NORTHWESTERN PENSION PLAN
(Amended and Restated Effective as of January 1, 2000)
Northwestern Pension Plan
(Amended and Restated Effective as of January 1, 2000)
Contents
Section Page
Article I. The Plan 1
1.1 Establishment and Amendment of the Plan 1
1.2 Applicability of the Plan 1
1.3 Purpose of the Plan 1
Article II. Definitions 2
2.1 'Accrued Benefit' 2
2.2 'Actuarial Equivalent' 2
2.3 'Affiliate' 2
2.4 'Annuity Starting Date' 3
2.5 'Applicable Interest Rate' 3
2.6 'Applicable Mortality Table' 3
2.7 'Beneficiary' 3
2.8 'Attained Age' 3
2.9 'Cash Balance Participant' 3
2.10 'Code' 3
2.11 'Company' 3
2.12 'Compensation' 3
2.13 'Contract' 4
2.14 'Covered Compensation' 4
2.15 'Employee' 4
2.16 'Employer' 4
2.17 'ERISA' 4
2.18 'Final Average Compensation' 4
2.19 'Highly Compensated Employee' 4
2.20 'Hour of Service' 5
2.21 'Independent Contractor' 7
2.22 'Insurer' 7
2.23 'Normal Retirement Age' 7
2.24 'Nonresident Alien' 7
2.25 'One-Year Break in Service' 8
2.26 'Participant' 8
2.27 'Pension Benefit' 8
2.28 'Plan' 8
2.29 'Plan Year' 8
2.30 'Retirement Annuity' 8
2.31 'Retirement Date' 8
2.32 'Service' 8
2.33 'Service Break' 9
2.34 'Social Security Retirement Age' 10
2.35 'Spouse' 10
2.36 'Supervisory Committee' 10
2.37 'Taxable Wage Base' 11
2.38 'Termination Date' 11
2.39 'Traditional Participant' 11
2.40 'Trust' 11
2.41 'Trust Fund' 11
2.42 'Trustee' 11
2.43 'Vested Benefit Percentage' 11
2.44 'Year of Service' 12
Article III. Participation in the Plan 13
3.1 Traditional Participant 13
3.2 Cash Balance Participant 13
3.3 Eligibility Requirements For New Hires 13
3.4 Participation Following Service Break 14
3.5 Leased Employees 14
Article IV. Former Contributions of Participants 15
4.1 Former Contributions of Participants 15
Article V. Retirement Dates 16
5.1 Normal Retirement Date 16
5.2 Early Retirement Date 16
5.3 Late Retirement Date 16
5.4 Disability Retirement Date 16
Article VI. Traditional Pension Benefit 17
6.1 Traditional Accrued Benefit 17
6.2 Traditional Pension Benefit 17
6.3 Traditional Disability Benefit 20
6.4 Traditional Vested Benefit 21
6.5 Forfeiture of Traditional Benefits 22
6.6 Traditional Preretirement Survivor Annuity 23
Article VII. Cash Balance Pension Benefit 25
7.1 Cash Balance Accrued Benefit 25
7.2 Opening Balance 25
7.3 Pay Credits 26
7.4 Interest Credits 29
7.5 Normal Cash Balance Pension Benefit 30
7.6 Early Retirement Cash Balance Pension Benefit 30
7.7 Postponed Retirement Cash Balance Pension Benefit 30
7.8 Disability Cash Balance Pension Benefit 31
7.9 Termination of Vested Cash Balance Participant 32
7.10 Death Benefits 33
Article VIII. Maximum Plan Benefits 35
8.1 General Limitation 35
8.2 Early Commencement 35
8.3 Less than Ten Years of Service 35
8.4 Non-Single Life Annuity 36
8.5 Non-Applicability 36
Article IX. Payment of Benefits 37
9.1 Normal and Optional Forms of Benefit 37
9.2 Cashout 40
9.3 Direct Rollovers of Eligible Distributions 41
9.4 Distribution Rules 42
Article X. Administration 45
10.1 Misstatement 45
10.2 Determinations by the Supervisory Committee 45
10.3 Participant's Responsibilities 45
10.4 Claims Procedure 45
10.5 Claims Review Procedure 46
10.6 Plan Qualification 46
10.7 Indemnity of Supervisory Committee Members 46
Article XI. Financing the Plan 47
11.1 Financing the Plan 47
11.2 Nonreversion 47
Article XII. Amendment and Termination 48
12.1 Amendment to the Plan 48
12.2 Termination of the Plan 48
12.3 Restriction on Benefits on Early Termination 49
Article XIII. Facility of Payment 52
13.1 Facility of Payment 52
Article XIV. Assignment of Benefits 53
14.1 Assignment of Benefits 53
Article XV. Beneficiary 54
15.1 Designating a Beneficiary 54
15.2 Nonspouse Beneficiary 54
15.3 Plan Designations 54
15.4 Interpretations 54
Article XVI. Miscellaneous 56
16.1 Gender 56
16.2 Titles 56
16.3 Governing Law 56
Article XVII. Top-Heavy Provisions 57
17.1 Application of Top-Heavy Provisions 57
17.2 Definitions 57
17.3 Vesting Requirements 59
17.4 Minimum Accrual Formula 59
17.5 Collective Bargaining Agreements 60
Article XVIII. USERRA 61
Article I. The Plan
1.1 Establishment and Amendment of the Plan
NorthWestern Corporation (the 'Company') presently maintains a defined
benefit pension plan known as the 'NorthWestern Pension Plan' (the
'Plan') for the benefit of its eligible Employees and the eligible
Employees of its participating Affiliates. The Plan was established
effective as of October 1, 1940 and has been amended and restated from
time to time. The Plan is hereby amended and restated as set forth
herein, effective as of January 1, 2000.
1.2 Applicability of the Plan
The provisions of the Plan as set forth herein are applicable only to
the eligible Employees of an Employer in current employment on or
after January 1, 2000, except as specifically provided herein. Except
as so provided, the rights of any person whose employment terminated
prior to January 1, 2000, to receive benefits, if any, under the Plan,
and the amount of and conditions under which such benefits shall be
payable, shall be determined in accordance with the provisions of the
Plan as may have been applicable to such former Employee as in effect
on the date of his termination of employment.
1.3 Purpose of the Plan
The purpose of the Plan is to provide retirement income for
Participants.
Article II. Definitions
2.1 'Accrued Benefit' means a Traditional Participant's Accrued
Benefit as defined in section 6.1, and a Cash Balance
Participant's Accrued Benefit as defined in Section 7.1.
Notwithstanding any other provisions in the Plan, the Accrued
Benefit of each section 401(a)(17) Employee on any determination
date after December 31, 1993 shall be not less than the greater
of -
(1) the sum of -
(A) the Employee's Accrued Benefit as of December
31, 1993, frozen in accordance with the Treasury
regulations Section 1.401(a)(4)-13, and
(B) the Employee's Accrued Benefit determined
under the benefit formula applicable on such
determination date, as applied to Years of Service
credited to the Employee for Plan Years beginning on or
after January 1, 1994 for purposes of benefit accruals;
or
(2) the Employee's Accrued Benefit determined under the
benefit formula applicable on such determination date, as
applied to all Years of Service credited to the Employee for
purposes of benefit accruals.
A Section 401(a)(17) Employee means an Employee whose current
Accrued Benefit on or after January 1, 1994 is based on
Compensation for a Plan Year beginning prior to January 1, 1994,
that exceed $150,000.
2.2 'Actuarial Equivalent' shall mean any one of two or more
benefits of equivalent value as determined actuarially on the
basis of the Applicable Interest Rate and Applicable Mortality
Table.
2.3 'Affiliate' means-
(A) any corporation while it is a member of the same 'controlled
group' of corporations (within the meaning of Code Section
414(b)) as the Company;
(B) any other trade or business (whether or not incorporated)
while it is under 'common control' (within the meaning of
Code Section 414(c)) with the Company;
(C) any organization during any period in which it (along with
the Company) is a member of an 'affiliated service group'
(within the meaning of Code Section 414(m)); or
(D) any other entity during any period in which it is required
to be aggregated with the Company under Code Section 414(o).
2.4 'Annuity Starting Date' means the first day of the first month
for which a Plan benefit is paid or commences under Section 9.4.
2.5 'Applicable Interest Rate' for each Plan Year means the annual
rate of interest on 30-year Treasury securities for the month of
November immediately preceding the first day of such Plan Year.
2.6 'Applicable Mortality Table' means the mortality table defined
in Code Section 417(e)(3)(A)(ii)(I) or any successor Section and
regulations and rulings issued thereunder.
2.7 'Beneficiary' means any person designated by a Participant
pursuant to Article XIV to receive a benefit under the Plan in
the event of the Participant's death.
2.8 'Attained Age' means, at the time any determination is being
made, a Cash Balance Participant's age in whole years and a
fractional year as of the date such determination is made. The
fractional year shall be calculated by using the number of days
in such fractional year as the numerator and 365 as the
denominator.
2.9 'Cash Balance Participant' means a Participant deemed to be a
Cash Balance Participant pursuant to Section 3.2.
2.10 'Code' means the Internal Revenue Code of 1986, as amended.
2.11 'Company' means NorthWestern Corporation, a Delaware
corporation.
2.12 'Compensation' means compensation for Service rendered,
excluding overtime pay, shift differentials, commissions and
bonuses.
In addition to other applicable limitations which may be set
forth in the Plan and notwithstanding any other contrary
provision of the Plan, compensation taken into account under the
Plan shall not exceed $200,000 adjusted for changes in the cost
of living as provided in Section 415(d) of the Internal Revenue
Code for any Plan Year commencing after December 31, 1988.
However, the Accrued Benefit determined in accordance with this
provision shall not be less than the Accrued Benefit determined
on January 1, 1989 without regard to this provision.
With respect to all benefits accruing on or after January 1,
1994, the Compensation of each Participant that may be taken into
account under the Plan shall not exceed the first $150,000 of a
Participant's Compensation (as adjusted in accordance with Code
section 401(a)(17) and Regulations thereunder). However, a
Participant's Accrued Benefit determined in accordance with this
limitation shall not be less than the Accrued Benefit determined
as of December 31, 1993.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Code Section 414(q)(6)) shall
apply, except in applying such rules, the term 'family' shall
include only the Participant's spouse and any lineal descendants
of the Participant who have not attained age 19 before the close
of the Plan Year. For Plan Years commencing on or after January
1, 1997, the family aggregation provisions of Section 414(q)(6)
of the Code shall cease to be applicable to the determination of
this limitation.
2.13 'Contract' means Group Annuity Contract No. 15 GAC issued by the
Insurer to the Employer. The Contract was terminated, and
effective May 5, 1993, the Trust was established.
2.14 'Covered Compensation' means for each Participant the average of
the taxable wage base in effect under the Social Security Act for
each calendar year during the 35-year period ending with the last
day of the calendar year in which the Participant attains Social
Security Retirement Age. In the case of a Participant who
continues employment with an Employer in a Plan Year commencing
after the calendar year in which the Participant attains Social
Security Retirement Age, the Participant's Covered Compensation
for such Plan Year shall be equal to the Participant's Covered
Compensation for the Plan Year in which the Participant attains
Social Security Retirement Age. A Participant's Covered
Compensation shall be automatically adjusted for each Plan Year.
2.15 'Employee' means an individual employed by the Employer;
provided, however, that 'Employee' does not include any Leased
Employees, Independent Contractors, or Nonresident Aliens.
2.16 'Employer' means the Company and any Affiliate which has adopted
the Plan.
2.17 'ERISA' means the Employee Retirement Income Security Act of
1974 as it may be amended from time to time.
2.18 'Final Average Compensation' means the average of a
Participant's Compensation in the 60 consecutive calendar months
in which he received his highest Compensation during the 120-
month period immediately preceding the earlier of (i) his
Termination Date, or (ii) his Retirement Date. Notwithstanding
the foregoing, for purposes of determining an Opening Balance
Benefit under Section 7.2, the 120-month period shall end on
December 31, 1999. If a Participant has not earned Compensation
for 60 consecutive months, 'Final Average Compensation' means the
average of the Participant's monthly Compensation for the longest
consecutive period during which he earned Compensation.
2.19 'Highly Compensated Employee' means any Employee who (a) during
the current Plan Year or the preceding Plan Year was at any time
a five percent (5%) owner of the Company, as defined in Section
416(i)(1)(B)(i) of the Code; or (b) during the preceding Plan
Year received Compensation from the Company in excess of $85,000
(or such greater amount provided by the Secretary of the Treasury
pursuant to Section 414(q) of the Code), and was in the top paid
group of Employees for such Plan Year. An Employee is in the 'top
paid group' for a Plan Year if he is in the group consisting of
the top 20 percent of the Employees when ranked on the basis of
Compensation paid during such Plan Year.
In determining who is a Highly Compensated Employee, the
following rules shall apply:
(A) For purposes of determining the number of Employees in the
top paid group, the following Employees are excluded:
(1) Employees who have not completed six months of Service;
(2) Employees who normally work less than 17-1/2 hours per
week;
(3) Employees who normally work not more than 6 months
during any Plan Year;
(4) Employees who have not attained age 21; and
(5) to the extent allowable under Treasury Regulation
Section 1.414(q)-1T, Employees covered by a collective
bargaining agreement between employee representatives
and the Company.
(B) As required by Section 414(q)(6) of the Code and the
regulations thereunder, a Highly Compensated Employee shall
include a former Employee if (i) such Employee was a Highly
Compensated Employee when such Employee separated from
service, or (ii) such Employee was a Highly Compensated
Employee at any time after attaining age 55.
(C) The provisions of Section 414(q) of the Code shall apply in
determining whether an Employee is a Highly Compensated
Employee. The Company for any Plan Year may elect to
identify Highly Compensated Employees based upon the current
Plan Year to the extent permitted by Section 414(q) of the
Code and Regulations issued thereunder.
2.20 'Hour of Service' means-
(A) Each hour for which an Employee is paid, or entitled to
payment, by the Employer for the performance of duties.
Such hours shall be credited to the Employee for the
computation period, or periods in which the duties are
performed; and
(B) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence, subject to a maximum of 501 hours on account of any
single continuous period during which the Employee performs
no duties, whether or not such period occurs in a single
computation period. Such hours shall be determined in
accordance with regulations issued by the Secretary of
Labor, and shall be credited to the Employee for the
computation period or periods in which payment is made or
amounts payable to the Employee become due; and
(C) Each other hour not included in (1) or (2) above for which
back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. Such hours shall be
credited to the Employee for the computation period or
periods to which the award or agreement pertains and not
that in which the award, agreement or payment is made.
(D) Solely for purposes of determining whether a One-Year Break
in Service for participation and vesting purposes has
occurred in a computation period, an Employee who is absent
from work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise have
been credited to such Employee but for such absence, or in
any case in which such hours cannot be determined, 8 hours
of service per day of such absence. No more than 501 Hours
of Service shall be credited under this paragraph for any
such absence.
The Hours of Service credited under this paragraph shall be
credited in the computation period in which the absence
begins if the crediting is necessary to prevent a One-Year
Break in Service in that period, or in all other cases, in
the following computation period as defined in Code Sections
410 and 411.
For purposes of this paragraph, an absence from work by
reason of maternity or paternity means an absence-
(1) by reason of pregnancy of the individual,
(2) by reason of the birth of a child of the individual,
(3) by reason of the placement of a child with the
individual in connection with the adoption of such
child by such individual, or
(4) for purposes of caring for such child for a period
beginning immediately following such birth or
placement.
This paragraph shall not apply to an Employee unless such
individual furnishes the Supervisory Committee such timely
information as the Supervisory Committee may require to
establish that an absence is by reason of maternity or
paternity and to verify the length of the period for such
absence.
(E) Pursuant to Article XVIII, any period of absence from active
employment with the Company prior to the Employee's Normal
Retirement Date due to his service in the uniformed services
(as that term is defined in the Uniformed Services
Employment and Reemployment Rights Act of 1994 (`USERRA'))
for a period during which the Employee's reemployment rights
are guaranteed by USERRA, shall not count as a Break in
Service and shall be considered as Service for vesting
purposes, provided the Employee is reemployed by the Company
under the terms of Section 4312 of USERRA.
2.21 'Independent Contractor' means any person who is engaged as an
independent contractor pursuant to a contract or agreement
between such person and an Employer that designates him as an
independent contractor, or otherwise contemplates or implies that
he will function as an independent contractor. Only individuals
who are paid as Employees from the payroll of an Employer and
treated by an Employer at all times as Employees shall be deemed
Employees for purposes of the Plan, and no independent contractor
shall be treated as an Employee under the Plan during the period
he renders services to an Employer as an independent contractor.
Any person retroactively or in any other way held or found to be
a 'common law employee' shall not be eligible to participate in
the Plan for any period during which he was not treated as an
Employee by an Employer.
2.22 'Insurer' means John Hancock Mutual Life Insurance Company,
Boston, Massachusetts, its successors and assigns.
2.23 'Normal Retirement Age' means the date a Participant attains age
65. For Plan Years beginning on and after January 1, 1988, if an
Employee becomes a Participant after age 60, his Normal
Retirement Age means the date which is five years subsequent to
the date he first became a Participant.
Upon attaining his Normal Retirement Age, a Traditional
Participant shall have a nonforfeitable right to his Accrued
Benefit if his Termination Date has not occurred and a Service
Break is not then in effect with respect to him. The
nonforfeitable rights, if any, of a Traditional Participant whose
Termination Date has occurred or with respect to whom a Service
Break is in effect, shall be determined in accordance with
Section 6.4 of the Plan.
2.24 'Nonresident Alien' means any person who is a nonresident alien
and who receives no earned income (within the meaning of Code
Section 911(d)(2)) from an Employer that constitutes income from
sources within the United States (within the meaning of Code
Section 861(a)(3)).
2.25 'One-Year Break in Service' for purposes of eligibility and
vesting means a Plan Year during which a Participant fails to
complete more than 500 Hours of Service. For purposes of benefit
accrual and calculation of Service as defined in Section 2.33, a
One-Year Break in Service means a Period of Severance of at least
twelve consecutive months. A One-Year Break in Service shall be
deemed to commence on the first day of the Period of Severance
and shall be deemed to end on the day in which the Employee again
performs an Hour of Service for an Employer. A 'Period of
Severance' means a continuous period of time during which an
Employee is not employed by an Employer. Such a period shall
begin on the earlier of: (i) the day on which the Employee
quits, retires, is discharged or dies; or (ii) the first
anniversary of the date on which the Employee separates from
service with all Employers for any reason other than the reasons
set forth in clause (i) above, such as vacation, holiday,
sickness, disability, leave of absence or layoff. A Period of
Severance shall end on the date on which an Employee again
performs an Hour of Service for the Company.
2.26 'Participant' means each Employee who satisfies the eligibility
requirements for participation in the Plan. The term
'Participant' encompasses each Traditional Participant and each
Cash Balance Participant. A person shall continue to be a
Participant after his employment ceases, for any reason, as long
as benefits may become payable to him under the Plan.
2.27 'Pension Benefit' means the benefit available to a Cash Balance
Participant and a Traditional Participant under the Plan.
2.28 'Plan' means the NorthWestern Pension Plan, as amended and
restated effective January 1, 2000, and as further amended from
time to time.
2.29 'Plan Year' means the 12-month period commencing on each January
1, and ending on the following December 31.
2.30 'Retirement Annuity' means the monthly annuity amount of Pension
Benefit payable to a Participant or his Beneficiary.
2.31 'Retirement Date' means the date a Participant terminates
employment with an Employer in accordance with Article V.
2.32 'Service' means the period of employment of a Participant,
expressed in whole years and a fractional year. The fractional
year shall be calculated by using the number of days in the
fractional year as the numerator and 365 as the denominator.
Service for purposes of this Section shall be calculated to
include or exclude the following:
(a) Service shall include any period for which a Past
Service Annuity was purchased with respect to the
Participant prior to December 31, 1973;
(b) If a Participant's employment with an Employer
terminates and he is reemployed by an Employer before he
incurs a One-Year Break in Service, his Service shall
include the period of absence from employment, as if such
absence had not occurred;
(c) If a Participant's employment with an Employer
terminates and he is not reemployed by an Employer before he
incurs a One-Year Break in Service, his Service shall not
include the period of One-Year Break in Service;
(d) If a Participant is reemployed by an Employer, his
Service shall not include Years of Service completed prior
to the One-Year Break in Service until he has completed one
Year of Service commencing on his date of reemployment and
unless he meets the conditions described in paragraphs (f)
and (g) next below;
(e) If a Participant has a One-Year Break in Service and is
reemployed by an Employer, his Service shall include the
years of Service to his credit at the time the One-Year
Break in Service began, unless he did not have any
nonforfeitable right to the Accrued Benefit derived from
Employer contributions prior to such One-Year Break in
Service and if the number of consecutive One-Year Breaks in
Service in such period equals or exceeds the greater of (i)
five or (ii) the number of years of Service to his credit at
the beginning of such a One-Year Break in Service. Such
aggregate number of years of Service will not include any
years of Service disregarded under the preceding sentence by
reason of prior One-Year Breaks in Service;
(f) If a Participant has a One-Year Break in Service,
receives a distribution from the Plan as a result of his
termination from employment with an Employer, and is later
reemployed by an Employer, his years of Service with respect
to which he received a distribution will not be included in
the calculation of his Accrued Benefit. Notwithstanding the
foregoing, years of Service for which a Participant received
a distribution shall be included in the calculation of his
Traditional or Cash Balance Normal Retirement Benefit, if
the Participant repays to the Plan the full amount of the
distribution received pursuant to Section 411(a)(7)(C) of
the Code and interest on such amount calculated pursuant to
Section 411(c)(2)(C) of the Code.
2.33 'Service Break' means a period which begins on the first day of
any One-Year Break in Service and continues until the day, if
ever, on which the Participant resumes active participation in
the Plan in accordance with Article III of the Plan.
2.34 'Social Security Retirement Age' means the age used as the
retirement age for the Participant under Section 216(1) of the
Social Security Act, except that such Section shall be applied
without regard to the age increase factor, and as if the early
retirement age under Section 216(l)(2) of such Act were 62.
The following schedule will apply to determine the Social
Security Retirement Age of any Plan Participant:
(A) Age 65 for Plan Participants born prior to 1938.
(B) Age 66 for Plan Participants born between 1938 and 1954
inclusive.
(C) Age 67 for Plan Participants born after 1954.
2.35 'Spouse' means the person who is legally married to a
Participant throughout the one-year period ending on the earlier
of the date on which Pension Benefit payments to the Participant
commence or the date of such Participant's death. For purposes
of the preceding sentence, if a Participant marries a person
within the one-year period preceding the date on which Pension
Benefit payments to him commence, and the Participant remains
married to such person for at least one-year period ending on or
before the date of the Participant's death, then the Participant
and such person will be treated as having been married throughout
the one-year period ending on the date Pension Benefit payments
to the Participant commence.
2.36 'Supervisory Committee' means the committee responsible for the
general administration and operation of the Plan and the
performance of other fiduciary responsibilities of the Company
under the Plan. The Supervisory Committee shall be the 'named
fiduciary' within the meaning of Section 402(a) of ERISA. The
Supervisory Committee shall consist of such members as may be
determined and appointed from time to time by the Chief Executive
Officer of the Company, and who shall serve at the pleasure of
said Chief Executive Officer. Members of the Committee shall
serve without compensation, but their reasonable expenses shall
be an expense of the administration of the Plan. The Committee
may elect such officers as the Committee may decide upon. If a
Secretary of the Committee is elected, such Secretary need not be
a member of the Committee. The Committee shall, subject to the
provisions of Article VIII-
(A) establish rules for the functioning of the Committee
including the times and place for holding meetings, the
notices to be given in respect of such meetings, and the
number of members who shall constitute a quorum for the
transaction of business;
(B) determine from the records of the Employer the compensation,
service records, status and other facts regarding
Participants and other Employees;
(C) prescribe forms to be used for applications for
participation, distributions, withdrawals, notifications,
etc., as may be required in the administration of the Plan;
(D) set up such rules, applicable to all Participants similarly
situated, as are deemed necessary to carry out the terms of
the Plan;
(E) perform all other acts reasonably necessary for
administering the Plan and carrying out its provisions and
performing the duties imposed on it by the Employer;
(F) resolve all questions of administration of the Plan not
specifically referred to in this Section; and
(G) dispose of claims arising under this Plan.
The Committee may delegate or redelegate to one or more persons,
jointly or severally, and whether or not such persons are members
of the Committee or Employees, such functions assigned to the
Committee hereunder as it may from time to time deem advisable.
2.37 'Taxable Wage Base' means the taxable wage base for a Cash
Balance Participant in effect for the Plan Year ending on or
including the Contribution Date applicable to such Participant
for purposes of the federal Social Security Act as in effect for
that Year.
2.38 'Termination Date' means the date on which a Participant's
employment with the Employer is terminated other than by death or
attainment of a Retirement Date, provided that a One-Year Break
in Service will not be deemed to have occurred until the end of
the Plan Year in which the Participant fails to complete more
than 500 Hours of Service.
2.39 'Traditional Participant' means a Participant deemed to be a
Traditional Participant pursuant to Section 3.1.
2.40 'Trust' means the agreement entered into between the Company and
the Trustee to hold and administer the Trust Fund.
2.41 'Trust Fund' means the cash and other properties held and
administered in accordance with the provisions of the Trust.
2.42 'Trustee' means the individual, individuals or corporation
appointed by the Board to administer the Trust, and any duly
appointed successor thereto.
2.43 'Vested Benefit Percentage' means the percentage determined
pursuant to Section 6.4 or subsection 7.9(f), as applicable.
2.44 'Year of Service' means any Plan Year in which a Participant
completes at least 1000 Hours of Service.
In the case of a Participant who does not have any nonforfeitable
right to an Accrued Benefit derived from employer contributions,
Years of Service before a period of consecutive One-Year Breaks
in Service will not be taken into account in computing Service
for the purposes of determining eligibility to participate in the
Plan under Section 3.3 or determining a Traditional
Participant's Vested Benefit Percentage under Section 6.4, if the
number of consecutive One-Year Breaks in Service in such period
equals or exceeds the greater of five or the aggregate number of
Years of Service. Such aggregate number of Years of Service will
not include any Years of Service disregarded under the preceding
sentence by reason of prior Breaks in Service.
Article III. Participation in the Plan
3.1 Traditional Participant
Each Participant who is an Employee on December 31, 1999, shall become
a Traditional Participant on the later to occur of (i) January 1,
2000, and (ii) the date he satisfies the eligibility requirements set
forth in Section 3.3, if (i) he affirmatively and irrevocably elected
to become a Traditional Participant on or before December 31, 1999, in
accordance with election procedures established by the Company, or
(ii) he did not affirmatively and irrevocably elect to become either a
Traditional Participant or a Cash Balance Participant on or before
December 31, 1999.
3.2 Cash Balance Participant
A Participant shall become a Cash Balance Participant as follows:
(a) Each person who is an Employee on December 31, 1999, shall
become a Cash Balance Participant on the later to occur of
(i) January 1, 2000, and (ii) the date he satisfies the
eligibility requirements set forth in Section 3.3, if he
affirmatively and irrevocably elected to become a Cash
Balance Participant on or before December 31, 1999, in
accordance with election procedures established by the
Company.
(b) Each Employee hired or rehired after December 31, 1999,
shall become a Cash Balance Participant upon satisfying the
applicable eligibility requirements set forth in Sections
3.3 or 3.4.
3.3 Eligibility Requirements For New Hires
An Employee who was not employed by an Employer on December 31, 1999,
shall become a Cash Balance Participant in the Plan on the first day
of the month coincident with or next following the date the following
eligibility requirements are met:
(a) He must have completed at least 1000 Hours of Service during an
eligibility computation period.
The initial eligibility computation period for such an Employee
is the twelve-month period commencing on the day he first
performs an Hour of Service. Subsequent eligibility computation
periods are the successive Plan Years commencing with the Plan
Year which begins during the initial eligibility computation
period.
(b) He must have attained his twenty-first birthday.
3.4 Participation Following Service Break
(a) Subject to the provisions of Section 6.2(e) or
Section 7.7, as applicable, if any Participant or former
Participant shall be reemployed by an Employer before a One-
Year Break in Service occurs, he shall be a Participant from
the date of his first hour of Service following his
reemployment;
(b) Subject to the provisions of Section 6.2(e) or Section 7.7,
as applicable, if any Participant or former Participant
completes one Year of Service for eligibility purposes
following his reemployment by an Employer after incurring a
One-Year Break in Service, he shall participate in the Plan
retroactively from the date of his first Hour of Service
following such reemployment; and
(c) Subject to the provisions of Section 6.2(e) or Section 7.7,
as applicable, if a Participant or former Participant
completes a Year of Service after incurring a One-Year Break
in Service but not terminating his employment, he shall
participate in the Plan retroactively to the date he again
becomes an Employee once he completes one Year of Service
following the date he again became an Eligible Employee.
3.5 Leased Employees
A person who is not an Employee of an Employer or nonparticipating
Affiliate but who performs services for an Employer or a
nonparticipating Affiliate pursuant to an agreement between an
Employer or a nonparticipating Affiliate and a leasing organization
shall be considered a 'Leased Employee' after such person performs
such services on a substantially full-time basis for at least 12
months and the services are performed under the primary direction or
control of an Employer. A person who is considered a Leased Employee
of an Employer or a nonparticipating Affiliate shall not be considered
an Employee for purposes of participating in the Plan or receiving any
contribution or benefit under the Plan. If a Leased Employee
subsequently becomes an Employee, and thereafter participates in the
Plan, he shall be given credit for Hours of Service and Years of
Service for his period of employment as a Leased Employee, except to
the extent that the requirements of Section 414(n)(5) of the Code were
satisfied with respect to such Employee while he was a Leased
Employee. Notwithstanding the preceding provisions of this Section, a
Leased Employee shall be treated as an Employee for purposes of
applying the requirements described in Section 414(n)(3) of the Code
and for purposes of determining the number and identity of Highly
Compensated Employees.
Article IV. Former Contributions of Participants
4.1 Former Contributions of Participants
Effective December 31, 1986 the accumulated employee contributions
with interest credited under the Plan as in effect prior to 1987 (the
'Prior Plan') through December 31, 1986 were refunded to each
Participant who had not commenced receiving annuity payments on or
prior to December 31, 1986. The refunds of employee contributions
were in lieu of all other benefits otherwise payable under the Prior
Plan which were solely derived from such employee contributions,
including any death benefit or cash surrender value. However, the
refund event does not operate to diminish, reduce, or modify in any
way Participants' Accrued Benefits which were derived from both
Employer and Employee Contributions prior to the beginning of the 1987
Plan year and which subsequent thereto are derived solely from
Employer contributions.
Article V. Retirement Dates
5.1 Normal Retirement Date
A Participant's Normal Retirement Date is the first day of the month
coincident with or next following his Normal Retirement Age.
5.2 Early Retirement Date
A Participant's Early Retirement Date is the first day of any month,
within the ten year period immediately preceding the Participant's
Normal Retirement Age, specified by the Participant in a written
notice to the Supervisory Committee. Such notice is to be filed with
the Supervisory Committee at least 60 days prior to the Early
Retirement Date specified in the notice.
5.3 Late Retirement Date
A Participant's Late Retirement Date is the first day of the month
coincident with or next following the Participant's actual date of
retirement after having reached his Normal Retirement Date, as
specified by the Participant in a written notice to the Supervisory
Committee.
5.4 Disability Retirement Date
A Participant's Disability Retirement Date is the first day of any
month following the date that a Participant satisfies the following
requirements, as determined by the Supervisory Committee:
(a) He must have been Totally Disabled as defined in Section 6.3
or subsection 7.8(f), as applicable, for a period of six
months and must be eligible to receive total disability
benefit payments under the Social Security Act;
(b) He must have attained his thirty-fifth birthday; and
(c) He must have completed at least ten Years of Service
(as defined in subsection 2.44).
Article VI. Traditional Pension Benefit
The provisions of this Article VI shall apply only to Traditional
Participants.
6.1 Traditional Accrued Benefit
The Accrued Benefit of a Traditional Participant is a yearly amount of
benefit in the form of a Life and Ten Year Period Certain Retirement
Annuity commencing on his Annuity Starting Date and ceasing with the
last payment due on the later of his date of death or the expiration
of the guaranteed period, if applicable.
The yearly amount of Accrued Benefit applicable to a Traditional
Participant is equal to the product of (1) and (2) below:
(1) the sum of 1.34 percent of (A) and 1.75 percent of (B)
where-
(A) is the Final Average Compensation up to the Covered
Compensation base of the Traditional Participant, and
(B) is the Final Average Compensation in excess of the
Covered Compensation base of the Traditional
Participant.
(2) The number of years and months of Service completed by the
Traditional Participant. Service for purposes of this
Section 6.1 shall be calculated as provided in Section 2.32.
Notwithstanding any provision to the contrary, in no event shall the
Traditional Accrued Benefit under this Section 6.1 be less than the
largest Early Retirement benefit the Traditional Participant would
have been entitled to receive under subsection 6.2(c) below by
retiring on an Early Retirement Date.
6.2 Traditional Pension Benefit
(a) General. The Pension Benefit for a Traditional Participant whose
Termination Date has not occurred, and with respect to whom a
Service Break is not in effect, is in the form of a ten years
certain and continuous Retirement Annuity payable for the
lifetime of the Traditional Participant and the remaining
guaranteed period, if applicable, commencing on his Retirement
Date and ceasing with the last payment due on or prior to his
date of death, unless the Qualified Joint and Survivor Annuity
described in subsection 8.1(a) of the Plan or one of the other
Optional Forms of Benefit described in subsection 9.1(c) is in
effect with respect to him.
(1) This Section is not applicable to a Traditional Participant
who was receiving Retirement Annuity payments immediately
prior to December 31, 1973 under the provisions of the
Contract as it existed on December 30, 1973, or to a
Traditional Participant whose Termination Date occurred
prior to December 31, 1973.
(2) The Accrued Benefit for a Traditional Participant who was
covered under the Contract prior to December 31, 1973 shall
not be less than the Cancelled Annuity described in
paragraphs 3 and 4 below, multiplied by the appropriate
Vested Benefit Percentage in the event his Termination Date
occurs subsequent to December 31, 1973.
(3) The Cancelled Annuity with respect to a Traditional
Participant or Contingent Annuitant covered under the
Contract immediately prior to December 31, 1973 to whom
Retirement Annuity payments were then being made is a yearly
annuity equal to twelve times the monthly amount of
Retirement Annuity then being paid to him.
(4) The Cancelled Annuity with respect to a Traditional
Participant covered under the Contract immediately prior to
December 31, 1973 to whom Retirement Annuity payments were
not then being made is a yearly annuity equal to the yearly
amount of annuity previously purchased and in effect with
respect to him on December 30, 1973.
(b) Traditional Normal Retirement Benefit. The yearly amount of
Pension Benefit commencing on the Normal Retirement Date of a
Traditional Participant who retires on his Normal Retirement Date
is his Traditional Accrued Benefit.
(c) Traditional Early Retirement Benefit.
(1) A Traditional Participant who retires on or after his Early
Retirement Date and prior to his Normal Retirement Date
shall be entitled to receive a Traditional Pension Benefit,
commencing on his Normal Retirement Date. The annual amount
of such Traditional Pension Benefit shall be equal to the
Traditional Participant's Accrued Benefit.
A Traditional Participant eligible for an Early Retirement
Traditional Pension Benefit may elect to have his
Traditional Pension Benefit commence prior to his Normal
Retirement Date on an Annuity Starting Date that is the
first day of any month coincident with or following his
Early Retirement Date.
(2) A Traditional Participant who wishes to commence receiving
his Traditional Pension Benefit prior to his Normal
Retirement Date must file an application therefor with the
Supervisory Committee not later than thirty (30) days prior
to his Annuity Starting Date. Such application shall specify
the Annuity Starting Date on which such Traditional Pension
Benefit shall first be payable.
(3) Nothing contained in the Plan shall be construed to require
the payment of any Traditional Pension Benefit to any
Traditional Participant for any month prior to the earlier
of the month in which a Normal Retirement benefit would
commence pursuant to subsection 6.2(b), or thirty (30) days
subsequent to the receipt of an application for a
Traditional Pension Benefit filed pursuant hereto.
(4) The yearly amount of Pension Benefit applicable to a
Traditional Participant whose Annuity Starting Date is an
Early Retirement Date is an amount equal to his Traditional
Accrued Benefit determined as of his Annuity Starting Date,
reduced by 5/12 of one percent for each month that his
Annuity Starting Date precedes the first day of the month
coinciding with or next following the date he attains age
62.
(d) Traditional Late Retirement Benefit. The yearly amount of
Pension Benefit applicable to a Traditional Participant whose
retirement date is his late Retirement Date is an amount equal to
the greater of (1) or (2) below:
(1) A yearly amount of Pension Benefit which is determined in
the same manner as the Traditional Participant's Accrued
Benefit pursuant to Section 6.1 hereof and based on
Compensation and Service applicable to the Traditional
Participant through his Late Retirement Date.
(2) A yearly amount of Pension Benefit which is the actuarial
equivalent value of the amount of Pension Benefit accrued by
the Traditional Participant through his Normal Retirement
Date, when computed on the basis of the actuarial methods,
factors and assumptions utilized under the Plan.
A former Traditional Participant who is reemployed by the
Employer or an Affiliate following an Early, Normal or Late
Retirement Date and commencement of a Retirement Annuity, shall
continue to receive payment of such Retirement Annuity for the
duration of his period of reemployment and thereafter as provided
by the terms of the Plan. In no event shall such former
Participant receive benefits attributable to Service prior to his
initial Retirement Date in an amount, or for a duration, less
than the amount or duration that such former Traditional
Participant would have received if he were not reemployed by the
Employer or an Affiliate. Notwithstanding the above, if a
Traditional Participant has, as of the end of any Plan Year,
attained an Early, Normal or Late Retirement Date, and if
distribution of benefits has commenced to the Traditional
Participant as of the end of such Plan Year, any benefit accrual
for such Plan Year required under this subsection 6.2(d) shall be
reduced (but not below zero) by the actuarial equivalent of the
total Retirement Annuity payments made to the Traditional
Participant by the close of the Plan Year, in accordance with
regulations prescribed by the Secretary of the Treasury.
(e) Traditional Deferred Vested Annuitant Benefit. Notwithstanding
anything to the contrary in the foregoing provisions of this
Article VI, effective as of January 1,1987, the Pension Benefit
of each Participant whose Termination Date was prior to January
1, 1974, and who has a deferred Vested Benefit under the Plan as
of December 31, 1986 shall be increased, commencing on the Normal
Retirement Date of such Participant and shall be equal to the
product of (1) and (2) below:
(1) The sum of 1.25 percent of (A) and 1.75 percent of (B)
where-
(A) is the Final Average Compensation up to the Covered
Compensation base of the Participant, and
(B) is the Final Average Compensation in excess of the
Covered Compensation base of the Participant;
provided, however, that for purposes of this paragraph,
Final Average Compensation shall not include Compensation
received after the Participant's Normal Retirement Date.
(2) The number of years and months of Service completed by the
Participant up to his Normal Retirement Date, and during the
period from the date on which he became an Employee until he
became covered hereunder, counting each full month as one-
twelfth of a year, and also including as Service any period
for which a Past Service Annuity was purchased with respect
to the Participant prior to December 31, 1973. Service for
purposes of this Section shall be calculated as provided in
Section 2.32.
In no event shall such increased benefit be less than $10 per
month.
(f) Additional Annuity for Certain Retirees Effective March 1, 1994.
On March 1, 1994, Retirement Annuity payments for each
Participant who was receiving such payments as of December 31,
1992 shall be increased by an amount equal to .8 percent (.008)
of the monthly payment in effect for such Participant immediately
prior to March 1, 1994 multiplied by the number of completed and
partial years from such Participant's Retirement Date until
January 1, 1994. In no event shall any increase in benefit
pursuant to this provision be less than (1) $20 per month for a
Participant who retired prior to January 1, 1983 or (2) $10 per
month for a Participant who retired prior to January 1, 1993.
6.3 Traditional Disability Benefit
The Disability Benefit for a Traditional Participant who has incurred
a Disability Retirement Date is an amount of Pension Benefit which
shall be determined by the application of the imputed Compensation and
Service established below, and which shall be payable to the
Traditional Participant commencing on his Normal Retirement Date;
provided, however, a Traditional Participant may elect to commence
receipt of a Pension Benefit pursuant to this Section prior to his
Normal Retirement Date on any date following the date he attains age
55.
The Final Average Compensation to be used in determining the Pension
Benefit for a Traditional Participant will be computed as if the
Traditional Participant had continued to receive Compensation after
the date he became Totally Disabled, at the same rate of Compensation
he was receiving on such date, and continuing to the earliest of (i)
his Normal Retirement Date, (ii) the date he ceased to be Totally
Disabled, or (iii) the date he elects to commence receipt of his
Pension Benefit, if he elects to commence receipt of his Pension
Benefit prior to his Normal Retirement Date.
The completed Service to be used in determining the Pension Benefit
for the Traditional Participant on the date that such Benefit
commences will be computed to include the period during which the
Traditional Participant was Totally Disabled prior to such
commencement date, as determined by the Supervisory Committee.
The words 'Totally Disabled' as used in this subsection mean that the
Traditional Participant has incurred a 'Total Disability' as defined
under the long-term disability plan maintained by the Company at the
time of the determination. Determinations as to Total Disability
shall be made by the Supervisory Committee, in its sole discretion.
If the Traditional Participant is still living upon attainment of his
Normal Retirement Date or his earlier elected Annuity Starting Date,
he will be entitled to commence receipt of a Traditional Normal
Retirement Benefit. Such Benefit will be payable in a form provided
under Article IX.
If a Totally Disabled Traditional Participant dies on or after his
Disability Date but prior to his Normal Retirement Date, the
Traditional Participant's surviving Spouse shall be entitled to
receive the Traditional Preretirement Survivor Annuity described in
Section 6.6 if the requirements of Section 6.6(a) are satisfied.
If a Traditional Participant does not incur a Disability Date, no
benefit shall be payable under this Section.
6.4 Traditional Vested Benefit
If a Traditional Participant's Termination Date has occurred or if a
Service Break is in effect with respect to a Traditional Participant
who has completed five or more Years of Service, such Traditional
Participant shall have a Vested Benefit Percentage of 100% and shall
be eligible to retire under the Plan and receive a Traditional Vested
Benefit which shall equal his Traditional Accrued Benefit commencing
on his Normal Retirement Date. A Traditional Participant may elect to
have his Traditional Vested Benefit commence prior to his Normal
Retirement Date on an Annuity Starting Date that is the first day of
any month coincident with or following his Early Retirement Date. To
elect such early commencement, a Traditional Participant must file an
application therefor with the Supervisory Committee not later than
thirty (30) days prior to his Annuity Starting Date. Such application
shall specify the Annuity Starting Date on which such Traditional
Vested Benefit shall first be payable.
The yearly amount of Traditional Vested Benefit applicable to a
Traditional Participant whose Annuity Starting Date is an Early
Retirement Date is an amount equal to his Traditional Accrued Benefit
determined as of his Annuity Starting Date and reduced in accordance
with Section 6.2(c) of the Plan. A Traditional Participant who has
completed less than five Years of Service prior to his Termination
Date shall have a Vested Benefit Percentage of zero and forfeit all of
his benefits under the Plan as provided under Section 6.5.
The yearly amount of Traditional Vested Benefit applicable to a
Traditional Participant on his Annuity Starting Date shall in no event
be less than the yearly amount which would have been applicable to him
if his Annuity Starting Date had occurred on any prior date on which
he was eligible to retire in accordance with the Plan.
Notwithstanding the foregoing, a Traditional Participant shall be
fully vested in his Traditional Accrued Benefit if a Termination Date
or Service Break occurs on or after the date the Plan is terminated,
or if the Plan is terminated with respect to a certain class or
classes of Traditional Participants and the Traditional Participant is
a member of the class of Traditional Participants to which the partial
termination is applicable.
6.5 Forfeiture of Traditional Benefits
(a) A Traditional Participant will forfeit all his benefits under the
Plan if-
(1) his Termination Date occurs or a Service Break becomes
effective with respect to him before he has completed five
Years of Service, or
(2) his death occurs before both his Retirement Date and his
Normal Retirement Date and a Traditional Preretirement
Survivor Annuity (under Section 6.6) is not payable with
respect to him in accordance with the Plan, or
(3) his death occurs on or after his Normal Retirement Date and
before his actual Retirement Date has occurred and neither a
Traditional Preretirement Survivor Annuity nor any form of
benefit which provides for post-death benefit payments to a
beneficiary or contingent annuitant is payable with respect
to him in accordance with the Plan.
(b) Notwithstanding subsection (a)-
(1) a Traditional Participant's eligibility service and
Vested Benefit Percentage shall be reinstated to the extent
required by Section 2.44; and
(2) a Traditional Participant's right to the Normal Retirement
Benefit described in Section 6.2 will be considered
nonforfeitable upon attainment of Normal Retirement Age
provided he is an Employee on his Normal Retirement Age.
6.6 Traditional Preretirement Survivor Annuity
(a) If a Participant is vested in his Traditional Accrued Benefit and
has a Spouse on the date of his death, then a 'Traditional
Preretirement Survivor Annuity' shall be provided to the
surviving Spouse of the Participant if he dies while in the
employment of the Company or after termination of his employment
but before his Annuity Starting Date. If the Participant dies
before attaining his Early Retirement Date, the Traditional
Preretirement Survivor Annuity payable to his surviving Spouse
shall be a survivor annuity payable for the life of the Spouse
under which the payments to the Spouse are equal to the amount
that would have been payable to the Spouse as a survivor annuity
if the Participant had terminated employment with the Company on
the date he died, attained his Early Retirement Date, retired
with an immediate 50% Joint and Survivor Annuity (as described in
subsection 9.1(c)(1)(C) with the Spouse as Beneficiary, and died
the next day. In the case of a Participant who dies after
terminating his employment with the Company, the preceding
sentence shall be applied without regard to the requirement that
the Participant be treated as though he had terminated employment
with the Company on the day he died. If the Participant dies
after attaining his Early Retirement Date, then the Traditional
Preretirement Survivor Annuity payable to his surviving Spouse
shall be a survivor annuity payable for the life of the Spouse
under which the payments to the Spouse are equal to the amount
that would have been payable to the Spouse as a survivor annuity
if the Participant had retired with an immediate 50% Joint and
Survivor Annuity with the Spouse as Beneficiary on the day before
his death. The Traditional Preretirement Survivor Annuity shall
be reduced to reflect the early commencement of benefit payment
as provided in Section 6.2(c). The Traditional Preretirement
Survivor Annuity shall be payable to the surviving Spouse in
equal monthly installments commencing on the later to occur of
(i) the first day of the month following the date of death of the
Traditional Participant and (ii) the first day of the month in
which the Traditional Participant would have attained his Early
Retirement Date, and shall terminate on the first day of the
month in which the surviving Spouse dies. The surviving Spouse
may elect to defer the commencement of payment of the Traditional
Preretirement Survivor Annuity to an Annuity Starting Date not
later than the date that the Traditional Participant would have
attained his Normal Retirement Date, and if such deferral is
elected, the amount of payments shall be reduced based on the
elected Annuity Starting Date pursuant to Section 6.2(c), to
reflect the early commencement of benefit payments.
(b) Notwithstanding the above, in no event will a Traditional
Preretirement Survivor Annuity be less than the Pension Benefit
or Traditional Vested Benefit accrued to December 31, 1999 and
adjusted by the appropriate Traditional Early Retirement and
Traditional Spouse's Benefit factors in effect on December 31,
1999.
(c) If a Traditional Participant shall die on or after the first to
occur of his sixty-fifth birthday or the date of commencement of
a Pension Benefit to him, payment shall be made to his surviving
Spouse or Beneficiary in accordance with the form of payment
elected by the Participant pursuant to Article IX (with the
consent of the surviving Spouse if applicable), or if no such
election is then in effect, to his surviving Spouse, if any, in
the form of the survivor portion of a 50% Joint and Survivor
Annuity pursuant to the terms of subsection 9.1(c)(1)(C).
Article VII. Cash Balance Pension Benefit
7.1 Cash Balance Accrued Benefit
(a) Accrued Benefit. The Accrued Benefit of a Cash Balance
Participant is a Single Life Annuity, commencing on the Cash
Balance Participant's Normal Retirement Date, which is the
Actuarial Equivalent of the Cash Balance Participant's Cash
Account Balance as of the date of determination, increased by
interest to the Cash Balance Participant's Normal Retirement
Date, using the Applicable Interest Rate. The present value of a
Cash Balance Participant's Accrued Benefit as of any
determination date shall always equal the Cash Balance
Participant's Cash Account Balance as of such date.
(b) Cash Account Balance. A Cash Balance Participant's Cash Account
Balance shall consist of the sum of his (i) Opening Balance (as
determined under Section 7.2), (ii) allocated Pay Credits (as
determined under Section 7.3), and (iii) allocated Interest
Credits (as determined under Section 7.4).
(c) Minimum Cash Balance Accrued Benefit. Notwithstanding anything
to the contrary, the Accrued Benefit of a Cash Balance
Participant shall not be less than the Accrued Benefit of such
Participant under the Northwestern Pension Plan as in effect on
December 31, 1999.
7.2 Opening Balance
(a) Calculation. 'Opening Balance' means the Actuarial Equivalent as
of December 31, 1999, based on the Cash Balance Participant's
then Attained Age and Service (as defined in Section 2.32) as of
December 31, 1999, of a Cash Balance Participant's Opening
Balance Benefit calculated based on (i) the Applicable Mortality
Table on December 31, 1999 and (ii) an interest rate of 6.0%.
(b) Opening Balance Benefit 'Opening Balance Benefit' means, with
respect to each Cash Balance Participant, an amount payable as a
Life and Ten Year Period Certain Retirement Annuity commencing
according to paragraph (c) below, where such amount, when
expressed as a yearly benefit, equals the product of (1) and (2)
below:
(1) the sum of 1.34 percent of (A) and 1.75 percent of (B) where
-
(A) is the Final Average Compensation up to the Covered
Compensation base of the Cash Balance Participant,
determined as of December 31, 1999, and
(B) is the Final Average Compensation in excess of the
Covered Compensation base of the Cash Balance
Participant, as determined as of December 31, 1999.
(2) The number of years and months of Service completed by the
Cash Balance Participant as of December 31, 1999.
(c) Actuarial Equivalent. The Actuarial Equivalent of the Opening
Balance Benefit determined pursuant to paragraphs (a) and (b)
shall be determined as follows:
(1) With respect to a Cash Balance Participant whose Attained
Age and Service total less than 45 as of December 31, 1999,
the Opening Balance Benefit shall be deemed to commence as
of the later of (i) January 1, 2000, or (ii) the Cash
Balance Participant's Normal Retirement Date.
(2) With respect to a Cash Balance Participant whose Attained
Age and Service total at least 45 but less than 80 on
December 31, 1999, the Opening Balance Benefit shall be
deemed to commence as of the later of (i) January 1, 2000,
or (ii) the first day of the month coincident with or next
following the date the Cash Balance Participant will attain
age 62.
(3) With respect to a Cash Balance Participant whose Attained
Age and Service total more than 80 on December 31, 1999, the
Opening Balance Benefit shall be deemed to commence on the
later of (i) January 1, 2000, or (ii) the first day of the
month coincident or next following the date the Cash Balance
Participant will attain age 55; provided, however, that such
Opening Balance Benefit shall be reduced by 5/12 of one
percent for each month that such deemed commencement date
precedes the first day of the month coinciding with or next
following the date he will attain age 62.
(d) Minimum Opening Balance. Notwithstanding the foregoing, a Cash
Balance Participant's Opening Balance shall not be less than the
product of (i) four percent (4%), times (ii) his Compensation for
the 1999 Plan Year, times (iii) his Service as of December 31,
1999.
In the case of a Cash Balance Participant who terminated
employment prior to January 1, 2000, and was rehired by an
Employer after that date, the Opening Balance Benefit shall be
based on (i) his Accrued Benefit under the Plan as of his
Termination Date, (ii) his Attained Age as of his date of re-
employment, and (iii) the actuarial assumptions set forth in
subsection 7.2(a).
7.3 Pay Credits
(a) General. Pay Credits shall mean for each Contribution Date, a
contribution allocated to the Cash Account of a Cash Balance
Participant. Pursuant to the table set forth below, Pay Credits
shall be credited to a Cash Balance Participant's Cash Account as
of each Contribution Date based on a Cash Balance Participant's
aggregate Attained Age and Service on December 31, 1999, and such
Participant's Compensation paid with respect to the Plan Year
that includes such Contribution Date. For purposes of applying
the following table, any person who is not considered to be an
Employee on December 31, 1999, but who is later hired or rehired
by an Employer after such date, shall be deemed to have an
aggregate Attained Age and Service totaling less than 45. Any
Participant on or after January 1, 2000, who incurs a One-Year
Break in Service, and who subsequently again becomes eligible to
participate in the Plan, shall be deemed to have an aggregate
Attained Age and Service equal to his aggregate Attained Age and
Service on the date his One-Year Break in Service commenced.
Aggregate of Contribution as a Percent Contribution as a Percent
Attained Age and of Compensation Below of Compensation Over
Service on 12/31/99 the Taxable Wage Base the Taxable Wage Base
- -------------------- ------------------------- -------------------------
less than 45 3.0% 6.0%
more than 45 but less than 46 3.5% 7.0%
more than 46 but less than 47 3.6% 7.2%
more than 47 but less than 48 3.7% 7.4%
more than 48 but less than 49 3.8% 7.6%
more than 49 but less than 50 3.9% 7.8%
more than 50 but less than 51 4.0% 8.0%
more than 51 but less than 52 4.1% 8.2%
more than 52 but less than 53 4.2% 8.4%
more than 53 but less than 54 4.3% 8.6%
more than 54 but less than 55 4.4% 8.8%
more than 55 but less than 56 4.5% 9.0%
more than 56 but less than 57 4.6% 9.2%
more than 57 but less than 58 4.7% 9.4%
more than 58 but less than 59 4.8% 9.6%
more than 59 but less than 60 4.9% 9.8%
more than 60 but less than 61 5.0% 10.0%
more than 61 but less than 62 5.1% 10.2%
more than 62 but less than 63 5.2% 10.4%
more than 63 but less than 64 5.3% 10.6%
more than 64 but less than 65 5.4% 10.8%
more than 65 but less than 66 5.5% 11.0%
more than 66 but less than 67 5.6% 11.2%
more than 67 but less than 68 5.7% 11.4%
more than 68 but less than 69 5.8% 11.6%
more than 69 but less than 70 5.9% 11.8%
more than 70 but less than 71 6.0% 12.0%
more than 71 but less than 72 6.1% 12.2%
more than 72 but less than 73 6.2% 12.4%
more than 73 but less than 74 6.3% 12.6%
more than 74 but less than 75 6.4% 12.8%
more than 75 but less than 76 6.5% 13.0%
more than 76 but less than 77 6.6% 13.2%
more than 77 but less than 78 6.7% 13.4%
more than 78 but less than 79 6.8% 13.6%
more than 79 but less than 80 6.9% 13.8%
more than 80 but less than 81 7.0% 14.0%
more than 81 but less than 82 7.1% 14.2%
more than 82 but less than 83 7.2% 14.4%
more than 83 but less than 84 7.3% 14.6%
more than 84 but less than 85 7.4% 14.8%
more than 85 7.5% 15.0%
(b) Contribution Date. A Cash Balance Participant's
Contribution Date shall be determined as follows:
(1) Active Participants. The Contribution Date for each
Cash Balance Participant who is (i) actively employed
on the last day of the Plan Year or (ii) Totally
Disabled pursuant to subsection 7.8(f), shall be the
last day of the Plan Year.
(2) Retired, Terminated Vested and Deceased Participants.
The Contribution Date for each Cash Balance Participant
who terminates employment during the Plan Year for any
reason, including death, shall be such Participant's
Retirement Date, his Termination Date, or his date of
death, as the case may be.
(3) Hours of Service Requirement. Notwithstanding the
foregoing, no Cash Balance Participant who has not
completed at least 1,000 Hours of Service during a Plan
Year shall have a Contribution Date for such Plan Year,
unless his employment terminates during such Plan Year
because of death, Total Disability or attainment of a
Retirement Date.
(c) Contribution Date for First Year of Eligibility.
Notwithstanding any other provision of the Plan to the
contrary, if a Cash Balance Participant does not have a
Contribution Date during any Plan Year of employment because
of his failure to meet the eligibility criteria for Plan
participation set forth in Section 3.3, such Cash Balance
Participant shall, if he is eligible for a Contribution Date
during the first Plan Year of eligibility, receive a Pay
Credit for such first Plan Year that is based on his
Compensation for all of his Plan Years of employment.
7.4 Interest Credits
(a) General. As of the last day of each Plan Year, the Cash
Account of each Participant shall be credited with an
Interest Credit . 'Interest Credit' means the product of
the Cash Balance Participant's Cash Account balance as of
the close of the immediately preceding Plan Year, and the
Investment Credit Percentage for that Plan Year.
(b) Investment Credit Percentage. 'Investment Credit
Percentage' means the Applicable Interest Rate. In the case
of a Cash Balance Participant who terminates employment and
defers distribution of his Pension Benefit, the Investment
Credit Percentage shall continue to be credited to the Cash
Balance Participant's Cash Account Balance until his Annuity
Starting Date. 'Applicable Interest Rate' for a partial
Plan Year shall mean the annual rate of interest on 30-year
Treasury securities for the month of November immediately
preceding such partial Plan Year, multiplied by a fraction,
the numerator of which is the number of completed months in
such partial Plan Year, and the denominator of which is 12.
7.5 Normal Cash Balance Pension Benefit
A Cash Balance Participant who retires on his Normal Retirement
Date shall be entitled to a Cash Balance Pension Benefit. The
annual amount of such Cash Balance Pension Benefit shall be equal
to the Cash Balance Participant's Accrued Benefit as determined
on his Normal Retirement Date.
7.6 Early Retirement Cash Balance Pension Benefit
(a) A Cash Balance Participant who retires on or after his Early
Retirement Date and prior to his Normal Retirement Date
shall be entitled to receive a Cash Balance Pension Benefit,
commencing on his Normal Retirement Date. The annual amount
of such Cash Balance Pension Benefit shall be equal to the
Cash Balance Participant's Accrued Benefit determined on his
Normal Retirement Date.
A Cash Balance Participant eligible for an Early Retirement
Cash Balance Pension Benefit under this Section 7.6 may
elect to have his Cash Balance Pension Benefit commence
prior to his Normal Retirement Date on an Annuity Starting
Date that is the first day of any month coincident with or
following his Early Retirement Date. In that event, the Cash
Balance Pension Benefit payable shall be equal to an
immediate annuity that is the Actuarial Equivalent of the
Cash Balance Participant's Cash Account Balance on his
Annuity Starting Date.
(b) A Cash Balance Participant who wishes to commence receiving
a monthly Cash Balance Pension Benefit prior to his Normal
Retirement Date must file an application therefor with the
Supervisory Committee not later than thirty (30) days prior
to his Annuity Starting Date. Such application shall specify
the Annuity Starting Date on which such Cash Balance Pension
Benefit shall first be payable.
(c) Nothing contained in the Plan shall be construed to require
the payment of any monthly Cash Balance Pension Benefit to
any Cash Balance Participant for any month prior to the
earlier of the month in which a Normal Retirement Income
would commence pursuant to Section 7.5, or thirty (30) days
subsequent to the receipt of an application for a Cash
Balance Pension Benefit filed pursuant hereto.
7.7 Postponed Retirement Cash Balance Pension Benefit
A Cash Balance Participant may continue as a Cash Balance
Participant after his Normal Retirement Date. A Cash Balance
Participant who retires on a Late Retirement Date shall be
entitled to a Cash Balance Pension Benefit, commencing on the
date that is the first day of the month on or after his Late
Retirement Date, in an amount equal to his Accrued Benefit as
determined on his Late Retirement Date. Pay Credits and Interest
Credits shall continue to accrue until the Cash Balance
Participant Retires.
A former Cash Balance Participant who is reemployed by the
Company or an Affiliate following an Early, Normal or Late
Retirement Date and commencement of a Retirement Annuity, shall
continue to receive payment of such Retirement Annuity for the
duration of his period of reemployment and thereafter as provided
by the terms of the Plan. In no event shall such former Cash
Balance Participant receive benefits attributable to Service
prior to his initial Retirement Date in an amount, or for a
duration, less than the amount or duration that such former Cash
Balance Participant would have received if he were not reemployed
by the Company or an Affiliate. A former Cash Balance
Participant who is re-employed by the Company following a
distribution to him pursuant to subsection 9.1(c)(1)(E), shall
have a Cash Account Balance of zero on his re-employment date.
7.8 Disability Cash Balance Pension Benefit
(a) Eligibility. Any Cash Balance Participant who has incurred a
Disability Retirement Date shall be eligible for a
Disability Cash Balance Pension Benefit for life, payable in
equal monthly installments, commencing on his Normal
Retirement Date; provided, however, a Cash Balance
Participant may elect to commence receipt of a Cash Balance
Pension Benefit pursuant to this Section prior to his Normal
Retirement Date on any date following the date he attains
age 55.
(b) Amount. The amount of a Cash Balance Participant's monthly
Disability Cash Balance Pension Benefit shall be equal to
the amount of his Normal Retirement Cash Balance Pension
Benefit determined under Section 7.5 and based upon Interest
Credits and Pay Credits determined under this Section. A
Cash Balance Participant whose employment has terminated as
provided in Section 7.8(a) will be credited with the
Interest Credits and Pay Credits he would have earned had he
continued to be employed by an Employer as a Cash Balance
Participant, based upon the annual rate of Compensation in
effect for the calendar year in which he incurs his
Disability Retirement Date, until the first to occur of (1)
his Normal Retirement Date, (2) the date he recovers from
his Total Disability, or refuses to provide proof of
continued Disability, (3) the date the Plan is terminated,
(4) the date future benefit accruals under the Plan cease
for all Cash Balance Participants, or (5) the date he elects
to commence receipt of his Cash Balance Pension Benefit, if
he elects to commence receipt of such Benefit prior to his
Normal Retirement Date.
For purposes of determining the Cash Balance Participant's
total Pay Credits for the Plan Year in which the Cash
Balance Participant's employment terminates due to a
Disability Retirement Date, the Cash Balance Participant's
Compensation shall include his actual Compensation earned
for the portion of the Plan Year prior to his Disability
Retirement Date, plus an amount equal to his annual rate of
Compensation prorated for the portion of the Plan Year
remaining after his termination of employment.
(c) Proof of Disability. The Supervisory Committee, before
approving the payment of any Disability Cash Balance Pension
Benefit, may require proof in such form as the Supervisory
Committee deems appropriate, including the certificate of a
duly licensed physician that the Participant has had,
currently has, and will continue to have, a Total
Disability. The Supervisory Committee may, in its discretion
exercised in a non-discriminatory manner, require proof of
the continued Disability of the Cash Balance Participant.
(d) Cause of Disability. A Cash Balance Participant will not be
entitled to receive a Disability Cash Balance Pension
Benefit if his Disability is the result of an injury
intentionally self-inflicted for the purpose of collecting a
benefit hereunder.
(e) Recovery from Disability. If the Supervisory Committee finds
that a Cash Balance Participant has recovered from his
Disability at any time prior to his Normal Retirement Date,
or if a Cash Balance Participant refuses to provide the
proof of continued Disability required by the Supervisory
Committee pursuant to the last sentence of subsection (c)
hereof, then, as set forth in subsection (b) hereof,
additional crediting of Interest Credits and Pay Credits
shall be discontinued. In making such finding, the
Supervisory Committee shall accord all Participants like
treatment under the same or similar circumstances
(f) Disability Defined. For purposes of this Article VII only,
'Total Disability' means 'Total Disability' as that term is
defined under the long-term disability plan maintained by
the Company at the time of the determination.
Determinations as to Total Disability shall be made by the
Supervisory Committee, in its sole discretion.
(g) Re-employment. If a Cash Balance Participant recovers from
a Disability and is re-employed by an Employer, he shall be
deemed to have accrued Pay Credits and Interest Credits
through the end of the month in which such Disability
recovery occurs, and no One-Year Break(s) in Service shall
be deemed to have occurred during such period. For
calculations under this Section 7.8(g), the Cash Balance
Participant's Accrued Benefit shall not be less than if it
were based on his Cash Account Balance determined as of the
date his Disability commenced.
7.9 Termination of Vested Cash Balance Participant
(a) A Cash Balance Participant who has incurred a Termination
Date, other than by reason of a Retirement Date, shall be
entitled to receive a Cash Balance Pension Benefit,
commencing on his Normal Retirement Date. The annual amount
of such Cash Balance Pension Benefit shall be equal to his
Accrued Benefit on his Normal Retirement Date.
(b) A terminated Cash Balance Participant eligible for a Cash
Balance Pension Benefit under this Section may elect to have
his Cash Balance Pension Benefit commence prior to his
Normal Retirement Date on an Annuity Starting Date that is
the first day of any month coincident with or following his
Termination Date. In that event, the Cash Balance Pension
Benefit payable shall be equal to an immediate annuity that
is the Actuarial Equivalent of the Cash Balance
Participant's Cash Account Balance on his Annuity Starting
Date.
(c) A Cash Balance Participant who wishes to commence receiving
his Cash Balance Pension Benefit prior to his Normal
Retirement Date must file an application therefor with the
Supervisory Committee not later than thirty (30) days prior
to his Annuity Starting Date. Such application shall
specify the Annuity Starting Date on which such Cash Balance
Pension Benefit shall first be payable.
(d) Nothing contained in the Plan shall be construed to require
the payment of any Cash Balance Pension Benefit to any Cash
Balance Participant for any month prior to the earlier of
the month in which a Cash Balance Pension Benefit would
commence pursuant to Section 7.5 or thirty (30) days
subsequent to the receipt of an application for a Cash
Balance Pension Benefit filed pursuant hereto.
(e) A Cash Balance Participant shall at all times be fully
vested in his Cash Balance Pension Benefit.
7.10 Death Benefits
If a Cash Balance Participant dies prior to his Annuity Starting
Date, a benefit shall be paid to the Cash Balance Participant's
Beneficiary. If such Beneficiary is not the Cash Balance
Participant's Spouse, the Beneficiary shall receive, as soon as
practicable after the Cash Balance Participant's death, a single-
sum payment equal to the Cash Balance Participant's Cash Account
Balance as of the Cash Balance Participant's date of death.
If such Beneficiary is the Cash Balance Participant's Spouse,
payment of the Accrued Benefit as of the date of death shall be
made in the form of a Preretirement Survivor Annuity based on the
Attained Age of the Spouse at the Annuity Starting Date. The
Preretirement Survivor Annuity shall be payable to the surviving
Spouse in equal monthly installments commencing on an Annuity
Starting Date elected by the Spouse that is the first day of any
month (as elected by the surviving Spouse) following the Cash
Balance Participant's death and terminating on the first day of
the month in which the surviving Spouse dies; provided, however,
in lieu of the Preretirement Survivor Annuity, the spouse may
elect to receive, as soon as practicable after the Cash Balance
Participant's death, a single-sum payment equal to the Cash
Balance Participant's Cash Account Balance determined as of the
Cash Balance Participant's date of death.
In no event may the Spouse elect an Annuity Starting Date that is
later than the later of (1) what would have been the
Participant's Normal Retirement Date and (2) the first day of the
first month following the Participant's death. If the Spouse
does not elect an Annuity Starting Date, then the Spouse's
Annuity Starting Date shall be the later of the dates set forth
in the immediately preceding sentence.
'Preretirement Survivor Annuity' shall mean, with respect to the
Spouse of a deceased Cash Balance Participant, an amount payable
to such Spouse for the life of the Spouse, based upon the Cash
Balance Participant's Accrued Benefit at the date of his death.
The Preretirement Survivor Annuity shall be a Single Life Annuity
that is the Actuarial Equivalent of the Participant's Cash
Account Balance at the Participant's death, based on the Spouse's
Attained Age as of the Annuity Starting Date. In no event shall
the Preretirement Survivor Annuity be less than the amount
required by Sections 401(a)(11) and 417 of the Code.
Article VIII. Maximum Plan Benefits
8.1 General Limitation .
Notwithstanding any other provision of this Plan to the contrary,
the annual Pension Benefit provided under this Plan (together
with that provided by all other defined benefit plans of the
Company and any Affiliate) for any Participant for a limitation
year, which shall be the Plan Year, may not exceed the lesser of-
(a) $135,000 (indexed under rules issued by the Secretary
of the Treasury to reflect increases in the cost of
living), or
(b) 100 percent of the Participant's average compensation
(as defined in Treasury Regulation Section 1.415-2(d))
during his three consecutive years of participation
that produce the highest average, or during all years
he was a Participant if less than three.
In no event however, will this limitation reduce the Pension
Benefit earned by a Participant prior to the effective date of
the Tax Reform Act of 1986, Deficit Reduction Act of 1984, or the
Tax Equity and Fiscal Responsibility Act of 1982. Further, the
maximum annual benefit for any individual who is a Participant as
of the first day of any limitation year beginning after December
31, 1986, shall not be less than the Participant's current
Accrued Benefit as of December 31, 1986.
8.2 Early Commencement .
If a Participant's Pension Benefit begins before his Social
Security Retirement Age, the $135,000 figure in subsection (a)(1)
will be adjusted as required by Code Section 415(b). If a
Participant's benefit begins after his Social Security Retirement
Age, the $135,000 figure in Subsection (a)(1) shall be adjusted
to the maximum extent permitted by Code Section 415(b). The
adjustments shall be made in such manner as the Secretary of the
Treasury may prescribe in order to comply with Code Section 415.
8.3 Less than Ten Years of Service .
If a Cash Balance Participant has less than ten Years of Service,
the percentage limitation in subsection 8.1(a) will be reduced by
multiplying the limitation amount by his Years of Service and
dividing the results by ten years. If a Participant's years of
participation in this Plan is less than ten years, the $135,000
limitation will be reduced by multiplying the limitation amount
by his years of participation in this Plan and dividing the
results by ten years.
8.4 Non-Single Life Annuity .
If the annual benefit is payable in the form of a benefit other
than a single life annuity, the limitations of Section 8.1 shall
be adjusted in accordance with Treasury Regulations to be the
actuarial equivalent of a single life annuity. For the purpose
of the preceding sentence, a benefit payable in the form of a
qualified joint and survivor annuity as defined in Code Section
417 shall not be taken into account.
8.5 Non-Applicability .
The limitations of this Article will not apply to a Participant
if-
(1) the total annual retirement benefits payable to the
Participant under the Plan and under all other defined
benefit plans of the Company and any Affiliate do not
exceed $10,000 for the Plan Year or for any prior Plan
Year, multiplied by the ratio of the Participant's
total Years of Service to ten (such ratio not to be
greater than one), and
(2) the Participant has not participated at any time in any
defined contribution plan which the Company or any
Affiliate may have maintained.
Article IX. Payment of Benefits
9.1 Normal and Optional Forms of Benefit
(a) Normal Form of Payment
(1) Married Participant. The Pension Benefit payable to a
Participant who has a Spouse at his Annuity Starting
Date shall be payable as a Qualified Joint and Survivor
Annuity, unless the Participant makes a timely election
to receive payments pursuant to one of the optional
forms of payment described in subsection 9.1(c) below.
The Qualified Joint and Survivor Annuity shall be the
Actuarial Equivalent of the Accrued Benefit otherwise
payable to the Participant pursuant to Article VI or
Article VII, as applicable. An election by a
Participant to receive payments pursuant to subsection
9.1(c) shall only be effective if such Participant's
Spouse has consented to such election as provided in
subsection 9.1(b). A 'Qualified Joint and Survivor
Annuity' means an annuity payable to the Participant
for his life, with a survivor annuity payable to his
Spouse for the life of such Spouse in an amount equal
to 50% of the amount payable during the life of the
Participant.
(2) Unmarried Traditional Participant. The Pension Benefit
payable to a Traditional Participant who does not have
a Spouse at his Annuity Starting Date shall be payable
as a Life and Ten Year Period Certain Annuity unless
the Traditional Participant makes a timely election to
receive payments pursuant to one of the optional forms
of payment described in subsection 9.1(c) below.
(3) Unmarried Cash Balance Participant. The Pension
Benefit payable to a Cash Balance Participant who does
not have a Spouse at his Annuity Starting Date shall be
payable as a Single Life Annuity unless the Cash
Balance Participant makes a timely election to receive
payments pursuant to one of the optional forms of
payment described in subsection 9.1(c) below.
(b) Election of an Optional Form of Benefits.
(1) At least thirty (30) and no more than ninety (90) days
prior to a Participant's Annuity Starting Date, the
Supervisory Committee shall give such Participant a
written notice, in nontechnical terms, of his right to
elect not to receive his Pension Benefit pursuant to
subsection 9.1(a) and of his right to make an election
of an optional form of payment of his Pension Benefit
pursuant to Subsection 9.1(c). Such notice shall
include a description of (i) the terms and conditions
of the normal form of payment under subsection 9.1(a),
(ii) the Participant's right to make and the effect of
an election to waive such form, (iii) the rights of the
Participant's Spouse not to consent to such election,
(iv) the right to make, and the effect of a revocation
of such an election, and (v) the optional forms of
payment available under subsection 9.1(c).
(2) The election provided for above may be made by the
Participant by giving a written notice of election to
the Supervisory Committee at any time during the ninety
(90) day election period ending on the Participant's
Annuity Starting Date. Any such election may be
modified or revoked during such election period and
shall be automatically revoked if the Participant dies
before commencement of payment of his Pension Benefit
to him, or if he has no Spouse on his Annuity Starting
Date (because of divorce or the Spouse's death).
(3) Any election by a Participant not to receive payment in
the normal form set forth in subsection 9.1(a) shall
not take effect unless such Participant's Spouse
consents in writing to such election, such consent
acknowledges the effect of such election and such
consent is witnessed by a representative of the Plan or
a notary public, unless the Participant establishes to
the satisfaction of the Supervisory Committee that such
consent cannot be obtained because the Spouse cannot be
located or because of such other conditions as the
Secretary of the Treasury by regulation may prescribe.
Any consent by a Spouse (or establishment that the
consent cannot be obtained) shall only be effective
with respect to that Spouse. Any consent by a Spouse
hereunder shall be irrevocable. Any consent by a Spouse
hereunder shall be in favor of a specific alternate
Beneficiary and/or form of benefit.
(4) Any election of an optional form of benefit pursuant to
subsection 9.1(c), and any designation of a contingent
annuitant shall be irrevocable from and after a
Participant's Annuity Starting Date.
(c) Optional Forms of Payment.
(1) Each of the optional forms of payment described under
this subsection 9.1(c) shall be the Actuarial
Equivalent of the Participant's Accrued Benefit.
Subject to subsection 9.1(b)(3), a Participant may
elect the following forms of payment of benefits as
provided below:
(A) Life and Ten Year Period Certain. A
Participant may receive a Pension Benefit payable
monthly during his lifetime and, in the event of
his death within a period of ten (10) years after
the commencement of payments, the same amount
shall be payable monthly for the remainder of such
ten (10) year period to his Beneficiary or
Beneficiaries.
(B) Single Life Annuity. A Participant may
receive a Pension Benefit payable monthly during
his life, ending on the first day of the month
during which the death of the Participant occurs.
(C) Joint and Survivor Annuity. A
Participant may receive a Pension Benefit payable
to the Participant for his life with a survivor
annuity payable to his Spouse for the life of such
Spouse in an amount equal to 50%, 66 2/3 or 100%
(as selected by the Participant) of the amount
payable during the life of the Participant.
(D) Social Security Adjustment.
(1) Purpose. This option provides for larger
payments to the Participant from his
Retirement Date to the date Social Security
benefits are expected to commence and reduced
payments thereafter during the Participant's
lifetime. The amount of reduction is equal
to the Primary Social Security Insurance
Benefit to which the Participant is entitled.
The amount of the Primary Social Security
Insurance Benefit is the primary insurance
amount of the Old Age Insurance Benefits
payable to the Participant under the Social
Security Act as estimated by the Plan
Administrator.
The date Social Security benefits are
expected to commence is the first day of the
month next following the Participant's
attainment of his sixty-fifth birthday.
(2) Amount of Benefit. The increased yearly
amount of Pension Benefit payable under this
option to the Participant until the
attainment of his sixty-fifth birthday shall
be equal to the sum of-
(A) the yearly amount of Pension
Benefit otherwise payable to the
Participant if the Single Life Annuity
option were in effect with respect to
him, and
(B) the amount of the
Participant's expected yearly Primary
Social Security Insurance Benefit.
The reduced yearly amount of Pension Benefit
payable under this option to the Participant
during his lifetime after the attainment of
his sixty-fifth birthday shall be equal to
the excess of-
(i) the increased yearly amount of
Pension Benefit payable to the
Participant until the attainment of
his sixty-fifth birthday, over
(ii) the amount of the Participant's
expected yearly Primary Social
Security Insurance Benefit.
In the event the Qualified Joint and Survivor
Annuity is in effect on the Participant's
Early Retirement Date, the yearly amount of
Pension Benefit applicable to the Participant
in the form of a temporary annuity is as
described above, and the yearly amount
applicable in the form of a life annuity, is
equal to the excess of the Pension Benefit
which is applicable to the Participant when
the Qualified Joint and Survivor Annuity is
in effect over the product of the
Participant's expected yearly Primary Social
Security Insurance Benefit and the applicable
Social Security Factor. The monthly amount
of the Pension Benefit payable to the
Participant's Spouse following the
Participant's death will be determined as if
the Social Security Adjustment Option were
not in effect.
(3) Not Available for Employees Hired
on or after January 1, 2000. This Option
shall be available only to Participants hired
prior to January 1, 2000.
(E) Cash Balance Lump Sum. A Cash Balance
Participant may receive the Actuarial Equivalent
of his Accrued Benefit in a single sum as soon as
practicable following his Retirement Date or
Termination Date.
(2) Notwithstanding paragraph (a) above, in no
event will a Participant's Pension Benefit upon Early
Retirement or in an optional form of payment be less
than the Pension Benefit accrued to December 31, 1999
and adjusted by the appropriate Early Retirement and/or
Optional Form of Benefit factors in effect on
December 31, 1999.
9.2 Cashout
(a) Notwithstanding any other provision of the Plan, if the
present value of a Participant's Accrued Benefit at his
Retirement Date or Termination Date is less than or equal to
$5,000, or such higher amount as may be permitted under
applicable law, the Supervisory Committee shall direct that
the present value of his Accrued Benefit be paid in a single
sum. The single sum payment will be a full discharge of the
Plan's liability to him and any nonvested portion will be
treated as a forfeiture.
(b) If a Participant does not have any vested interest in his
Accrued Benefit under this Plan on the Termination Date or
Retirement Date, the Participant shall be deemed to have
received a distribution of his vested Accrued Benefit on
such date. Such individual shall cease to be a
'Participant' under the Plan and shall not be a
'Participant' under the Plan for purposes of Section 4006 of
ERISA. If an individual who was deemed to have received a
distribution under this subsection is rehired, he shall be
treated as having repaid such Accrued Benefit on his date of
rehire.
(c) If the present value of the benefits payable to an alternate
payee under a qualified domestic relations order is less
than or equal to $5,000 on the date upon which the alternate
payee is entitled to benefits, the alternate payee shall be
paid such amount in a single sum regardless of the
provisions of the qualified domestic relations order.
9.3 Direct Rollovers of Eligible Distributions
(a) General. 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 Supervisory Committee, to
have any portion of an Eligible rollover distribution paid
directly to an Eligible retirement plan specified by the
distributee in a direct rollover, provided that the Eligible
rollover distribution is not less than $200.
(b) Definitions.
(1) Eligible rollover distribution. An Eligible rollover
distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except
that an Eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution
to the extent such distribution is required under 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).
(2) Eligible retirement plan. 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 rollover distribution to the
surviving Spouse, an Eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(3) Distributee. A distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving Spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Code Section are distributees with
regard to the interest of the spouse or former spouse.
(4) Direct rollover. A direct rollover is a payment by the
Plan to the Eligible retirement plan specified by the
distributee.
9.4 Distribution Rules
(a) Commencement of Benefits. Benefit payments shall commence
or be paid:
(1) to a Participant who retires under the Plan on his
Retirement Date;
(2) to a Participant who has a Vested Benefit under the
Plan on his Normal Retirement Date or Early Retirement
Date;
(3) to a Cash Balance Participant who elects the Cash
Balance Lump Sum Option as soon as practicable
following his Retirement or Termination Date;
(4) to a Surviving Spouse of a Traditional Participant
entitled to a Traditional Preretirement Survivor
Annuity as of the date specified in Section 6.6(c); or
(5) to a Beneficiary of a Cash Balance Participant entitled
to a death benefit as of the date specified in
Section 7.10.
Retirement Annuity payments shall be payable for the
lifetime of the Participant or Surviving Spouse and, except
as may otherwise be provided under the Plan, shall cease
with the last payment due on or prior to his date of death.
(b) Minimum Distributions. Notwithstanding anything to the
contrary contained in this Article VII-
(1) All distributions under this Plan shall comply with the
requirements of subsections (c) and (d).
(2) All distributions under this Plan shall be made in
accordance with Code Section 401(a)(9) and the
regulations thereunder. Provisions of the Plan
regarding payment of distributions shall be interpreted
and applied in accordance with Code Section 401(a)(9)
and the regulations thereunder.
(c) Required Distributions. Despite any other provision of the
Plan, a Participant may only elect to receive an optional
form of benefit that meets the distribution requirements of
this Section.
(1) A Participant not currently receiving benefits under
this Plan who attains age 70-1/2 shall commence
receiving benefits on April 1 of the calendar year
following the later of:
(A) the calendar year in which the
Participant attains age 70-1/2, and
(B) the calendar year in which he leaves the
employ of the Employer and all
Affiliates unless he is a five percent
owner (as defined in Section 416 of the
Code) of the Employer at any time during
the five-Plan Year period ending in the
calendar year in which the Participant
attains age 70-1/2, in which case this
clause (B) shall not apply.
Notwithstanding the preceding provisions
of this subsection, the preceding
provisions of this subsection will not
apply to a Participant who reaches age
70-1/2 on or after January 1, 1996 and
prior to January 1, 1999, unless he
elects to have such provisions apply to
him. This election shall not be
available to any Participant who is a 5%
owner (as defined in Section 416 of the
Code) of the Employer at any time during
the five-Plan Year period ending in the
calendar year in which the Participant
attains age 70-1/2. The Supervisory
Committee shall notify any such
Participant of his right to make such an
election. Such election shall be made in
writing in the manner and at the time
prescribed by the Supervisory Committee.
If such election is not made by any such
Participant, his required distribution
date will be April 1 of the calendar
year following the calendar year in
which he attains age 70-1/2.
(2) A Participant's benefits will be distributed, beginning
not later than the date required pursuant to paragraph
(1), over the life of the Participant or over the lives
of such Participant and his designated Beneficiary, or
over a period not extending beyond the life expectancy
of such Participant or the joint life expectancy of
such Participant and Beneficiary.
(3) If the distribution of a Participant's benefits have
begun in accordance with paragraph (1), and the
Participant dies prior to the required commencement
date under paragraph (1) but before his entire interest
has been distributed to him, the remaining portion of
the Participant's benefits will be distributed at least
as rapidly as under the method of distribution in
effect at the date of his death.
(4) If a Participant dies prior to the required
commencement date and prior to commencement of the
payment of benefits, the Participant's benefits will be
distributed within five years after the end of the year
in which the Participant's death occurs, except as
permitted under paragraphs (5) and (6).
(5) If-
(A) any portion of a Participant's benefits are
payable to a designated beneficiary;
(B) such portion will be distributed over the life of
such beneficiary or over a period not extending
beyond the life expectancy of the beneficiary; and
(C) such distributions begin not later than the last
day of the calendar year following the year of the
Participant's death;
then the portion referred to in subparagraph (5)(C)
shall be treated as having been distributed within the
time required under paragraph (4).
(6) If the beneficiary referred to in paragraph (5)(C) is
the surviving Spouse of the Participant the date on
which distributions are required to begin under
paragraph (5)(C) shall not be earlier than the date on
which the Participant would have attained age 70-1/2.
(7) If the distribution of a Participant's benefits begin
in accordance with paragraph (1) while the Participant
is an Employee, the Participant's required minimum
distribution under subsection (b) above shall be paid
as a single sum in each calendar year during which the
Participant is an Employee, unless in such year the
Participant has a Retirement Date and his benefits have
commenced in accordance with subsection (b).
(d) Incidental Death Benefit. If a Participant's benefit under
this Plan is distributed as an annuity, such annuity may
only be payable for a period not to exceed the lifetime of
the Participant or the lifetimes of the Participant and his
designated beneficiary. If the Participant's beneficiary is
not his Spouse, the periodic annuity payments payable to the
designated beneficiary may not exceed the 'applicable
percentage' of the annuity payments payable to the
Participant. The 'applicable percentage' shall be
determined pursuant to regulations issued under Code Section
401(a)(9).
(e) Calculation of Life Expectancies. Life expectancies of
Participants and Beneficiaries under this Section 9.4 shall
not be subject to recalculation.
Article X. Administration
10.1 Misstatement
If the age, sex, or any other relevant fact with respect to a
Participant or other payee to whom a benefit is payable is
misstated, an equitable adjustment shall be made in the benefits
paid or to be paid in the future to a Participant or other payee
so as to provide the benefits which would have been payable had
the correct information been provided initially.
10.2 Determinations by the Supervisory Committee
The Supervisory Committee shall from time to time establish rules
for the administration of the Plan. The Supervisory Committee
shall have the exclusive right to interpret the terms and
provisions of the Plan and to determine any and all questions
arising under the Plan or in connection with its administration,
including, without limitation, the right to remedy or resolve
possible ambiguities, inconsistencies, or omissions, by general
rule or particular decision, all in its sole and absolute
discretion. The Supervisory Committee shall make all such
determinations in a consistent and nondiscriminatory manner. All
such determinations shall be conclusive for the purposes of the
Plan, subject to the provisions of Section 10.4, and shall be
given the maximum possible deference allowed by law.
The Supervisory Committee shall also make, or cause to be made,
all reports or other filings necessary to meet the reporting,
disclosure, and other filing requirements of ERISA.
10.3 Participant's Responsibilities
The Participant and any other person having rights under the Plan
shall provide all information, prescribed forms and proofs which
may reasonably be required of him in the administration of the
Plan. The Supervisory Committee may require evidence that a
payee is living on the date any benefit is due the payee.
10.4 Claims Procedure
Claims for benefits under the Plan may be filed with the
Supervisory Committee on forms supplied by the Employer. Written
notice of the disposition of a claim shall be furnished to the
claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be
understood by the claimant pertinent provisions of the Plan shall
be cited, and, where appropriate, an explanation as to how the-
claimant can perfect the claim will be provided. In addition,
the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
10.5 Claims Review Procedure
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Supervisory Committee
pursuant to Section 9.4 shall be entitled to request the
Supervisory Committee to give further consideration to his claim
by filing with the Supervisory Committee (on a form which may be
obtained from the Supervisory Committee) a request for a hearing.
Such request together with a written statement of the reasons why
the claimant believes his claim should be allowed, shall be filed
with the Supervisory Committee no later than 60 days after
receipt of the written notification provided for in Section 10.4.
The Supervisory Committee shall then conduct a hearing within the
next 60 days, at which the claimant may be represented by an
attorney or any other representative of his choosing and at which
the claimant shall have an opportunity to submit written and oral
evidence and arguments in support of his claim. At the hearing
(or prior thereto upon five business days written notice to the
Supervisory Committee) the claimant or his representative shall
have an opportunity to review all documents in the possession of
the Supervisory Committee which are pertinent to the claim at
issue and its disallowance. Either the claimant or the
Supervisory Committee may cause a court reporter to attend the
hearing and record the proceedings. In such event a complete
written transcript of the proceedings shall be furnished to both
pates by the court reporter. The full expense of any such court
reporter and such transcripts shall be borne by the party causing
the court reporter to attend the hearing. A final decision as to
the allowance of the claim shall be made by the Supervisory
Committee within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances,
provided the delay and the special circumstances occasioning it
are communicated to the claimant within the 60-day period). Such
communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for
the decision and specific references to the pertinent Plan
provisions on which the decision is based.
10.6 Plan Qualification
It is intended that the Plan in design and operation will meet
the requirements of Code Section 401(a) and of acts amending such
Section. If it is determined that such requirements are not
being met, the Plan and benefits thereunder may be modified,
retroactively if necessary, to satisfy such requirements.
10.7 Indemnity of Supervisory Committee Members
The Company shall indemnify and defend each member of the
Supervisory Committee and each of its other employees against any
and all claims, loss, damages, expenses (including reasonable
attorney's fees), and liability arising in connection with the
administration of the Plan, except when the same is judicially
determined to be due to the gross negligence or willful
misconduct of such member or other employee.
Article XI. Financing the Plan
11.1 Financing the Plan
(a) Funding. The Plan is funded through the Trust Fund. The
Company or other appropriate Employer will make
contributions to the Trust in amounts which it determines,
after consultation with the actuary for the Plan, are
necessary to maintain funding at a level sufficient to
provide all benefits under the Plan as they become due.
(b) Credits. Any credits arising from the forfeiture of
benefits will not be applied to increase the benefits to
which any Participant would otherwise be entitled under the
Plan but will be applied to reduce the amount of the
contributions which the Company or other appropriate
Employer would otherwise make to the Plan.
(c) Contributions. Contributions will be paid to the Trust to
be held by the Trustee pursuant to the terms of the Trust.
The Trustee shall be the custodian of all of the assets and
funds of the Trust, shall accept and receive all sums of
money paid to it from time to time by the Company pursuant
to the terms of the Trust, and shall hold, invest, reinvest,
manage and administer those funds and the increment,
earnings and income thereof as the Trust Fund for the
exclusive benefit of Participants and their Beneficiaries,
all pursuant to the Trust. The Trustee shall pay benefits
to such persons, at such times, and in such amounts as shall
be provided under the Trust. In no event shall the Trustee
be under any obligation to make any payment other than from
the Trust Fund.
11.2 Nonreversion
(1) Except as provided in Section 12.2, no Employer shall
have any right title, or interest in the contributions
made to the Plan, and no part of the Plan assets shall
revert to any Employer. However, if a contribution is
made to the Plan by any Employer by a mistake of fact
then such contribution shall be returned to such
Employer within one year after the payment of the
contribution.
(2) All contributions to the Plan are contingent on the
deductibility of such contributions. If any part or
all of a contribution is disallowed as a deduction
under Code Section 404, then to the extent such
contribution is disallowed as a deduction it shall be
returned to such Employer within one year after the
disallowance.
Article XII. Amendment and Termination
12.1 Amendment to the Plan
The Company shall have the right to amend the Plan in any respect
at any time by an instrument in writing duly executed by the
Company; provided however, no such amendment shall have any
retroactive effect which would reduce a Participant's Accrued
Benefit or Vested Benefit as of the date immediately prior to
such amendment or otherwise adversely affect benefits already
purchased or established for a Participant or other payee except
as may be required by applicable provisions of the Code or ERISA
or the rules and regulations thereunder.
12.2 Termination of the Plan
The Company shall have the right to terminate the Plan at any
time, provided that in the event of such Termination, the benefit
of any highly compensated employee (as defined in Code Section
414(q)) and former highly compensated employee shall be limited
to a benefit that is nondiscriminatory under Code Section
401(a)(4). Upon Termination, the Supervisory Committee shall
allocate the assets of the Plan, after first providing for the
expenses of the Plan, in the following order:
(a) In the case of benefits payable as a retirement annuity, to-
(1) the smallest benefit payable to each retired
Participant or Beneficiary of the Plan which was in pay
status at least three years before the Termination of
the Plan, based on the Plan provisions in effect five
years prior to the Termination of the Plan; and
(2) the smallest benefit which would have been in pay
status to each Participant or Beneficiary of the Plan,
not included in (1), if the Participant had retired at
least three years before Termination of the Plan, based
on the plan provisions in effect five years prior to
the Termination of the Plan.
(b) To all other benefits not included in (a) and (b) which are
payable under the Plan and which are guaranteed under Title
IV of ERISA.
(c) To all other benefits not included in (a), (b) or (c) which
are payable under the Plan and in which Participants are
vested.
(d) To all other benefits which are payable under the Plan.
If the assets available for allocation are insufficient to cover
all benefits within a priority class, such assets will be
allocated pro rata within that class to the exclusion of
succeeding classes.
If the Plan is terminated with respect to a specified class or
classes of Participants only, the Supervisory Committee shall
determine the portion of the assets of the Plan which is
attributable to such class or classes of Participants. The
Supervisory Committee shall then allocate such portion of the
assets of the Plan to the Participants who are members of the
class or classes to which such partial Termination is applicable
in the same manner as if the Plan had been terminated with
respect to all Participants, after first providing for the
expenses applicable to the discontinued portion of the Plan.
Upon Termination or partial Termination of the Plan, the Accrued
Benefit of each affected Participant determined as of the date of
such Termination or partial Termination, shall be nonforfeitable
to the extent it is then funded.
All assets of the Plan shall be used for the exclusive benefit of
Participants and their Beneficiaries and for defraying the
reasonable expenses of administering the Plan; provided, however,
if and when all liabilities of the Plan have been satisfied, any
remaining assets may revert to the Employer.
There shall be no merger or consolidation with, or transfer of
assets or liabilities to, any other plan, unless each Participant
would, if such other plan then terminated, receive a benefit
immediately after the merger, consolidation, or transfer, which
is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation
or transfer if the Plan had then terminated.
12.3 Restriction on Benefits on Early Termination
(a) Restrictions Prior to January 1, 1994. Notwithstanding any
other provisions in the Plan to the contrary, for Plan Years
beginning before January 1,1994, the Pension Benefits
provided under the Plan for Participants (including
subsequently retired Participants) of the Plan who are among
the 25 most highly-compensated Employees of the Employer as
of the effective date of the Plan, or as of any later date
as of which any amendment of the Plan shall increase the
retirement benefits hereunder for such Participant (each of
which dates shall hereinafter be referred to as a
'Restricted Date'), and whose anticipated annual benefits
exceed $1,500, shall be subject to the following
restrictions:
(1) If, on any date prior to ten years after any Restricted
Date, the Plan is terminated as respects the Employer,
the benefits payable to any Participant in this group
from Employer contributions shall not exceed the
benefit which can be provided from the greater of the
following:
(A) the Employer contributions (or funds attributable
thereto) which would have been applied to provide
benefits for the Participant under the Plan as in
effect on the day before such applicable
Restricted Date had it continued in effect
unchanged to such date of termination of the Plan;
(B) $20,000;
(C) the sum of-
(i) the Employer contributions (or funds
attributable thereto) which would have been
applied to provide benefits for the
Participant under the Plan as in effect on
the day before such applicable Restricted
Date if it had been terminated on the day
before such applicable Restricted Date; and
(ii) an amount computed by multiplying (I) 20
percent of the Participant's average annual
earnings, or (II) $10,000, whichever is the
lesser, by the number of years elapsing
between the applicable Restricted Date and
such date of Termination of the Plan; or
(D) the present value of the benefit guaranteed for
such Employees under Section 4022(b) of ERISA.
(2) If any Participant in this group leaves the employ of
the Employer when the full current costs have not been
met the funds or benefits from Employer contributions
which any Participant in such group may receive
(including any funds or benefits from Employer
contributions he has already received) shall not, at
any time prior to ten years after an applicable
Restricted Date, exceed the funds or benefits from
Employer contributions which he could receive in
accordance with paragraph (1) above if the Plan were
terminated at the time he receives such funds or
benefits; provided, however, that neither paragraph (2)
nor paragraph (1) of this Section 12.3(a) shall
restrict the current payment of the full monthly
retirement benefits called for by the Plan for any
Participant in such group while the Plan is in full
effect and its full current costs have been met.
(b) Restrictions on and after January 1, 1994.
(1) Restriction. Notwithstanding any other Plan provision
to the contrary, for Plan Years beginning on or after
January 1, 1994, the payment of Pension Benefits
provided under the Plan to or on behalf of a
Participant described in paragraph (2) below will be
restricted to an amount equal to the payments that
would be made on the Participant's behalf under a
single life annuity that is the Actuarial Equivalent of
the sum of the Participant's Accrued Benefit and the
Participant's other benefits (if any) under the Plan
and a social security supplement if any, that the
Participant is entitled to receive.
(2) Restricted Participants. The Participants subject to
the restrictions set forth in subsection (a) are those
Participants who are the 25 Highly Compensated
Employees (as defined in Code Section 414(q)) and
former Highly Compensated Employees with the greatest
Compensation (as defined in Code Section 414(s)) in the
current or any prior year.
(3) Nonapplicability. The restrictions in this Section
12.3(b) will not apply, however, if-
(A) After taking into account payment to or on behalf
of such a Participant of all the existing Pension
Benefits payable to or on behalf of the
Participant under the Plan, the value of Plan
assets equals or exceeds 110 percent of the value
of Current Liabilities as defined in Code Section
412(l)(7);
(B) The value of the benefits payable to or on behalf
of the Participant under the Plan is less than 1
percent of the value of Current Liabilities before
distribution.
(C) The value of the Pension Benefit payable to the
Participant under the Plan does not exceed $5,000
(or such greater amount as may be permitted under
Code Section 411(a)(11)(A)); or
(D) The Commissioner of Internal Revenue determines
that such restrictions are not necessary to
prevent the prohibited discrimination that may
occur in the event of an early termination of the
Plan.
(c) Definitions. For purposes of this Section 12.3, the
following terms shall have the meaning set forth below:
(1) 'Accrued Benefit' shall have the meaning set forth
in Section 2.1.
(2) 'Actuarial Equivalent' shall have the meaning set
forth in Section 2.2.
(3) 'Benefit' or 'Pension Benefit' shall include among
other benefits under the Plan, loans in excess of the
amounts set forth in Section 72(p)(2)(A) of the Code,
any periodic income, any withdrawal values payable to a
living or former Employee, and any death benefits under
the Plan not provided for by insurance on the
Employee's or former Employee's life.
Article XIII. Facility of Payment
13.1 Facility of Payment
If any payee under this Plan is considered by the Supervisory
Committee to be legally, physically or mentally incapable of
giving a valid release for any payment due, payment of the
amounts payable may be made to any person or institution who is
then found to be maintaining or have custody of such payee, until
claim is made by the duly appointed guardian or other legal
representative of such payee. Any payment made in good faith in
accordance with this provision shall, to the extent of such
payment, constitute a full discharge of any liability to make
such payment.
Article XIV. Assignment of Benefits
14.1 Assignment of Benefits
Except as otherwise prescribed by law or pursuant to a qualified
domestic relations order as defined in Code Section 414(p), no
payee under the Plan shall have the right to assign, alienate,
encumber, or commute any payments hereunder, nor shall any
payments hereunder be subject to the debts, contracts, or
engagements of any payee or to any judicial process to levy upon
or attach the same for the payment of any claim against the
payee.
The Supervisory Committee shall be responsible for any
determination relating to the qualification, interpretation or
administration of a domestic relations order assigning benefits
payable under the Plan. The Supervisory Committee shall
establish reasonable procedures to determine the qualified status
of domestic relations orders and to administer distributions
under these orders.
Notwithstanding the provisions contained herein, the benefits
payable under the Plan may be offset by an amount set forth in a
court order or requirement to pay that arises from (1) a judgment
of conviction for a crime involving the Plan, (2) a civil
judgment (or consent order or decree) that is entered by a court
in an action brought in connection with a breach (or alleged
breach) of a fiduciary duty under ERISA, or (3) a settlement
agreement entered into by the Participant with the Secretary of
Labor in connection with a breach of fiduciary duty under ERISA
by a fiduciary or any other person, provided that such judgment
or agreement is issued or entered into on or after August 5,
1997.
Article XV. Beneficiary
15.1 Designating a Beneficiary
Upon becoming a Participant or any time thereafter prior to his
Termination of service, a Participant may, by notice to the
Employer, designate a Beneficiary or Beneficiaries to receive
such payments or Distributions as may be provided for under the
Plan. Such designation may be changed from time to time or
revoked, without the consent of any previously designated
Beneficiary, by notice to the Employer. No such designation,
change or revocation shall be effective unless executed by the
Participant and acknowledged by the Employer.
15.2 Nonspouse Beneficiary
The designation of a nonspouse Beneficiary by a married
Participant must be consented to in writing by the Participant's
Spouse in accordance with subsection 9.1(b)(3). In the absence
of spousal consent, a married Participant shall be deemed to have
designated his Spouse as Beneficiary.
15.3 Plan Designations
If there is no designated Beneficiary to receive any amount that
becomes payable to a Beneficiary, or in the event a designated
Beneficiary has predeceased the Participant such payments or
distributions shall be paid in equal shares to the person or
persons in the first surviving class of the following classes of
preference beneficiaries-
(a) Participant's widow or widower,
(b) Participant's surviving issue per stirpes and not per capita,
(c) Participant's surviving parents,
(d) Participant's surviving brothers and sisters,
(e) Representative of Participant's estate.
15.4 Interpretations
When used herein and, unless the Participant has otherwise
specified in his Beneficiary designation, when used in a
Beneficiary designation, 'per stirpes' means in equal shares
amount living children and the issue, taken collectively, of each
deceased child, with such issue taking by right of
representation; 'children' means issue of the first generation
and 'issue' means all persons who are descended from the person
referred to, either by legitimate birth to or legal adoption by
him or any of his legitimately born or legally adopted
descendants.
Unless the Participant is survived by Beneficiaries designated by
him at the time of his death, the automatic Beneficiaries
specified above shall become fixed as of the Participant's death
so that if a beneficiary survives the Participant but dies before
the receipt of all payments due such Beneficiary hereunder, such
remaining payments shall be given effect without regard to
whether the relationship to the Participant exists either then or
at the Participant's death. Any designation of a Beneficiary by
name that is accompanied by a description of relationship to the
Participant shall be given effect without regard to whether the
relationship to the Participant exists either then or at the
Participant's death. Any designation of a Beneficiary only by
statement of relationship to the Participant shall be effective
only to designate the person or persons standing in such
relationship to the Participant at the Participant's death.
Article XVI. Miscellaneous
16.1 Gender
Words of the masculine gender include the feminine unless the
context indicates otherwise.
16.2 Titles
The titles given to the various Sections of the Plan are inserted
for convenience of reference only. They are not part of the Plan
and shall not be considered in determining the purpose, meaning
or intent of any provision thereof.
16.3 Governing Law
Except to the extent preempted by ERISA, the laws of the State of
South Dakota shall govern the construction and administration of
the Plan.
Article XVII. Top-Heavy Provisions
17.1 Application of Top-Heavy Provisions
(a) Single Plan Determination. Except as provided in subsection
(b)(2), if as of a Determination Date, the sum of the amount
of the Section 416 Benefits of Key Employees and the
beneficiaries of deceased Key Employees exceeds 60 percent
of the amount of the Section 416 Benefits of all Employees
and beneficiaries (excluding former Key Employees), the Plan
is top-heavy and the Provisions of this Article shall become
applicable.
(b) Aggregation Group Determination.
(1) If as of a Determination Date this Plan is part of an
Aggregation Group which is top-heavy, the Provisions of
this Article shall become applicable. Top-heaviness
for the purpose of this subsection shall be determined
with respect to the Aggregation Group in the same
manner as described in subsection (a) above.
(2) If this Plan is top-heavy under subsection (a), but the
Aggregation Group is not top-heavy, the Plan shall not
be top- heavy and this Article shall not be applicable.
(3) The Supervisory Committee shall have responsibility to
make all calculations to determine whether this Plan is
top-heavy.
17.2 Definitions
(a) 'Aggregation Group' means this Plan and all other plans
maintained by the Employers and Affiliates which cover a Key
Employee and any other plan which enables a plan covering a
Key Employee to meet the requirements of Code Section
401(a)(4) or Section 410. In addition, at the election of
the Supervisory Committee, the Aggregation Group may be
expanded to include any other qualified plan maintained by
an Employer or an Affiliate if such expanded Aggregation
Group meets the requirements of Code Sections 401(a)(4) and
410.
(b) 'Determination Date' means the last day of the Plan Year
immediately preceding the Plan Year for which top-heaviness
is to be determined or, in the case of the first Plan Year
of a new plan, the last day of such Plan Year.
(c) 'Key Employee' means a Participant who is a 'key employee'
as defined in Code Section 416(i). Any Employee who is not
a key employee shall be a 'non-key employee' for purposes of
applying this Article XV.
(d) 'Section 416 Benefit' means-
(1) the present value of the accrued benefit credited as of
a Determination Date to a Participant or beneficiary
under the Plan and under any other qualified defined
benefit plan which is part of an Aggregation Group;
(2) the amount credited to a Participant's or beneficiary's
account under a qualified defined contribution plan
which is part of an Aggregation Group (including
amounts to be credited as of the Determination Date but
which have not yet been contributed); and
(3) the amount of Distributions to the Participant or
beneficiary during the five-year period ending on the
Determination Date other than a distribution which is a
tax-free rollover contribution (or similar transfer)
that is not initiated by the Participant or that is
contributed to a plan which is maintained by an
Employer or an Affiliate;
reduced by-
(4) the amount of rollover contributions (or similar
transfers) and earnings thereon credited as of a
Determination Date under the Plan or a plan forming
part of an Aggregation Group which is attributable to a
rollover contribution (or similar transfer) initiated
by the Participant and derived from a plan not
maintained by an Employer or an Affiliate.
The present value of the accrued Benefits shall be
determined as of the most recent valuation date used for the
purposes of Code Section 412 which is within the 12-month
period ending on the Determination Date. The accrued
benefit of a current Participant shall be determined as if
the Participant terminated service as of such valuation
date. The funding assumptions to be used in any calculation
to determine top- heavy status of the Plan are as follows:
Interest 5 percent per annum; Post Retirement Mortality: the
1971 Group Annuity Mortality Table set back two years for,
Males and eight years for Females.
The accrued benefit or account of a Participant who was a
Key Employee and who subsequently meets none of the
conditions of subsection (c) for the Plan Year containing
the Determination Date is not a Section 416 Benefit and
shall be excluded from all computations under this Article.
Furthermore, if a Participant has not performed any services
for an Employer or an Affiliate during the five-year period
ending on the Determination Date, any accrued benefit of
such - Participant (and any account for such Participant)
shall not be taken into account in computing top-heaviness
under this Article.
17.3 Vesting Requirements
If the Plan is determined to be top-heavy with respect to a Plan
Year under the Provisions of Section 16.1, then a Traditional
Participant's interest in his accrued benefit shall vest in
accordance with the following schedule:
Years of Vesting Service Vesting Percentage
------------------------- ------------------
Less than 2 0%
2 or more but less than 3 20%
3 or more but less than 4 40%
4 or more but less than 5 60%
5 or more 100%
The vesting Provisions described in this Section shall not apply
to a Traditional Participant who does not have an Hour of Service
after the Plan becomes top-heavy. If in a subsequent Plan Year
the Plan is no longer top-heavy, the vesting provisions that were
in effect prior to the time the Plan became top-heavy shall be
reinstated; provided, however, that any portion of a Traditional
Participant's accrued benefit which was vested prior to the time
the Plan was no longer top-heavy shall remain vested, and
provided further that a Traditional Participant who has at least
three years of vesting Service at the start of such Plan Year
shall have the option of remaining under the vesting schedule in
effect while the Plan was top-heavy.
17.4 Minimum Accrual Formula
(a) Amount. If the Plan is determined to be top-heavy under the
provisions of Section 17.1 with respect to a Plan Year, the
accrued benefit when expressed as an Annual Retirement
Benefit (as defined below), of a Participant who is not a
Key Employee shall not be less than the difference between
(1) and (2) where-
(1) is the product of-
(A) the number of years of Top-Heavy Service (as
defined below); and
(B) 2 percent of the Participant's average Wages
during the period of the five consecutive years of
Top-Heavy Service during which the Participant had
the greatest aggregate Wages;
but such product shall not exceed 20 percent of the
average Wages; and
(2) is the amount of the Annual Retirement Benefit that
would be provided by the Participant's account balance
attributable to Employer contributions under a defined
contribution plan which is included in an Aggregation
Group.
(b) Definitions.
(1) Annual Retirement Benefit means a benefit payable
annually in the form of a single life annuity and which
commences at age 65. If the benefit is payable in
another form or commences at another time, the amount
described in subsection (a) above shall be adjusted on
an actuarial equivalent basis. Preretirement death
benefits shall not cause a reduction in the amount of
the benefit.
The accrued benefit of any Employee other than a Key
Employee shall be determined-
(A) under the method which is used for accrual
purposes for all plans of the Company and
Affiliates, or
(B) if there is no method described in (A), as if such
benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section
411(b)(1)(C).
(2) Top-Heavy Service means the Years of Service credited
to the Participant under the Plan, but determined under
the rules of paragraphs (4), (5), and (6) of Code
Section 411(a) and excluding any Year of Service for
any Plan Year ending during such Year of Service during
which the Plan was not top-heavy and excluding any Year
of Service completed in a Plan Year beginning before
January 1, 1984.
(3) Wages means the Participant's remuneration, as
described in Treasury regulation Section 1.415-2(d)(2),
received for personal services rendered in the course
of employment with Employers and Affiliates, excluding
those items described in Treasury regulation Section
1.415-2(d)(3) and without regard to Code Section 125 or
402(e)(3). Wages shall be limited by the limit on
compensation imposed under Code Section 401(a)(17) in
accordance with the provisions of Section 2.12.
17.5 Collective Bargaining Agreements
The requirements of Sections 17.3 and 17.4 shall not apply with
respect to any Employee included in a unit of Employees covered
by a Collective bargaining agreement between Employee
representatives and an Employer or an Affiliate if retirement
Benefits were the subject of good faith bargaining between such
Employee representatives and such Employer or Affiliate.
Article XVIII. USERRA
The following special provisions of this Article shall apply to
an Employee or Participant who is reemployed in accordance with
the reemployment provisions of the Uniformed Services Employment
and Reemployment Rights Act of 1994 (`USERRA') following a period
of qualifying military service (as determined under USERRA):
(a) Each period of qualifying military service served by an
Employee or Participant shall, upon such reemployment, be
counted toward determining the Employee's or Participant's
Service for all purposes of the Plan, including determining
the amount of and eligibility for a pension or a death
benefit.
(b) For all purposes under the Plan, the Participant shall be
treated as having received Compensation from the Employer or
an Affiliate based on the rate of Compensation the
Participant would have received during the period of
qualifying military service, or if that rate is not
reasonably certain, on the basis of the Participant's
average rate of Compensation during the 12-month period
immediately preceding such period.
(c) If the Plan is amended at any time to allow voluntary
contributions by the Participant, the Participant shall be
permitted to make up any such voluntary contributions missed
during the period of qualifying military service. The
Participant shall have a period of time beginning on the
date of the Participant's reemployment with the Employer or
an Affiliate following his period of qualifying military
service and extending over the lesser of (i) the product of
three and the Participant's period of qualifying military
service, and (ii) five years, to make up such missed
voluntary contributions. Compensation shall not be credited
to a Participant's voluntary contribution account with
respect to any voluntary contribution before such
contribution (if permitted) actually is made.
(d) With respect to any contribution made by the Employer or an
Affiliate or an Employee in accordance with the foregoing
provisions of this Article XVIII:
(i) such contributions shall not be subject to any
otherwise applicable limitation under Code Section
404(a) or 415, and shall not be taken into account in
applying such limitations to other Employee or Employer
or Affiliate contributions under the Plan or any other
plan, with respect to the year in which such
contributions are made, and such contributions shall be
subject to these limitations only with respect to the
year to which such contributions relate and only in
accordance with regulations prescribed by the Internal
Revenue Service; and
(ii) the Plan shall not be treated as failing to meet the
requirements of Code Section 401(a)(4), 401(a)(26),
401(m), 410(b) or 416 by reason of such contributions.
IN WITNESS WHEREOF, this Amended and Restated Plan has been
executed on behalf of Northwestern Corporation by its duly
authorized officer, on this _____ day of ______________, 2000,
effective as of January 1, 2000.
NORTHWESTERN CORPORATION
By: