THE RETIREMENT PLAN OF
THE CONTINENTAL CORPORATION
(Amended and Restated As of January 1, 1994)
(Incorporates Amendments No. 1 Thru 35)
THE CONTINENTAL CORPORATION, a New York Corporation, and certain of
its affiliates have adopted the following Retirement Plan for the
benefit of those of their respective employees eligible to
participate therein as hereinafter provided.
ARTICLE I
Definitions
The following terms when used herein, unless the context clearly
indicates otherwise, shall have the meanings set forth below:
1.1 Active Service. A measure of time, expressed in years, used
in determining the vesting of a Benefit.
(a) With respect to periods prior to January 1, 1976, one
year of Active Service shall be credited for each 12
months of service in the employ of an Employer or an
Affiliated Corporation which is not an Employer. For the
purpose of this subsection (a), service shall include:
(i) any period of absence after at least 24 months of
full-time Employment during which a person receives
long-term disability benefits under the Company's
Long Term Disability Plan;
(ii) any period of absence on leave (in the granting of
which, persons in similar circumstances will be
treated in a uniform and nondiscriminatory manner),
with or without pay, provided the person returns to
full-time Employment at or prior to the termination
of the leave; and
(iii) any period of absence in service of the armed
forces of the United States in time of war or
national emergency provided the person returns
to full-time Employment within 90 days after
termination of his service in such armed
forces, or such longer period as his
employment rights are protected by law.
(b) With respect to periods beginning after December 31,
1975, one year of Active Service shall be credited for
each calendar year during which a person has at least
1000 Hours of Service and during any part of which such
person either is a Member or is at least 22 years of age;
provided, however, that if a person becomes a Member by
completing 1000 Hours of Service during the 12-month
period beginning on the date his Employment first began,
and if such 12-month period overlaps two calendar years
in neither of which such person completed 1000 Hours of
Service, such person shall be credited with one year of
Active Service. Service of individuals who are leased
employees or employed in noncovered employment for the
Employer controlled group and affiliated service group
will be counted for vesting purposes.
(c) With respect to an Employee who is in Employment on or
after January 1, 1985, the minimum age referred to in
Section 1.1(b) above shall be 18 rather than 22.
1.2 Administrator. An individual appointed by the Retirement Plan
Committee to serve in this capacity. The Administrator is not
precluded from serving as a Trustee.
1.3 Affiliated Corporation. A corporation during such time as it
is either:
(a) controlling, controlled by or under common control with
the Company, through ownership, directly or indirectly
through one or more intermediaries, of at least a
majority of the voting stock of the controlled
corporation; or
(b) a member of a controlled group of corporations (within
the meaning of Section 1563(a) of the Internal Revenue
Code, determined without regard to Sections 1563(a)(4)
and 1563(e)(3)(C) thereof) of which any Employer is a
member.
Except as may be provided in Exhibit A hereto, service
for a corporation shall be treated as service for an
Affiliated Corporation only if performed during such time
as such corporation is an Affiliated Corporation.
1.4 Beneficiary. The person designated pursuant to Section 4.2
hereof to receive payments in the event of the death of a
Member.
1.5 Benefit. An amount payable under Article III hereof.
1.6 Board of Directors. The Board of Directors of the Company.
1.7 Company. The Continental Corporation, a New York corporation.
1.8 Credited Service. A measure of time, expressed in months, but
not to exceed 480 months, used to determine the amount of a
person's Benefit.
(a) With respect to periods prior to January 1, 1976, one
month of Credited Service shall be credited for each full
month of service as an Employee for one or more
Employers. For the purpose of this subsection (a),
service shall include:
(i) any period of absence after at least 24 months of
full-time service for an Employer during which the
Employee receives long-term disability benefits
under the Company's Long Term Disability Plan;
(ii) any period of absence on leave (in the granting of
which, persons in similar circumstances will be
treated in a uniform and nondiscriminatory manner),
with or without pay, provided the Employee return
to the full-time service of an Employer at or prior
to the termination of the leave; and
(iii) any period of absence in the service of the
armed forces of the United States in time of
war or national emergency, provided the
Employee returns to the full-time service of
an Employer within 90 days after the
termination of his service in such armed
forces, or such longer period as his
employment rights are protected by law.
(b) With respect to periods after December 31, 1975, months
of Credited Service shall be credited on the basis of the
number of Hours of Service as an Employee for one or more
Employers completed during each calendar year, as
follows:
Hours of Service Months of
In Calendar Year Credited Service
900-1049 6
1050-1199 7
1200-1349 8
1350-1499 9
1500-1649 10
1650-1799 11
1800 or more 12
In the event an Employee completes less than 900 Hours of
Service for one or more Employers in either the calendar year
in which he becomes a Member, or the calendar year in which he
dies while in Employment or retires, such Employee shall be
credited with one month of Credited Service for each 150 Hours
of Service for one or more Employers completed during such
year.
(c) Notwithstanding the foregoing; any Employee (other than
a Reemployed Early Retiree) who is scheduled to work for
the regular workweek of an Employer at the Employee's
location (or who was scheduled to do so at the beginning
of a period of absence described in clauses (a), (b), (c)
of Section 1.15), shall be credited with one month of
Credited Service for each calendar month for which he is
entitled to be credited with at least one Hour of Service
under Section 1.15.
(d) The foregoing shall be construed so as to avoid
duplication of credit for Hours of Service for a single
hour. In no event shall Credited Service be credited
with respect to any person who does not become a Member
until after the Effective Date for any period during
which such person was not a Member.
1.9 Effective Date. January 1, 1972.
1.10 Employee. A person employed by an Employer excluding any
officer or director who is not compensated by regular salary.
1.11 Employer.
(a) The Company and those of its Affiliated Corporations it
designates.
(b) Corporations set forth in Exhibit A hereto.
Except as may be provided in Exhibit A hereto, service
for a corporation shall be treated as service for an
Employer only if performed during such time as such
corporation is an Employer.
1.12 Employment. That period of time during which a person is
credited with Hours of Service.
1.13 Equivalent Actuarial Value. An equivalent value computed
using the applicable factors set forth in Exhibit B, C or D to
this Plan. The implementation of the foregoing Equivalent
Actuarial Value Factors will not reduce the accrued benefit of
any Member as of January 1, 1984.
1.14 ERISA. The Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.15 Hour of Service. An hour for which a person is directly or
indirectly compensated (including back pay irrespective of
mitigation of damages) by an Employer or an Affiliated
Corporation which is not an employer. In addition, eight
Hours of Service shall be credited for each scheduled workday
for which a person is on:
(a) Any period of absence, after at least two years of Active
Service, during which such person receives long-term
disability benefits under the Company's Long-Term
Disability Plan;
(b) Any period of absence on leave without pay (in the
granting of which, persons in similar circumstances will
be treated in a uniform and nondiscriminatory manner),
provided the person returns to Employment at or prior to
the termination of the leave; and
(c) Any period of absence in the service of the armed forces
of the United States in time of war or national
emergency, provided the person returns to Employment
within 90 days after the termination of his service in
such armed forces or within such longer period as his
employment rights are protected by law.
Notwithstanding the foregoing, any Employee (other than
a Reemployed Early Retiree) who is scheduled to work for
the regular workweek of an Employer or an Affiliated
Corporation at the Employee's location (or who was
scheduled to do so at the beginning of a period of
absence described in clauses (a), (b), or (c) of the
preceding sentence), shall be credited with 190 Hours of
Service for each calendar month for which he is entitled
to be credited with at least one Hour of Service under
the preceding sentence. The foregoing shall be construed
so as to avoid duplication of credit for Hours of Service
for a single hour.
Hours of Service shall be computed and credited in
accordance with paragraphs (b) and (c) of section
2530.200b-2 of the Department of Labor regulations.
1.16 Member. An Employee who becomes a Member as provided in
Article II hereof.
1.17 Monthly Compensation. With respect to a Member terminating
his Employment after December 31, 1991, the salary or wages
paid or accrued by an Employer, or Affiliated Corporation
which is not an Employer, to a Member during any month of
Employment (prior to any reduction for tax-deferred
contributions to the Incentive Savings Plan or reduction in
order to reflect tax-exempt contributions or benefit
payments), plus any overtime pay, shift differentials, awards
under the Annual Management Incentive Plan or annual business
unit incentive plans and commissions, but excluding (without
limitation) fees, compensation paid or realized through the
Long Term Incentive Plan, Chairman's or President's award
programs, relocation plans or other special compensation (if
any), amounts paid under the Long Term Disability Plan,
reimbursement for expenses, and amounts paid or accrued with
respect to this Plan or any other Plan of deferred
compensation.
Notwithstanding the foregoing, if a Member is credited with
less than 150 Hours of Service in any full month of Employment
subsequent to December 31, 1975, his salary or wages, as
defined previously in this Section, plus overtime and shift
differentials, paid or accrued during such month, shall be
adjusted upward for purposes of Section 3.1 by multiplying it
by a fraction, the numerator of which shall be 150, and the
denominator of which shall be his Hours of Service for such
month. In no event will the sum of Monthly Compensation over
any consecutive 12 month period taken into account for
purposes of this Plan exceed $200,000 during 1989, or such
higher amount as increased by the Secretary of the Treasury
for years after 1988. In no event will the sum of Monthly
Compensation over any consecutive 12 month period taken into
account for purposes of this Plan exceed $150,000 during 1994,
or such higher amount as increased by the Secretary of the
Treasury for years after 1994.
For a Member terminating his Employment on or before December
31, 1991, the definition of Monthly Compensation will be that
as set forth in the Plan prior to January 1, 1992.
1.18 Normal Retirement Date. The later of the first day of the
month coinciding with or next following the date a Member
attains age 65 or the fifth anniversary of the time the Member
commences Employment. A Member will have a nonforfeitable
interest in his Normal Retirement Allowance on attaining his
Normal Retirement Age which is the later of the date a Member
attains age 65 or the fifth anniversary of the time the Member
commences Employment.
1.19 Plan. The retirement plan herein set forth or, if hereafter
amended, as so amended.
1.19A Plan Year. The Plan Year and the limitation year shall
be a calendar year.
1.20 Retirement Credit. The figure computed as provided in Section
3.1 hereof for measuring the amount of a Benefit payable under
the Plan.
1.21 Reemployed Early Retiree. Any Employee who retires prior to
his Normal Retirement Date, is reemployed, who is scheduled to
work less than and completes less than 900 Hours of Service
during the first twelve consecutive months of Employment or
each calendar year commencing after his date of reemployment.
In computing Hours of Service for purposes of this Section,
the next to last paragraph of Section 1.15 shall not apply.
1.22 Trust Agreement. The agreement described in Section 5.1
hereof.
1.23 Trust Fund. The fund described in Section 5.1 hereof.
1.24 Trustees. The individual trustees appointed by the
Compensation Committee as provided in Section 5.1 hereof or
any successor trustees designated in accordance with the terms
of the Trust Agreement.
1.25 Vesting Percentage. After December 31, 1982 the Vesting
Percentage for a Member who is an Employee after December 31,
1982 is the higher of the applicable percentages determined
under Tables A, B, or C below if such Member became an
Employee prior to January 1, 1983:
Table A
Years of Sum of Age Plus
Active Service Years of Active Service Percentage
Less than 5 Less than 45 0
5 45 or 46 50
6 47 or 48 60
7 49 or 50 70
8 51 or 52 80
9 53 or 54 90
10 or more 55 or more 100
The applicable percentage under Table A is the lesser of the
percentages corresponding to the Member's years of Active
Service, or to the sum of the Member's age and years of Active
Service.
Table B
Years of Active Service Percentage
Less than 10 0
10 50
11 60
12 70
13 80
14 90
15 or more 100
The applicable percentage under Table B is percentage
corresponding to the Member's years of Active Service.
Table C
Years of Active Service Percentage
Less than 10 0
10 or more 100
For Members who first became Employees on or after January 1,
1983, the Vesting Percentage shall be determined under Table
C.
Table D
Years of Active Service Percentage
Less than 5 0
5 or more 100
Table D shall apply to all Members who are in Active Service
on or after January 1, 1989.
Notwithstanding the foregoing, the Vesting Percentage of a
Member who has been covered under the provisions of the Plan
as in effect prior to January 1, 1976, shall not be less than
his Vesting Percentage would have been if the provisions of
the Plan as in effect prior to January 1, 1976, had continued
without change.
1.26 Retirement Plan Committee (or "Committee"). A Committee whose
members are the named fiduciaries (as defined by ERISA) of the
Plan. Members of the Retirement Plan Committee are
individuals appointed by the Compensation Committee to serve
in this capacity.
1.27 Compensation Committee. The Compensation Committee of the
Board of Directors as appointed from time to time.
1.28 Covered Social Security Compensation. Covered Social Security
Compensation means with respect to any Member, one-twelfth of
the average of the contribution and benefit bases in effect
under Section 230 of the Social Security Act for each year in
the 35-year period ending with the year in which the Member
attains the ending age indicated in the following table:
Member's Year of Birth Ending Age
Before 1938 65
After 1937 and before 1955 66
After 1954 67
ARTICLE II
Participation
2.1 An Employee shall be eligible to become a Member participating
in the Plan unless he is:
(a) participating in any other plan qualified under Section
401(a) of the Internal Revenue Code of 1954 (except The
Continental Corporation Incentive Savings Plan) to which
an Employer contributes;
(b) covered by a collective bargaining agreement between
employee representatives and one or more Employers, if
such agreement does not expressly provide for coverage by
this Plan and if retirement benefits were the subject of
good faith bargaining between such employee
representatives and such Employer or Employers;
(c) Employed in Canada;
(d) employed outside the United States who is not a citizen
of the United States; or
(e) with respect to periods prior to January 1, 1976, any
person (i) not regularly employed on a full-time basis by
an Employer, (ii) whose customary employment was for not
more than 20 hours in any one week or not more than five
months in any calendar year, or (iii) whose compensation,
hours or work, or conditions of employment were
determined by a collective bargaining agreement that did
not expressly provide for coverage of such person by this
Plan.
2.2 Every Employee who is eligible to become a Member under
Section 2.1 shall become a Member as of the later of the
applicable dates on which he is an Employee as set forth in
Subsection (a) and (b) below:
(a) Periods prior to January 1, 1976. With respect to
periods prior to January 1, 1976.
(1) Every Employee on the Effective Date shall become a
Member as of the Effective Date provided that at
the date his employment by an Employer first began
he was less than 55 years old; and
(2) Any person not an Employee on the Effective Date
shall become a Member on the date his Employment by
an Employer first begins if on such date he is less
than 55 years old.
(b) Periods after December 31, 1975. With respect to periods
after December 31, 1975:
(1) Every person who became a Member pursuant to
Section 2.2(a) hereof shall continue to be a
Member:
(2) Every Employee if not already a Member shall become
a Member as of the later of the following dates on
which he is an Employee:
(A) January 1, 1976;
(B) the day after he attains age 25, or if he is
an Employee who is in Employment on or after
January 1, 1985, the day after he attains age
21; or
(C) the day following the close of the first
12-month period measured from the date he
commenced Employment (or any anniversary
thereof) during which he completed 1,000 Hours
of Service.
2.3 Termination of Participation. A Member's participation in the
Plan shall terminate, and all of his rights under the Plan
(except his rights, if any, under Section 3.5 hereof) shall
cease and determine, upon the termination of his Employment
for any reason prior to the time when he shall have qualified
for a Benefit under this Plan; provided, however, that if a
Member's participation in the Plan terminates and he
thereafter again commences Employment with an Employer, he
shall immediately upon his reemployment be admitted to
participation in the Plan, and his Benefit with respect to
Employment after such reemployment shall take into account all
his prior Active Service and Credited Service, but shall be
adjusted to reflect the amount of any Benefit he has already
received based on his prior Employment.
ARTICLE III
Benefits
3.1 Retirement Credit. Whenever a Member or Member's spouse
becomes entitled to a Benefit as hereafter provided in this
Article III, the Benefit shall be computed by reference to a
Retirement Credit equal to the amount determined under the
Revised Formula, described in Section 3.1(e). However, in no
event will the Retirement Credit be less than the Member had
accrued as of December 31, 1988, based upon Monthly
Compensation and Credited Service before January 1, 1989,
under whichever of the following apply:
-- the Regular Formula described in Section 3.1(a), or
-- in the case of an individual who was a Member prior to
January 1, 1979, the greater of the amount determined
under the Regular Formula or the amount determined under
the Alternative Formula described in Section 3.1(b), or
-- the benefit provided for in Section 3.7 or Exhibit A to
this Plan.
(a) the Regular Formula is one-twelfth of:
(i) the product of (1) two percent of the Member's
average Monthly Compensation for the highest
paid 60 consecutive months of the 120 months
next preceding the date as of which the
Retirement Credit is computed (or, if Monthly
Compensation has been paid or accrued to the
Member for less than 60 consecutive months,
his average Monthly Compensation for all
months) multiplied by (2) the number of months
of his Credited Service not in excess of 240
months; plus
(ii) the products of (1) one percent of the Member's
average Monthly Compensation (as determined in
Section 3.1(a)(i) above), multiplied by (2) the
number of months of his Credited Service in excess
of 240 months; reduced by
(iii) a Social Security offset in an amount equal to
the product of (1) two and one-half percent of
the monthly primary benefit payable to the
Member under the Federal Social Security Act
as in effect on the earlier of the date the
Member's Employment ceases, or the date upon
which he first becomes eligible for unreduced
benefits by virtue of age under the Federal
Social Security Act, multiplied by (2) the
number of months of the Member's Credited
Service not in excess of 240 months; and
(b) The Alternate Formula is one-twelfth of:
(i) the product of (1) one and one-half percent of the
Member's average Monthly Compensation (as
determined in Section 3.1(a)(i) above), multiplied
by (2) the number of months of his Credited
Service; reduced by
(ii) a Social Security offset in an amount equal to the
product of (1) one and one-half percent of the
excess, if any, over $220 per month (being the
approximate maximum primary insurance benefit at
December 31, 1971, for any person aged 65 at
December 31, 1971), of the monthly primary benefit
payable to the Member under the Federal Social
Security Act as in effect on the earlier of the
date the Member's Employment ceases, or the date
upon which he first becomes eligible for unreduced
benefits by virtue of age under the Federal Social
Security Act, multiplied by (2) the number of
months of the Member's Credited Service after the
Effective Date not in excess of 400 months.
(c) If the Member is less than the age at which he first
becomes eligible for unreduced benefits by virtue of age
under the Federal Social Security Act at the time the
Social Security offset is to be computed, then the amount
of the offset is to be determined on the assumption that
the Member will not thereafter receive any income that
would be treated as wages for purposes of the Federal
Social Security Act.
(d) For purposes of this Section 3.1, the age at which a
Member first becomes eligible for unreduced benefits ,by
virtue of age, under the Federal Social Security Act is
determined as set forth in the following table.
Age at Which
Eligible For Unreduced
Year of Member's Birth Social Security Benefits
Prior to 1938 65
1938 through 1942 65 plus 2 months for each
year date of birth is
after 1937
1943 through 1954 66
1955 through 1959 66 plus 2 months for each
year date of birth is
after 1954
1960 and later 67
(e) The Revised Formula is one-twelfth of the sum of (i) and
(ii), where:
(i) is the product of (1) one and fifteen
one-hundredths percent of the Member's average
Monthly Compensation (as determined in Section
3.1(a) (i) above), multiplied by (2) the number of
months of his Credited Service not in excess of 420
months and
(ii) is the product of (1) forty-three one-hundredths
percent of the Member's average Monthly
Compensation (as determined in Section 3.1(a) (i)
above) in excess of Covered Social Security
Compensation, if any, multiplied by (2) the number
of months of his Credited Service not in excess of
420 months.
(f) If the Member is less than his applicable ending age (as
set forth in Section 1.28) at the the time the Retirement
Credit is to be determined under 3.1(e) above, then the
contribution and benefit base for all future years for
purposes of determining the Covered Social Security
Compensation shall be assumed to be the same as the
contribution and benefit base for Social Security at the
time such determination is made.
3.2 Normal Retirement Allowance. If a Member who is in Employment
on the day prior to the later of (a) the fifth anniversary of
the time he commenced Employment, or (b) the date he has
attained the age of 65 retires from Employment, he thereupon
shall be entitled to receive each month for the remainder of
his life (beginning at his Normal Retirement Date) a Normal
Retirement Allowance in an amount per month equal to his
Retirement Credit; provided, however, that if his highest
Early Retirement Allowance determined on any date which could
constitute his Early Retirement Date is greater than such
Retirement Credit determined without regard to any increase
since such Early Retirement Date in the primary Benefit under
the Federal Social Security Act, then his Normal Retirement
Allowance shall be such Early Retirement Allowance.
3.3 Postponed Retirement Allowance.
(a) A Member who continues in full-time Employment after his
Normal Retirement Date shall, upon his actual retirement
from Employment, but not before, be entitled to receive
for the remainder of his life, beginning at the date of
his actual retirement, a Postponed Retirement Allowance
in an amount per month equal to his Retirement Credit
computed as of the date of his actual retirement. This
provision shall be administered in accordance with and
subject to applicable Department of Labor Regulations on
Suspension of Benefits. A Member who so continues in
Employment and who dies before his actual retirement from
Employment shall be deemed for the purpose of payment of
his Benefit under Article IV to have retired on the day
next preceding his death. A Member whose Employment is
on other than a regular full-time basis at any time after
his Normal Retirement Date shall be deemed to have
retired at the date his Employment on a regular full-time
basis ceased. For the purposes of this Section 3.3,
full-time Employment or Employment on a regular full-time
basis shall mean Employment which is scheduled for more
than 20 hours per week for at least six months during a
calendar year.
(b) If a Member who, while in Employment, will have attained
his Normal Retirement Date on or before February 1, 1992
and would have completed ten or more years of Active
Service by December 31, 1992, and for whom the sum of age
and years of Active Service equals at least 85 by such
date, makes an election to retire effective February 1,
1992, and such election is made prior to January 7, 1992,
then that Member's actual retirement date shall be
February 1, 1992 and such Member shall receive a
temporary monthly supplemental payment for each month
starting with February 1992 and ending with January 1993.
The amount of such monthly supplemental payment shall be
70% of the first $833.33 of the Member's average monthly
compensation (as determined in Section 3.4(c)) plus 20%
of the next $2,500 of such average monthly compensation.
For the purposes of this Section 3.3(b), the applicable
formula for determining a Member's Retirement Credit
shall be applied using average monthly compensation as
defined in Section 3.4(c) instead of average Monthly
Compensation as determined in Section 3.1.
3.4 Early Retirement Allowance.
(a) A Member who, while in Employment, has attained age 55
and has completed ten or more years of Active Service,
may retire upon six months advance notice to the
Administrator (or upon such shorter notice as the
Administrator shall in his discretion agree to accept),
and thereupon shall be entitled to receive for the
remainder of his life (beginning at the date of his early
retirement, which date must be the first day of a month
prior to his Normal Retirement Date) an Early Retirement
Allowance in an amount per month equal to his Retirement
Credit computed as of the date of his early retirement,
multiplied by the appropriate factor (interpolated for
calendar months when partial years are involved) from the
following table:
Years By Which Years By Which
Early Retirement Early Retirement
Dates Precede Dates Precede
Normal Retirement Normal Retirement
Dates Factor Dates Factor
1 1.00 6 .85
2 1.00 7 .80
3 1.00 8 .75
4 .95 9 .70
5 .90 10 .65
(b) However, notwithstanding the foregoing, if a Member who,
while in Employment, will have attained at least the age
of 55 and completed twenty or more years of Active
Service during 1982, makes an election to retire
Effective May 1, 1982, and such election is made prior to
April 1, 1982, then that Members' Early Retirement Date
shall be May 1, 1982 and the factor in the preceding
table shall be 1.0 for all years, up to eleven, by which
such Early Retirement Date precedes Normal Retirement
Date unless the Regular
Formula described in Section 3.1(a) shall apply to the
Member. If such Regular Formula shall apply, the factor
shall be as set forth in the table below until such time
as the Member's age precedes his Normal Retirement Date
by seven years.
Years By Which
Early Retirement
Dates Precede
Normal Retirement
Dates Factor
1 but not more than 7 1.00
8 .94
9 .88
10 .82
more than 10 but less than 11 actuarial reduction
A Member retiring in accordance with the provisions of this
paragraph shall also be entitled to receive temporary supplemental
monthly payments in lieu of Social Security benefits as set forth
in the table below.
Supplemental Payment
will Continue Up To
Monthly and Including
Age Last Birthday At Supplemental The Month In Which
Early Retirement Date Payment The Member Attains Age
54 but less than 60 $435 62
60 but less than 65 $550 65
(c) However, notwithstanding the foregoing, if a Member who,
while in Employment, would have attained at least the age
of 55 and completed ten or more years of Active Service
by December 31, 1992, and for whom the sum of age and
years of Active Service equals at least 85 by such date,
makes an election to retire effective February 1, 1992,
and such election is made prior to January 7, 1992, then
that Member's Early Retirement Date shall be February 1,
1992 and the factor in the table in Section 3.4(a) shall
be 1.0 for all years by which such Early Retirement Date
precedes his Normal Retirement Date.
A Member retiring in accordance with the provisions of
this Section 3.4(c) shall also be entitled to receive
temporary supplemental monthly payments in lieu of Social
Security benefits. The amount of such monthly payment
shall be 70% of the first $833.33 of the Member's average
monthly compensation plus 20% of the next $2,500 of such
average monthly compensation if the birth date of the
Member retiring under this Section 3.4(c) was on or
before February 1, 1930, or 80% of the amount so
determined if the birth date of the Member was after
February 1, 1930. For the purpose of this Section
3.4(c), average monthly compensation shall mean one-
sixtieth of the sum of the Member's annual rates of
salary or wages as of December 31st of 1987, 1988, 1989,
1990 and November 1, 1991, plus the average Monthly
Compensation, excluding any amount representing salary or
wages, for the 58 consecutive month period ending on
November 1, 1991. The temporary supplemental monthly
payments as determined under this paragraph shall be
payable for the period as set forth in the following
table.
Member's Date of Birth Supplemental payment will
continue up to and
including the later of
the month of January 1993
or the month prior to the
month in which the Member
attains age
on or before Feb. 1, 1930 65
after February 1, 1930 62
For the purposes of this Section 3.4(c), the applicable
formula for determining a Member's Retirement Credit
shall be applied using average monthly compensation as
defined in this Section 3.4(c) instead of average Monthly
Compensation as determined in Section 3.1.
3.5 Vested Retirement Allowance. A Member who terminates his
Employment prior to his Normal Retirement Date, other than by
death or retirement on an Early Retirement Allowance, but
after the earlier of the date on which he either:
(a) completes five years of Active Service and the sum of his
years of Active Service and his age equals at least 45,
or completes ten years of Active Service, for Members who
became Employees prior to January 1, 1983, or
(b) completes ten years of Active Service, for Members who
became Employees on or after January 1, 1983, or
(c) completes five years of Active Service, for Members who
are in Active Service on or after January 1, 1989,
shall be entitled to receive a Vested Retirement
Allowance in an amount per month equal to his Retirement
Credit multiplied by his Vesting Percentage, each
computed as of the date his Employment terminates. Such
Vested Retirement Allowance shall be paid beginning at
the Member's Normal Retirement Date, except that, in the
case of a Member who has completed ten years of Active
Service at the time his Employment terminates, such
Member may elect, by six months advance written notice to
the Administrator, to have payment of the Vested
Retirement Allowance begin at the first day of any month
after he attains age 55, in which event such allowance
shall be in a reduced amount of Equivalent Actuarial
Value to the Vested Retirement Allowance that such Member
otherwise would have been entitled to receive beginning
at his Normal Retirement Date.
3.6 Surviving Spouse's Allowance.
(a) If a Member dies while in Employment, after completing
ten years of Active Service and either attaining age 55
or after attaining age 45 if the sum of his age and
completed years of Active Service total at least 65, but
before his Normal Retirement Date, and is survived by a
spouse to whom he has been married throughout the
12-month period ending on the date of his death, such
spouse shall be entitled to receive for the remainder of
his or her life, a Surviving Spouse's Allowance in an
amount equal to one-half of the Member's Retirement
Credit computed as of the date of the Member's death,
reduced by an amount determined by applying the
appropriate factor in columns I and II of Table A below.
However, in no event will the Surviving Spouse's
Allowance be less than the greater of I or II in Table B
below.
TABLE A I II
Age of Employee Reduction In Member's Reduction in Member's
at Date of Death Retirement Credit Retirement Credit
55 But Less Than
65 1/3% for each full month 1/4% for each full
that Member's death month by which Spouse
precedes attainment of is more than 5 years
age 65. younger than Member.
45 But Less Than
55 40% plus 1/4% for each 1/4% for each full
full month that Member's month by which Spouse
death precedes attainment is more than 5 years
of age 55. younger than Member.
TABLE B
I. $50 per month.
II. The amount to which such Spouse would be
entitled had the Member's Retirement Credit
as of the date of his death been converted
into a fifty percent joint and survivor
annuity of Equivalent Actuarial Value with
payments to begin immediately and with the
Spouse as the contingent annuitant, and had
the Member died immediately thereafter.
Payments of the Surviving Spouse's Allowance shall
commence on the last day of the month in which the Member
dies (or, if the Member's death occurs on the last day of
a month, on the last day of the next succeeding month)
and shall terminate with the date of the death of the
spouse. Whenever the Member or spouse shall die on other
than the last day of a month, the Surviving Spouse's
Allowance otherwise payable to the spouse for such month
shall be prorated to reflect the date of death.
(b) If a Member (1) performs at least one Hour of Service on
or after August 23, 1984, (2) dies before he begins
receiving a Benefit, (3) has a Vesting Percentage which
is greater than zero, and (4) is survived by a spouse to
whom he has been married throughout the 12-month period
ending on the date of his death and the spouse is not
entitled to a Benefit under Section 3.6(a) or Article IV,
then such spouse shall be entitled to receive a Surviving
Spouse's Allowance computed as follows:
(i) If a Member dies before attaining age 55, then the
surviving spouse shall be entitled to receive for
the remainder of his or her life an amount to which
such spouse would be entitled had the Member
terminated his Employment on the date of his death,
survived until age 55, then converted his
Retirement Credit (based on his Credited Service
and Vesting Percentage at his date of death) into a
fifty percent joint and survivor annuity of
Equivalent Actuarial Value with payments to begin
immediately (with the spouse as the contingent
annuitant) and the Member had died on the following
day. Payments to the surviving spouse shall
commence on the last day of the month in which the
Member would have attained age 55 (or, if such date
occurs on the last day of the month, on the last
day of the next succeeding month) and shall
terminates with the date of the death of the
spouse.
(ii) If a Member dies on or after attaining age 55, then
the surviving spouse shall be entitled to receive
for the remainder of his or her life an amount to
which such spouse would be entitled had the
Member's Retirement Credit as of one day before the
date of his death been converted into a fifty
percent joint and survivor annuity of Equivalent
Actuarial Value with payments to begin immediately
(and with the spouse as the contingent annuitant)
and had the Member died the following day.
Payments to the surviving spouse shall commence on
the last day of the month in which the Member dies
(or, if the Member's death occurs on the last day
of a month, on the last day of the next succeeding
month) and shall terminate with the date of the
death of the spouse.
(iii) Whenever the member or spouse shall die on
other than the last day of a month, the
Surviving Spouse's Allowance otherwise payable
to the spouse for such month shall be prorated
to reflect the date of death.
(c) Notwithstanding Section 3.6(b), if a Member (1)
terminated his Employment prior to August 23, 1984 (but
after December 31, 1975), (2) is not entitled to a
Benefit on August 23, 1984 (and is alive on that day),
(3) had completed 10 years of Active Service, and (4) is
survived by a spouse to whom he has been married
throughout the 12-month period ending on the date of his
death and the spouse is not entitled to a Benefit under
Section 3.6(a) or Article IV, then such spouse shall be
entitled to receive a Surviving Spouse's Allowance
computed under Section 3.6(b).
3.7 Certain Employees. Anything elsewhere in this Plan to the
contrary notwithstanding, (a) every person who became a Member
on the Effective Date and who immediately prior to the
Effective Date participated in the Glen Falls Insurance
Company Retirement Plan or the Title Insurance Company of
Pennsylvania Pension Plan shall have a nonforfeitable right to
a Benefit at a rate not less than those benefits he would have
had a nonforfeitable right to receive pursuant to the Glens
Falls Insurance Company Retirement Plan or the Title Insurance
Company of Pennsylvania Pension Plan, as the case may be; (b)
every person who became a Member on the Effective Date and who
immediately prior to the Effective Date participated in the
Pacific of New York Group Employees' Pension Plan shall have
a nonforfeitable right to a Normal Retirement Allowance at a
rate not less than he would have had a nonforfeitable right to
receive pursuant to the terms of Group Annuity Contract No.
GR-847 issued by the Travelers Insurance Company if the Group
Annuity Contract had been discontinued by reason of
termination of the Pacific of New York Group Employees'
Pension Plan immediately prior to the Effective Date; (c)
there shall be set off against and deducted from any Benefit
payable under this Plan to any person who became a Member on
the Effective Date and who is a former employee of Norwich
Union Fire Insurance Society Ltd. or Scottish Union and
National Insurance Company the amount of any annuity payable
to such person under John Hancock Mutual Life Insurance
Company Group Annuity Contract #342; and (d) there shall be
added to any Retirement Credit determined under this Plan for
any Employee who became a Member on the Effective Date and who
is a former employee of Underwriters Adjusting Company an
amount equal to the pension that would have been payable from
Normal Retirement Date under the former Underwriters Adjusting
Company Retirement Plan if it had continued in effect to the
date of the Employee's retirement, multiplied by a fraction of
which the numerator is the number of months the Employee was
in the employ of Underwriters Adjusting Company prior to April
1, 1967, and the denominator is the sum of such numerator plus
the total number of months of his Credited Service. In
addition, there shall be set off against and deducted from any
Benefit payable under this Plan to an Employee who was employed
by William Penn Life Insurance Company of New York on September
1, 1982 the amount of any benefit payable to such person under
the Retirement Plan for Salaried Employees of Penncorp Financial,
Inc. and Affiliates.
3.8 Employees Retired Prior to Effective Date. Every former
employee of an Employer (or beneficiary of a former employee
of an Employer) who on the Effective Date had retired and was
receiving a retirement benefit pursuant to the Retirement Plan
of The Continental Insurance Company, the Glens Falls
Insurance Company Retirement Plan or the Title Insurance
Company of Pennsylvania Pension Plan shall be deemed to be a
retired Member of this Plan and shall continue to receive from
the Trust Fund a Benefit at the same rate and subject to the
same terms and conditions as the benefit that he was then
receiving. The amount of such Benefit shall not be increased
or decreased by reason of the adoption of this Plan.
3.9 Increases in Benefits.
(a) Benefits payable after May 31, 1974, under Sections 3.2,
3.3, 3.4, 3.6 and 3.8 hereof to any person who (or to the
Beneficiary of any person who) has received a Benefit
under any such Section prior to January 1, 1974, shall be
increased by an amount computed by multiplying the
monthly Benefit otherwise payable (but not in excess of
$833.33) by 0.2 percent of the number of months such
person (or his decedent) received Benefits under this
Plan or its predecessor plan during the years 1970
through 1973.
(b) Benefits payable after June 30, 1978 under Sections 3.2,
3.3, 3.4, 3.5, 3.6 and 3.8 hereof to any person who (or
to the Beneficiary of any person who) was receiving a
Benefit under any such Section on December 31, 1977 shall
be increased by an amount computed by multiplying the
monthly Benefit otherwise payable by the appropriate
percentage from the following table:
Date Benefit First Received
By the Member
(or his Beneficiary, if earlier) Percentage
June 1974 or earlier 10.0%
July 1974 through December 1974 9.0
January 1975 through June 1975 8.0
July 1975 through December 1975 7.0
January 1976 through June 1976 6.0
July 1976 through December 1976 4.5
January 1977 through June 1977 3.0
July 1977 through December 1977 1.5;
provided, however, that in any event such amount not be
less than $2.00 per month.
(c) Benefits payable after June 30, 1982 under Sections 3.2,
3.3, 3.4, 3.6 and 3.8 hereof to any person who (or to the
Beneficiary of any person who) was receiving a Benefit
under any such Section on June 30, 1981, or who had
reached the Normal Retirement Date on June 30, 1981,
shall be increased by an amount computed by multiplying
the monthly Benefit otherwise payable by the appropriate
percentage from the following table:
Earliest of: (1) Date Benefit
First Received by Member (2)
Date Benefit First Received by
Member's Beneficiary, or (3)
Member's Normal Retirement Date Percentage
December 1978 or earlier 15%
January 1979 through June 1979 13%
July 1979 through December 1979 10%
January 1980 through June 1980 8%
July 1980 through December 1980 5%
January 1981 through June 1981 3%
provided, however, that (1) this adjustment will only be
applicable to the first $1,250 of each monthly retirement
allowance, and (2) in any event such amount will not be
less than $3 per month.
(d) Benefits payable after June 30, 1988 under Sections 3.2,
3.3, 3.4, 3.6(a) and 3.8 hereof to any person who (or to
the Beneficiary of any person who) was receiving a
Benefit under any such Section on December 31, 1986, or
who had reached the Normal Retirement Date on December
31, 1986, and retired prior to January 1, 1988, shall be
increased by an amount computed by multiplying the
monthly Benefit otherwise payable, but not including any
temporary supplemental payments in lieu of SociaL
Security benefits described in Section 3.4, by the
appropriate percentage from the following table:
Earliest of: (1) Date Benefit First
Received by Member, (2) Date Benefit First
Received by Member's Beneficiary, or (3)
Member's Normal Retirement Date Percentage
December 1981 or earlier 8%
January 1982 through December 1982 7%
January 1983 through June 1983 6%
July 1983 through December 1983 5%
January 1984 through June 1984 4%
July 1984 through June 1985 3%
July 1985 through December 1986 2%
provided, however, that in any event such amount will not
be less than $3 month.
3.10 Maximum Benefits.
(a) The total annual retirement pension payable to a Member
under Section 4.1, or Section 4.2(a) Option B or Option
D, as adjusted pursuant to Section 3.9, (when added to
the annual retirement pension payable to such member
under all other defined benefit plans of an Employer or
Affiliated Corporation), shall not exceed the lesser of
(i) $90,000, or (ii) 100 percent of the Member's average
compensation from an Employer or an Affiliated
Corporation for the three consecutive years that produced
the highest average. For the purpose of the foregoing
limitation, the term "compensation" shall mean earnings
as reported by the Employer on Form W-2 for the
applicable year. However, if the Member has not
completed 10 years of service with one or more Employers
or Affiliated Corporations, such maximum amount shall be
reduced to an amount equal to such maximum amount
multiplied by the ratio which the number of years (or
part therefore) of his service bears to 10. If the
pension begins before the Member's 62nd birthday, the
maximum amount in (i) above shall be the greater of
$75,000, (or, if the pension begins before the Member's
55th birthday, the actuarial equivalent of a $75,000
pension beginning at age 55) or the equivalent actuarial
value of the maximum amount in (i) beginning at age 62.
For purposes of the preceding sentence, the equivalent
actuarial value shall be based on an interest rate equal
to the greater of five percent per year or the interest
rate otherwise used under this Plan in the determination
of equivalent actuarial value. If the pension begins
after the Member's 65th birthday, the maximum amount in
(i) shall be of equivalent actuarial value based on an
interest rate equal to the lesser of five percent per
year or the interest rate otherwise used under this Plan
in the determination of equivalent actuarial value, to
that maximum benefit payable at age 65. In the event
that a Member elects benefits under Section 4.2(a),
Option D (Other), the total benefits so payable shall be
subject to such maximum limitation (except that if such
benefits constitute a qualified joint and survivor
annuity, only the reduced pension to the Member shall be
subject to such maximum limitation), and such benefit
shall be adjusted to its actuarially equivalent annual
straight life annuity for the purpose of determining
whether such maximum limitation has been exceeded. In
the event that a Member elects benefits under Section
4.2(a), Option A (120 Months Certain), the total benefit
so payable shall be subject to such maximum limitation,
and such benefit shall be adjusted to its actuarially
equivalent annual straight life annuity for the purpose
of determining whether such maximum limitation has been
exceeded. For purposes of the last two sentences, the
determination of actuarial equivalents shall be based on
an interest rate equal to the greater of five percent per
year or the interest rate otherwise used under this Plan
in the determination of equivalent actuarial value. As
of January 1 of each calendar year on and after January
1, 1988, the dollar limitation in (i) above will be
automatically adjusted by the Commissioner of Internal
Revenue. Such adjusted limitation will apply to
limitation years ending on or after the date of such
adjustment. As of January 1 of each calendar year the
limitation in (ii) above shall, with respect to retired
participants, be automatically adjusted by the
Commissioner of Internal Revenue. Such adjusted
limitation will apply to limitation years ending on or
after the date of such adjustment.
Notwithstanding the preceding paragraph, in no event
shall a Member's annual pension payable under this Plan
be less than the benefit which the Member had accrued
under the Plan as of December 31, 1982; provided,
however, that in determining such benefit, no changes in
the Plan on or after July 1, 1982, shall be taken into
account.
Anything in this Section 3.10(a) notwithstanding, in no
event shall benefits under this Plan exceed the maximum
benefits permitted under Section 415(b) of the Internal
Revenue Code of 1986.
(b) In the case of any Member as to whom the sum of the
defined benefit Plan fraction and the defined
contribution Plan fraction for any year exceeds 1.0
(prior to the application of this subsection (b)), the
annual retirement benefit payable under this Plan shall
be reduced to the extent required to make such sum 1.0.
A Member's defined benefit plan fraction for any year is
a fraction the numerator of which is the sum of the
Member's projected annual retirement benefit under all
defined benefit plans (whether or not terminated)
maintained by an Employer or an Affiliated Corporation,
determined as of the close of the year, and the
denominator of which is the lesser of the product of 1.25
multiplied by the dollar limitation in subsection (a)(i)
above or the product of 1.4 multiplied by the amount in
subsection (a)(ii) above. A Member's defined
contribution plan fraction for any year is a fraction the
numerator of which is the sum of the annual additions to
the Member's account under all defined contribution plans
maintained by an Employer or an Affiliated Corporation
(whether or not terminated) for the current and all prior
limitation years (determined as of the close of the
year), and the denominator of which is the sum of the
lesser of the following amounts determined for such year
and for each such prior year of service with an Employer
or an Affiliated Corporation: the product of 1.25
multiplied by the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) for such year,
or the product of 1.4 multiplied by the amount which may
be taken into account under section 415(c)(1)(B) of the
Internal Revenue Code of 1954.
For purposes of the preceding paragraph, a Member's
projected annual retirement benefit is the annual benefit
to which the Member would be entitled under the terms of
this Plan if the Member continued employment until normal
retirement age (or current age, if later) and the
Member's compensation for the limitation year and all
other relevant factors used to determine such benefit
remained constant until normal retirement age (or current
age, if later).
3.11 Transfers from Canada. Anything in the Plan to the contrary
notwithstanding, if an individual is transferred directly from
service with an Employer in Canada to service with an Employer
in the United States:
(a) his period of service with one or more Employers in
Canada shall be considered service as an Employee for the
purpose of determining his Credited Service; and
(b) his Retirement Credit under the Plan shall be reduced by
an amount which has the Equivalent Actuarial Value of any
retirement income attributable to employer contributions
that is payable to him or on his behalf under any pension
or retirement plan of any Employer that is registered
under any Provincial Pension Benefit Act in Canada.
ARTICLE IV
Payment of Benefits
4.1 Standard Method of Payment.
(a) In the absence of an election under Section 4.2 hereof,
every Normal Retirement Allowance, Postponed Retirement
Allowance, Early Retirement Allowance, and Vested
Retirement Allowance shall be paid in equal monthly
installments in an amount equal to the Member's Benefit,
except that, if the Member has a spouse on the date he
becomes entitled to received a Benefit, such Member will
receive a monthly payment in an amount of Equivalent
Actuarial Value to the Benefit to which otherwise he
would be entitled, under which he will receive a reduced
Benefit during his lifetime with the provision that, if
he dies survived by such spouse, then the Benefit shall
continue to be paid to such spouse during the lifetime of
such spouse at a rate equal to 50 percent of the rate at
which the Benefit was paid to the Member. If on or after
the later of his sixty-fifth birthday or the tenth
anniversary of the commencement of his participation in
the Plan, but prior to his Normal Retirement Date, a
Member (whose spouse is not entitled to receive a Benefit
under Section 3.6) dies, shall be deemed to have become
entitled to receive a Benefit on the date prior to the
date of his death. If a Member dies prior to the first
day of a month which next succeeds his having completed
10 years of Active Service, attained age 55, and elected
by six months' advance written notice to the
Administrator to have payment of his Vested Retirement
Allowance begin prior to his Normal Retirement Date, he
shall be deemed to have become entitled to receive such
a Benefit on the date prior to the date of his death.
The standard method of payment of an accrued benefit for
an unmarried Member will be in the form of a straight
life annuity.
(b) The payment of a Member's Benefit shall commence on the
last day of the month in which the Member becomes
entitled to receive the Benefit, and shall terminate on
the death of the Member. If payment is to be made to the
Member's spouse as set forth above, payments to the
spouse shall commence on the last day of the month in
which the Member dies (or, if the Member dies on the last
day of a month, on the last day of the following month)
and shall terminate with the death of the spouse.
Whenever a Member or spouse dies other than on the last
day of a month, the Benefit otherwise payable to such
person for such month shall be prorated to reflect the
date of death.
4.2 Optional Methods of Payments.
(a) In lieu of payment of a Normal Retirement Allowance,
Postponed Retirement Allowance, or Early Retirement
Allowance pursuant to the provisions of Section 4.1
hereof, a Member may elect to receive any of the
following optional forms of payment in an amount of
Equivalent Actuarial Value to the Benefit to which
otherwise he would be entitled:
Option A -- 120 Months Certain
A reduced Benefit payable during the lifetime of the
Member, with the provision that if the Member dies within
the period of 120 months next following the date payment
of the Benefit begins, then the Benefit shall continue to
be paid at the same rate to the Member's Beneficiary
until the end of the period of 120 months.
Option B -- Joint-and-Survivor Annuity
A reduced Benefit payable during the lifetime of the
Member with the provision that, if the Member dies
survived by a spouse, then the Benefit shall continue to
be paid to his spouse during the lifetime of the spouse
at a rate equal to 25 percent, 75 percent, or 100 percent
(as the Member may elect) of the rate at which the
Benefit was paid to the Member.
Option C -- Straight Life Annuity
A Benefit payable in equal monthly installments during
the lifetime of the Member, with no further payments on
his behalf after his death.
(b) A Member entitled to a Vested Retirement Allowance
payable under Section 3.5(b) hereof may elect, in lieu of
payment pursuant to the provisions of Section 4.1 hereof,
to receive the optional form of payment described in
Option C.
(c) No spouse of a Member entitled to receive a Surviving
Spouse's Allowance and no Member entitled to a Vested
Retirement Allowance payable under Section 3.5(a) hereof,
may elect to receive any optional form of payment.
(d) Every election of an optional form of payment shall be
made in writing, signed by the Member, and, if he is
married, consented to (in writing) by his spouse unless
the optional form of payment is a 75 percent or 100
percent joint and survivor annuity described in Option B.
The consent of the spouse must acknowledge the effect of
the election and must either be notarized or witnessed by
a plan representative. The election shall be delivered
to the Administrator at any time during the 90 day period
ending on the Member's Normal, Early or Postponed
Retirement Date, whichever is applicable. The
information with which a married Member must be provided
respecting an election not to receive payment of a
Benefit under the method provided for in Section 4.1(a),
will be mailed or personally delivered to such Member in
such time as is reasonable to assure that it will be
received on or about the date which is nine months before
the date on which he attains age 65 or such earlier date
as on which he can elect to receive a Benefit. If a
married Member requests additional information regarding
the financial effect of being paid under the method
provided for in Section 4.1(a) at any time prior to 60
days before his Normal, Early or Postponed Retirement
Date, which ever is applicable, then notwithstanding the
foregoing, the election period shall be extended to
include the 60 calendar days immediately following the
date that the requested additional information is
personally delivered or mailed to the Member. An
election of an optional form of payment shall take effect
on the date following the expiration of the election
period provided for above, and shall be inoperative
unless both the Member and his beneficiary are alive at
that date. An election of an optional form of payment
may be revoked by the Member at any time prior to the
expiration of the election period, but shall thereafter
be irrevocable. Nothwithstanding any other provision of
this Section the qualified election period shall be a
period within the 90 day period ending on the "annuity
starting date" and the annuity starting date shall mean
(i) the first day of the first period for which an
amount is payable as an annuity (whether by reason of
retirement or disability) or (ii) in the case of a
benefit not payable in the form of an annuity, the first
day on which all events have occurred which entitle the
Member to such benefit.
(e) Each Member who elects Option A or B shall designate a
Beneficiary to receive the payments provided for after
the Member's death by filing with the Administrator a
designation in writing in such form as the Administrator
shall prescribe. In the case of Option B, the designated
Beneficiary must be the Member's spouse. The Member may
change the designation from time to time and at any time
until the election has taken effect, or in the case of
Option A after benefit payments under such Option have
commenced to the Member, by filing with the Administrator
a new designation.
(f) Any other provision of the Plan notwithstanding, if the
Beneficiary under Option A is other than the Member's
spouse, benefit payments commencing under such Option
shall be adjusted so that if any payment would otherwise
be payable more than 5 years after the death of the
Member, or the death of the Member's spouse, where
benefits were being paid to such spouse, all remaining
benefits will have been paid within 5 years of the death
of the Member or his spouse whichever is applicable.
This subsection shall not apply if the period over which
benefits are payable does not exceed the Member's life
expectancy at the time benefit payments commence.
4.3 Lump Sum for Small Pensions. Whenever a Benefit becomes
payable at a time when such Benefit has an Equivalent
Actuarial Value of not more that $3,500, such Benefit shall be
paid in a lump sum amount equal to such Equivalent Actuarial
Value, such payment to be made on the last day of the month in
which the recipient becomes entitled to receive the Benefit.
4.4 Suspension of Payments. Except as provided in Section 3.3
with respect to Employment on other than a regular full-time
basis after Normal Retirement Date, if any retired Member is
restored to Employment (except as a Reemployed Early Retiree),
his retirement allowance payments shall be suspended for such
period as he shall remain in Employment, but not beyond the
April 1 of the year following the year in which he attains age
70-1/2. However, any such suspension of benefits shall be in
accordance with and subject to applicable Department of Labor
Regulations.
4.5 Any rules in this Article IV notwithstanding, in no event will
benefit payments to a Member or his beneficiary commence after
the April 1 of the calendar year following the calendar year
in which the Member attains age 70-1/2. If a Member continues
in Employment after attaining age 70-1/2, his benefit will be
recalculated each year in which he accrues additional
benefits, and his benefit payments increased if required to
meet the minimum distribution requirements of Section
401(a)(9) of the Internal Revenue Code of 1986.
4.6 Any form of Benefit which is paid pursuant to this Article IV
and which involves payments to a person or persons other than
the Member or the Member's spouse shall be such that the
present value of the payments to be made to the Member is more
than 50% of the present value of the total payments to be made
to the Member and such other person or persons.
ARTICLE V
Administration
5.1 Trust Fund. All contributions by an Employer shall be paid
into, and all payments herein provided for shall be paid from,
a Trust Fund maintained by agreement between the Company and
individual trustees designated by the Compensation Committee,
which agreement shall be in such form and contain such
provisions as the Compensation Committee may deemed
appropriate, including, but not limited to, provisions with
respect to the powers and authority of the Trustees, the
authority of the Board of Directors or Compensation Committee
to amend the Trust Agreement and to terminate the trust, and
the authority of the Board of Directors or Compensation
Committee to settle the accounts of the Trustees on behalf of
all persons having an interest in the Trust Fund. When
entered into, the Trust Agreement shall be taken to form a
part of this Plan, and all rights and benefits that may accrue
to any person under this Plan shall be subject all the terms
and provisions of the Trust Agreement. The several Employers
will make all contributions to the Trust Fund, and no
contributions will be required of any Member in connection
therewith. All expenses of administering the Plan and the
Trust Fund shall be paid from the Trust Fund unless paid by
the Company.
5.2 Retirement Plan Committee, Trustees and Administrator.
(a) Retirement Plan Committee shall administer the Plan in
accordance with its terms and shall have all powers and
authority necessary or appropriate for carrying out their
duties in that respect. Not in limitation but in
amplification of the foregoing, the Retirement Plan
Committee, subject to the provisions of the Plan, from
time to time shall adopt and establish such rules as they
deem necessary or desirable for administering the Plan,
and shall adopt appropriate mortality and other tables
and interest rates to be used in administering the
Benefits provided under the Plan. The Retirement Plan
Committee shall establish a procedure for establishing
and carrying out of a funding policy and method
consistent with the objectives of the Plan and the
requirements of the law, which policy and method shall be
reviewed at least annually. The
Retirement Plan Committee shall have full power and
authority to interpret, construe, and administer the
Plan, and determine all questions that may arise
hereunder, including, without limitation, all questions
relating to the eligibility of employees of an Employer
to be Members, and the amount of benefits to which any
person shall be entitled under the Plan; the Retirement
Plan Committee may correct any error or defect or supply
any omission or reconcile any inconsistency in the Plan
in such manner and to such extent as they shall deem
expedient to carry the Plan into effect; and the
Retirement Plan Committee shall be the sole and final
judge of such expediency. The interpretations and
constructions of the Retirement Plan Committee, and all
other acts and determinations of the Retirement Plan
Committee done or made in good faith, shall be final,
conclusive, and binding upon all parties, including the
several Employers, Employees, and Beneficiaries. The
Retirement Plan Committee may appoint in writing such
persons, who need not be members of the Retirement Plan
Committee as they may deem necessary or desirable for the
effective exercise of the duties and responsibilities of
the Retirement Plan Committee and may delegate to such
persons in writing such duties and confer upon them in
writing such powers, discretionary or otherwise, as the
Retirement Plan Committee may deem expedient or
appropriate. With respect to all or any portion of the
Plan assets, the Retirement Plan Committee may appoint an
investment manager or managers, pursuant to Sections
402(c)(3) and 405(c)(1) of ERISA, to manage, acquire, or
dispose of any assets of the Plan. Each such investment
manager shall accept appointment as a fiduciary of the
Plan and shall be either registered as an investment
adviser under the Investment Advisers Act of 1940, a bank
as defined under that Act, or an insurance company
qualified under the laws of more than one state to
manage, acquire, or dispose of Plan assets.
(b) Except where the Trustee is a corporate Trustee, the
following provisions shall govern. Where a corporate
Trustee is appointed, it may act through any one or more
of its duly authorized officers or employees. The
Trustees shall designate one of their number as Chairman,
and shall appoint a Secretary, who may, but need not, be
a Trustee. The Chairman shall preside at all meetings of
the Trustees at which he is present, but in his absence
any Trustee may call the meeting to order and preside.
The Secretary shall duly record or cause to be recorded
all acts and determinations of the Trustees, and all
records shall be preserved in his custody or as the
Trustees may direct. Any act or determination that the
Plan authorizes or requires the Trustees to do or make
may be done or made by a majority of the Trustees at the
time acting hereunder, and the act or determination of
such majority of the Trustees expressed at any time and
from time to time by a vote at a meeting or in writing
without a meeting shall constitute the act or
determination of the Trustees and shall have the same
effect for all purposes as if assented to by all the
Trustees serving at the time. Any person dealing with
the Trustees or with any agent or representative of the
Trustees shall be entitled to rely upon the certificates
of the Chairman or Secretary as to the fact that any act
or determination is the act or determination of the
Trustees.
The Trustees shall have the power to adopt rules for the
time and place of their meetings, the notice to be given
of such meetings, and all similar matters governing the
conduct of the Trustee's business.
(c) The Administrator shall have the duties and
responsibilities imposed by law on the administrator of
an employee benefit plan. In addition, the Administrator
shall perform such other duties and responsibilities as
may be delegated to him in writing by the Retirement Plan
Committee, and shall have such powers as may be conferred
on him in writing by the Retirement Plan Committee. The
Administrator may appoint in writing such persons as he
may deem necessary or desirable for the effective
exercise of his duties and may delegate to such persons
in writing such duties and responsibilities and confer
upon them in writing such powers, discretionary or
otherwise, as he may deem expedient or appropriate.
(d) The Trustees, Retirement Plan Committee and the
Administrator (and any person or persons to whom the
Trustees, Retirement Plan Committee or the Administrator
have delegated any duties or responsibilities) may employ
one or more persons to render advice with regard to any of
the duties or responsibilities of the Trustees,
Retirement Plan Committee or the Administrator under the
Plan.
(e) The Company shall defray all the expenses of the
Trustees, Retirement Plan Committee and the Administrator
in the administration of the Plan.
(f) The Trustees, Retirement Plan Committee and the
Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by any
actuary, upon all certificates and reports made by any
independent public accountants; and upon all opinions of
law given by any counsel (who may be counsel to an
Employer) and shall be fully protected in respect of any
act done or permitted or determination made in good faith
in reliance upon any such table, valuation, certificate,
report or opinion. Neither a Trustee, Retirement Plan
Committee nor the Administrator shall be liable to an
Employer or to any Employee or to any Beneficiary on
account of any act done or omitted or determination made
in the performance of his duties under the Plan, nor for
any act done or omitted by any agent or representative of
the Trustees, Retirement Plan Committee or the
Administrator so long as such Trustee, Retirement Plan
Committee or the Administrator has acted with the care,
skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with
like aims. Neither shall any Trustee be liable to any
person for any act done or omitted by any other Trustee
except to the extent prescribed by law. The Company
agrees to indemnify and hold harmless the Trustees,
Retirement Plan Committee and the Administrator from and
against any liability they may incur in the
administration of the Plan, unless arising from their own
negligence or willful misconduct. The provisions of this
Section 5.2(f) shall be effective only to the extent
permitted by law.
5.3 Benefit Claims Procedure
(a) In the event that any person makes a claim for benefits
under this Plan and such claim is denied in whole or
part, the Administrator, within a reasonable time, shall
furnish to such person a written notice of such denial
setting forth the specific reasons for such denial,
specific references to the provisions of the Plan upon
which such denial is based, a description of any
additional material or information necessary for such
person to provide including an explanation why such
material or information is necessary, and an explanation
of the review procedure under this Plan.
(b) Any person whose claim for benefits is denied in whole or
part may, within sixty days after receiving the foregoing
notice, request in writing addressed to the Administrator
a review by the Retirement Plan Committee of the denial.
In addition, any person who makes a claim for benefits
under this Plan and does not receive any decision on such
claim within a reasonable time may request a review by
the Retirement Plan Committee of the claim. Any person
requesting a review under this subsection 5.3(b) shall
have the opportunity to review pertinent documents and to
submit a written statement to the Retirement Plan
Committee, shall be entitled to request a hearing before
the Retirement Plan Committee, and shall be entitled to
have representation in connection with this review
procedure.
(c) Upon receipt of a request for review under subsection
5.3(b) hereof, the Retirement Plan Committee shall render
a decision as promptly as possible and in any event
within sixty days from such receipt, unless special
circumstances (such as the need to hold a hearing)
require an extension of time for processing, in which
case a decision shall be rendered as soon as possible,
but not later than 120 days from such receipt. The
decision of the Retirement Plan Committee shall be in
writing and shall include the specific grounds for the
decision and specific reference to the provisions of this
Plan upon which the decision is based.
ARTICLE VI
Amendment, Termination and Merger
6.1 Amendment. The Board of Directors or Compensation Committee
at any time and from time to time, by written notice to the
Trustees and to each Employer, may amend in whole or in part
any or all of the provisions of the Plan. The Office of the
Chairman of The Continental Corporation (or, in the cases of
clauses (1) and (3) below, the senior Human Resources officer)
may amend the Plan when it finds that such amendment (1) is
required to conform the Plan to applicable laws or
regulations, (2) will not increase the annual cost of the Plan
by more than the greater of 5% or $1 million, or (3) is
intended to implement transactions approved by the Board of
Directors. However, no amendment shall authorize or permit
any part of the Trust Fund to be used for or diverted to
purposes other than the exclusive benefit of Members and their
beneficiaries, and no amendment (except to the extent that it
is made retroactive to secure a favorable determination as to
the qualification of this Plan under the Internal Revenue
Code) shall reduce any interest of any person existing
immediately prior to such amendment.
6.2 Termination.
(a) The Board of Directors or Compensation Committee, at any
time, by written notice to the Trustees and to each
Employer, may terminate the Plan in whole or in part.
Upon a complete or partial termination, the rights of all
persons affected by such termination who are then
Members, to Benefits Accrued to the date of such
termination (hereinafter referred to as the Termination
Date), to the extent then funded, shall become
nonforfeitable (subject, however, to the provisions of
Section 6.3 hereof), and upon receipt of notice of such
termination, the Administrator shall allocate the Trust
Fund exclusively for the benefit of Members and
beneficiaries of Members, by providing for payment in
accordance with Section 4044 of ERISA.
(b) The Administrator, in his discretion, shall apply the
amounts allocated under this Section 6.2 for the benefit
of Members and their beneficiaries by cash payments, by
the purchase of annuity contracts from an insurance
company or companies designated by the Administrator or
by the continuance of the Trust Fund and payment of
Benefits therefrom.
(c) If, upon such termination, there is an amount remaining
in the Trust Fund after satisfying all liabilities to
Members and their beneficiaries, then and not otherwise,
the Trustees shall pay over to the several Employers, or
upon their order, their respective shares of the amount
so remaining in the Trust Fund, provided that such
distribution does not contravene any provision of law.
(d) Notwithstanding any such termination, the provisions of
Article V hereof and of the Trust Agreement shall
continue in effect until the Trustees shall have
completed the distribution of the Trust Fund and their
final accounts have been settled.
6.3 Restrictions on Benefits in Event of Early Termination.
(a) If at any time prior to the tenth anniversary of a
Commencement Date (as defined in paragraph (c) of this
Section) (1) the Plan shall be terminated or (2) the full
current costs of the Plan shall not then have been
funded, then, notwithstanding anything in the Plan to the
contrary, the amount of funds under the Plan that can be
used to provide benefits for any of the 25 highest paid
Employees of each Employer on that Commencement Date
whose anticipated Normal Retirement Allowance exceeds
$125 a month shall not exceed the greater of
(i) $20,000; or
(ii) 20 percent of the first $50,000 of the Annual
Compensation (as defined in paragraph (d) of this
Section) of such Employee multiplied by the number
of years between that Commencement Date and the
date of termination of the Plan or the date of the
failure to meet the full current costs of the Plan,
whichever is earlier; or
(iii) If such Employee is a substantial owner as
defined in section 4022(b)(5), of ERISA, a
dollar amount which equals the present value
of the benefit guaranteed for such Employee
under section 4022 of ERISA, or if the Plan
has not terminated, the present value of the
benefit that would be guaranteed if the Plan
terminated on the date the benefit commences,
determined in accordance with the regulations
of the Pension Benefit Guarantee Corporation
("PBGC"). If such Employee is not a
substantial owner as defined in section
4022(b)(5) of ERISA, a dollar amount which
equals the present value of the maximum
benefit described in section 4022(b)(3)(B) of
ERISA (determined on the date the Plan
terminates or on the date benefits commence,
whichever is earlier, and determined in
accordance with regulations of the PBGC)
without regard to any other limitations in
section 4022 of ERISA.
(iv) In the case of any Commencement Date other than the
Effective Date, either (1) the amount of funds
under the Plan that would have been used to provide
Benefits for such Employee if the Plan as in effect
the day before such Commencement Date had been
continued without change or (2) the sum of (A) the
amount of funds under the Plan that would have been
used to provide Benefits for such Employee if the
Plan had been terminated on the day before such
Commencement Date, plus (B) 20 percent of the first
$50,000 of the Annual Compensation of such Employee
multiplied by the number of years between that
Commencement Date and the date of termination of
the Plan or the date of the failure to meet the
full current costs of the Plan, whichever is
earlier.
(b) The provisions of paragraph (a) of this Section
shall not restrict the current payment of full
Benefits called for by the Plan for any Employee
who has retired while the Plan is in full effect
and its current costs have been met.
(c) As used in this Section 6.3, "Commencement Date"
means the Effective Date of the Plan (or with
respect to employees of any Affiliated Corporation
that becomes an Employer after the Effective Date,
the date it becomes an Employer) or the effective
date of any subsequent amendment to the Plan that
changes the Plan so as to increase substantially
the extent of possible discrimination as to an
Employer's contributions and as to Benefits
actually payable in event of the subsequent
termination of the Plan or the subsequent
discontinuance of the Employer's contributions
thereunder.
(d) As used in this Section 6.3, "Annual Compensation"
of an Employee means his average regular annual
compensation during the five calendar years
immediately preceding the earlier of (i) the date
of termination of the Plan, or complete
discontinuance of contributions hereunder, or (ii)
the date of commencement of Benefit payments under
the Plan to that Employee.
6.4 Merger, Consolidation and Transfer of Plan Assets. The Board
of Directors or Compensation Committee may direct the
Administrator to do all things necessary to effect a merger or
consolidation of the Plan with, or the transfer of all or a
part of the assets and liabilities of the Plan to, another
plan (or plans) if and only if
(a) Each trust forming a part of such plan (or plans) is a
qualified trust under Section 401 of the Internal Revenue
Code of 1986 and that each such trust is exempt from
Federal Income Tax under Section 501 of the Internal
Revenue Code of 1986;
(b) Each Member of the Plan would (if the Plan then
terminated) receive a Benefit immediately after the
merger, consolidation or transfer which is equal to or
greater than the Benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated); and
(c) The Administrator shall have timely filed, pursuant to
Section 6058 of the Internal Revenue Code of 1954, an
actuarial statement of valuation of evidencing compliance
with (b) above.
The Board of Directors or Compensation Committee, the
Trustees and the Administrator shall be entitled to rely
conclusively on the certificate of an actuary stating
that the condition set forth in (b) above has been met.
ARTICLE VII
Miscellaneous
7.1 Limitations on Employees' Rights. No Employee, Member or
other person shall have any right or claim to any Benefit
under the Plan except in accordance with the provisions of the
Plan, and then only to the extent that there are funds
available therefore in the hands of the Trustees. The
establishment of the Plan shall not be construed as creating
any contract of employment between any Employer and any person
or otherwise conferring upon any person any legal right to
continuation of employment, nor as limiting or qualifying the
right of each Employer to discharge any of its employees
without regard to the effect that such discharge might have
upon such employee's rights under the Plan.
7.2 Non-Assignability of Rights. No interest, right or claim in
or to any part of the Trust Fund or any payment therefrom
shall be assignable, transferable or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution, or levy of any kind, and
the Administrator shall not recognize any attempt to assign,
transfer, sell, mortgage, pledge, hypothecate, commute, or
anticipate the same, except to the extent required by law. If
any person entitled to any Benefit under the Plan shall
adjudicated bankrupt or shall attempt to assign, transfer,
sell, mortgage, pledge hypothecate, commute, or anticipate the
same, then the Administrator in his discretion may forthwith
terminate the right of such person to such Benefit and hold or
apply the amount thereof for the Benefit of such person, his
spouse, children or other dependents or any of them, in such
manner and in such proportion as the Administrator in his
discretion shall determine.
7.3 Facility of Payments. In the event that the Administrator
shall find that any person to whom a Benefit is payable under
the Plan is unable to care for his affairs because of illness
or accident, or otherwise, the Administrator may direct that
any Benefit payments due shall be paid to the duly appointed
legal representative of such person, or if there be no duly
appointed legal representative, to the spouse, a child, a
parent or other blood relative of the person, or to any person
deemed by the Administrator to have incurred expense for the
benefit of such person, and any such payments so made shall be
a complete discharge of the liabilities of the Plan therefor.
7.4 Refund of Employer Contributions. Once a contribution is made
to the Plan by any Employer on behalf of its Employees, it is
not refundable to the Employer unless the contribution:
(a) was made by a mistake of fact;
(b) was made conditioned upon a favorable determination by
the Internal Revenue Service and such a determination is
not received; or
(c) was made conditioned upon the contribution being allowed
as a deduction for Federal income tax purposes and such
deduction is disallowed.
Any refund under (a) must be made within one year from
the date the contribution was made to the Plan, and any
refund under (b) and (c) must be made within one year
from the date of failure to receive a favorable
determination, or the date of disallowance of the tax
deduction, respectively.
7.5 Number and Gender. Where from the context it appears
appropriate, each term used in this Plan in either the
singular or the plural shall include the singular and the
plural, and pronouns stated in either the masculine, feminine
or neuter gender shall include the masculine, feminine and
neuter.
7.6 Captions. Captions or Sections of this Plan are inserted for
convenience of reference only, and the Plan is not to be
construed by interpretation thereof.
7.7 Applicable Law. This Plan shall be interpreted, construed and
administered in accordance with the laws of the State of New
York (to the extent not preempted by ERISA), and with a view
toward compliance with ERISA.
ARTICLE VIII
Top-Heavy Plan Provisions
8.1 General Rule. For any calendar year (hereinafter called a
"Plan Year") in which this Plan is a "Top-Heavy Plan" as
defined in Section 8.7 below, any other provisions of this
Plan to the contrary notwithstanding, this Plan shall be
subject to the following provisions:
(a) the vesting provisions of Section 8.2
(b) the minimum benefit provisions of Section 8.3
(c) the limitation on compensation set by Section 8.4
(d) the limitation on benefits set by Section 8.5
8.2 Vesting Provisions. Each Member who (i) has completed an Hour
of Service during any Plan Year in which the Plan is top-heavy
and (ii) has completed the number of Years of Service
specified in the following table shall have a nonforfeitable
right to the percentage of the Retirement Credit under this
Plan correspondingly shown in the following table:
Nonforfeitable
Years of Percentage
Service Of Retirement Credit
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more years 100%
"Years of Service" as used in this Paragraph 8.2 shall
constitute the same years of Active Service as defined in
Section 1.1 of this Plan as used to determine the Member's
vesting percentage under Section 1.25 and 3.5.
Each Member's nonforfeitable Retirement Credit shall not be
less than his nonforfeitable Retirement Credit determined as
of the last day of the last Plan Year in which the Plan was a
Top-Heavy Plan. If the Plan ceases to be top-heavy, each
Member with five (5) or more Years of Service, whether of not
consecutive, shall have his nonforfeitable Retirement Credit
determined in accordance with this Section 8.2 and Section
1.25. Each such Member shall have the right to elect the
applicable schedule within 60 days after the day the Member is
issued written notice by the Committee, or as otherwise
provided in accordance with regulations issued under the
provision of the Internal Revenue Code, relating to changes in
the vesting schedule.
This provision shall apply without regard to contributions or
benefits under Social Security or any other Federal or State
Law.
8.3 Minimum Benefit Provisions. Each Member who (i) is a Non-Key
Employee (as defined in Section 8.9 below) and (ii) has
completed at least 1,000 Hours of Service during the first 12
months of his Employment or a calendar year thereafter shall
be entitled to a Retirement allowance in the form of an annual
pension benefit (as defined in paragraph (1) below) that shall
be not less than the applicable percentage (as defined in
paragraph (2) below) of the Participant's average annual
compensation for years in the testing period (as defined in
paragraph (3) below).
(1) "Annual pension benefit" mean a benefit payable annually
in the form of a single life annuity (with no ancillary
benefits) beginning at Normal Retirement Date or its
Equivalent Actuarial Value.
(2) "Applicable percentage" means the lesser of two percent
multiplied by the number of Top-Heavy Plan Years of
Service (as defined in paragraph (4) below) or 20
percent.
(3) "Testing period" means, with respect to a Member, the
period of consecutive years (not exceeding five) of
employment during which the Member had the greatest
aggregate compensation from the Employer. The testing
period shall not include any year of employment not
included as a Year of Service as defined in paragraph (4)
below. The testing period shall also not include any
Year of Service that ends in a Plan Year beginning before
January 1, 1984 or during which the Plan was not a
Top-Heavy Plan.
(4) "Years of Service" means such Active Service as defined
in Section 1.25 of this Plan and used to determine the
Participants nonforfeitable Retirement Credit under
Section 3.5.
Benefits taken into account under this section shall not
include any benefits payable under the Social Security Act or
any other Federal or State law.
8.4 Limitation on Compensation. Annual compensation taken into
account under this Section 8.4 and under the definition of
Monthly Compensation as set forth in Section 1.17 and average
Monthly Compensation determined in Section 3.1 for purposes of
computing benefits under this Plan shall not exceed the first
$200,000, provided that such limit shall be adjusted
automatically for each Plan Year to the amount prescribed by
the Secretary of the Treasury or his delegate pursuant to
regulations for the calendar year in which such Plan Year
commences.
8.5 Limitations on Benefits. In the event that an Employer should
maintain a defined contribution plan providing contributions
on behalf of Employees who are also Members in this Plan, one
of the two following provisions shall apply:
(a) If for the Plan Year this Plan would not be a "Top-Heavy
Plan" as defined in Section 8.7 below if "90 percent"
were substituted for "60 percent," then Section 8.3 shall
apply for such Plan Year as if amended so that the
"applicable percentage" means the lesser of three percent
multiplied by the number of Years of Service (as defined
in paragraph (4) of Section 8.3) during which the Plan
would be top-heavy and the overall applicable percentage
does not exceed the lesser of (i) 30% or (ii) 20% plus 1%
for each year the Plan is taken into account under this
Section 8.5(a).
(b) If for the Plan Year this Plan would continue to be a
"Top-Heavy Plan" as defined in Section 8.7 below if "90
percent" were substituted for "60 percent," then the
denominator of both the defined contribution plan
fraction and the defined benefit plan fraction shall be
calculated as set for in Section 3.10 for the Plan by
substituting "1.0" for "1.25" in each place such figure
appears, except with respect to any individual for whom
there are no Employer contributions, forfeitures or
voluntary nondeductible contributions allocated or any
accruals for such individual under the defined benefit
plan.
8.6 Coordination with Other Plans. In the event that a defined
contribution plan or another defined benefit plan maintained
by an Employer provides contributions or benefits on behalf of
Members in this Plan, such other plan shall be treated as a
part of this Plan pursuant to applicable principles (such as
Rev. Rul. 81-202 or any successor ruling) in determining
whether this Plan satisfies the requirements of Section 8.3 of
this article. Such determination shall be made upon the
advice of counsel to the Committee.
8.7 Top-Heavy Plan Definition. This Plan shall be a "Top-Heavy
Plan" for any Plan Years if, as of the determination date (as
defined in paragraph (1) below), the present value (as
determined in Paragraph (2) below) of the cumulative accrued
benefits under the Plan for Members (including former Members)
who are Key Employees (as defined in Section 8.8 below)
exceeds 60% of the present value of the cumulative accrued
benefits under the Plan for all Members, excluding former Key
Employees, or if this Plan is required to be in an aggregation
group (as defined in paragraph (3) below) which for such Plan
Year is a Top-Heavy Group (as defined in paragraph (4) below).
However, the Plan shall not be considered a "Top-Heavy Plan"
for any Plan Year in which the Plan is part of a Required or
Permissive Aggregation Group which is not top-heavy. For
purposes of making this determination, the present value of
accrued benefits for a participant (1) who is not a key
employee but who was a key employee in a prior year or (2) for
plan years beginning after 12/31/84, who has not performed any
service for the Employer at any time during the 5-year period
ending on the determination date, shall be disregarded.
(1) "Determination Date" means for any Plan Year the last day
of the immediately preceding Plan Year.
(2) The present value shall be determined as of the most
recent valuation date that is within the twelve-month
period ending on the Determination Date and as described
in the regulations under the Internal Revenue Code.
(3) "Aggregation Group" means the group of plans, if any,
that includes both the group of plans that are required
to be aggregated and the group of plans that are
permitted to be aggregated.
(A) The group of plans that are required to be
aggregated (the "required aggregation group")
includes:
(i) Each plan (including any terminated plan) of
an Employer in which a Key Employee is a
Member, including collectively bargained
plans, and
(ii) Each other plan (including any terminated
plan), including collectively bargained plans
of an Employer which enables a plan in which a
Key Employee is a Member to meet the
requirements of the Internal Revenue Code,
prohibiting discrimination as to contributions
or benefits in favor of Members who are
officers, shareholders or the highly
compensated or prescribing the minimum
participation standards.
(B) The group of plans that are permitted to be
aggregated (the "permissive aggregation group:)
includes the required aggregation group plus one or
more plans of an Employer that is not part of the
required aggregation group and that the Committee
certifies as constituting a plan within the
permissive aggregation group. Such plan or plans
may be added to the permissive aggregation group
only if, after the addition, the aggregation group
as a whole continues not to discriminate as to
contributions or benefits in favor of officers,
shareholders or the highly compensated and to meet
the minimum participation standards under the Code.
(4) "Top-Heavy Group" means the aggregation group, if as of
the applicable Determination Date, the sum of the present
value of the cumulative accrued benefits for Key
Employees under all defined benefit plans included in the
aggregation group plus the aggregate of the accounts of
Key Employees under all defined contribution plans
included in the aggregation group exceeds 60% of the sum
of the present value of the cumulative accrued benefits
for all Members, excluding former Key Employees, under
such defined benefit plans plus the aggregate accounts
for all Participants, excluding former Key Employees,
under such defined contribution plans. If the
aggregation group that is a Top-Heavy Group is a required
aggregation group, each plan in the group will be
top-heavy. If the aggregation group that is a Top-Heavy
Group is a permissive aggregation group, only those plans
that are part of the required aggregation group will be
treated as top-heavy. If the aggregation group is not a
Top-Heavy Group, no plan within such group will be
top-heavy.
(5) In determining whether this plan constitutes a "Top-Heavy
Plan", the Committee shall make the following adjustments
in connection therewith:
(A) When more than one plan is aggregated, the
Committee shall determine separately for each plan
as of each plan's determination date the present
value of the accrued benefits or account balance.
The results shall then be aggregated by adding the
results of each plan as of the Determination Dates
for such plans that fall within the same calendar
year.
(B) In determining the present value of the cumulative
accrued benefit or the amount of the account of any
Member, such present value or account shall include
the amount in dollars value of the aggregate
distributions made to such Member under the
applicable plan during the five-year period ending
on the Determination Date, unless reflected in the
value of the accrued benefit or account balance as
of the most recent valuation date. Such amounts
shall include distributions to Members which
represented the entire amount credited to their
accounts under the applicable plan.
(C) Further, in making such determination, such present
value or such account shall include any rollover
contribution (or similar transfer), as follows:
(i) If the rollover contribution (or similar
transfer) is initiated by the Member or made
to or from a plan maintained by another
Affiliate, the plan providing the distribution
shall include such distribution in the present
value or such account; the plan accepting the
distribution shall not include such
distribution in the present value or such
account unless the plan accepted it before
January 1, 1984.
(ii) If the rollover contribution (or similar
transfer) is not initiated by the Employee or
made from a plan maintained by another
Employer, the plan accepting the distribution
shall include such distribution in the present
value or such account, whether the plan
accepted the distribution before or after
January 1, 1984; the plan making the
distribution shall not include the
distribution in the present value or such
account.
(D) Effective January 1, 1985, if any individual has
not received any compensation from any Employer
maintaining the plan (other than benefits under the
plan) at any time during the 5-year period ending
on the Determination Date, any accrued benefit for
such individual (and the account of such
individual) shall not be taken into account.
8.8 Key Employee. The term "Key Employee" means any Employee or
former Employee under this Plan who, at any time during the
Plan Year containing the Determination Date or during any of
the four preceding Plan Years, is or was one of the following:
(a) An officer of the Employer. However, an officer earning
not more than one and one-half times the then applicable
limit in Section 415(c)(1)(A) of the Code shall not be
considered a Key Employee. Whether an individual is an
officer shall be determined by the Committee on the basis
of all the facts and circumstances, such as an
individual's authority, duties and term of office, not on
the mere fact that the individual has the title of an
officer. For any such Plan Year, there shall be treated
as officers no more than the lesser of:
(1) 50 employees; or
(2) the greater of three employees or 10 percent
of the employees.
For the purpose of the preceding sentence, the
highest-paid officers shall be selected first.
(b) One of the ten employees owning (or considered as owning,
within the meaning of the constructive ownership rules of
the Code) the largest interests in the Employer. An
Employee who has some ownership interest is considered to
be one of the top ten owners unless at least ten other
employees own a greater interest that that employee.
However, an Employee will not be considered a top ten
owner for a Plan Year if the Employee does not earn more
that than the applicable limitation in Section
415(c)(1)(A) of the Code.
(c) Any person who owns (or is considered as owning within
the meaning of the constructive ownership rules of the
Code) more than five percent of the outstanding stock of
the Employer or stock possessing more than five percent
of the combined total voting power of all stock of the
Employer.
(d) A person satisfying (c) above if "one percent" were
substituted for "five percent" and having an annual
Compensation of more than $150,000.
For purposes of parts (a), (b), (c) and (d) of this
Section 8.8, a beneficiary of a Key Employee shall be
treated as a Key Employee. For purposes of Subclauses
(b), (c) and (d), each individual Employer is treated
separately in determining ownership percentages; but, in
determining the amount of compensation, all Employers are
taken into account.
8.9 Non-Key Employee. The term "Non-Key Employee" means any
Member (and any beneficiary of such Member) who is not a Key
Employee.
8.10 Employer. The term "Employer" means the definition of
Employer found in Section 1.11 of the Plan.
8.11 Collective Bargaining Rules. The provisions of Section 8.2,
8.3, 8.4 and 8.5 above do not apply with respect to any Member
included in a unit of employees covered by a collective
bargaining agreement, unless the application of such sections
has been agreed upon with the collective bargaining agent.
ARTICLE IX
DIRECT ROLLOVERS
9.1 Distributee's Election. This Article 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 Article, a
distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
9.2 Eligible Rollover Distribution. An eligible rollover
distribution is 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: 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; any distribution to the extent
such distribution is required under section 401(a)(9) of the
Code; and 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).
9.3 Eligible Retirement Plan. An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in
section 401(a) of the 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.
9.4 Distributee. A 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 Code, are distributees with regard to the
interest of the spouse or former spouse.
9.5 Direct Rollover. A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.