Bargaining Unit Pension Plan [Amendment No. 1] - Farah Inc.
FIRST AMENDMENT
OF
FARAH U.S.A., INC.
BARGAINING UNIT PENSION PLAN
WHEREAS, Farah Incorporated (the "company") maintains the Farah
U.S.A., Inc. Bargaining Unit Pension Plan (the "plan"); and
WHEREAS, the plan was last amended and restated on December 31,
1994, effective generally on January 1, 1990, and further
amendment of the plan now is considered desirable to bring the
plan into compliance with section 767(a) of the Uruguay Round
Agreements Act (P.L. 103-465), effective with respect to
distributions payable on or after January 1, 1996.
NOW, THEREFORE, by virtue and in exercise of the power reserved
to the company by Section 6.4 of the plan and delegated to the
undersigned officer by resolution of its Board of Directors
adopted at the March 13-15, 1995 meeting of the Board of
Directors, the plan be and it hereby is amended effective
January 1, 1996, as follows:
1. Section 1.1(A)(23) of the plan shall be deleted in its
entirety and the following section inserted in lieu thereof:
"(23) The term "actuarially equivalent" as used herein
means equality in value of the aggregate amounts
expected to be received under different forms of
payment based upon the same mortality and interest
rate assumptions. Unless specifically
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provided otherwise under the provisions hereof, the
mortality and interest rate assumptions used in
computing 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 shall be the Unisex
Pension Mortality Table Projected to 1984 (UP-1984
Table) and an 8% interest rate.
Any provisions above to the contrary
notwithstanding, if the applicable mortality table
described in Section 417(e)(3)(A)(ii)(I) of the
Internal Revenue Code of 1986, as amended, and
regulations issued pursuant thereto (which shall be
based on the prevailing commissioners' standard
table described in Section 807(d)(5)(A) of the
Internal Revenue Code of 1986, as amended, used to
determine reserves for group annuity contracts
issued on the date as of which present value is
being determined without regard to any other
subparagraph of Section 807(d)(5)) (the "Applicable
Mortality Table"), and the applicable interest rate
described in Section 417(e)(3)(A)(ii)(II) of the
Internal Revenue Code of 1986, as amended, and
regulations issued pursuant thereto (the annual rate
of interest on 30-year Treasury securities) as of
the first day of November immediately preceding the
plan year during which the distribution is made or
commences (the "Applicable Interest Rate"), will
result in a larger distribution being payable to the
participant or his beneficiary, as the case may be,
the interest rate and mortality assumptions used to
compute the amount of any actuarially equivalent
lump-sum distribution that is payable on
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or after January 1, 1996 or any other actuarially
equivalent form of distribution that initially
commences on or after January 1, 1996 and that
provides payments in the form of a decreasing
annuity or that provides payments for a period less
than the life of the participant (or, in the case of
a death benefit payable to his beneficiary under the
provisions of Section 2.3(G), 2.4(A)(3) or 2.4(B)
hereof, for a period less than the life of his
beneficiary) shall be equal to the Applicable
Mortality Table and Applicable Interest Rate. For
the above purposes, a joint and survivor annuity
form of payment which may decrease upon the death of
the participant or his joint pensioner shall be
deemed to be a non-decreasing annuity."
2. Section 3.2 of the plan shall be deleted in its entirety and
the following section inserted in lieu thereof:
"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 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 provision
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
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or termination of service to determine actuarially equivalent
values; provided, however, with respect to lump sums paid on
and after January 1, 1996, if the Applicable Mortality Table
and Applicable Interest Rate (as defined in Section
1.1(A)(23) hereof) in effect on the date the lump sum is
distributed will result in a larger lump sum being payable,
then the Applicable Mortality Table and Applicable Interest
Rate (as defined in Section 1.1(A)(23) hereof) in effect on
the date the lump sum is distributed will be used to
determine the actuarial equivalent. 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 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."
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3. Section 4.1(H) of the plan shall be deleted in its entirety
and the following section inserted in lieu thereof:
"(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 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. Notwithstanding any of the foregoing to the contrary,
this Section 4.1(H) shall not apply to the change of
actuarial assumptions effective as of January 1, 1996 made to
Sections 1.1(A)(23), 3.2 and Supplement A hereof in order to
bring the plan into compliance with section 767(a) of the
Uruguay Round Agreements Act (P.L. 103-465)."
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4. Section A-2(a) of Supplement A of the plan shall be deleted
in its entirety and the following section inserted in lieu
thereof:
"(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 determined actuarially
equivalent values; provided, however, that with respect to
lump sums paid on and after January 1, 1996, if the
Applicable Mortality Table and Applicable Interest Rate (as
defined in Section 1.1(A)(23) of the plan) in effect on the
date the lump sum is distributed will result in a larger lump
sum being payable, then the Applicable Mortality Table and
Applicable Interest Rate (as defined in Section 1.1(A)(23)
hereof) in effect on the date the lump sum is
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distributed will be used to determine the actuarial
equivalent. 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."
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IN WITNESS WHEREOF, Farah Incorporated has caused this amendment
to be executed on its behalf by its duly authorized officer as
of this 13th day of December, 1995.
FARAH INCORPORATED
By: /s/ James C. Swain
------------------------
Executive Vice President
of Farah Incorporated
(CORPORATE SEAL)
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