OLSTEN CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective January 4, 1999
OLSTEN CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Table of Contents
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Article I
Background and Purpose
1.1 Background........................................................1
1.2 Purpose...........................................................1
Article II
Definitions
2.1 Accrued Benefit...................................................1
2.2 Active Service....................................................2
2.3 Actuarial Equivalent..............................................2
2.4 Beneficiary.......................................................3
2.5 Benefit Objective.................................................3
2.6 Benefits Committee................................................3
2.7 Board of Directors................................................3
2.8 Break in Service..................................................3
2.9 Change in Control.................................................4
2.10 Code..............................................................4
2.11 Company...........................................................4
2.12 Disability (or "Disabled")........................................4
2.13 Early Retirement Age..............................................4
2.14 Early Retirement Date.............................................4
2.15 Effective Date....................................................4
2.16 Employee..........................................................4
2.17 Entry Date .......................................................4
2.18 ERISA.............................................................4
2.19 Final Average Earnings............................................4
2.20 Highly Compensated Employee.......................................5
2.21 Hours of Service..................................................5
2.22 Integrated Benefits...............................................6
2.23 Late Retirement Date..............................................7
2.24 Normal Retirement Age.............................................7
2.25 Normal Retirement Date............................................7
2.26 Participant.......................................................7
2.27 Participating Employer............................................7
2.28 Plan..............................................................7
2.29 Plan Administrator................................................7
2.30 Plan Year.........................................................7
2.31 Primary Social Security Benefit...................................7
2.32 Prior Plan........................................................7
2.33 Service...........................................................7
2.34 Subsidiary........................................................7
2.35 Termination of Service............................................8
2.36 Total Compensation................................................8
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2.37 Trust.............................................................8
2.38 Trustee...........................................................8
2.39 Year(s)of Participation...........................................8
2.40 Year(s)of Service.................................................9
Article III
Eligibility and Participation
3.1 Eligibility.......................................................9
3.2 Participation.....................................................9
3.3 Suspension of Participation.......................................9
Article IV
Funding
4.1 Funding..........................................................10
4.2 Insolvency.......................................................11
4.3 Amounts Not Made Available.......................................12
4.4 Contingent Nature of Accrued Benefits............................12
Article V
Entitlement to Benefits
5.1 Normal Retirement................................................12
5.2 Late Retirement..................................................12
5.3 Early Retirement.................................................12
5.4 Termination of Service...........................................12
5.5 Death............................................................13
5.6 Disability.......................................................13
5.7 Vesting and Forfeitures..........................................13
5.8 Distribution Elections...........................................13
5.9 Special Rule for Change in Control...............................14
5.10 Special Rules for Additional Benefits............................14
Article VI
Distributions
6.1 Forms of Payment.................................................15
6.2 Pre-Retirement Death Distributions...............................15
Article VII
Participating Employers
7.1 Adoption by Other Employers......................................16
7.2 Allocation of Plan and Trust Expenses............................16
7.3 Designation of Company as Agent..................................16
7.4 Employee Transfers...............................................16
7.5 Contributions and Forfeitures of Participating Employer..........17
7.6 Amendments by Participating Employers............................17
7.7 Discontinuance of Participation .................................17
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Article VIII
Amendment and Termination
8.1 Right to Amend or Terminate......................................17
8.2 Merger or Consolidation..........................................18
Article IX
Administration
9.1 Plan Administrator...............................................18
9.2 Binding Effect...................................................18
9.3 Delegation of Authority..........................................18
9.4 Plan Records.....................................................19
9.5 Limited Liability................................................19
Article X
Claims Procedure
10.1 Claims Submission................................................19
10.2 Claim Review.....................................................20
10.3 Right of Appeal..................................................20
10.4 Review of Appeal.................................................20
10.5 Designation......................................................20
Article XI
Miscellaneous
11.1 Headings.........................................................20
11.2 Uniformity.......................................................21
11.3 Obligations of the Company and Participating Employers...........21
11.4 Governing Law....................................................21
11.5 Gender and Number................................................21
11.6 Taxes............................................................21
11.7 Plan Benefits Nontransferable....................................21
11.8 Incompetence.....................................................21
11.9 Identity.........................................................21
11.10 Other Benefits...................................................22
11.11 Construction.....................................................22
11.12 No Guarantee of Employment.......................................22
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OLSTEN CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
Background And Purpose
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1.1 Background. The Olsten Corporation Supplemental Executive Retirement Plan
(the "Plan") was established effective January 4, 1999. The Plan is an
amendment, restatement and continuation of the Olsten Corporation Supplemental
Retirement Plan for Key Executives Designated by the Company (the "Prior Plan").
1.2 Purpose. The Plan was established for the purpose of providing unfunded
deferred compensation for a select group of management and highly compensated
employees as defined in Title I of the Employee Retirement Income Security Act
of 1974, as amended. All contributions to the Plan are made by the Company or
Participating Employers. Participants are not required or permitted to make any
contributions to the Plan. The Plan is not intended to qualify under Code
section 401(a).
ARTICLE II
Definitions
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2.1 Accrued Benefit means the benefit payable to a Participant under the Plan
determined in accordance with this Section and the provisions of the Plan.
(a) A Participant's Accrued Benefit at his or her Normal
Retirement Date shall be equal to (i) the Participant's
Benefit Objective multiplied by a fraction, the numerator of
which is the Participant's actual Years of Participation upon
Termination of Service and the denominator of which is the
Participant's projected Years of Participation had the
Participant remained employed by the Company or a
Participating Employer until his or her Normal Retirement Date
minus (ii) the Participant's Integrated Benefits (calculated
as provided in paragraph (b) below).
(b) For purposes of paragraph (a) above, the Participant's
Benefit Objective minus the Participant's Integrated Benefits
shall be calculated as follows:
(i) The Participant's Benefit Objective shall first be
expressed as an Actuarially Equivalent lump sum.
(ii) Such lump sum shall then be reduced by the
Actuarially Equivalent lump sum of any Integrated
Benefits.
(iii) The resulting amount shall then be converted into
an Actuarially Equivalent single life annuity.
(c) A Participant's Accrued Benefit at his or her Early
Retirement Date shall be equal to the Participant's Accrued
Benefit at his or her Normal Retirement date, adjusted as
follows:
(i) For Participants who terminate employment after
having attained their Early Retirement Age, the
Years of Participation in the denominator of the
fraction described in Section 2.1(a) shall be
limited to thirty (30) years; and
(ii) The Participant's Accrued Benefit at his or her
Normal Retirement Date shall be actuarially reduced
by six percent (6%) for each year by which the
Participant's Early Retirement Date precedes the
Participant's Normal Retirement Date.
(d) A Participant's Accrued Benefit payable at the
Participant's Late Retirement Date shall be calculated in the
same manner as the Participant's Accrued Benefit payable at the
Participant's Normal Retirement Age, except that all of a
Participant's Years of Participation through the Participant's
Late Retirement Date shall be included in both the numerator
and the denominator of the fraction described in paragraph (a)
above.
(e) In the case of any payments made before a Participant's
Early Retirement Date, the Participant's Accrued Benefit shall
be the Actuarial Equivalent of the Accrued Benefit available at
Early Retirement Date.
2.2 Active Service means the period during which an Employee is employed by the
Company or a Participating Employer and the Employee is actively at work with
the Company or Participating Employer. Active Service does not include periods
(i) for which the Employee receives severance benefits from the Company or a
Participating Employer; or (ii) during which the Employee performs services for
the Company or Participating Employer as a consultant or independent contractor.
2.3 Actuarial Equivalent means an amount determined using the following
mortality tables and interest factors:
(a) For determining the actuarial equivalent of a lump sum:
(i) the mortality table shall be the UP84 Unisex
Pension Mortality Table; and
(ii) the interest rate shall be based upon the rate
promulgated by the Pension Benefit Guaranty
Corporation (PBGC) for purposes of determining
settlements upon plan termination as of the
beginning of the Plan Year during which the
determination is being made, but in the event the
PBGC no longer promulgates such interest rates, the
Plan Administrator shall select an alternative
method of determining the applicable interest rate.
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(b) For determining the actuarial equivalent of any other
optional form of benefit:
(i) the mortality table shall be the 1983 Group Annuity
Mortality (GAM) Table (blended 50% of the male and
50% of the female rate); and
(ii) the interest rate shall be seven percent (7.00%).
2.4 Beneficiary means such beneficiary as the Participant may designate from
time to time on a form made available by the Company for such purpose (which may
be available in paper, facsimile, electronic or voice response format), to
receive any benefit payable in the event of the Participant's death. Unless
otherwise designated, the Beneficiary with respect to a married Participant
shall be the Participant's surviving spouse. If a Participant has no surviving
spouse and has not made a valid Beneficiary designation hereunder, the
Participant's death benefit shall be paid to the Participant's estate.
2.5 Benefit Objective means an amount equal to the value of a single life
annuity that will pay the Participant an annual amount equal to sixty percent
(60%) of the Participant's Final Average Earnings, subject to the adjustments
described in (a) and (b) below.
(a) A Participant who has fewer than twenty (20) projected
Years of Service at the Participant's Normal Retirement Date
will have his or her Benefit Objective reduced as provided in
this paragraph. The Benefit Objective will be multiplied by a
fraction (not to exceed one), the numerator of which is the
Participant's projected Years of Service at his or her Normal
Retirement Date and the denominator of which is twenty (20).
(b) Notwithstanding the preceding paragraph, a Participant with
fewer than ten (10) projected Years of Participation from the
Participant's Entry Date to his or her Normal Retirement Date
will have his or her Benefit Objective reduced as provided in
this paragraph. The Participant's Benefit Objective will be
multiplied by a fraction (not to exceed one), which produces
the lowest Benefit Objective, determined as follows:
(i) the Participant's Years of Service at his or her
Normal Retirement Date divided by twenty (20); or
(ii) the Participant's Years of Participation at his or
her Normal Retirement Date divided by ten (10).
2.6 Benefits Committee means the committee established by the Company to manage
its various employee benefit plans.
2.7 Board of Directors means the board of directors of the Company.
2.8 Break in Service means a Plan Year in which a Participant does not complete
at least 501 Hours of Service.
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2.9 Change in Control means the acquisition by a "person" (as such term is used
in sections 13(d) and 14(d) of the Securities Exchange Act of 1934) of more than
twenty-five percent (25%) of the then outstanding voting stock of the Company,
other than through a transaction arranged by, or with the consent of, the
Company or the Board, or the purchase of at least ten percent (10%) of the then
outstanding shares of voting stock of the Company pursuant to a tender offer or
exchange offer which is opposed by a majority of the members then serving on the
Board.
2.10 Code means the Internal Revenue Code of 1986, as amended.
2.11 Company means Olsten Corporation and its successors.
2.12 Disability (or Disabled) means a medically determinable physical or mental
impairment that renders a Participant totally disabled. If the Participant
qualifies to receive benefits under the Company's long term disability program,
the Participant shall be presumed Disabled for purposes of this Plan. If the
Participant does not qualify to receive benefits under the Company's long term
disability program, the Plan Administrator may nevertheless determine that the
Participant is Disabled for purposes of this Plan. Continued payment of benefits
under the Plan in the event of a Participant's Disability shall be conditioned
upon the Participant's continued Disability, which may be reviewed from time to
time by the insurance carrier for the Company's long term disability program or
by the Plan Administrator.
2.13 Early Retirement Age means age fifty-five (55).
2.14 Early Retirement Date means the first day of any calendar month after (i)
the Participant's Early Retirement Age but before the Participant's Normal
Retirement Age, regardless of whether the Participant is actively employed by
the Company or a Participating Employer on such date and (ii) the Participant's
completion of five (5) Years of Service.
2.15 Effective Date of the Plan means January 4, 1999.
2.16 Employee means the regular, full-time employees of the Company or a
Participating Employer who is designated as such on the books and records of the
Company or Participating Employer, as determined by the Plan Administrator.
2.17 Entry Date means the first day of the calendar month on or after the date
on which a key executive who is a Highly Compensated Employee is designated by
the Company as being eligible to participate in the Plan.
2.18 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
2.19 Final Average Earnings means the annualized average of the Participant's
highest Total Compensation for the five (5) out of six (6) consecutive calendar
years in the ten (10) consecutive calendar years including and preceding a
Participant's Termination of Service with the Company or a Participating
Employer; provided, however, a Participant's Final Average Earnings may include
the projected amount that would have been paid to the Participant as base salary
for the calendar year in which the Participant terminated Service, added to any
bonus and incentive compensation actually paid to the Participant in the
calendar year in which the Participant terminated Service.
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2.20 Highly Compensated Employee means any Employee who is a management or
highly compensated employee (within the meaning of Title I of ERISA) and who:
(a) is a five percent (5%) owner of the Company or
Participating Employer at any time during the Plan Year or the
preceding Plan Year;
(b) for the preceding Plan Year received Total Compensation in
excess of the amount specified in Code section 414(q)(1)(B)(i);
or
(c) for the current Plan Year, the Plan Administrator
determines that the Employee's Total Compensation is expected
to exceed the amount specified in Code Section 414(q)(1)(B)(i).
2.21 Hours of Service
(a) Hours of Service includes each hour:
(i) for which an individual is paid, or entitled to
pay, by the Company or a Participating Employer for
the performance of duties, and
(ii) for which an individual is paid, or entitled to
pay, by the Company or Participating Employer with
respect to a period of time during which no duties
are performed due to vacation, holiday, or illness,
incapacity, disability, maternity leave, layoff,
jury duty, military duty, or leave of absence
(determined in accordance with Department of Labor
Regulations section 2530.200b-2(b) and (c)), and
(iii) for which back pay, irrespective of mitigation of
damages, is either awarded to an individual or
agreed to by the Company or Participating Employer.
(b) An Hour of Service shall not be credited under more than
one paragraph above. Only 501 Hours of Service will be credited
to an individual for any single continuous period of time
during which the individual was paid but rendered no services,
even where such period spans more than one computation period.
(c) An Employee will be credited with forty-five (45) Hours of
Service for each week for which he or she would be credited
with one Hour of Service under the Department of Labor
regulations.
(d) Hours of Service shall include employment with the Company
and with an affiliate of the Company within the meaning of Code
section 1563(a).
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(e) For purposes of determining whether a Break-in-Service for
participation or vesting purposes has occurred in a Plan Year,
an Employee who is absent from work for maternity or paternity
reasons shall receive credit for Hours of Service which would
otherwise have been credited to such individual but for such
absence, or, in any case in which such hours cannot be
determined, eight (8) Hours of Service per day of such absence.
For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence:
(i) by reason of the pregnancy of the individual;
(ii) by reason of a birth of a child of the individual;
(iii) by reason of the placement of a child with the
individual in connection with the adoption of such
child by such individual; or
(iv) for purposes of caring for such child for a period
beginning immediately following such birth or
placement for adoption.
(f) The Hours of Service credited under this paragraph shall be
credited in the Plan Year in which the absence begins if the
crediting is necessary to prevent a Break-in-Service in that
period, or in all other cases, in the following Plan Year.
2.22 Integrated Benefits. Based on facts available to the Plan Administrator,
the Plan Administrator shall determine a Participant's Integrated Benefits,
which determination shall be binding and conclusive on all Participants and
Beneficiaries. A Participant's Integrated Benefit shall equal the sum of the
following:
(a) The Participant's account balances (as of the date of the
Participant's Termination of Service) from employer
contributions and the earnings thereon (other than matching
contributions and the earnings thereon) maintained in the
Olsten Corporation Retirement Savings Plan, the Olsten
Corporation Nonqualified Retirement and Savings Plan
(established effective January 1, 1999) (which includes the
Olsten Corporation Nonqualified Savings Plan for Selected
Management Employees and the Olsten Corporation Nonqualified
Retirement Plan for Selected Management Employees) or any other
plan of deferred compensation that includes employer
contributions on behalf of the Participant. In no event shall
accumulations in such other plans attributable to employee
contributions (whether pre-tax or after-tax) and the earnings
thereon or employer matching contributions and the earnings
thereon be considered as Integrated Benefits in this Plan.
(b) The Participant's Primary Social Security Benefit.
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2.23 Late Retirement Date means the first day of any calendar month after the
Participant's Normal Retirement Date.
2.24 Normal Retirement Age means the date that the Participant attains age
sixty-two (62).
2.25 Normal Retirement Date means the first day of the calendar month on or
immediately after the date that the Participant (i) attains his or her Normal
Retirement Age and (ii) has completed five (5) Years of Service.
2.26 Participant means any Highly Compensated Employee who is a key executive of
the Company or a Participating Employer and is designated by the Company as
eligible to participate in the Plan.
2.27 Participating Employer means any entity in the following group that
includes the Company: (i) a controlled group of corporations, within the meaning
of Code section 414(b); (ii) a group of trades or businesses under common
control, within the meaning of Code section 414(c); (iii) an affiliated service
group, within the meaning of Code section 414(m); or (iv) a trade or business
required to be aggregated pursuant to Code section 414(o), provided such entity
has adopted this Plan pursuant to Article VIII, with the permission of the Plan
Administrator.
2.28 Plan means the Olsten Corporation Supplemental Executive Retirement Plan,
which is intended to be an unfunded deferred compensation arrangement for a
select group of management or Highly Compensated Employees of the Company and
Participating Employers.
2.29 Plan Administrator means the Benefits Committee or its designated
representative.
2.30 Plan Year means the period of time beginning on January 1 and ending on the
following December 31.
2.31 Primary Social Security Benefit. Unless the Plan Administrator determines
otherwise, "Primary Social Security Benefit" means the Participant's primary
insurance amount under the United States or Canadian Social Security Act payable
at the disability retirement date or at age sixty-five (65), whichever applies
to the Participant, and/or any other comparable primary insurance amount payable
under another governmental retirement program.
2.32 Prior Plan means the Olsten Corporation Supplemental Retirement Plan for
Key Executives Designated by the Company.
2.33 Service means the period of full-time employment of a Participant with (i)
the Company or a Participating Employer or (ii) a Subsidiary of the Company (but
not counting any period during which such Subsidiary was not a Subsidiary of the
Company, unless specifically agreed to by the Company). For this purpose, all
periods of employment with the Company and any Subsidiary (both before and after
the adoption of the Plan and before and after the Employee became a Participant
in the Plan) shall be included as Service.
2.34 Subsidiary means any corporation, at least fifty percent (50%) of the
outstanding voting stock of which is beneficially owned directly or indirectly
by the Company.
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2.35 Termination of Service means the last day of the calendar month on or after
the termination of a Participant's Service whether by voluntary or involuntary
separation, retirement, disability or death.
2.36 Total Compensation means:
(a) All remuneration for services paid to an Employee by the
Company or a Participating Employer, as defined in Code section
3401(a) (for purposes of income tax withholding at the source),
but determined without regard to any rules that limit
remuneration included in wages based on the nature and location
of employment or the services performed.
(b) Total Compensation as defined in subsection (a) shall
exclude the following items (even if includable in gross
income):
(i) reimbursement or other expense allowances;
(ii) fringe benefits (cash and noncash);
(iii) moving expenses and gross up for taxes;
(iv) welfare benefits (including short term and long
term disability income from any insurance policies
offered through the Company or a Participating
Employer);
(v) payments on account of severance of the Participant
from employment with the Company or a Participating
Employer;
(vi) payments on account of early retirement;
(vii) income arising from the grant or exercise of stock
options or restricted stock awards;
(viii) Accrued Benefits under this Plan; and
(ix) distributions from the Olsten Corporation
Nonqualified Retirement and Savings Plan (but
pre-tax employee contributions to the Olsten
Corporation Nonqualified Retirement and Savings
Plan shall be included in the definition of Total
Compensation for purposes of this Plan).
2.37 Trust means one or more trust instruments designated to hold assets
associated with the Plan.
2.38 Trustee means the Trustee of the Trust and any successor Trustees.
2.39 Year(s) of Participation means the number of completed months of Service
during which the Participant has earned an Accrued Benefit under the Plan.
Participants whose participation has been suspended in accordance with Section
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3.3 shall not earn any Years of Participation for benefit accrual purposes
during the period of such suspension.
2.40 Year(s) of Service means the number of the Participant's completed months
of Service, whether or not consecutive, divided by twelve (12), counting each
twelve (12) months as a Year of Service and each additional full month as 1/12th
of a Year of Service.
ARTICLE III
Eligibility and Participation
-----------------------------
3.1 Eligibility.
(a) Except as provided in this Section 3.1(a), all participants
in the Prior Plan shall become Participants hereunder as of
January 4, 1999. To the extent an Employee participated in the
Prior Plan and did not perform any Service for the Company or a
Participating Employer on or after January 4, 1999, such
Employee's benefits shall be determined exclusively under the
terms of the Prior Plan. For Employees who first participate in
the Plan on or after January 4, 1999, the Prior Plan shall not
have any effect on the benefits payable under this Plan.
(b) Highly Compensated Employees who are age twenty-one (21) or
older, employed by the Company or a Participating Employer on
December 31, 1998 and designated by the Company as eligible to
participate in the Plan, shall become Participants as of
January 4, 1999.
(c) Highly Compensated Employees who are age twenty-one (21) or
older and who are employed by the Company or a Participating
Employer on or after January 4, 1999 and designated by the
Company as eligible to participate in the Plan, shall become
Participants as of their Entry Date.
(d) The Company shall have sole discretion to determine when
and if an Employee becomes eligible to participate in the Plan.
3.2 Participation. The Chief Executive Officer of the Company or his or her
designee will notify eligible Highly Compensated Employees in writing when they
have been selected for participation in the Plan.
3.3 Suspension of Participation.
(a) A Participant's participation in the Plan may be suspended
by the Company due to a diminution of responsibilities. The
Chief Executive Officer or his or her designee shall notify the
Participant in writing if his or her participation hereunder
shall be suspended, including the effective date of such
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suspension. Participants whose participation hereunder has been
suspended shall continue to earn Years of Service for vesting
purposes with respect to the Accrued Benefit earned by the
Participant prior to the effective date of such suspension.
However, Participants whose participation hereunder has been
suspended shall cease accumulating additional Accrued Benefits
as of the effective date of the suspension.
(b) A Participant whose participation in the Plan is suspended
under Section 3.3(a) shall be eligible to resume participation
in the Plan at such time as the Company may determine. Upon the
resumption of participation in the Plan, the Participant shall
earn additional Years of Participation for benefit accrual
purposes, but only with respect to those Years of Participation
occurring before the suspension and after the resumption of
participation. Unless the Company provides otherwise, Years of
Participation shall not be credited for the period during which
the suspension of the Participant's participation was
effective.
ARTICLE IV
Funding
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4.1 Funding.
(a) The Company or Participating Employer may deposit into a
Trust any amounts it deems appropriate to fund the Accrued
Benefits described in the Plan. To the extent the Trust is
unable or not required to pay such Accrued Benefits, the
Accrued Benefits shall be paid by the Company or Participating
Employer as and when they become due as provided herein.
(b) Nothing contained herein shall be deemed to create a trust
of any kind or create any fiduciary relationship. Funds
deposited into the Trust shall continue for all purposes to be
a part of the general funds of the Company or Participating
Employer and no person other than the Company or respective
Participating Employer shall, by virtue of the Plan, have any
interest in such funds. To the extent that any person acquires
a right to receive payments from the Company or a Participating
Employer under the Plan, such right shall be no greater than
the right of any unsecured general creditor of the Company or
the Participating Employer.
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(c) Should any insurance contract or other investment be
acquired in connection with the liabilities assumed under this
Plan, it is expressly understood and agreed that the
Participants and Beneficiaries shall not have any right with
respect to, or claim against, such assets nor shall any such
purchase be construed to create a trust of any kind or a
fiduciary relationship between the Company, Participating
Employers and the Participants, Beneficiaries or any other
person. The Company, Participating Employer or the Trust(s)
shall be designated owner and beneficiary of any insurance
contract acquired in connection with its obligation under this
Plan.
(d) Each Participant and Beneficiary shall be required to look
to the provisions of this Plan and to the Company or respective
Participating Employer for enforcement of any and all benefits
under this Plan. To the extent any such person acquires a right
to receive payment under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the
Company or Participating Employer, respectively.
4.2 Insolvency.
(a) The Participant's interest in his or her benefits under the
Plan shall be payable under the Trust and shall be subject to
the solvency of the Company or Participating Employer.
(b) Should the Company or Participating Employer be considered
insolvent such that the Company or Participating Employer is
unable to pay current obligations as they come due or is
subject to a proceeding under the federal Bankruptcy Code or
should the Company or Participating Employer become aware of
its pending insolvency or bankruptcy, the affected entity,
acting through its board of directors or chief executive
officer shall give immediate written notice of such to the Plan
Administrator and the Trustee.
(c) Upon receipt of such notice, the Plan Administrator and the
Trustee shall cease to make any payments to Participants or
Beneficiaries of the affected entity and shall hold any and all
assets with respect to those Participants and Beneficiaries for
the benefit of the general unsecured creditors of such entity.
For this purpose, it is expressly provided that the assets of
the Company and each Participating Employer which are intended
for use in this Plan shall at all times be available to
creditors of such entity. The Plan shall be administered on an
employer-by-employer basis, such that the assets of each
Participating Employer (including the Company) that are
available to the creditors of that Participating Employer shall
equal the liabilities accrued on behalf of the employees of
that Participating Employer. Furthermore, the assets of other
Participating Employers (including the Company) shall not be
available to satisfy the claims of any creditor of any other
entity whose employees participate in this Plan.
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4.3 Amounts Not Made Available. No amounts held in the Trust or recorded as an
Accrued Benefit hereunder shall be made available to the Participant or
Beneficiaries, except as provided for distributions described in Article VII.
4.4 Contingent Nature of Accrued Benefits. Until the Accrued Benefits are
distributed under the Plan to the Participants or Beneficiaries, the interest of
each Participant and Beneficiary in this Plan is contingent only and is subject
to forfeiture as provided hereunder. Title to and beneficial ownership of any
assets, whether cash or investments, which the Company or a Participating
Employer may set aside to meet its contingent deferred obligation hereunder
shall at all times remain the property of the Company or Participating Employer
and no Participant or Beneficiary shall under any circumstances acquire any
property interest in any specific assets of the Company or Participating
Employer.
ARTICLE V
Entitlement to Benefits
-----------------------
5.1 Normal Retirement. If a Participant has a Termination of Service on his or
her Normal Retirement Date while in Active Service, the Participant shall be
entitled to receive his or her Accrued Benefit as of the Participant's Normal
Retirement Date, subject to the Participant's distribution election described in
Section 5.8.
5.2 Late Retirement. If a Participant has a Termination of Service after his or
her Normal Retirement Date while in Active Service, the Participant shall be
entitled to receive his or her Accrued Benefit as of the Participant's Late
Retirement Date, subject to the Participant's distribution election described in
Section 5.8.
5.3 Early Retirement. If a Participant has a Termination of Service after his or
her Early Retirement Date while in Active Service (other than by reason of death
or Disability), the Participant shall be entitled to receive a distribution of
the vested portion (as determined under Section 5.7(b)) of his or her Accrued
Benefit as of such date, subject to the Participant's distribution election
described in Section 5.8.
5.4 Termination of Service. If a Participant has a Termination of Service while
in Active Service after completing five (5) Years of Service but before his or
her death, Disability or Early Retirement Date, the Participant shall be
entitled to receive a distribution of the vested portion (as determined under
Section 5.7(b)) of his or her Accrued Benefit. Distributions due to Termination
of Service shall be made in accordance with the Participant's distribution
election described in Section 5.9, but distribution may not commence until the
Participant has attained his or her Early Retirement Date.
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5.5 Death. Notwithstanding Section 5.8, if a Participant dies before his or her
Normal Retirement Date or Late Retirement Date while in Active Service, then, in
accordance with Section 6.2, a pre-retirement survivor annuity shall be paid to
such Participant's Beneficiary as soon as practicable following the later of (i)
the Participant's death or (ii) the Participant's Early Retirement Date. The
amount of the Participant's death benefit shall be determined as if the
Participant had a Termination of Service on his or her date of death.
5.6 Disability. Notwithstanding Section 5.8, if a Participant becomes Disabled
before his or her Normal Retirement Date while in Active Service, the
Participant shall be entitled to receive his or her Accrued Benefit in the form
of a straight life annuity as soon as practicable after the Participant has been
determined to be Disabled. The amount of the Participant's Accrued Benefit shall
be reduced by the amount of payments that the Participant could have received
from any long term disability insurance program sponsored by the Company or a
Participating Employer, based on the highest long term disability benefit option
made available to the Participant by the Company or Participating Employer.
5.7 Vesting and Forfeitures.
(a) A Participant shall become fully vested in his or her
Accrued Benefit upon the occurrence of his or her Normal
Retirement Age, death or Disability.
(b) Except as provided in (a), a Participant shall become
vested in his or her Accrued Benefit as follows:
Years of Service
Following Entry
Into the Plan Percentage Vested
---------------- -----------------
Fewer than 5 0%
5 50%
6 60%
7 70%
8 80%
9 90%
10 100%
(c) Any non-vested Accrued Benefit shall be forfeited upon the
Participant's Termination of Service. The forfeited amount
shall be used to reduce future contributions otherwise required
from the Company or a Participating Employer.
5.8 Distribution Elections.
(a) Subject to the approval of the Plan Administrator, payment
of the Participant's vested Accrued Benefit shall be made at
the time and in the form selected by the Participant in
accordance with the last valid designation filed by the
Participant with the Plan Administrator; provided however, that
the only forms of benefit available under the Plan are those
forms which are described in Sections 6.1 and 6.2.
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(b) The designation of the time and form of payment shall only
be valid if (i) the designation is filed with the Plan
Administrator at least six (6) months before the distributions
begin and no later than the last day of the Plan Year before
the first Plan Year for which such designation is to apply;
(ii) the designation is filed with the Plan Administrator
during the first thirty (30) days that the Participant is
eligible to participate in the Plan and the distribution
commencement date begins not earlier than the first day of the
calendar year following the date the designation is filed with
the Plan Administrator; or (iii) thirty (30) days from the date
this Plan is effective for eligible employees.
(c) If the designation is not valid under Section 5.8(b), the
Participant's previous designation shall be reinstated.
(d) Except as provided in this section 5.8(d), in the event the
Participant does not have a valid designation of a distribution
commencement date and form of benefit under this section, then
the Participant shall be deemed to have elected to receive a
five (5) year installment payment beginning on the
Participant's Normal Retirement Date, as provided in Section
6.1, or in the case of the Participant's death while in Active
Service, a survivor annuity, as provided in Section 6.2.
Installment payments shall be made in a manner that distributes
at least fifty thousand dollars ($50,000) annually to
Participants (but no more than the Accrued Benefit), provided,
however, that the final installment may be less than fifty
thousand dollars ($50,000) if necessary in order to distribute
the remainder of the Participant's Accrued Benefit. For
example, if the Participant's Accrued Benefit is $230,000, the
Participant would receive installments of $50,000 over four (4)
years and the Participant's final installment would be $30,000.
(e) For purposes of this Section 5.8 only, the phrase "the date
this Plan is effective for eligible employees" shall mean the
date on which the Plan Administrator first provides a
distribution election form under this Plan to a Participant.
5.9 Special Rule for Change in Control. Notwithstanding anything herein to the
contrary, in the event of a Change in Control, Participants shall be fully
vested in the value of their Accrued Benefit.
5.10 Special Rules for Additional Benefits. Notwithstanding anything in the Plan
to the contrary, the Company, in its sole discretion, may instruct the Plan
Administrator to increase a Participant's Accrued Benefit hereunder.
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ARTICLE VI
Distributions
-------------
6.1 Forms of Payment.
(a) Except as provided in Section 6.2, the normal form of
payment under the Plan is a single life annuity. Under a single
life annuity, benefits will be paid on the first day of each
month to the Participant for the remainder of the Participant's
lifetime, with the last payment being made on the first day of
the month in which the Participant dies. Survivor benefits are
not payable under a single life annuity, regardless of when the
Participant dies. The Plan Administrator shall have sole
discretion to select the payor of the single life annuity.
(b) A Participant may elect, in accordance with Section 5.8, to
receive distribution of his or her Accrued Benefit in a form
that is an Actuarial Equivalent to a single life annuity and
payable as:
(i) a single, lump sum payment;
(ii) installments over five (5) or ten (10) years; or
(iii) a joint and survivor annuity.
(c) Installments shall be payable monthly, bi-weekly or more
frequently, at the discretion of the Plan Administrator. If a
Participant dies while receiving installment payments
hereunder, the Plan Administrator may elect to continue paying
such installments to the Participant's Beneficiary or to
convert the remaining installment payments to a lump sum
payment to the Participant's Beneficiary. The Plan
Administrator shall have sole discretion to select the payor of
installment benefits and whether to convert the remaining
installment payments to a lump sum.
(d) Periodic payments under a joint and survivor annuity may be
made from proceeds of a commercial annuity contract which the
Company or Participating Employer may establish with an annuity
provider whereby the Company or Participating Employer may be
the annuitant under the contract. The Plan Administrator shall
have sole discretion to select the payor of the joint and
survivor annuity and the frequency of the payments to be made
to the Participant and his or her Beneficiary.
6.2 Pre-Retirement Death Distributions.
(a) Unless the Plan Administrator provides otherwise, if a
Participant dies before beginning to receive distributions
under the Plan, the Participant's Beneficiary shall receive a
pre-retirement survivor annuity, equal to the Participant's
Accrued Benefit as of his or her date of death, payable in
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monthly installments over the Beneficiary's life expectancy
beginning on the later of (i) the Participant's death or (ii)
the Participant's Early Retirement Date. Unless the Plan
Administrator provides otherwise, if the Participant dies after
beginning to receive distributions under the Plan and has
elected other than a Straight Life Annuity, the Beneficiary
shall continue receiving the payments which would otherwise
have been made to the Participant, in accordance with their
distribution election under Section 5.8.
(b) If the Plan has not purchased a commercial annuity to fund
the Beneficiary's pre-retirement death benefits, then upon the
death of the Beneficiary, if any amounts remain from the
Participant's Accrued Benefit, such amount shall be paid in a
lump sum to the Beneficiary's estate as soon as practicable
following the date of the Beneficiary's death. If the Plan
purchases a commercial annuity to fund the Beneficiary's
pre-retirement death benefits, payments shall cease upon the
Beneficiary's death. The Plan Administrator shall have sole
discretion to select the payor of the pre-retirement survivor
annuity.
ARTICLE VII
Participating Employers
-----------------------
7.1 Adoption by Other Employers. Notwithstanding anything herein to the
contrary, a Participating Employer may, with the consent of the Plan
Administrator and the Trustee, adopt the Plan and all of the provisions hereof
under such procedures as the Plan Administrator may determine. The Plan is not
intended to be a joint venture between the Company and any Participating
Employer. The Plan Administrator shall have the authority to make any and all
necessary rules or regulations to effectuate the purposes of this Section.
7.2 Allocation of Plan and Trust Expenses. Any expenses of the Plan and Trust
which are to be paid by the Company or borne by the Trust shall be allocated
among the Company and the Participating Employers in the proportion that the
total Accrued Benefits attributable to a Participating Employer's Participants
bears to the total assets of the Trust.
7.3 Designation of Company as Agent. Each Participating Employer shall be deemed
irrevocably to have designated the Company as its agent with respect to all
matters affecting the Plan and Trust.
7.4 Employee Transfers. The transfer of employment of a Participant from the
Company to a Participating Employer or from one Participating Employer to
another (or vice versa) shall not affect the Participant's rights under the Plan
and the number of the Participant's Years of Service shall not be deemed to be
interrupted for any purpose of the Plan. Transfer of employment between such
entities shall not be treated as a Termination of Service with the Company or
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prior Participating Employer and distributions shall not be made from the Plan
based on such a transfer of employment. The entity to which the Participant is
transferred shall thereupon become obligated hereunder with respect to such
Participant in the same manner as was the organization from which the
Participant was transferred.
7.5 Contributions and Forfeitures of Participating Employer. All contributions
made by a Participating Employer may be determined separately and may be paid to
the bookkeeping accounts of such Participating Employer, subject to all of the
terms and conditions of the Plan.
7.6 Amendments by Participating Employers. Participating Employers do not have
the right to amend the Plan in any regard.
7.7 Discontinuance of Participation.
(a) A Participating Employer shall be permitted to discontinue
or terminate its participation in the Plan at any time, upon
giving reasonable advance notice to the Company. At the time of
any such discontinuance or termination, satisfactory evidence
thereof shall be delivered to the Trustee and distribution of
Accrued Benefits held in the Trust for the benefit of employees
of the withdrawing employer shall be distributed as soon as
administratively feasible, unless the Plan Administrator
provides otherwise.
(b) If the Plan Administrator elects not to distribute the
Accrued Benefits of affected Participants under (a) above, the
Plan Administrator may suspend the affected Participant's
participation in the Plan, in accordance with Section 3.3.
ARTICLE VIII
Amendment And Termination
-------------------------
8.1 Right to Amend or Terminate. Except as hereinafter provided, the Company
shall have the right to amend or terminate the Plan and Trust at any time and
from time to time to any extent that it may deem advisable. Upon termination of
the Plan, the rights of all affected Participants shall be limited to benefits
accrued as of the date of termination. Any amendment to the Plan shall not (i)
increase the responsibilities of the Plan Administrator or the Trustee without
their written consent; or (ii) directly or indirectly reduce any Participant's
Accrued Benefit. Notwithstanding anything herein to the contrary, this Plan may
be amended at any time if necessary or desirable to conform the Plan to the Code
or any federal statute with respect to employees' trusts or any regulations or
rulings issued pursuant thereto and no such amendment shall be considered
prejudicial to the rights of any Participant. Notice of all material amendments
shall be given to each Participant and Beneficiary.
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8.2 Merger or Consolidation. The Plan may not be merged or consolidated with,
and its assets or liabilities may not be transferred to any other plan, unless
each person entitled to benefits under the Plan would, if the resulting plan
were then terminated, receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he or
she would have been entitled to receive immediately before the merger,
consolidation or transfer if the Plan had then terminated.
ARTICLE IX
Administration
--------------
9.1 Plan Administrator. The Plan Administrator shall have the sole authority, in
its absolute discretion:
(a) to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the
Plan;
(b) to prescribe the form or forms used in connection with the
Plan, (which forms shall be consistent with the terms of the
Plan but need not be identical and which may be in any format
acceptable to the Plan Administrator, including, but not
limited to, paper, facsimile, electronic record or voice
response record);
(c) to construe and interpret the Plan and any forms used in
the operation of the Plan and the rules and regulations of the
Plan;
(d) to employ actuaries, accountants, counsel and other persons
the Plan Administrator deems necessary in connection with the
administration of the Plan; and
(e) to take all other necessary and proper actions to fulfill
its duties under the Plan.
9.2 Binding Effect. All decisions, determinations and interpretations of the
Plan Administrator shall be final and binding on all Participants and
Beneficiaries.
9.3 Delegation of Authority. The Plan Administrator may delegate its authority
to administer the Plan to any individual(s) as the Plan Administrator may
determine and such individual(s) shall serve solely at the pleasure of the Plan
Administrator. Any individual(s) who are authorized by the Plan Administrator to
administer the Plan shall have the full power to act on behalf of the Plan
Administrator but shall at all times be subordinate to the Plan Administrator
and the Plan Administrator shall retain ultimate authority for the
administration of the Plan.
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9.4 Plan Records. The books and records to be maintained for the purposes of the
Plan shall be maintained by the Company's officers and employees at the
Company's expense and subject to the supervision of the Plan Administrator. All
expenses of administering the Plan shall be paid by the Company, including any
annual fees imposed by financial institutions, brokerage firms or otherwise to
maintain the Trust.
9.5 Limited Liability. No member of the Company's Board of Directors, the board
of directors of a Participating Employer or the Benefits Committee and no
officer or employee of the Company or any Participating Employer shall be liable
to any person for any action taken or omitted in connection with the
establishment or administration of this Plan, including the receipt of benefits
thereunder, unless attributable to his or her own fraud or willful misconduct,
nor shall the Company or any Participating Employer be liable to any person for
any such action unless attributable to fraud or willful misconduct on the part
of a director, officer or employee of the Company or Participating Employer.
ARTICLE X
CLAIMS PROCEDURE
----------------
10.1 Claims Submission.
(a) All claims for benefits under the Plan by a Participant or
Beneficiary, regardless of the nature of the claim, shall be
initially submitted in writing to the Plan Administrator. Such
claims shall be submitted within a reasonable period of time
after the date such benefit was, or was purported to be,
available to the Participant or Beneficiary, with such
determination of reasonableness to be made by the Plan
Administrator in its sole discretion. All claims must
adequately state the basis for the claim including a statement
of all pertinent facts and applicable law, except to the extent
expressly waived by the Administrator. The Administrator may
prescribe additional procedural requirements for claims, not
inconsistent herewith.
(b) In the event that a Participant or Beneficiary does not
receive any Plan benefit that is claimed, such Participant or
Beneficiary shall be entitled to consideration and review as
provided in this Article. Such consideration and review shall
be conducted in a manner designed to comply with ERISA section
503.
(c) Failure to follow the requirements of this Article shall
result in the denial of the claim submitted. The Participant or
Beneficiary submitting such deficient claim shall be deemed to
have not exhausted his or her administrative remedies under the
Plan.
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10.2 Claim Review. Upon receipt of any written claim for benefits, the Plan
Administrator shall be notified and shall give due consideration to the claim
presented. If the claim is denied to any extent by the Plan Administrator, the
Plan Administrator shall furnish the claimant with a written notice setting
forth (in a manner calculated to be understood by the claimant):
(a) the specific reason or reasons for denial of the claim;
(b) a specific reference to the Plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(d) an explanation of the provisions of this Article.
10.3 Right of Appeal. A claimant who has a claim denied under section 10.2 may
appeal for reconsideration of that claim. A request for reconsideration under
this section must be filed by written notice with the Plan Administrator within
sixty (60) days after receipt by the claimant of the notice of denial under
section 10.2.
10.4 Review of Appeal. Upon receipt of an appeal, the Company shall promptly
assign a committee or appropriate officer independent of the Plan Administrator
to review the Plan Administrator's denial of the claim. Such independent
committee or officer shall take action to give due consideration to the appeal.
Such consideration may include a hearing of the parties involved, if the
committee or officer feels such a hearing is necessary. In preparing for this
appeal the claimant shall be given the right to review pertinent documents and
the right to submit in writing a statement of issues and comments. After
consideration of the merits of the appeal, the committee or officer shall issue
a written decision which shall be binding on all parties. The decision shall be
written in a manner calculated to be understood by the claimant and shall
specifically state its reasons and pertinent Plan provisions on which it relies.
The decision on the appeal shall be issued within sixty (60) days after the
appeal is filed, except that if a hearing is held, the decision may be issued
within one hundred twenty (120) days after the appeal is filed.
10.5 Designation. The Plan Administrator may designate one or more of its
members or any other person of its choosing to make any determination otherwise
required to be made by the Plan Administrator under this Article.
ARTICLE XI
Miscellaneous
-------------
11.1 Headings. The headings in this Plan are for convenience of reference only
and are not to be considered as constructions of the provisions.
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11.2 Uniformity. In the exercise of any discretionary power of authority
hereunder, all Participants under similar circumstances shall be treated in a
uniform and non-discriminatory manner.
11.3 Obligations of the Company and Participating Employers. The Company and the
Participating Employers expect to continue the Plan in force indefinitely, but
continuance of the Plan is completely voluntary and is not assumed as a
contractual obligation of the Company or the Participating Employers.
11.4 Governing Law. This Plan is made under, and shall be subject to and
governed by, the laws of the State of New York.
11.5 Gender and Number. Words used in the masculine shall be read and construed
in the feminine where applicable. Wherever required, the singular of the word
used in this Plan shall include the plural and the Plural may be read in the
singular.
11.6 Taxes. The Company and Participating Employers have the right to deduct
from all benefits paid under the Plan any taxes required by law to be withheld
with respect to such benefits. The Company and Participating Employers do not
represent or guarantee that any particular federal or state income, payroll,
personal property or other tax consequence will result from participation in
this Plan. Participants should consult their personal tax advisors to determine
the tax consequences of his or her participation in the Plan.
11.7 Plan Benefits Nontransferable. The right of any Participant or Beneficiary
in any benefit or payment hereunder shall not be subject to attachment or other
legal process for the debts of such Participant or Beneficiary and any such
benefit or payment shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge or encumbrance. Any attempt to subject any benefit
or payment in whole or in part to the debts, contracts, liabilities engagements
or torts of the Participant or Beneficiary or any other person, entitled to any
such benefit or payment pursuant to the terms of the Plan shall result in the
termination of such benefit or payment in the discretion of the Plan
Administrator.
11.8 Incompetence. If the Plan Administrator determines that any person to whom
a benefit is payable under the Plan is incompetent by reason of a physical or
mental Disability, the Plan Administrator shall have the power to cause the
payments becoming due to such person to be made to another person for his or her
benefit without the responsibility of the Plan Administrator, the Company,
Participating Employer or Trustee to see to the application of such payments.
Any payment made pursuant to such power shall, as to such payment, operate as a
complete discharge of the Plan Administrator, the Company, Participating
Employer and any Trustee.
11.9 Identity. If, at any time, any doubt exists as to the identity of any
person entitled to any payment hereunder or the amount of time of such payment,
the Plan Administrator shall be entitled to hold such sum until such identity or
amount of time is determined or until an order of a court of competent
jurisdiction is obtained. The Plan Administrator shall also be entitled to pay
such sum into court in accordance with the appropriate rules of law. Any
expenses incurred by the Company, Participating Employer, the Plan Administrator
and any Trustee incident to such proceeding or litigation shall be charged
against the account of the affected Participant.
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11.10 Other Benefits. The benefits of each Participant or Beneficiary hereunder
shall be in addition to any benefits paid or payable to or on account of the
Participant or Beneficiary under any other pension, disability, annuity or
retirement plan of policy whatsoever.
11.11 Construction. All questions of interpretation, construction or application
arising under this Plan shall be decided by the Plan Administrator whose
decision shall be final and conclusive upon all persons.
11.12 No Guarantee of Employment. Nothing contained herein shall be construed as
a contract of employment or deemed to give any Participant the right to be
retained in the employ of the Company or a Participating Employer, or to
interfere with the rights of any such employer to discharge any individual at
any time, with or without cause, except as may be otherwise agreed to in writing
or provided by applicable law.
IN WITNESS WHEREOF, this Plan has been executed effective January 4, 1999.
OLSTEN CORPORATION
By:___________________________
Member, Benefits Committee
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