Exhibit (10.r)
MET-PRO CORPORATION
SALARIED PENSION PLAN
AMENDED AND RESTATED
EFFECTIVE SEPTEMBER 1, 2000
MET-PRO CORPORATION
SALARIED PENSION PLAN
AMENDED AND RESTATED
EFFECTIVE SEPTEMBER 1, 2000
TABLE OF CONTENTS
Article Page
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I. Definitions ...........................................................................................1
II. Transition and Eligibility to Participate .............................................................8
III. Service and Credited Service, Transfers ..............................................................10
IV. Eligibility for Benefits .............................................................................14
V. Calculation of Benefits ..............................................................................15
VI. Vesting ..............................................................................................20
VII. Pre-Retirement Death Benefits ........................................................................21
VIII. Distribution .........................................................................................23
IX. Limitation on Benefits ...............................................................................29
X. Funding ..............................................................................................35
XI. Administration .......................................................................................36
XII. Management of Trust Fund .............................................................................38
XIII. Benefit Claims Procedure .............................................................................39
XIV. Non-Alienation of Benefits ...........................................................................40
XV. Designation of Beneficiary ...........................................................................41
XVI. Amendment and Termination ............................................................................42
XVII. Top-Heavy Provisions .................................................................................45
XVIII. General Provisions ...................................................................................49
Appendix A ...........................................................................................51
Appendix B............................................................................................53
MET-PRO CORPORATION
SALARIED PENSION PLAN
WHEREAS, MET-PRO CORPORATION ("Company") adopted the Met-Pro Corporation
Salaried Pension Plan ("Plan"), effective September 1, 1968 for certain of its
employees; and
WHEREAS, under the terms of the Plan, the Company has the ability to amend the
Plan; and
WHEREAS, the Company desires at this time to amend and restate the Plan in its
entirety to incorporate amendments adopted since the previous restatement
effective September 1, 1989, and to comply with, inter alia, the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, and the Taxpayer Relief Act of 1997;
NOW, THEREFORE, effective September 1, 2000, unless otherwise provided, the
Met-Pro Corporation Salaried Pension Plan is continued, amended, and restated,
as hereinafter set forth:
ARTICLE I
DEFINITIONS
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Except where otherwise clearly indicated by context, the masculine shall include
the feminine, the singular shall include the plural, and vice-versa.
1.1 "Actuarial Equivalent" of a given benefit shall mean a benefit payable
in a different form from such given benefit but having the same
actuarial present value of such benefit taking into account, where
applicable, the probability of surviving to receive such benefit
("Mortality") and the time value of money ("Interest"). The calculation
of actuarial present values shall be based on the actuarial assumptions
as set forth in Appendix A to this Plan.
1.2 "Actuary" shall mean the firm employing an "enrolled actuary" as defined
in Section 7701(a)(35) of the Code appointed by the Administrator.
1.3 "Administrator" shall mean the Company acting through its officers or a
Committee appointed by the Company under Article XI.
1.4 "Annuity Starting Date" shall mean the first date as of which
distribution of Retirement Benefits to a Participant is to begin under
Section 8.3 or the first date as of which distribution of Pre-Retirement
Death Benefits to a Spouse is to begin under Section 7.3.
1.5 "Average Monthly Compensation" shall mean the monthly Compensation of a
Participant averaged over the five consecutive calendar years which
produce the highest monthly average within the last ten completed
calendar years of employment. If a Participant has less than five
completed consecutive calendar years of service, his Average Monthly
Compensation will be based on his monthly Compensation during his months
of service from his date of employment to the earlier of the date he
terminates and the date he has completed 60 months of service.
1.6 "Board of Directors" shall mean the Board of Directors of the Company.
1.7 "Break in Service" shall mean any Plan Year during which an employee
suffers a Break in Service described in Article III.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as it may from time
to time be amended or supplemented. References to any section of the
Code shall be to that section as it may be renumbered, amended,
supplemented or reenacted.
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1.9 "Committee" shall mean the persons who may be appointed by the Board of
Directors to act on behalf of the Company to supervise the
administration of the Plan, as hereinafter provided.
1.10 "Compensation" shall mean with respect to any Participant, total
Compensation paid by the Company for the calendar year excluding
reimbursement or other expense allowances, fringe benefits (cash and
non-cash), moving expenses, deferred compensation, and welfare benefits
but including any Employee deferrals pursuant to Code Sections 125 or
401(k). Compensation shall not exceed the maximum amount that may be
taken into account under Code Section 401(a)(17), adjusted as provided
under Code Section 415(d) to reflect increases in the cost of living. In
applying this limitation, for Plan Years ending on or before August 31,
1997, the family group of a highly compensated Participant who is
subject to the family member aggregation rules of Code Section 414(q)(6)
because such Participant is either a "Five Percent Owner" of the
Employer or one of the ten (10) highly compensated employees paid the
greatest "415 Compensation" during the year, shall be treated as a
single Participant, except that for this purpose family members shall
include only the affected Participant's Spouse and any lineal
descendants who have not attained age nineteen (19) before the close of
the year. If, as a result of the application of such rules the adjusted
limitation is exceeded, then the limitation shall be prorated among the
affected family members in proportion to each such family member's
compensation prior to the application of this limitation, or the
limitation shall be adjusted in accordance with any other method
permitted by Regulation.
1.11 "Company" shall mean Met-Pro Corporation, including its several
Divisions, and its successors.
1.12 "Corporation Division" shall mean the corporate headquarters unit of the
Company.
1.13 "Dean Pump Division" shall mean the Dean Pump Division of Met-Pro
Corporation.
1.14 "Defined Benefit Plan" shall mean an employee benefit plan, as defined
in Section (3)(3) of ERISA that (a) is maintained by the Company, (b) is
qualified under Sections 401 and 501 of the Code, and (c) is not a
Defined Contribution Plan.
1.15 "Defined Contribution Plan" shall mean an employee benefit plan, as
defined in Section (3)(3) of ERISA that (a) is maintained by the
Company, (b) is qualified under Sections 401 and 501 of the Code, and
(c) provides for an individual account for each Participant and for
benefits based solely on the amounts credited to those accounts.
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1.16 "Divisions" shall mean those divisions of the Company who are
participating in the Plan and shall include the Corporation Division,
Dean Pump Division, Fybroc Division, Keystone Filter Division, Sethco
Division, Stiles-Kem Division, Systems Division (Non-Oxy), and Systems
Division (Oxy). Effective November 1, 1989, "Divisions" shall also mean
Duall Division. Effective July 1, 1993, "Divisions" shall also mean
Mefiag Division, and effective November 1, 1998, shall also mean the
Flex Kleen Division.
1.17 "Duall Division" shall mean, effective November 1, 1989, the Duall
Division of Met-Pro Corporation.
1.18 "Early Retirement Date" shall mean the first day of the calendar month
coincident with or next following the day on which a Participant (a)
attains age 55, and (b) is credited with three Years of Service.
1.19 "Effective Date" shall mean September 1, 2000.
1.20 "Eligible Employee" shall mean any salaried Employee of the Company
employed in a Division or by a Subsidiary who is not a Leased Employee
and who is not covered by a collective bargaining agreement, unless the
same provides for participation hereunder.
1.21 "Employee" shall mean anyone who is employed by the Company or by a
Subsidiary of the Company. Solely for the requirements prescribed in
Code Section 414(n)(3), Employee shall include Leased Employees within
the meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and
such Leased Employees do not constitute more than 20 percent of the
recipient's non-highly compensated work force.
The following shall not be considered an Employee: (i) any individual
who is classified by the Company or a Subsidiary as an independent
contractor or self-employed individual, whether or not such individual
is subsequently determined to have been a common-law employee, or (ii)
any individual employed by the Company for a specified limited period of
time, or for the duration of a specified project, with no expectation of
long-term employment (until and unless such individual is specifically
notified by the Company in writing that he is being reclassified as a
regular Employee).
1.22 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may from time to time be amended or supplemented. References to
any section of ERISA shall be to that section as it may be renumbered,
amended, supplemented or reenacted.
1.23 "Five Percent Owner" shall mean an Employee who owns more than five
percent of the Company (within the meaning of Section 416(i)(1)(B)(i) of
the Code).
1.24 "Flex Kleen" shall mean, effective November 1, 1998, the Flex Kleen
Division of Met-Pro Corporation.
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1.25 "Fund" shall mean the trust fund established for this Plan, administered
under the Trust Agreement, out of which benefits payable under this Plan
shall be paid.
1.26 "Fybroc Division" shall mean Fybroc Division of Met-Pro Corporation.
1.27 "Hour of Service" shall mean an hour for which:
(a) an Employee is directly or indirectly paid or entitled to
payment by the Company for the performance of employment duties,
or
(b) back pay, irrespective of mitigation of damages, is either
awarded or agreed to, or
(c) an Employee is directly or indirectly paid or entitled to
payment by the Company on account of a period of time during
which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), jury duty, lay-off, leave of
absence, or military duty.
There shall be excluded from the foregoing those periods during which payments
are made or due under a plan maintained solely for the purpose of complying with
applicable workers' compensation, unemployment compensation, or disability
insurance laws. An Hour of Service shall not be credited where an employee is
being reimbursed solely for medical or medically related expenses.
Hours of Service shall not be credited twice. Hours of Service shall be credited
in accordance with the rules set forth in U.S. Department of Labor Regulations
2530.200b-2(b) and (c).
Hours of Service shall be credited for any individual considered a Leased
Employee for purposes of this Plan under Section 414(n) of the Code.
Notwithstanding the foregoing, the Committee may, in accordance with uniform
rules nondiscriminatorily applied, elect to credit Hours of Service using one or
more of the following equivalencies:
Basis Upon Which Records Credit Granted to Individual
Are Maintained For Period
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Shift Actual Hours for Full Shift
Day 10 Hours of Service
Week 45 Hours of Service
Semi-Monthly Period 95 Hours of Service
Month 190 Hours of Service
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1.28 "Initial Anniversary Date" shall mean September 1, 1968 for Employees of
the Corporation and Systems Division (Non-Oxy), September 1, 1975 for
Employees of Fybroc Division and Keystone Filter Division, September 1,
1977 for Employees of Sethco Division and Stiles-Kem Division, and
September 1, 1979 for Employees of Systems Division (Oxy).
1.29 "Keystone Division" shall mean Keystone Division of Met-Pro Corporation.
1.30 "Late Retirement Date" shall mean the first day of the calendar month
coincident with or next following the day on which a Participant's
employment with the Company has ceased after the Participant's Normal
Retirement Date.
1.31 "Mefiag Division" shall include, effective July 1, 1993, only those
Employees of the Mefiag Division of Met-Pro Corporation who are employed
in the United States.
1.32 "Normal Retirement Age" shall mean exact age 65.
1.33 "Normal Retirement Date" shall mean the first day of the calendar month
coincident with or next following the day on which a Participant attains
age 65.
1.34 "Participant" shall mean a participant in this Plan as determined under
Article 2.
1.35 "Past Service Date" shall mean September 1, 1975 for Employees of the
Corporation, Systems (Non-Oxy) Division, Fybroc Division and Keystone
Filter Division; September 1, 1977 for Employees of Sethco Division and
Stiles-Kem Division; September 1, 1979 for Employees of Systems Division
(Oxy); September 1, 1986 for Employees of Dean Pump Division; effective
November 1, 1989, shall mean September 1, 1990 for Employees of Duall
Division; effective July 1, 1993, shall mean September 1, 1993 for
Employees of the Mefiag Division; and shall also mean February 1, 1997
for Employees of the Strobic Air Subsidiary. "Past Service Date" shall
mean September 12, 1996 for former Employees of the Strobic Air
Corporation (see also Article VI), and shall mean November 1, 1998 for
former Employees of the Flex Kleen Division.
1.36 "Plan" shall mean the retirement plan set forth in this document as it
may from time to time be amended or supplemented.
1.37 "Plan Year" shall mean a twelve-month period which shall commence each
September 1 and end on the next following August 31.
1.38 "Pre-Retirement Death Benefit" shall mean the death benefit payable
under Article VII to the beneficiary of a Participant who dies before
his Annuity Starting Date.
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1.39 "Prior Plan" shall include the Fybroc, Inc. Salaried Pension Plan, the
Keystone Filter Salaried Pension Plan, and the Stiles-Kem Corporation
Defined Benefit Plan as in effect on April 14, 1978 immediately prior to
their amendment and replacement in entirety by this Plan on April 15,
1978. "Prior Plan" shall also include the Oxy-Catalyst, Inc. Employees'
Pension Plan as in effect June 30, 1980 immediately prior to its
amendment and replacement in entirety by this Plan on July 1, 1980.
1.40 "Qualified Domestic Relations Order" is a domestic relations order that
meets the requirements as defined in Section 414(p) of the Code.
1.41 "Qualified Joint and Survivor Annuity" shall mean an annuity for the
life of a Participant with a survivor annuity for the life of the
Participant's Spouse where the survivor annuity is 50 percent of the
amount of the annuity payable during the joint lives of the Participant
and the Participant's Spouse and the joint and survivor annuity is at
least the Actuarial Equivalent of the most valuable form of benefit
under the Plan payable on his Annuity Starting Date.
1.42 "Qualified Pre-Retirement Survivor Annuity" shall mean a survivor
annuity for the life of the Participant's Spouse. Each payment under the
survivor annuity shall be equal to:
(a) in the case of a Participant who dies after his Early Retirement
Date and has not had a Separation from Service, the survivor
annuity the Participant's Spouse would have received if the
Participant had a Retirement on the day before his death and
received distribution of benefits in the form of an immediate
Qualified Joint and Survivor Annuity, or
(b) in the case of a Participant who dies on or before his Early
Retirement Date or has had a Separation from Service, the
survivor annuity the Participant's Spouse would have received if
the Participant had a Separation from Service on the earlier of
his actual Separation from Service and the day of his death,
survived to the later of his Early Retirement Date and his date
of death, received distribution of benefits in the form of a
Qualified Joint and Survivor Annuity and died on the day after
the later of his Early Retirement Date and his date of death.
1.43 "Regulations" shall mean the Income Tax Regulation as promulgated by the
Secretary of the Treasury or his delegate, and amended from time to
time.
1.44 "Rehired Employee" shall mean an Employee who is re-employed by the
Company after Separation from Service.
1.45 "Retirement" shall mean a Participant's termination of employment on or
after his Normal or Early Retirement Date.
1.46 "Retirement Benefit" shall mean the monthly benefit that accrues to a
Participant under Article V.
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1.47 "Separation From Service" of an Employee shall mean the time when the
employer-employee relationship with the Company is terminated for any
reason, including but not limited to, a termination by resignation,
discharge, death, total disability, or retirement.
1.48 "Sethco Division" shall mean Sethco Division of Met-Pro Corporation.
1.49 "Six Months of Service" shall mean the first consecutive six-month
period after the Employee's date of hire with the Company or an acquired
company or return to service in which the Employee completes at least
500 Hours of Service.
1.50 "Spouse" shall mean the person to whom a Participant is married on the
applicable date.
1.51 "Stiles-Kem Division" shall mean Stiles-Kem Division of Met-Pro
Corporation.
1.52 "Strobic Air Subsidiary" shall mean, effective February 1, 1997, the
Strobic Air Corporation, a subsidiary of the Met-Pro Corporation.
1.53 "Subsidiary" shall mean those subsidiaries of the Company who are
participating in the Plan and shall include the Strobic Air Subsidiary.
1.54 "Systems Division (Non-Oxy)" shall include only those Employees of the
Systems Division of Met-Pro Corporation who were not employees of
Oxy-Catalyst, Inc. on the date of its acquisition by the Company.
1.55 "Systems Division (Oxy)" shall include only those Employees of Systems
Division of Met-Pro Corporation who were employees of Oxy-Catalyst, Inc.
on the date of its acquisition by the Company.
1.56 "Trust" shall mean the trust established or maintained under the Trust
Agreement.
1.57 "Trust Agreement" shall mean the agreement between the Company and the
Trustee which provides for the establishment or continuation of the
Trust in accordance with Article XII.
1.58 "Trustee" shall mean the Bank, Trust Company or Insurance Company
designated as provided under Article XI.
1.59 "Vested Interest" shall mean the nonforfeitable portion of a
Participant's Normal Retirement Benefit.
1.60 "Years of Credited Service" shall mean the number of full and partial
Plan Years counted with respect to determining a Participant's Accrued
Benefit under the Plan, as further described in Article III.
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1.61 "Years of Service" shall mean the number of Plan Years counted with
respect to determining a Participant's eligibility for benefits and
vested status under the Plan, as further described in Article III and
Article VI.
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ARTICLE II
TRANSITION AND ELIGIBILITY TO PARTICIPATE
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2.1 Rights Affected. Unless specified to the contrary, each Participant who
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has retired or has terminated service with the Company before the
Effective Date shall receive no additional rights as a result of this
amended and restated Plan, but shall have his rights and benefits
determined solely under the Plan as in effect before the Effective Date.
Any former Employee who has terminated employment before the Effective
Date and who is reemployed as an Employee on or after the Effective Date
shall have the rights and benefits provided hereunder.
2.2 Preservation of Plan Benefits. Subject to the maximum benefit
---------------------------------
limitations, in no event shall the Accrued Benefit of a Participant at
any time after the Effective Date be less than the amount of the
Participant's Accrued Benefit on the day preceding the Effective Date.
2.3 Eligibility to Participate. Each Employee who was a Participant in the
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Plan immediately prior to the Effective Date and who remains an Eligible
Employee of the Company on the Effective Date shall be a Participant
hereunder as of such date. Each other Eligible Employee shall become a
Participant on the later of (a) the September 1 coincident with or next
following the date he completed Six Months of Service, and (b) the date
he qualified as an Eligible Employee, but not later than six months
following the date he completes 1000 Hours of Service in a consecutive
twelve-month period. Effective as of September 1, 2000, an Eligible
Employee shall become a Participant on the later of his date of hire or
the date such employee qualifies as an Eligible Employee.
2.4 Cessation of Participant. A Participant shall cease to be a Participant
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on the earliest of the following three dates:
(a) his date of death,
(b) the date all distributions to the Participant have been made,
(c) the date he incurs a Break in Service provided that at that time
he has no entitlement to non-forfeitable benefits under the
Plan.
2.5 Participation Upon Reemployment. If a Rehired Employee who is not a
---------------------------------
Participant before he is rehired is an Eligible Employee as of the date
he is reemployed, and his Break in Service caused prior service to be
disregarded, then the Employee shall be treated as a new Employee. If a
Rehired Employee who was not a Participant before he is rehired or who
was a Participant before rehire is an Eligible Employee as of the date
he is reemployed and his Break in Service did not cause prior service to
be disregarded, then the employee shall again become a Participant on
the date he was rehired.
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2.6 Plant Shutdown. Effective December 31, 1996 the Systems Division was
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shut down. Each Participant in the Met-Pro Corporation Negotiated
Pension Plan is a Participant in this Plan effective June 1, 1997. All
benefit provisions applicable to such Participants will be determined
under the Met-Pro Corporation Negotiated Pension Plan.
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ARTICLE III
SERVICE AND CREDITED SERVICE, TRANSFERS
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3.1 Past Service shall mean full calendar years and full calendar months of
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service on an elapsed time basis (with a full month equal to 1/12 of a
year) completed by an Eligible Employee after his date of employment
with the Company or, if applicable, his earlier date of employment with
a company that has been acquired by the Company, and before his Past
Service Date.
3.2 Future Service for Purposes of Meeting Eligibility Requirements for
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Benefits and Vesting. An Employee shall accrue a Year of Service for
----------------------
each Plan Year commencing on or after his Past Service Date during which
he is credited with 1,000 or more Hours of Service.
3.3 Full Years of Future Credited Service for Benefit Accrual. Except as
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provided otherwise in this Article, an Employee shall accrue a full year
of Future Credited Service for each Plan Year commencing on or after his
Past Service Date in which he is an Eligible Employee for the full Plan
Year and is credited with 1,000 or more Hours of Service.
3.4 Partial Years of Future Credited Service for Benefit Accrual. With
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respect to any Plan Year commencing on or after an Employee's Past
Service Date and during which the Employee is an Eligible Employee for
less than the full Plan Year, the Employee shall accrue 1/12 of a year
of Future Credited Service for each month during which he is an Eligible
Employee for the full month and completes at least 83-1/3 Hours of
Service. Notwithstanding the above, a Participant who transfers out of
the Plan after the 15th day of a month shall accrue 1/12 of a year of
Future Credited Service for the month that he transfers out of the Plan
as long as he is an Employee for the full month and completes at least
83-1/3 Hours of Service, and a Participant who transfers into the Plan
before the 16th day of the month shall accrue 1/12 of a year of Future
Credited Service for the month that he transfers into the Plan, provided
that he is an Employee for the full month and completes at least 83-1/3
Hours of Service.
3.5 Credited Service shall mean the total of an Employee's Past Service and
-----------------
his full and partial years of Future Credited Service, subject to the
following adjustments for Employees of the Corporation Division (former
Strobic Air Corporation employees), Dean Pump Division, Duall Division,
Mefiag Division, Sethco Division, Stiles-Kem Division, and Systems
Division (Oxy), the Strobic Air Subsidiary and the Flex Kleen Division:
(a) Dean Pump Division - All Past Service accumulated before October
1, 1985 shall not be taken into account in determining the
amount of Credited Service.
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(b) Duall Division - Effective November 1, 1989, all Past Service
accumulated before July 1, 1988 shall not be taken into account
in determining the amount of Credited Service.
(c) Mefiag Division - Effective July 1, 1993, all Past Service
accumulated before July 1, 1993 shall not be taken into account
in determining the amount of Credited Service.
(d) Sethco Division - All Past Service accumulated before July 1,
1977 shall not be taken into account in determining the amount
of Credited Service.
(e) Stiles-Kem Division - All Past Service accumulated before August
1, 1970 shall not be taken into account in determining the
amount of Credited Service.
(f) Systems Division (Oxy) - All Past Service accumulated before
January 1, 1970 shall not be taken into account in determining
the amount of Credited Service.
(g) Corporation Division (former Strobic Air Corporation employees)
- All Past Service accumulated before October 1, 1996 by former
employees of Strobic Air Corporation shall not be taken into
account in determining the amount of Credited Service.
(h) Strobic Air Subsidiary - All Past Service accumulated before
February 1, 1997 shall not be taken into account in determining
the amount of Credited Service.
(i) Flex Kleen Division - All Past Service accumulated before
November 1, 1998 shall not be taken into account in determining
the amount of Credited Service.
3.6 Years of Service shall mean the total of an Employee's Past Service and
----------------
his Future Service for Eligibility for Benefits and Vesting, plus any
period of eligibility and vesting service accumulated by the Employee
under the provisions of another of the Company's pension plans or Prior
Plans, provided that, for Employees of Sethco Division, any Past Service
accumulated before August 1, 1971 shall not be taken into account in
determining Years of Service.
3.7 Transfers. When a Participant transfers to another pension plan of the
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Company, his continuity of service for eligibility and vesting shall not
be affected in any way whatsoever. His Years of Service, as calculated
for purposes of this Plan, shall include Years of Service as calculated
to date of transfer, plus all Years of Service subsequently earned in
the plan to which his is transferred. Similarly, his Years of Service
for purposes of the plan to which he is transferred shall include all
Years of Service earned under this Plan.
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3.8 Breaks in Service.
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(a) Any Plan Year in which a Participant is not credited with more
than 500 Hours of Service shall constitute a one-year Break in
Service; provided, however, that if an Employee is absent for
the following reasons, he shall be credited with an Hour of
Service, for purposes of this Section only, for each Hour of
Service he would have received if he had continued in the active
employ of the Company during the following periods of absence:
(i) layoff for a period not in excess of one year;
(ii) leave of absence with the approval of the Committee for
a period not in excess of one year, unless extended by
the Committee;
(iii) military service under leave granted by the Company or
required by law, provided the absent Participant returns
to service with the Company within 90 days of his
release from active military duty or any longer period
during which his right to reemployment is protected by
law.
(b) Service credited under this Section shall not be credited for
any other purpose under the Plan unless such service is
comprised of Hours of Service.
(c) If a Participant is absent from work by reason of pregnancy,
childbirth, adoption, or for purposes of the care of such
Participant's child immediately after birth or adoption, such
Participant shall be credited solely for purposes of this
Section with sufficient Hours of Service to avoid a Break in
Service in the Plan Year in which the absence commences or, if
the Participant already has more than 500 Hours of Service in
such Plan Year, the immediately following Plan Year. Hours of
Service during such absence shall be credited in an amount equal
to the Hours of Service the Participant would have had but for
such absence or, if such hours cannot be determined, at the rate
of eight hours per normal workday.
3.9 Restoration of Service.
-----------------------
(a) A Participant who had a Vested Interest under Article VI and who
incurs a Break in Service shall have his pre-break and
post-break service with the Company aggregated for purposes of
Sections 3.5 and 3.6 on his reemployment by the Company.
(b) A Participant who does not have a Vested Interest under Article
VI and who incurs a Break in Service shall have his pre-break
and post-break service with the Company aggregated for purposes
of Sections 3.5 and 3.6 on his reemployment within a period of
less than five consecutive Breaks in Service. If the consecutive
Breaks in Service are equal to or in excess of five, he shall
receive no credit for his pre-break service for purposes of
Sections 3.5 and 3.6.
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3.10 Credit for Military Service. Effective as of December 12, 1994,
------------------------------
notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Internal Revenue Code.
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ARTICLE IV
ELIGIBILITY FOR BENEFITS
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4.1 Normal Retirement Benefit. A Participant shall be eligible for normal
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retirement benefits on his Normal Retirement Date.
4.2 Early Retirement Benefit. A Participant shall be eligible for early
--------------------------
retirement benefits as of his Early Retirement Date.
4.3 Late Retirement Benefit. A Participant shall be eligible for late
-------------------------
retirement benefits on his Late Retirement Date.
4.4 Deferred Vested Benefit. A Participant who has completed three or more
------------------------
Years of Service and who, at the time of Separation from Service, is not
eligible for a benefit under Sections 4.1, 4.2 or 4.3 of this Plan,
shall be eligible for deferred vested retirement benefits.
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ARTICLE V
CALCULATION OF BENEFITS
-----------------------
5.1 General. The retirement benefits for a Participant that are payable
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under the single life form of payment shall be determined under this
Article V subject to the limitations set forth in Article IX. Each
Participant shall be entitled to the non-forfeitable portion, as
determined under Article VI of his retirement benefit and shall have no
right to any portion of his retirement benefit which is not
nonforfeitable under Article VI. Adjustments for forms of payment other
than the single life form shall be made in accordance with the
provisions of Article VIII.
5.2 Accrued Monthly Pension. On any given date, the Accrued Monthly Pension
-----------------------
for a Participant shall be determined as follows:
For a Participant whose date of hire with the Company or an acquired
Company (or whose date of rehire in the case of a Participant who
terminates and forfeits service in accordance with Section 3.9 and is
subsequently rehired) is on or before December 15, 1982 and whose Past
Service Date is prior to September 1, 1986, such benefit shall be equal
to the greater of 1/12 of [(a) + (b)], or (c) or (d) as set forth below
in this Section 5.2.
For a Participant whose date of hire with the Company or an acquired
company (or whose date of hire in the case of a Participant who
terminates and forfeits service in accordance with Section 3.10 and is
subsequently rehired) is after December 15, 1982, or whose Past Service
Date is on or after September 1, 1986, such benefit shall be equal to
the greater of (c) or (d) as set forth below in this Section 5.2.
(a) 0.75 percent of the Participant's base wage or salary on his
Initial Anniversary Date up to $7,800 and 1.20 percent of such
base wage or salary in excess of $7,800, multiplied by Credited
Service prior to his Initial Anniversary Date, plus
(b) For each Plan Year beginning with the Plan Year commencing on
the Participant's Initial Anniversary Date, and ending with the
Plan Year beginning September 1, 1988, 0.75 percent of base wage
or salary up to $7,800 and 1.75 percent of base wage or salary
in excess of $7,800, multiplied by the fraction of a year of
Credited Service completed by the Participant in the Plan Year
in question, plus 1.65 percent of base wage or salary earned in
each Plan Year beginning on or after September 1, 1989.
-16-
Annual base wage or salary for Plan Years beginning before September 1,
1989 means the annual base wage or salary in effect on the September 1,
beginning the Plan Year in question, except that when necessary, a
Participant's annual base wage or salary on the September 1 following
his date of hire shall be used in determining the amount of Accrued
Benefit attributable to his first partial year of Credited Service. For
the period beginning September 1, 1989, Compensation, as defined in
Section 1.10 is used in lieu of annual base wage or salary.
(c) Credited Service multiplied by the rate in effect on the last
day that the Participant accrued Credited Service under the
Plan. Notwithstanding the above, effective February 27, 1995, if
the Participant transfers out of the Plan and into another of
the Company's defined benefit pension plans, the rate used to
calculate the monthly pension will be the rate in effect on the
last day that the Participant accrued credited service under any
of the Company's defined benefit pension plans.
The rates in effect are as follows:
Rate Effective Date
---- --------------
9.00 September 1, 1984 - June 14, 1987
12.00 June 15, 1987 - June 14, 1988
14.00 June 15, 1988 - June 14, 1989
16.00 June 15, 1989 - June 14, 1990
18.00 June 15, 1990 - June 30, 1994
20.00 July 1, 1994 - April 30, 1995
21.00 May 1, 1995 - September 30, 1996
22.00 October 1, 1996 and thereafter
(d) One percent of the Participant's Average Monthly Compensation
multiplied by Credited Service or, in the case of an individual
who is or becomes a Participant on or after September 1, 2000,
if greater, a monthly benefit of $62.50, payable commencing on
the Participant's Normal Retirement Date.
(e) For Participant's with Compensation for a Plan Year prior to
September 1, 1994 in excess of $150,000, in no event will such
Participant's benefit determined according to (a) and (b) and
(d) of this Section 5.2 be less than the sum of:
(i) the Participant's Accrued Benefit on August 31, 1994
frozen in accordance with Section 1.401(a)(4)-13 of the
Regulations and
(ii) the Participant's Accrued Benefit determined using the
benefit formula applicable on or after September 1, 1994
with respect to Credited Service earned on or after
September 1, 1994.
-17-
5.3 Normal Retirement Benefit. A Participant who is eligible for normal
---------------------------
retirement benefits shall receive a monthly pension equal to his Accrued
Monthly Pension benefit on such retirement date.
5.4 Early Retirement Benefit. A Participant who is eligible for early
--------------------------
retirement benefits, upon retirement, shall receive either of the
following:
(a) A monthly pension equal to the product of (i) his Accrued
Monthly Pension as of his date of Separation from Service, and
(ii) his vesting percentage as of his date of Separation of
Service with such product, reduced by 5/9 percent for each of
the first 60 fall calendar months, and 5/18 percent for each of
the next 60 full calendar months by which the commencement of
his benefits precedes his Normal Retirement Date.
(b) A deferred monthly pension equal to the product of (a) his
Accrued Monthly Pension as of the date of his Separation from
Service, and (b) his vesting percentage as of the date of his
Separation from Service with payment commencing at his Normal
Retirement Date.
5.5 Deferred Vested Benefit. A Participant who is eligible for deferred
-------------------------
vested retirement benefits shall receive either of the following:
(a) A deferred monthly pension with payments commencing any time on
or after his Early Retirement Date equal to the product of (i)
his Accrued Monthly Pension as of the date of his Separation of
Service, and (ii) his vesting percentage as of the date of his
Separation of Service with such product, reduced by 5/9 percent
for each of the first 60 full calendar months, and 5/18 percent
for each of the next 60 full calendar months by which the
commencement of his benefits precedes his Normal Retirement
Date, and
(b) A deferred monthly pension equal to the product of (i) his
Accrued Monthly Pension as of the date of his Separation of
Service, and (ii) his vesting percentage as of the date of his
Separation of Service with payment commencing on his Normal
Retirement Date.
5.6 Late Retirement Benefit. A Participant who is eligible for late
-------------------------
retirement benefits shall receive a monthly pension equal to the greater
of (a) his Accrued Monthly Pension benefit on his Normal Retirement Date
or (b) the Actuarial Equivalent of his Normal Retirement Benefit except
that the benefit provided under Appendix B is not subject to any
actuarial increase that would otherwise result due to the benefit
commencing after his Normal Retirement Date, except to the extent
required by law.
-18-
5.7 Suspension of Benefits
----------------------
(a) (i) In the event that a Participant is employed in qualified
reemployment or qualified employment, the benefits
otherwise payable to the Participant shall be suspended
for each calendar month in which he continues his
qualified reemployment or qualified employment. The
rules relating to such a suspension of benefits and
their subsequent resumption are described in this
Section.
(ii) The Committee shall notify the Participant by personal
delivery or first class mail of the suspension of his
benefits during the first month in which such suspension
of benefits occurs if required in accordance with the
notification requirements of Department of Labor
Regulations Section 2530.203-3(b)(4).
(iii) Each Participant receiving benefits under the Plan shall
be required to give notice to the Committee of any
employment relationship which such Participant has with
the Company. The Committee shall have the right to use
all reasonable efforts to determine whether such
employment constitutes qualified reemployment or
qualified employment. The Committee shall also have the
right to require the Participant to provide information
sufficient to prove that such employment does not
constitute qualified reemployment or qualified
employment.
(iv) A Participant may, by written request, ask the Committee
to make a determination as to whether specific
contemplated employment constitutes qualified
reemployment or qualified employment. The Committee
shall respond to such request in writing within 60 days
of the Committee's receipt of the request.
(v) Subject to Sections 8.3 and 8.8, benefit payments to the
Participant will resume (or commence) no later than the
first day of the third calendar month following the
month in which his qualified reemployment or qualified
employment ceases or, if later, the first day of the
calendar month following receipt by the Committee of the
Participant's notice that his qualified reemployment or
qualified employment has ceased. The initial resumption
payment shall include payment for the current month and
for all previous calendar months since the cessation of
the Participant's qualified employment or reemployment.
(vi) The Committee shall offset resumed benefits by an amount
equal to any benefits which were paid to the Participant
with respect to a calendar month in which the
Participant was engaged in qualified reemployment or
qualified employment. However, the offset to any monthly
benefit, other than the initial resumption payment,
shall not exceed twenty-five percent (25%) of such
monthly benefit. Any remaining offset shall be applied
to benefits payable in subsequent months.
-19-
(b) In the event that a Participant is employed or reemployed by the
Company under any circumstances other than as described in
Subsection (a), the benefits otherwise payable to the
Participant shall be continued during such period of employment
or reemployment.
(c) Qualified reemployment shall mean the reemployment of a
Participant by the Company after his Normal Retirement Date in
such a capacity that (and provided that) the Participant
receives or is entitled to be paid for at least 40 Hours of
Service (not including Hours of Service credited as a result of
back pay) during a calendar month. Notwithstanding the above,
for Participants that attain age 70 1/2 in calendar years before
January 1, 2003, qualified reemployment shall not include
employment on or after the April 1st following the calendar year
in which the Participant attains age 70 1/2. In addition,
effective January 1, 2002, qualified reemployment shall not
include employment with respect to a Participant that makes an
election to commence benefits under Section 8.3(b).
(d) Qualified employment shall mean the continued employment of a
Participant after his Normal Retirement Date in such a capacity
that (and provided that) the Participant receives or is entitled
to be paid for at least 40 Hours of Service (not including Hours
of Service credited as a result of back pay) during a calendar
month. Notwithstanding the above, for Participants that attain
age 70 1/2 in calendar years before January 1, 2003, qualified
employment shall not include employment on or after the April
1st following the calendar year in which the Participant attains
age 70 1/2. In addition, effective January 1, 2002, qualified
employment shall not include employment with respect to a
Participant that makes an election to commence benefits under
Section 8.3(b).
-20-
ARTICLE VI
VESTING
-------
If a Participant has been credited with three or more Years of Service, a
portion of the Participant's Accrued Benefit shall be nonforfeitable. The
nonforfeitable portion shall be an amount equal to a Participant's Accrued
Benefit multiplied by a percentage based upon the number of Years of Service, as
follows:
Number of Years of Service Vesting Percentage
-------------------------- ------------------
0 0
1 0
2 0
3 20
4 40
5 60
6 80
7 or more 100
Notwithstanding the above, the Vesting Percentage of a Participant who has
attained his Normal Retirement Age shall be 100 percent.
Also notwithstanding the above, each individual who was an employee of Strobic
Air Corporation on the date of acquisition by the Company and who continued his
employment with the Company and became a Participant in the Plan shall have his
Vesting Percentage equal to 100% if he had attained age 55 on or before the
September 12, 1996 date of acquisition.
-21-
ARTICLE VII
PRE-RETIREMENT DEATH BENEFITS
-----------------------------
7.1 Pre-Retirement Survivor Death Benefit
---------------------------------------
In the event of a death of a Participant who (a) has a Vested Interest,
and (b) has not yet had an Annuity Starting Date, the Participant's
designated beneficiary shall receive a Pre-Retirement Survivor Death
Benefit. For purposes of this Article, a married Participant's
designated beneficiary shall be the Participant's Spouse. For Employees
who are hired by the Company or a Subsidiary on or after September 1,
2001, the provisions of this Section 7.1 will apply only if the
Participant is married on his or her date of death.
7.2 Amount and Form of Pre-Retirement Survivor Death Benefit
--------------------------------------------------------
Subject to the following, the Participant's Pre-Retirement Survivor
Death Benefit shall be paid to the Participant's Spouse or designated
beneficiary in the form of an annuity for the Spouse's or designated
beneficiary's life. The amount of the monthly annuity shall be such that
the present value of the Pre-Retirement Survivor Death Benefit shall be
equal to the present value of the deceased Participant's vested Accrued
Benefit on his date of death. Notwithstanding the above, if the
Participant is married, the present value of the monthly annuity shall
not be less than the present value of a Qualified Pre-Retirement
Survivor Annuity. If the Actuarial Equivalent present value of a
Participant's Pre-Retirement Survivor Death Benefit as of the Annuity
Starting Date does not exceed $5,000, the method of distribution to the
Participant's Spouse or designated beneficiary shall be as a single cash
distribution which is the Actuarial Equivalent of the Qualified
Pre-Retirement Survivor Annuity.
7.3 Timing of Distribution
----------------------
Distribution of a Participant's Pre-Retirement Survivor Death Benefit
shall commence as of the Annuity Starting Date of the Participant's
Spouse or designated beneficiary. The Annuity Starting Date of the
Participant's Spouse or designated beneficiary shall be the earliest
date which the Participant could have begun to receive benefits if he
had survived (the first day of the month following the Participant's
death if the Participant had been eligible at the time of his death to
begin receiving benefits). Notwithstanding the above, (1) if the
Participant's Pre-Retirement Survivor Death Benefit is not payable in
the form of a Qualified Pre-Retirement Death Benefit, then the Annuity
Starting Date of the Participant's designated beneficiary shall be the
first day of the month coincident with or next following the
Participant's date of death, and (2) if the Actuarial Equivalent present
value of his Pre-Retirement Survivor Death Benefit does not exceed
$5,000, the Annuity Starting Date of the Participant's designated
beneficiary shall be the first day of the month coincident with or next
following the Participant's death.
-22-
7.4 Required Distribution
---------------------
If a Participant's Pre-Retirement Survivor Death Benefit is paid in the
form of a single cash payment, the Participant's entire Pre-Retirement
Survivor Death Benefit shall be distributed to his designated
beneficiary within five years of the Participant's death. If a
Participant's Pre-Retirement Survivor Death Benefit is distributed in
the form of an annuity, distribution shall commence by the December 31
of the year after the year of the Participant's death or, if later, in
the case of a married Participant, the December 31 of the year the
Participant would have attained age 70 1/2. Such Pre-Retirement Survivor
Death Benefit must be distributed over a period not extending beyond the
life expectancy of the Spouse or designated beneficiary.
-23-
ARTICLE VIII
DISTRIBUTION
------------
8.1 Optional Forms of Benefits. The Participant may elect, subject to
----------------------------
Section 8.7, to receive distribution of his Retirement Benefit (if the
Actuarial Equivalent present value of such benefit as of the
Participant's Annuity Starting Date or at the time of any prior
distribution is in excess of $5,000) by one of the following methods:
(a) a Single Life Annuity - an annuity payable in equal monthly
installments to the retired Participant for his life; or
(b) a Qualified Joint and Survivor Annuity - an annuity payable in
monthly installments to the Participant for his life and with
fifty percent (50%) of the amount of such monthly installment
payable after his death of the Participant to the Spouse of such
Participant, if then living, for the life of such Spouse. The
benefit payable to the Participant and co-pensioner under this
form of payment shall be the Actuarial Equivalent of the Single
Life form of payment; or
(c) a Single Life Annuity with a 60, 120, or 180 month period
certain feature - an annuity payable in equal monthly
installments to the retired Participant for his life, with 60,
120, or 180 monthly payments guaranteed. The benefits payable
shall be the Actuarial Equivalent of the Single Life form of
payment; or
(d) a Joint and Survivor Annuity for the life of the Participant
with a survivor annuity for the life of the Participant's named
co-pensioner equal to 50 percent or 100 percent of the amount
payable to the Participant. The benefit payable to the
Participant and co-pensioner under this form of payment shall be
the Actuarial Equivalent of the Single Life form of payment.
8.2 Small Benefit Payments. If the Actuarial Equivalent present value of the
----------------------
Retirement Benefit is less than $5,000, such benefit shall be paid in a
single lump sum payment.
Notwithstanding the above, effective for distributions occurring on or
after March 22, 1999, if a Participant has begun to receive
distributions pursuant to an optional form of benefit under which at
least one scheduled periodic distribution has not yet been made, and if
the present value of the Participant's benefit at the time of the first
distribution exceeded the cash-out limit set forth above, then the
present value of the Participant's benefit is deemed to continue to
exceed such cash-out limit.
-24-
8.3 Timing of Distribution; Annuity Starting Date.
----------------------------------------------
(a) Distribution of a Participant's Retirement Benefit shall
commence as of his Annuity Starting Date. A Participant's
Annuity Starting Date shall be the earliest of (1) the first day
of the month coincident with or next following the day of the
Participant's Retirement, (2) the first day of the month
coincident with or next following the day of the Participant's
Separation from Service if as of that date the Actuarial
Equivalent present value of his Vested Interest does not exceed
$5,000, (3) the first day of the month coincident with or next
following the Participant's Normal Retirement Date if the
Participant has a Separation from Service prior to that time,
unless the Participant elects under Section 8.4 to commence to
receive distribution prior to his Normal Retirement Date, and
(4) effective for all Participants (except Participants that
attained age 70 1/2after January 1, 1988 and before January 1,
2003, or Participants that are Five Percent Owners during the
Plan Year ending with or within the calendar year in which they
attain age 70 1/2or any subsequent Plan Year), the first day of
April immediately following the calendar year in which the
Participant retires or attains age 70 1/2, whichever occurs
later. For Participants that attained age 70 1/2after January 1,
1988 and prior to January 1, 2003, and for Five Percent Owners
as described above, the required beginning date of Plan benefits
is April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2. In no event, unless
the Participant elects otherwise, shall distribution of a
Participant's Vested Interest commence later than 60 days after
the latest of the last day of the Plan Year in which occurs (i)
the Participant's Retirement, and (ii) the Participant's
attainment of age 65.
(b) Notwithstanding the above, effective January 1, 2002, a
Participant that has completed twenty years of Credited Service
and attained age 70 who is an active Employee may elect (subject
to the minimum distribution requirements of Sections 8.3(a) and
8.8) to commence benefits as of the first day of the month
following attainment of age 70 or as of the first day of any
month thereafter while an active Employee. The calculation of
the benefit payable to such a Participant that makes an election
under this subsection shall be made in accordance with Section
5.6. The first date for which benefits are payable due to an
election under this subsection shall be considered the
Participant's Annuity Starting Date.
8.4 Election to Receive Distribution Before Normal Retirement Date. A
--------------------------------------------------------------------
Participant who (a) has a Separation from Service before his Normal
Retirement Date and (b) has a Vested Interest, the Actuarial Equivalent
present value of which exceeds $5,000 as of the Participant's Annuity
Starting Date, may elect to have distribution of his Retirement Benefit
commence before his Normal Retirement Date. In that event, distribution
shall commence as of the first day of any month following the election,
but not prior to a Participant's Early Retirement Date.
-25-
8.5 Qualified Joint and Survivor Annuity for Married Participants
-------------------------------------------------------------
(a) Subject to subsection (b), a Participant who is married on his
Annuity Starting Date shall receive distribution of his
Retirement Benefit in the form of a Qualified Joint and Survivor
Annuity, unless the Participant has previously waived his right
to receive benefits in this form. The waiver must be executed
and consented to by the Participant's Spouse in accordance with
Section 8.7. Both the Participant's waiver and the Spouse's
consent must state the particular optional form of benefit to be
distributed. Alternatively, the Spouse's consent may permit the
Participant to elect any optional form of benefit available
under the Plan. Such a general consent must acknowledge that the
Spouse has voluntarily relinquished rights to limit consent to a
specific form of benefit. A Participant's waiver of a Qualified
Joint and Survivor Annuity under this Section 8.5 may be revoked
at any time before the Participant's Annuity Starting Date and,
once revoked, may be made again before that date. A Spouse's
consent to the waiver once given may be revoked before the
Annuity Starting Date.
(b) In the case of a Participant (i) who is married for less than
one year on his Annuity Starting Date, (ii) receives
distribution of his Retirement Benefit in the form of a
Qualified Joint and Survivor Annuity and (iii) does not remain
married to his Spouse for at least one year, such Spouse shall
lose all survivor rights. In such event the Participant shall be
entitled to receive distribution of his Retirement Benefit in
any other form under Section 8.1.
8.6 Notification of Right to Waive Qualified Joint and Survivor Annuity.
-----------------------------------------------------------------------
Within the period beginning no earlier than 90 days, and no later than
30 days before the Participant's Annuity Starting Date the
Administrative Committee shall provide each Participant with a notice of
the Participant's right to elect to waive his right to receive
distribution of his Retirement Benefit in the form of a Qualified Joint
and Survivor Annuity. The notice shall contain an explanation, in
nontechnical language, of (a) the terms and conditions of the election
and its effect upon the Participant's Retirement Benefit (in terms of
dollars per annuity payment), (b) the requirement that the Participant's
Spouse must consent to the election in accordance with Section 8.7, (c)
the Participant's right to revoke the election in the manner prescribed
in regulations promulgated by the Secretary of the Treasury and (d) a
general description of the eligibility conditions and other features of
the optional forms of benefit under the Plan and sufficient information
to explain the relative values of these optional forms of benefits.
The Annuity Starting Date may not occur before the expiration of the 30
day period beginning on the date a written explanation describing the
terms of the Qualified Joint and Survivor Annuity is provided to the
Participant; provided however that the Annuity Starting Date may be less
than 30 days after receipt by the Participant of the written explanation
provided: (a) the Participant has been provided with information that
clearly indicates that the Participant has at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity; (b) the
Participant is permitted to revoke any affirmative distribution election
at least until the Annuity Starting Date or , if later, at any time
-26-
prior to the expiration of the 7-day period that begins the day after
the explanation of the Qualified Joint and Survivor Annuity is provided
to the Participant; and (c) the Annuity Starting Date is a date after
the date that the written explanation was provided to the Participant.
8.7 Spousal Consent. A Participant's waiver of a Qualified Joint and
----------------
Survivor Annuity described in Section 8.6 shall be valid only if the
Participant's Spouse executes a written consent to that election
acknowledging the effect of the election and the consent is witnessed by
a notary public or Plan Administrator. The Spouse's consent is not
required if (a) the Participant's Spouse cannot be located or for such
other circumstances as may be provided in regulations promulgated by the
Secretary of the Treasury, (b) the Participant is legally separated from
the Spouse or (c) the Participant has been abandoned by his or her
Spouse (within the meaning of local law) and the Participant has a court
order to that effect. A Participant's waiver of a Qualified Joint and
Survivor Annuity shall be effective only with respect to the Spouse who
consents to it as provided in this Section 8.7.
8.8 Minimum Distribution Requirements.
----------------------------------
(a) Notwithstanding any provision of this Plan to the contrary, all
distributions under the Plan shall be made in accordance with
Section 401(a)(9) of the Code and the regulations promulgated by
the Secretary of the Treasury thereunder.
(b) In the case of a Participant who is a Five Percent Owner, or a
Participant that attains age 70 1/2prior to January 1, 2003, or
a Participant that makes an election to commence benefits under
Section 8.3(b), if such a Participant remains an Employee after
attainment of age 70 1/2(or age 70 for a Participant electing
under Section 8.3(b)) and has commenced to receive Retirement
Benefits from the Plan, such Participant shall have such
benefits increased as of the first day of each calendar year to
reflect any additional Credited Service accrued during the Plan
Year ending immediately before the first day of that calendar
year. If a Participant who is not a Five Percent Owner attains
age 70 1/2after January 1, 2003, the Participant's accrued
benefit shall be actuarially increased in accordance with
Appendix A to take into account the period after age 70 1/2in
which the Participant is not receiving any benefits from the
Plan. The actuarial increase shall be provided for the period
starting on April 1 following the calendar year in which the
employee attains age 70 1/2. The actuarial increase described
above will be provided even during the period when a valid
benefit suspension is in place under ERISA Section 203(a)(3)(B).
(c) If a Participant dies after the date his Retirement Benefit has
commenced, the remaining portion, if any, of the Participant's
benefit shall be distributed to the Participant's beneficiary at
least as rapidly as it would have been distributed under the
method of distribution in effect on the day of the Participant's
death.
-27-
(d) If a Participant's Retirement Benefit is distributed in the form
of an annuity other than an annuity for the life of the
Participant or an annuity for the joint lives of the Participant
and the Participant's Spouse or in installments and the
Participant's Beneficiary is other than the Participant's
Spouse, the distribution must satisfy the minimum distribution
incidental benefit requirements under Section 1.401(a)(9)-2 of
the Income Tax Regulations.
(e) With respect to distributions under the Plan made in calendar
years beginning on or after January 1, 2001, the Plan will apply
the minimum distribution requirements of section 401(a)(9) of
the Internal Revenue Code in accordance with the regulations
under section 401(a)(9) that were proposed in January 2001,
notwithstanding any provision of the Plan to the contrary. This
amendment shall continue in effect until the end of the last
calendar year beginning before the effective date of final
regulations under Code section 409(a)(9) or such other date
specified in guidance published by the Internal Revenue Service.
This also applies to required distributions made under Article
VII.
8.9 Direct Rollover
---------------
(a) This Section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in
the manner prescribed by the Plan 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.
(b) For purposes of this Section the following definitions shall
apply:
(i) 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 Code
Section 401(a)(9); 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).
(ii) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that
accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
-28-
rollover distribution to the surviving Spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) 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 Code
Section 414(p), are distributees with regard to the
interest of the Spouse or former Spouse.
(iv) A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
8.10 Payments To Incompetents
------------------------
If the Committee shall find that any person to whom a benefit is payable
from the Trust Fund is unable to care for his affairs because of illness
or accident, or is a minor, any payment due (unless a prior claim
therefore shall have been made by a duly appointed guardian, committee
or other legal representative) may be paid to the Spouse, a child, a
parent, or a brother or sister, or to any person deemed by the Committee
to have incurred expense for such person otherwise entitled to payment.
Any such payment shall be a complete discharge of any liability of the
Company, the Administrator, the Committee, the Trustee, and the Fund
therefore.
8.11 Lost Participant. Neither the Administrator nor the Trustee shall be
-----------------
obligated to search for or ascertain the whereabouts of any Participant
or Beneficiary (other than to write to the Participant at his last
mailing address shown in the Plan Administrator's records). If a
Participant or Beneficiary cannot be located, the Participant's
Retirement Benefit or Pre-Retirement Death Benefit shall be forfeited,
but shall be reinstated (without interest) upon the Participant's or
Beneficiary's claim for the benefit.
8.12 Deemed Cashouts
---------------
Notwithstanding any other provision contained herein, if a Participant
separates from service and the Actuarial Equivalent present value of his
vested Accrued Monthly Pension is zero, the Participant shall be deemed
to have received a distribution of his vested Accrued Monthly Pension.
-29-
ARTICLE IX
LIMITATION ON BENEFITS
----------------------
9.1 Definitions. The following definitions apply for purposes of Section 9.2:
-----------
(a) Annual Benefit - shall mean a benefit which is payable annually
in the form of a straight life annuity with no ancillary
benefits.
(b) Compensation - shall mean annual compensation, as defined in
Regulation 1.415(2)(d)(l) of the Code, and effective for
limitation years beginning on or after January 1, 1998, shall
include (i) any elective deferral as defined in Code Section
402(g)(3) and (ii) any amount which is contributed or deferred
by the Company at the election of an Employee which is not
includible in gross income by reason of Code Section 125, or
effective January 1, 2001, Code Section 132(f).
(c) Defined Benefit Plan Fraction - for any limitation year ending
before the 2000 limitation year is a fraction:
(i) the numerator of which is the Projected Annual Benefit
of a Participant under the Defined Benefit Plan
(determined as of the close of the year), and
(ii) the denominator of which is the lesser of:
(1) 1.25 multiplied by $90,000 (or the applicable
dollar limitation under Section 415(d) of the
Code), or
(2) 1.4 multiplied by the average of the
Participant's total Compensation during the
three consecutive years in which he earned the
greatest amount of total Compensation from the
Company.
(d) Defined Contribution Plan Fraction - for any limitation year
ending on or before the 2000 limitation year is a fraction:
(i) the numerator of which is the sum of annual additions to
the Participant's accounts under the Defined
Contribution Plan as of the close of the year, and
(ii) the denominator of which is the sum of the lesser of the
following amounts for such year and for each prior year
of service with the Company;
-30-
(1) 1.4 multiplied by the amount determined under
Section 415(c)(l)(B) of the Code, or
(2) 1.25 multiplied by $30,000 (or the applicable
dollar limitation under Section 415(c)(1)(A) of
the Code).
For limitation years ending before the 2000 limitation year, in
the case of a Participant with respect to whom the sum of his
Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction exceeds 1.0 as of either (or both) December 31, 1982 or
December 31, 1986 (computed as if the provisions of Section 415
of the Code, as amended by the Tax Equity and Fiscal
Responsibility Act of 1982 or the Tax Reform Act of 1986,
respectively, were in effect on the applicable of those dates)
the numerator of the Participant's Defined Contribution Plan
Fraction shall be reduced so that the sum of those fractions as
of the applicable date does not exceed 1.0.
(e) Projected Annual Benefit - shall mean the annual benefit to
which a Participant would be entitled under the terms of all
Defined Benefit Plans if he had continued employment until his
normal retirement date under such plans and if his compensation
for the purpose of such plans had continued at the same rate.
9.2 Maximum Retirement Benefit. Notwithstanding any other provisions of this
--------------------------
Plan the Maximum Retirement Benefit shall be:
(a) Subject to Sections 9.2(b), (c), and (d), the Retirement Benefit
of a Participant shall be reduced to the extent that it (plus,
if applicable, the aggregate retirement benefit to which the
Participant is entitled under all other Defined Benefit Plans in
which he or she was a participant) exceeds the lesser of (1)
$90,000 (or such higher amount as may be permitted under Section
415 (d) of the Code to reflect increases in the cost of living,
and (2) 100 percent of the Participant's average annual
compensation during the three consecutive Plan Years in which
the Participant received the greatest aggregate amount of annual
compensation. No reduction shall be required under this Section
9.2(a) in the case of a Participant who never participated in a
defined contribution plan if the Participant's Retirement
Benefit (plus, if applicable, the Participant's retirement
benefit under all other Defined Benefit Plans) does not exceed
$10,000.
(b) The following adjustments shall be made in applying the
limitations of Sections 9.2(a) and 9.4.
(i) If a Participant's Retirement Benefit (or a retirement
benefit to which the Participant is entitled under any
other Defined Benefit Plan) is payable in a form other
than an Annual Benefit, the Retirement Benefit shall be
adjusted so that it is the Actuarial Equivalent of an
Annual Benefit, except that the following shall not be
taken into account: (A) any ancillary benefit that is
-31-
not related to retirement income benefits and (B) the
survivor annuity provided under the portion of any
annuity that constitutes a Qualified Joint and Survivor
Annuity (as defined in Section 417(b) of the Code).
Effective September 1, 1995, for purposes of adjusting
any benefit for any form of payment subject to Code
Section 417(e)(3), the interest rate assumption shall
not be less than the greater of the applicable interest
rate described in Appendix A(2)(b) or the rate described
in Appendix A(1)(a).
(ii) The dollar limitation set forth in Section 9.2(a)(i)
shall be adjusted as follows:
(1) If distribution of a Participant's Retirement
Benefit begins before the Participant's Social
Security retirement age as defined in Section
415(b)(8) of the Internal Revenue Code but on or
after the Participant's attainment of age 62
then the limitation shall be reduced by 5/9 of
one percent for each of the first 36 months and
5/12 of one percent for each of the additional
months (up to 24 months), if any, by which the
benefits commenced before the month in which the
Participant attains his or her Social Security
retirement age.
(2) If the distribution of a Participant's
Retirement Benefit begins before his or her
attainment of age 62 then the limitation shall
be reduced by (A) reducing the limitation to the
applicable limit for benefits payable at age 62
in accordance with paragraph (i); and (B) then
determining the Actuarial Equivalent of that
amount at the Participant's age at the time that
the benefit commences.
(3) If distribution of a Participant's Retirement
Benefit begins after the Participant's Social
Security retirement age, the limitation shall be
increased (in accordance with regulations
promulgated by the Secretary of the Treasury) so
that it equals the amount of an Annual Benefit
beginning at the time distribution of the
Participant's Retirement Benefit begins, which
is the Actuarial Equivalent of an Annual Benefit
equal to the dollar limitation set forth in
Section 9.2(a)(1) beginning at the Participant's
Social Security retirement age.
(iii) In the case of a Participant with less than ten years of
participation in the Plan or less than ten (10) years of
Credited Service:
(1) the dollar limitation set forth in Section
9.2(a)(i) shall be multiplied by a fraction the
numerator of which is the aggregate number of
-32-
the Participant's years of participation in the
Plan at the time the determination is made and
the denominator of which is ten, and
(2) the percentage limitation set forth in Section
9.2(a)(2) and the $10,000 minimum benefit
referred to in the last sentence of Section
9.2(a) shall be multiplied by a fraction the
numerator of which is the aggregate number of
the years of the Participant's Years of Service
at the time the determination is made and the
denominator of which is ten.
(iv) For purposes of adjusting the Participant's retirement
benefit under Section 9.2(b)(i) or the dollar limitation
under Section 9.2(b)(ii), the interest rate assumption
shall be that set forth in the Appendix to this Plan
subject to the limitations on interest rates of Section
415(b)(2)(E) of the Code, and the mortality decrement
shall be ignored to the extent that a forfeiture does
not occur at death.
(c) The Retirement Benefit of a Participant who was a Participant
before January 1, 1987 shall not be reduced under any other
provisions of this Section 9.2 to the extent that it does not
exceed the Participant's Retirement Benefit accrued as of that
date and determined in accordance with the requirements of
Section 415 of the Code in effect on that date and without
regard to amendments to the Plan after May 5, 1986. The
Retirement Benefit of a Participant who was a Participant before
January 1, 1983 shall be similarly protected.
(d) If a Participant is a participant in any Defined Contribution
Plan for limitation years ending before the 2000 limitation
year, the Participant's Retirement Benefit shall be reduced to
the extent that it causes the sum of the Participant's Defined
Benefit Plan Fraction and the Participant's Defined Contribution
Plan Fraction to exceed 1.0 for any Plan Year.
(e) If Section 415 of the Code is amended, or if new regulations are
promulgated by the Secretary of Treasury, the restrictions under
this Section 9.2 shall be correspondingly modified without
formal amendment to this Plan.
9.3 Incorporation by Reference
--------------------------
Notwithstanding anything contained in Section 9.1 and 9.2 to the
contrary, the limitations, adjustments and other requirements prescribed
in Section 9.1 and 9.2 shall at all times comply with the provisions of
Code Section 415 and the Regulations thereunder, the terms of which are
specifically incorporated herein by reference.
-33-
9.4 Restrictions on 25 Highest Paid Employees
-----------------------------------------
(a) Benefits distributed to any of the twenty-five (25) most highly
compensated active and highly compensated former employees with
the greatest compensation in the current or prior year are
restricted such that the monthly payments are no greater than an
amount equal to the monthly payment that would be made on behalf
of such individual under a straight life annuity that is the
Actuarial Equivalent of the sum of the individual's Accrued
Monthly Pension, the individual's other benefits under the Plan
(other than a social security supplement within the meaning of
Regulation 1.411(a)-7(c)(4)(ii)), and the amount the individual
is entitled to receive under a social security supplement.
However, the limitation of this Section 9.4 shall not apply if:
(i) after payment of the benefit to an individual described
above, the value of Plan assets equals or exceeds 110
percent of the value of current liabilities, as defined
in Code Section 412(1)(7);
(ii) the value of the benefits payable under the Plan to an
individual described above is not less than 1 percent of
the value of current liabilities before distribution; or
(iii) the value of the benefits payable under the Plan to an
individual described above does not exceed $5,000.
(b) For purposes of this Section, benefit includes any periodic
income, any withdrawal values payable to a living Participant,
and any death benefits not provided for by insurance on the
individual's life.
(c) An individual's otherwise restricted benefit may be distributed
in full to the affected individual if, prior to receipt of the
restricted amount, the individual enters into a written
agreement with the Administrator to secure repayment to the Plan
of the restricted amount. The restricted amount is the excess of
the amounts distributed to the individual (accumulated with
reasonable interest) over the amounts that could have been
distributed to the individual under the straight life annuity
described above (accumulated with reasonable interest). The
individual may secure repayment of the restricted amount upon
distribution by:
(i) entering into an agreement for promptly depositing into
escrow with an acceptable depositary, property having a
fair market value equal to at least 125 percent of the
restricted amount;
(ii) providing a bank letter of credit in an amount equal to
at least 100 percent of the restricted amount; or
-34-
(iii) posting a bond equal to at least 100 percent of the
restricted amount. The bond must be furnished by an
insurance company, bonding company or other surety for
federal bonds.
(d) The escrow agreement may permit an individual to withdraw from
escrow amounts in excess of 125 percent of the restricted
amount. If the market value of the property in an escrow account
falls below 110 percent of the remaining restricted amount, the
individual must deposit additional property to bring the value
of the property held by the depositary up to 125 percent of the
restricted amount. The escrow arrangement may provide that the
individual has the right to receive any income from the property
placed in escrow, subject to the individual's obligation to
deposit additional property, as set forth in the preceding
sentence.
(e) A surety or bank may release any liability on a bond or letter
of credit in excess of 100 percent of the restricted amount.
(f) If the Administrator certifies to the depositary, surety or bank
that the individual (or the individual's estate) is no longer
obligated to repay any restricted amount, a depositary may
deliver to the individual any property held under an escrow
arrangement, and a surety or bank may release any liability or
an individual's bond or letter of credit.
(g) Notwithstanding the foregoing, with respect to Plan Years
beginning prior to January 1, 1989, compliance with the Plan and
Regulations then in effect shall be deemed compliance with this
Section 9.4.
-35-
ARTICLE X
FUNDING
-------
10.1 Contributions to the Fund. The benefits provided under the Plan shall be
-------------------------
financed exclusively by contributions made from time to time to the
Trustees by the Company and by the Fund created thereby. Subject to the
provisions of applicable law, the liability of the Company under the
Plan shall be limited to the contributions determined by the Company
from time to time in accordance with the advice and counsel of the
Actuary. The Company's liability for Plan payments shall be limited to
making contributions into the Fund in order to maintain the funding
standard account set forth in Section 412 of the Internal Revenue Code.
The funding policy applicable to the Fund shall be established by the
Committee and reviewed from time to time.
10.2 Use of Contributions to the Fund. The contributions deposited under the
--------------------------------
terms of this Plan shall constitute the Fund held for the benefit of
Participants, former Employees, and their eligible survivors under and
in accordance with this Plan. No part of the corpus or income of the
Fund shall be used for or diverted to purposes other than exclusively
for the benefit of such Participants, former Employees, and their
eligible survivors and for necessary administrative costs; provided,
however, that, in the event of the termination of the Plan and after all
fixed and contingent liability, as defined under the Code and ERISA,
shall have been satisfied and, upon receipt of the necessary approvals
from the Pension Benefit Guaranty Corporation, any remaining funds
attributable to contributions by the Company shall revert to the
Company; and further provided that, in the case of a contribution (a)
made by the Company as a mistake of fact, or (b) for which a tax
deduction is disallowed, in whole or in part, by the Internal Revenue
Service, the Company shall be entitled to a refund of said contributions
(i) within one year after payment of a contribution is made as a mistake
of fact, or (ii) within one year after disallowance, to the extent of
such disallowance, as the case may be.
10.3 Forfeitures. Forfeitures and other actuarial gains shall not be applied
-----------
to increase the benefits of any Participant, but shall reduce the
contributions of the Participating Company hereunder.
-36-
ARTICLE XI
ADMINISTRATION
--------------
11.1 Committee. The Company is plan administrator with full discretionary
---------
authority to interpret the Plan, find facts relating to the Plan, and
apply the Plan as such to the facts. The Board of Directors of the
Company shall appoint a Committee consisting of not less than two
persons to act on behalf of the Company with full discretionary
authority to control and manage the operation of, and administer, the
Plan. The Committee members may, but need not be, employees of the
Company and shall serve at the pleasure of the Board of Directors of the
Company. They shall be entitled to reimbursement of expenses, but those
members of the Committee who are also employees of the Company shall be
entitled to no compensation for their service on the Committee. Any
reimbursement of expenses of the Committee members shall be paid
directly by the Company. Vacancies on the Committee shall be filled by
the Board of Directors of the Company. Such Committee shall be
responsible for the general administration of the Plan under the policy
guidance of the Company.
11.2 Duties and Powers of the Committee. In addition to the duties and powers
----------------------------------
described elsewhere hereunder, the Committee shall have the following
specific duties and powers:
(a) to retain such consultants, accountants, attorneys, and
Actuaries as deemed necessary or desirable to render statements,
reports, and advice with respect to the Plan and to assist the
Committee in complying with all applicable rules and regulations
affecting the Plan; any consultants, accountants, attorneys, and
Actuaries may be the same as those retained by the Company;
(b) to decide appeals under Article XIII;
(c) to establish a funding policy consistent with the objectives of
the Plan;
(d) to enact uniform and nondiscriminatory rules and regulations to
carry out the provisions of the Plan;
(e) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
(f) to interpret the provisions of the Plan;
(g) to determine whether any domestic relations order received by
the Plan is a qualified domestic relations order, as provided in
Section 414(p) of the Code;
(h) to evaluate administrative procedures; and
-37-
(i) to delegate such duties and powers as the Committee shall
determine from time to time to any person or persons, including
the Administrator.
11.3 Functioning of Committee. The Committee and those persons or entities to
------------------------
whom the Committee has delegated responsibilities shall keep accurate
records and minutes of meetings, interpretations and decisions. Any
Employee may examine records pertaining directly to him. The Committee
shall elect a chairman and a secretary from its membership. The
Committee shall act by majority vote of the members, and such action
shall be evidenced by a written document.
11.4 Indemnification. Each member of the Committee, and any other person who
---------------
is an employee or director of the Company, shall be indemnified by the
Company against expenses (other than amounts paid in settlement to which
the Company does not consent) reasonably incurred by him in connection
with any action to which he may be a party by reason of his performance
of administrative functions and duties under the Plan, except in
relation to matters as to which he shall be adjudged in such action to
be personally guilty of negligence or willful misconduct in the
performance of his duties. The foregoing right to indemnification shall
be in addition to such other rights as the Committee member, or other
person may enjoy as a matter of law or by reason of insurance coverage
of any kind. Rights granted hereunder shall be in addition to and not in
lieu of any rights to indemnification to which the Committee member, or
other person may be entitled pursuant to the by-laws of the Company.
11.5 The Trustee. The Trustee shall be the named fiduciary with respect to
-----------
the management and control of Plan assets held by it, and shall have
exclusive authority to hold, manage and administer the Trust Fund in
accordance with the terms of the Trust Agreement entered into between
the Company and the Trustee except to the extent that authority to
manage certain assets held by the Trust is delegated by the
Administrative Committee to an Investment Manager pursuant to the terms
of the Trust Agreement. The Trustee may designate agents or others to
carry out certain of the administrative responsibilities in connection
with the management of the Trust.
11.6 The Trust Fund. The Trust Fund shall be used to pay benefits as provided
--------------
in the Plan and for the payment of expenses relating to the Plan except
to the extent that such expenses are paid by the Employers. For all
other purposes, including investment management and custodial functions,
the Trust Fund held under this Plan may be commingled with the Trust
Fund or Funds held under any other pensions plan or plans of the
Company. Prior to the satisfaction of all rights of Participants and
Beneficiaries under the Plan, no part of the principal or income of the
Trust Fund shall be used or diverted to purposes other than those
provided in the Plan, and no part thereof shall revert to the Employers
except after satisfaction of all liabilities of the Plan.
-38-
ARTICLE XII
MANAGEMENT OF TRUST FUND
------------------------
12.1 The Trust Fund. The Trust Fund shall be held in trust by the Trustee
---------------
appointed from time to time (before or after termination of the Plan) by
the Administrative Committee and shall he evidenced by a Trust Agreement
between the Company and the Trustee, a copy of which shall be filed with
the Administrative Committee.
12.2 Exclusive Benefit. The Trust Agreement must contain a provision that it
-----------------
shall be impossible at any time prior to the satisfaction of all
liabilities with respect to Participants or Beneficiaries thereof under
the Trust, for any part of the corpus or income to be used for purposes
other than for the exclusive benefit of Participants or Beneficiaries
and paying the reasonable expenses of the Plan and of the Trust,
provided that nothing herein shall be deemed to prevent the return of
any employer contribution (1) resulting from a mistake of fact, or (2)
conditioned upon deductibility under Section 404 of the Code, within one
year after the date of (i) payment of the contribution, or (ii) the
disallowance of the contribution, respectively.
12.3 Trustee's Reports. As soon as practicable after each Plan Year, the
------------------
Trustee shall submit to the Administrative Committee an appropriate
report stating the net value of the Trust Fund as of the end of the Plan
Year and containing such other information relating to the Trust Fund as
the Administrative Committee from time to time may request.
12.4 Trust Agreement. The Trust Agreement shall be a part of this Plan and
----------------
any rights or benefits under this Plan shall be subject to all the terms
and provisions of the Trust Agreement.
12.5 Expenses. All expenses incurred in the administration of the Plan shall
--------
be paid for by the Trust Fund to the extent not paid by the Company.
Such expenses include any expenses incident to the administration of the
Plan including, but not limited to, fees of accountants, counsel and
other specialist.
-39-
ARTICLE XIII
BENEFIT CLAIMS PROCEDURE
------------------------
13.1 Claim for Benefits. Any claim for benefits under this Plan shall be made
------------------
in writing to the Administrative Committee. If a claim for benefits is
wholly or partially denied, the Administrative Committee shall so notify
the Participant or Beneficiary within 90 days after receipt of the
claim, unless special circumstances require an extension to 180 days, in
which case the Participant will be notified of the need for the
extension within the initial 90-day period. The notice of denial shall
be written in a manner calculated to be understood by the Participant or
Beneficiary and shall contain (a) the specific reason or reasons for
denial of the claim, (b) a specific reference to the pertinent Plan
provisions upon which the denial is based, (c) a description of any
additional material or information necessary to perfect the claim
together with an explanation of why such material or information is
necessary and (d) an explanation of the claims review procedure. If a
written notice of denial is not provided to the Participant or
Beneficiary within such time period, the claim may be considered denied.
13.2 Review of Claim. Within 60 days after the receipt by the Participant or
---------------
Beneficiary of notice of denial of a claim (or at such later time as may
be reasonable in view of the nature of the benefit subject to claim and
other circumstances), the Participant or Beneficiary may (a) file a
request with the Committee that it conduct a full and fair review of the
denial of the claim, (b) review pertinent documents and (c) submit
questions and comments to the Committee in writing.
13.3 Decision After Review. Within 60 days after the receipt of a request for
---------------------
review under Section 13.2, the Administrative Committee shall deliver to
the Participant or Beneficiary a written decision with respect to the
claim, except that if there are special circumstances (such as the need
to hold a hearing) which require more time for processing, the 60-day
period shall be extended to 120 days upon notice within the initial
60-day period to the Participant or Beneficiary to that effect. The
decision shall be written in a manner calculated to be understood by the
Participant or Beneficiary and shall (a) include the specific reason or
reasons for the decision and (b) contain a specific reference to the
pertinent Plan provisions upon which the decision is based. If a written
notice of denial is not provided to the Participant or Beneficiary
within such time period, the appeal may be considered denied.
13.4 Committee Determination Binding. The Committee shall have the right to
---------------------------------
decide, in their sole and exclusive discretion, all questions respecting
the interpretation, application, or administration of the rules of
eligibility for the benefits or services furnished by the Plan and such
decisions shall be conclusive and binding upon all Participants,
dependents and beneficiaries.
-40-
ARTICLE XIV
NON-ALIENATION OF BENEFITS
--------------------------
14.1 Non-Alienation. Subject to Section 14.2, any benefits under or interests
--------------
in this Plan shall not be assignable or subject to alienation,
hypothecation, garnishment, attachment, execution or levy of any kind.
Any action in violation of this provision shall be void.
14.2 Qualified Domestic Relations Orders. Section 13.1 shall not apply to the
-----------------------------------
creation, assignment or recognition of a right to the Retirement Benefit
of a Participant pursuant to a Qualified Domestic Relations Order. The
Administrative Committee shall establish reasonable procedures for
determining whether a domestic relations order is a Qualified Domestic
Relations Order and for administering distributions under such order.
-41-
ARTICLE XV
DESIGNATION OF BENEFICIARY
--------------------------
15.1 Beneficiary Designation.
-----------------------
(a) The designation of a beneficiary under a joint and survivor
annuity shall be fixed and may not be changed on or after
benefit payments commence.
(b) The designation of a beneficiary to receive any remainder of a
guaranteed number of payments may be made or changed until the
date on which the guaranteed period has expired.
(c) Subject to Subsections (a) and (b) and to the provisions set
forth above relating to the rights of Spouses to survivor
benefit payments, each Participant shall have the right at any
time to designate or to change the previous designation of the
beneficiary or beneficiaries who shall receive benefits, if any,
after his death by executing and filing with the Committee a
form prescribed by the Committee. No designation, revocation, or
change of beneficiaries shall be valid and effective unless and
until filed with the Committee. If no designation is made, or if
all of the beneficiaries named in such designation predeceases
the Participant or cannot be located by the Committee, the
interest, if any, of the deceased Participant shall be paid to
the surviving relatives of the Participant in the first
surviving class in the schedule set forth as follows: (i)
Spouse, (ii) lineal descendants (including stepchildren and
adopted persons), (iii) parents equally, and (iv) the
Participant's estate.
15.2 Effective Date of Designation. Any designation or revocation of a
-------------------------------
designation of a Beneficiary shall become effective when actually
received by the Administrative Committee but shall not affect any
distribution previously made pursuant to a prior designation.
-42-
ARTICLE XVI
AMENDMENT AND TERMINATION
-------------------------
16.1 Power of Amendment and Termination. It is the intention of the Company
-----------------------------------
that this Plan will be permanent. However, the Company reserves the
right to terminate its participation in this Plan at any time by action
of its board of directors or other governing body. Furthermore, the
Company reserves the power to amend or terminate the Plan at any time by
action of the Board of Directors. Each amendment to the Plan will be
binding on the Company.
16.2 Limitation on Amendment.
------------------------
(a) Except as expressly provided elsewhere in the Plan, prior to the
satisfaction of all liabilities with respect to the benefits
provided under this Plan, no such amendment or termination shall
cause any part of the monies contributed hereunder to revert to
the Company or to be diverted to any purpose other than for the
exclusive benefit of Participants and their beneficiaries. No
amendment shall have the effect of retroactively depriving
Participants of benefits already accrued under the Plan. Any
amendment shall become effective as of the date designated by
the Board of Directors.
(b) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a
merger, plan transfer or similar transaction) shall be effective
to the extent it eliminates or reduces any "Section 411(d) (6)
protected benefit" or adds or modifies conditions relating to
"Section 411(d) (6) protected benefits" the result of which is a
further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of
the later of the adoption date or effective date of the
amendment. "Section 411(d) (6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of
benefits.
(c) If this Plan is amended and an effect of such amendment is to
increase current liability (as defined in Code Section 401(a)
(29) (E)) under the Plan for a Plan Year, and the funded current
liability percentage of the Plan for the plan Year in which the
amendment takes effect is less than sixty percent (60%),
including the amount of the unfunded current liability under the
Plan attributable to the amendment, the amendment shall not take
effect until the Employer (or any member of a controlled group
which includes the Employer) provides security to the Plan. The
form and amount of such security shall satisfy the requirements
of Code Section 401(a) (29) (B) and (C). Such security may be
released provided the requirements of Code Section 401(a) (29)
(D) are satisfied.
-43-
16.3 Amendment to Vesting Provision. If the vesting provisions set forth in
-------------------------------
Article VI are amended, any Participant who, as of the effective day of
the amendment had been credited with three or more years of Vesting
Service may irrevocably elect to have his nonforfeitable interest
computed without regard to the amendment. Notice of the amendment and
the availability of the election shall be given to each such
Participant, and the election may be exercised by the Participant by
notice to the Administrative Committee within 60 days after the later of
(a) the Participant's receipt of the notice, (b) the day the amendment
is adopted or (c) the effective date of the amendment.
16.4 Amendment to Maintain Qualified Status. Notwithstanding anything to the
--------------------------------------
contrary in Section 16.1, the Board, in its discretion, may make any
modifications or amendments to the Plan, retroactively or prospectively,
which it deems appropriate to establish or maintain the Plan and the
Trust Agreement as a qualified employees' plan and trust under Section
401 and 501 of the Code.
16.5 Disposition on Termination. In the event of the termination or partial
---------------------------
termination of the Plan, as defined in the Code, the interest of each
affected Participant who would not have a non-forfeitable right to one
hundred percent (100%) of his Accrued Benefit if his employment
terminated on the date of the termination or partial termination of the
Plan shall become non-forfeitable; however, in the event of such a
termination, each Participant and beneficiary shall have recourse toward
satisfaction of his non-forfeitable rights to his pension only from Plan
assets or from the Pension Benefit Guaranty Corporation to the extent
that it guarantees benefits.
The amount of the Fund shall be determined and, after providing for
expenses incident to termination and liquidation, the remaining assets
of such Fund shall be allocated in accordance with Section 4044 of ERISA
for the purpose of paying benefits proportionately among each of the
priority groups described below in the following order of precedence:
(a) to provide benefits to retired Participants and beneficiaries
who began receiving benefits at least three years before the
Plan termination (including those benefits which would have been
received for at least three years if the Participant had retired
that long ago), based on Plan provisions in effect five years
prior to termination during which period such benefit would be
the least; provided that the lowest benefit in pay status during
a three-year period shall be considered the benefit in pay
status for such period;
(b) to provide all other Accrued Benefits guaranteed by Federal law;
(c) to provide all other vested Accrued Benefits;
(d) to provide all remaining non-vested Accrued Benefits.
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If the assets available for allocation under any priority group (other
than as provided in priority groups (c) and (d)) are insufficient to
satisfy in full the Accrued Benefits of all Participants and
beneficiaries, the assets shall be allocated pro rata among such
Participants and beneficiaries on the basis of the present value of
their respective benefits (as of the termination date). The foregoing
payments and payments in the event assets are insufficient to pay the
Accrued Benefits provided in priority groups (c) and (d) will be paid in
accordance with regulations prescribed by the Pension Benefit Guaranty
Corporation. The procedure for allocation of assets upon termination of
the Plan will be carried out in an appropriate manner as to prevent the
Plan from being deemed disqualified by the Internal Revenue Service.
In the event all Accrued Benefits described above have been fully
funded, any remaining funds will revert to the Company.
Notwithstanding any other provision in this Section, if any of the
provisions of this Section conflicts with ERISA and regulations
thereunder, then ERISA and its regulations shall control.
16.6 Merger, Consolidation, or Transfer. In case of any merger or
-------------------------------------
consolidation with, or transfer of assets or liabilities to any other
plan, as provided in the Code, the benefit of any Participant or
beneficiary immediately after such merger, consolidation, or transfer
(if the Plan had then terminated) shall be at least equal to the benefit
such Participant or beneficiary would have received immediately before
such merger, consolidation, or transfer (if the Plan had then
terminated).
Plant Shutdown. Effective December 31, 1996 the Systems Division was
---------------
shut down. Certain employees were covered by the Met-Pro Corporation
Negotiated Pension Plan. The Met-Pro Corporation Negotiated Pension Plan
is merged into this Plan effective June 1, 1997. In the event of a
termination or partial termination or spin-off of this Plan occurring on
or prior to May 31, 2002, the allocation of assets of the Plan pursuant
to this Article XVI shall be made in such a manner as to give effect to
any special schedule of benefits which is required, pursuant to
regulations issued under Section 414(l) of the Internal Revenue Code, to
be created as a result of the merger of the Met-Pro Corporation
Negotiated Pension Plan into this Plan which merger was effective as of
June 1, 1997.
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ARTICLE XVII
TOP-HEAVY PROVISIONS
--------------------
17.1 The following definitions apply for purposes of this Article XVII:
(a) Average Compensation - a Participant's average annual
compensation (as defined in Regulation 1.415-2(d)(1) of the
Code) during the five consecutive Plan Years in which the
Participant received the greatest compensation, taking into
account only Plan Years (1) during which he was a Participant,
(2) with respect to which the Participant was credited with a
year of Vesting Service and (3) ending no later than the last
day of the last Plan Year in which the Plan was a Top Heavy
Plan.
(b) Determination Date - with respect to any plan year of the Plan,
a Defined Benefit Plan or a Defined Contribution Plan, the last
day of the preceding plan year (or in the case of the first plan
year of a plan the last day of that plan year).
(c) Key Employee - an Employee who at any time during a Plan Year or
any of the preceding four Plan Years is (a) an officer of the
Employer with Compensation greater than 50 percent of the amount
in effect under Section 415(b)(l)(A) of the Code on the last day
of the Plan Year, (b) one of the ten Employees with Compensation
greater than the amount in effect under Section 415(c)(l)(A) of
the Code on the last day of the Plan Year and owning the largest
percentage (in excess of one half of one percent) interest in
value of the Company (c) a Five Percent Owner and (d) an owner
of more than One Percent Owner with Compensation in excess of
$150,000. The determination of whether an Employee is a Key
Employee shall be made in accordance with Section 416(i) of the
Code. The Beneficiary of a Key Employee shall be treated as a
Key Employee.
(d) Permissive Aggregation Group of Plans - a group of employee
benefit plans including a Required Aggregation Group of Plans
and any other Defined Benefit Plans or Defined Contribution
Plans which when considered as a group meets the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group of Plans - a group of employee
benefit plans including each Defined Benefit Plan and Defined
Contribution Plan (a) in which any Key Employee is or was a
Participant or (b) which enables a plan described in clause (a)
to meet the requirements of Section 401(a)(4) or Section 410 of
the Code.
(f) Super Top Heavy Plan - the Plan for any Plan Year if it
satisfies the definition of Top Heavy Plan with 90 percent
substituted for 60 percent.
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(g) Top Heavy Fraction means (a) with respect to the Plan, a
fraction for a Plan Year the numerator of which is the aggregate
of the present values of the accrued benefits as of a
Determination Date of all Participants who are Key Employees and
the denominator of which is the aggregate of the present values
of the accrued benefits as of a Determination Date of all
Participants or (b) with respect to a Required Aggregation Group
of Plans or a Permissive Aggregation Group of Plans a fraction
(A) the numerator of which is the sum of (i) the aggregate of
the present values of the accrued benefits as of the applicable
Determination Date of all Participants who are Key Employees
under all defined benefit plans included in that group and (ii)
the aggregate credit balances as of the applicable Determination
Date in the accounts of all Participants who are Key Employees
under all defined contribution plans included in the group and
(B) the denominator of which is the sum of (i) the aggregate of
the present values of the accrued benefits as of the applicable
Determination Date of all Participants under all defined benefit
plans included in the Group and (ii) the aggregate credit
balances as of the applicable Determination Date in the accounts
of all Participants under all defined contribution plans
included in the group.
In computing a Top Heavy Fraction for a Plan Year, the following
rules shall apply: (a) the present value of accrued benefits as
of a Determination Date under each defined benefit plan and the
aggregate account balances as of a Determination Date under each
defined contribution plan shall be increased by the aggregate
distributions made from that plan to Participants during the
five year period ending on the Determination Date, (b) the
accrued benefit under any defined benefit plan and the account
balance under any defined contribution plan of a Participant who
has not performed services for an Employer at any time during
the five-year period ending on the Determination Date shall be
disregarded, (c) the present value of accrued benefits under a
defined benefit plan as of a Determination Date and the credit
balance under a defined contribution plan shall be determined as
of that plan's valuation date which occurs during the 12-month
period ending on the Determination Date, (d) in the case of a
Required Aggregation Group or a Permissive Aggregation Group,
the Determination Date of each Plan included in the group shall
be the Determination Date that occurs in the same calendar year
as the Determination Date of the Plan, (e) in the case of a
Required Aggregation Group or a Permissive Aggregation Group, in
determining the present value of accrued benefits the actuarial
assumptions set forth for this Plan shall be used for all
defined benefit plans, and (f) in the case of a Required
Aggregation Group or Permissive Aggregation Group the present
value of the accrued benefits under all defined benefit plans of
Participants other than Key Employees shall he determined based
upon the method used uniformly for accrual purposes for all
defined benefit plans but if there is no uniform method, based
upon the benefit accrual rate which does not exceed the slowest
accrual rate permitted under the fractional accrual rule of
Section 411(b)(l)(C) of the Internal Revenue Code.
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(h) Top Heavy Plan - the Plan for any Plan Year if the Top Heavy
Fraction for that Plan Year exceeds 60 percent (a) for the Plan,
if the Plan is not part of a Required Aggregation Group of
Plans, (b) for the Required Aggregation Group of Plans, if the
Plan is part of a Required Aggregation Group of Plans, or (c)
for the Permissive Aggregation Group of Plans, if the Plan is
part of a Permissive Aggregation Group of Plans and a Required
Aggregation Group of Plans.
17.2 When Top Heavy Provisions Apply. Notwithstanding any other provision of
-------------------------------
this Plan, the provisions of this Article XVII shall apply with respect
to any Plan Year for which the Plan is a Top Heavy Plan.
17.3 Minimum Benefit. Subject to Article IX, upon the retirement or
----------------
termination of employment of a Participant who is not a Key Employee,
the Participant's retirement benefit shall be equal to the greater of
(a) the Retirement Benefit that otherwise would be determined for the
Participant under Article V if no effect were given to this Article XVII
and (b) the product of 2 percent of the Participant's Average
Compensation and the number of years of his or her Years of Service (not
in excess of 10) credited with respect to Plan Years in which the Plan
is a Top Heavy Plan and he or she is a Participant. For purposes of
determining a Participant's Retirement Benefit under this Section 17.3,
it shall be assumed that payment of the Retirement Benefit shall be in
the form of a straight life annuity without ancillary benefits,
commencing on the Participant's Normal Retirement Date. If a Participant
who is not a Key Employee participates in both a defined benefit and
defined contribution Plan, the Company is not required to provide such
Participant both the minimum benefit and the minimum contribution. In
such event, the Participant shall receive the benefit described in this
Section.
The retirement benefit determined under this Section 17.3 shall apply
even though as a result of other Plan provisions a Participant who is
not a Key Employee would not otherwise have been entitled to have
received a benefit or would have received a lesser benefit because (i)
he or she failed to make mandatory employee contributions under the
Plan; (ii) his or her Compensation is less than the stated amount; (iii)
he or she is not employed on the last day of the accrual computation
period or (iv) the Plan is integrated with Social Security.
17.4 Vesting. For any Plan Year the Plan is a Top Heavy Plan, the non-
-------
forfeitable portion of the Retirement Benefit of a Participant who is
credited with at least one Hour of Service during that Plan Year under
Section 1.24 shall be the greater of the percentage determined under
Article VI and a percentage based on the Participant's Years of Service
as follows:
Number of Years of Service Vesting Percentage
0 0
1 0
2 20
3 40
4 60
5 80
6 or more 100
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17.5 Change From Top Heavy Vesting. If the Plan is a Top Heavy Plan for a
-------------------------------
Plan Year and ceases to be a Top Heavy Plan for the subsequent Plan
Year, the change in the vesting provision under this Section 17.5 to the
vesting provision under Article VI shall for purposes of Section 16.3 be
treated as an amendment of the vesting provisions of the Plan.
17.6 Combined Limitation. For any Plan Year in which the Plan is a Super Top
-------------------
Heavy Plan, 1.0 shall be substituted for 1.25 in clause (1) of the
definition of Defined Benefit Plan Fraction (Section 9.1(b)) and clause
(2) of the definition of Defined Contribution Plan Fraction (Section
9.1(c)). The foregoing shall not apply for Plan Years beginning on or
after the first day of the 2000 limitation year.
-49-
ARTICLE XVIII
GENERAL PROVISIONS
------------------
18.1 No Employment Rights. Neither the action of the Company in establishing
--------------------
the Plan, nor any provisions of the Plan, nor any action taken by it or
by the Committee shall be construed as giving to any employee of the
Company the right to be retained in its employ, or any right to payment
except to the extent of the benefits provided in the Plan to be paid
from the Fund.
18.2 Governing Law. Except to the extent superseded by ERISA, all questions
-------------
pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the state in which
the principal place of business of the Company is located.
18.3 Severability of Provisions. If any provision of this plan is determined
--------------------------
to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that
court only, shall be deemed not to include the provisions determined to
be void.
18.4 No Interest in Fund. No persons shall have any interest in, or right to,
-------------------
any part of the principal or income of the Fund, except as and to the
extent expressly provided in this Plan and in the Trust Agreement.
18.5 Discretion. Any discretionary acts under this Plan by the Company or by
----------
the Administrative Committee shall be uniform and applicable to all
persons similarly situated. No discretionary act shall be taken which
constitutes prohibited discrimination under the provisions of Section
401(a) of the Code.
18.6 Gender. Wherever applicable, any word used in the masculine should
------
include the feminine, and any word used in the singular shall include
the plural.
18.7 Participant Information. Each Participant shall notify the
--------------------------
Administrative Committee of (a) his mailing address and each change of
mailing address, (b) the Participant's, the Participant's Beneficiary's
and, if applicable the Participant's Spouse's date of birth, (c) the
Participant's marital status and any change of his marital status, and
(d) any other information required by the Administrative Committee. The
information provided by the Participant under this Section 18.7 shall be
binding upon the Participant and the Participant's Beneficiary for all
purposes of the Plan.
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18.8 Statement of Retirement Benefits. Upon a Participant's written request
--------------------------------
to the Administrative Committee, but no more frequently than once in a
twelve-month period, the Administrative Committee shall furnish him with
a statement of his Retirement Benefits.
18.9 Notices. Any notice, request, election, designation, revocation or other
-------
communication under this Plan shall be in writing and shall be
considered given when delivered personally or mailed by first class mail
to the last address furnished to the Committee.
18.10 Headings. The headings in this Plan are for convenience of reference and
--------
shall not be given substantive effect.
18.11 Withholding. The Committee and the Trustees shall have the right to
-----------
withhold any and all state, local, and Federal taxes which may be
withheld in accordance with applicable law.
Executed this 26th of February, 2002.
[SEAL] (NAME)
By: /s/ William L. Kacin
----------------------
President and CEO
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APPENDIX A
ACTUARIAL ASSUMPTIONS USED TO DETERMINE ACTUARIAL EQUIVALENCE
-------------------------------------------------------------
1. "Actuarial Equivalent". Subject to Section 2, the Actuarial Equivalent
-----------------------
of a given benefit shall be determined using the following assumptions:
(a) Interest - 8 percent per annum compounded annually.
(b) Mortality - The 1971 Male Group Annuity Table with ages set back
three years.
2. Minimum Actuarial Equivalent Present Value.
------------------------------------------
(a) Subject to paragraph (b) below, if a Participant's benefits are
to be paid in a single sum, then in no event shall the Actuarial
Present Value of a Participant's Vested Interest be less than
the greater of:
(i) such present value determined based on the assumptions
set forth in Section 1 above, or
(ii) such present value determined based on the interest
rates which would be used as of the first day of the
Plan Year in which distribution occurs by the Pension
Benefit Guaranty Corporation for a trusteed single
employer Plan and the mortality table specified in
paragraph (b) of Section 1.
(b) Effective September 1, 1995, if a Participant's benefits are to
be paid in a single sum, then in no event shall the Actuarial
Equivalent present value of a Participant's Vested Interest be
less than:
(i) such present value determined based on the assumptions
set forth in Section 1 above, or
(ii) such present value determined using the following
assumptions:
(A) Interest - the annual rate of interest on
30-Year Treasury securities as published by the
IRS for the month prior to the first month of
the Plan Year in which the distribution occurs.
(B) Mortality - determined under the applicable
mortality table under Code Section 417(e).
-52-
(c) Solely for the purpose of determining an actuarial increase in
benefits due as a result of the commencement of such benefits
after the Participant's attainment of age 70 1/2, the following
assumptions will be used:
(i) Interest - 5 percent per annum compounded annually,
(ii) Mortality - 1994 Group Annuity Table.
-53-
APPENDIX B
Effective as of December 31, 2000, the Accrued Monthly Pension of William L.
Kacin is increased by $6,666.67.
-54-