Bargaining Unit Pension Plan - Farah Inc.
FARAH U.S.A., INC. BARGAINING UNIT PENSION PLAN
As Amended and Restated Effective
January 1, 1990
(Except to the Extent Otherwise Indicated)
FARAH INCORPORATED
EL PASO, TEXAS
2
TABLE OF CONTENTS
SECTION PAGE
------- ----
DEFINITIONS: PARTICIPATION
---------------------------
1.1 - DEFINITIONS........................................................ 3
1.2 - PARTICIPATION..................................................... 10
1.3 - LEAVE OF ABSENCE AND TERMINATION OF SERVICE........................12
1.4 - REEMPLOYMENT.......................................................13
1.5 - TRANSFER TO OR FROM STATUS AS AN EMPLOYEE..........................18
1.6 - ELECTION NOT TO PARTICIPATE IN PLAN................................21
1.7 - RIGHTS OF OTHER EMPLOYERS TO PARTICIPATE...........................22
NORMAL AMOUNT AND PAYMENT OF RETIREMENT INCOME
----------------------------------------------
2.1 - NORMAL RETIREMENT AND RETIREMENT INCOME............................24
2.2 - EARLY RETIREMENT AND RETIREMENT INCOME.............................25
2.3 - DISABILITY RETIREMENT AND RETIREMENT INCOME........................27
2.4 - BENEFITS OTHER THAN ON RETIREMENT..................................30
2.5 - MINIMUM ACCRUED MONTHLY INCOME.....................................36
2.6 - NO DUPLICATION OF BENEFITS.........................................36
SPECIAL PROVISIONS REGARDING PAYMENT OF BENEFITS
------------------------------------------------
3.1 - OPTIONAL FORMS OF RETIREMENT INCOME................................37
3.2 - LUMP-SUM PAYMENT OF SMALL RETIREMENT INCOME........................40
3.3 - BENEFITS APPLICABLE TO PARTICIPANT WHO HAS
BEEN OR IS EMPLOYED BY TWO OR MORE EMPLOYERS.......................42
3.4 - FUNDING OF BENEFITS THROUGH PURCHASE OF LIFE
INSURANCE CONTRACT OR CONTRACTS....................................42
3.5 - DIRECT ROLLOVERS...................................................43
GOVERNMENTAL REQUIREMENTS AFFECTING BENEFITS
---------------------------------------------
4.1 - SPECIAL PROVISIONS REGARDING AMOUNT AND PAYMENT
OF RETIREMENT INCOME...............................................46
4.2 - TEMPORARY LIMITATIONS ON BENEFITS REQUIRED BY THE
INTERNAL REVENUE SERVICE...........................................68
4.3 - BENEFITS NONFORFEITABLE IF PLAN IS TERMINATED......................74
4.4 - MERGER OF PLAN.....................................................74
4.5 - TERMINATION OF PLAN AND DISTRIBUTION OF TRUST FUND.................75
- i -
3
PAGE
----
4.6 - SPECIAL PROVISIONS THAT APPLY IF PLAN IS TOP-HEAVY................. 80
4.7 - PARTICIPATION AND BENEFITS FOR LEASED EMPLOYEES.................... 89
MISCELLANEOUS PROVISIONS REGARDING PARTICIPANTS
-----------------------------------------------
5.1 - PARTICIPANTS TO FURNISH REQUIRED INFORMATION.......................91
5.2 - BENEFICIARIES......................................................92
5.3 - CONTINGENT BENEFICIARIES...........................................94
5.4 - PARTICIPANTS' RIGHTS IN TRUST FUND.................................95
5.5 - BENEFITS NOT ASSIGNABLE............................................95
5.6 - BENEFITS PAYABLE TO MINORS AND INCOMPETENTS........................96
5.7 - CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN......................97
5.8 - NOTIFICATION OF MAILING ADDRESS....................................97
5.9 - WRITTEN COMMUNICATIONS REQUIRED....................................98
5.10 - BENEFITS PAYABLE AT OFFICE OF TRUSTEE..............................98
5.11 - APPEAL TO COMMITTEE................................................98
MISCELLANEOUS PROVISIONS REGARDING THE EMPLOYER
-----------------------------------------------
6.1 - CONTRIBUTIONS..................................................... 101
6.2 - EMPLOYER'S CONTRIBUTIONS IRREVOCABLE.............................. 101
6.3 - FORFEITURES....................................................... 102
6.4 - AMENDMENT OF PLAN................................................. 102
6.5 - TERMINATION OF PLAN............................................... 104
6.6 - EXPENSES OF ADMINISTRATION........................................ 105
6.7 - FORMAL ACTION BY EMPLOYER......................................... 105
ADMINISTRATION
--------------
7.1 - ADMINISTRATION BY COMMITTEE........................................106
7.2 - OFFICERS AND EMPLOYEES OF COMMITTEE............................... 106
7.3 - ACTION BY COMMITTEE............................................... 107
7.4 - RULES AND REGULATIONS OF COMMITTEE................................ 108
7.5 - POWERS OF COMMITTEE............................................... 108
7.6 - DUTIES OF COMMITTEE............................................... 108
7.7 - INDEMNIFICATION OF MEMBERS OF COMMITTEE........................... 109
7.8 - ACTUARY........................................................... 110
7.9 - FIDUCIARIES....................................................... 111
7.10 - APPLICABLE LAW.................................................... 112
- ii -
4
PAGE
----
TRUST FUND
----------
8.1 - PURPOSE OF TRUST FUND.............................................113
8.2 - BENEFITS SUPPORTED ONLY BY TRUST FUND.............................113
8.3 - TRUST FUND APPLICABLE ONLY TO PAYMENT OF BENEFITS.................113
- iii -
5
INDEX OF DEFINED TERMS
DEFINED TERM PAGE
------------ ----
Actuarially equivalent...........................................................8
Beneficiary......................................................................8
Break in Service.................................................................9
Committee........................................................................4
Company..........................................................................3
Credited Service.................................................................6
Deferred Monthly Retirement Income Commencing at
Normal Retirement Date..................................................7
Designated nonparticipating employer.............................................4
Disability retirement...........................................................27
Early retirement................................................................25
Early retirement date...........................................................26
Effective date of the plan.......................................................4
Employee.........................................................................4
Employer.........................................................................3
Hour of Service..................................................................5
Initial Vesting Date.............................................................7
Last date of commencement of employment..........................................5
Leave of absence................................................................12
Normal retirement...............................................................24
Normal retirement date..........................................................24
Participant......................................................................5
Plan.............................................................................3
Plan year........................................................................8
Required Beginning Date..........................................................9
Single-sum value.................................................................7
Superseded plan..................................................................3
Supplement.......................................................................3
Termination of service..........................................................12
Trust............................................................................8
Trust agreement..................................................................3
Trust fund.......................................................................8
Trustee..........................................................................4
Vesting Service..................................................................6
- iv -
6
FARAH U.S.A., INC. BARGAINING UNIT PENSION PLAN
As Amended and Restated Effective January 1, 1990
(Except to the Extent Otherwise Indicated)
INTRODUCTION
The Farah Manufacturing Company, Inc. Pension Plan and the Farah Manufacturing
Company, Inc. Pension Trust were adopted by Farah Manufacturing Company, Inc. effective
as of August 1, 1976 as an amendment and complete restatement of the pension plan
originally adopted by said employer effective as of July 27, 1970.
Effective as of February 17, 1977, the Farah Manufacturing Company, Inc.
Bargaining Unit Pension Plan and the Farah Manufacturing Company, Inc. Bargaining
Unit Pension Trust were adopted by Farah Manufacturing Company, Inc. as a spin off
from the aforementioned Farah Manufacturing Company, Inc. Pension Plan and the Farah
Manufacturing Company, Inc. Pension Trust in order to establish a new and separate
pension plan and trust for its eligible bargaining unit employees. Said pension
plan and trust for the Company's bargaining unit employees were set forth in an
agreement titled Farah Manufacturing Company, Inc. Bargaining Unit Pension Plan
and Trust Agreement.
Effective as of September 4, 1979, that portion of the aforementioned Farah
Manufacturing Company, Inc. Bargaining Unit Pension Plan and Trust Agreement setting
forth the provisions of the Farah Manufacturing Company, Inc. Bargaining Unit Pension
Plan was amended and restated in its entirety.
7
- 2 -
Effective as of March 31, 1987, Farah Manufacturing Company, Inc. was
re-named
Farah Incorporated.
Effective as of December 31, 1990, the Farah Retiree Plan was merged into
the Farah Manufacturing Company, Inc. Bargaining Unit Pension Plan.
Effective as of January 1, 1990, except to the extent otherwise indicated,
the Farah Manufacturing Company, Inc. Bargaining Unit Pension Plan is being amended
and restated in its entirety and, effective as of January 1, 1995, the name of the
Farah Manufacturing Company, Inc. Bargaining Unit Pension Plan is being changed
to the Farah U.S.A., Inc. Bargaining Unit Pension Plan.
Subject to receipt by Farah Incorporated of favorable rulings that the
qualified
status of the Farah U.S.A., Inc. Bargaining Unit Pension Plan and the related trust
under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986 is not adversely
affected by such amendment and restatement, each person who becomes a participant
hereunder shall be entitled upon his retirement or termination of service to such
benefits as are specified in the provisions which follow.
8
- 3 -
SECTION 1
DEFINITIONS: PARTICIPATION
1.1 - DEFINITIONS
(A) The following words and phrases shall have the meanings stated
below unless a different meaning is plainly required by the context:
(1) The term "Company" as used herein means Farah
Incorporated, a corporation, and its successor or
successors.
(2) The term "Employer" as used herein means,
collectively or distributively as the context may
indicate, the Company and any other corporations,
associations, joint ventures, proprietorships or
partnerships which have adopted and are participating
in the plan in accordance with the provisions of
Section 1.7 hereof.
(3) The term "plan" as used herein means the Farah
U.S.A., Inc. Bargaining Unit Pension Plan (prior to
January 1, 1995, the plan was known as the Farah
Manufacturing Company, Inc. Bargaining Unit Pension
Plan) as amended and restated effective as of January
1, 1990, except to the extent otherwise indicated, as
set forth in this document and as it may hereafter be
amended from time to time.
(4) The term "trust agreement" as used herein means the
Farah Manufacturing Company, Inc. Bargaining Unit
Pension Trust as amended and restated effective as of
September 4, 1979 as set forth in the trust agreement
of that title, which is attached to this plan, as
such trust agreement may thereafter be amended from
time to time.
(5) The term "superseded plan" as used herein means,
collectively or distributively, as the context may
indicate, the qualified retirement plan, if any,
which was maintained by an Employer for its eligible
employees prior to the effective date of the plan and
which the plan and trust agreement represent an
amendment and restatement thereof. References to the
superseded plan as of any given date shall refer to
the provisions as set forth under the terms of the
applicable document describing such qualified
retirement plan as amended and in effect on such
given date prior to the effective date of the plan.
(6) The term "supplement" as used herein means any
supplement which is attached to and made a part of
the plan and which describes provisions of the
9
- 4 -
plan which apply only to employees of an Employer or
Employers specified in such supplement.
(7) The term "designated nonparticipating employer" as
used herein means:
(a) any corporation or association which is not
an Employer as defined herein and which is
a
member of a controlled group of corporations
(within the meaning of Section 1563(a) of
the Internal Revenue Code of 1986, as
amended) with respect to which the Employer
is a member or is the common parent
corporation;
(b) any trade or business (whether or not
incorporated) which is not an Employer as
defined herein and which is under common
control with the Employer as determined in
accordance with Section 414(c) of the
Internal Revenue Code of 1986, as amended,
and regulations issued thereunder;
(c) any service organization which is not an
Employer as defined herein and which is a
member of an affiliated service group
(within the meaning of Section 414(m) of the
Internal Revenue Code of 1986, as amended)
with respect to which the Employer is a
member; and
(d) any other corporation, association,
proprietorship, partnership, or other
business organization which (i) is not an
Employer as defined herein and (ii) the
board of directors of the Company designates
on the basis of a uniform policy applied
without discrimination as a "designated
nonparticipating employer" for the purposes
of this plan.
(8) The term "trustee" as used herein means the corporate
trustee or the individual trustees, as the case may
be, appointed from time to time pursuant to the
provisions of the trust agreement to administer the
trust fund maintained for the purposes of the plan.
(9) The term "effective date of the plan" as used herein
means January 1, 1990, except to the extent otherwise
indicated, or such later date as of which the plan
first became effective with respect to the particular
Employer concerned.
(10) The term "Committee" as used herein means the
Retirement Committee appointed from time to time to
administer the plan pursuant to the provisions of
Section 7.1 hereof.
(11) The term "Employee" as used herein means any person
employed by the Employer whose working conditions are
determined under a collective
10
- 5 -
bargaining agreement between the Employer and the
Amalgamated Clothing and Textile Workers Union.
(12) The term "participant" as used herein means (a) any
active Employee who has satisfied the requirements of
Section 1.2 hereof, (b) any former Employee who has
satisfied the requirements of Section 1.2 hereof,
whose service has not been terminated but who has
subsequently been transferred from his status as an
Employee as defined herein and (c) any retired or
terminated Employee who has vested rights to benefits
under the provisions of the plan.
(13) The term "last date of commencement of employment"
means:
(a) if the employee's service has not been
previously terminated in accordance with the
provisions hereof, the date on which he
first performs an Hour of Service for an
Employer or for any predecessor business of
an Employer conducted as a corporation,
partnership or proprietorship; or
(b) if the employee's service has been
previously terminated in accordance with the
provisions hereof, the first day following
his last termination of service on which he
performs an Hour of Service for an Employer
or for any predecessor business of an
Employer conducted as a corporation,
partnership or proprietorship;
provided, however, that the last date of commencement
of employment of an employee, who immediately before
his current employment was employed by a predecessor
or acquired business up to the date of its merger
with or acquisition by the Employer, shall not be
earlier than the date fixed for this purpose by the
Employer and provided that the same date is uniformly
fixed for this purpose as to all of the employees of
a given predecessor or acquired business.
(14) The term "Hour of Service" as used herein means each
hour during an applicable computation period for
which an employee is directly or indirectly paid, or
is entitled to payment, by the Employer for (a) the
performance of duties for the Employer or (b) reasons
other than the performance of duties for the
Employer, including but not limited to vacation,
holidays, sickness, disability, paid layoff and
similar paid periods of nonworking time. Such Hours
of Service shall be credited to the employee for the
computation period in which such duties were
performed or in which occurred the period during
which no duties were performed. An Hour of Service
also includes each hour, not credited above, for
which backpay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Employer.
These Hours of Service shall be credited to the
11
- 6 -
employee for the computation period to which the
award or agreement pertains. The number of Hours of
Service to be credited to an employee for any
computation period shall be governed by Sections
2530.200b-2(b) and 2530.200b-2(c) of Part 2530 of
Subchapter C of Chapter XXV of Title 29 of the Code
of Federal Regulations (Department of Labor
regulations relating to minimum standards for
employee pension benefit plans).
(15) The term "Credited Service" as used herein means the
total period of an employee's service with the
Employer, computed in completed months, during the
period beginning on his last date of commencement of
employment and ending on his date of actual
retirement or termination of employment or, where
applicable, ending on such other date as is specified
hereunder; provided, however, that:
(a) with respect to any period of such an
employee's service which would be included
in his Credited Service in accordance with
the provisions above, any complete calendar
month that the employee is absent from the
service of the Employer will be excluded
from his Credited Service unless he receives
regular compensation from the Employer for
all or any portion of such calendar month
and except as otherwise provided below;
(b) any absence due to the employee's engagement
in military service will be included in his
Credited Service if such absence is covered
by a leave of absence granted by the
Employer or is by reason of compulsory
military service;
(c) any period of service while the employee was
a partner or proprietor of an Employer or of
a predecessor business of an Employer shall
be excluded from his Credited Service; and
(d) the provisions of Sections 1.4 and 1.5
hereof shall apply in the case of an
employee who is reemployed with a
reinstatement of Credited Service accrued
prior to his last date of commencement of
employment or is transferred to or from his
status as an Employee as defined herein.
(16) The term "Vesting Service" as used herein means the
total period of elapsed time, computed in years and
days, during the period beginning on the employee's
last date of commencement of employment and ending on
his date of retirement or termination of service or,
where applicable, ending on such other date as is
specified hereunder; provided, however, that:
(a) with respect to any absence during such
period which is of a duration of longer than
12 consecutive months, and which does not
constitute
12
- 7 -
a termination of service, the first 12
months of such absence will be included in
the participant's Vesting Service but that
portion of such absence which (i) is in
excess of 12 months and (ii) is excluded
from his Credited Service will be excluded
from his Vesting Service;
and
(b) the provisions of Sections 1.4 and 1.5
hereof shall apply in the case of an
employee who is reemployed with a
reinstatement of Vesting Service accrued
prior to his last date of commencement of
employment or is transferred to or from his
status as an Employee as defined herein.
(17) The term "Initial Vesting Date" as used herein means
the earlier to occur of the following dates:
(a) the date on which the participant has
completed 5 years of Vesting Service; or
(b) the date on which the participant attains
the normal retirement age of 65 years;
provided, however, that the Initial Vesting Date of
a
participant shall not be earlier than the effective
date of the plan.
(18) The term "Deferred Monthly Retirement Income
Commencing at Normal Retirement Date" as used herein
shall mean the monthly retirement income, payable in
the manner described in Section 2.1(C) hereof
commencing at the participant's normal retirement
date, which he has accrued as of a given date and
shall be equal to $4.50 multiplied by his number of
years of Credited Service at such given date;
provided, however, that the Deferred Monthly
Retirement Income Commencing at Normal Retirement
Date which a participant has accrued as of a given
date shall not exceed an amount which is actuarially
equivalent as of such given date to that amount which
would cause the monthly retirement income payable to
or on behalf of the participant under the plan to be
in excess of the maximum amount of retirement income
specified in Section 4.1(A) hereof; and provided
further, however, that the provisions of Section 4.6
hereof shall apply in determining the Deferred
Monthly Retirement Income Commencing at Normal
Retirement Date of a participant who has accrued
Vesting Service during any plan year that the plan is
top-heavy.
(19) The term "single-sum value" as used herein means the
actuarially computed present value, as of a given
date, of the retirement income payments for which it
is determined based upon the interest and mortality
assumptions
13
- 8 -
specified in the provisions of the plan. The
single-sum value as of a given date of a
participant's accrued Deferred Monthly Retirement
Income Commencing at Normal Retirement Date shall in
all cases hereunder be discounted for interest and
mortality from the participant's normal retirement
date to such given date.
(20) The terms "trust" and "trust fund" as used herein
mean the trust fund established pursuant to the terms
of the trust agreement.
(21) The term "beneficiary" as used herein means the
person or persons on whose behalf benefits may be
payable under the plan after a participant's death in
accordance with the provisions hereof.
(22) The term "plan year" as used herein means the
calendar, policy or fiscal year on which the records
of the plan are kept as reported from time to time by
the plan administrator to the Internal Revenue
Service. The plan year, unless subsequently changed
in accordance with rules or regulations issued by the
Internal Revenue Service or Department of Labor,
shall be the 12-month period beginning January 1st of
each calendar year.
(23) The term "Break in Service" as used herein shall mean
a period of 12 consecutive months or longer that
immediately follows an employee's date of termination
of service and immediately precedes the date, if any,
on which he next performs an Hour of Service.
(24) The term "Required Beginning Date" as used herein
means the first day of April of the calendar year
following the calendar year in which the participant
attains age 70-1/2. Notwithstanding the foregoing,
the Required Beginning Date of a participant who
attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (a) or (b) below:
(a) the Required Beginning Date of a participant
who is not a "5- percent owner" (as defined
in below) is the first day of April of the
calendar year following the calendar year in
which the later of retirement or attainment
of age 70-1/2 occurs; or
(b) the Required Beginning Date of a participant
who is a 5-percent owner during any year
beginning after December 31, 1979, is the
first day of April following the later of:
(i) the calendar year in which the
participant attains age 70-1/2,
or
14
- 9 -
(ii) the earlier of the calendar year
with or within which ends the plan
year in which the participant
becomes a 5-percent owner, or the
calendar year in which the
participant retires.
Also notwithstanding the foregoing, the Required
Beginning Date of a participant who is not a 5-percent
owner who attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
A
participant is treated as a 5-percent owner if such
participant is a 5-percent owner as defined in Section
416(i) of the Internal Revenue Code (determined in
accordance with section 416 but without regard to
whether the plan is top-heavy) at any time during the
plan year ending with or within the calendar year in
which such owner attains age 66-1/2 or any subsequent
plan year. Once distributions have begun to a
5-percent owner they must continue to be distributed,
even if the participant ceases to be a 5-percent owner
in a subsequent year. Notwithstanding any other
provision of the plan to the contrary, all
distributions required under the plan shall be
determined and made in accordance with Section
401(a)(9) of the Internal Revenue Code and the
Proposed Income Tax Regulations under Section
401(a)(9) of the Internal Revenue Code or any
successor regulations, including the minimum
distribution incidental death requirement of Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations
or any successor regulations.
(B) The terms "herein", "hereunder" and similar terms refer to this
document, including the trust agreement which is a part of this document, unless
otherwise qualified by the context.
(C) The pronouns "he", "him" and "his" used in the plan shall also
refer to similar pronouns of the feminine gender unless otherwise qualified by the
context.
(D) The following terms and expressions as used herein shall have
the meanings specified in the sections of the Internal Revenue Code of 1986, as
amended, respectively indicated:
(1) "Defined Benefit Plan" -- Section 415(k)
(2) "Defined Contribution Plan" -- Section 415(k)
(3) "Defined Benefit Plan Fraction" -- Section 415(e)(2)
(4) "Defined Contribution Plan Fraction" -- Section
415(e)(3)
15
- 10 -
1.2 - PARTICIPATION
Each person who was a participant in the superseded plan, if any, of the
Employer as of the day immediately preceding the effective date of the plan will
become a participant in the plan on the effective date of the plan; provided, however,
that any such participant who had retired or whose service had been terminated prior
to the effective date of the plan and who is not an active employee of an Employer
or designated nonparticipating employer or on an approved leave of absence granted
by an Employer or designated nonparticipating employer as of the effective date
of the plan shall be entitled on and after the effective date of the plan to only
those benefits, if any, to which he is entitled on and after the effective date
of the plan under the provisions of the superseded plan (except that Section 1.2
of the superseded plan shall be deemed to be amended effective as of January 1,
1988 to be identical to Section 1.2 of the plan and Sections 1.1(A)(15), 1.4(C)
and 2.1(B)(2) of the superseded plan shall be deemed to be amended effective as
of January 1, 1989 to include post-normal retirement date service as described herein
in such Sections), and he and his beneficiaries shall not be entitled to any additional
benefits under the plan as set forth herein unless he reenters the service of an
Employer after the effective date of the plan or unless the plan is amended on or
after the effective date of the plan specifically to provide otherwise.
Each other Employee in the service of the Employer on or after January
1,
1988 will become a participant in the plan on the latest to occur of the following
dates:
(A) the date on which he attains the age of 21 years; or
(B) the first anniversary of his last day of commencement of employment;
provided, however, that any Employee who had attained the age of 60 years prior
to his commencement of employment and who has not performed an Hour of Service after
December 31, 1987, shall not be eligible to become a participant in the plan; provided
further, however, that
16
- 11 -
any such other Employee whose service has not been terminated but who is absent
from the active service of the Employer on such date that he is first eligible to
become a participant in the plan as described above will become a participant hereunder
as of the date of his return to active service with the Employer.
The above provisions describe the date on which an eligible Employee will
initially become a participant in the plan. In the event that a participant's service
is terminated and he is subsequently reemployed, the date on or after the date of
his reemployment as of which he will become a participant in the plan is described
in Section 1.4 hereof.
1.3 - LEAVE OF ABSENCE AND TERMINATION OF SERVICE
Any absence from the active employment of the Employer by reason of an
approved
absence granted by the Employer because of illness or military service, or for any
other reason on the basis of a uniform policy applied by the Employer without discrimination,
will be considered a leave of absence for the purposes of the plan and will not
terminate an employee's service provided he returns to the active employment of
the Employer at or prior to the expiration of his leave or, if not specified therein,
within the period of time which accords with the Employer's policy with respect
to permitted absences. If the employee does not return to the active employment
of the Employer at or prior to the expiration of his leave of absence as above defined,
his service will be considered terminated as of the earliest to occur of (i) the
date on which his leave of absence expired, (ii) the first anniversary of the date
on which his leave of absence began or (iii) the date of his resignation, quit or
discharge; provided, however, that, except for absence because of military service,
if any such employee, who was a participant in the plan on the date on which his
leave began, is prevented from his timely return to the active employment of the
Employer because
17
- 12 -
of his total and permanent disability or his death, he shall, nevertheless, be
entitled, if he meets the requirements necessary to qualify therefor, to any disability
benefit as provided in Section 2.3 hereof or to any death benefit as provided in
Section 2.4 hereof, whichever is applicable, as though he returned to active employment
immediately preceding the date of his total and permanent disability or his death.
Absence from the active service of the Employer because of compulsory engagement
in military service will be considered a leave of absence granted by the Employer
and will not terminate the service of an employee if he returns to the active employment
of the Employer within the period of time during which he has reemployment rights
under any applicable Federal law or within 60 days from and after discharge or separation
from such compulsory engagement if no Federal law is applicable. No provision of
this section or in this plan shall require reemployment of any employee whose active
service with the Employer was terminated by reason of military service.
In the event that an employee's service with the Employer is interrupted
because of any absence from the active service of the Employer, including, but not
limited to, absence by reason of discharge or resignation, which is not deemed a
leave of absence as defined above, his service will be considered terminated as
of the date of such interruption; provided, however, that any period of service
as a partner or as a proprietor of any predecessor business shall not constitute
an interruption of an employee's employment and transfers of employment among the
Employers and designated nonparticipating employers shall not be deemed interruptions
of employment and shall not constitute a termination of service for the purposes
of the plan.
Notwithstanding any provision in the Plan to the contrary, any period of
leave pursuant to the Family and Medical Leave Act of 1993, as amended, will be
treated as continued service for
18
- 13 -
for purposes of vesting and eligibility to participate to the extent required
by
such law and the regulations thereunder.
1.4 - REEMPLOYMENT
(A) Reemployment Within One Year After
Termination of Service:
If any employee reenters the service of the Employer within the 12-month
period immediately following the date of his quit, resignation or discharge or within
the 12-month period immediately following the first anniversary of the date that
his absence began for any other reason, his service shall not be considered to have
been terminated for the purposes of the plan and he shall, subject to the following
provisions of this Section 1.4, be treated under the plan upon such reentry as though
he had been on a leave of absence during the period between the dates of such interruption
and such reentry.
(B) Reemployment of Vested Terminated Participant
Prior to Commencement of Payments:
If a participant's service is terminated on or after his Initial Vesting
Date for a reason other than his normal retirement, early retirement or disability
retirement as described in Sections 2.1, 2.2 and 2.3 hereof, respectively, and he
subsequently reenters the active service of the Employer prior to the date as of
which his retirement income payments are to commence in accordance with the provisions
of Section 2.4(A) hereof, and such participant has not received, in accordance with
Section 3.1 or 3.2 hereof, the value of his benefit provided under Section 2.4(A)(l),
he will become a participant upon the date of such reentry and will be entitled
to the Credited Service and Vesting Service he had on the date of termination of
his service in lieu of the benefits to which he was entitled on such date under
Section 2.4(A)(l); provided, however, that the benefit payable to
19
- 14 -
such participant commencing at normal retirement date shall not be less than the
amount to which he was entitled under Section 2.4(A)(l) hereof prior to his reentry
into the service of the Employer.
(C) Reemployment of Retired or Vested Terminated Participant
After Commencement of Payments:
If a participant who is receiving a retirement income under the provisions
of Section 2.4(A)(1) or who has retired and is receiving a retirement income under
the provisions of Section 2.1 or 2.2 hereof subsequently reenters the active service
of the Employer, he shall become a participant upon the date of such reentry and
no retirement income payments shall be made during the period of such reemployment.
Such participant shall be treated in the same manner as a vested terminated participant
whose retirement income payments have not commenced and who subsequently reenters
the service of the Employer as described in Section 1.4(B) above, except that the
benefit payable under the plan to or on behalf of such participant upon his subsequent
retirement or termination of service shall be reduced on an actuarially equivalent
basis by an amount equal to the sum of the retirement income payments which he received
under the provisions of Section 2.2, 2.4(A) or 3.1 hereof, whichever is applicable,
prior to such reentry into the service of the Employer.
Notwithstanding the above provisions of this Section 1.4(C), in lieu of having
his
retirement income payments discontinued and his benefit payable upon his subsequent
retirement or termination determined in accordance with the above provisions of
this Section 1.4(C), any such participant who is receiving retirement income payments
under the plan and who reenters the active service of the Employer may, upon such
reentry, elect in writing filed with the Committee to continue to receive his retirement
income payments after his reemployment in the same manner
20
- 15 -
as though he had not reentered the service of the Employer; and in such event
he
shall be treated as if he then first entered the service of the Employer except
that, (i) he shall become a participant in the plan on the date of such reentry,
(ii) his Vesting Service shall include the Vesting Service which he had accrued
prior to such reemployment, (iii) he shall not accrue any Credited Service or Vesting
Service during any calendar year that he is credited with less than 1,000 Hours
of Service, and (iv) the benefit which he accrues after the date of his reemployment
which is payable to such participant or his beneficiary upon his subsequent retirement
or termination of service (even if his subsequent retirement or termination of service
is due to his total and permanent disability or death) shall be limited to the amount
which can be provided on an actuarially equivalent basis by the monthly retirement
income, if any, which he accrues subsequent to such reemployment based upon his
Credited Service determined in the same manner as though he then first entered the
service of the Employer; provided further, however, that such income which such
a participant accrues subsequent to his reemployment shall not cause the actuarial
equivalent of the total income payable to the participant or his beneficiary under
the plan to exceed the amount which would have been payable if he had not elected
to continue to receive his retirement income after his reemployment.
(D) Reemployment After Disability Retirement:
If a participant who has retired under the provisions of Section 2.3 recovers
from disability and reenters the active service of the Employer within one year
after the date of his recovery from disability by accepting reemployment offered
by the Employer within 30 days after such offer, his service will be deemed to have
been continuous and he will receive Credited Service and Vesting Service under the
plan for that period during which he was considered totally and permanently disabled
as provided herein.
21
- 16 -
(E) Reemployment After Full Settlement:
If a participant's service has been terminated on or after January 1,
1985
for any reason and he was entitled, upon such termination, to a monthly retirement
income under the provisions of Section 2.1, 2.2, 2.3 or 2.4(A)(l) hereof and the
full actuarial equivalent value of such retirement income has been paid on behalf
of such participant under the provisions of Section 3.1 or 3.2 hereof, and such
participant reenters the active service of the Employer, he shall become a participant
on the date of his reentry and shall be entitled to a reinstatement of the Credited
Service and Vesting Service which he had accrued as of such previous date of termination,
but the benefit payable under the plan to or on behalf of such participant upon
his subsequent retirement or termination of service shall be reduced by the actuarially
equivalent value of such retirement income which has been paid on his behalf under
Section 3.1 or 3.2 hereof.
(F) Reemployment of Other Employees:
(1) Any employee, whose service is terminated, who is not
included under the provisions of Section 1.4(A), 1.4(B), 1.4(C), 1.4(D) or 1.4(E)
above (and who incurs a Break in Service if the date of termination of his service
is on or after the effective date of the plan) and who reenters the service of the
Employer, will be treated as though he then first entered the service of the Employer;
provided, however, that:
(a) if his Break in Service is for a period of
less than five years or if the number of years
and days included in his Break in Service is
less than the number of years and days of
Vesting Service which he had accrued as of the
date of termination of his service, such
employee shall be entitled to a reinstatement
of the Credited Service and Vesting Service
which he had accrued as of such previous date
of termination of service; and
(b) if, as of the date of termination of his
service, such employee was a participant in
the plan or if he had previously satisfied the
service requirement for eligibility to
participate in the plan prior to the date
22
- 17 -
of his termination of service, he shall be
deemed to have satisfied the service
requirement for eligibility to participate
in the plan under Section 1.2 hereof as of
the date of his reentry.
(2) If an employee to whom the provisions of Section 1.4(F)(1) above
apply has an absence from the service of the Employer which begins on or after January
1, 1985 and is due to the pregnancy of the employee, the birth of a child of the
employee or the placement of a child with the employee in connection with the adoption
of such child by such employee or is for the purpose of caring for such child for
a period beginning immediately following such birth or placement and if the service
of such employee is terminated during such absence, the rights of such employee
under Section 1.4(F)(1) above to resume participation in the plan and to a reinstatement
of his previous Credited Service and Vesting Service upon his reemployment shall
not be less favorable to the employee than those corresponding rights that he would
have under such section if the date of termination of his service had been the second
anniversary of the date on which his absence began and if the length of such employee's
Break in Service were based on the termination date; provided, however, no employee
shall accrue any additional Credited Service or Vesting Service between the date
of termination of his service and the second anniversary of the date on which his
absence began as a result of the provisions of this Section 1.4(F)(2).
1.5 - TRANSFER TO OR FROM STATUS AS AN EMPLOYEE
An employee will be deemed to be transferred from his status as an Employee
as defined herein in the event that he remains in the service of the Employers but
has a change in his employment status so that he no longer qualifies as an Employee
as defined herein or in the event that he is transferred to a designated nonparticipating
employer. Conversely, a person who is not an Employee as defined herein will be
deemed to be transferred to the status of an Employee as defined herein in the event
that he remains in the service of the Employers but has a change in his
23
- 18 -
employment status so that he becomes an Employee as defined herein or in the event
that he is transferred to an Employer from a designated nonparticipating employer
and becomes an Employee as defined herein. The service of such a person described
above shall not be considered to be interrupted by reason of any such transfer,
and service with the designated nonparticipating employer shall be terminated in
the same manner as service with the Employer is terminated; and the rights of such
a person upon his reemployment by a designated nonparticipating employer shall be
determined in the same manner as though he had been reemployed by the Employer and
immediately thereafter had been transferred to such designated nonparticipating
employer. Any provisions of Section 2.l, 2.2, 2.3 or 2.4 hereof to the contrary
notwithstanding, the benefits of any such employee who has been transferred to or
from the status as an Employee as defined herein on or after both February 17, 1977
and the date that he became a participant in the plan or superseded plan shall be
determined in accordance with the following provisions of this Section 1.5.
(A) Eligibility for Benefits: In determining the eligibility of
such an employee to whom the provisions of this Section 1.5
are applicable for participation in the plan and in
determining his eligibility for the benefits provided under
the plan, his Credited Service, Hours of Service and Vesting
Service shall include all service, which otherwise would be
included as Credited Service, Hours of Service and Vesting
Service in accordance with the provisions hereof, which he
accrued with the designated nonparticipating employers and
with the Employers while not qualified as an Employee as
defined herein as well as all Credited Service, Hours of
Service and Vesting Service which he accrued with the
Employers while qualified as an Employee as defined herein.
Any such employee who is transferred to the status of an
Employee as defined herein shall become a participant in the
plan on the date that he becomes an Employee as defined herein
if he has otherwise satisfied the requirements to become a
participant in the plan as described in Section 1.2 hereof
prior to such date that he becomes an Employee as defined
herein.
(B) Computation of Benefits: A participant to whom the provisions
of this Section 1.5 are applicable shall be entitled upon his
retirement or termination of service (or his beneficiary, or
beneficiaries, shall be entitled in the event his service is
terminated by reason of his death), if he meets all
requirements necessary to qualify for a benefit
24
- 19 -
under the provisions of Section 2.1, 2.2, 2.3 or 2.4 hereof or
under the provisions of any supplement hereto, as the case may
be, to a benefit payable in accordance with the provisions of
Section 2.1, 2.2, 2.3 or 2.4 hereof or in accordance with the
provisions of any supplement hereto, whichever is applicable,
but the amount of the monthly retirement income which is
payable on his behalf under the plan shall be equal to the
product of:
(1) the monthly retirement income which would have been
payable on behalf of such participant under the
provisions of Section 2.1, 2.2, 2.3 or 2.4 hereof or
under the provisions of any supplement hereto,
whichever is applicable, if all of his service had
been accrued with the Employers hereunder while
qualified as an Employee as defined herein;
multiplied by
(2) the fraction in which the numerator is the
participant's number of years of Credited Service
which he accrued while in the service of the
Employers hereunder while qualified as an Employee as
defined herein and the denominator is the total
number of years of Credited Service which he would
have accrued if all of his service had been accrued
with the Employers hereunder while qualified as an
Employee as defined herein;
provided, however, that there shall be no duplication of
service in computing benefits under this plan and under any
other qualified pension or annuity plan maintained by any
Employer or designated nonparticipating employer, and, if
credit for service accrued while qualified as an Employee as
defined herein is granted under any such other qualified
pension or annuity plan, then the portion of the benefit
payable under the plan based on such duplicated service shall
be reduced (but not so as to produce a negative amount) by the
actuarially equivalent amount of the benefit payable under
such other qualified pension or annuity plan based on such
duplicated service; provided further, however, that the
Deferred Monthly Retirement Income Commencing at Normal
Retirement Date of a participant who has been transferred from
his status as an Employee as defined herein shall not be less
than the Deferred Monthly Retirement Income Commencing at
Normal Retirement Date which the participant had accrued under
the provisions of the plan to the date of his transfer from
his status as an Employee as defined herein. It is
specifically provided that the benefit specified under Section
2.4(B)(l)(a)(ii) hereof shall apply only if the participant is
an Employee as defined herein on the date of his death and, in
such event, the benefit determined under Section
2.4(B)(l)(a)(ii) shall not be reduced by the application of
the fraction specified in (2) above but such benefit
determined under such section which is payable on behalf of
such a participant shall be reduced by the actuarial
equivalent of any benefit payable on behalf of such
participant under any other qualified pension or annuity plan
maintained by any Employer or designated nonparticipating
employer, and the limitation equal to 100 times the
anticipated monthly retirement income to which the participant
would be entitled at
25
- 20 -
his normal retirement date, described in Section
2.4(B)(1)(a)(ii)(2), shall include the anticipated monthly
retirement income based on his service accrued prior to his
death to which such participant would be entitled at his
normal retirement date under any other qualified pension or
annuity plan maintained by any Employer or designated
nonparticipating employer.
(C) Payments From One Trust Fund: In lieu of the payment of
retirement income or other benefits to such a participant from
the trust fund of more than one qualified pension plan of the
designated nonparticipating employers and the Employers, the
administrators of the pension plans may, by mutual agreement,
provide for payment of the entire monthly income or other
benefit from one trust fund with appropriate reimbursement to
the trustee of the trust fund from which the benefits are to
be paid by transfer of funds equal to the single-sum value of
the benefits payable under the other plan (or plans) to the
trust fund from which benefits actually will be paid.
1.6 - ELECTION NOT TO PARTICIPATE IN PLAN
Any provisions of any other section of the plan to the contrary notwithstanding,
any Employee may voluntarily elect in writing filed with the Committee not to become
a participant in the plan or to discontinue his participation in the plan and in
such event his rights under the plan shall be determined as follows.
Any such participant who elects not to participate in the plan or to discontinue
his participation in the plan may subsequently become a participant in the plan
as of any subsequent January 1st that is at least two years after the date that
he would have become a participant in the plan or the date that he discontinued
his participation in the plan, whichever is applicable; provided, however, that
any such Employee who has either elected not to participate in the plan or to discontinue
his participation in the plan and who subsequently becomes a participant in the
plan shall not be eligible to become a participant in the plan at a later date if
he subsequently elects to discontinue his participation in the plan. Any such election
not to participate in the plan, to
26
- 21 -
discontinue participation in the plan or to resume participation in the plan shall
be made on forms furnished by the Committee for this purpose and must be filed with
the Committee prior to the date that such election becomes effective.
In the event that the service of any such Employee who elects to discontinue
his participation is terminated for any reason prior to his subsequently becoming
a participant in the plan, the benefit, if any, which is payable to such participant
or his beneficiary (even if his termination of service is due to his total and permanent
disability or death) shall be equal to the amount which can be provided on an actuarially
equivalent basis by the single-sum value of the Deferred Monthly Retirement Income
Commencing at Normal Retirement Date, if any, which he had accrued as of the date
as of which he discontinued his participation accumulated with interest from such
date to the date of termination of his service.
In the event that any such participant, who elects not to participate in
the plan or who elects to discontinue his participation, subsequently becomes a
participant in accordance with the provisions hereof, the monthly retirement income
determined on his behalf under Section 2.1(B) hereof if he retires or his service
is terminated on or after his normal retirement date or the Deferred Monthly Retirement
Income Commencing at Normal Retirement Date determined on his behalf under Section
l.l(A)(18) hereof if he retires or his service is terminated prior to his normal
retirement date, whichever is applicable, shall be reduced by multiplying the amount
of income determined under such applicable section by the fraction in which the
denominator is the number of years and months, computed in completed months, between
his last date of commencement of employment and his normal retirement date and the
numerator is the excess of the number of years and months in the denominator over
the number of years and months, computed in completed months, that he did not participate
in the plan while eligible to do so.
27
- 22 -
1.7 - RIGHTS OF OTHER EMPLOYERS TO PARTICIPATE
Any other corporation, association, joint venture, proprietorship, or
partnership
may, in the future, adopt this plan by formal action on its part in the manner described
in Section 6.7 hereof provided that the board of directors of the Company and the
Committee both approve such participation.
The administrative powers and control of the board of directors of the
Company,
as provided in the plan, shall not be deemed diminished under the plan by reason
of the participation of any other Employers in the plan, and such administrative
powers and control specifically granted herein to the board of directors of the
Company with respect to the appointment of the Committee, amendment of the plan
and other matters shall apply only with respect to the board of directors of the
Company.
Each Employer shall have the obligation to pay the contributions for its
own employees and no other Employer shall have such obligation. Any failure by any
Employer to live up to its obligation under the plan shall have no effect on any
other Employer.
Any Employer may withdraw at any time without affecting the others in the
plan by formal action on its part, in the manner described in Section 6.7 hereof,
specifying its determination to withdraw. The board of directors of the Company
may in its absolute discretion terminate any Employer's participation at any time.
28
- 23 -
SECTION 2
NORMAL AMOUNT AND PAYMENT OF RETIREMENT INCOME
2.1 - NORMAL RETIREMENT AND RETIREMENT INCOME
Normal retirement under the plan is retirement from the service of the
Employer
on or after the date that the participant attains the normal retirement age of 65
years. No provision of this section or this plan shall require the retirement of
a participant upon his attainment of the normal retirement age, but actual retirement
shall be governed by the policy of the Employer. In the event of normal retirement,
payment of retirement income will be governed, subject to the provisions of Section
4 hereof, by the following provisions of this Section 2.1.
(A) Normal Retirement Date: The normal retirement date of each participant
will be the first day of the month coincident with or next following the date on
which he attains the age of 65 years. Any participant who retires after attaining
the age of 65 years but prior to his normal retirement date shall be considered
for the purposes of the plan to have retired on his normal retirement date.
(B) Amount of Retirement Income:
(1) To Participant Who Retires on Normal Retirement Date: The monthly
retirement income payable in the manner described in Section 2.1(C) hereof to a
participant who retires on his normal retirement date shall be an amount equal to
$4.50 multiplied by his number of years of Credited Service.
(2) To Participant Who Retires After Normal Retirement Date: The
monthly amount of retirement income payable to a participant who retires after his
normal retirement date shall be equal to the amount payable under Section 2.1(B)(1)
hereof, determined as of the date the 29
- 24 -
participant actually retires; provided, however, that any participant who, as
of
December 31, 1994, would have been entitled to a larger monthly amount of retirement
income under Section 2.1(B)(2) of the plan as then constituted, shall receive such
amount. As of December 31, 1994, Section 2.1(B)(2) of the plan provided that the
monthly amount of retirement income payable to a participant who retires after his
normal retirement date shall be equal to that amount which can be provided on an
actuarially equivalent basis by the sum of:
(a) the single-sum value as of his normal retirement date of the
normal monthly retirement income which would have been payable
to the participant in accordance with the provisions of
Section 2.1(B)(1) above if he had retired on his normal
retirement date;
and
(b) the amount of interest on such single-sum value in (a) above,
where the interest shall be compounded annually from the
participant's normal retirement date to his actual retirement
date,
where all computations (including any computations applicable under Section 3.1
hereof) shall be on the basis of the interest and mortality assumptions which were
being used as of the participant's normal retirement date to determine actuarially
equivalent values.
(C) Payment of Retirement Income: The monthly retirement income payable
in the event of normal retirement will be payable on the first day of each month.
The first payment will be made on the participant's normal retirement date, or,
if the participant retires after his normal retirement date, the first payment will
be made on the first day of the month coincident with or next following the date
of his actual retirement. The last payment will be the payment due next preceding
the retired participant's death.
30
- 25 -
2.2 - EARLY RETIREMENT AND RETIREMENT INCOME
Early retirement under the plan is retirement from the service of the
Employer
prior to the participant's normal retirement date and on or after the date as of
which he has both attained the age of 55 years and completed 10 years of Vesting
Service. In the event of early retirement, payment of retirement income will be
governed, subject to the provisions of Section 4 hereof, by the following provisions
of this Section 2.2.
(A) Early Retirement Date: The early retirement date will be the
first
day of the month coincident with or next following the date a participant retires
from the service of the Employer under the provisions of this Section 2.2 prior
to his normal retirement date.
(B) Amount of Retirement Income: The monthly amount of retirement
income payable in the manner described in Section 2.2(C) hereof to a participant
who retires prior to his normal retirement date under the provisions of this Section
2.2 shall be equal to the product of:
(1) the Deferred Monthly Retirement Income Commencing at
Normal Retirement Date which the participant has
accrued as of his early retirement date;
multiplied by
31
- 26 -
(2) a factor, specified in the schedule below, based upon
the number of years and full months by which the
participant's early retirement date precedes his
normal retirement date:
Actuarial Reduction Factors By Years and Months by Which
Early Retirement Date Precedes Normal Retirement Date
Months
-----------------------------------------------------------------------------------------------------------
Years 0 1 2 3 4 5 6 7 8 9 10 11
----------------------------------------------------------------------------------------------------------------
0 1.000
.994 .989 .983 .978 .972 .967 .961 .956 .950 .944
.939 1 .933 .928 .922 .917 .911 .906 .900 .894
.889 .883 .878 .872 2 .867 .861 .856 .850 .844
.839 .833 .828 .822 .817 .811 .806 3 .800 .794
.789 .783 .778 .772 .767 .761 .756 .750 .744 .739
4 .733 .728 .722 .717 .711 .706 .700 .694 .689
.683 .678 .672 5 .667 .664 .661 .658 .656 .653
.650 .647 .644 .642 .639 .636
6 .633 .631 .628 .625 .622 .619 .617 .614 .611
.608 .606 .603 7 .600 .597 .594 .592 .589 .586
.583 .581 .578 .575 .572 .569 8 .567 .564 .561
.558 .556 .553 .550 .547 .544 .542 .539 .536 9
.533 .531 .528 .525 .522 .519 .517 .514 .511 .508
.506 .503 10 .500
(C) Payment of Retirement Income: The retirement income payable in
the event of early retirement will be payable on the first day of the month. The
first payment will be made on the participant's early retirement date and the last
payment will be the payment due next preceding the retired participant's death.
2.3 - DISABILITY RETIREMENT AND RETIREMENT INCOME
(A) Definition: A participant may retire from the service of the
Employer
under the plan if his service is terminated prior to his normal retirement date
and on or after the effective date of the plan by reason of his becoming totally
and permanently disabled as defined in Section 2.3(B) below. Such retirement from
the service of the Employer shall herein be referred to as disability retirement.
In the event of disability retirement, uniformly and consistently applied rules
shall be used with respect to all participants in similar circumstances and payment
of retirement income will be governed, subject to the provisions of Section 4 hereof,
by the following provisions of this Section 2.3.
32
- 27 -
(B) Total and Permanent Disability: A participant shall be considered
totally and permanently disabled for the purposes of the plan if, in the opinion
of the Committee, he is disabled, due to sickness or injury, from a cause other
than specified in Section 2.3(C) hereof, and, as a result of such disability, is
completely unable to perform any and every duty pertaining to his occupation and
is eligible for and receives disability benefits under the Social Security Act.
(C) Nonadmissible Causes of Disability: A participant will not be
entitled to receive any disability retirement income if, in the opinion of the Committee,
the disability is a result of:
(1) excessive and habitual use by the participant of
drugs, intoxicants or narcotics;
(2) injury or disease sustained by the participant while
willfully and illegally participating in fights,
riots, civil insurrections or while committing a
felony;
(3) injury or disease sustained by the participant while
serving in any armed forces;
(4) injury or disease sustained by the participant which
was diagnosed or discovered subsequent to the date
his employment was terminated;
(5) injury or disease sustained by the participant while
working for anyone other than the Employer and
arising out of such employment; or
(6) injury or disease sustained by the participant as a
result of an act of war, whether or not such act
arises from a formally declared state of war.
(D) Proof of Disability: The Committee before approving the payment
of any disability retirement income shall require satisfactory proof, which may
be in the form of evidence satisfactory to the Committee that the participant is
then entitled to disability benefits under the Social Security Act, that the participant
has become disabled as provided herein. Every six months after commencement of disability
retirement income, or more frequently, the Committee may similarly require proof
of the continued disability of the participant.
33
- 28 -
(E) Disability Retirement Income: The benefit payable to a participant
who retires from the service of the Employer under the provisions of this Section
2.3 due to his total and permanent disability is the monthly amount of retirement
income which can be provided on an actuarially equivalent basis by the single-sum
value, determined as of the date as of which his disability retirement income payments
are to commence in accordance with the provisions of Section 2.3(F) hereof, of the
Deferred Monthly Retirement Income Commencing at Normal Retirement Date which the
participant has accrued as of the date of termination of his service due to disability.
(F) Payment of Disability Retirement Income: The monthly retirement
income to which a participant is entitled in the event of his disability retirement
will be payable on the first day of each month. The first payment will be made on
the first day of the month coincident with or next following the later to occur
of (a) the date as of which his disability has existed for six months and (b) the
date as of which application is made in writing by the participant or his authorized
representative for the payment of such retirement income. The last payment will
be as follows:
(1) if the participant recovers from the disability prior
to his normal retirement date, the last payment will
be the payment due next preceding the date of such
recovery; or
(2) if the participant dies prior to his normal
retirement date without recovering from his
disability or attains his normal retirement date
while still disabled, the last payment will be the
120th payment or the payment due next preceding the
date of his death, whichever is later.
Any monthly retirement income payments due after the death of a disabled participant
shall be paid to the participant's designated beneficiary (or beneficiaries) as
provided in Sections 5.2 and 5.3 hereof.
34
- 29 -
(G) Benefit Payable in the Event of Death of Disabled
Participant Prior to Commencement of Payments
In the event that the death of a disabled participant occurs after he
has
been determined to be disabled by the Committee but prior to both the date as of
which his disability has existed for six months and the date as of which his disability
retirement income payments are to commence as specified in Section 2.3(F) above,
his beneficiary (or beneficiaries) will receive, in lieu of all other benefits payable
on behalf of the participant under the plan, a death benefit, payable in the manner
described in Section 2.4(B) hereof, commencing on the first day of the month coincident
with or next following the date of the disabled participant's death, which can be
provided on an actuarially equivalent basis by an amount equal to the single-sum
value of the death benefit which would have been payable on behalf of the participant
under the provisions of such Section 2.4(B) if his service had been terminated by
reason of his death on his last day of active employment with the Employer.
(H) Recovery from Disability: If the Committee finds that the participant
who is receiving disability retirement income is, at any time prior to his normal
retirement date, no longer disabled, as provided herein, the Committee shall direct
that the retirement income be discontinued. However, any such participant who recovers
from disability, and whose retirement income is discontinued by the Committee and
whose date of termination of service due to disability was on or after his Initial
Vesting Date, shall, if he does not reenter the service of the Employer, be entitled
to the vested deferred retirement income as provided in and subject to the provisions
of Section 2.4(A) hereof, based upon the Deferred Monthly Retirement Income Commencing
at Normal Retirement Date which he had accrued as of the date of termination of
his service due to disability and upon his attained age determined as of the date
of his recovery from disability.
35
- 30 -
2.4 - BENEFITS OTHER THAN ON RETIREMENT
(A) Benefit on Termination of Service and on
Death After Termination of Service:
(1) In the event that a participant's service is terminated
prior to his normal retirement date and on or after the date on which he completed
5 years of Vesting Service for any reason other than his death, early retirement
as described in Section 2.2 hereof or disability retirement as described in Section
2.3 hereof, he will be entitled to a monthly retirement income to commence on his
normal retirement date or, if the participant so requests in writing filed with
the Committee at least 30 days prior to the effective date thereof, to commence
on the first day of any month which is prior to his normal retirement date and on
or after the date on which he attained the age of 55 years. Such monthly amount
of retirement income payable to a participant under the provisions of this Section
2.4(A)(1) ln the manner described in Section 2.4(A)(2) below shall be equal to the
product of:
(a) the Deferred Monthly Retirement Income
Commencing at Normal Retirement Date which
the participant has accrued to the date of
termination of his service;
multiplied by
(b) a factor, specified in the schedule below,
based upon the number of years and full
months by which the date of commencement of
the participant's retirement income payments
under this Section 2.4(A)(l) precedes his
normal retirement date:
36
- 31 -
Actuarial Reduction Factors By Years and Months By Which
Date of Commencement of Payments Precedes Normal Retirement Date
Months
-------------------------------------------------------------------------------------------------------------
Years 0 1 2 3 4 5 6 7 8 9 10 11
------------------------------------------------------------------------------------------------------------------
0 1.000 .994 .989 .983 .978 .972 .967 .961 .956
.950 .944 .939
1 .933 .928 .922 .917 .911 .906 .900 .894 .889
.883 .878 .872
2 .867 .861 .856 .850 .844 .839 .833 .828 .822
.817 .811 .806
3 .800 .794 .789 .783 .778 .772 .767 .761 .756
.750 .744 .739
4 .733 .728 .722 .717 .711 .706 .700 .694 .689
.683 .678 .672
5 .667 .664 .661 .658 .656 .653 .650 .647 .644
.642 .639 .636
6 .633 .631 .628 .625 .622 .619 .617 .614 .611
.608 .606 .603
7 .600 .597 .594 .592 .589 .586 .583 .581 .578
.575 .572 .569
8 .567 .564 .561 .558 .556 .553 .550 .547 .544
.542 .539 .536
9 .533 .531 .528 .525 .522 .519 .517 .514 .511
.508 .506 .503
10 .500
Any computations applicable under Section 2.4(A)(3) or 3.1 hereof on behalf of
such
a terminated participant, shall be on the basis of the interest and mortality assumptions
which are being used as of the date of termination of the participant's service
to determine actuarially equivalent values.
(2) The retirement income payable under Section 2.4(A)(1) above will
be payable on the first day of each month. The first payment will be made, if the
participant shall then be living, on the date as of which the participant's retirement
income payments are to commence as described in Section 2.4(A)(1) above, and the
last payment will be the payment due next preceding such participant's death.
(3) In the event that the terminated participant dies prior to the
date as of which his retirement income payments are to commence as described above
(without having received, in accordance with Section 3.2, the value of the benefit
in Section 2.4(A)(1) above), his beneficiary (or beneficiaries) will receive the
monthly retirement income, payable for 10 years certain and life thereafter and
beginning on the first date of the month coincident with or next following the date
of the terminated participant's death, which can be provided on an actuarially equivalent
basis by the single-sum value as of the participant's date of death of the Deferred
37
- 32 -
Monthly Retirement Income Commencing at Normal Retirement Date which the participant
had accrued to the date of termination of his service; provided, however, in lieu
of payment of such benefit in the form of monthly income described above, the single-sum
value of such benefit may be paid on an actuarially equivalent basis to the participant's
designated beneficiary (or beneficiaries) for the life of the designated beneficiary
(or beneficiaries), if the participant so elects or, in the event no election is
made by the participant prior to his death, if the beneficiary (or beneficiaries)
so elects.
(4) The provisions of Sections 3.1 and 4 hereof are applicable
to the benefits provided under this Section 2.5(A).
(5) Except as specifically provided otherwise in any supplement
hereto and except as provided in Section 2.3 with respect to disability retirement
and Section 2.4(B) below with respect to death, and unless specifically provided
otherwise in the plan, the participant whose service is terminated prior to his
Initial Vesting Date shall not be entitled to any benefit under the plan whatever.
(B) Benefit Payable in Event of Death While in Service:
(1) If the service of a participant is terminated by reason
of his death, there shall be payable to the participant's designated beneficiary
(or beneficiaries) the monthly retirement income, beginning on the first day of
the month coincident with or next following the date of his death, which can be
provided on an actuarially equivalent basis by:
(a) if the participant's service is terminated
by reason of his death on or prior to his
normal retirement date, the greater of:
(i) an amount equal to the single-sum
value of the Deferred Monthly
Retirement Income Commencing at
Normal Retirement Date which the
participant has accrued to the date
of his death; or
38
- 33 -
(ii) an amount equal to the smaller of:
(1) $3,000; or
(2) 100 times the monthly
retirement income to which
the participant would have
been entitled on his normal
retirement date in accordance
with the provisions of
Section 2.1(B) hereof if his
employment had not been
terminated but had continued
uninterrupted from the date
of his death to his normal
retirement date;
or
(b) if the participant's service is terminated
by reason of his death after his normal
retirement date, the single-sum value of the
monthly retirement income which the
participant would have been entitled to
receive under the provisions of Section
2.1(B) hereof if he had retired from the
service of the Employer on the date of
termination of his service immediately
preceding his death, where all computations
under this Section 2.4(B)(1)(b) shall be on
the basis of the interest and mortality
assumptions which were being used as of his
normal retirement date to determine
actuarially equivalent values.
(2) Except as provided in Section 2.4(B)(3) below, the monthly
retirement income payments under this Section 2.4(B) shall be payable for the life
of the beneficiary (or beneficiaries) designated or selected under Section 5.2 to
receive such benefit, and, in the event of such beneficiary's death within a period
of 10 years after the participant's death, the same monthly amount shall be payable
for the remainder of such 10-year period in the manner and subject to the provisions
of Section 5.3.
(3) In lieu of the benefits payable in Section 2.4(B)(2)
above, the single-sum value of such benefits may be paid on an actuarially equivalent
basis to the participant's designated beneficiary (or beneficiaries) for the life
of the designated beneficiary (or beneficiaries), if the participant so elects or,
in the event no election is made by the participant prior to his death, if the beneficiary
(or beneficiaries) so elects.
39
- 34 -
(C) Special Provisions Applicable to Payment of Death Benefits: Any
form of payment applicable to the death benefit provided under Section 2.3(G), 2.4(A)(3)
or 2.4(B) hereof, which has been designated by a participant prior to January 1,
1984 and which satisfies the transitional rule in Section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982 (P.L. 97-248), will continue in effect on
and after January 1, 1984 with respect to the death benefits provided under Section
2.3(G), 2.4(A)(3) or 2.4(B) hereof unless such designated form of payment is subsequently
revoked or changed (a change of beneficiaries under the designation will not be
considered to be a revocation or change of such form of payment so long as the change
in beneficiaries does not alter, directly or indirectly, the period over which distributions
are to be made under such form of payment); provided, however, if a participant,
whose death occurs on or after his Initial Vesting Date, had been married to his
spouse throughout the one-year period immediately preceding his death and he had
designated a person other than his spouse as his beneficiary and such spouse has
not consented to such other person being designated, the provisions of Section 4.1(D)
hereof shall apply with respect to payments due his surviving spouse, if any. Subject
to the preceding sentence and except to the extent otherwise permissible under Section
401(a)(9) of the Internal Revenue Code of 1986, as amended, and regulations issued
pursuant thereto, the benefit payable under Section 2.3(G), 2.4(A)(3) or 2.4(B)
hereof on behalf of any participant whose death occurs on or after January 1, 1989
must be payable in a manner that satisfies the restrictions of Section 401(a)(9)
of the Internal Revenue Code of 1986, as amended, and, any provisions of such sections
to the contrary notwithstanding, must:
(a) commence not later than April 1st of the calendar year
immediately following the calendar year in which the
participant would attain the age 70-1/2 years; provided,
however, if the beneficiary is not the participant's
40
- 35 -
spouse, distribution must commence not later than one year
after the date of the participant's death or, if the
participant's surviving spouse was his beneficiary and such
surviving spouse dies prior to the commencement of benefit
payments, distribution must commence not later than one year
after the date of such surviving spouse's death;
(b) be distributed to the participant's beneficiary over one or a
combination of the following periods:
(i) the life of his beneficiary; or
(ii) a period certain not extending beyond the life
expectancy of the beneficiary;
provided, however, if the participant has no designated beneficiary or if the designated
beneficiary is not a living person, such benefit must be distributed in its entirety
to the beneficiary not later than the fifth anniversary of the date of (i) the participant's
death or (ii) the death of the participant's spouse, whichever death is the later
to occur; and provided further, however, any amount payable to a child of the participant
shall be treated for the purposes of this Section 2.4(C) as if it had been payable
to the surviving spouse of the participant if such amount that is payable to the
child will become payable to such surviving spouse upon such child's reaching majority
(or upon the occurrence of such other designated event permitted under regulations
issued with respect to Section 401(a)(9) of the Internal Revenue Code of 1986, as
amended).
2.5 - MINIMUM ACCRUED MONTHLY INCOME
In the case of a participant whose Credited Service includes service which
was accrued prior to February 17, 1977 and who was a participant in the Farah Manufacturing
Company, Inc. Pension Plan as of February 16, 1977, the amount of his monthly normal
retirement income,
41
- 36 -
determined under Section 2.1(B) hereof and as applied on his behalf throughout
the
plan, and the amount of his Deferred Monthly Retirement Income Commencing at Normal
Retirement Date, determined under Section 1.1(A)(18) hereof and as applied on his
behalf throughout the plan, shall not be less than the amount of the monthly benefit
which he had accrued as of February 16, 1977 under the provisions of the said Farah
Manufacturing Company, Inc. Pension Plan as in effect on that date.
2.6 - NO DUPLICATION OF BENEFITS
Unless the context clearly provides otherwise, there shall be no duplication
of benefits under the plan or under any supplement hereto, and the benefits payable
under the preceding sections of the plan to or on behalf of a participant shall
be inclusive of the benefits, if any, concurrently payable to or on behalf of the
same participant under all other sections of the plan and under any supplements
hereto.
42
- 37 -
SECTION 3
SPECIAL PROVISIONS REGARDING PAYMENT OF BENEFITS
3.1 - OPTIONAL FORMS OF RETIREMENT INCOME
In lieu of the amount and form of retirement income payable in the event
of normal retirement, early retirement, disability retirement or termination of
service, as specified in Sections 2.1, 2.2, 2.3 and 2.4(A) hereof and as subjected
to the provisions of Section 4.1 hereof, a participant, upon written request to
the Committee, may elect to receive a retirement income or benefit of equivalent
actuarial value payable in accordance with one of the options described below commencing
on the date as of which such retirement income is due under the provisions of Section
2.1, 2.2, 2.3 or 2.4(A) hereof, whichever is applicable, or commencing on such later
date -- which shall not be later than his Required Beginning Date -- as the participant
may specify in his written request.
Option 1: A retirement income of smaller monthly amount,
payable to the participant for his lifetime, and in
the event of his death within a period of 10 years
after the date as of which his retirement income
payments first commenced, the same monthly amount
that was payable to the participant will be payable
for the remainder of such 10-year period to a
beneficiary designated by him.
Option 2: A retirement income of modified monthly amount,
payable to the participant during his lifetime, and in
the event that the participant predeceases his spouse,
50% of such modified monthly amount will be payable
after the death of the participant to such spouse for
the lifetime of the spouse. This option is also
referred to herein as the Qualified Joint and 50%
Survivor Annuity Option.
Any optional form of payment designated by a participant prior to January
1, 1984, which satisfies the transitional rule in Section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982 (P.L. 97-248), will continue in effect on
and after January 1, 1984 unless such optional form of payment is subsequently revoked
or changed (a change of beneficiaries under the
43
- 38 -
designation will not be considered to be a revocation or change of such optional
form of payment so long as the change in beneficiaries does not alter, directly
or indirectly, the period over which distributions are to be made under such form
of payment); provided, however, that the provisions of Section 4.1(C) hereof shall
apply if the participant has a spouse at the date on which his initial payment under
such optional form is due and his spouse does not consent to such optional form
of payment. Subject to the preceding sentence but notwithstanding any other provision
of this Section 3.1 to the contrary, any option elected under this Section 3.1 that
applies to a benefit commencing on or after January 1, 1985 must provide that the
entire interest of the participant will be expected to be distributed to the participant
and his beneficiaries and joint pensioners, in a manner that satisfies the restrictions
of Section 401(a)(9) of the Internal Revenue Code, over one or a combination of
the following periods:
(a) the life of the participant;
(b) the lives of the participant and his designated
beneficiary or joint pensioner;
(c) a period certain not extending beyond the life
expectancy of the participant; or
(d) a period certain not extending beyond the joint life
and last survivor expectancy of the participant and
his designated beneficiary or joint pensioner.
The amount to be distributed each year under the optional form of payment must
be
equal to or greater than the lesser of (i) the single-sum value of the benefit payable
on behalf of the participant or (ii) an amount equal to the quotient obtained by
dividing the single-sum value, determined as of the beginning of such year or, if
later, as of the date of initial distribution of such benefit to the participant,
of the benefit payable on behalf of the participant by the life expectancy of the
participant or by the joint life and last survivor expectancy of the participant
and his designated
44
- 39 -
beneficiary or joint pensioner, as the case may be; provided, however, no distribution
shall be required or a lesser amount may be distributed if, beginning with the calendar
year during which the participant's Required Beginning Date occurs and each calendar
year thereafter, the aggregate of the amounts distributed by the end of the applicable
calendar year is at least equal to the aggregate of the minimum amounts which would
be required by the above provisions to have been distributed by the end of such
calendar year if payments had commenced on his Required Beginning Date; and provided
further, however, that an annuity or endowment contract issued by an insurance company
which provides for non-increasing payments over one or a combination of the periods
described in (a), (b), (c) and (d) above beginning not later than the Required Beginning
Date shall satisfy the provisions of this sentence. At the election of the participant
(or, if the participant is deceased, his spouse), the life expectancy of the participant
or the joint life and last survivor expectancy of the participant and his designated
beneficiary or joint pensioner used for the purposes of this paragraph may be redetermined
after the Required Beginning Date, but not more frequently than annually, only if
the participant's designated beneficiary or joint pensioner is his spouse. Such
life expectancy shall not exceed the period computed by use of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Any
amount that is payable to the child of a participant under an optional form of payment
hereunder shall be treated for the purposes of satisfying the requirements of this
paragraph as if it had been payable to the surviving spouse of the participant if
such amount that is payable to the child will become payable to such surviving spouse
upon such child's reaching majority (or upon the occurrence of such other designated
event permitted under regulations issued with respect to Section 401(a)(9) of the
Internal Revenue Code).
45
- 40 -
Retirement income payments will be made under the option elected in accordance
with the provisions of this section and will be subject to the following limitations:
(A) If a participant's service is terminated by reason of his
death prior to the date that his retirement income commences
under the plan, no benefit will be payable under the option to
any person.
(B) If a retired or terminated participant dies after the date of
his retirement or termination of service and prior to the date
that his retirement income commences under the plan, no
benefit will be payable under the option to any person unless
such option specifically provides for the payment of a benefit
in such event and the death benefit, if applicable, provided
under Section 2.4(A)(3) hereof has been waived.
(C) If the designated beneficiary or joint pensioner dies before
the date that the participant's retirement income commences
under the plan, the option elected will be cancelled
automatically and a retirement income of the form and amount
otherwise payable in accordance with the provisions of Section
2 hereof will be payable to the participant as if the election
had not been made unless a new election is made in accordance
with the provisions of this section or unless a new
beneficiary or joint pensioner is designated by the
participant prior to the date that his retirement income
commences under the plan and within 90 days after the death of
the prior beneficiary or joint pensioner.
(D) If both the participant and the beneficiary designated by him
die after the date that the participant's retirement income
commences under the plan but before the full payment has been
effected under any option providing for payments for a period
certain, made pursuant to the provisions of this Section 3.1,
the contingent beneficiary pursuant to Section 5.3, in his
discretion, may elect that the remaining payments be made, or
that the commuted value of the remaining payments be paid in
a
lump sum, in either case in accordance with Section 5.3
hereof.
(E) If a participant dies after his payments have commenced,
payment of his remaining interest, if any, shall be
distributed, to the extent required by Section 401(a)(9) of
the Internal Revenue Code and regulations issued with respect
thereto, at least as rapidly as provided under the method of
payment in effect prior to his death.
3.2 - LUMP-SUM PAYMENT OF SMALL RETIREMENT INCOME
Notwithstanding any provision of the plan to the contrary, if the monthly
income payable to any person entitled to any benefit hereunder is less than $50
or if the single-sum value of the retirement income or other benefit payable to
any person entitled to any benefit hereunder is less
46
- 41 -
than $5,000, or if such monthly income or single-sum value is less than such alternate
amount that the Committee may from time to time prescribe for application under
this section in lieu of $50 and $5,000, respectively, the actuarial equivalent of
such retirement income or other benefit shall be paid in a lump sum, subject to
the provisions below. Such actuarial equivalent shall be based upon the mortality
and interest assumptions which are being used as of the date of the participant's
retirement or termination of service to determine actuarially equivalent values;
provided, however, that the interest assumption used to compute the amount of any
such lump-sum payment may not be greater than the interest rate which would be used
by the Pension Benefit Guaranty Corporation for purposes of determining the present
value of a lump-sum distribution on plan termination (as determined under Sections
411(a)(11) and 417 of the Internal Revenue Code and regulations issued pursuant
thereto) as of the first day of the plan year during which the distribution is made.
Any benefit payable under this Section 3.2 shall require the consent of the recipient
and of the participant's spouse, if living, if either (i) the amount of such lump-sum
payment exceeds $3,500 (or such higher amount as may be permitted from time to time
under Sections 411(a)(11) and 417 of the Internal Revenue Code and the regulations
issued pursuant thereto), whether such lump-sum payment is to be made before or
after the participant attains (or would have attained) age 65, (ii) such lump-sum
payment is to be made after the annuity starting date of the applicable retirement
income or other benefit, or (iii) the date of payment of such lump-sum payment is
later than the close of the second plan year following the plan year in which the
date of the participant's retirement or termination of service occurs, and payment
must be made within 90 days after such consent is received by the Committee. Any
spousal consent required under this Section 3.2 must satisfy the requirements of
Section 4.1(G) and Section 417(b)(2) of the Internal Revenue Code. For purposes
of this Section, if the single-sum value of the retirement income or other benefit
47
- 42 -
payable pursuant to this Section is zero, the person entitled to such benefit
shall
be deemed to have received a distribution of such retirement income or other benefit.
3.3 - BENEFITS APPLICABLE TO PARTICIPANT WHO HAS
BEEN OR IS EMPLOYED BY TWO OR MORE EMPLOYERS
In the event that a participant's service is terminated for any reason
and such participant has been or is employed by any two or more Employers, his retirement
or termination benefit, if any, shall be computed by applying the benefit formulas
as if all the Employers were a single Employer, provided there is a proper allocation
(taking into account the Credited Service applicable to each Employer) of the costs
of the resulting benefits among the Employers by which such participant has been
or is employed.
3.4 - FUNDING OF BENEFITS THROUGH PURCHASE OF
LIFE INSURANCE CONTRACT OR CONTRACTS
In lieu of paying benefits from the trust fund to a participant or his
beneficiary, upon direction of the Committee with specific prior authorization in
writing from the Employer, the trustee shall enter into a contract or contracts,
or an agreement or agreements, with one or more legal reserve life insurance companies
for the purchase, with funds in the trust, of a retirement annuity or other form
of life insurance contract which, as far as possible, provides benefits equal to
(or actuarially equivalent to) those provided in the plan for such participant or
beneficiary, but provides no optional form of retirement income or benefit which
would not be permitted under Section 3.1 hereof, whereupon such contract shall thereafter
govern the payment of the amount of benefit, if any, represented by such contract,
which is payable under the plan upon the participant's retirement or termination
of service, and the liability of the trust fund and of the plan will cease and terminate
with respect to such benefits that are purchased and for which the premiums are
duly paid.
48
- 43 -
Any policy or contract issued under this section shall be subject to the
provisions of Section 4.1 hereof pertaining to the Qualified Joint and 50% Survivor
Annuity Option and to the qualified preretirement survivor annuity.
Any policy or contract issued under this Section 3.4 prior to the termination
of the plan shall provide that the trustee shall retain all rights of ownership
at all times except the right, unless such policy or contract provides otherwise,
to designate the beneficiary or beneficiaries to receive any benefits payable upon
the death of the participant and shall further provide that all dividends or experience
rating credits shall be paid to the trustee and applied to reduce future Employer
contributions to the plan.
Any annuity contract distributed by the trustee to a participant or beneficiary
hereunder shall contain a provision to the effect that the contract may not be sold,
assigned, discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose, to any person other than
the issuer thereof.
3.5 - DIRECT ROLLOVERS
This Section 3.5 applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit
a Distributee's election under this Section 3.5, a Distributee may elect, at the
time and in the manner prescribed by the Committee, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
(A) Waiver of Notice: If a distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply, such distribution may commence
less than 30 days after the
49
- 44 -
notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is
given,
provided that:
(1) the Committee clearly informs the participant that the
participant has a right to a period of at least 30
days after receiving the notice to consider the
decision of whether or not to elect a distribution
(and, if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice,
affirmatively elects a distribution.
(B) Definitions: For purposes of this Section 3.5, the terms described
below
shall have the following meanings:
(1) "Eligible Rollover Distribution" means any
distribution of all or any portion of the balance to
the credit of the Distributee, except that an
Eligible Rollover Distribution does not include (a)
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a
specified period of ten years or more; (b) any
distribution to the extent such distribution is
required under Section 401(a)(9) of the Internal
Revenue Code; and (c) the portion of any distribution
that is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) "Eligible Retirement Plan" means an individual
retirement account described in Section 408(a) of the
Internal Revenue Code, an individual retirement
annuity described in Section 408(b) of the Internal
Revenue Code, an annuity plan described in Section
403(a) of the Internal Revenue Code, or a qualified
trust described in Section 401(a) of the Internal
Revenue Code, that accepts the Distributee's Eligible
Rollover Distribution; however, in the case of an
Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(3) "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Internal
Revenue Code, are Distributees with regard to the
interest of the spouse or former spouse.
(4) "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the
Distributee.
50
- 45 -
SECTION 4
GOVERNMENTAL REQUIREMENTS AFFECTING BENEFITS
4.1 - SPECIAL PROVISIONS REGARDING AMOUNT AND PAYMENT OF
RETIREMENT INCOME
The amount and payment of retirement income determined under Sections
2.1,
2.2, 2.3 and 2.4 hereof shall be subjected to the following provisions of this Section
4.1.
(A) Maximum Amount of Retirement Income: Any provisions herein to the
contrary
notwithstanding, in no event shall the monthly retirement income, determined under
Section 2.1, 2.2, 2.3, or 2.4 hereof, which is payable to a participant hereunder
exceed (1) the maximum amount of retirement income for Defined Benefit Plans as
specified in Section 415(b) of the Internal Revenue Code or (2) if the participant
is a participant in both a Defined Benefit Plan and a Defined Contribution Plan
maintained by the Employer, the maximum amount of retirement income due to the limitation
in the case of a Defined Benefit Plan and a Defined Contribution Plan for the same
employee as specified in Section 415(e) of the Internal Revenue Code. The maximum
amounts of retirement income specified in Sections 4.1(A)(l), 4.1(A)(2) and 4.1(A)(3)
below apply to the amount of retirement income, exclusive of any portion thereof
attributable to the participant's own contributions, if any, which is payable under
the plan to the participant in the form of a straight life annuity (with no ancillary
benefits), where any ancillary benefit which is not directly related to retirement
income payments shall not be taken into account and where that portion of any joint
and survivor annuity which constitutes a qualified joint and survivor annuity (as
defined in Section 417 of the Internal Revenue Code) shall not be taken into account.
In determining the maximum monthly retirement income payable on behalf of any participant,
all Defined Benefit Plans (whether or not terminated) of (i) all corporations and
associations which
51
- 46 -
are members of a controlled group of corporations within the meaning of Section
1563(a) of the Internal Revenue Code, determined without regard to Section 1563(a)(4)
and Section 1563(e)(3)(C) and substituting "more than 50%" for the phrase "at least
80%" each place that it appears in Section 1563(a)(1), with respect to which the
Employer is such a member, (ii) all trades or businesses (whether or not incorporated)
which are under common control with the Employer, as determined under Section 414(c)
of the Internal Revenue Code and regulations issued thereunder, and (iii) all service
organizations which are members of an affiliated service group with respect to which
the Employer is such a member, as determined under Section 414(m) of the Internal
Revenue Code and regulations issued thereunder, are to be treated as one Defined
Benefit Plan; and all Defined Contribution Plans (whether or not terminated) of
such corporations, associations, trades or businesses and service organizations
are to be treated as one Defined Contribution Plan. The proportion of the maximum
monthly retirement income applicable to all such Defined Benefit Plans of such corporations,
associations, trades or businesses and service organizations shall be determined
on a pro rata basis depending upon the actuarially equivalent amount of retirement
income otherwise accrued under each such Defined Benefit Plan. In the case of an
individual who was a participant in one or more Defined Benefit Plans of the employer
as of the first day of the first limitation year beginning after December 31, 1991,
the application of the limitations of this Section 4.1(A) shall not cause the maximum
permissible amount for such individual under all Defined Benefit Plans to be less
than the individual's current accrued benefit. The preceding sentence applies only
if such Defined Benefit Plan met the requirements of Section 415 of the Internal
Revenue Code for all limitation years beginning before January 1, 1992. An individual's
current accrued benefit is the individual's accrued benefit under the plan determined
as if the participant had separated from service as of the close of the last limitation
year beginning before
52
- 47 -
January 1, 1992 when expressed as an annual benefit within the meaning of Section
415(b)(2) of the Internal Revenue Code disregarding any change in the terms and
conditions of the plan after May 5, 1986 and any cost-of-living adjustments occurring
after May 5, 1986.
(1) Maximum Amount of Retirement Income Due to Restrictions of Section
415(b) of the Internal Revenue Code: Subject to the provisions of Section 4.1(A)(3)
below, the monthly retirement income (the total applicable to all such Defined Benefit
Plans) payable in the manner described above in this Section 4.1(A) shall not exceed
an amount which is actuarially equivalent to 1/12 of the smaller of:
(a) an amount equal to the sum of $90,000 and the
accumulated increments, if any, which have been added
to such figure on or after January 1, 1988 for
increases in cost-of-living pursuant to the
provisions of Section 415(d) of the Internal Revenue
Code of 1986, as amended; provided, however that:
(i) effective as of January 1, 1992, if the date
of commencement of the participant's
retirement income is after the participant's
Social Security Retirement Age, the $90,000
limitation shall be increased to the
actuarial equivalent (determined in
accordance with Section 415(b)(2)(E) of the
Internal Revenue Code of 1986, as amended)
of a $90,000 annual benefit beginning at the
Social Security Retirement Age
(notwithstanding the foregoing to the
contrary, effective on or after January 1,
1990, but prior to January 1, 1992, the
following shall apply instead of the
foregoing: if the date of commencement of
the participant's retirement income is after
the date on which he attained the age of 65
years, the maximum amount of retirement
income applicable to him under this Section
4.1(A)(1)(a) shall be increased in
accordance with the provisions of Section
415(b)(2)(D) of the Internal Revenue Code
and regulations issued pursuant thereto, so
that such maximum amount applicable to him
is actuarially equivalent to the amount of
retirement income that is applicable under
this Section 4.1(A)(1)(a) to a participant
who is age 65 years); or
(ii) effective as of January 1, 1992, if the date
of commencement of the participant's
retirement income is prior to the
53
- 48 -
participant's Social Security Retirement
Age, the $90,000 limitation shall be reduced
to the actuarial equivalent (determined in
accordance with Section 415(b)(2)(E) of the
Internal Revenue Code of 1986, as amended)
of a $90,000 annual benefit beginning at the
Social Security Retirement Age. Such
reduction shall be made in such manner as
shall be prescribed by the Secretary of the
Treasury which is consistent with the
reduction for old-age insurance benefits
under the Social Security Act commencing
before the Social Security Retirement Age
(notwithstanding the foregoing to the
contrary, effective on or after January 1,
1990, but prior to January 1, 1992, the
following shall apply instead of the
foregoing: if the date of commencement of
the participant's retirement income is prior
to the date on which he will attain the age
of 62 years, the maximum amount of
retirement income applicable to him under
this Section 4.1(A)(1)(a) shall be reduced
in accordance with the provisions of Section
415(b)(2)(C) of the Internal Revenue Code
and regulations issued pursuant thereto, so
that such maximum amount applicable to him
is equal to the greater of: (aa) an amount
that is actuarially equivalent to the amount
of retirement income that is applicable
under this Section 4.1(A)(1)(a) to a
participant who is age 62 years; or (bb) an
amount equal to: (1) if the participant has
attained the age of 55 or more years as of
the date of commencement of his retirement
income, $75,000; or (2) if the participant
has not attained the age of 55 years as of
the date of commencement of his retirement
income, an amount that is actuarially
equivalent to the amount of retirement
income that is applicable under (1)
immediately above to a participant who is
age 55 years); or
(iii) if the participant was a participant in the
plan before the limitation year beginning in
1983 and his Credited Service includes
service which was accrued prior to such
limitation year, any provisions of (i) or
(ii) above to the contrary notwithstanding,
the maximum amount of retirement income
applicable to him under the provisions of
this Section 4.1(A)(1)(a) shall not be less
than his current accrued benefit (within the
meaning of Section 235(g)(4) of the Tax
Equity and Fiscal Responsibility Act of
1982) which he would have been entitled to
receive under the provisions of the plan as
in effect on July 1, 1982 if his service had
been terminated on the last day of the
limitation year which immediately precedes
the limitation year beginning in 1983, if
the terms and conditions of the plan as in
effect on July 1, 1982 had
54
- 49 -
continued without change and if there were
no cost-of-living adjustments pursuant to
the provisions of Section 415(d) of the
Internal Revenue Code, as amended, occurring
after July 1, 1982; or
(b) an amount equal to the larger of:
(i) the sum of (1) 100% of the
participant's average annual IRC
415 Compensation during the three
consecutive years during which he
received the greatest aggregate IRC
415 Compensation and (2) the
accumulated increments, if any,
which have been added to such
figure on and after January 1, 1988
and after the date of the
participant's retirement or
termination of service for
increases in cost-of-living
pursuant to the provisions of
Section 415(d) of the Internal
Revenue Code; or
(ii) $10,000 but such amount shall apply
only if the Employer has not at any
time maintained a Defined
Contribution Plan in which the
participant participated, and such
amount shall not require any
adjustment to the value of any
retirement benefit payable under
the plan which is not in the form
of a straight life annuity (whether
or not directly related to
retirement benefits);
provided that if the participant has less than 10 years of participation with the
Employer, the limitation described in (a) above is reduced by one-tenth for each
year of participation (or part thereof) less than ten and if the participant has
less than ten years of service with the employer the limitation described in (b)
above is reduced by one-tenth for each year of service (or part thereof) less than
ten. The increments, if any, which are added to the figures described above for
increases in cost-of-living pursuant to the provisions of Section 415(d) of the
Internal Revenue Code shall become effective as of January 1st of each applicable
calendar year or, if applicable, as of such other date as the Secretary of the Treasury
or his delegate may prescribe as the date on which any such increase shall become
effective. The mortality and interest assumptions that are used in computing actuarially
equivalent amounts under the above provisions of this section shall be the
55
- 50 -
same as those that are used in computing actuarially equivalent benefits payable
on behalf of a participant upon his retirement or termination of service and upon
the exercise of optional forms of retirement income under the plan except that (a)
the interest rate assumption shall not be less than 5% for the purposes of converting
the retirement income to a form other than a straight life annuity (with no ancillary
benefits) and for the purposes of adjusting the maximum retirement income payable
to a participant who is less than age 62 years so that it is actuarially equivalent
to such a retirement income commencing at age 62 years or at age 55 years, whichever
is applicable, and (b) the interest rate assumption shall not be greater than 5%
for the purposes of adjusting the maximum retirement income payable to a participant
who is over age 65 years so that it is actuarially equivalent to such a retirement
income commencing at age 65 years.
(2) Maximum Amount of Retirement Income Due to Restrictions of Section
415(e) of the Internal Revenue Code: Subject to the provisions of Section 4.1(A)(3)
below, the monthly retirement income payable in the form and manner described above
in this Section 4.1(A) to a participant hereunder who is a participant in both a
Defined Contribution Plan and a Defined Benefit Plan to which the provisions of
this Section 4.1(A) apply shall not exceed an amount equal to:
(a) the smaller of:
(i) the maximum amount of monthly retirement
income determined under Section 4.1(A)(1)(a)
above multiplied by 1.25; or
(ii) the maximum amount of monthly retirement
income determined under Section 4.1(A)(1)(b)
above multiplied by 1.4;
multiplied by
56
- 51 -
(b) the excess of (i) 1.0, over (ii) his Defined
Contribution Plan Fraction.
(3) Post-Retirement Cost-of-Living Increases: In the event
that the maximum amount of retirement income specified in Section 4.1(A)(1) of the
plan is increased after the date of commencement of a participant's retirement income
due to any cost-of-living adjustment announced by the Internal Revenue Service pursuant
to the provisions of Section 415(d) of the Internal Revenue Code, the amount of
monthly retirement income payable under the plan to a participant whose retirement
income is restricted due to the provisions of such section of the plan shall be
increased, effective as of January 1st of the calendar year for which such increase
becomes effective or, if applicable, as of such other date as the Secretary of the
Treasury or his delegate may prescribe as the date on which such increase shall
become effective, to reflect the increase in the amount of retirement income that
may be payable under the plan as a result of such cost-of-living adjustment.
(4) IRC Section 415 Definitions: Following are certain terms
which are used herein for the purposes of the limitations under Section 415 of the
Internal Revenue Code and which shall have the meanings assigned to them in Section
415 of said Code and regulations and rulings issued with respect thereto:
(a) "Defined Benefit Plan" shall have the
meaning assigned in Section 414(j) of the
Internal Revenue Code.
(b) "Defined Benefit Plan Fraction" is the
fraction in which the numerator is the
participant's projected annual benefit
(determined as of the end of the limitation
year) under all Defined Benefit Plans to
which the provisions of this Section 4.1(A)
apply and the
57
- 52 -
denominator is the lesser of (i) 1.25
multiplied by the amount determined on
behalf of the participant under Section
4.1(A)(1)(a) above or (ii) 1.4 multiplied by
the amount determined on behalf of the
participant under Section 4.1(A)(1)(b)
above.
(c) "Defined Contribution Plan" shall have the
meaning assigned in Section 414(i) of the
Internal Revenue Code.
(d) "Defined Contribution Plan Fraction" is the
fraction in which the numerator is the sum
of the actual annual additions to the
participant's accounts in such limitation
year and for all prior limitation years
under all Defined Contribution Plans to
which the provisions of this Section 4.1(A)
apply and the denominator is the sum of the
lesser of (i) 1.25 multiplied by the dollar
limitation in effect under Section 415(c) of
the Internal Revenue Code (as modified by
the provisions of Section 415(d) of said
Code) for such limitation year and for all
prior limitation years of such participant's
employment (assuming for this purpose that
said Sections 415(c) and 415(d) had been in
effect during such prior years) and (ii) 1.4
multiplied by 25% of the participant's IRC
415 Compensation for such limitation year
and for all prior limitation years of such
participant's employment.
(e) "IRC 415 Compensation" shall include (i)
wages, salaries, fees for professional
services, and other amounts received
(without regard to whether or not an amount
is paid in cash) for personal services
58
- 53 -
actually rendered in the course of
employment with the Employer
to the extent that the amounts are
includible in gross income (including, but
not limited to, commissions paid salesmen,
compensation for services on the basis of a
percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe
benefits, and reimbursements of other
expense allowances under a nonaccountable
plan (as described in Income Tax Regulations
Section 1.62-2(c)), (ii) in the case of a
participant who is an employee within the
meaning of Section 401(c)(1) of the Internal
Revenue Code and the regulations thereunder,
the employee's earned income (as described
in Section 401(c)(2) and the regulations
thereunder), (iii) amounts described in
Sections 104(a)(3), 105(a) and 105(h) of the
Internal Revenue Code, but only to the
extent that these amounts are includible in
the gross income of the participant, (iv)
amounts paid or reimbursed by the Employer
for moving expenses incurred by the
participant, but only to the extent that at
the time of the payment it is reasonable to
believe that these amounts are not
deductible by the participant under Section
217 of the Internal Revenue Code, (v) the
value of a non-qualified stock option
granted to the participant by the Employer,
but only to the extent that the value of the
stock option is includible in the gross
income of the participant for the taxable
year in which granted, (vi) the amount
includible in the gross income of the
participant
59
- 54 -
upon making the election described in
Section 83(b) of the Internal Revenue Code
and (vii) any amounts received by the
participant pursuant to an unfunded
non-qualified plan in the year such amounts
are includible in the gross income of the
participant. Paragraphs (i) and (ii) above
include foreign earned income (as defined in
Section 911(b) of the Internal Revenue
Code), whether or not excludable from gross
income under Section 911 of the Internal
Revenue Code, compensation described in
paragraph (i) above shall be determined
without regard to the exclusions from gross
income in Sections 931 and 933 of the
Internal Revenue Code and similar principles
are applied with respect to income subject
to Sections 931 and 933 in determining
compensation in paragraph (ii) above.
Compensation as defined above shall exclude
(i) contributions by the Employer to a plan
of deferred compensation which are not
included in the participant's gross income
for the taxable year in which contributed,
(ii) contributions by the Employer under a
simplified employee pension plan for the
taxable year in which contributed, (iii) any
distribution from a plan of deferred
compensation, (iv) amounts realized from the
exercise of a non-qualified stock option,
(v) amounts realized when restricted stock
(or property) held by the participant either
becomes freely transferable or is no longer
subject to a substantial risk of forfeiture,
(vi) amounts realized from the sale,
exchange or other disposition of stock
acquired under a
60
- 55 -
qualified stock option, (vii) other amounts
which received special tax benefits and
(viii) contributions made by the Employer
(whether or not under a salary reduction
agreement) towards the purchase of an
annuity described in Section 403(b) of the
Internal Revenue Code (whether or not the
amounts are actually excludable from the
gross income of the participant). For
limitation years beginning after December
31, 1991, IRC 415 Compensation for a
limitation year is the IRC 415 Compensation
actually paid or made available during such
limitation year.
(f) "limitation year" is the 12-month period
which is used for application of the
limitations under Section 415 of the
Internal Revenue Code and, unless a
different 12-month period has been elected
by the Employer in accordance with rules or
regulations issued by the Internal Revenue
Service or the Department of Labor, shall be
the calendar year.
(g) effective as of January 1, 1992, "Social
Security Retirement Age" is the age used as
the retirement age for the participant under
Section 216(l) of the Social Security Act,
except that such Section shall be applied
(i) without regard to the age increase
factor, and (ii) as if the early retirement
age under Section 216(l)(2) thereof was age
62.
(h) effective as of January 1, 1992, "annual
addition" is employer contributions,
forfeitures, employee contributions, amounts
61
- 56 -
allocated after March 31, 1984 to an
individual medical account that is part of
a
pension or annuity plan maintained by the
Employer, amounts derived from contributions
paid or accrued after December 31, 1985, in
taxable years ending after such date, that
are attributable to post-retirement medical
benefits allocated to the separate account
of a key employee (as defined in Section
419A(d)(3) of the Internal Revenue Code)
under a welfare benefit fund and allocations
under a simplified employee pension, but
effective from January 1, 1990 to prior to
January 1, 1992, instead of all employee
contributions counting as "annual
additions", only employee contributions
exceeding 6% of the employee's IRC 415
Compensation for the limitation year or, if
less, one-half of such employee
contributions shall count as annual
additions.
(B) Minimum Benefits on Normal or Early Retirement: Any provisions
of Section 2.1 or 2.2 hereof to the contrary notwithstanding, in the event of the
normal retirement or early retirement of a participant in accordance with the provisions
of Section 2.1 or 2.2 hereof, his monthly retirement income determined in accordance
with the provisions of Section 2.1(B) or 2.2(B) hereof, whichever is applicable,
shall not be less than the monthly retirement income, if any, determined in accordance
with the provisions of Section 2.1(B) or Section 2.2(B) hereof that such participant
would have received as of any earlier date of retirement if he had retired under
the provisions of Section 2.1 or 2.2 at any time prior to his actual date of retirement.
(C) Requirement With Respect to Form of Payment: The Committee shall
provide each participant no less than 30 days and no more than 90 days before the
date as of which his
62
- 57 -
retirement income payments are scheduled to commence under the provisions of Sections
2.1(C), 2.2(C), 2.3(F) and 2.4(A)(2) written notification of:
(1) the terms and conditions of payment under Sections
2.1(C), 2.2(C), 2.3(F) and 2.4(A)(2) hereof;
(2) the terms and conditions of payment under the
Qualified Joint and 50% Survivor Annuity Option
described in Section 3.1 hereof;
(3) the participant's right to make and the effect of an
election to waive the Qualified Joint and 50%
Survivor Annuity Option;
(4) the rights of the participant's spouse;
(5) the right to make, and the effect of, a revocation of
a previous election to waive the Qualified Joint and
50% Survivor Annuity Option; and
(6) the relative values of the various optional forms of
benefit under the plan.
Any provisions of Section 2.1(C), 2.2(C), 2.3 (F), 2.4(A)(2) or 3.1 hereof to the
contrary notwithstanding, if a participant, who has a spouse at the date on which
his retirement income payments are scheduled to commence as specified under the
provisions of said sections, does not elect, in writing filed with the Committee
(and with the consent of his spouse if the date of such commencement of payments
is on or after January 1, 1985) during the election period described below, to receive
the retirement income payable on his behalf either (i) under the form of payment
specified in Section 2.1(C), 2.2(C), 2.3(F) or 2.4(A)(2), whichever is applicable,
or (ii) under an optional form of payment described in and subject to the provisions
of Section 3.1 hereof, such participant shall be deemed to have elected (and his
retirement income shall be payable on an actuarially equivalent basis in accordance
with the provisions of) the Qualified Joint and 50% Survivor Annuity Option. Any
such married participant may make an election under this section
63
- 58 -
at any time during the period beginning on the date which is 90 days prior to
the
date as of which his retirement income payments are to commence under Section 2.1(C),
2.2(C), 2.3(F) or 2.4(A)(2), whichever is applicable, and ending on the latest to
occur of (i) such applicable date, (ii) the date which is 90 days after the date
on which he was provided with the general written explanation described above or
(iii) the date which is 90 days after the date on which he was provided with any
specific detailed information concerning the payment of his retirement income that
is required to be furnished due to the request of the participant. If any such participant
does not file his election with the Committee prior to the expiration of the election
period described above, the commencement of his retirement income may be delayed
until the end of such election period, but he will be entitled to a retroactive
payment with respect to those retirement income payments which were delayed. If
any participant has elected a form of payment other than that provided under the
Qualified Joint and 50% Survivor Annuity Option, he may subsequently revoke such
election, in writing filed with the Committee within the election period described
above, in order to receive his retirement income payable in accordance with this
Section 4.1(C). The consent of the participant's spouse during such election period
shall be required in order for a participant, whose retirement income payments initially
commence on or after January 1, 1985, to receive his retirement income in a form
other than that provided under the Qualified Joint and 50% Survivor Annuity Option.
(D) Qualified Preretirement Survivor Annuity: If a deceased participant,
whose death occurs on or after his Initial Vesting Date and on or after January
1, 1985 and on whose behalf a death benefit is payable under Section 2.3(G), 2.4(A)(3)
or 2.4(B) hereof, had been married to his spouse throughout the one-year period
immediately preceding his death and he had designated a person other than his spouse
as his beneficiary at a time other than during the election period
64
- 59 -
described below or such spouse has not consented to such other person being designated
as the beneficiary, the participant shall be deemed to have:
(1) revoked his prior designation of beneficiary;
(2) designated such spouse as his beneficiary to receive
a
portion of the death benefit payable on his behalf
under Section 2.3(G), 2.4(A)(3) or 2.4(B), whichever
is applicable;
(3) specified that the portion of the benefit provided
under Section 2.3(G), 2.4(A)(3) or 2.4(B) that is
payable to his surviving spouse will be payable as an
actuarially equivalent monthly income payable on the
first day of each month with the first payment being
due (only if said spouse is then living) on the
earliest date as of which payments to the participant
could have commenced under Section 2.1, 2.2 or 2.4(A)
hereof, as the case would be, if the participant had
survived until such date (such date is hereinafter
referred to in this Section 4.1(D) as the "Earliest
Annuity Commencement Date"), and with the last payment
being the payment due next preceding such spouse's
death;
(4) specified that the portion of the benefit provided
under Section 2.3(G), 2.4(A)(3) or 2.4(B) that is
payable to the surviving spouse shall have an
actuarially equivalent single-sum value, determined as
of the date of his death, of the monthly retirement
income that would be payable to his surviving spouse,
commencing on the Earliest Annuity Commencement Date,
under the Qualified Joint and 50% Survivor Annuity
Option if:
65
- 60 -
(a) the participant terminated on the date of
his death for a reason other than disability
retirement or death (or, if the participant
is a vested terminated participant entitled
to a benefit under Section 2.4(A) hereof, he
had survived to the Earliest Annuity
Commencement Date);
(b) the participant had (for the purposes of
determining the amount of such monthly
retirement income commencing at the Earliest
Annuity Commencement Date) waived the death
benefit coverage under Section 2.4(A)(3)
hereof, if applicable, during the period
beginning on the date of his death and
ending on the Earliest Annuity Commencement
Date; and
(c) the participant had died immediately after
such commencement of payments (one-half of
the initial payment which would have been
due the participant on such Earliest Annuity
Commencement Date shall be included in the
determination of such single-sum value); and
(5) designated such other person (or persons) that was
named as his beneficiary under such revoked
designation as the beneficiary to receive the
remaining portion of such benefit payable on his
behalf under and in accordance with the provisions of
Section 2.3(G), 2.4(A)(3) or 2.4(B) hereof.
The election period during which a participant may designate a person other than
his spouse as his beneficiary such that the benefit described above ("qualified
preretirement survivor annuity") will not be paid to his spouse is the period which
begins on the first day of the plan year in which the
66
- 61 -
participant attains age 35 and ends on the date of the participant's death. If
a participant separates from service prior to the first day of the plan year in
which age 35 is attained, with respect to benefits accrued prior to separation,
the election period shall begin on the date of separation. A participant who will
not yet attain age 35 as of the end of any current plan year may make a special
qualified election to waive the qualified preretirement survivor annuity for the
period beginning on the date of such election and ending on the first day of the
plan year in which the participant will attain age 35. Such election will not be
valid unless the participant receives a written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to the explanation required under
Section 4.1(C). Qualified preretirement survivor annuity coverage will be automatically
reinstated as of the first day of the plan year in which the participant attains
age 35. Any new waiver on or after such date shall be subject to the full requirements
of this Section 4.1.
The Committee shall provide each participant within the applicable period
for such participant, a written explanation of the qualified preretirement survivor
annuity in such terms and in such a manner as would be comparable to the explanation
provided for meeting the requirements of Section 4.1(C) applicable to a Qualified
Joint and 50% Survivor Annuity Option. The applicable period for a participant is
whichever of the following periods ends last: (i) the period beginning with the
first day of the plan year in which the participant attains age 32 and ending with
the close of the plan year preceding the plan year in which the participant attains
age 35; (ii) a reasonable period ending after the individual becomes a participant,
(iii) a reasonable period ending after the "subsidization rule" described below
ceases to apply to the participant; (iv) a reasonable period ending after this Section
4.1(D) first applies to the participant. Notwithstanding the foregoing, notice must
be provided within a reasonable period ending after
67
- 62 -
separation of service in case of a participant who separates from service before
attaining age 35. For purposes of the preceding paragraph, a reasonable period ending
after the enumerated events described in (ii), (iii) and (iv) is the end of the
two year period beginning one year prior to the date the applicable event occurs
and ending one year after that date. In the case of a participant who separates
from service before the plan year in which age 35 is attained, notice shall be provided
within the two year period beginning one year prior to separation and ending one
year after separation. If such a participant thereafter returns to employment with
the Employer, the applicable period for such participant shall be redetermined.
Notwithstanding the other requirements of this Section 4.1(D), the respective notices
prescribed by this section need not be given to a participant if the plan "fully
subsidizes" the costs of a qualified preretirement survivor annuity, and the plan
does not allow the participant to waive the qualified preretirement survivor annuity
and does not allow a married participant to designate a nonspouse beneficiary. For
these purposes, a plan fully subsidizes the costs of a benefit if under the plan
no increase in cost or decrease in benefits to the participant may result from the
participant's failure to elect another benefit. Prior to the time the plan allows
the participant to waive the qualified preretirement survivor annuity, the plan
may not charge the participant for the cost of such benefit by reducing the participant's
benefits under the plan or by any other method. In lieu of the payment of such benefit
to the surviving spouse of a participant in the form of monthly income described
in Section 4.1(D)(3) above commencing at the Earliest Annuity Commencement Date,
such benefit may be paid on an actuarially equivalent basis to the participant's
spouse, subject to the provisions of Section 2.4(C) hereof, in an optional form
available under Section 3.1 and commencing on such other date as the surviving spouse
may elect. For the purposes of Sections 4.1(D)(3) and 4.1(D)(4) above, the Earliest
Annuity Commencement Date of a deceased disabled participant on
68
- 63 -
whose behalf a death benefit is payable under Section 2.3(G) hereof and the monthly
retirement income that would be payable to his surviving spouse, commencing on the
Earliest Annuity Commencement Date, under the Qualified Joint and 50% Survivor Annuity
Option, shall be determined as though such participant had recovered from his total
and permanent disability and had reentered the service of the Employer immediately
prior to his death.
If the beneficiary of a participant is his spouse but the participant elects,
pursuant to the provisions of Section 2.4(A)(3) or 2.4(B) hereof, whichever is applicable,
an actuarially equivalent form of payment of the benefit provided under such applicable
section that does not provide for monthly payments during the lifetime of his spouse
in an amount at least as great as the actuarially equivalent income, if any, which
would have been payable to such spouse under the provisions of the Qualified Joint
and 50% Survivor Annuity Option if the participant had retired under the provisions
of Section 2.1 or 2.2 hereof or his retirement income payments due under Section
2.4(A) hereof had commenced, whichever is applicable, on the day before his death
while said option was in effect and he had died immediately thereafter, the Committee
shall inform such participant that such election will constitute an election not
to receive a benefit which has the effect of a qualified preretirement survivor
annuity provided under a qualified joint and survivor annuity as described in Section
417 of the Internal Revenue Code of 1986, as amended, and shall require the consent
of the participant's spouse.
There shall be no duplication between the benefits provided under Sections
2.3(G), 2.4(A)(3) and 2.4(B) and under the qualified preretirement survivor annuity
described in this Section 4.1(D), but the benefits under each shall be inclusive
of the benefits under the other.
(E) Latest Date of Commencement of Benefits to 5-Percent Owner: Any provisions
of Section 2.1 or 3.1 hereof to the contrary notwithstanding, distribution on or
after January 1, 1985
69
- 64 -
of the accrued benefit to which a participant, who is a 5-percent owner (within
the meaning of Section 416(i) of the Internal Revenue Code), has a nonforfeitable
interest must commence, regardless of whether or not his service has been terminated,
on a date not later than his Required Beginning Date; provided, however, if an election
of a form of payment has been made by a participant prior to January 1, 1984 and
such election provides for the commencement of the participant's benefit at a date
later than the dates specified in (a), (b) and (c) above, distribution of the participant's
accrued benefit shall commence and be payable in accordance with such election provided
that such election both (1) satisfies the transitional rule in Section 242(b)(2)
of the Tax Equity and Fiscal Responsibility Act of 1982 (P.L. 97-248) and (2) has
not been subsequently revoked or changed (a change of beneficiaries under the designation
will not be considered to be a revocation or change of such form of payment so long
as the change in beneficiaries does not alter, directly or indirectly, the period
over which distributions are to be made under such form of payment); and provided
further, however, that the provisions of Section 4.1(C) hereof shall apply if the
participant has a spouse at the date on which his initial payment under such optional
form of payment is due and his spouse does not consent to such optional form of
payment. Any such participant, whose retirement income payments are required under
the provisions of this Section 4.1(E) to commence prior to the date that his service
is terminated, shall be treated in all respects under the plan on and after the
date of commencement of his retirement income payments in the same manner as though
he had actually retired on such date of commencement of payments.
(F) Consent Required for Commencement of Retirement Income Prior to Normal
Retirement Date: Any provisions of Section 2.2 or 2.4(A) hereof to the contrary
notwithstanding, in order to receive retirement income payments under either of
such sections that commence prior
70
- 65 -
to the date on which the participant will attain the age of 65 years, the written
consent of the participant must be filed with the Committee within 90 days of the
date as of which his retirement income payments are to commence. In the event that
such consent is not filed within such period, the commencement of retirement income
payments to the participant shall be deferred until the first day of the month coincident
with or next following the date on which he will attain the age of 65 years, and
the benefit payable to such participant (or to his beneficiary in the event of his
death prior to such deferred commencement date) shall be determined in the manner
described in Section 2.4(A) hereof.
(G) Spousal Consent Requirement and Waiver: Any provisions herein to the
contrary notwithstanding, if the consent of the spouse of the participant is required
under the provisions hereof for any specified action that is required hereunder,
such consent (i) must be in writing, (ii) the related election must designate a
specific alternate beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (or the spouse expressly
permits designations by the participant without any further spousal consent) and,
with respect to a waiver of the Qualified Joint and 50% Survivor Annuity Option
only, the related election must designate a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly permits designations
by the participant without any further spousal consent), (iii) the consent must
acknowledge the effect of the election, and (iv) the consent must be witnessed by
a plan representative or a notary public; provided, however, that such spousal consent
for any such specified action that is required hereunder shall, unless otherwise
required by the Committee or by applicable law, be waived for the purposes of the
plan if:
71
- 66 -
(1) the spouse has previously consented to such
designation in accordance with the provisions above
and such previous consent (a) permits changes with
respect to such designation without any requirement of
further consent by such spouse and (b) acknowledges
the effect of such consent by the spouse; or
(2) it is established to the satisfaction of the Committee
that such consent may not be obtained because there is
no spouse, because the spouse cannot be located or
because of such other circumstances as the Secretary
of the Treasury or his delegate may prescribe by
regulations as reasons for waiving the spousal consent
requirement.
Any consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse. A consent that permits designations by the participant without any
requirement of further consent by such spouse must acknowledge that the spouse has
the right to limit consent to a specific beneficiary, and a specific form of benefit
where applicable, and that the spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver pursuant to a spouse's consent
may be made by a participant without the consent of the spouse at any time prior
to the commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the participant has
received notice as provided in Section 4.1(C) or 4.1(D), as is applicable.
(H) Minimum Preserved Benefit Due to Change in Actuarial Assumption: In
the event that the plan is or has been amended after January 1, 1982 to change the
actuarial assumptions used to determine actuarially equivalent benefits payable
under the plan, the monthly retirement
72
- 67 -
income or other benefit, if any, payable under the provisions of Section 2.1,
2.2,
2.3 or 2.4 (and Section 3.1 if an optional form of payment is applicable) on behalf
of a participant, who was a participant in the plan as of the day immediately preceding
the date that the change in assumptions becomes effective (herein referred to as
the "Preservation Date") and who retires or whose service is terminated after the
Preservation Date, shall be at least equal to the corresponding amount of the monthly
retirement income or other benefit, if any, payable on his behalf under the provisions
of Section 2.1, 2.2, 2.3 or 2.4 (and Section 3.1 if an optional form of payment
is applicable), as the case may be, of the plan as in effect on the Preservation
Date computed using the Deferred Monthly Retirement Income Commencing at Normal
Retirement Date which he had accrued as of the Preservation Date under the provisions
of the plan as in effect on the Preservation Date and using the mortality table
and interest rate assumptions that applied under the provisions of the plan as in
effect on the Preservation Date to compute actuarially equivalent benefits payable
on behalf of participants who retired or whose service was terminated on the Preservation
Date.
4.2 - TEMPORARY LIMITATIONS ON BENEFITS
REQUIRED BY THE INTERNAL REVENUE SERVICE
This Section 4.2 is applicable only to those of the 25 highest-paid employees
of each Employer, determined as of the applicable dates specified below, whose monthly
retirement income upon normal retirement would exceed $125. The term "employee"
as used in this Section 4.2 shall include all such employees in the employment of
the Employer who are participants in the plan on such applicable dates and all other
persons in the employment of such Employer on such dates who may later become participants
in the plan.
Notwithstanding any provision of any other section of the plan to the contrary,
the amount of Employer contributions (or funds attributable thereto) which may be
used to provide the benefits
73
- 68 -
for any participant to whom this Section 4.2 is applicable, who is within the
applicable
group of the 25 highest-paid employees as hereinafter described, shall not exceed
an amount which is equal in value to (or which is actuarially equivalent to) the
amount specified below with respect to the period for which the limitations described
herein shall be applicable.
(A) This Subsection 4.2(A) is applicable to any employee who is in
the group of the 25 highest-paid employees of an Employer,
determined as of the effective date of the plan applicable to
such Employer, except that the provisions of Subsection 4.2(B)
below shall apply to any such employee of any such Employer
who is also in the group of the 25 highest-paid employees
determined as of any date that the provisions of Subsection
4.2(B) are applicable. The amount of Employer contributions
(or funds attributable thereto) which may be used to provide
benefits for any such participant to whom this Subsection
4.2(A) is applicable, which may be received prior to the end
of the 10-year period that next follows the effective date of
the plan applicable to the Employer concerned, shall not
exceed an amount which is equal in value to (or which is
actuarially equivalent to) the largest of the following
amounts:
(1) the amount, if any, of Employer contributions (or
funds attributable thereto) which would have been
applied to provide the benefits for such participant
if the superseded plan as in effect on the day
immediately preceding the effective date of the plan
had been continued without change;
(2) $20,000; or
(3) the sum of:
(a) the amount, if any, of Employer
contributions (or funds attributable
thereto) which would have been applied to
provide the benefits accrued to the
participant on the day immediately preceding
the effective date of the plan under the
provisions of the superseded plan as in
effect on such day; and
(b) an amount computed by multiplying the number
of years elapsed since the effective date of
the plan, for which the full current costs
of the plan have been met, by the smaller of
the following amounts:
(i) $10,000; or
(ii) an amount equal to 20% of the
participant's average regular
annual compensation received from
the Employer for the five years
immediately preceding the date of
such determination or, if earlier,
the date of termination of service
of a
74
- 69 -
terminated participant, the date of
retirement of a participant who has
retired prior to his normal
retirement date or the normal
retirement date of a participant
who has attained his normal
retirement age whether or not he
has retired under the plan;
provided, however, if the full current costs of the plan have
not been met at the end of the 10-year period that next
follows the effective date of the plan applicable to the
Employer concerned, the above limitations will continue to
apply until the full current costs have been funded for the
first time.
(B) This Subsection 4.2(B) is applicable to any employee who is in
the group of the 25 highest-paid employees of an Employer
determined as of the date after the effective date of the plan
that the plan is amended so as to produce an increase in
benefits actually payable. The amount of Employer
contributions (or funds attributable thereto) which may be
used to provide the benefits for any such participant to whom
this Subsection 4.2(B) is applicable, which may be received
prior to the end of the 10-year period that next follows the
effective date of such amendment, shall not exceed an amount
which is equal in value to (or which is actuarially equivalent
to) the largest of the following amounts:
(1) the amount, if any, of Employer contributions (or
funds attributable thereto) which would have been
applied to provide the benefits for such participant
if the plan as in effect immediately prior to such
amendment had been continued without change;
(2) $20,000; or
(3) the sum of:
(a) the amount, if any, of Employer
contributions (or funds attributable
thereto) which would have been applied to
provide the benefits accrued to the
participant on the day immediately preceding
the effective date of such amendment under
the provisions of the plan as in effect
immediately prior to such amendment; and
(b) an amount computed by multiplying the number
of years elapsed since the effective date of
such amendment, for which the full current
costs of the plan have been met, by the
smaller of the following amounts:
(i) $10,000; or
(ii) an amount equal to 20% of the
participant's average regular
annual compensation received from
the Employer for the five
75
- 70 -
years immediately preceding the
date of such determination or, if
earlier, the date of termination of
service of a terminated
participant, the date of retirement
of a participant who has retired
prior to his normal retirement date
or the normal retirement date of a
participant who has attained his
normal retirement age whether or
not he has retired under the plan;
provided, however, if the full current costs of the plan have
not been met at the end of the 10-year period that next
follows the effective date of such amendment to the plan, the
above limitations will continue to apply until the full
current costs have been funded for the first time.
(C) Notwithstanding the provisions of Subsections 4.2(A) and
4.2(B) above, the amount specified in such subsections shall
not be less than either:
(1) if the participant is a substantial owner within the
meaning of Section 4022(b)(5) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), the
present value of the benefit guaranteed on his behalf
under Section 4022 of ERISA or, if the plan has not
been terminated, the present value of the benefit
that would be guaranteed on his behalf under such
section if the plan were terminated on the date his
benefit commences, determined in accordance with
regulations of the Pension Benefit Guaranty
Corporation; or
(2) if the participant is not a substantial owner within
the meaning of Section 4022(b)(5) of ERISA, the
present value of the maximum benefit described in
Section 4022(b)(3) of ERISA (determined on the date
the plan terminates or on the date his benefits
commence, whichever is earlier) without regard to any
other limitations in Section 4022 of ERISA.
The foregoing conditions will not restrict the payment of the full benefits
to a beneficiary after the death of a participant whose benefits are subject to
the provisions of this Section 4.2, if, at the time of such death, the plan is in
full effect and the full current costs thereof have been met.
The provisions of this Section 4.2 will not apply to the retirement income
payable in a form which does not provide a larger monthly income than a straight
life income to any participant retiring or receiving benefits during any period
in which the plan is in full effect and the full current costs thereof have been
met.
76
- 71 -
The limitations will not apply to the payment of any survivorship income
with respect to any deceased participant or retired participant who dies prior to
the termination of the plan and while the full current costs thereof have been met.
The provisions of this Section 4.2 will not prevent the payment of a benefit
larger than a monthly straight life income to a participant whose benefits are restricted
under this Section 4.2 if the participant enters into an agreement with the trustee,
adequately secured, in conformity with the requirements of the Internal Revenue
Service, that should the plan terminate or should the full current costs of the
plan not be met at any time prior to the end of the 10-year period that next follows
the effective date of the plan or any amendment thereto applicable to the Employer,
the participant will repay any part of the distribution which is restricted under
this Section 4.2.
In the event of the termination of the plan while the limitations of this
Section 4.2 are in effect, the portion of the assets of the trust fund arising from
contributions made by the Employer concerned with respect to those of its participants
to whom the provisions of this Section 4.2 are applicable which is in excess of
the foregoing limitations will be allocated to its other participants, including
its retired participants, in accordance with the provisions contained in Section
4.5 hereof; provided, however, subject to the provisions of Section 4.5(E) hereof
pertaining to the approval of the method of distribution, if there be any asset
value remaining after the full allocations to the participants and their beneficiaries
as Section 4.5(C) hereof but prior to the distribution of any residual assets to
the Employer as specified in said Section 4.5(C), allocation shall be made in a
nondiscriminatory manner with respect to each participant to whom the provisions
of this Section 4.2 are applicable in the amount required to provide that portion
of the allocation provided on his behalf under Section 4.5(C) to which he is not
entitled by reason of the foregoing limitations of this Section 4.2; and provided
further that, if such remaining asset value
77
- 72 -
be less than the aggregate of such amounts, such amounts shall be reduced pro
rata
among such individuals so that the aggregate of such reduced amounts will be equal
to such remaining asset value.
Notwithstanding the foregoing to the contrary, effective as of January
1,
1994, the following shall apply instead of the foregoing. In the event of plan termination,
the benefit of any highly compensated active or former employee is limited to a
benefit that is nondiscriminatory under Section 401(a)(4) of the Internal Revenue
Code.
Benefits distributed to any of the 25 most highly compensated active and
highly compensated former employees with the greatest compensation in the current
or any prior year are restricted such that the annual payments are no greater than
an amount equal to the payment that would be made on behalf of the employee under
a straight life annuity that is the actuarial equivalent of the sum of the employee's
accrued benefit, the employee's other benefits under the plan (other than a social
security supplement, within the meaning of Section 1.411(a)-7(c)(4)(ii) of the Income
Tax Regulations), and the amount the employee is entitled to receive under a social
security supplement.
The preceding paragraph shall not apply if: (1) after payment of the benefit
to an employee described in the preceding paragraph, the value of plan assets equal
or exceeds 110% of the value of current liabilities, as defined in Section 412(1)(7)
of the Internal Revenue Code, (2) the value of the benefits for an employee described
above is less than 1% of the value of current liabilities before distribution, or
(3) the value of the benefits payable under the plan to an employee described above
does not exceed $3,500.
For purposes of this section, benefit includes loans in excess of the amount
set forth in Section 72(p)(2)(A) of the Internal Revenue Code, any periodic income,
any withdrawal values
78
- 73 -
payable to a living employee, and any death benefits not provided for by insurance
on the employee's life.
4.3 - BENEFITS NONFORFEITABLE IF PLAN IS TERMINATED
In the event of the termination or partial termination of the plan, the
rights of each affected participant in the plan to benefits accrued to such date
of termination, to the extent then funded, shall be nonforfeitable, where such benefits
shall be determined and distributed as provided in Section 4.5 hereof.
4.4 - MERGER OF PLAN
In the case of the merger or consolidation of the plan with, or the transfer
of assets or liabilities to, another qualified retirement plan, each participant
must be entitled to receive a benefit, upon termination of such other retirement
plan after such merger, consolidation or transfer, which is at least equal to the
benefit which he would have been entitled to receive immediately before the merger,
consolidation or transfer if the plan hat been terminated at that time.
4.5 - TERMINATION OF PLAN AND DISTRIBUTION OF TRUST FUND
Upon termination of the plan in accordance with the provisions hereof,
the trust fund shall be allocated and distributed in accordance with the following
procedure:
(A) The Committee shall determine the date of distribution and the asset
value to be distributed, after taking into account the expenses of such distribution.
(B) The Committee shall determine the method of distribution of the asset
value -- that is, whether distribution shall be by payment in cash, by transfer
to individual retirement accounts established under Section 408 of the Internal
Revenue Code of 1986, as amended, by the
79
- 74 -
maintenance of another or substituted trust fund, by the purchase of insured annuities,
or in kind based on the then market value -- for each class of participants and
other persons entitled to benefits under the plan, as specified in (C) below.
(C) The Committee shall determine the share of the asset value available
for distribution on behalf of each Employer or group of Employers with respect to
which the plan represents a single plan after taking into account the expenses of
such distribution. After having determined such asset value available for distribution
to each such Employer or group of Employers, as the case may be, and subject to
the applicable provisions of any supplement hereto pertaining to the distribution
of assets upon the termination of the plan, the Committee shall allocate such asset
value (allocated to the particular Employer or group of Employers) as of the date
of termination of the plan in the manner set forth below to determine the amount,
if any, to which each affected participant or beneficiary is entitled. Such allocation
shall be made using the methods and actuarial assumptions that are being used as
of the date of termination of the plan by the Pension Benefit Guaranty Corporation
in determining the value of plan benefits under terminating non-multiemployer pension
plans covered by Title IV of the Employee Retirement Income Security Act of 1974,
as amended, or, at the option of the Committee, using such other methods and actuarial
assumptions that are mutually acceptable to the Committee, the Pension Benefit Guaranty
Corporation and the Internal Revenue Service.
(1) Allocation shall first be made with respect to each
active, retired or terminated participant and to each
beneficiary of a deceased participant in an amount
equal to (a) the amount, if any, credited to his
account under the plan on the date of termination of
the plan that is attributable to his voluntary
employee contributions or (b) if the funds
attributable to his voluntary employee contributions
are being used to provide an actuarially equivalent
benefit, the amount required to provide (after the
date of termination of the plan) that portion of his
benefit which is attributable to his voluntary
employee contributions; provided, however, that if the
asset value
80
- 75 -
be less than the aggregate of such amounts, such
amounts shall be reduced pro rata among such
individuals so that the aggregate of such reduced
amounts will be equal to the asset value; and
provided further, however, that the benefits on which
the allocations specified below are based shall
exclude any portion thereof attributable to the
participant's voluntary employee contributions.
(2) If there be any asset value remaining after the
allocation under (1) above, allocation shall next be
made with respect to each active, retired or
terminated participant and to each beneficiary of a
deceased participant in an amount equal to the
excess, if any, of (a) the participant's mandatory
employee contributions, if any, together with
interest credited thereto over (b) the aggregate of
payments, if any, exclusive of payments attributable
to the participant's voluntary employee
contributions, if any, which have previously been
made on behalf of the participant; provided, however,
that if such remaining asset value be less than the
aggregate of the amounts thus allocated hereunder,
such latter amounts shall be reduced pro rata among
such individuals so that the aggregate of such
reduced amounts will be equal to the remaining asset
value.
(3) If there be any asset value remaining after the
allocations under (1) and (2) above, allocation shall
next be made with respect to:
(a) each retired or terminated participant whose
retirement income payments commenced at
least three years prior to the date of
termination of the plan in an amount equal
to (i) the excess, if any, of the amount
required to provide (after the date of
termination of the plan) the smallest amount
of income payable to such participant during
such three-year period immediately preceding
the date of termination of the plan, based
upon the provisions of the plan as in effect
during the five-year period immediately
preceding the date of termination of the
plan which would result in the least amount
of income being payable to such participant
over (ii) the amount of his allocation, if
any, under (2) above;
(b) each person receiving a retirement income on
such date of termination on account of a
deceased participant or retired or
terminated (but since deceased) participant
whose retirement income payments commenced,
either to such person or to such retired or
terminated (but since deceased) participant,
at least three years prior to the date of
termination of the plan in an amount equal
to (i) the excess, if any, of the amount
required to provide (after the date of
termination of the plan) the smallest amount
of income payable to such person during such
three-year period immediately preceding the
date of termination of the plan, based upon
the provisions of the
81
- 76 -
plan as in effect during the five-year
period immediately preceding the date of
termination of the plan which would result
in the least amount of income being payable
to such person over (ii) the amount of his
allocation, if any, under (2) above; and
(c) each other active, retired, or terminated
participant who, at least three years prior
to the date of termination of the plan,
either had become eligible for normal
retirement but had not yet retired or had
satisfied the applicable age and service
requirements to be eligible for an early
retirement benefit, or the beneficiary of
any such eligible participant whose service
was terminated by reason of his death during
such three-year period, in an amount equal
to (i) the excess, if any, of the amount
required to provide (after the date of
termination of the plan) the monthly
retirement income which would have been
payable on behalf of such participant if he
had retired three years prior to the date of
termination of the plan, based upon the
provisions of the plan as in effect during
the five-year period immediately preceding
the date of termination of the plan which
would result in the least amount of income
being payable to such participant or
beneficiary over (ii) the amount of his
allocation, if any, under (2) above;
provided, however, that if such remaining asset value
be less than the aggregate of the amounts thus
allocated hereunder, such latter amounts shall be
reduced pro rata among such individuals so that the
aggregate of such reduced amounts will be equal to
the remaining asset value.
(4) If there be any asset value remaining after the
allocations under (1), (2) and (3) above, allocation
shall next be made with respect to each active,
retired or terminated participant and to each
beneficiary under the plan in an amount equal to the
excess, if any, of (a) the amount required to provide
that portion of the single-sum value of the Deferred
Monthly Retirement Income Commencing at Normal
Retirement Date which he had accrued as of the date
of termination of the plan or, if applicable, which
he was receiving as of the date of termination of the
plan, which is not in excess of the actuarially
equivalent single-sum value of the benefit guaranteed
on his behalf under the termination insurance
provisions of the Employee Retirement Income Security
Act of 1974 determined without regard to Sections
4022(b)(5) and 4022(b)(6) of said Act, over (b) the
aggregate of the allocations, if any, made on his
behalf under (2) and (3) above; provided, however,
that if such remaining asset value be less than the
aggregate of the amounts thus allocated hereunder,
such latter amounts shall be reduced pro rata among
such individuals so that the aggregate of such
reduced amounts will be equal to the remaining asset
value.
82
- 77 -
(5) If there be asset value remaining after the
allocations under (1), (2), (3) and (4) above,
allocation shall next be made with respect to each
retired or terminated participant receiving a
retirement income hereunder on such date, each person
receiving a retirement income on such date on account
of a deceased participant or a retired or terminated
(but since deceased) participant and each participant
who has, by such date, become eligible for normal
retirement but has not yet retired, in an amount
equal to the excess, if any, of (a) the amount
required to provide the retirement income which such
participant or other person is receiving or is
entitled to receive under the plan over (b) the
aggregate of the allocations made on behalf of such
participant or other person under (2), (3) and (4)
above; provided, however, that if such remaining
asset value be less than the aggregate of the amounts
thus allocated hereunder, such latter amounts shall
be reduced pro rata among such individuals so that
the aggregate of such reduced amounts will be equal
to the remaining asset value.
(6) If there be any asset value remaining after the
allocations under (1), (2), (3), (4) and (5) above,
allocation shall next be made with respect to:
(a) each participant in the service of the
Employer on the date of termination of the
plan whose Initial Vesting Date is on or
prior to such date and who is not entitled
to an allocation under (5) above, in an
amount equal to the excess, if any, of (i)
the amount required to provide the
actuarially equivalent single-sum value of
the vested retirement income which he would
have been entitled to receive under the
provisions of Section 2.4(A)(l) hereof if
his service had been terminated on the date
of termination of the plan over (ii) the
aggregate of the allocations made on behalf
of such participant under (2), (3) and (4)
above; and
(b) each terminated participant then entitled to
a benefit under the provisions of Section
2.4(A)(l) hereof, whose monthly income
payments have not commenced by such date, in
an amount equal to the excess, if any, of
(i) the amount required to provide the
actuarially equivalent single-sum value of
the vested deferred retirement income to
which he is entitled under Section 2.4(A)(l)
hereof over (ii) the aggregate of the
allocations made on behalf of such
participant under (2), (3) and (4) above;
provided, however, that if such remaining asset value
be less than the aggregate of the amounts thus
allocated hereunder, such latter amounts shall be
reduced pro rata among such individuals so that the
aggregate of such reduced amounts will be equal to
the remaining asset value.
83
- 78 -
(7) If there be any asset value remaining after the
allocations under (1), (2), (3), (4), (5) and (6)
above, allocation shall lastly be made with respect
to each participant in the service of the Employer on
the date of termination of the plan who is not
entitled to an allocation under (5) above, in an
amount equal to the excess, if any, of (a) the amount
required to provide the actuarially equivalent
single-sum value of the Deferred Monthly Retirement
Income Commencing at Normal Retirement Date which he
had accrued as of the date of termination of the plan
(assuming his vested percentage is 100%) over (b) the
aggregate of the allocations made on behalf of such
participant under (2), (3), (4) and (6) above;
provided, however, that if such remaining asset value
be less than the aggregate of the amounts thus
allocated hereunder, such latter amounts shall be
reduced pro rata among such individuals so that the
aggregate of such reduced amounts will be equal to
such remaining asset value.
(8) In the event that there be asset value remaining
after the full allocations specified in (1), (2),
(3), (4), (5), (6) and (7) above, such residual
assets shall be distributed to the Employer.
(D) The order of priorities for, and the amounts of, the distributions
set forth in (C) above and the rights of participants and beneficiaries to benefits
under the plan shall be subject (i) to the limitations provided by Section 4.2 of
the plan, (ii) to any changes, including the recapture of any prior distributions
to participants, as may be ordered by the Pension Benefit Guaranty Corporation,
and (iii) to any changes required by the Internal Revenue Service as a condition
for issuing a favorable determination letter stating that the distribution of assets
will not adversely affect the continued qualified status of the plan under Section
401(a) of the Internal Revenue Code of 1986, as amended.
(E) As soon as practicable after receipt by the Employer of (a) notification
from the Pension Benefit Guaranty Corporation evidencing its approval of a proposed
method of distribution of assets and (b) a favorable determination letter from the
Internal Revenue Service stating that in its opinion such method will not adversely
affect the continued qualified status of
84
- 79 -
the plan under Section 401(a) of the Internal Revenue Code of 1986, as amended,
the Committee shall direct the trustee to distribute the assets in accordance with
such method.
4.6 - SPECIAL PROVISIONS THAT APPLY IF PLAN IS TOP-HEAVY
The provisions of this Section 4.6 shall apply if the plan becomes a "top-heavy
plan" within the meaning of Section 416(g) of the Internal Revenue Code with respect
to any plan year that begins after December 31, 1983 and that ends after the effective
date of the plan, except to the extent otherwise indicated. The provisions of this
Section 4.6 shall not apply (and the plan shall not be top-heavy) with respect to
any plan year that begins prior to January 1, 1984.
(A) Determination of Plan Years in Which Plan is Top-Heavy: The plan
shall be "top-heavy" with respect to an applicable plan year if:
(1) either (a) any participant, former participant or
beneficiary in the plan is a "key employee" within
the meanings of Sections 416(i)(1) and 416(i)(5) of
the Internal Revenue Code (such participants, former
participants and beneficiaries are hereinafter
referred to in this Section 4.6 as "Key Employees")
or (b) the plan enables any other plan, which is
included in the Aggregation Group (as defined below)
and which has a participant who is a Key Employee, to
meet the requirements of Section 401(a)(4) or Section
410 of the Internal Revenue Code; and
(2) the ratio (determined in accordance with Section 416
of the Internal Revenue Code) as of the last day of
the preceding plan year or, in the case of the first
plan year, the last day of such first plan year (such
day, whether applicable to the first plan year or to
subsequent plan years, is hereinafter referred to in
this Section 4.6 as the "Determination Date") of:
85
- 80 -
(a) the sum of (i) the present value of the
cumulative accrued benefits for all Key
Employees under all defined benefit plans
included in the Aggregation Group plus (ii)
the aggregate of the individual accounts of
all Key Employees under all defined
contribution plans included in such
Aggregation Group;
to
(b) a similar sum determined for all
participants, former participants and
beneficiaries, excluding any participants
and former participants (or their
beneficiaries) who have not at any time
during the five-year period ending on the
Determination Date performed any service for
any employer maintaining a plan included in
the Aggregation Group, under all defined
benefit plans and defined contribution plans
included in such Aggregation Group;
is greater than 60%. The individual amount balances
and accrued benefits of a participant who is not a
Key Employee, but who was a Key Employee in a prior
year, or who has not been credited with at least one
Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on
the Determination Date will be disregarded.
For the purposes of this Section 4.6, the Aggregation Group shall mean
the
plan plus all other defined benefit plans and defined contribution plans, if any,
maintained by (i) the Employer, (ii) any other corporation which is a member of
a controlled group of corporations, within the meaning of Section 1563(a) of the
Internal Revenue Code, with respect to which the Employer is such a member, (iii)
any trade or business (whether or not incorporated) which is under common
86
- 81 -
control with the Employer, as determined under Section 414(c) of the Internal
Revenue
Code and regulations issued thereunder, or (iv) any service organization which is
a member of an affiliated service group with respect to which the Employer is such
a member, as determined under Section 414(m) of the Internal Revenue Code and regulations
issued thereunder; provided, however, that any such defined benefit plan or defined
contribution plan that (a) does not have any participant who is a Key Employee and
(b) is not required to be combined with any other plan, which is included in the
Aggregation Group and which has a participant who is a Key Employee, in order to
enable such other plan to meet the requirements of Section 401(a)(4) or Section
410 of the Internal Revenue Code, shall be included in the Aggregation Group only
if such defined benefit plan or defined contribution plan, together with the other
plans that are included in the Aggregation Group, as a combined group satisfy the
requirements of Sections 401(a)(4) and 410 of the Internal Revenue Code.
The present value of an accrued benefit under the plan shall, for the
purposes
of this Section 4.6, be determined as of the most recent valuation date that (i)
is used for the plan year for computing plan costs for minimum funding purposes
(regardless of whether a valuation is actually performed for that year) and (ii)
is within the 12-month period ending on the applicable Determination Date (such
valuation date is herein referred to in this Section 4.6 as the "Valuation Date").
Effective as of January 1, 1987, the accrued benefit of a participant other than
a Key Employee shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans maintained by the Employer,
or (b) if there is no such method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Internal Revenue Code.
87
- 82 -
The present value of the cumulative accrued benefits under the other defined
benefit plans included in the Aggregation Group and the aggregate of the individual
accounts under the defined contribution plans included in such Aggregation Group
shall be determined separately for each such plan in accordance with Section 416
of the Internal Revenue Code and regulations issued with respect thereto as of the
"determination date" that is applicable to each such separate plan and that falls
within the same calendar year that the Determination Date applicable to the plan
falls.
Unless required otherwise under Section 416 of the Internal Revenue Code
and regulations issued thereunder, a participant's (or beneficiary's) accrued benefit
under the plan shall be equal to the sum of:
(a) an amount equal to either:
(i) if his service has not been terminated and he has not
reached his normal retirement date as of the Valuation
Date, the Deferred Monthly Retirement Income
Commencing at Normal Retirement Date which he has
accrued as of the Valuation Date;
(ii) if his service has not been terminated and he has
reached his normal retirement date as of the Valuation
Date, the monthly retirement income to which he would
have been entitled under the normal retirement
provisions of the plan if he had retired on the
Valuation Date; or
(iii) if his service has been terminated as of the Valuation
Date, the amount of retirement income or other benefit
which is payable on his behalf under the plan on and
after the Valuation Date;
plus
88
- 83 -
(b) the aggregate distributions made on his behalf during the
five-year period ending on the Determination Date.
provided, however, that his estimated accrued benefit between the Valuation Date
and Determination Date applicable to the first plan year shall be included as part
of his accrued benefit with respect to the first plan year only.
(B) Minimum Vesting Provisions if Plan Becomes Top-Heavy. Any provisions
of Section 1.1(A)(17) hereof to the contrary notwithstanding, the Initial Vesting
Date of an Employee, who is a participant in the plan and has accrued an Hour of
Service during any plan year that is subsequent to the last plan year that the plan
was not top-heavy, for the purpose of determining his eligibility for the benefit
provided under Section 2.4(A) hereof during any plan year that is subsequent to
the last plan year that the plan was not top-heavy, shall not be later than (i)
the date as of which he completes two years of Vesting Service or (ii) the first
day of the plan year immediately following the last plan year that the plan was
not top-heavy, whichever is later, but the benefit otherwise determined under Section
2.4(A) hereof shall be multiplied by the applicable vested percentage specified
in the schedule below, based upon the participant's number of years of Vesting Service
as of the date of termination of his service:
Vested
Years of Vesting Service Percentage
------------------------ ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or More 100%
89
-84-
provided, however, the vested percentage shall be 100% if the participant has
attained
the age of 65 years as of his date of termination of service. If the vesting schedule
under the plan shifts in and out of the above schedule for any plan year because
of the plan's top-heavy status, such shift is an amendment of the vesting schedule
and the election in Section 6.4 applies.
In the event that the plan ceases to be top-heavy with respect to any subsequent
plan year, the following provisions will apply with respect to the minimum benefits
to which such a participant is entitled under Section 2.4(A) hereof during such
subsequent plan years that the plan is not top-heavy:
(1) if the participant had not completed at least two years of
Vesting Service as of the last day of the last plan year
during which the plan was top-heavy, the benefits to which he
is entitled under Section 2.4(A) hereof shall be determined as
though the plan had never been top-heavy;
(2) if the participant had completed at least two but had not
completed at least five years of Vesting Service as of the
last day of the last plan year during which the plan was
top-heavy, he shall be eligible for a minimum benefit payable
under Section 2.4(A) hereof, based upon the product of (a) the
amount of the Deferred Monthly Retirement Income Commencing at
Normal Retirement Date which he had accrued as of the last day
of the last plan year during which the plan was top-heavy
multiplied by (b) his vested percentage specified in the
schedule above but determined as of the last day of the last
plan year during which the plan was top-heavy based upon his
years of Vesting Service as of such date; and
90
- 85 -
(3) if the participant had completed at least five years of
Vesting Service as of the last day of the last plan year
during which the plan was top-heavy, he shall be eligible for
the benefit provided under Section 2.4(A) hereof, but such
benefit otherwise determined under Section 2.4(A) hereof shall
be multiplied by the participant's vested percentage specified
in the above schedule, based upon his number of years of
Vesting Service as of the date of termination of his service.
(C) Minimum Benefit If Plan Becomes Top-Heavy: In the event that
the
service of a participant, who is not a Key Employee, is terminated on or after his
Initial Vesting Date (as defined in Section 1.1(A)(17) hereof and as modified by
the provisions of Section 4.6(B) above) for any reason, the benefit payable to or
on behalf of the participant under the provisions of Section 2.1, 2.2, 2.3, 2.4(A)
or 2.4(B) hereof, whichever is applicable, shall not be less than that amount which
is actuarially equivalent (based upon the interest and mortality assumptions which
are being used under the plan as of the date of his retirement or termination of
service to determine actuarially equivalent values) to an amount equal to the excess,
if any, of:
(1) a monthly retirement income payable to the participant for
life commencing at his normal retirement date in an amount
equal to (a) 2% of his "IRC 416 Final Average Monthly
Compensation" multiplied by (b) his number of years of Vesting
Service, not in excess of 10 years, which were accrued during
those plan years in which the plan was top-heavy, with the
resulting product multiplied by (c) his vested percentage as
of his date of termination of service; over
(2) the monthly retirement income payable to the participant for
life commencing at his normal retirement date in an amount
equal to the sum of:
91
- 86 -
(a) such amount of income, if any, which he has a
nonforfeitable right to receive and which is payable
to the participant under the other defined benefit
plans, if any, which are included in the Aggregation
Group;
plus
(b) such amount of income which can be provided on an
actuarially equivalent basis (based upon the interest
and mortality assumptions which are being used under
the plan as of the date of his retirement or
termination of service to determine actuarially
equivalent values) by the amounts, if any, which he
has a nonforfeitable right to receive and which are
attributable to employer contributions and
forfeitures that are credited to his account under
the defined contribution plans, if any, included in
the Aggregation Group;
provided, however, if the Aggregation Group includes one or more defined contribution
plans, and if, with respect to each plan year that the plan is top-heavy, the participant
has received an allocation of employer contributions and forfeitures to his account
under such defined contribution plan or plans which is equal to or greater than
5% of his "compensation" (within the meaning of Section 415 of the Internal Revenue
Code and as defined in Section 4.1(A) hereof, as limited by Section 401(a)(17) of
the Internal Revenue Code) which he received during such plan year from the employers
maintaining plans included in the Aggregation Group, the minimum benefit described
above in this Section 4.6(D) shall not apply to such participant.
For the purposes of Section 4.6(C)(1) above, a participant's "IRC 416 Final
Average Monthly Compensation" shall be equal to his average monthly rate of "compensation"
(within the meaning of Section 415 of the Internal Revenue Code and as defined in
Section 4.1(A) hereof, as
92
- 87 -
limited by Section 401(a)(17) of the Internal Revenue Code) for the five consecutive
calendar years, which are prior to the January 1st immediately following (i) the
date of the participant's retirement or termination of service or (ii) the close
of the last plan year in which the plan is top-heavy, whichever is earlier, during
which he received the highest aggregate compensation. Such average monthly rate
of compensation will be determined by dividing the total of such compensation that
he received during such five-consecutive-calendar year period from the employers
maintaining plans included in the Aggregation Group by the product equal to 12 times
the number of years of Vesting Service which he accrued during such five-consecutive-calendar-year.
In the event that the participant does not receive both compensation and Vesting
Service during a calendar year or calendar years, such calendar year or calendar
years during which he did not receive both compensation and Vesting Service shall
be ignored and excluded in determining the five consecutive calendar years during
which he received the highest aggregate compensation.
(D) Maximum Amount of Retirement Income Due to Restrictions of Section
416(h) of the Code if Plan is Top-Heavy: Any provision of Section 4.1(A) hereof
to the contrary notwithstanding, the monthly retirement income payable in the form
and manner described in Section 4.1(A) hereof during any plan year that the plan
is top-heavy to a participant hereunder who has Credited Service under the plan
which was accrued while he was a participant in both a defined contribution plan
and a defined benefit plan, which are either maintained by the Employer or included
in the Aggregation Group, shall not exceed an amount equal to:
(1) the smaller of:
(a) the maximum amount of monthly retirement
income determined under Section 4.1(A)(1)(a)
hereof; or
93
- 88 -
(b) the maximum amount of monthly retirement
income determined under Section 4.1(A)(1)(b)
hereof multiplied by 1.4;
multiplied by
(2) the excess of (a) 1.0 over (b) his "IRC 416 Adjusted
Defined Contribution Plan Fraction" (where such
fraction shall be determined in the manner described
in Section 415(e) of the Internal Revenue Code but
substituting "1.0" for "1.25" in paragraph (3)(B) of
said Section 415(e) as prescribed in Section 416(h)
of said Code).
4.7 - PARTICIPATION AND BENEFITS FOR LEASED EMPLOYEES
Unless the plan is otherwise excluded by applicable regulations from the
requirements of Section 414(n) of the Internal Revenue Code, in the event that,
on or after January 1, 1984, the Employer or a designated nonparticipating employer
receives services from a "leased employee" (within the meaning of Section 414(n)
of the Internal Revenue Code), such leased employee shall not qualify as an Employee
as defined herein. In the event that any such former leased employee subsequently
becomes an Employee as defined herein, the total period on or after January 1, 1984
that he provided services to the Employer or designated nonparticipating employer
as a leased employee shall be treated under the plan in determining his nonforfeitable
right to his accrued benefits and his eligibility to become a participant in the
plan in the manner described in Section 1.5(A) hereof as though he had been an employee
of a designated non-participating employer during such period of service (but such
service shall not be included in the service that is used to calculate any benefits
which he accrues under the plan).
94
- 89 -
SECTION 5
MISCELLANEOUS PROVISIONS REGARDING PARTICIPANTS
5.1 - PARTICIPANTS TO FURNISH REQUIRED INFORMATION
Each participant and his beneficiaries and joint pensioners will furnish
to the Committee such information as the Committee considers necessary or desirable
for purposes of administering the plan, and the provisions of the plan respecting
any payments thereunder are conditional upon the participant's, beneficiary's or
joint pensioner's furnishing promptly such true, full and complete information as
the Committee may request.
Each participant will submit proof of his age and marital status and proof
of the age of each beneficiary and joint pensioner designated or selected by him
to the Committee at such time as required by the Committee. The Committee will,
if such proof of age and marital status is not submitted as required, use as conclusive
evidence thereof, such information as is deemed by it to be reliable, regardless
of the source of such information. Any adjustment required by reason of lack of
proof or the misstatement of the age of persons entitled to benefits hereunder,
by the participant or otherwise, will be in such manner as the Committee deems equitable.
Any notice or information which, according to the terms of the plan or
the rules of the Committee, must be filed with the Committee, shall be deemed so
filed at the time that it is actually received by the Committee.
The Employer, the Committee, and any person or persons involved in the
administration of the plan shall be entitled to rely upon any certification, statement,
or representation made or evidence furnished by an employee, participant, beneficiary
or joint pensioner with respect to his age or other facts required to be determined
under any of the provisions of the plan, and shall not be liable on account of the
payment of any monies or the doing of any act or failure to act in
95
- 90 -
reliance thereon. Any such certification, statement, representation, or evidence,
upon being duly made or furnished, shall be conclusively binding upon the person
furnishing same; but it shall not be binding upon the Employer, the Committee, or
any other person or persons involved in the administration of the plan, and nothing
herein contained shall be construed to prevent any of such parties from contesting
any such certification, statement, representation, or evidence or to relieve the
employee, participant, beneficiary or joint pensioner from the duty of submitting
satisfactory proof of any such fact.
5.2 - BENEFICIARIES
Subject to the provisions of the following paragraphs of this section,
each participant may, on a form provided for that purpose, signed and filed with
the Committee, designate a beneficiary to receive the benefit, if any, which may
be payable under the plan in the event of his death, and each designation may be
revoked by such participant by signing and filing with the Committee a new designation
of beneficiary form.
If a deceased participant, who has been married to his spouse throughout
the one-year period immediately preceding his death, has designated a person other
than his spouse as his beneficiary and such spouse has not consented, on or after
the first day of the plan year in which the participant attained the age of 35 years
(or such other election period described in Section 4.1(D)) and in accordance with
the provisions of Section 4.1(G) hereof, to such other person being designated as
the beneficiary, the provisions of Section 4.1(D) hereof, relating to the qualified
preretirement survivor annuity payable to his surviving spouse, will apply in the
event of his death on or after his Initial Vesting Date, and the participant will
automatically be deemed to have changed his designation of beneficiary to the extent
necessary to comply with the provisions of Section 4.1(D).
96
- 91 -
If a deceased participant who had a spouse at the date of his death failed
to designate a beneficiary in accordance with the provisions of this section, he
shall be deemed to have designated his spouse as his beneficiary. If a deceased
participant who had no spouse at the date of his death failed to designate a beneficiary
in accordance with the provisions of this section or if a deceased participant (whether
or not he has a surviving spouse at the date of his death) had previously designated
a beneficiary but no designated beneficiary is surviving at the date of his death,
the death benefit, if any, which may be payable under the plan with respect to such
decreased participant may be paid, in the discretion of the Committee but subject
to the provisions of Sections 4.1(D) and 4.1(G) hereof if the spouse of such deceased
participant is surviving, either to:
(a) any one or more of the persons comprising the group consisting
of the participant's spouse, the participant's descendants,
the participant's parents or the participant's heirs-at-law,
and the Committee may direct the payment of the entire benefit
to any member of such group or the apportionment of such
benefit among any two or more of them in such shares as the
Committee, in its sole discretion, shall determine; or
(b) the estate of such deceased participant;
or in the event the Committee does not so direct any of such payments, the Committee
may elect to have a court of applicable jurisdiction determine to whom a payment
or payments shall be paid. In any of such cases the person to whom a payment is
to be paid may elect that the commuted value of the remaining monthly income payments
be paid in a lump sum; provided, however, if the recipient is the participant's
spouse, the written consent of such spouse shall be required. Any payment made to
any person pursuant to the power and discretion conferred upon the Committee by
the provisions of this Section 5.2 shall operate as a complete discharge of all
obligations under
97
- 92 -
the plan with respect to such deceased participant and shall not be subject to
review by anyone but shall be final, binding and conclusive on all persons ever
interested hereunder.
5.3 - CONTINGENT BENEFICIARIES
In the event of the death of a beneficiary who survives the participant
and who, at the beneficiary's death, is receiving benefits pursuant to the provisions
of the plan within any certain period specified under the plan with respect to which
death benefits are payable under the plan after the participant's death, the same
amount of monthly retirement income which the beneficiary was receiving shall be
payable for the remainder of such specified certain period to a person designated
by the participant (in the manner provided in Section 5.2) to receive the remaining
death benefits, if any, payable in the event of such contingency or, if no person
was so named, then to a person designated by the beneficiary (in the manner provided
in Section 5.2) of the deceased participant to receive the remaining death benefits,
if any, payable in the event of such contingency; provided, however, that if no
person so designated be living upon the occurrence of such contingency, then the
remaining death benefits, if any, shall be payable for the remainder of such specified
certain period, in the discretion of the Committee, either to (a) all or any one
or more of the persons comprising the group consisting of the participant's spouse,
the beneficiary's spouse, the participant's descendants, the beneficiary's descendants,
the participant's parents, the beneficiary's parents, the participant's heirs-at-law,
or the beneficiary's heirs-at-law or (b) the estate of such deceased beneficiary;
or in the event the Committee does not so direct any of such payments, the Committee
may elect to have a court of applicable jurisdiction determine to whom a payment
or payments shall be paid; provided, further, that in any of such cases the person
to whom a payment is to be paid may elect that the commuted value of the monthly
retirement income payments due for the remainder of the specified certain period
be paid in a lump sum, but,
98
- 93 -
if the recipient is the participant's spouse, the written consent of such spouse
shall be required. Any payments made to any person pursuant to the power and discretion
conferred upon the Committee by the provisions of this Section 5.3 shall operate
as a complete discharge of all obligations under the plan with respect to such deceased
beneficiary and shall not be subject to review by anyone but shall be final, binding
and conclusive on all persons ever interested hereunder.
5.4 - PARTICIPANTS' RIGHTS IN TRUST FUND
No participant or other person shall have any interest in or any right
in, to or under the trust fund, or any part of the assets thereof, except as to
the extent expressly provided in the plan.
5.5 - BENEFITS NOT ASSIGNABLE
Except to the extent required to comply with a qualified domestic relations
order as described in Sections 401(a)(13) and 414(p) of the Internal Revenue Code,
no benefits, rights or accounts shall exist under the plan which are subject in
any manner to voluntary or involuntary anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate,
transfer, assign, pledge, encumber or charge the same shall be null and void; nor
shall any such benefit, right or account under the plan be in any manner liable
for or subject to the debts, contracts, liabilities, engagements, torts or other
obligations of the person entitled to such benefit, right or account; nor shall
any benefit, right or account under the plan constitute an asset in case of the
bankruptcy, receivership or divorce of any person entitled under the plan; and any
such benefit, right or account under the plan shall be payable only directly to
the participant or beneficiary, as the case may be. Where a qualified domestic relations
order has been received by the Committee, the terms and benefits of the plan will
be considered to have
99
- 94 -
been modified with respect to the participant affected to the extent that such
order requires benefits to be paid to specified individuals other than the participant.
5.6 - BENEFITS PAYABLE TO MINORS AND INCOMPETENTS
Whenever any person entitled to payments under this plan shall be a minor
or under other legal disability or in the sole judgment of the Committee shall otherwise
be unable to apply such payments to his own best interest and advantage (as in the
case of illness, whether mental or physical, or where the person not under legal
disability is unable to preserve his estate for his own best interest), the Committee
may in the exercise of its discretion direct all or any portion of such payments
to be made in any one or more of the following ways unless claim shall have been
made therefor by an existing and duly appointed guardian, tutor, conservator, committee
or other duly appointed legal representative, in which event payment shall be made
to such representative:
(A) Directly to such person unless such person shall be an infant or
shall have been legally adjudicated incompetent at the time of
the payment;
(B) To the spouse, child, parent or other blood relative to be
expended on behalf of the person entitled or on behalf of those
dependents as to whom the person entitled has the duty of
support; or
(C) To a recognized charity or governmental institution to be
expended for the benefit of the person entitled or for the
benefit of those dependents as to whom the person entitled has
the duty of support.
The decision of the Committee will, in each case, be final and binding
upon
all persons, and the Committee shall not be obliged to see to the proper application
or expenditure of any payments so made. Any payment made pursuant to the power herein
conferred upon the Committee shall operate as a complete discharge of the obligations
of the trustee and of the Committee.
5.7 - CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN
100
- 95 -
The establishment and maintenance of the plan will not be construed as
conferring any legal rights upon any participant to the continuation of his employment
with the Employer, nor will the plan interfere with the right of the Employer to
discipline, lay off or discharge any participant. The adoption and maintenance of
the plan shall not be deemed to constitute a contract between the Employer and any
employee or to be a consideration for, inducement to, or condition of employment
of any person.
5.8 - NOTIFICATION OF MAILING ADDRESS
Each participant and other person entitled to benefits hereunder shall
file with the Committee from time to time, in writing, his post office address and
each change of post office address, and any check representing payment hereunder
and any communication addressed to a participant, a former participant, a beneficiary
or a pensioner hereunder at his last address filed with the Committee (or, if no
such address has been filed, then at his last address as indicated on the records
of the Employer) shall be binding on such person for all purposes of the plan, and
neither the Committee nor the trustee shall be obliged to search for or ascertain
the location of any such person.
If the Committee, for any reason, is in doubt as to whether retirement
income payments are being received by the person entitled thereto, it may, by registered
mail addressed to such person and to such person's designated beneficiary (or beneficiaries)
if any, at their address last known to the Committee, notify such person and his
beneficiary (or beneficiaries) that all unmailed and future retirement income payments
shall be henceforth withheld until the Committee is provided with evidence of such
person's continued life and his proper mailing address or with evidence of such
person's death. In the event that (i) such notification is mailed to such person
and his designated beneficiary (or beneficiaries), (ii) the Committee is not furnished
with evidence of such
101
-96-
person's continued life and proper mailing address or with evidence of his death
and (iii) the Committee is unable to find any person to whom payment is due under
the provisions of the plan, all retirement income and other benefit payments due
shall be forfeited; provided, however, if claim for any forfeited benefit is subsequently
made by any such person to whom payment is due under the plan, such forfeited benefits
due such person shall be reinstated.
5.9 - WRITTEN COMMUNICATIONS REQUIRED
Any notice, request, instruction, or other communication to be given or
made hereunder shall be in writing and either personally delivered to the addressee
or deposited in the United States mail fully postpaid and properly addressed to
such addressee at the last address for notice shown on the Committee's records.
5.10 - BENEFITS PAYABLE AT OFFICE OF TRUSTEE
All benefits hereunder, and installments thereof, shall be payable at
the
office of the trustee.
5.11 - APPEAL TO COMMITTEE
A participant or beneficiary who feels he is being denied any benefit
or
right provided under the plan shall have the right to file a written claim with
the Committee. All such claims shall be submitted on a form provided by the Committee
which shall be signed by the claimant and shall be considered filed on the date
the claim is received by the Committee.
Upon the receipt of such a claim and in the event the claim is denied,
the Committee shall, within 90 days after its receipt of such claim, provide such
claimant a written statement which shall be delivered or mailed to the claimant
by certified or registered mail to his last known address, which statement shall
contain the following:
(A) the specific reason or reasons for the denial of benefits;
102
- 97 -
(B) a specific reference to the pertinent provisions of the plan
upon which the denial is based;
(C) a description of any additional material or information which
is necessary; and
(D) an explanation of the review procedure provided below;
provided, however, in the event that special circumstances require an extension
of time for processing the claim, the period during which the Committee shall provide
such claimant with such written statement described above shall be not later than
180 days after receipt of the claimant's claim, but, in such event, the Committee
shall furnish the claimant, within 90 days after its receipt of such claim, written
notification of the extension explaining the circumstances requiring such extension
and the date that it is anticipated that such written statement will be furnished.
Within 60 days after receipt of a notice of a denial of benefits as provided
above, the claimant or his authorized representative may request, in writing, to
appear before the Committee for a review of his claim. In conducting its review,
the Committee shall consider any written statement or other evidence presented by
the claimant or his authorized representative in support of his claim. The Committee
shall give the claimant and his authorized representative reasonable access to all
pertinent documents necessary for the preparation of his claim.
Within 60 days after receipt by the Committee of a written application
for review of his claim, the Committee shall notify the claimant of its decision
by delivery or by certified or registered mail to his last known address; provided,
however, in the event that special circumstances require an extension of time for
processing such application, the Committee shall so notify the claimant of its decision
not later than 120 days after receipt of such application, but, in such event, the
Committee shall furnish the claimant, within 60 days after its receipt of such
103
- 98 -
application, written notification of the extension explaining the circumstances
requiring such extension and the date that it is anticipated that its decision will
be furnished. The decision of the Committee shall be in writing and shall include
the specific reasons for the decision presented in a manner calculated to be understood
by the claimant and shall contain references to all relevant plan provisions on
which the decision was based. The decision of the Committee shall be final and conclusive.
104
- 99 -
SECTION 6
MISCELLANEOUS PROVISIONS REGARDING THE EMPLOYER
6.1 - CONTRIBUTIONS
No contributions shall be required of any participant. The Employer intends,
but does not guarantee, to make annual contributions in amounts at least equal to
the amounts, if any, required to meet the minimum funding requirements of Section
412 of the Internal Revenue Code of 1986, as now or hereafter amended, as specified
in the actuary's valuation reports for the applicable periods of time. Subject to
applicable provisions of law, neither the Employer nor any of its officers, agents
nor any member of its board of directors, nor any partner or sole proprietor, guarantees,
in any manner, the payment of benefits under the plan.
6.2 - EMPLOYER'S CONTRIBUTIONS IRREVOCABLE
The Employer shall have no right, title or interest in the trust fund
or
in any part thereof, and no contributions made thereto shall revert to the Employer
except such part of the trust fund, if any, which remains therein after the satisfaction
of all liabilities to persons entitled to benefits under the plan and except as
provided in the following paragraph.
All contributions to the plan are made subject to the qualification of
the plan under Section 401 of the Internal Revenue Code of 1986, as now or hereafter
amended, and to their deductibility under Section 404 of said Code. In the event
that the plan represents a newly established retirement plan (and not an amendment
of an existing retirement plan) with respect to an Employer and such qualification
of the plan is denied, the total contributions of the Employer, adjusted for any
earnings or losses of the trust fund attributable thereto, shall be returned to
the Employer within one year of the date of denial of qualification. In the event
that a contribution either is made by a good faith mistake of fact or is the result
of a good faith mistake in determining the
105
- 100 -
deductibility of such contribution, the excess of the amount contributed over
the
amount that would have been contributed if there had not been such a mistake, with
such excess, reduced by the net losses, if any, of the trust fund attributable thereto
(but without any increase due to the net earnings, if any, of the trust fund attributable
thereto), shall be returned to the Employer within one year of the date of the mistaken
payment or the disallowance of the deduction, as the case may be.
6.3 - FORFEITURES
Forfeitures shall not be used to increase the benefits that any employee
would otherwise receive under the plan at any time prior to the termination of the
plan but shall be anticipated in determining the costs under the plan.
6.4 - AMENDMENT OF PLAN
The plan may be amended from time to time in any respect whatever by resolution
of the board of directors of the Company specifying such amendment, subject only
to the following limitations:
(A) Under no condition shall such amendment result in or permit
the return or repayment to any Employer of any property held
or acquired by the trustee hereunder or the proceeds thereof
or result in or permit the distribution of any such property
for the benefit of anyone other than the participants and
their beneficiaries or joint pensioners, except to the extent
provided by Section 6.6 and Section 4.5 hereof with respect to
expenses of administration and termination of the plan,
respectively.
(B) Under no condition shall such amendment change the duties or
responsibilities of the trustee hereunder without its written
consent.
With respect to participants who have at least one Hour of Service in
any
plan year beginning after January 1, 1990, if the plan's vesting schedule is amended
or the plan is amended in any way that directly or indirectly affects the computation
of a participant's vested interest, each participant with at least three years of
Vesting Service may elect within a reasonable period of time
106
- 101 -
after the adoption of the amendment or change, to have his vested interest computed
under the plan without regard to such amendment or change. The period during which
the election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the later of 60 days after the amendment is adopted
or deemed to be made, 60 days after the amendment becomes effective, or 60 days
after the participant is issued written notice of the amendment by the Employer
or Committee.
Subject to the foregoing limitations, any amendment may be made retroactively
which, in the judgment of the Committee, is necessary or advisable provided that
such retroactive amendment does not deprive a participant, without his consent,
of a right to receive benefits hereunder which have already vested and matured in
such participant, except such notification or amendment as shall be necessary to
comply with any laws or regulations of the United States or of any state to qualify
this as a tax-exempt plan and trust.
The participation in the plan of Employers other than the Company shall
not limit the power of the Company under the foregoing provisions; provided, however,
that the Company shall deliver a copy of each amendment to the plan to each other
Employer within 90 days of such amendment. Amendments by the Company shall be binding
upon all other Employers to the extent accepted by such other Employers. Acceptance
by each such other Employer shall be presumed. Each Employer may modify the provisions
of the plan as it pertains only to its own employees by the adoption, by formal
action on its part in the manner described in Section 6.7 hereof, of a supplement
to the plan specifying such modifications which shall pertain only to its employees;
and each Employer shall have the right to withdraw from the plan by formal action
on its part, in the manner described in Section 6.7 hereof, specifying its determination
to
107
- 102 -
withdraw. Any such withdrawing Employer shall furnish the Committee and the trustee
with evidence of the formal action of its determination to withdraw.
Any such withdrawal may be accompanied by such modifications to the plan
as such Employer shall deem proper to continue a retirement plan for its employees
separate and distinct from the retirement plan herein set forth. A withdrawal by
any Employer without any provision for the continuation of a plan for its employees
shall constitute a termination of the plan with respect to that Employer. Withdrawal
from the plan by any Employer shall not affect the continued operation of the plan
with respect to the other Employers.
6.5 - TERMINATION OF PLAN
The plan may be terminated by the Employers at any time by (1) formal action,
in the manner described in Section 6.7 hereof, on the part of each Employer then
a party to the plan specifying (a) that the plan is being terminated and (b) the
date as of which the termination is to be effective and (2) notifying the Pension
Benefit Guaranty Corporation, the Committee and the trustee of such termination
at least 10 days before the date of the proposed termination. Any successor business
to an Employer may provide for continuation of the plan by formal action on its
part in the manner described in Section 6.7 hereof. The plan may be terminated in
the manner described above with respect to one, but less than all, of the Employers
theretofore parties hereto and the plan continued for the remaining Employer or
Employers. The plan shall automatically terminate as to a particular Employer only
upon adjudication by a court of competent jurisdiction that such Employer is bankrupt
or insolvent (whether such proceedings be voluntary or involuntary), upon dissolution
of such Employer or upon its liquidation, merger or consolidation without provisions
being made by its successor, if any, for the continuation of the plan.
108
- 103 -
6.6 - EXPENSES OF ADMINISTRATION
The Employer may pay all expenses incurred in the establishment and administration
of the plan, including expenses and fees of the trustee, but it shall not be obligated
to do so, and any such expenses not so paid by the Employer shall be paid from the
trust fund.
6.7 - FORMAL ACTION BY EMPLOYER
Any formal action herein permitted or required to be taken by an Employer
shall be:
(a) if and when a partnership, by written instrument executed by
one or more of its general partners or by written instrument
executed by a person or group of persons who has been
authorized by written instrument executed by one or more
general partners as having authority to take such action;
(b) if and when a proprietorship, by written instrument executed
by the proprietor or by written instrument executed by a
person or group of persons who has been authorized by written
instrument executed by the proprietor as having authority to
take such action;
(c) if and when a corporation, by resolution of its board of
directors or other governing board, or by written instrument
executed by a person or group of persons who has been
authorized by resolution of its board of directors or other
governing board as having authority to take such action; or
(d) if and when a joint venture, by formal action on the part of
the joint venturers in the manner described above.
109
- 104 -
SECTION 7
ADMINISTRATION
7.1 - ADMINISTRATION BY COMMITTEE
The plan will be administered by the Retirement Committee appointed by
the board of directors of the Company. Such Committee will consist of (a) a chairman
and at least two additional members or (b) a single individual. Each member may,
but need not, be a director, proprietor, partner, officer or employee of any Employer,
and each such member shall be appointed by the board of directors of the Company
to serve until his successor shall be appointed in like manner. Any member of the
Committee may resign by delivering.his written resignation to the board of directors
of the Company and to the other members, if any, of the Committee. The board of
directors of the Company may remove any member of the Committee by so notifying
the member and other Committee members, if any, in writing. Vacancies on the Committee
shall be filed by action of the board of directors of the Company. The Committee
shall be the administrator of the plan.
7.2 - OFFICERS AND EMPLOYEES OF COMMITTEE
The Committee may appoint a secretary who may, but need not, be a member
of the Committee and may employ such agents, clerical and other services, legal
counsel, accountants and actuaries as may be required for the purpose of administering
the plan. Any person or firm so employed may be a person or firm then, theretofore
or thereafter serving the Employer in any capacity. The Committee and any individual
member of the Committee and any agent thereof shall be fully protected when acting
in a prudent manner and relying in good faith upon the advice of the following professional
consultants or advisors employed by the Employer or the Committee: any attorney
insofar as legal matters are concerned, any certified public accountant insofar
as
110
- 105 -
accounting matters are concerned, and any enrolled actuary insofar as actuarial
matters are concerned.
7.3 - ACTION BY COMMITTEE
A majority of the members of the Committee shall constitute a quorum for
the transaction of business and shall have full power to act hereunder. The Committee
may act either at a meeting at which a quorum is present or by a writing subscribed
by at least a majority of the members of the Committee then serving. Any written
memorandum signed by the secretary or any member of the Committee who has been authorized
to act on behalf of the Committee shall have the same force and effect as a formal
resolution adopted in open meeting. Minutes of all meetings of the Committee and
a record of any action taken by the Committee shall be kept in written form by the
secretary appointed by the Committee or, if no secretary has been appointed by the
Committee, by an individual member of the Committee. The Committee shall give to
the trustee any order, direction, consent or advice required under the terms of
the trust agreement, and the trustee shall be entitled to rely on any instrument
delivered to it and signed by the secretary or any authorized member of the Committee
as evidencing the action of the Committee.
A member of the Committee may not vote or decide upon any matter relating
solely to himself or vote in any case in which his individual right or claim to
any benefit under the plan is particularly involved. If, in any case in which any
Committee member is so disqualified to act, the remaining members cannot agree or
if there is only one individual member of the Committee, the board of directors
of the Company will appoint a temporary substitute member to exercise all of the
powers of a qualified member concerning the matter in which the disqualified member
is not qualified to act.
7.4 - RULES AND REGULATIONS OF COMMITTEE
111
- 106 -
The Committee shall have the authority to make such rules and regulations
and to take such action as may be necessary to carry out the provisions of the plan
and will, in its sole discretion, decide any questions arising in the administration,
interpretation and application of the plan, including but not limited to determining
eligibility for benefits, the amount, manner and time of payment of any benefits
under the plan, and the status and rights of participants and other persons under
the plan, which decisions shall be conclusive and binding on all parties. The Committee
may allocate or delegate any part of its authority and duties as it deems expedient.
7.5 - POWERS OF COMMITTEE
In order to effectuate the purposes of the plan, the Committee shall have
the power, in its sole discretion, to construe the plan and to make equitable adjustments
for any mistakes or errors made in the administration of the plan, and all such
actions or determinations made by the Committee in good faith shall not be subject
to review by anyone. The Committee is given the power to appoint, in its sole discretion,
in accordance with the provisions of the trust agreement, one or more Investment
Managers to manage, including the power to acquire or dispose of, all or any portion
of the assets of the plan and trust fund.
7.6 - DUTIES OF COMMITTEE
The Committee shall, as a part of its general duty to supervise and administer
the plan:
(A) determine all facts and maintain records with respect to any
employee's age, length of service, Vesting Service, Credited
Service and date of initial coverage under the plan, and by
application of the facts so determined and any other facts
deemed material, determine the amount, if any, of benefit
payable under the plan on behalf of a participant;
(B) establish, carry out and periodically review a funding policy
and method consistent with the objectives of the plan and the
applicable lawful requirements of Title I of the Employee
Retirement Income Security Act of 1974, as amended; provided,
however, that any decisions pertaining to the amount and
timing of contributions by the Employer to the trust fund are
delegated to the Employer;
112
- 107 -
(C) give the trustee specific directions in writing with respect
to:
(1) the making of distribution payments, giving the names
of the payees, the amounts to be paid and the time or
times when payments shall be made; and
(2) the making of any other payments which the trustee is
not by the terms of the trust agreement authorized to
make without a direction in writing of the Committee;
(D) furnish the trustee with such information (including
information relative to the liquidity needs of the plan) as is
deemed necessary for the trustee to carry out the purposes of
the trust agreement;
(E) comply with all applicable lawful reporting and disclosure
requirements of the Employee Retirement Income Security Act of
1974, as amended;
(F) engage on behalf of all plan participants an independent
qualified public accountant to examine the financial
statements and other records of the plan for the purposes of
an annual audit and opinion as to whether the financial
statements and schedules in the annual report of the plan are
presented fairly in conformity with generally accepted
accounting principles, unless such audit is waived by the
Secretary of Labor or his delegate or unless such is otherwise
not required; and
(G) engage on behalf of all plan participants an enrolled actuary
to prepare required actuarial statements, unless this
requirement is waived by the Secretary of Labor or his
delegate or unless such actuarial statements are otherwise not
required.
The foregoing list of express duties is not intended to be either complete
or conclusive, and the Committee shall, in addition, exercise such other powers
and perform such other duties as it may deem necessary, desirable, advisable or
proper for the supervision and administration of the plan.
7.7 - INDEMNIFICATION OF MEMBERS OF COMMITTEE
To the extent not covered by insurance or if there is a failure to provide
full insurance coverage for any reason and to the extent permissible under corporate
by-laws and other applicable laws and regulations, the Company agrees to hold harmless
and indemnify the members of the Committee against any and all claims and causes
of action by or on behalf of any and all parties
113
- 108 -
whomsoever, and all losses therefrom, including without limitation costs of defense
and attorneys' fees, based upon or arising out of any act or omission relating to
or in connection with the plan and trust agreement other than losses resulting from
any such person's fraud or willful misconduct.
7.8 - ACTUARY
The actuary will do such technical and advisory work as the Committee
or
the Employer may request, including analysis of the experience of the plan from
time to time, the preparation of actuarial tables for the making of computations
thereunder, and the submission of an actuarial report each year to the Company and
the Committee, which report shall contain an actuarial valuation showing the financial
condition of the plan, a statement of the contributions to be made by the Employers
for the ensuing year, and such other information as may be required by the Committee.
The actuary shall be appointed by the Committee with the approval of the
Company to serve as long as it is agreeable to the Committee, the Company and the
actuary. In computing benefits to which a participant may be entitled upon his retirement
or termination, such assumptions of mortality and interest rates as are specified
in the plan shall be used. The actuarial assumptions specified in the plan and the
computations based thereon shall be conclusive and binding on all persons whomsoever.
Neither the Committee nor the Employer shall be liable for any mistakes or errors
in any computations made in good faith, and the trustee shall not be liable for
any such mistakes or errors in any event.
7.9 - FIDUCIARIES
The trustee is the fiduciary hereunder with respect to the powers, duties
and responsibilities of investment of the trust fund, and the Committee is the named
fiduciary hereunder and is the fiduciary hereunder with respect to the other powers,
duties and responsibilities of the
114
-109-
administration of the plan; provided, however, that certain powers, duties and
responsibilities
of each of said fiduciaries are specifically delegated to others under the provisions
of the plan and trust agreement, and other powers, duties and responsibilities of
any fiduciaries may be delegated by written agreement to others to the extent permitted
under the provisions of the plan and trust agreement.
The powers and duties of each fiduciary hereunder, whether or not a named
fiduciary, shall be limited to those specifically delegated to each of them under
the terms of the plan and trust agreement. It is intended that the provisions of
the plan and trust agreement allocate to each fiduciary the individual responsibilities
for the prudent execution of the functions assigned to each fiduciary. None of the
allocated responsibilities or any other responsibilities shall be shared by two
or more fiduciaries unless such sharing shall be provided by a specific provision
in the plan or the trust agreement. If any of the enumerated responsibilities of
a fiduciary are specifically waived by the Secretary of Labor, then such enumerated
responsibilities shall also be deemed to be waived for the purposes of the plan
and trust agreement. Whenever one fiduciary is required by the plan or the trust
agreement to follow the directions of another fiduciary, the two fiduciaries shall
not be deemed to have been assigned a share of any responsibility, but the responsibility
of the fiduciary giving the directions shall be deemed to be his sole responsibility
and the responsibility of the fiduciary receiving those directions shall be to follow
same insofar as such instructions on their face are proper under applicable law.
Any fiduciary may employ one or more persons to render advice with respect to any
responsibility such fiduciary has under the plan or trust agreement.
Each fiduciary may, but need not, be a director, proprietor, partner,
officer
or employee of the Employer. Nothing in the plan shall be construed to prohibit
any fiduciary from:
115
- 110 -
(a) serving in more than one fiduciary capacity with respect to
the plan and trust agreement;
(b) receiving any benefit to which he may be entitled as a
participant or beneficiary in the plan, so long as the benefit
is computed and paid on a basis which is consistent with the
terms of the plan as applied to all other participants and
beneficiaries; or
(c) receiving any reasonable compensation for services rendered,
or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with respect to the
plan, except that no person so serving who already receives
full-time pay from an Employer shall receive compensation from
such plan, except for reimbursement of expenses properly and
actually incurred.
Each fiduciary shall be bonded as required by applicable law or statute
of the United States, or of any state having appropriate jurisdiction, unless such
bond may under such law or statute be waived by the parties to the trust agreement.
The Employer shall pay the cost of bonding any fiduciary who is an employee of the
Employer.
7.10 - APPLICABLE LAW
The plan will, unless superseded by federal law, be construed and enforced
according to the laws of the state comprising the situs of the Company and all provisions
of the plan will, unless superseded by federal law, be administered according to
the laws of the said state.
SECTION 8
TRUST FUND
8.1 - PURPOSE OF TRUST FUND
A trust fund has been created and will be maintained for the purposes
of the plan, and the moneys thereof will be invested in accordance with the terms
of the agreement and declaration of trust which forms a part of the plan. All contributions
will be paid into the trust fund, and all benefits under the plan will be paid from
the trust fund, except to the extent provided by Section 3.4 hereof.
116
- 111 -
8.2 - BENEFITS SUPPORTED ONLY BY TRUST FUND
Subject to applicable provisions of law, any person having any claim under
the plan will look solely to the assets of the trust fund for satisfaction.
8.3 - TRUST FUND APPLICABLE ONLY TO PAYMENT OF BENEFITS
The trust fund will be used and applied only in accordance with the provisions
of the plan, to provide the benefits thereof, and no part of the corpus or income
of the trust fund will be used for, or diverted to, purposes other than for the
exclusive benefit of participants and other persons thereunder entitled to benefits,
except to the extent provided in Section 6.6 and Section 4.5 hereof with respect
to expenses of administration and termination of the plan, respectively.
IN WITNESS WHEREOF, FARAH INCORPORATED has caused this instrument to be
executed by its duly authorized officer on this 31 day of December, 1994, effective
as of January 1, 1990, except to the extent otherwise indicated.
FARAH INCORPORATED
By /s/ James C. Swaim
--------------------------------
James C. Swaim
Executive Vice President
117
SUPPLEMENT A
TO THE
FARAH U.S.A., INC. BARGAINING UNIT PENSION PLAN
MERGER OF PLAN EFFECTIVE DECEMBER 31, 1990
A-1 In General. Notwithstanding any other provisions of the plan, effective
as of 9:00 a.m. on December 31, 1990 (the 'merger date'), the Farah Retiree Plan
(the 'Retiree Plan') shall be merged with and into the plan and the following provisions
shall apply:
(a) Assets and liabilities of the Retiree Plan shall be transferred in
cash
or in kind to the plan on the merger date or as soon as practicable thereafter.
(b) Notwithstanding Section 1.7, Value Slacks, Inc. shall be considered
an Employer (as defined in Section 1.1(A)(2) of the plan) as of the merger date,
but only to the extent necessary for participants in the Retiree Plan to receive
benefits under the plan. No employees or former employees of Value Slacks, Inc.
shall become participants in the plan because of Value Slacks, Inc. becoming an
Employer under the plan for the purpose described in the preceding sentence, except
participants in the Retiree Plan as of the merger date.
(c) Participants in the Retiree Plan shall both become participants in
the
plan and be credited for purposes of the plan with their Compensation, Credited
Service, Vesting Service and benefits under the Retiree Plan as of the merger date.
Participants' accrued benefits under the Retiree Plan which are transferred to this
plan shall become accrued benefits under this plan. A Participant in the Retiree
Plan who becomes a participant in the plan on the merger date shall not accrue any
additional benefits from and after the merger date under this plan and shall be
entitled to receive a benefit on and after the merger date under this plan not less
than the benefit that he would have been entitled to receive under the Retiree Plan
immediately before the merger date if the Retiree Plan had terminated at that time.
(d) All elections, waivers, consents, designations, directions, qualified
domestic relations orders and other exercises of rights and privileges under the
Retiree Plan shall be deemed effective and applicable with respect to the plan as
of the merger date.
(e) The officers of the Company may adopt such further amendments to the
plan, including amendments to the plan on or after the merger date, as may be necessary
to comply with applicable Internal Revenue Service requirements and any modifications
that the officers of the Company deem necessary or desirable.
A-2 Distributions. To the extent that the Retiree Plan provided additional
distribution options than those provided under the plan that must be preserved pursuant
to Section 411(d)(6) of the Internal Revenue Code, such distribution options are
preserved with respect to the participants covered by this Supplement A entitled
to those distribution options. Subject to the forgoing, the following additional
distribution options from Sections 1.4(E), 3.5 and the First Supplement to the Retiree
Plan are preserved with respect to such participants:
118
- 2 -
(a) Notwithstanding any provision of the plan to the contrary, in lieu
of the amount and form of retirement income payable in the event of normal retirement
as specified in Section 2.1 hereof and as subjected to the provisions of Section
4.1 hereof, a participant who retires on or after his normal retirement date may
elect to receive the actuarial equivalent of such retirement income in a lump sum
payment as of the date the first payment of retirement income would otherwise have
been made to him under the provisions of Section 2.1 hereof by making written application
for the same to the Committee and obtaining a written spousal consent, witnessed
by a plan representative or a notary public; provided, however, that no spousal
consent has to be obtained if the participant's lump sum payment will not exceed
$3,500 or if it is established to the satisfaction of the Committee that such consent
may not be obtained because there is no spouse, the spouse cannot be located or
because of such other circumstances as the Secretary of the Treasury or his delegate
may prescribe. The actuarial equivalent of the retirement income otherwise payable
to the participant described above shall be based upon the mortality and interest
assumptions which are being used as of the date of the participant's retirement
to determine actuarially equivalent values; provided, however, that the interest
assumption used to compute the amount of any such lump sum payment may not be greater
than the interest rate which would be used by the Pension Benefit Guaranty Corporation
for purposes of determining the present value of a lump sum distribution on plan
termination (as determined under Sections 401(a)(11) and 417 of the Internal Revenue
Code of 1986, as amended, and regulations issued pursuant thereto) as of the first
day of the plan year during which the distribution is made ("PBGC Rate"). A participant
who is reemployed by the Employer after receiving a lump sum payment pursuant to
this Section A-2(a) shall not be eligible to elect to receive a second lump sum
payment upon his retiring after being re-employed, regardless of whether the participant
repays the lump sum to the plan with interest thereon at the rate of 120 percent
of the federal mid-term rate (as in effect under Section 1274 of the Internal Revenue
Code of 1986, as amended, for the first month of a plan year), compounded annually,
for the period beginning on the date such lump sum was paid to the participant and
ending on the date the participant makes his repayment to the trust fund. Such repayment
may only be made before the earlier of: (1) 5 years from the date on which the participant
reenters the active service of the Employer, or (2) the close of the first period
of 5 consecutive one year Breaks in Service commencing after the date on which the
lump sum was paid to the participant because of his prior retirement.
(b) With respect to participants whose Credited Service includes service
which was accrued with the Company prior to January 1, 1978 and who were participants
in the Farah Manufacturing Company, Inc. Pension Plan as of December 31, 1977 (such
retirement plan as in effect prior to January 1, 1978 is herein referred to as the
"Superseded Plan"), if a participant has elected an optional form of payment prior
to January 1, 1978 and such election is in force on December 31, 1977 under the
terms of the Superseded Plan, such election shall continue in effect with respect
to benefits payable under the plan until a new election of an optional form is made
in accordance with Section 3.1 of the plan.
A-3 Limitation Rules. The revisions to Section 4.1(A) of the plan which
are effective as of January 1, 1992 shall be effective as of the merger date to
the participants covered by this Supplement A.