees rang- ing from 6 per cent to 10 per cent — ^while a large number stand ready to re-purchase xmder stipulated conditions at purchase price when employes wish to sell. The majority will re-purchase at the current market price. Employe Associations In a number of cases the business of employe stock subscription functions through company benefit associations, groups of employes, incorporated, for investment purposes, or trusteeships appointed by the company concerned. Subscriptions Subscriptions generallj'^ limited by salary considerations and fre- quently by the amount of stock allotted for the purpose. Certificates of Participation Employes' interest in stock sometimes represented by certificates of participation, bearing the privilege — ^which may be abrogated for cause — of ultimate conversion into stock. Pass Books Some companies issue pass books to employes the more efficiently to safeguard stock subscription accounts. 8 Payments As a rule, employe-owiied stock is paid for in instalments. Gen- erally a definite proportion of the monthly or weekly salary or wage, varying from 2 per cent to 25 per cent, is deducted by the company, though payment outright is usually, although not always, permitted. Occasionally a stipulated sum must accompany the application as an initial payment. Of course this deposit is returned if the application is not accepted. In a very few instances arrangements are made for loans to employes for the purpose of subscription either by the com- pany directly or its bankers. Dividends As a rule, also, although not invariably, dividends and all interest accruing upon deposits are credited to employe's subscription ac- coimt. Occasionally full payment is made by means of dividends and interest accruing upon them, both being retained by the company for a period necessary to cover payment. Special dividend features are not uncommon. Interest on payments from 4 per cent to 20 per cent. In the majority of cases interest on payments is computed at the rate of 6 to 7 per cent. Unpaid Balances Usually interest at a rate varying from 4 per cent to 7 per cent is charged on unpaid balances. Special Bonus A number of companies offer a special bonus — from 50 cents to $5 per share annually as an inducement for the employe to complete his subscription and retain ownership of stock for a given period. Such special benefits may be paid every year or endure for a given number of years — generally five. Special Funds Special funds created by failure of employe subscribers to live up to various terms of their subscription pledges not uncommon. Such forfeited monies generally divided pro rata among participant's who fulfil the conditions. Stipulated Period for Payment A time limit is nearly always set within which payment of stock 9 must be completed; such time limit varies from ten months to ten years — ^with a norm of five years. Increase in Holdings upon Advance in Wages An increase in holdings upon an advance in wages is infrequently provided for. Retention of Stock Stock is almost universally held bj'^ company until payment is complete and sometimes (in the case of stock bonuses) longer. Pe- riods vary between ten months and fifteen years — five years is the time most frequently set. Suspension Suspension of employment usually means a temporary suspension of payments for the period of lay-off, except in case of refusal to return to work upon request, in which case the rules for cancellation are generally enforced. Withdrawals Withdrawal of subscription is usually permitted after due notice to the company, which thereupon, in some cases, delivers any shares due employe and repays with interest any additional amounts paid in, but more often with the stipulation that shares in his name be sold only to the company. Five per cent appears to be the usual rate on payments withdra^vn not represented by stock or stock certificates previously issued. Assignment, Pledge, Transfer and Sale Assignment, transfer, pledge or sale of company stock in the name of an employe except to the company is very generally ex- plicitly forbidden. Occasionally the employe is required to sign an agreement binding him to retain his stock for a given period of years. Failure to Complete Payments, Cancellation, Death, Disability, etc. In case of failure to complete payments, cancellation, death, per- manent disability, termination of employment, etc., employe sub- scriber or his heirs are refunded their amounts paid in with interest — ^usually at the rate of 5 per cent; or, if shares are fully paid for, 10 stock is delivered. In many cases subscribers are permitted to con- tinue payments after resignation. Interpretations and Decisions Interpretation of plans or decisions in regard to them is always expressly reserved to the company or its representatives. Alteration or Termination of Plans Companies also reserve the right to alter or terminate plans after due notice of intention. Voting Privileges Participants are generally enjoined from exercising voting or any other privileges as a stockholder except as owners of fully paid-up shares of stock. Expenses All expenses connected with employe stock subscription plans in- variably assumed by the company except in the case of incorporated associations of employes for the purpose of investment, and some- times even then. Employe Representative Three companies have and another promises, when its employe subscriptions have reached a certain quota, representatives of sub- scribing employes, with full voting powers, on their boards of directors. 11 EMPLOYE SHARE-HOLDING PLANS American Light and Tkaction Company and Auxiliaries Beneficiaries. — Officers, except presidents and heads of depart- ments. Plan. — ^Employe subscribers have privilege of purchasing com- mon stock of respective companies at less than market price and pay- ing for it in quarterly instalments ; payments must aggregate a sum equal to 10 per cent of subscriber's annual salary; purchase must be completed within and extend over a period of ten years; Company retains stock in subscriber's name until paid for in full; interest charge of 5 per cent on unpaid balances; dividends declared other- wise than in cash, as stock dividends, retained by Company for de- livery to employe when stock is fully paid for; cash dividends paid direct to subscriber. Extension of Plan. — Plan supplemented about five years since by granting privilege to company's officers of buying stock at par, one- tenth of purchase price to be paid each year, with interest at 5 per cent on unpaid balances ; dividends on stock delivered when due. The American Rolling Mill Company November 1, 1919, the Company opened subscription books of its second offer of stock to employes. Subscriptions. — ^All subscriptions made on forms furnished by Company (see Appendix) and accepted only upon condition and agreement that all questions concerning subscriptions be decided by Finance Committee of Company. One or more shares of common stock at $50 a share allotted, but only forty-seven monthly instal- ments of $1.00 each required to pay in full for each share. Com- pany guarantees quarterly dividends sufficient to pay difference be- tween subscription price of $50 a share and payment required of r, and also to pay interest on deferred or anticipated payments. Payments. — Payment of subscriptions in monthly instalments de- 12 ducted by Company from wages or salaries of subscribers ; first deduc- tion made December 15, 1919; no instabnent less than $1.00 a month per share ; instalments exceeding minimimi in even dollars ; subscribers may pay subscriptions in full at any time, and receive benefit of interest at 6 per cent on anticipation payments; payments must be completed by October 15, 1923; interest at 6 per cent charged on unpaid balances. Until delivery of shares to subscriber, cash or stock dividends paid to Trustees ; all amounts received in excess of interest charges, and amounts necessary to cover cost of stock held by Trustees for distribution until December 15, 1923, and then divided ratably among subscribers (either in stock or cash at discretion of Trustees) according to number of shares of stock paid for in full at that time. Possession and Delivery.— ^o stock delivered until paid for in full, nor in any event untU December 15, 1923, except in case of death or disability. Meantime all stock held in trust by three Trustees designated by Company through action of Board of Directors. Com- pany has right at any time, by action of Board, to appoint one or more new trustees in place of those previously appointed and to fill vacancies occurring in position of Trustees; on December 15, 1923, all stock paid for in full delivered to subscribers. Cancellations. — Subscriptions cancelled for following reasons: ( 1 ) By request of subscriber. (2) By (a) subscriber leaving service of Company, Avhether vol- untary, discharged, or for any other cause; or (b) failing to resume employment when requested. (3) By discontinuing payments without consent of Company for three consecutive months. Cancellation of subscription forfeits all interest and benefits re- ceivable (whether stock is paid for in part or in full), but in case of cancellation actual amount of money paid in returned, plus 6 per cent interest for average time it was held by trustees; subscription not cancelled in part without consent of trustees; accrued profits (sur- plus quarterly dividends, special stock dividends, and fimd derived from special benefits) to date of cancellation, applicable to stock cov- ered by cancelled subscriptions, remain in pool for benefit of sub- scribers who do not cancel. Shares of stock represented by cancelled subscriptions not with- drawn from pool except if, in judgment of Finance Committee, total cancellations reach such an amount as to make it impracticable for 13 trustees to carry such cancelled stock in pool; profits accruing to stock remain in pool and are held by trustees for benefit of subscribers who do not cancel; profits derived from cancelled stock accruing to benefit of pool on December 15, 1923, divided ratably among subscribers according to number of shares of stock paid for in full at that time. Company retains right to reinstate a cancelled subscription if cir- cumstances warrant reinstatement ; this provision only applied in very exceptional cases. Special Benefit. — On each anniversary of subscription, including November 1, 1922, Company agrees to pay Trustees 50 cents for each share subscribed for and in force at the time; the fund so accu- mulated to be retained by trustees and divided on December 15, 1923, ratably among subscribers according to number of shares of stock paid for in full at that time. Death or Permanent Disability. — If subscriber dies or is perma- nently disabled while in service of Company before subscription is paid in full, either the representatives of his estate; his beneficiary (in case he has designated one), or subscriber himself, in case of per- manent disability, has option: (a) Of continuing payments until stock is paid for in full and then participating, pro rata, with subscribers whose stock has been paid for in full, in distribution to be made by Trustees on December 15, 1923 ; (b) Of canceling subscription and receiving at once actual cash paid in by subscriber, with intei-est at 6 per cent, for average time money paid in has been held by Trustees, and nothing more; (c) Of discontinuing payments and receiving at once as many shares of stock as amount of monej'^ actually paid in by sub- scriber, plus his proportion of profits, accumulated to date of last payment, will buy at $47 a share. Beneficiary. — Subscriber may name in his subscription, as bene- ficiary, a person to whom, in event of death, he desired trustees to pay amounts in connection with his subscription, otherwise payable to his estate; the trustees, upon satisfactory proof of death, pay to desig- nated beneficiary amounts otherwise payable to subscriber's estate; when a beneficiary has been named, subscriber's estate has no claim to such amounts, unless beneficiary should die before subscriber, in 14 which event payment is made to subscriber's estate ; by written notice given to trustees, under regulations they prescribe, subscriber may substitute another beneficiary. Suspension of Employment. — Subscriber whose employment has been suspended, by reason of temporary closing in whole or part of company's plant or for any other reason, if otherwise he complies with all conditions of subscription, does not have subscription can- celed provided that, upon request by Company, he returns promptly to work. Subscriptions not accepted after pool was closed (November 30, 1919), except from employes Avho had been in United States military service during the World War and returned to service of Company after pool was opened, provided they signified a desire to subscribe within thirty days after return to employment of Company, and pro- vided their application met with approval of management. The following table shows maximum number of shares which might be subscribed for and purchased under plan by those whose regular yearly compensation was within the respective limits stated; but individuals might subscribe for less than maximum number of shares; no subscription might be for more than 130 shares; an indi- vidual subscribing for shares may also subscribe for shares in any succeeding pool that may be opened, provided the total number of shares on which he is making payments at any one time shall not exceed limits set, based on his yearly compensation at time subscrip- tions are opened: 1 500.00 10 $1700.00 36 $2800.00 68 $3900.00 81 $5000.00 107 600.00 12 1800.00 37 2900.00 60 4000.00 83 5100.00 109 700.00 14 1900.00 39 3000.00 62 4100.00 86 5200.00 111 800.00 16 2000.00 41 3100.00 65 4200.00 88 5300.00 113 900.00 18 2100.00 43 3200.00 67 4300.00 91 5400.00 115 1000.00 20 2200.00 4S 3300.00 69 4400.00 93 5500.00 118 1100.00 22 2300.00 48 3400.00 71 4500.00 95 5600.00 120 1200.00 25 2400.00 50 3600.00 73 4600.00 98 6700.00 123 1300.00 27 2500.00 52 3600.00 75 4700.00 100 5800.00 125 1400.00 29 2600.00 64 3700.00 77 4800.00 103 5900.00 128 1500.00 31 2700.00 66 3800.00 79 4900.00 105 6000.00 130 1600.00 33 Ameeican Sugar Refining Company Partial payment of $5 or multiples thereof for each share of stock. Full payment for five shares or less must be made within two years 15 after application. Full payment for more than five shares must be made within three years. Atlas Powder Company Beneficiaries. — Efficient employes with at least two years of ser- vice with Company. Plan. — Bonus in form of stock; amount determined by Directors annually but never over one-half the annual salary of employe; cer- tificates of shares held in trust for 6 years by so-called "bonus trustee" with power of attorney transferring employe's interest in stock; after 6 years stock delivered and power of attorney cancelled ; upon resig- nation or dismissal employe receives only that proportion of stock which elapsed portion of the 6 years bears to full period, which pro- portion may be purchased by company at par; participants receive all dividends declared on stock allotted\them. Employes may also subscribe for company stock at par, total amount of subscription depending upon salaries as follows: $1,000.00 or less 20% $1,000.00— $2,000.00 15% $2,000.00— $5,000.00 10% Over $5,000.00 8% Stock may be paid for outright or in monthly instalments at not less than $2 a share per month, deducted from salaries or wages. Subscribers receive aU dividends and are charged 5 per cent on unpaid balance; employes who have paid for stock and retain it receive bonus of $2 a share for 5 years if in company's employ. Baker Manufacturing Company Beneficiaries. — So-called "honorary employes" or workers having 4,500 hours of service during 100 consecutive weeks to their credit. Plan. — Bonus in form of 90% stock and 10% cash; net profits of Company, after specified deductions, divided between preferred stock and employes in proportion that 5% on stock bears to employes' wages ; Company requires all employes to deposit their stock with it, in order to ensure first opportunity to purchase at market prices ; sum available for extra dividend, profit remaining after (a) 5% dividend 16 on preferred and common stock; (b) $5 paid into a stock purchasing fimd for every share of stock on deposit with the company; and (c) 10% balance added to sinking fund; Company agrees to purchase employes' stock whenever owner requests if sufficient money remains in Stock Purchasing Fund. Bell Telephone and Telegraph System The following Stock Purchase plan is the second offered to em- ployes of the Bell System. The first plan was offered in January, 1915; an extension of this first plan in March, 1916; and the Second Stock Purchase Plan, or present plan, in December, 1919. Purchase. — ^Any employe in service of the American Telephone and Telegraph Company, or its Associated Companies for one year or more continuously on December 1, 1919, eligible to purchase stock of the American Telephone and Telegraph Company at $100 a share if the Company employing him had accepted this plan ; employe exer- cised right to purchase by signing a prescribed form of purchase agreement and filing it with his immediately superior officer, on or before December 31, 1919; questions arising under plan as to term of employment, rate of pay, leave of absence and temporary layoff, determined in accordance with rules established xmder the Company's Plan for Employes' Pensions, Disability Benefits and Death Benefits. ■ Any employe whose term of service met requirements, privileged to purchase one share of stock for each $300, or fraction, of annual rate of pay received on December 1, 1919, but not exceeding 20 shares; that is, an employe receiving pay on December 1, 1919, at an annual rate of $900 might purchase a maximum of 3 shares, while an employe receiving more than $900, but not more than $1,200, might purchase a maximum of 4 shares, and so on ; an employe might purchase less than his maximum number of shares ; in case total nimi- ber of shares applied for exceeded number of shares available. Com- pany reserved right to reduce applications. Payments. — Payments for stock made by deductions from em- ploye's wages at $3 a share a month, deductions beginning in Feb- ruary, 1920, except in case of employes already paying for stock under previous plans whose payments might be delayed imtil May, 1920; $1.50 a share deducted semi-monthly for employes paid semi- monthly; for employes paid weekly, 75 cents a share deducted for each first four weekly payroll periods ending in calendar month. 17 Employes who purchased stock under plan, and who, after Feb- ruary 1, 1920, were paying for stock purchased under Extension of Plan to Aid Employes of the Bell System to become Stocldiolders of American Telephone and Telegraph Company, permitted to elect, to have deductions from wages begin in May, instead of February, 1920; in case of such elective deductions for the 9 months' period — May, 1920, to January, 1921, inclusive, fixed at $4 a share a month, after which regular deductions at $3 a share a month made; credits on account of dividends and charges on account of interest made as though deductions had begim in February, 1920, but if employment terminated before deductions were made, that fact constituted a can- cellation of purchase agreement of December 31, 1919; since Feb- ruary 1, 1920, dividends on Company's stock credited upon each share of stock purchased, an amount equal to amount of dividend a share. Interest charged on impaid balances from February 1, 1920, at 4% per annum and added to balance at end of each quarterly period; rights to subscribe for new stock issued by Company or other rights of similar character attaching to stock partially paid for, can be sold and proceeds credited pro rata upon unpaid purchase price of stock ; on or after June 1, 1921, employe may pay balance then unpaid on account of shares purchased by him. Transfer of Stock. — Stock fully paid for, transferred to purchaser who is entitled to receive a certificate therefor ; if instalments are paid regularly and dividends continued at present rate, stock will be fully paid for by July, 1922. Contracts Not Transferable. — Until stock is fully paid for, no employe may pledge or alienate his rights under his purchase agree- ment; a violation of this provision constitutes withdrawal from pur- chase agreement, and employe's only right to receive from Trustees the total amount withheld from his wages on account of purchase price of stock, together with interest at 4% per annum, compounded quarterly, such payment operating as a cancellation of purchase agreement. Termination of Purchase Agreements and Suspension of Pay- ments; Termination of Service. — ^At termination of employe's service by death or otherwise before stock is paid for, purchase agreement cancelled and he or his estate entitled to receive net amount accu- mulated on contract as result of deductions from wages, dividends and otherwise, provided that if termination occurs on or before June 18 1, 1921, he or his estate may, with respect to each share purchased, either take in cash net amount so accumulated or make payment in full and be entitled to stock. Temporary Absence. — In case of leave of absence, temporary layoff on account of reduction in force, or transfer to a disability payroll, employe privileged to (a) cancel pvirchase agreement and receive amoimt to which he would be entitled if permanently leaving service, or (b) make required periodical payments on stock directly to Treasurer of company employing him, or (c) suspend payments for period his name is off regular payroll, not exceeding 3 months; deferred payments to be made up during following 6 months. In case employe, acting under option (b) or (c) fails to make payments, purchase agreement cancelled and he receives amount which would be due him upon permanent termination of service. Withdrawal. — Employe continuing in service privileged to with- draw from purchase agreement upon filing application for transmis- sion to Trustees ; upon receipt of application, he is entitled to receive total amount withheld from wages; as to each share in respect of which withdrawal is requested, with interest at 4% per annum, com- pounded quarterly, and purchase agreement respecting those shares cancelled. Trustees. — Contract for execution of plan made between Com- pany and 3 Trustees appointed by Board of Directors or Executive Committee of Companj'^ under which stock requisite to carry out agreement with employes has been acquired by Trustees; contract requires Trustees to hold stock to insure performance of contract with emploj'^es and does not permit them to pledge it except to secure loans necessary for Trustees to make to provide funds to pay for stock before payments made by employes are sufficient for this pur- pose; Trustees required by contract to apply to purchase of stock all funds derived from payments by employes, dividends, and sales of rights (if any), and to transfer stock to each employe as his stock is paid for in accordance with plan; trustees, with assent of Board of Directors or Executive Committee of Company, have power to make changes in details of plan not, in their judgment, prejudicial to employes, that will aid in making it effective ; decision of Trustees final respecting rights or interests under plan of employes collectively or individually. In case of death, mental incompetency or disappearance of em- 19 ployes, Tnistees may, in settlement of purchase agreements, waive compliance with legal formalities that will, in their judgment, in- volve imdue expense, delay or other hardship, and may make pay- ments and transfers of stock to such persons, as representatives of estates of employes, as, in the judgment of Trustees, circumstances warrant, being governed, so far as practicable, by provisions relating to payment of death benefits under Company's plan for Employes' Pensions, Disability Benefits and Death Benefits. Pensioners. — ^Employes who became pensioners prior to Febru- ary 1, 1920, could not purchase stock under plan, but employes who became pensioners on or before that date might elect to continue pay- ments on stock or to cancel purchase agreements and receive amount to which would be due him if permanently leaving service. No employe is xmder any obligation to purchase stock and no official is permitted to urge his subordinates to do so. The present standing and future prospects of an employe are not affected in the least degree by his decision as to the purchase of stock. Belle City Malleable Iron Company Motive. — Encouraging thrift among employes. Beneficiaries. — Heads of departments and rank and file. Bonus. — ^A 2% dividend on stock subscribed for during period of 5 years. Payment. — Monthly, $1.50 a share, with interest at 5% charged on deferred payments; stock, therefore, received a net credit of 3% annually during 5 years; monthly dues, dividends and extra credits expected to pay for stock in something less than 5 years. Resignation. — Employes who resign not required to sell stock back to Company; practically no other coercive reservations. Boston Consolidated Gas Company Motive. — ^Rewarding efficiency. Beneficiaries.— Any employe in employ of Company for one year prior to July 1 of any year in which premium is declared, provided work has been such as to warrant participation. Provisions of Plan. — "Premiums" or annual shares in Company's profits allotted to participating employes on basis of annual salaries 20 or earnings at same rate as dividends on stock of Company for pre- ceding year; separate premium account showing principal, interest and debit charges kept by Company for each employe who receives a premimn; when amount thus credited is sufficient to purchase one or more preferred shares of capital stock of JSIassachusetts Gas Com- pany at the then market price, the President of the Company, at his discretion, either pays premium in cash or purchases one or more of preferred shares mentioned at market price and on account of em- ploye; shares so purchased delivered to employe and become his abso- lute property to be sold by him at his option any time after 7 days' notice in writing to Treasurer of Company; if sale does not receive approval of Directors, employe may be dropped from list of profit sharers for at least one year; no deduction of premium made on ac- count of illness not exceeding 2 months ; profit sharers have a repre- sentative of their own, with full voting powers, on Board of Directors. BuiujEKS Iron Foundry Beneficiaries. — Officers and leading employes. Plan. — ^Debenture certificates, bearing interest at same rate as dividends on Company stock, but in any case never less than 6%, may be purchased. Payment. — Payment for certificates made partly by subscribers and partly by contributions from Company, in proportion to annual increase in surplus; subscriber acquires no rights as a partner or stockholder nor does he become liable for any debts or obligations of Company. Liquidation. — ^Amoimt of savings debenture certificate repaid on 15th of March, June, September or December, on 10 days' notice, at pleasure of Builders' Iron Foundry, or on 30 days' notice given Company by holder; while debenture is outstanding, ' interest on amoxmt paid by Company at 6% per annum, or during each year, at such higher rate as is equivalent to rate earned during that year on its invested capital, after paying all taxes, by Builders' Iron Foundry. Canada Cement Company, Ltd. Several allotments of stock have been made by Company, each more general in application. At present, however, benefits limited to employes whose services are practically indispensable. 21 Charlks Warnek Company Beneficiaries. — Employes showing special effort in service of Company. All employes eligible except officials and laborers. Plan. — After setting aside certain fixed charges, 1/3 net surplus earnings distributed in form of common stock purchased by Com- pany for this purpose in open market; distribution not proportioned to wages but efficiency; employes divided into 4 classes, Group "A" receiving the maximum and Group "D" the minimum; stock assigned to participants held for period of 5 years, dividends meanwhile paid in cash ; stock issued immediately to subscriber in case of resignation or lay-off or his estate at death; subscription cancelled by Company for cause, in such case stock reverting to profit sharing fund. Additional Plan. — Company has a stock ownership plan divorced from any principle of profit sharing; under plan first and second preferred stock offered annually in January to employes at price somewhat below market value; employes not permitted to subscribe amoimts exceeding 30% of salary; preference in case of over-sub- scription given lower salaried employes; stock purchased for resale in open market by Company; payments deducted monthly from sal- ary check in instalments of $2.50 per share; interest on unpaid bal- ances 5% deducted from regular 7% dividends. The Chicago Central Station Institute and Allied Companies Employes may be stockholders in Company on payment of a small amount a share down and payments of $5 a share per month. Clevtsland Worsted Mills Company Beneficiaries. — Any "worthy and interested employe." Terms of Plan. — Stock sold at par, with minimum initial pay- ment of 5%, after which dividends applied on principal year by year, interest at 5%. Commonwealth Edison Company Beneficiaries. — ^Any employe in service of Company one year. Plan. — Subscriptions of 3% or 5% of employe's salary made to savings fund; amount thus deposited draws interest at 6% com- 22 pounded; payments made within 4 days after each pay day; option after 5 years of withdrawing deposit with accrued interest, or in form of stock at $120 a share, a figure generally lower than that of market. Resignations. — If subscriber leaves Company's service, is dis- charged, or wishes to discontinue subscription, deposit refunded with interest. Commonwealth Power, Railway and Light Company Beneficiaries. — ^All employes, including heads of departments. Plan. — Plan in effect February 1, 1916; payments made on stock, at $60 a share, by deductions of $1 a share per month from wages, interest at 5% on unpaid balances; dividends credited to purchase account at price at which stock is offered to employes; actual dividend yield 6 2/3% ; employe subscribes for no more than 2 shares for each $300, or fraction, of his annual wage ; stock not delivered to employe until fully paid for, meanwhile not transferable; subscribers may re- duce subscriptions and have net amounts paid in applied to purchase of shares in full. Resignation or Death. — Upon resignation or death, settlement made by delivery of as many shares of stock, at $60 a share, as amount paid in and accumulated on account will purchase, with check for balance remaining. Curtis Companies, Incorporated Plan. — The Curtis Companies, Incorporated, oAvning all stock of Curtis Brothers and Company as well as the other Curtis operating companies, has amended its Articles of Incorporation to authorize an issue of Employe's Preferred Stock, in order to give to everybody connected with the business an opportunity to invest in the capital stock of the Company. Company has agreed to sell Employes' Pre- ferred Stock of Curtis Companies, Incorporated, to any individual in the employ of any of its companies 2 months or more, and will make additional payments to holders of such stock based on length of ser- vice. It is intended to provide a means by which employes may in- vest savings in securities of the business in which they work, and to make returns on the investment of employes as safe and large as the business permits. 28 The Curtis Companies, Incorporated, has authorized a total of $2,000,000, preferred stock, $1,000,000 Employes' Preferred Stock, and $3,000,000 common stock. Preferred Stock, carrying a straight 7% dividend and no voting power, has first right to dividends out of earnings. Employes' Preferred Stock, having a guaranteed dividend also, plus certain special payments offered by operating companies, has second right to dividends out of earnings, before Common Stock receives anything. In event of dissolution or distribution of assets, preferred stock paid first. Employes' Preferred Stock second; both must be paid up in full, together Avith all arrears of dividends, before common stock receives anything. Two million dollars common stock issued and fully paid, and a surplus of over $500,000.00, so that margin of security for holders of preferred and Employes' Preferred stock is substantial. If addi- tional amounts of preferred stock are sold, common stock outstanding will undoubtedly increase proportionately. Employes' Preferred Stock. — Provisions in Articles of Incorpora- tion, vmder which stock is issued, follow : 1st. Stock issued only to employes of corporation and subsi- diaries. 2nd. Stock entitled to receive dividends at 7% per annum, pay- able annually on February 1, each year, in preference to dividends upon common stock; dividends cumulative so that any deficiency in dividends paid on stock, in any year, made good out of earnings of subsequent years before dividends are paid upon common stock. 3rd. In event of insolvency or dissolution of Corporation, stock entitled to be paid in full, together with accumulated dividends, be- fore distribution of assets of corporation, shall be made to holders of common stock. 4th. Stock, or any part thereof, may be retired at any time, by vote of Board of Directors, upon payment of $105 a share, and divi- dends accrued to date of retirement; retirement effected by mailing notice, setting forth time of retirement to each holder of stock to be retired, at least 30 days prior to time fixed for retirement; if holder of stock fails to present it for retirement, at office of Corporation, on or before date fixed, stock ceases to draw dividends from date fixed for retirement. 5th. At death or resignation of holder of stock, Board of Direc- tors may call in stock and retire it by paying par arid all earned divi- 24 dends for it ; if stock is not surrendered for retirement within 30 days after notice of retirement, no dividends drawn after expiration of the "30 days. Additional Payments Paid by Company by Which Owner of Stock Is Employed. — To holder of stock, company pays an addi- tional 1% when employe has been in service of any Curtis company continuously for 2 years or more; 2% for 5 years or more, and 3% for 10 years or more; in other words, owners of stock entitled to receive 8% dividends upon completion of 2 years' continuous service with any Curtis company; after 5 years of service, they receive 9% dividends^ and when they have served 10 years, they receive 10% dividends. Purchase. — Employes' Preferred Stock purchased for cash in full, or by part payment and instalment payments ; if paid for on instal- ment plan, deposits draw interest from date of deposit at same rate that stock would draw in dividends if purchased outright; for ex- ample, a man who has been in continuous employment of any Curtis Company for 10 years and enters into contract to purchase stock on instalment plan, draws 10% interest on his deposits until stock sub- scribed for has been paid for, when the stock draws regular 10% dividend; if deposits are withdrawn before stock is issued, employe receives interest at 7% only, with additional interest for years of service. Amount Purchased by Employe Limited. — Employe may pur- chase stock in amoimt equal to twice his total wages for one year, and Company will pay additional dividends for length of service on any amotmt of stock to each employe up to that limit; if employe desires to purchase more stock he may do so, but he receives in dividends on additional amount purchased only regular 7% dividend. Retirement of Stock. — If owner of stock leaves employ of com- pany, special dividends cease immediately, xmless he enters service of another Curtis company, in which case that company assumes the obligation to pay the extra dividend that first company has paid; Company reserves right to withdraw the special dividend feature, but in case of withdrawal, it agrees to purchase holdings at par and ac- crued dividends, unless a new proposition, in lieu of the special fea- ture withdrawn, is submitted to the vote of all holders of stock and approved by the majority. 25 De Laval Separator Company Beneficiaries. — ^All employes. Plan. — Employes subscribe to investment and profit sharing cer- tificates to extent of 10% of salaries or wages at end of each half year (limited in case of a few higher salaried men) ; amount of profit sharing certificates at beginning of each year shares profits of business for that year pro rata with net investment of stockholders, apart from fund subscribed by employes ; subscriptions made July 1 of each year share to extent of one-half in profits for that year; employe's share paid to him when annual net profits have been determined, usually March 1 ; employe gets full share of profit, stockholders' share limited to dividends usually less than full amount earned; a salary and wage retention provision of plan provides that employe may authorize re- tention of 10% of pay toward conversion into a profit sharing cer- tificate at end of a half-year, receiving interest on retention. Dennison Manufacturing Company The industrial policies of the Dennison Manufacturing Company are so dependent upon the form of the fundamental organization of the company that it is impossible clearly to understand these policies without first carefully considering this organization. An Industrial Partnership Organization. — Technically, the Com- pany has all the attributes of a corporation. It consists of a fund which the law recognizes as an entity entitled to sue and be sued, to incur obligations and acquire rights, and which is controlled by a group of stockholders — OAvners of the fund whose right to control the policies of the company arises from and is in proportion to their rights of ownership in the corporate fund. Actually, the Company is, as the name of its voting stock suggests, not a normal financial corporation, but an industrial partnership. In so far as its corporate fund is the property of investors, it is in the form of preferred stock, which gives to its owners a fixed re- turn, representing interest and compensation for risk. But this pre- ferred stock gives no share, either in net profits or control of the Corporation. If the Company defaults in paying dividends upon this stock, the control of the corporation is acquired by the preferred stock-holders in a manner similar to foreclosure. The investors are in 26 the position of lenders and not in any sense a part of the body cor- porate. Industrial Partnership Stock. Each year the profits remaining after dividends on all outstanding stock of any kind have been paid are re-invested in the business and against this investment shares of stock are issued called industrial Partnership Stock. Two-thirds of this stock is voting stock and issued to the so-called Managerial In- dustrial Partners in proportion to their relative salaries. These Man- agerial Industrial Partners are the managerial employes of the com- pany — employes who have been with the company at least 5 years and whose positions require the exercise of managing ability and con- trol over methods of manufacturing and marketing, such as any exec- utive, principal foreman, chief clerk, or principal salesman, or whose work shows the use of a high degree of imagination, tact or business judgment. Since the "Industrial Partnership Stock" is the only voting stock, the entire control of the Company is in the hands of the managerial employes, and since this stock is non-transferable and must be ex- changed for second preferred stock when an Industrial Partner leaves the company, the control will always remain exclusively in their hands, except when the control is transferred to the preferred stock- holders in the case of foreclosure for failure to pay dividends. Non-Voting Stock. — The remaining one-third of the Industrial Partnership Stock is non-voting, and is distributed among the Em- ploye Industrial Partners in relation to the length of their service. These consist of all employes other than the Managerial Industrial Partners, who have been over three years with the Company. All employes who have been with the Company long enough to have become thoroughly identified with it thus share in the profits of the Company. General Works Committee. — Finally, all non-managerial em- ployes of the factory, though not sharing the direct control of the Company, participate with the Managerial Industrial Partners in its management through representation in the General Works Commit- tee. The General Works Committee consists of about 60 represen- tatives of the employes, elected by departments. It meets without the presence of any member of the Management. It is free to dis- cuss any factory problem or policy and to make recommendations in regard thereto "for the approval of the Management. In practice, 27 it has become an active and important factor in management and through it all non-managerial employes participate in the direction of the Company. Since the control of the Company is thus vested in its managerial employes, and the direction of its policies and the distribution of its profits are participated in by all employes who have been long enough with the Company to become identified with it, the Company is very similar to a technical "limited partnership" of nearly two thousand members, and is more accurately described as an "Industrial Part- nership" than as a corporation. If the Companj'^ is thought of as a corporation, it should be carefully borne in mind that although strictly the corporate entity is still an invested fimd, the body corporate is not a group of investors but the active workers of the Company. In the Dennison Manufacturing Company the active workers of whom the Company is composed are truly the corporation. DoRT Cab Company Beneficiaries. — Heads of Departments. Plan. — Subscribers permitted to acquire stock in Company by giving note in payment with stock as collateral. Note paid by earn- ings on stock. Another method provided by setting aside a certain amount of stock on which dividends are paid, stock being delivered to employe at end of 5 years if he continues in service. Eastman Kodak Company and Allied Companies Synopsis of Plan for Sale of Common Shares, at Par to Employes Adopted July 10, 1919. — Stock for which employes of Company may subscribe is in part a donation by the President of the Company, Mr. George Eastman, and in part an issue authorized by Company. Employes entitled to apply for shares donated by President. — Subject to approval by Mr. Eastman, Company's common stock donated by him and estimated at 10,000 shares of the par value of $1,000,000 offered to employes who completed 2 years or more of continuous service prior to January, 1918, each employe permitted to apply for and purchase an amoimt of stock, at par, equal to 2% of salary or wages received while continuously employed prior to that date. Employes entitled to apply for shares set aside by Company i — Subject to approval by Company, stock set aside by it, viz.: 10,000 28 shares of the par value of $1,000,000 at par, offered for sale to em- ployes who complete or have completed 2 years of continuous service, and who remain continuously in service, until they have applied for an amount of shares equal to 2% of total salary or wages received during 5 years of continuous service; such offer and sale to future em- ployes to continue as long as shares set aside and issued by Company for sale to employes are sufficient for the purpose. Terms and Conditions. — ^All shares referred to, both those donated by Mr. Eastman and those set aside by the Company, sold to em- ployes upon the following terms and conditions. Managers. — Company, with concurrence of Mr. Eastman, has ap- pointed 3 managers to act without compensation and to be responsible to Company, each manager for himself and not one for another, and only for honesty and good faith on his own part in the transaction of the business ; no manager further liable to Company or purchasers of shares under plan ; in case of death, resignation or inability to act on the part of a manager, his successor appointed by Company. Expenses. — Clerical force, office expense, furniture, fixtures, printing, stationery, postage and revenue stamps necessary to conduct the business furnished by Company which pays all necessary inciden- tal expenses. Applications. — Managers send notices to employes entitled to apply for shares donated by Mr. Eastman setting forth number of shares or fractional parts employe is entitled to purchase, and also send to employes application blanks to be signed and returned to man- agers by employes desiring to apply for shares. Mr. Eastman trans- fers to managers from shares donated by him shares required by such applications as he approves, and thereupon managers issue to each employe whose application has been approved, a managers' certificate containing terms and conditions governing the transaction. Similar regulations obtain in regard to company stock with the substitution of Company for Mr. Eastman. Managers' Certificates. — Managers' Certificates issued for shares donated by Mr. Eastman dated July 1, 1919; Managers' Certificates issued for shares set aside and issued by Company dated January 1, April 1, July 1, or October 1, following that anniversary of employe's entering service on which application shares may be made by employe. Manager's Certificates mature 5 years from date of issue and are not transferable. 29 Applications Voluntary — No Debt Incurred. — Applications en- tirely voluntary; by applying for shares, employe assumes no debt, but may pay whole par value of shares at once, make payments from time to time, or pay for shares by means of dividends thereon received by managers from Company, Avhich dividends, together with pay- ments made by employe, managers apply semi-annually on January and July in reduction of amount unpaid and interest until par value and interest is fully paid. Managers Keep Accounts. — Managers cause an account to be kept with holders of Managers' Certificates, debiting deferred pay- ments and interest semi-annually at 5% per annum; and crediting semi-annually payments made by emploj'^e and dividends received on shares first against interest due on account and balance against principal. Managers Account to Employes Semi-annually. — Managers re- ceive from Company dividends paid upon shares, both those donated by Mr. Eastman and those issued by Company and held by them, for which they have issued Managers' Certificates, and pay over to hold- ers whose Certificates are fully paid for, semi-annually, amount of dividends received by managers ; in case of Certificates not fully paid for, managers first apply dividends semi-annually, together with pay- ments made by employe, with accrued interest. Par Value of Shares Donated by Mr. Eastman Paid Over to Com- pany for benefit of Employes — Par value of shares donated by Mr. Eastman with all interest accruing tvimed over to Company to be used in a welfare fund for benefit of employes and administered vmder rules and regulations mutually agreed upon by Mr. Eastman and Board of Directors. Employe Leaving Service Before Maturity of Managers' Certifi- cate Loses Right to Purchase Shares. — If holder of Managers' Cer- tificate leave service before its maturity for any reason or other than death or permanent disability, all rights and privileges granted under certificate abrogated, except that on return of Certificate to man- agers, employe receives, without interest, amount paid and dividends applied, less accrued interest to be deducted from amount of divi- dends. Interests of employes safeguarded by equal representation upon committees formed to deal with such matters impartially. Death of Employe Holding Managers' Certificate. — In case em- ploye holding a Managers' Certificate dies before its maturity, on 30 payment of par value and accrued interest within one year from such date, shares are transferred to widow, next of kin, legatees or per- sonal representatives of deceased, in accordance with his or her last will and testament, or in accordance with the laws governing intestacy if there he no will; or, in case of failure to make such payment, the amount paid and dividends applied, less accrued interest to be de- ducted from amount of such dividends, is paid over without interest by managers to estate of deceased and Managers' Certificate can- celled. Permanent Disability of Employe or Marriage of Woman Em- ploye Holding Managers' Certificate. — If an employe holding a Managers' Certificate becomes permanently disabled in service before rjiaturity of certificate, or if a woman employe marries and leaves service, on account of such disability or marriage, when par value with all accrued interest is paid, the shares may, with approval of Company, be transferred to employe on satisfactory proof to man- agers of permanent disability or marriage. Employes Returning from War Service. — The interval during which an employe was out of Company while engaged in military or naval service in the World War, or while engaged in any auxiliary war service, provided he re-entered service of Company on discharge, has been disregarded in computing terms of continuous employment. Company May Annul Managers' Certificate for Cause. — Com- pany, with consent of Mr. Eastman, reserves right to annul before maturity any Managers' Certificate and abrogate all rights and privi- leges of holder on account of any act deemed prejudicial to Com- pany; written notice sent by managers by mail to employe, and on return of certificate to managers, holder receives, without interest, amount paid and all dividends applied on shares, less accrued interest to be deducted from amount of dividends. Interpretation. — Questions arising between Company and holder of Managers' Certificate, or between managers and holder, as to proper interpretation of terms and conditions governing purchase of shares by employes decided by managers and their decision is final. Shares Transferred to Employe on Maturity of Managers' Cer- tificate. — Employe holding Managers' Certificates, on maturity date, if meantime continuously in service (provided Certificate is then in force, and par value of shares of $100 a share with accrued interest is fully paid) entitled to purchase shares specified in Certificate and 31 receive in exchange and without further payment a Stock Certificate issued by Company for shares ; but no stock certificate issued by Com- pany for a fraction of a share other than one-tenth or multiples. Em- ployes, on maturity of Certificates, given opportunity to buy or sell at market price then prevailing, fractions of a share less than one- tenth. Edison Electric Illuminating Company of Brooklyn Beneficiaries. — ^Employes to whom 3 successive annual sums have been credited in connection with percentage of profits plan of Com- pany, a plan by which employes who have been in Company's service for 2, 3, 4, and 5 years respectively receive each year an equivalent to one-fourth, one-half, or three-fourths — in the case of first three classes of employes — of the rate of dividends paid on capital stock according to term of service ; and in the case of 5 years' continuous employment, a percentage equivalent to full dividend rate. Plan. — ^After three successive annual sums have been credited to the employe, he may take out stock in Company to amount of his credit for first 2 years of three-year period; employes may make regu- lar deposits in investment fund in addition to their profit sharing credits and may withdraw such deposits at will. E. I. Du Pont de Nemours & Company The Board of Directors of this Company has modified the Plan for Stock Subscription, which has been in effect since 1909, and has made important changes for the purpose of providing an opportunity for employes to invest their surplus earnings in such a way as to share in the profits of the Company, while enjoying the security afforded by the debenture stock. Employes who become Stockholders under this Plan will receive not only a fixed cumulative dividend on their stock, when declared, but also (a) — a participating payment at a rate increasing with the net earnings of the Companj% and (b) — a Service Payment based upon the length of service credited to them. The Directors hope that by this plan employes will be assisted in accumu- lating savings and wiU have an added incentive to remain in the em- ploy of the Company and to contribute largely to its success. Debenture Stock. — The Company offers employes in its service one year or longer, opportunity to subscribe to its Non- Voting 6% Debenture Stock at $100 a share. 32 Subscribers and Participants. — Employes subscribing to this de- benture stock but whose payments have not -been completed called "Subscribers"; employes paying subscriptions in full and receiving their stock certificates, thereby becoming eligible to receive participat- ing and service payments when payable, called "Participants." Net Earnings.-^FoT the purpose of the Plan, "Net Earnings of the Company" comprise the net earnings shown in the published annual statement to stockholders for the year 1920, adjusted to in- clude Company's equity in the undivided net earnings of subsidiary companies for the same year. Combined Total Invested Capital. — For the purpose of the Plan also, the "combined total invested capital" of the Company comprises the sum of outstanding bonds or notes having a maturity beyond one year from original issue, capital stock, undivided profits and surplus, of December, 1919, shown by the published annual report, adjusted to include Company's equity in amount by which net assests of its sub- sidiary companies differ from values at which securities of such com- panies are carried on the books of the holding Company. Participating Payments. — Participating payments based upon net earnings in accordance with the following computation : Net earnings on combined total Participating payment per invested capital per annum : annum : 8% to less than 9% $1.00 per share 9% " " " 10% 2.00 " 10% " " " 11% 3.00 " 11% " " " 12% 4.00 " 12% 5.00 " " Service Payments. — Rate of service payments based on years of continuous service with Company or subsidiaries; remain unchanged for one year; adjusted annually January 31. Payments made on following basis : Length of service 1 year and less than 2 years — $1.00 per share per annum. Length of service 2 years and less than 4 years — $2.00 per share per annvim. Length of service 4 years and less than 7 years — $3.00 per share per annum. Length of service 7 years or over $4.00 per share per annum. 33 Dates of Participating and Service Payments. — Participating and service payments paid on same dates as dividends on debenture stock to participants who have completed payments on or before the 10th of month in which such dividends are paid. First Participating Pay- ment, based on net earnings of preceding calendar year, made on April dividend date, and followed by three additional payments of like amount on succeeding dividend dates. Maccimum Participation. — If participant has been in service of Company for 7 years or more, and if Company's net earnings for preceding year were 12% or more on its combined total invested capi- tal, subject to declaration and payment of regular cumulative 6% dividend, employe receives in all 15% or $15.00 for the following year on each share of debenture stock, beginning with the April payment. Table of Payments. — Subject to declaration and payment of regular cumulative 6% dividend on debenture stock, the following table shows aggregate annual payments to participants according to net earnings of Company and employe's length of service : T _»v * "^""' If Earn- If Earn- If Earn- If Earn- JJ^"™ Lenethof ,'"««?" ingsare ingsare ingsare ings are S".^*™ Service '*=|^"" 8% to 9% 9% to 10% 10% to 11% 11% to 12% *^%°' 1 to 2 years. 7% 8% 9% 10% 11% 12% 2 to 4 years. 8% 9% 10% 11% 12% 13% 4 to 7 years. 9% 10% 11% 12% 13% 14% 7 years and over 10% 11% 12% 13% 14% 15% Eligibility. — ^Any employe not a director and with at least one year of continuous service with the Company or subsidiaries to his credit on January 31, 1921, may subscribe to debenture stock under this Plan. Continuity. — Continuity of emploj'^ment and length of actual service of subscribers and participants established according to pub- lished rules of Company. Amount of Subscription. — ^Any eligible employe may subscribe to amount of stock equivalent to not more than four times his monthly rate of salary or wages effective November 30, 1920, including extra salary and merit pay, but in no case to more than 20 shares. Regu- larly monthly pay of employe working on hourly basis considered as 200 times hourly pay. No subscription accepted for less than one 34 share. An employe entitled to subscribe for a fractional part of a share may subscribe for an extra share ; no fractional part of a share issued. Subscriptions for stock received at any time on or before January 31, 1921. No subscriptions received after that date. Sub- scriptions for stock must be made on one of tAvo blanks. (See Ap- pendix). Payments by Subscribers. — Stock for which employes subscribe under this offering must be paid for within one year, except that final payment may be credited to subscribers not later than February 10, 1922. Subscribers may pay in full at time of subscription or make partial payments. Payments received on or before January 31 cred- ited to subscribers on February 10. Subscriptions not paid in full accompanied by initial payment of $4.00 per share, balance to be paid m amounts of $8.00 a share per month either by check or money order drawn to order of- Company, or by deduction from salaries or wages, duly authorized in writing. Subscribers wishing to complete subscrip- tions may do so at any time during the year. Credit Dates. — Subscribers receive first credit on February 10th for payments made prior to that date. Subsequent payments credited on 10th of month in which they are made, provided they are received on or before that date. Payments received later than 10th of month credited on 10th of foUoAving month. Interest. — Subsci'ibers allowed interest at 6% a year on instal- ment payments, subject to adjustment for that portion of quarterly dividend accrued to date of final payment. Checks in payment of interest due subscribers sent to them at same time as stock certificates. Dividends. — Stock for which employes may subscribe carries divi- dends only after being paid for in full. According to Company's present policy, dividends on debenture stock paid on the 25th of April, July, October and January to stocldiolders of record on the 10th of these months. Certificates of Stock. — Certificates of stock issued and delivered when stock subscriptions have been paid for in full. Only one certifi- cate issued for each subscription. Cancellation of Subscriptions. — If subscriber resigns from service of Company or is discharged for cause, or fails to make payments at minimum rate, his subscription cancelled and' stock delivered in amount represented by payments already made. Fractions of less than $100 adjusted in cash. Those remaining in Company's employ 35 entitled thereafter to receive participating and service payments on stock in settlement. Upon written request of subscriber, his sub- scription cancelled and settlement made. (See Appendix.) Leave of Absence. — Subscriber or participant on leave of absence with pay has same status as one on active roll. Subscriber on leave of absence without pay may continue instalments or complete subscrip- tion, but upon its completion he will not receive participating or serv- ice payments imtil his return to service of Company. Participant on leave of absence without pay, or one who resigns or is discharged re- ceives no participating or service pajj^ments until his return to service of Company, except that if leave of absence or separation begins within 15 days prior to date when payments are due, he receives them. Stockholders retain debenture stock if they choose, but they will be entitled thereafter to receive regular dividends only, if declared, at 6% a year. Lack of Work. — Subscribers and participants laid off on account of lack of work, reduction in force, or idle mills, treated as employes on leave of absence without pay, except that if not re-employed within time specified in Company's published regulations they will be considered as having left service, and settlement Avill be made with them. Reinstatement. — Upon reinstatement of employes in right to re- ceive participating and service payments, payments begin at next dividend date, unless reinstatement takes place within 15 days prior to that date. Pensioners. — Pensioners not permitted to subscribe, but employes who subscribe and are subsequently pensioned permitted to pay sub- scriptions on same terms as if remaining in service ; pensioners entitled to receive participating and service payments already referred to. Stock Negotiable and Transferable. — ^Employes purchasing and receiving debenture stock under Plan may use stock as collateral in obtaining a loan without impairing right to participating and service payments. If, however, stock is sold or transferred, right to pay- ments immediately ceases. Redemption of Stock. — Company desires employes to feel that their funds are reasonably within their control at all times. Employes, therefore, who desire to have their stock redeemed permitted to do so under certain conditions. In such cases, however, Company re- quires 3 months' written notice in advance, except in cases of neces- 36 sity, approved by department head. Stock will then be redeemed at $100 a share. Number of shares of stock of employe which Company will redeem in one calendar year limited to maximum number to which he subscribed in any year. When stock is thus redeemed, employe not entitled to participating and service payments in quarter in which stock is redeemed. However, in case of subscribers or participants leaving service through resignation or discharge, debenture stock pur- chased under Plan, upon written request, redeemed by Company at $100 a share, with no requirement as to notice, and without limitation as to number of shares redeemed. Settlement in Case of Death of Suhscriher. — In case of death of subscriber check sent to legal representative for amount of principal and interest standing to his credit. Settlement in Case of Death of Participant. — At death of a par- ticipant both participating and service payments cease. At written request of legal representative, Company redeems his debenture stock at $100 a share and in addition makes an adjustment equivalent to amount in dividends of participating and service payments accrued since last payment. Future Ofer. — If Plan meets with favorable response, it is in- tended to make a similar offer each year, except that the amoimt of stock to be offered may vary. Employes Who Subscribed Under Former Plan. — ^Employes who subscribed to debenture stock under the former plan and have not completed payments at liberty to cancel previous subscriptions and apply balance due (less amount of stock received in settlement) to subscriptions under this offer. Upon receipt of written request, ac- companying duly executed subscription form, on or before January 31, 1921, old accounts cancelled and credit given to new subscriptions as of February 10, 1921. In addition to these credits, subscribers pay from beginning amounts prescribed until completion of subscrip- tions. Stock received by employes in part settlement of former sub- scriptions do not entitle owner to participating and service payments, but carry extra compensation as specified in former plan. Termination of Plan. — Company reserves right to terminate Plan after due notice under the following conditions : On December 1, of any subsequent year Company may ( 1 ) Give notice that no additional stock will be offered but that participating and service payments will continue on stock employes have already subscribed for. 37 (2) Announce termination and abandonment of Stock Subscrip- tion Plan effective one year from following 25th of January. (3) Announce termination and abandonment of Plan effective at once. If Company adopts (2) it will announce its choice of one of two plans for redeeming debenture stock at $100 a share, namely: (a) All stock redeemed at one time; except that employes who desire to retain stock may do so, in which case they receive regular dividends only on this stock, when and if declared. (b) Company may elect to take 3 years for redemption of stock, redeeming approximately one-third each year and continu- ing participating and service payments on balance out- standing. In latter case redemption and retirement of stock by lot and employe whose name is drawn will notify Com- pany immediately whether he desires to have part or all or none of his stock redeemed. If Company chooses (3) it will pay to each participant, on follow- ing 25th of January, not onlj' regular participating and service pay- ments but also an amount corresponding to total participating and service payments which he will have received during the twelve months^ ending on that date. First National Bank of Chicago Beneficiaries. — Any member of the Bank Pension Fund. Plan. — Employes may purchase stock within 10 points of market price; money may be borrowed from Bank for such purpose at 4% and repaid in instalments of $5 a month per share. Ford Motor Company Investment Certificates. — Company announces the institution of Ford Investment Certificates in which employes desiring to share in prosperity of Company, beyond interest in Bonus Plan, may invest a portion of their income. To Whom Sold. — Non-negotiable and non-assignable certificates issued in names of employe in denominations of $100, $500 and $1,000; only persons in actual and active service of Company per- mitted to buy or hold certificates. 38 Returns. — Guaranteed interest on certificates at 6% yearly, and, in addition, further payments made semi-annually if earnings of Com- pany permit, at rate fixed by Directors. Payment of Certificates. — Company reserves right to require 30 days' notice in writing of intention of employe to demand payment of Certificates; subject to this reservation, employe receives in cash, at any time, face value of certificates together with interest due at 6% per annvim. Certificates Payable at Death of Owner. — In case of death of em- ploye. Certificates payable at once to his personal representative in cash, plus interest at 6% per annum. Certificates Left as an Investment. — Certificates standing in name of a deceased employe may continue, at discretion of Directors, to draw interest and payments for benefit of dependents. Retiring of Certificates. — ^Directors of Company reserve right to take up for cash, and on terms stipulated, any or all Investment Cer- tificates held by employes. One-third of Pay May Be Invested. — Deposits toward purchase of Certificates may be made by employes within 3 days after pay re- ceived from Company; amount deposited, not to exceed 1/3 of pay; in addition, bonuses may be deposited in full within 5 days after receipt. Interest on Deposits. — Deposits made toward purchase of Certifi- cates draw interest at 3% per annum, compounded semi-annually. Certificates Paid For Out of Bonus and Pay.- — Money withdrawn by employes from bank accoimts not accepted in payment, either in whole or in part, for Investment Certificates; certificates must be paid for out of bonus and pay; no employe permitted to invest an amount in excess of 1/3 his yearly pay in addition to total amount of his bonus. Frost Gear and Forge Company Beneficiaries. — Foremen and superiors, including officers of Com- pany. Plan. — ^After setting aside 10% for stocldiolders, portion of ex- cess profits divided among participants in proportion to salary; profits paid in stock representing share of each participant and held 39 in treasury for 3 years when it is issued to individual whether then in Company or not ; dividends paid on stock meantime. F. P. KiRKENDAJLI- & COMPANY Beneficiaiies. — Worthy employes in service more than one year. Plan. — Participants may subscribe for common stock, payments coming out of dividends declared upon it; 7% charged on impaid bal- ances ; stock disposable to Company only. General Electric Company Offer. — Any employe of the Company on November 1, 1920, and on its payroll continuously since September 1, 1920, offered privilege of subscribing for 1 to 10 shares of its capital stock at $136 per share ; a credit, amounting to $20 per share, against the subscription price, represents a net return substantially that which would be enjoyed by anyone purchasing stock on an instalment plan, paying interest on de- ferred instalments and receiving cash and stock dividends ; stock cer- tificates issued to subscribers only when payments, including other credits, amounting to $116 a share, have been made. Subscriptions accepted during November, 1920, upon special forms and turned into office of branch where subscriber is employed. Subscription made upon condition that all questions arising under plan be decided by Board of Directors of Company, such decisions to be final and con- clusive upon all parties. Future Issues. — Should Company offer its stockholders rights to subscribe to new "issues of stock prior to date when final instalment payments become due, it will credit employe subscribers with average value of such "rights." Svich credit will reduce amount to be paid in cash by subscriber. Payment. — Payments made by deductions from salary or wages in monthly or weekly instalments; monthly deductions began with December, 1920, and weekly deductions January 28, 1921 ; except as reduced in number by equivalent of rights or other credits ; payments made in 29 monthly instalments of $4 for each share subscribed for, or in 116 weekly instalments of $1 for each share subscribed for; pay- ments of subscriptions not made in advance. The following table illustrates the number and amount of instal- ments to be paid: 40 Monthly Payments Weekly Payments No. of Per Total Per Total ires Month 29 Months Week 116 Weeks 1 $4 $116 $1 $116 2 8 232 2 232 3 12 348 3 348 4 16 464 4 464 5 20 580 5 580 6 24- 696 6 696 7 28 812 7 812 8 32 928 8 928 9 36 1,044 9 1,044 40 1,160 10 1,160 Delivery of Stock. — Upon payment of final instalment Company will issue to subscribers, as soon as practicable, certificates for number of shares subscribed for; no earlier or partial deliveries of stock made; no assignment, transfer, pledge or sale of subscriptions or payments may be made ; subscriber may withdraw from subscription agreement at any time prior to decision to make final payment and take his stock certificate; upon withdrawal total amount paid by deductions from salary or wages, plus interest at 7% per annum; same rule obtains when subscriber leaves Company's employ, or does not resume pay- ments after temporary absence or lay-off. A subscriber temporarily absent because of illness or lay-off may continue subscription payments regularly, or suspend payments dur- ing absence but for a period not longer than 3 months or 12 weeks. If subscriber be retired upon pension before payments are completed, he may either have a refund of the total amount paid by him by de- ductions from salary or wages, plus interest at 7%, or he may con- tinue his subscription and make payment in cash of remaining instal- ments as they become due. Generai. Motors Corporation and Subsidiaries Payment. — Under the Partial Payment Plan by which employes of Company purchase its stock, $6 per share accompanies application as initial payment; balance of purchase price paid in equal monthly payments on 15th of each month following initial payment until pur- chase price fully paid. If application is not accepted initial payment return promptly; if application is accepted, purchaser charged with full purchase price of stock and credited with initial payment and sub- 41 sequent monthly payments. Cash dividends, and, unless otherwise arranged, stock dividends and rights applied as far as may be neces- sary to oifset interest charges at 6% per annum on deferred pay- ments, credit balance, if any, paid to purchaser at time of delivery of stock; purchaser not asked to make payments other than initial pay- ment and subsequent monthly payments ; purchaser may pay any or all remaining monthly payments at any time. If monthly payment remains overdue for more than 30 days stock may be sold at market price, and credit balance, if any, paid to purchaser. When total pay- ments equal purchase price stock issued and registered in accordance with instructions in application, imless purchaser otherwise instructs. Pass Book. — Pass Book issued to purchaser returned with each monthly payment that proper credit may be entered; entry made by Corporation in pass book constitutes receipt for monthly payment; unless specifically requested no other receipt issued. Dividends. — Present dividend on common stock $1 per share cash and 10% in common stock per annum; as illustration, annual return on 10 shares of stock, $10 cash and stock dividends amounting to one share of common stock; dividends on common stock paid regularly and without interruption since October, 1915. Security of Dividends. — Sales for 1919 amounted to $509,000,000, with profits, before taxes and dividends, of $90,000,000; capital in- vested in business January 1, 1920, $34<6,000,000 compared with $44,- 000,000 on July 31, 1915, an increase of $302,000,000. George A. Hormel & Co. Company has two classes of stock which can be owned by em- ployes: First, the regular preferred, and second, a "Class B" com- mon, enjoying same prerogatives as common stock except that "Class B" must be turned back to Company when owner breaks affiliations with Company. An employe in service long enough to merit confi- dence is given, at the discretion of the Board of Directors, a certain number of shares of this stock, which shares pay for themselves out of their own earnings. When employe leaves Company, stock is bought from him at its then book value. Preferred stock is paid for according to small weekly payment plan (1% weekly) , a continuation of the method used in handling Liberty Bonds for employes. Goodyear Tire and Rubber Company Beneficiaries. — Heads of departments, branch and district man- 42 agers, foremen and other emj)loyes to number of about three-fourths entire staff. Plan. — Participants permitted to acquire common stock at par on instahnent plan; amount each man permitted to subscribe deter- mined by management largely on basis of length and merit of service. Graton & Knight Manufacturing Company and Associated Companies The Graton and Knight Manufacturing Company, under its financial reorganization, invites every employe to become a stock- holder. It extends the opportunity to employes in associated com- panies also. Up to time of adoption of new financial plan par value of common stock was $100 a share. Par value of stock, under new plan, $25 a share; price on this offer fixed at $75 a share, which is less than book value, as the statement of the finances of the Company shows that the net value behind each share is $101.80. Application. — Blank forms for subscription obtainable at the cashier's or paymaster's offices. (See Appendix.) Stock certificates allotted in order of application. Dividends. — ^Directors intend to maintain dividends on common stock so far as earnings permit, at $5 a share, or approximately 6 2/3% a year on an investment of $75 a share as dividends are de- pendent upon earnings of business, no fixed rate of dividend guaran- teed. In the past, common stock dividends have been greater than those of preferred stock, and profits of Company have been sufficient to warrant Directors in establishing the above named basis for divi- dends; a recent issue of $5,000,000 of preferred stock, authorized on same capitalization plan, has been sold, and some of it purchased by employes. Those who have this class of stock may exchange it for common stock. Payment. — Arrangements for payment for this stock are as fol- lows: A weekly payment plan adopted, whereby employe may sub- scribe for one share for each $10 or fraction he draws in pay; by pay- ing $1 or more a week on each share of stock he can have his balance carried by Company; interest at 6% a year charged on amount neces- sary to carry stock; payments to be completed within 75 weeks. Cancellation. — If employe is unable to continue weekly payments, subscription may be cancelled; in such case, the amount actually paid in by employe is refunded. As this sale of common stock is made 43 for the benefit of employes only and it is not desired that the stock be distributed on the open market at this price, the trustees will re- purchase any employe's stock at $75 a share at any time within one year from date of sale. If purchaser of stock desires to sell his shares within 5 years after purchase, he agrees to offer stock first to Com- pany at current market price. Gbeat Northern Railway Company Beneficiaries. — ^Employes other than day laborers in service of Company continuously at least 3 years and whose annual salaries or wages do not exceed $3,000. Plan. — Through formation of a separate company, the Great Northern Employes' Investment Company, employes subscribe for Company stock at par to amount of $1,188,000; participants sub- scribe for certificates in investment Company upon payments of $10 or multiples ; not more than $5,000 worth may be purchased by one employe ; certificates not transferable and Company may demand sur- render at any time, holders being paid face value with accrued divi- dends; interest paid to holders of Certificates at same rate per dollar as dividends on Great Northern Railway stock held by Investment Company; dividend rate for many years 7%. Liquidation. — ^Employes completing subscriptions for certificate not permitted to re-invest until after expiration of 3 years; invest- ment company refunds, upon 10 days' notice, principal of Certificate held by employe with all dividends declared and payable; but em- ployes who cash certificates under this privilege not permitted to sub- scribe again, intent of plan being that employes retain holdings while employed by Railway Company. Expenses of management paid by Railway Company. Harsh & Chapijn Shoe Company Beneficiaries. — ^All efficient employes. Plan. — Participants buy stock of company on instalment plan, paying 50c a week and up; they receive 6% interest and a graduated share of profits of business ; payments made toward purchase of stock may be withdrawn at any time. Hart, Schaffner & Marx Beneficiaries. — Minor executives. 44 Plan. — In 1916 shares of common stock distributed among em- ployes having some executive authority; paid for in instalments de- ducted from salary. Henry L. Doheuty & Company and Subsidiaries In response to the request of a Committee representing managers of properties of the Doherty Organization that an offering of pre- ferred stock be 'made to employes, a plan was prepared by which em- ployes of the Organization were given the opportimity, through Prop- erty Managers and Department heads, to purchase the Company's 6% cumulative preferred stock. At present prices the stock returns in excess of 9% per annum. This offering afforded to members of the Department, and also to the members of their immediate families, an opportunity to purchase Cities Service Company 6% Cumulative Preferred stock on the following terms : Terms. — Stock sold at bid price at time order was given to Trad- ing Desk; Payment for stock to be made: $20 on July 1, one-half bal- ance August 1 ; remainder September 1 ; all dividends paid on stock purchased credited to purchaser and interest charged at 6% on un- paid balances. As stock yields over 9% there is a substantial differ- ence between interest charges and dividend payments in favor of pur- chaser. On all stock purchased under this special plan and held in name of investor for 4 months, a rebate of $2.50 a share will be made to purchaser at close of 4 months period bringing cost of stock down 2% points under market at time of purchase. Payment. — ^Property managers and department heads had option of two methods of payment; one, payment in full for stock at deliv- ery, and that of instalment payments to be completed by September 1, 1920. In addition, all employes not theretofore holders of record of any securities of corporations under management of Organization allowed a further rebate as a new stockholder at $1 a share up to a total of 5 shares ; no such new name commission less than $2 ; under plan, if a member of Bond Department had not been a holder of rec- ord of securities of corporations imder management of Organization, he would receive in form of rebates on a purchase of one share of preferred stock, $2.50 and $2, or a total of $4.50; if he purchased 5 shares, he would receive a rebate of $12.50 and $5, or a total of $17.50. H. P. Hood & Son Beneficiaries.— Any employe in service of company 3 months or longer. 45 Plan. — ^A special issue of $200,000 worth of preferred stock of company, paying a 7% dividend, available to purchase by employes at $10 a share par value; stock has voting power; Company reserves right to repurchase stock if subscriber leaves its employ ; at death of employe stock redeemed at advance of 25% above par value. Illinois Centrai. Railroad Company The plan of the Illinois Central is substantially that of the Lehigh Valley Railroad Company and has been in existence since 1893. The only fimdamental difference in the Illinois Company's plan and the Lehigh Valley plan is that employes on the Illinois Central are only allowed to buy one share at a time on the instalment plan. An em- ploye desiring to purchase more than one share may do so by paying cash in full for the number of shares that he desires, and the Illinois Central has an arrangement to purchase such stock on the open mar- ket in order to assist the employes, who usually do not understand stock exchange methods and are rather shy of approaching a broker. International Harvester Company and Subsidiary Companies Extra Compensation and Stock Ownership Plan adopted by stockholders July 29, 1920, and effective January 1, 1921. Company sets apart annually for its own and employes of affiliated or subsidiary companies in the United States and Canada, not employed in man- agerial or executive capacity, an extra compensation fund to equal 40% of Company's annual profit in excess of 7% upon invested capi- tal in the business of the Company for the ptirpose of this plan. "Profit" for each year means profit shown upon Company's income accoimt for that year, approved by its Board of Directors, before de- ducting the full amount of the extra compensation payable to em- ployes. "Invested Capital" means issued preferred and common stock and surplus of Company as shown on its annual balance sheet of December 31 of the preceding year. Basis of Distribution. — ^Extra compensation fund distributed to employes in the proportion which actual earnings of each employe for the year bear to their aggregate earnings: "Actual earnings" not to include extra compensation paid under plan. Amount of extra com- pensation for each year computed not later than May 1 of the follow- ing year and then paid to employes in two parts — one in cash and one 46 in fully paid up 7% cumulative preferred stock of Company on a basis of $100 of extra compensation representing one share of stock ; as far as possible, extra compensation paid one-half in cash and one- half in stock; Company under no circumstances bound to issue frac- tional shares of capital stock under plan; Company reserves right to pay all extra compensation in cash ; employes may utilize that part of extra compensation distributed in cash in purchasing from Company shares of Company's preferred stock at par; if amount deposited with Company by employe is less than $100, interest allowed upon deposit at 7% per annum until sufficient credits accumulate to purchase one or more shares of preferred stock. Extra Compensation to Executives. — Company also sets apart out of annual earnings for its own and executives of its affiliated or subsidiary Companies in the United States and Canada, an extra compensation fund to equal 20% of Company's annual profit in ex- cess of 7% upon invested capital in business of Company; extra com- pensation fund distributed among managers in proportion to value of services as determined by Board of Directors ; amount of extra com- pensation computed and paid in accordance with method adopted in case of subordinate employes; Avhenever, in judgment of Board of Directors, substantial reduction a share from book value of common stock to be distributed on December 31, 1920, through issue of stock dividends, occurs. Board of Directors retains power to make propor- tionate reduction in price at which common stock shall thereafter be issued under plan. Employes Eligible.- — Extra compensation funds distributed only to employes continuously in service of Company during calendar year for which funds are provided and until distributed on or before May 1 of following year; if employe continuously in service of Company throughout any calendar year be discharged before May 1 of follow- ing year, his right to receive extra compensation for calendar year during which he served unforfeited. Only employes retaining at time of distribution of funds owner- ship and possession of capital stock of Company issued and delivered to them, receive extra compensation tmless Board of Directors Avaives this provision in any proper case upon application by employe; em- ploye leaving service of Company, voluntarily, or otherwise, during any calendar year forfeits right to share in extra compensation fimds that calendar year and all future years, except that if employe be re- 47 tired on pension or dies while in service, then his distributive shares, which would have been payable had he remained in service through- out calendar year, are payable to him or his estate ; right of employes retired on pension to receive extra compensation terminates after pay- ment is made; if employe, having worked throughout any calendar year, volvmtarily leaves service of Company from January 1 to May 1 of succeeding year, his right to share in extra compensation funds for that calendar year and all future years immediately ceases ; tem- porary discontinuance of employment not exceeding 3 months, through special leave of absence, lack of work, sickness or accident disability not considered a break in continuous service of an employe. Board of Directors of Company may extend benefits of plan to any employe of Company or affiliated or subsidiary companies outside the United States and Canada. Modification or Termination. — Company retains right to modify plan, but any modification not effective until beginning of following calendar year; Company intends to continue plan permanently, but reserves to Board of Directors right to terminate at end of any calen- dar year, provided published notice of decision be given at least 6 months prior to date of termination. Operation. — Board of Directors retains charge of operation of plan, has power to interpret provisions, exercise discretion and make necessary and proper decisions, and also to prescribe rules and regu- lations; orders and decisions of Board are final, conclusive and bind- ing upon all parties. International Nickel Company Employes permitted to purchase stock of Company at $110 a share by making monthly payments of not less than $3 a share de- ducted from wages or salaries; payments must not exceed 25% of monthly salary; stock to be paid for within 3 years; interest at 5% charged on deferred payments ; subscribers receive dividends as soon as first instalment is paid and, if they retain stock and remain in Com- pany's employ for 5 years, rendering satisfactory service, they receive an extra 5% on their stock for each of those years; extra compensa- tions of employes who cancel subscriptions by leaving Company dur- ing the 5 years' f/eriod go into a fund to be distributed at end of period among remaining subscribers ; upon cancellation of subscription, em- ploye receives amount paid with interest at 5%, no credit for divi- 48 dends being allowed; number of shares for which an employe may- subscribe varies according to length of service, the maximum being 10 shares. John B. Stetson Company Par value of stock paid by accumulated dividends and as soon as stock is paid for employe receives full benefit of dividends but does not receive the stock for a period of 15 years, the stock being held by trustees during that time; as soon as stock is allotted employe may draAv a 5% dividend yearly, but with result that a longer time must elapse before stock is paid for in full. During the 15 year trusteeship if employe leaves or is discharged for cause, he receives only amount of par value accumulated; if employe is incapacitated or dies, then stock is transferred to him or his heirs ; plan has been in force for a little over 18 years. Julius Kayser & Company Beneficiaries. — Certain qualified employes. Plan. — For each year of continuous service up to 5 years, partici- pants receive an amount equal to 1% from 5 to 10 years — one-half of 1% for each additional year, thereafter, 7%% ; payments made partly in cash and partly to a deposit account, the general fund being in- vested in stock of the company so far as this is possible or advisable. Kei,ly Springfield Tire Company Beneficiaries. — ^All employes. Plan. — Employes have privilege of subscribing each year to com- mon stock of Company; paji-ments made in monthly instalments. Lehigh Coal and Navigation Company and Subsidiary Companies Men working in anthracite mines invited to become partners, through stock purchase, in the Company, operator of properties in the Panther Greek field. According to announcement by the Company this offer is the first of its kind in the history of the industry. Purpose. — The Company, through its President, S. D. Warriner, observes that for three years employes have been setting aside small 49 monthly payments to meet Liberty bond subscriptionis. To encour- age and continue that habit, and to encourage and recognize the loy- alty and efficiency of employes, the plan for stock purchases by em- ployes is presented. Plan. — The statement announces that the total number of shares put out in the initial opportunity is 2,500, offered at $65 a share. Employes receiving $1,500 a year or less limited to subscriptions of not more than 2 shares, those receiving more held to a maximum of 5 shares. Payment on monthly instalment plan, each payment not less than $5 a share, with dividends credited to subscribers' accounts. In- terest charged at 4% on deferred payments. Lehigh Vallf.y Railkoad Company Application.— Kiaployes purchase from one to five, ten or twenty shares of Company common stock; blank form of application filled out by employe indicating number of shares desired, giving employe's full name, address, division and work performed; blank filled in by applicant handed to superior officer, who arranges to fill in payroll references, etc., to complete identification of applicant. Purchase. — Company buys stock at market price on day subscrip- tion reaches Treasurer's Office at Philadelphia, or as soon thereafter as possible; application forwarded to Treasurer's Office, when order is received, an acknowledgment of order, quoting price and stating deductions to be made on payroll mailed to employe, a copy going to division payroll office; stock purchased on open market and bears all privileges, voting powers, dividends, etc., common to all holders of stock. Payment. — ^Deductions made monthly from payroll for second half of month at $5 for each share subscribed for; deductions after being entered on payroll, abstracted and abstracts forwarded to gen- eral office, where record of stock subscriptions is kept; account with subscriber recorded on back of application blank, ruled to record payments, interest calculations, date stock certificate is issued, cer- tificate number; record bound in loose leaf binder; several binders used, one for each division, one for the general office, one for officers, etc. ; stock bought at $43 a share, if paid for at $5 a month delivered in about 9 months, total amount due on stock may be paid up at any time ; stock issued in name of employe delivered promptly upon com- pletion of final payment. 50 Retention of Stock. — Stock held by Company remains its prop- erty until final instalment is paid, therefore, any dividends paid on it belong to the company; interest, however, allowed to employes on payments; each instalment paid by employe regarded as an invest- ment and credited to him with interest at dividend rate paid by Com- pany on common stock. Interest. — Interest computed by allowing employe 7% from date of payroll until date on which he completes payments ; final payment generally made between dividend dates ; after employe has completed payments he becomes a registered stockholder and Avhen next divi- dend is declared receives it ; inasmuch as he has been allowed interest on instalments up to date of final payment. Company claims an equity in first dividend received by him, and collects it by charging interest at 7% on par value of stock from date of the last dividend to date ol final payment; stock is forwarded to emploj'^e by registered U. S. mail; once stock is paid for dividend checks mailed quarterly when declared; at present 7% rate dividends on each $50 share amounts to $3.50 a share annually. Rules for Refund and Transfer. — If employe leaves service, either his money is refunded with interest or he may pay in full and take his stock; employes not allowed to transfer subscriptions, but, can do what they like with stock after paying for it; employes given to understand there is no intention on part of the management to urge them unduly to become stockholders of the company. Lever Bkothers^ Ltd. Beneficiaries. — ^Employes of Company — a branch of an English company operating under same title — considered worthy of member- ship in Company's so-called "co-partnership" trust, 22 years of age, and in service of Company 4 years. Plan. — Partnership certificates to fixed total allotted to employes in proportion to annual salary or wages on graded basis of value of service, with special allotment for unusual efficiency or helpful sug- gestions ; for certificate distribution, staff divided into classes — direc- tors and managers, foremen, salesmen, and general staff; co-partners receive certificates annually until maximum holding is reached rang- ing from 200 pounds (something under $900) to 3,000 pounds (under $14,000) ; dividends paid in 5% "cumulative 'A' preferred or- dinary shares" which holder can sell at any time for cash at par; co- 51 partnership involves loss sharing as well as profit sharing; if profits are not earned, holder of co-partnership certificates suffers loss of dividends equally with capital. Marshali, Field & Company One or more shares of preferred stock carrying a regular dividend of 7% taken by approximately one in ten employes ; in addition, em- ploye-owned stock carries a bonus of 2% annually. Marshall- Wells Company Beneficiaries. — Managers and salesmen, common stock; Pre- ferred stock, other employes. Plan. — ^Disposal of stock to employes entirely within immediate control of management and its decision guided by individual merits of each case ; regular preferred stock in Company held by a number of employes ; purchase upon no set plan, but in line with plan under which common stock is allotted; employe's preferred stock may be purchased at par by any employe to extent of 2 shares a year ; stock pays regular dividend of 6% per annum, payable quarterly; at end of 5 years' continuous service on part of employe, he is entitled to an extra cash dividend of 20%, making his investment net him 10%. MiDVALE Steel and Ordnance Company and Subsidiaries Beneficiaries. — Officers and employes of Company and subsidiary companies. Plan. — ^Announced January 5, 1920; subscriptions received Janu- ary 12-31, 1920; offer limited to 8,000 shares, par value $50; decisions rest with the Board of Directors of Company; maximum number of shares dependent upon annual salary or wages ; subscriptions paid in monthly instalments deducted by Company; subscriptions cancelled on resignation or discharge, shut down or failure to resume employ- ment when requested; stock certificates issued on completion of pay- ments; special payment of $2.50 a share paid after 5 years' continuous employment in addition to dividends. Minneapolis^ St. Paul and Saui-t-Sainte Marie Railway Company An incorporated association of employes formed, including repre- 52 sentatives of all classes ; membership dependent upon subscription for one share of Association's stock, valued at $1 ; no member permitted to hold more than one share ; members deposit monthly $1 or more for investment by officers of Association in stock of Railroad Com- pany or one of its subsidiaries ; dividends paid to members each year ; members refunded the $1 paid for subscription stock as well as their deposits — less their proportional share in administration expenses — on leaving Company's service. Montgomery Ward and Company Several months ago a plan providing for the purchase of common stock of the Company was submitted to employes. A nimiber of im- perfections in the plan was discovered and it was withdrawn vmtil such time as the Directors could offer a more perfect plan. After thorough reconsideration the offer was renewed on a more liberal basis. Employes who could not subscribe under the previous terms may now do so. Participation is entirely voluntary. Purpose of Plan. — To give employes an opportunity to purchase shares of Company's common stock on easy terms to extent of stock available for the purpose. Employes Eligible. — ^Any employe in good standing, devoting en- tire time to Company's business and in sei'vice not less than 6 months. Basis of Purchase. — Eligible employes subscribe for an amount of 'Stock involving a total purchase price not in excess of their salaries for one year ; fractional shares not subscribed for. Price of Stock. — First price, $30 a share; Directors of Company set selling price at beginning of each year ; stock without par value. Terms of Payment. — Full number of shares allotted credited to employe when allotment is made him ; stock paid for either in full, on equal yearly payments, or on equivalent equal monthly payments; payments in all cases to be completed within 5 years ; interest on de- ferred payments 6% per annum; dividends or special dividends on stock credited as payments on account of purchase price; company gratutiously adds each year $1 a share until stock is paid for, except as provided as follows : Whenever Company earns 7% net or more on sales, special divi- dends in lieu of $1 per share, added and credited to purchase price of employe's stock on the following scale. 53 Net Profit Special Dividend 7% $1.50 8% 2.00 9% 2.50 10% or more 3.00 Tliese special dividends non-cumulative and in addition to regular dividends declared and paid on common stock; stock subscribed for paid for only on one of the three above mentioned plans; payments not accepted on any other basis. Transfer of Stock. — Stock fully paid for transferred to employe without restrictions; until fully paid for stock remains property of Company. Withdrawal from Subscription Agreement. — Employes may apply to withdraw from subscription agreements at any time and if reason appears sufficient to General Manager of house in which he is employed, he is allowed to withdraw and surrender interest in stock subscribed for; amount of money paid in refunded, plus interest at 6% a year; additions to payments made by Company and dividends or special dividends credited to purchase price forfeited; same meas- ures followed if employe withdraws from service of Company. Withdrawal in Case of Death. — ^At death of employe subscriber before stock has been fully paid for and transferred. Directors of the Company pursue one of the following courses : 1. Pay to persons legally entitled to it amount paid by employe toward purchase of stock, plus amounts added by Com- pany, and plus also dividends or special dividends credited to purchase price up to that time, and plus 6% of amount paid in by employe, if death of employe occurs within one year of date of subscription. 2. Sell stock allotted at the then market price, paying over pro- ceeds, less amount unpaid, also less interest charges due Company and cost of sale, to persons legally entitled to it. 3. Continue to hold stock for period not beyond time when stock would have been paid for but for subscriber's death, dispos- ing of stock when deemed advisable and applying proceeds as in option 2. Special Dividends. — Upon stock fully paid for and transferred to employe, so long as he remains actual owner and continuously in 54 employ of Company, it continues gratuitously to pay each year $1 a share, or in lieu thereof, any special dividend declared on employe's stock. When stock is transferred by employe for cause, either before or after leaving employ of Company, dividends, whether regular or special, and gratuitous amounts added by Company cease to be paid; any employe leaving Company from any cause after stock is paid for not entitled to further payment beyond regular dividends paid to all holders of Company's common stock, nor will part payment be made should an employe leaA'^e at any time between payment of dividends. Assignment of Stock. — No assignment, pledge, sale or transfer of stock until after stock has been fully paid for. Bights to Subscribe to New Stock If Issued. — Rights to subscribe to new stock or other rights of similar character attaching to stock partially paid for attach to stock as if it were fully paid for and will be handled in such manner as may be determined by Directors of Company. Arbitration. — If dispute or misunderstanding arises in connection with terms or conditions of stock subscription, the decision of the Board of Directors is final and binding upon both parties. Allotment of Stock. — Directors of Company may increase or de- crease allotment of stock to an employe above or below the basis of an amount equal to one year's salary, and no modification shall bring in question allotments made to other employes, neither shall any such modification be made without approval of Directors. A Personal Agreement. — The Plan is a personal agreement with employe who subscribes and is in the nature of a confidential transac- tion between employe and Company. After paying for it employe may do as he pleases with stock without restriction of any kind. Vio- lation of any provision of plan terminates interest of employe therein and constitutes withdrawal, in which case money actually paid in or deducted from salary by instruction, refunded as though employment had been terminated, or paid over to person entitled to it ; additional amounts and dividends or special dividends credited to stock forfeited. The following table illustrates the manner in which the plan is expected to work out together with the net amounts which it is ex- pected will be actually paid by employes. It will be noted that in no case will payments extend beyond a period of 5 years. 55 9S I o M m W O O H o u o X 1^ O i 2 » <= ■S * S "■ ! ^ h.S 51 •e 3 s "= "O ".0.-S ( i-i o A w-t O X go g •13 Be n , S I 2 .Cj3 g •O n,J3 , * O I lag o: CO se- 5'?J i-S^' rt».g ■f S.S •Q lOifi h h V -3 ft" «i S " « 13 ft c 1 3 b < !gS" ~ ft<^ ° Si! ^ ».-■ u-i CO rt i-j ^^ ri ftf » n „r >t » .£jj g HI'S 0* 2 " 42 ■3 3^ 5o'0^'2S go gc- 9 M O ft U:S«»A t, s te S ■* 0) ■S -o "5 S E: E C B ** o s i 5£(S r* V Oi ■l t§ • •Ogog »- ".2 rt WW'S SSft" S "3 bs a.2 ^-s o o o . o o S d 5 I" Hi to ^ Ph ^03 CO ■a «i o, c-1 Ph CO o • o o ■ o to I t-l ee- • i « lis •a H o. mPScn eq T3 WO CJ -a -H i-i ■* ■* se eo o o ■-I o o d cq aq se o ■ o o . o to ; ?-i s© • & "3 8 ^ ej H ^ V >. 5 f 1:S ^ o a 1) •« e8 ^. a, >. "■ ^ M si's EQ I 14 13; — H 3 O TI B O iz; c Cli s V 1 i _d »N h ed o ^H 1 1 u 2 .s h ■S.&-P ■"jiPSw i« o . o to ' r-H _5 ■ I'll ■oKl/3 KH ■s S US s > Q 56 MoKRis AND Company Company issues 4^^% collateral gold bonds, face value $50 and multiples; emploj'^es msiy purchase as many bonds as they desire, either in cash or on 2-year instalments; by a profit-sharing plan in operation September 1, 1920, and retroactive from November 1, 1918, Company sold $2,000,000 of stock to employes; in January, 1920, employes who had paid cash for stock received equivalent of 60% per annimi; employes paid $86.50 for $100 stock and drew interest on face value ; company guarantees a net return on a profit sharing cer- tificate, interest on bonds, of not less than 10%. The Narrow Fabric Company Beneficiaries. — Employes whose application is acceptable to Com- pany. Plan. — Comprises stock selling combined with preferential divi- dends on employe stock and profit-sharing fund from an otherwise undivided balance. Nationai. Biscuit Company Beneficiaries. — ^Any employe of Company. Plan. — ^Application for one share of stock; payments at $5.00 or multiple; interest at 4% credited on payments; stock transferred to employe when fully paid for, plus any excess of dividend declared meantime above 4% interest on price paid by Company for the share of stock when purchased for employe's account ; all dividends paid in full to owner of fully paid up stock; Company cancels arrangement if no payments are made for 6 consecutive months, or if stock is not fully paid for within 2 years, or if, by a refund of payments actually made with accrued interest, employe desires to withdraw from ar- rangement; employes leaving Company's service must pay up bal- ance due on share subscribed for or accept amount credited in cash with interest. National Cloak and Suit Company Total allotment covers 5 years — 1/5 annually; number of shares allotted based on importance of position ; purchase price $25 a share paid for outright or on monthly instalment plan; certificate of stock issued immediately to employe paying for a year's allotment at one 57 time; certificates issued to those paying monthly after 12th payment; employe agrees not to dispose of stock under 5 years ; discontinuance of service for any reason forfeits all rights to stock not fully paid for except in case of employe dying before expiration of allotment period; Company turns stock over to estate of deceased employe with- out further payments and credits dividends on such stock to desig- nated beneficiary; no interest charged on deferred payments until dividends are paid. New Haven Gas Light Company Beneficiaries. — Efficient employes, exclusive of executive officers, with Company one year prior to February 10, 1919. Plan. — Participating employes paid S% bonus on wages of pre- ceding three months ; when bonus equals market value of one or more shares of Company stock, employe either receives cash or certificate representing shares of stock according to choice; no restrictions put on employes' sale of stock; if paid in cash, dividends only one-half amovmt credited to employe; on leaving Company employe receives full balance; if discharged for reasons over which he has no control (or in the case of women who marry) one-half; nothing at all if dis- charged for infraction of Company rules ; Company reserves right to cancel signed agreement for cause after one month's notice. A New Jersey Company Plan inaugurated in 1912. Trustee Agreement. (See Appen- dix.) Drawn up covering proposition; each employe interested per- mitted to subscribe for amount of stock approximately equal to yearly pay ; payments extend over period of 5 years, requiring a man to put aside 20% of yearly earnings each year; about 250 employes buying stock on Deferred Payment Plan; 'Trustee" holds stock in his own name until payments are completed, at which time stock becomes full property of employe with no reservations. N. O. Nelson Manufacturing Company Beneficiaries. — ^Employes Avith Company 6 months. Plan. — Interest at 6% paid on capital stock from net profits, re- mainder divided in equal percentage between capital stock and wages ; dividends accumulate to employe's credit until paid to him in Com- pany stock after 3 years; employes forbidden to sell stock except to 58 Company while in its service; accumulated dividend lost if employe leaves Company before 3-year period expires. The Nouvtalk Wire and Rubber Company A number of "deserving employes" allotted corporation stock from time to time. Oneida Community, Limited For the past 4 years all employes who have worked for Company over 12 months entitled to participate in common stock offer as follows : Amount Sold Each Employe. — '3 shares a quarter to employes of 5 years' service and over ; 2 shares a quarter to 3-year employes ; one share to 1-year employes ; price determined each year at stockholders' annual meeting. Method of Buying. — Wage deductions, employes' loan notes, or cash. Time of Issue. — Quarterly. Manner of Issue. — Stock certificate issued to employes for each purchase, but certificate remains in Secretary's book. Receipt, Option and Agreement. — Stock receipts given each em- ploye when stock is issued showing ownership ; receipt also embodies an "option and agreement" to prevent absentee ownership by giving Company right to buy back stock in any of following events: (1) Death, (2) Leaving Company's employ, or, (3) Desire of employe to sell. Re-purchase Price. — If Company exercises option to re-purchase, it agrees after one year from issue, to pay asset value for stock as figured from latest annual statement, plus accrued dividends. If one year from date of issue has not elapsed, original purchase price paid plus accrued dividends; par value of stock $25 a share; asset value, February 1, 1920, $51.20. Company's receipt, option, and agreement debased to prevent ab- sentee ownership. When employe leaves. Company can exercise its option by paying asset value which returns to employe the original investment as well as his equity in surplus built up during his associa- tion with Company. This plan is now in process of revision. 59 Parke, Davis & Company Beneficiaries. — ^Executive staff, traveling salesmen, valuable sub- ordinates in laboratories and offices. Plan. — Two allotments of 4,000 shares of stock sold to employes below par value of $25 ; where advisable, Company loans subscribers purchase money for 5 years at 5% interest. Pennsylvania Railkoad Company Employes of railroad may purchase from 1 to 10 shares of stock of Company through the Mutual Beneficial Association of Pennsyl- vania Railroad Employes, Incorporated, upon the following condi- tions : Application. — ^Application for purchase of shares of stock made upon a form provided by Association (See Appendix) obtained from local treasurers, or sent direct from office of Association, Philadel- phia, upon request. Payment. — Applications for purchase of shares of stock accom- panied by a United States Post Office money order or certified check, payable to General Treasurer of Association, for $10.00 a share; after first payment of $10.00, remainder paid in monthly instalments of at least $5.00 a share; all monthly payments must be in hands of General Treasurer before end of month, and forwarded to him at Philadelphia by mail ; any number of shares may be purchased and paid for in full at time of purchase; employe charged amount paid for shares, broker's charge of 15c a share with a minimum of $1.00 interest on un- paid balances, and any taxes or other necessary expenses incurred. Dividends and Transfer of Stock. — Dividends received on shares purchased by employe credited to his account; shares of stock pur- chased for employe held until fully paid for, and then transferred to him ; upon receipt of payments on shares of stock. General Treasurer forwards receipt to employe; should employe desire to dispose of stock held for his account, 10 days' notice must be given to General Treasurer. Payments Overdue. — Association reserves right to sell shares of stock purchased for employe when monthly payment becomes over- due; amount received over and above amount owed on stock by em- ploye returned after deducting interest, brokerage or other charges. 60 Philadelphia Company and Affiliated Companies Officers and employes continuously in employ of Company and affiliated companies for 6 months or more, permitted during month of April, 1916, to subscribe for one share of Company's 6% cumulative preferred stock at par for each $50.00 of salary or wages received dur- ing year ended March 31, 1916. No person entitled to subscribe for more than 100 shares; dividends preferred and cumulative but not guaranteed; subscriptions made only for whole number of shares and certificates issued for whole shares. Payment. — Payments made monthly on basis of 60c a share, for 5 years ; accoimt of subscriber credited, in addition to monthly pay- ments, with interest at 6% on par value of subscription, and with interest at 5% on unpaid balance of subscription; at beginning of each year, at option of subscriber, a certificate issued. to each sub- scriber as of May 1 of that year for as many whole shares of stock as he has paid in full at $50.00 a share, excluding all credits; subscriber at end of any month may surrender subscription to Company and re- ceive all money paid thereon not represented by stock certificates previously issued, with interest on payments at 5% per annum from dates of payment to date of issue of stock certificate, and thereafter on balances of payments not represented by stock certificate to date of surrender. In case of sickness or other misfortune, upon recommendation of Superintendent or head of department, employe permitted, Avithout surrendering rights under subscription, to withhold payments for a period not to exceed one year, during which time his account charged and credited with interest at 5%. Payments may be renewed at any time during year, but monthly amount to be paid increased so that at end of 5-year period total paid by employe is the same as if no sus- pension of payments had taken place. Upon issue of stock certificate to subscriber, monthly payments increased in amount equivalent to dividends paid on stock issued to subscriber. Should subscriber elect to waive receipt of certificates until expiration of subscription, monthly payments remain constant until maturity of subscription. Any balance, less accrued bonuses, due on accoimt of subscription, paid in cash by subscriber at end of 5-year period and at such time a stock certificate is issued to him for any remaining shares due him; agreement between Company and subscriber provides that monthly 61 payments on subscriptions be deducted from salary or wages of sub- scriber, and where salaries or wages are paid semi-monthly, deduction is made from pay covering first half of month. Disposal. — Neither right to subscribe nor subscription made, is as- signable; certificate once issued to employe becomes his absolutely, and Company not obligated to buy back interest represented by any certificate after having issued; in case of death of subscriber while still in service of Company, Company pays to his estate money paid in on subscription, for which no stock certificates have been issued, with interest at 6% on total amount of subscription to date of issue of stock certificate and upon balance of subscription not represented by certificates to date of death, less interest on unpaid balances at 5% ; and, in addition, pays such proportion of bonus of $5.00 a share as integral years during which payments have been made on subscription bear to number of years provided for full payment of subscription. Cancellation. — Upon failure of subscriber to make payments for one year, or if subscriber, for any reason other than death, leaves Company, or is discharged, his subscription automatically cancelled and Company pays him money paid on subscription, not represented by stock certificates previously issued, with interest at 5% per annum from dates of payment. Bonus. — On May 1, 1921, Company will allow a bonus of $5.00 a share on each share subscribed, and an additional bonus from a fund created by failure of subscribers to continue subscriptions. On May 1, 1917, Company set aside $1 for each share of stock subscribed dur- ing the month of April 1916, upon which all payments had been made during the year ending April 1, 1917, and on May 1, of each succeed- ing year, up to and including May 1, 1921, a like sum of money will be set aside; no bonus paid to subscriber who cancels or surrenders subscription, or forfeits subscription through non-payment, even though stock certificates have been issued to him prior to cancellation, surrender or forfeiture through non-payment of subscription. Sums of money so set aside placed in a fund from which the bonus of $5.00 a share on each share of stock subscribed and paid for by May 1, 1921, will be paid. Any balance remaining in fund due to forfeitures re- sulting from subscribers leaving employ of Company, or from can- cellation of subscriptions, in whole or in part, voluntarily or through failure to make payments after bonuses have been paid, will be ascer- tained and distributed in cash, pro rata, to all shares subscribed and paid for in full. 62 PiCANDS Mather & Company Beneficiaries. — Masters and engineers. Plan. — Shares of stock to number of 2,500 held in trust for pur- chase at par; masters may buy from 1 to 8 shares annually, chief engi- neers 1 to 5 ; payments in monthly instalments fixed by subscriber but must be complete in 3 years; 5% interest charged on deferred pay- ments; dividends credited to payments on stock; 300 extra shares set aside to distribute gratis to subscribers retaining stock until 1920. Pittsburgh, Butler & Harmony Consolidated Railway and Power Company One million dollars face value of common stock set aside imder trust agreement with bank or trust company ; certificates representing this stock issued to employes ; fund resulting from accrued dividends divided equally among all employes in the hope that each employe will interest himself in so limiting the number of employes that his individual share M'^ill be the greater ; widows and minor children be- come beneficiaries of deceased employe's share in fund; stock carries no voting power but employes are entitled to 3 directors on the Har- mony and Mars Board selected by themselves in accordance with their own rules. Pittsburgh Coal Company and Subsidiaries Plan. — The Pittsburgh Coal Company's Employes' Association accepts from employes monthly payments of not less than $1 a share toward an accumulation of funds wherewith to purchase common or preferred stock of Company at market price and for delivery to indi- vidual purchasers when subscriptions are complete; interest at 7% credited to payments in excess of $1 monthly; when monthly pay- ments plus dividends are then accrued, earnings equal average cost of all stock purchased on account of subscribers for any particular month; association delivers stock to subscribers; after resignation sub- scriber may keep up payments until completion of purchase ; interest at 6%i charged on defaults of monthly instalments; Association may cancel contract and return deposits with 5% interest after 3 months' failure to keep up payments ; privilege of withdrawal with interest of 5% on deposits open to participants desiring to cancel subscriptions. Special Payment. — Directors of Company have authorized a 63 special compensation payment of $1 a share on its stock, whether com- mon or preferred, as of December 1, 1919, and yearly thereafter until changed or withdrawn, made through Association, on fully paid shares of Company's stock, purchased through Employes' Associa- tion, owned and held by the employes of Company or its subsidiaries in good standing at that date. New Form of Contract. — In order that maximum benefits may be realized by employes and in view of fact that in the Employes' Asso- ciation Referendum of July 31, 1919, a large majority of employes voted in favor of a change in the form of contract permitting larger payments and earlier ownership of stock, a new form of contract was adopted to be substituted for existing unmatured contracts, to ex- tent that purchasers desire such substitution and to supersede the old form of contract in all purchases made through the Association on and after December 1, 1919. The special features of the new form of contract are : (1) Provision for payments of not less than $1.00 a share a month with privilege of making such additional payments as purchaser may desire up to a maximum amount not exceeding 25% of annual salary or wages. (2) Discontinuance of interest on advance payments. (3) Association reserves option as to basis of termination of con- tract in cases of default of payment for 3 months, or when purchasers leave or are discharged from employment of Company. (4) Provision for a joint interest of husband and wife under the laws of Pennsylvania, which in case of death of husband, permits benefits to pass to widoAV without delay and ex- pense of administration. The Proctor & Gamble Company and Subsidiaries Termination of Previous Plan of July 1, 1919. — The present re- vised plan for profit sharing dividends through employe stock owner- ship terminates and supersedes the plan of July 1, 1919. Application. — ^Any employe (except salesmen and traveling rep- resentatives) of the Company, or its subsidiaries, whose position per- mits of continuous employment, earning as wages an amount not ex- ceeding $2,000.00 a year, upon application to Treasurer, and after 64 approval by Company, may have purchased for his account, at market value at time application is received by Treasurer, the nearest number of shares of Company's common stock, the total cost of which to him equals or exceeds the amount of his annual wages ; the term "wages," whenever referred to in plan, excludes all additional amounts earned as result of working overtime or otherwise. Trustees. — Stock purchased for employe held for his benefit by 3 Trustees appointed from time to time by Board of Directors ; trustees selected at Board's discretion from Company's officers, directors or employes. Payments and Credits. — ^Employe repays to Company in cash dur- ing each year after date of purchase of stock until fully paid for, any amount, at convenient time ; but aggregate payments each month not less than l/l2 of 5% of total cost of stock purchased for him; all profit sharing dividends due employe credited to purchase price until stock is paid for; thereafter all profit sharing dividends paid in cash to employe. Certificate of Participation, Pass Book and Profit Sharing Divi- dends. — ^As soon as practicable after approval by Company of Em- ploye's application, Trustees issue to him certificate of Participation and Pass Book, the former setting forth the formal contract between Company and employe, amoimt of stock bought for him, price paid, and Company's guarantee of profit sharing dividends; from time to time, as dividends or payments are made or credited and stock issued for account of employes participating. Trustees have proper entries made in pass books. Bate of Dividend. — Profit sharing dividends paid by Company on amount of employe's monthly wages, at rates shoAvn below: 1st year of Participation 10% 2nd year of Participation 11% 3rd year of Participation 12% 4th year of Participation 13% 5th year of Participation 14% 6th year of Participation 15% 7th year of Participation 16% 8th year of Participation 17% 9th year of Participation 18% 10th year of Participation 19% 11th year of Participation 20% After 11 years 20% 65 '0 to Method of Crediting (a) Profit sharing dividends payable as soon as practicable after end of each calendar month, except as prescribed. (b) Profit sharing dividends credited or paid to employe only in case of employment in Company on last day of preceding month and continuously from date of Certificate of Participation. (c) No profit sharing dividend credited or paid to employe un- less cash payments for entire time of participation aggregate an amount at least equal to 5% per annum of total cost of stock sub- scribed for by him. (d) Should employe be discharged or leave employ of Company or make application for withdrawal, no profit sharing dividends re- ceived or credited on wages earned by last uncompleted calendar month. (e) As soon as practicable after end of each calendar month, after being a participant for a full year. Trustees deliver to employe all shares of Company's common stock fully paid for and at price per share indicated on Certificate of Participation. (f ) On shares so delivered, participant receives all dividends de- clared and paid upon Company's common stock. (g) Since main purpose of plan is to have Company's employes become and remain holders of its common stock, it is hoped no em- ploye will sell certificates of stock obtained imder plan, except in case of extreme emergency; trustees, however, upon written application of employe will purchase them at prevailing market price, subject to conditions prescribed. (h) If employe sells or disposes of stock received without formal consent of Trustees, so that his remaining holding is reduced below number of shares constituting original subscription, his profit sharing dividends cease with previous monthly payment, his account closes and settlement is made in accordance with terms and provisions gov- erning withdrawals ; he may not re-enter plan for one year thereafter, and then only upon resubscription on basis of a new subscriber. (i) Employes surrender Pass Books and Certificates of Partici- pation to Company whenever employment with Company ceases, in which event they are tendered the value of their interest on date of termination of employment. (j) Neither Certificate of Participation, Pass Book nor interest therein assignable or transferable except to Company, Company will 66 disregard attempted assignments or transfers from name of original holder. Increase of Houdings Upon Advance in Wages (a) If increase in pay cause annual wages to exceed amoimt of original subscription (wages as increased not being in excess of $2,000.00 a year) , there will be purchased for employe's accoimt, sub- ject to all conditions, and provided cost of stock already purchased does not equal or exceed annual wages after increase, the nearest nimi- ber of additional shares of Company's common stock at its then mar- ket value to make total cost of stock subscribed for equal or exceed annual wages after increase, and he shall receive thereafter profit sharing dividends upon total amount of monthly wage. (b) Employes whose wages are increased to exceed $2,000 a year, and therefore are no longer entitled to receive profit sharing dividends but whose subscription has not been paid in full, and who desire to complete payment, may continue to pay annually on ac- count, an amount equal to required 5% per annum, plus a further annual amount equal to year's profit sharing dividend last credited, in so doing retaining stock interest imtil paid in fidl. WithdratvaL — Employes may at any time surrender Pass Books and Certificates of Participation and withdraw interest. Notice and Surrender. — ^Employe must give written notice to Treasurer of desire to receive money due, and must surrender Pass Book and Certifica'te of Participation; thereupon, without regard to period of participation, profit sharing dividends cease with previous month and cannot be resumed for a year, and then only upon re-sub- scription upon basis of a new subscription. Withdrawal Before Participating for One Year. — Employes giv- ing written notice of desire to withdraw, who have participated for less than a year prior to date of written notice of withdrawal, can have refunded only the amount actually paid in cash toward purchase of stock, plus interest at 6% per annum, but he derives no benefit of profit sharing dividends credited to his account meantime. Withdrawal After Participating for One Year. — ^A participant for one year or more whose subscription is not complete, giving writ- ten notice of desire to withdraw, receives within 90 days, in addition to shares already delivered, an amount in cash equal to balance standing 67 to his credit; employe so Avithdrawing, can sell to Company at the then market price all shares of Company's common stock previously issued to him. Settlement Upon Discharge of Employe. — Company retains right to discharge employes and terminate participation; should em- ploye be discharged or leave Company's employ, his participation in benefits ceases immediatelj'^ and settlement is made based on status of his account on date of termination. Settlement Upon Death of Employe. — ^At death of participating employe, immediate settlement is made with his legal representative in manner provided by law, but on basis outlined in paragraph pro- viding for withdrawal after participating for one year regardless of time employe may have participated. Gruarantee. — If at termination of employment the actual market value of stock delivered is less than cost at time of subscription, upon receipt of employe's written request, within 10 days after termination of employment and upon return of certificates for shares of common stock delivered to him, duly indorsed, Company refunds cost in cash. Savings Certificates. — Supplementing the foregoing plan. Com- pany offers the following opportimity to participants who have paid amount of subscriptions in full and who desire to continue so to invest earnings as to return a safe, well paying investment upon which they can realize in case of emergency. Subscriber under terms and pro- visions of revised plan for profit sharing dividends through employe stock ownership who has paid amount of subscription in full may sub- scribe for $100.00 Savings Cei'tificates bearing interest at 6% per annum on the following basis : (a) Subscription for not more than 5 certificates in one year. (b) Payment toward Savings Certificates not less than 5% of wages monthly ; payments made in cash or by deductions from wages ; proper acknowledgment of all payments given and interest drawn at 6% per annum. (c) Interest on balances credited quarterly on March 31, June 30, September 30 and December 31. (d) As soon as payments and credits of interest aggregate $100.00, formal Savings Certificate delivered to subscriber bearing interest at 6% paid in cash in regular quarterly instalments on dates already mentioned. 68 (e) Interest on Savings Certificates paid or credited only while owner is employed by Companies; upon termination of employment interest discontinued. (f) Subscriber may withdraw payments either entirely or in part, by giving to Treasurer written notice and surrendering Certifi- cates or other evidence of Company's receipt of payments. (g) Savings Certificates not negotiable nor interest in assign- able or transferable except to Company ; company guarantees repay- ment of principal and accrued interest. Savings Certificates Exchangeable for Shares. — Employes at any time may surrender Savings Certificates to Treasurer and receive in exchange as many shares of Company's common stock as can be bought at the then market price with amount represented by Savings Certificates plus accrued interest ; this privilege restricted to employe holders of paid up Savings Certificates. Bight to Vote. — No participant has right to vote in own name as stocldiolder nor to enjoy privileges of stockholders except to extent of fully paid shares for which regular stock certificates have been delivered. Alteration or Termination of Plan. — Company reserves right to alter or amend plan and terminate it altogether at end of any fiscal year; in such event, settlement with each participant made according to conditions of his individual account at the time and under condi- tions governing withdrawal. Public Service Corporation of New Jersey Three thousand shares of stock purchased by Company in open market sold to employes on instalment plan; minimum payment $1.50 a month; subscriber cannot dispose of stock until fully paid for with- out consent of Welfare Committee; employes permitted to buy stock outright providing it be held 3 years. Republic Iron and Steel Company Beneficiaries.— Reads of departments and foremen, directly re- sponsible for profits and losses. PZan.— Modification of plan of United States Steel Corporation, involving both cash and stock settlements. 69 Samuel Elman Company Beneficiaries. — ^Employes numbering 200. Plan. — Employes pay 10% annually on common stock, valued at $100, yielding 7%, guaranteed, at $80 a share; subscribers permitted to make payments in lump sums annually or in weekly instalments. Shaft Pierce Shoe Company Beneficiaries. — Heads of departments, rank and file. Plan. — By arrangement. Company's bankers advance loans to cover purchase price, with reasonable time to meet loan; each share carries voting privileges, and each participant profits equally share and share alike. Standard Oil Company or New Jersey On November 26, 1920, the Directors of the Standard Oil Com- pany of New Jersey decided to reduce the par value of its shares from $100 to $25 and voted to increase its capital from $100,000,000 to $110,000,000 to provide shares for an offering which will be made to the corporation's employes. The corporation and its subsidiaries have approximately 37,000 employes in the United States eligible to stock ownership under the plan. The plan includes all employes who have been for one year actively engaged in the conduct of the Company's business. Studebaker Corporation Beneficiaries. — Executive officers, important clerks and foremen. Plan. — Participants divided into 4 groups, the relatively more im- portant receiving a higher percentage of profit sharing fund. Fund consists of balance of profits (after 7% of net is paid upon preferred stock; 5% upon common stock; and a certain sum to a special surplus account for amortization of preferred stock) systematized as follows: Up to $1,000,000 12% " " 2,000,000 14% Over 2,000,000 15% Payment. — Payments to first 3 groups of participants 50% com- mon stock and 50% cash ; payments to fourth group cash only. Stock dividends in instalments, 25% after first year; 25% after second year; 70 50% after third year. Dividends accruing paid participants promptly. Employes resigning automatically cancel right to share in year's profits as well as forfeit to Company 20% of common stock for their benefit from bonus of previous year. Extension of Plan. — ^Employes in service of Company 3 months or more may request Corporation to purchase for them common or preferred stock in an amount limited annually to 20% of their annual earnings, and to $400 market value of stock at date of purchase. Payment. — ^Application for purchase accompanied by initial pay- ment of 10% of estimated purchase price; remaining 40% to be paid in 4 years in instalments of 1/15 every 3 months after date of pur- chase; company credits accounts of employes who keep up payments and remain in continuous service with 1/16 of half the cost of stock purchased every 3 months, thus fully absorbing remaining 50% of cost of stock; stock charged to employe's account at cost; interest at 4% charged on impaid balances after deduction of corporation's credits and employe's payments ; dividends credited to accounts of em- ployes ; excess of dividend credits over interest charges act as reduc- tion of amount of final payment; stock certificates held in its name by Company imtil expiration of fourth year when, with final payment, delivery is made to employe. Voting Proxies. — Voting proxies meanwhile given to employes in advance of stockholders' meetings that they may vote stock held for their account in election of directors. Representative of Employe Stockholders. — When employes pur- chase and hold 20,000 shares of common stock imder this plan, the election as a director of a representative of employe stockholders to be nominated by them in an election held for the purpose will be recom- mended by the Board of Directors of the Company. Swift & Company In order to encourage saving, thrift, and loyalty on the part of employes, a new plan put into effect on June 2, 1919, permitting em- ployes to purchase Swift & Company's treasury stock at par ($100 a share) when market value was about $136 a share; employes earning less than $22 a week allowed to purchase one share, number of shares increasing with weekly salary so that those earning $50 and over could purchase 5 shares; payment, $1.00 a share a week, on instalment plan, deducted from employe's wages imtil paid in full. 71 Thomas Devlin INTanufacturing Company, Inc. Beneficiaries. — Employes rendering "continuous and faithful service" and earning $10 a week or over. Plan. — Upon payment of $1 a week, subscribers receive dividends upon $500 worth of company stock for 5 years ; as soon as cash pay- ments and earnings of stock amount to $100, a certificate of stock is issued covering such amount; arrangements in force whereby em- ployes paying $2 a week receive dividends on $1,000 worth of stock. Todd Shipyard Corporation and Subsidiaries Plan installed July, 1916, for Company and all subsidiary plants ; corporation allots a share of stock gratis to employe who becomes owner upon maturity of stock; dividends allotted from date of award. Union Pacific Railroad Company and Subsidiary Companies Announcement has been made by the Union Pacific system of a plan which has been approved giving to all employes of the Union Pacific Railroad Company, the Oregon Short Line and the Oregon Washington Railroad and Navigation Company the privilege of buy- ing the Company's stock on an instalment plan. Offer. — Company offers to purchase stock for subscribing em- ployes which it will carry for 2 years during which time he is expected to pay for it in instalments with 6% interest on unpaid balances ; divi- dends which the company will declare during that period credited to him; Company's stock now selling at a price to yield better than 8%, therefore if employe subscribes now he will receive the difference be- tween interest charged by Company for carrying him and the divi- dends. Payment. — Employe pays to Company amount of cost of stock in 24 monthly instalments, each equal to l/24th of cost ; monthly in- stalments deducted monthly from payroll of employing Company for second half of each month; if no wages or an insufficient amount to meet instalment be due employe on payroll, employe pays instalment, or balance, in cash to Assistant Treasurer on or before last day of month for which instalment is due; employe entitled to pay any or all deferred instalments at any time. 72 Dividends of Employes. — ^All dividends received by Company upon stock purchased for employes credited to them as against inter- est on deferred payments; interest and dividends will not affect monthly instalments, but upon payment of last monthly instalment, the Controller will send to employe a statement of dividends credited and interest charged to employe, together with check for any balance due him; Company assumes and pays all Federal and New York stamp taxes upon transfer of stock to employe. Union Switch & Signal Company Employes privileged to subscribe for capital stock of Company at a fixed price and in proportion to earnings as follows : Class (a) Employes earning annually $1,000 or less subscribed for not exceeding 5 shares ; Class (b) Employes earning annually between $2,000 and $3,000 subscribed for 5 shares applying on first $1,000 of compensation, and for 1 additional share for each additional $250 of compensation or fraction ; maximum subscription in class (b), accordingly, be- ing 15 shares ; Class (c) Employes earning annually in excess of $3,000 had right to subscribe for 13 shares applying on first $3,000 of compensation, and for 1 additional share for each additional $500 of compensation or fraction, with maximum subscription in class (c) limited to 20 shares. United States Rubber Company Beneficiaries. — Officers and employes selected by Executive Com- mittee. Plan. — ^A certain sum set aside annually for distribution among selected employes; participants receiving salaries over $5,000 receive 60% of share in cash and remainder in conditional certificates of interest in Company's common stock on basis of $50 a share; other employes receive their portion in cash; participants receiving stock and remaining with Company until 1920, having rendered satisfac- tory service, received stock represented by conditional certificates; dividends declared in stock held for employe's account delivered when due; resignation or discharge caused forfeiture of all rights to stock, 73 which thereupon were included in a fund for distribution among par- ticipants remaining throughout entire period. Additional Plan. — Officers and employes receiving wages above $1,300 permitted to subscribe for shares of common stock at $50 a share; maximum amount per subscription determined by Executive Committee, varies according to salary and position, minimum of $5 paid monthly on each share; impaid balances carry interest at 5%; dividends credited to account of subscriber until payment is com- pleted and stock issued; following cancellation, payments made re- turned with 5% interest; no credit allowed for dividends, and no in- terest charged upon deferred payments; reward granted of $3 per share for each year employe keeps stock for period of 5 years ; com- pensation further allowed from a special fund consisting of forfeited stock upon which 5% is also credited. United States Steel Corporation and Subsidiaries In January of each year, under plan inaugurated in 1903, shares of stock of Corporation offered to all employes upon easy and favor- able terms, involving benefits beyond those to ordinary stockholders. Principal features of plan as follows : Outline of Plan. — Number of shares to be subscribed for depends upon salary of employe, but relatively greater for a lower-paid man; price of stock the prevailing market price or usually a little less. Payments. — ^Minimum, $2.00 a share a month; maximum 25% of monthly earnings. Premium. — Premium of $5.00 per annum for 5 years paid on each share of stock purchased by employes under plan ; non-paid subscrip- tions may be cancelled and money paid in refimded to employe with 5% interest; premiums not paid to employes who cancel subscription, sell stock, or leave employ of Company; forfeited or unpaid pre- miums for all those except cancellations kept in a fund and divided pro rata among remaining shareholders at end of 5-year period. In Case of Death. — If death occurs to employe subscriber, his es- tate receives unpaid premiums for full 5-year period and a pro rata share of premiums undivided at time of death. In January, 1920, employes of the United States Steel Corpora- tion and the subsidiary companies were again offered the privilege of 74 subscribing for shares of the common stock of the Corporation imder substantially the same conditions and terms as those attached to the previous years' oiferings, except that the price for the 1920 subscrip- tions was $106 a share. Western Electric Company Extension of Bell System Plan. — In addition to being included in the plan of the Bell System to aid employes to become American Telephone and Telegraph Company stockholders, employes of the Western Electric Company afforded opportimity to subscribe to 5 year 7% convertible gold bonds recently issued by Company; sale to employes on instalment basis, payment made on schedule similar to that used during Liberty Loan drives ; interest allowed on money sub- scribers pay in, and also on bonds themselves so that instead of paying full subscription price of $98.50, employe investors' cost is $89.84 on each $100.00 bond. It has been figured that during the time they are paying for bonds, employes receive a net return of 9.8% a year, and that after complet- ing payments in May, 1922, and imtil redemption at par on April 1, 1925, annual interest on investment will amount to 8.3% a year, an average of 8.7% for the entire 5 years. Yawman & Erbe Manufacturing Company The stockholders of the Company, at a meeting held March 31, 1920, authorized an increase in Company's preferred stock, new stock non- voting 7% cumulative preferred, preferred both as to assets and earnings ; before dividends can be paid upon common stock, all divi- dends must be paid upon preferred, and in case of distribution of assets, preferred must be repaid at par ($100 a share) before any dis- tribution is made to common stockholders; provision that Company may retire or pay off preferred stock at $110 a share and any accrued dividends; Company offers employes right to purchase new stock upon following terms : Terms. — ^Purchase price of stock $100 per share, initial payment of 10% ($10 per share) made at time of subscription, balance payable as foUows: Employes paid monthly, $4.00 a share per month; those paid weekly, $1.00 a share per week; amounts to be deducted from regular monthly or weekly wages. 75 Interest anU Dividends. — ^Account kept with each employe sub- scribing, interest charged upon unpaid balance of subscription at 4% per year, all payments credited to account in addition; Company credits amount equal to regular dividends to which stock is entitled at 7% a year, credits made quarterly, at regular dividend dates, August, November, February and May; subscriptions paid in full within 2 years; at any time employe may pay balance of subscription or, on the first of any month, pay any amount to apply on it ; certificates of stock issued and delivered whenever fully paid for. Bonus. — To assist employes to pay for stock, and as additional in- ducement to retain stock. Company will pay annually on May 1 to May, 1925, to every employe who purchases preferred stock under this offer, who remains its owner and in employ of Company, a bonus of $3.00 for each share of stock purchased and still owned; if employe has paid for stock in full, bonus paid to him in cash ; otherwise applied upon unpaid balance of subscription. Disability or Death. — In case of permanent disability or death while subscriber is in Company's employ, he or his estate entitled to receive bonus from Company during remainder of 5-year period, end- ing May 1, 1925, exactly as if subscriber had continued in employ of Company ; if subscription has been paid in full, bonus paid to him or his estate in cash; otherwise applied upon unpaid balance of subscrip- tion. Return. — The following figures show return to employe upon each share of stock purchased, assuming that he retains stock, remains in employ of Company, and that his stock is retired at end of 5 year period. Dividends for 5 years at 7% $35.00 Bonus for 5 years at 3% 15.00 Premium paid by Company on retiring stock. . 10.00 Total for 5 year period, at 12% per year. . $60.00 (Interest upon unpaid amounts of subscription not included.) Suspension of Service. — Suspension of employe because of tem- porary closing of plant, or of department in which he is employed not counted in determining time within which payment of subscription made; neither shall employe be required to make payments on sub- scription during period of suspension, nor lose right to receive bonus, 76 provided, upon written notice, he returns promptly to employment with Company. Cancellation. — Employe's subscription cancelled upon his written request; Company reserves right to cancel subscription of employe if he voluntarily leaves Company's employ, if discharged for cause, if he fails upon request to return to work after being temporarily laid off, or if he fails for 3 consecutive months to make regular subscription payments. In case subscription is cancelled, all amounts paid upon subscription account (not including dividends or 3% bonus accred- ited) with interest at 4% per year refunded, and no interest charged to him on unpaid balance of subscription; payments upon subscrip- tion began with the month of May, 1920. YouNGSTOwN Sheet & Tube Company and Subsidiakies At a meeting of the stockholders of The Youngstown Sheet & Tube Company, held July 2, 1920, it was decided to reorganize the Company under a recent statute of the State of Ohio and authorize the issuance of 1,000,000 shares of common stock without par value; 800,000 shares of this issue to be exchanged for outstanding stock, at the rate of 4 shares for one; 100,000 shares to be set aside for sale to employes of The Youngstown Sheet & Tube Company and subsid- iaries; and 100,000 shares to be left in the treasury for future dis- position. This was done for the purpose of reducing the value of the shares in order to make distribution more easily to its employes. The directors of this Company have now decided on a plan imder which employes are offered the opportunity to subscribe for this stock and pay for it. The Company offers to those now actually in its employ, or in the employ of any of its subsidiaries, the opportunity to subscribe for shares of its common stock, not exceeding an aggregate of 20,000 shares, upon the following terms and conditions : Terms of Plan. — Subscriptions made upon express agreement that questions concerning them be decided by Board of Directors; subscriptions for one or more shares of common stock at $85 a share. The following table shows maximum number of shares which may be subscribed for by employes whose salaries or wages are within the re- spective limits stated; employes may subscribe for less than maxi- mum number of shares ; Company reserves right to reduce allotments in case of over subscription of total number of 20,000 shares. 77 Employes receiving May subscribe annual salaries or for not less wages at than one nor more than: $2,000.00 or less 5 shares $2,000.01 to $2,500.00 6 shares $2,500.01 to $3,000.00 7 shares $3,000.01 to $3,500.00 8 shares $3,500.01 to $4,000.00 9 shares $4,000.01 to $4,500.00 10 shares Employes receiving wages or salaries in excess of $4,500.00 per year may subscribe for an additional share for each $500.00 of excess ; provided, no one be entitled to subscribe for more than 20 shares. Payment. — Payment of subscriptions in instalments deducted from salary or wages of subscriber; deductions made twice a month in cases where wages are paid twice a month, and monthly where wages are paid monthly. First deduction made from first pay in January, 1921 ; deduction from pay $3.50 for each share of stock sub- scribed for in cases of employes paid twice a month; and $7.00 per share in cases of employes paid monthly; payments for stock to be completed within the year 1921 ; interest at 5% per annum charged on deferred payments, but aggregate amoimt of interest charges on any subscription not to exceed aggregate amount of dividends cred- eamings, and who have otherwise fulfilled the conditions outlined in ited thereon; subscribers making final payment from December, 1921 paragraph entitled "Special Benefits" entitled to those special bene- fits. Dividends. — ^All stock subscribed for participates in all dividends declared on common stock; dividends payable on stock subscribed for credited to account of subscriber as part of his payment imtil payment of subscriptions is made in full ; dividends declared after stock is issued paid to stockholder. Cancellations — Befrnid of Payments. — Subscriber may cancel subscription if his employment is suspended for more than 2 months by reason of a shutdown; Company may cancel any subscription for following reasons : (1) Resignation of subscriber. (2) Discharge of subscriber for cause. (3) Failure of subscriber to resume employment when re- quested. 78 Cancellation of subscription forfeits all rights and benefits which subscriber would otherwise receive; full amount of deduction made from his wages on subscription so cancelled refunded with interest at 5% per annum; no credit given for any dividends or special benefits, and no interest charged on deferred payments. Special Benefits. — Stock fully paid for issued to subscriber who may then sell it; but as inducement for him to keep it while he re- mains in service as well as to complete his subscription contract, the following special offer is made: Company will pay or credit to him, on first day of each year for a period of 5 successive years from and after date of first payment, $5.00 a share for each share of stock subscribed for, provided that on that date, if required by Company, satisfactory evidence is furnished of continuous employment in Company or its subsidiaries during pre- ceding year; that proper interest has been shown in its welfare and progress ; and that subscription has not been cancelled or stock, if is- sued, not sold or disposed of; special benefits provided applied in pay- ment for stock where stock has not been fully paid for; or paid in cash where stock has been paid for and issued to subscriber. Death or Permanent Total Disability. — If subscriber dies or suf- fers permanent total disability while an employe of Company and at any time before the last of the special benefits have been paid, pay- ment made to his estate, to his beneficiary, or to him, as the case may be, in lieu of further benefits provided for under "Special Benefits," as follows : (a) If subscription has been fully paid but certificate not de- livered. Company will issue certificate and pay special bene- fits for entire five-year period. (b) If subscription has been fully paid and stock received and not disposed of. Company will pay a sum equal to $5 per share for each of the 5 years not then expired. (c) If subscription has not been fully paid, subscriber, his bene- ficiary, or his estate, may select either of the following plans of settlement : (1) Subscription with all right and benefits may be continued and completed by making monthly payments, or by pay- ment in a lump sum of balance remaining due. (2) Company will pay the money theretofore paid on account, 79 together with all dividends declared on stock subscribed for and special benefits for the entire five-year period. Provided, that if death or permanent total disability be a direct result of body injury sustained by subscriber while acting in the course of his duties, and subscription has not been fully paid. Com- pany pays subscription in full and delivers certificate of stock, and pays the special benefits for the entire five-year period. Beneficiary. — Subscriber may name in his subscription, as bene- ficiary, the person to whom, in the event of his death, he desires the Company to pay all amounts and issue all stock in connection with his subscription, which would otherwise be payable to his estate ; Com- pany, upon satisfactory proof of death, will make payment and issu- ance accordingly. By written notice delivered to the Treasurer of the Company by which he is employed subscriber may change his bene- ficiary. When a beneficiary has been named, subscriber's estate has no claim under subscription, unless the beneficiary dies before subscriber ; in that event payment and issuance made to subscriber's estate. Voting Bights. — Subscriber not entitled to voting rights on stock subscribed for until full payment has been made and a stock certifi- cate issued to him; benefits to subscribers payable only from surplus profits arising from Company's business. Suspensions of Employment. — In case of temporary shutdown, payment not required during suspension of employment but sub- scriber may continue regular payments; period of suspension not counted as part- of time limited for full payment of subscription, nor does it deprive subscriber of special benefits; subscriptions received from November 1, 1920, to December 20, 1920, inclusive, and allot- ments made as soon thereafter as possible. For copy of subscription blanks see Appendix. LIST OF COMPANIES Any list of employe stockholding plans must include those of the following Companies : A American Light & Traction Company American Rolling Mill Company American Sugar Refining Company American Telephone and Telegraph Company Atlas Powder Company 80 B Baker Manufacturing Company Bell Telephone and Telegraph System Belle City Malleable Iron Company Boston Consolidated Gas Company Buckeye Coal Company Buckeye Cotton Oil Company Buckeye Land Company Builders Iron Company Butler Brothers C Canada Cement Company, Ltd. Charles Warner Company Chicago Central Station Institute Cleveland Worsted Mills Commonwealth Edison Company Commonwealth Power, Railway & Light Company Continental Supply Company Cumberland Telephone and Telegraph Company Curtis Brothers & Company D De Laval Separator Company Dennison Manufacturing Company Dort Car Company Duquesne Light Company E Eastman Kodak Company Edison Electric Illuminating Company of Brooldyn F Fairbanks, Morse & Company First National Bank of Chicago Ford Motor Company F. P. Kirkendall & Company Frost Gear & Forge Company G General Electric Company General Motors Corporation George A. Hormel & Company Goodyear Tire & Rubber Company Graton & Knight Manufacturing Company Great Northern Railway Company 81 H Harsh & Chapline Shoe Company Hart, Schaffner & Marx Henry L. Doherty & Company H. P. Hood & Sons Hydraulic Pressed Steel Company I Illinois Central Railroad Company International Harvester Company International Nickel Company J John B. Stetson Company Julius Kayser & Qompany K Kelly Springfield Tire Company L Lakeside Press Lehigh Coal & Navigation Company Lehigh Valley R. R. Company Lever Brothers, Ltd. M Marshall Field & Company Marshall-Wells Company Midvale Steel & Ordnance Company Minneapolis, St. Paul & Sault Sainte Marie Railroad Co. Montgomery Ward & Company Morris & Company N Narrow Fabric Company National Biscuit Company National Cloak & Suit Company New Haven Gas Light Company New York Telephone Company N. O. Nelson Manufacturing Company Norwalk Tire & Rubber Company O Oneida Community, Ltd. Oregon Short Line Railroad Company Oregon Washington Railroad Navigation Company 82 p Parke, Davis & Company Pennsylvania Railroad Company Philadelphia Company Pickands, Mather & Company Pittsburgh Coal Company Pittsburgh, Butler & Harmony Con. R, R. & Power Co. Proctor & Gamble Manufacturing Company Proctor & Gamble Company Proctor & Gamble Distributing Company Public Service Corporation of New Jersey R Republic Iron & Steel Company Roycroft Shop S Samuel Elman Company Shaft-Pierce Shoe Company Standard Oil Company of New Jersey Southern Bell Telephone and Telegraph Company Southwestern BeU Telephone System Studebaker Corporation Swift & Company T Thomas Devlin Manufacturing Company, Inc. Todd Shipyard Corporation U Union Pacific Railroad Company Union Switch & Signal Company United States Rubber Company United States Steel Corporation W Western Electric Company Y Yawman & Erbe Manufacturing Company YoungstoAvn Sheet & Tube Company Results A certain amount of data illustrative of the advancement along lines of employe stock ownership already has been cited in the intro- 83 duction to this report. Additional results, considei-ed both in the mass and in many instances in detail, are equally impressive. For example, participation of from 4%% to 90% of the personnel of companies having employe stock ownership plans is indicated by the investiga- tion. Lehigh Valley Railroad Company. — The subscription by classi- fied employes of the Lehigh Valley Railroad Company is as follows: Officers and general office employes. . 549 or 19 % of this class Agents and station employes 160 or 8 % " Engineers, firemen, conductors, etc.. .. 67 or 1 % " Maintenance of Equipment Dept 201 or 4 % Maintenance of Way Dept 90 or 1%% Miscellaneous 47 Oneida Community IJmited. — Out of 3,700 employes at the pres- ent time, 1,750 own Common Stock. Bell Telephone and Telegraph System. — There are at present more than 30,000 employes of the Bell System who are either actual owners of American Telephone and Telegraph Company stock or who are paying for stock out of their wages. New York Telephone Company. — The response to the various in- vitations to become company stockholders by the New York Tele- phone Company has been as follows : No. of Amount Subscriptions Subscribed The First Plan 8,959 $2,890,140 Extension of Plan 5,219 1,246,552 Second Stock Purchase Plan 10,006 4,213,100 General Electric Company. — 4,928 persons connected with the Lynn Works of the General Electric Company, subscribed for 13,232 shares of stock in the General Electric Company, taking advantage of the opportunity presented during November of bcoming part owners in the company. United States Steel Corporation. — The endorsement of the plan of the United States Steel Corporation has grown more emphatic year by year. Up to the present date, subscriptions have been re- ceived from a total of 66,311 employes for an aggregate number of 167,263 shares. This is the largest subscription received under any offer. 84 The subscriptions for 1916, 1917, 1918, 1919 and 1920 were as follows : Number of Employes Subscribing 1916 1917 1918 1919 1920 Employes receiving less than $800 per year 7,288 3,253 1,920 1,473 584 Employes receiving $800 to $2,500 per year 16,272 33,443 37,236 46,676 45,409 Employes receiving over $2,500 per year 1,583 2,556 4,621 13,175 20,318 Totals 25,143 39,252 43,777 61,324 66,311 Number of Shares of Stock 1916 1917 1918 1919 1920 Employes receiving less than $800 per year 8,961 3,253 2,252 2,148 593 Employes receiving $800 to $2,500 per year 31,952 52,680 72,856 101,764 92,900 Employes receiving over $2,500 per year 9,356 11,819 21,537 54,149 73,770 Totals 50,269 67,752 96,645 158,061167,263 Baker Manufacturing Company. — The plan has resulted in add- ing from 28% to 120% to the wages of stockholding employes during, the past sixteen years. About one-third of the employes of the com- pany are participants. There have been no labor troubles. De Laval Separator Company. — Two-thirds of the office force, more than half the field representatives, and 15% of the shop em- ployes are regular subscribers. Thomas Devlin Manufacturing Company. — Sixty-three of the stockholders are worlanen who own $109,000 in shares out of $830,000 issued. General Motors Corporation. — Of the employes qualified to sub- scribe about 32% are participants. Lever Brothers Limited.— Fifty-six "co-partners" out of a total of 700 employes. Proctor <| Gamble Company. — Approximately 85% of the em- ployes are participants. 85 Marshall Field ^ Company. — ^About one-tenth of the employes own one or more shares of company's Preferred Stock. Belle City Malleable Iron Company. — Nearly one-thu*d of the employes joined in the subscription, including one-fourth of all the Hungarian and Hebrew employes. Studebaker Corporation. — Thirty per cent of the employes of the South Bend Works have participated in the stock ownership plan. Commonwealth Power, Railway ^ Light Company. — 1,300 of the 5,500 employes have entered subscriptions. First National Bank of Chicago. — 130 of the 776 employes are stockholders. Kelly-Springfield Tire Company. — Approximately three quar- ters of aU employes of the Company are stockholders. Minneapolis, St. Paul <| Sault Sainte Marie Railway Company. — About one-seventh of the company's employes participate in its plan. Pittsburgh Coal Company. — Upwards of 15% of the employes participate. Morris and Company. — Employes to the number of 2,991 sub- scribed for $1,918,000 bonds; Office force, 42% ; Packing plant, 12% ; Branch houses, 22%; Foreign branches, 18%. Fairbanks, Morse ^ Company. — ^Employes offered 12,500 shares of Common Stock on time payments ; workers to the number of 14,000 (21% of total) applied for 24,500 shares. Narrow Fabric Company. — With an average of 850 employes about 300 have become employe stockholders. Parke, Davis (| Company. — ^About 800 out of 2,500 employes have participated in stock allotments. Boston Consolidated Gas Company. — The Company maintains on the average from 1,000 to 1,100 employes. About 650 are partici- pants. Charles Warner Company. — ^About one-fourth the total number of employes participate in the stock distribution. No collective labor troubles among the group which receive this stock. 86 COMMENT Certain excerpts from the expressed opinions of officials of com- panies operating plans to enable employes to become company stock- holders are particularly pertinent in the discussion of results. Union Switch and Signal Company. — "Mr. Westinghouse had in mind the advantages to the Company in a body of loyal and contented employes, with a realizing sense of the interdependence of their own prosperity with that of the Company — and all that this would mean in minimizing labor troubles. While there is room for some difference of opinion, as to the effectiveness of the plan, it is probably safe to say that the desired results were in a considerable measure achieved. Whether such a plan would justify itself imder present conditions is another question." Lehigh Valley Railroad Company. — "The results indicate that the men on the road who are strongly organized have not yet responded to same extent as officers and general office employes, but the com- pany is sanguine that they will ultimately become interested." Atlas Powder Company. — "It is the feeling of the officers of this company that its beneficiary schemes have had the effect of increasing materially the efficiency of the employes, and that they have been in- fluential in establishing harmonious relations to a very gratifying ex- tent, asregards both company and employes." (Assistant Treasurer.) Charles A. Warner Company. — "We do not feel that the size of our company, the nature of its business, nor the extent to which we conduct our present plan is any special test of the ability of allaying imrest." (President.) Yov/ngstown Sheet and Tube Company. — "We are very strongly of the belief that th is is the best method of preventing indust rialam.- rest and is best for our employ es, as they are obligedto save a certain pr cen lage o fHfl^ rjeaminjE^'^rf^'residehtT Todd Shipyard Corporation. — " The feeling to ward the plan is whol ehearted." ^ (President.) T^arrow Fabric Company. — "The pl_an_.has_ been, the means of stabilizing employment and avaidligriabor trouble, and is receiving the'hearty support of Jhe,empJflgrfiS.", (Treasurer.) Pickands, Mather and Company. — "We consider this plan has been a great success among t hejnen receiving the benefits^^Jt ; jn fact, it has helped our whole organization." " 87 New Haven Gas Light Company. — "My own feeling is that the plan is a flat failurejamong^the lowest grades of labor, and that hap- pens foH&e tlie^pla^_where wj. axe mgsjMtrguble^^ unreasonaHO^iaSidsr' ' ( Treasurer. ) Studehaker Corporation. — "The results thus far obtained are hipfhl y satisfactory and jusJtJf3L„theij:Jniiia±ion.'' (Assistant to the 'resident.) Proctor and Gamble Company. — "We believe that the operation of the plan has been a success." ( Service Superintendent. ) Minneapolis, St. Paul ^ Sault Sainte Marie Railway Co. — "I am of the opinion that the plan as followed up to date has been beneficial and has met a real need." ( Comptroller. ) Pittsburgh Coal Company. — "The plan effectively reaches and holds the thrifty classes of employes of the company and inculcates and encourages thrift among many who would not be naturally so dis- posed, in this way building up and strengthening the very fibre of the company's organization. It is a leaven quietly overcoming radicalism and class hatred." (Vice-President.) Swift <| Company. — "It is impossible to state definitely the results obtained through this proposition in respect to modifying the ten- dency toward labor troubles, but we feel that it is both beneficial to the employe and the company." (Secretary.) Canada Cement Company, Ltd. — "Since its inception we have had no serious labor troubles, but we do not believe that this is alto- gether due to the employes stock distribution plan." (Comptroller.) First National Bank of Chicago. — "The plan is a success." (Presi- dent. ) Parke, Davis and Cojnpany. — "We cannot say we regard it un- qualifiedly as a success. We believe our plan will continue to be a suc- cess so long as our business is successful." (President.) Republic Iron and Steel Corporation. — "I believe the sale of stock to any employe is a desirable policy to promote, as the encouragement of stock purchasing among the general employes undoubtedly has a stabilizing influence.' ' ( Chairman. ) Cleveland Worsted Mills Company. — "We shall continue this plan, as we believe it to be t he only s ystem gr_methQd.that seems.jto meet the very human elements involveHT' (President.) De Laval Separator Company. — "The plan has worked very well with ofiice employes and traveling sales representatives. It has not worked so well thus far with shop employes, except foremen ancl the more iniporfai5Femployes.''~"( President. ) Hydraulic Pressed Steel Car Company. — "It is regarded as an unqualified success as far as it has gone." (First Vice-President.) 88 Kelly-Springfield Tire Company. — "The factory workmen do no t a t all times seem to T fflliyiff t^fi imrort^Ti^f "^ tfipjr hnlHings, hij± wp fffi3]^Ssjr^c^^£jEftoifi a^ijmKenJLto them each day. ' ' ( Vice-Presi- F, C. Kirkendall and Company. — "Our opinion is that it has not produced satisfactory results." (President.) Commonwealth Edison Company. — "The plan has been in force for something over ten years and has been very satisfactory." (Vice- President.) 89 APPENDIX (To be filled in and returned to the Employment Department of The American Rolling Mill Company, Middletown, Ohio, not later than November 30, 1919.) Subscription Form. Middletown, Ohio, November 1, 1919. COMMON STOCK. Department Shares Subscribed .- To The American Rolling Mill Company: Referring to, and upon the terms of, your circular letter, dated Middletown, Ohio, October 20, 1919, 1 hereby subscribe for shares of the Common Stock of The American Rolling Mill Company, of the par value of Twenty-five Dollars each, subject to the understanding that tliere may be allotted to me all or any part of my sub- scription. According to the terms of said letter, I agree that payment for said stock shall be made by monthly deductions out of my salary or wages; and accordingly, for the purpose of making such payment, I authorize the Comptroller or Assistant Treasurer of the Company to deduct the sum of dollars ($ ) per month out of my wages or salary until I shall have paid the sum of forty-seven doUars-for each share subscribed, and to turn these amounts over to the Trustees provided for according to the terms of said letter, to be applied in 'pay- ment for such Common Stock; hereby reserving the right to increase or decrease the amount of such monthly pay- ments at my pleasure, within the limits stated in said communication. The stock so subscribed for is to be held by the Trustees under the conditions set forth in said letter, together with all cash and stock dividends and other benefits which may accrue. In accordance with Section Twelve of said letter of October 20th, 1919 I hereby designate residing at _ as the person, in the event of my death, to whom I desire the Trustees to pay my share under this subscription, which would otherwise be payable to my estate.' I have been in the employ of the Company continuously since , am now employed in the capacity of and now receive in salary or wages at the rate of $ per year. Do not use this space: Number of shares 0. K. Continuous Service record 0. K. Signature (first name in full). Typewritten copy of signature.. Mailing Address 92 z H < o J (L 0. < Z u o < I 111 (t) < I o D Ill U Q Z 3 >• Z < D. s X 0. < K O Ui -I LI U> »- >■ 111 U IS O 01 "^ ^- u Z U) < o o: K. Ill u X 1- u. 10 0) «i g K Ul li. U. Q Z < H Z o < u 0. 0. < 111 < s >• a 111 a bl X z •> I °- t § 111 < U (fl 111 X h- II. (II z o p 5 z u □ z < (I) s d: 111 H Ul X H h H Z < 3 Ul m Z a. 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Ul-U-JB NOTE— When U is desired to have the contract signed by a husband and wife for~the>urpo8* of securing the benefits provided ./f u '2^?*' '*F»{'h" the space at the beginning of the contract should be filled out for exampre,«s follows: John Smith and Mary Smttht his wife, the first named — " and the wife should sign in_the second signature space ^ittsihurgl) Coal Companj' Ctnplopeet;' ^fii£(ociation COMMON Stock Purchase Contract - Shares. Contract No. C— MADE this. _ day of 19. by and between being at the date hereof an employee of Pittsburgh Coal Company, or one of its subsidiary companies, at , and hereinafter called the "PURCHASER", and PITTSBURGH COAL COMPANY EMPLOYEES' ASSOCIATION, a co-partnership formed under Act of Assembly of Pennsylvania, approved May 9, 1899, P. L. 261, its successors and assigns, hereinafter called "ASSOCIATION." ^tneStttfl, That upon the terms and conditions hereinafter contained, the Purchaser agrees to purchase and accept delivery from the Association of. .shares of Common Stock of Pittsburgh Coal Company, a coiw poration organized and existing under the laws of Pennsylvania, the principal office and place of business of which is Pittsburgh, Pennsylvania. IT IS EXPRESSLY UNDERSTOOD that the terms and conditions upon which sad shares of Common stock are purchased from the Association by the Purchaser, and upon which the same are to be delivered by the Association to the Purchaser, are as follows, to-wit: First. The Purchaser, until entitled to the stock hereby agreed to be purchased, shall pay at least one dollar per share per month for each share of such stock, in monthly installments beginning. 1st, 19. , and shall have the privilege of making such further payments as the Purchaser may elect to make up to the full require- ments of tliis contract, provided the total payments so made under this and all other unmatured contracts of the Purchaser shall not in any one year exceed twenty-five per cent. (25%) of the salary or wages of the Purchaser for said year in his or her said employment; all of which payments made hereunder, and moneys accruing on stock acquired for the Purchaser's account, shall from time to time, as the same accumulate, be used for the purchase in the open market of shares of Common Stock of said Pittsburgh Coal Company. Second. When payments made by the Purchaser hereunder, together with moneys accruing on stock acquired for the Purchaser, shall equal the cost of all the. shares of stock hereby contracted for, the Association will obtain and deliver to the Purchaser a certificate or certificates for the shares of stock to which the Purchaser is entitled hereunder. Third. In the event that the Purchaser shall, before completing payments hereunder, leave the employ of the Pittsburgh Coal Company, or its subsidiary, or.be discharged from the service thereof, or fail, for a period of three months, to make the minimum payments required hereunder, the. Association shall have the right at its option to continue or terminate this contract and make settlement with the Purchaser on one of the following bases: (a) The Purchaser to be given the right to continue the contract until completion under such conditions as the Association shall impose. (b) The Association may deliver to the Purchaser the number of full shares then actually acquired for the Purchaser's account hereunder, together with the amount of payments in excess of the cost of such shares, without interest. (c) The Purchaser to be permitted to cancel this contract and withdraw the amount of payments made, with interest thereon', as provided in Paragraph "Fourth" hereof. Pourlk. The Purchaser shall not be permitted to assign this contract, but subject to the provisions of Paragraphs "Third" and "Seventh" hereof, shall have the right to cancel it at any time before coinpletion of payments, and upon such cancellation the Purchaser agrees to accept in full satisfaction of every claim and demand hereunder the sum of money theretofore received from the Purchaser as payments on account hereof as shown by the books of the Association, with interest thereon at five per cent. (5%) per annum from respective dates of payments up to the date of such cancella- tion, it being understood and agreed that all right to stock then acquired for the Purchaser's account and moneys accruing thereon, less the interest paid as aforesaid, shall revert to the Association for the joint account of all its other unmatured Corrunon Stock contracts. Fiflh. If this contract is not executed by husband arid wife and the Purchaser shall die before maturity thereof i his or her personal representative may either continue and complete payments under the contract or cancel same in like manner as the Purchaser could have done under the provisions in Paragraph "Fourth" hereof ; and in the event that this contract shall be executed by a husband and wife, all payments made, moneys accruing and rights to stock hereuiider shall be for their joint account and this contract shall be held to create an estate by entireties in the same, and' in the event of the death of either, all rights of the Purchaser shall thereupon vest absolutely in the survivor, bu^ if both su'rvivb- upon the maturity of this contract, the certificate or certificates for said shares shall be issued to and in the nanie of the one herein named as Purchaser, unless such person shall direct that the same shall be issued to arid in the name of the other. Sixth. The Purchaser shall be entitled under this arid any other unmatured contracts to purchase in any y6ar only such aggregate number of shares of stock of said Pittsburgh Coal Company, either Preferred or Common or both Preferred and Cornmon, as shall amount, at the minimum rate of payments herein required, to twenty-five per cent. (25%) of his or her salary or wages fbr said, year in his or her said employment; anI9. nOTE — ^^hen it is desired to have the contract ^gned by a huibaod.and wife for the purpose of securing the benefits provided for in Paragraph "Fifth" the space at the tKginnirig of the contract should be filled put for example, ab follows: "John Smith and Mary Smith, his wife, the first named — " and the wife should sign in the second signature space ^ittsiburgtl Coal Company (Cmplopeett' ^Hiotiation PREFERRED Stock Purchase Contract .Shares. Contract No. P — MADE this. .day of _ _... ,19_, by and between.. being at the date hereof an employee of Pittsburgh Coal Company, or one of its subsidiary companies, at , and hereinafter called the "PURCHASER", and PITTSBURGH COAL COMPANY EMPLOYEES' ASSOCIATION, a co-partnership formed under Act of Assembly of Pennsylvania, approved May 9, 1899,_ P. L. 261, its successors and assigns, hereinafter called "ASSOCIATION." ISitncMttfl, That upon the terms and conditions hereinafter contained, the Purchaser agrees to purchase and accept delivery from the Association of.'. shares of Preferred Stock of Pittsburgh Coal Company, a cor- poration organized and existing under the laws of Pennsylvania, the principal office and place of business of which is Pittsburgh, Pennsylvania. IT IS EXPRESSLY UNDERSTOOD that the terms and conditions upon which said shares of Preferred stock are purchased from the Association by the Purchaser, and upon which the same are to be delivered by the Association to the Purchaser, are as follows, to-wit: First. The Purchaser, until entitled to the stock hereby agreed to be purchased, shall pay at least one dollar per share per month for each share of such stock, in monthly installments beginning -. 1st, 19 and shall have the privilege of making such further payments as the Purchaser may elect to make up to the full require- ments of this contract, provided the total payments so made under this and all other unmatured contracts of the Purchaser shall not in any one year exceed twenty-five per cent. (25%) of the salary or wages of the Purchaser for said year in his or her said employment; all of which payments made hereunder, and moneys accruing on stock acquired for the Purchaser's account, shall from time to time, as the same accumulate, be used for the purchase in the open market of shares of Preferred Stock of said Pittsburgh Coal Cothpany. Second. When payments made by the Purchaser hereunder, together with moneys accruing on stock acc|uired for the Purchaser, shall equal the cost of all the shares ofstock hereby contracted for, the Association will obtain and deliver to the Purchaser a certificate or certificates for the shares of stock to which the Purchaser is entitled hereunder. Third. lA the event that the Purchaser shall, before completing payments hereunder, leave the employ of the Pittsburgh Coal Company, or its subsidiary^ or be discharged from the service thereof, or fail, for a period of three months, to make the minimum payments required hereunder, the Association shall have the right at its option to continue or terminate this contract and make settlement with the Purchaser on one of the following bases: (o) The Purchaser to be given the right to continue the contract until completion under such conditions as the Association shall impose. (6) The Association may deliver to the Purchaser the number of full shares then actually acquired for the Purchaser's account hereunder, together with the amount of payments in excess of the cost of such shares, without interest. (c) The Purcliaser to be permitted to cancel this contract and withdraw the amount of payments made, with interest thereon, as provided in Pat^igraph "Fourth" hereof. Fourth. The Purchaser shall not be permitted to assign this contract, but subject to the provisions of Paragraphs "Third" and "Seventh" hereof, shall have the right to cancel it at any time before completion of payments, and upon such cancellation the Purchaser agrees to accept in full satisfaction of every claim ,and demand hereunder the sum of money theretofore received from the Purchaser as payments on account hereof as shown by the books of the Association, with interest thereon at five per cent. (5%) per annum from respective dates of payments up to the date of such cancella- tion, it being understood and agreed that all right to stock then acquired for the Purchaser's account and moneys accruing thereon^ less the interest paid as aforesaid, shall revert to the Association for the joint account of all its other unmatured Preferred Stock contracts. Fifth. It this contract is not executed by husband and wife and the Purchaser shall die before, maturity thereof, his or her personal representative may either continueand complete payments underthecontract or cancel same in like manner as the Purchaser could have done under the provisions in Paragraph "Fourth." hereof ; and in the event that this contract shall be executed by a husband and wife, all payments made,- moneys accruingand rights to stock hereunder shall be for' their joint account and this contract diall be held to create an estate by entireties in the same, and in the event of the death of either, all rights of the Purdiaser shall thereupon vest absolutely in the survivof, but if both survive upon the maturity of this contract, the certificate or certificates- for said shares shall be issued to and in the name of the one herein named as Purchaser, iinless such person shall direct that the same shall be issued to and in-the name of the other. Sixth. The Purchaser shall be entitled under this and any other unmatured contracts to purchase in any year only such aggregate number of shares of stock of said Pittsburgh Coal Company, either Preferred orCoipmon or botti Preferred and Common, as shall amount, at the minimum rate of payments herein required,' to twenty-five per cent. (25%) of his or her salary or wages for said year in his or her said employment; and if and when the Association shall determine that the Purchaser has contracted for a greater number of shares than herein provided for, it shall have the right to reduce such number to the masdmum herein provided for by diminishing the number of shares on the Purchaser s contracts of latest date and refunding to the Purchaser any excess payments which may have made on account thereof, without interest. Saenth. The Purchaser shall complete payments required to be made for the stock hereby agreed to be purchased within five years from the date hejsof, and in the event that the Purchaser shall fail so to do, the Assoaation shall have the rieiit. at the end of said five year period, to reduce the. number of shares herein contracted for to such number of full shares as the payments made and moneys accrued thereon have purchased, and make refund to the Purchaser in cash of any balance remaning to his credit on the books of the Association under this contract. Eiehth. It is understood and agreed that Pittsburgh, Pennsylvania, shall be the place of performance for this contract and that it shaU be construed and the rights of the parties thereunder determined by and in accordance with the laws of Pennsylvania and shall be binding and effective when signed by the Purchaser and the President of the Assoaation. WITNESS the hand and seal of the Purchaser and the President of the Association, duly authorized in its behalf, the diay and year first above written, Attest: __..-,_(SEAL.> Purchuer (SEAL.) ta» Ind Boto) Pittsburgh Coal Company Employees' Association, ■'■ -- iiiaS;^ ^^' " ■ "fis^r- 105 106 SPECIMEN FORM OF SUBSCRIPTION BLANK (For Information Only) TO THE YOUNGSTOWN SHEET AND TUBE COMPANY: Referring to and upon the terms and conditions of your circular letter dated Youngstown, Ohio, October , 1920, I hereby subscribe and -will pay, at the price of $85 per share, for, _ shares of the COMMON STOCK of THET YOUNGSTOWN SHEET AND TUBE COMPANY, carrying all dividaids declared after the date of mis sub- scr^ytion, subject to the understanding that there may be alloted to me all or any part of my suibscription. I hereby agree to pay such price by allowing the deduction or reten- tion thereof out of my salary or wages, as described, in said circular letter, and accordingly, for the putpose of making such payment, I authorize the Treasurer of the Company by Which I am employed to deduct and retain and to apply in payment for such Common Stock the sum of $3.60 per share each pay out of my Wages, Or salary if paid semi-monthly, or the sum of $7.00 i>er ^lare, each pay, out of my wages or salary if piaid monthly, imtil said stock shall be fully paid up, as pro- vided for in said circular letter. In accordance with Paragraph Ninth of said cizcular letter, I hereby designate my (reilationship) (use given name) residing at , ■— , , as the person to whom, in the event of my