Exhibit 10.237
U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN
Amended and Restated
Effective January 1, 2001
TABLE OF CONTENTS
Page
ARTICLE 1 HISTORY AND PURPOSE OF PLAN.................................1
ARTICLE 2 DEFINITIONS.................................................1
ARTICLE 3 MEMBERSHIP..................................................8
3.1 Commencement of Membership......................................8
3.2 Termination of Membership.......................................9
3.3 Resumption of Membership after Severance Date...................9
ARTICLE 4 CREDITED SERVICE............................................9
4.1 Service Credited as of December 31, 1975........................9
4.2 Service Credited after December 31, 1975........................9
4.3 Effect of Breaks in Service on Credited Service.................9
4.4 Veterans' Rights...............................................10
ARTICLE 5 VESTING....................................................10
5.1 Eligibility for Vested Deferred Pension........................10
5.2 Amount and Payment of Vested Deferred Pension..................10
5.3 Effect of Breaks in Service after December 31, 1975............11
5.4 Restoration to Service of Vested Member........................11
5.5 Separation of Members Without Vested Rights....................12
5.6 Death of Vested Member.........................................12
ARTICLE 6 RETIREMENT.................................................12
6.1 Normal Retirement..............................................12
6.2 Early Retirement...............................................12
6.3 Postponed Retirement...........................................13
6.4 Disability Retirement..........................................13
6.5 Nonforfeitability of Pensions..................................13
6.6 Restoration to Employment......................................13
ARTICLE 7 RETIREMENT PENSIONS........................................13
7.1 Normal Retirement Pension......................................13
7.2 Early Retirement Pension.......................................14
7.3 Postponed Retirement Pension...................................15
7.4 Disability Retirement Pension..................................15
7.5 Restoration of Retired Members to Employment...................15
7.6 Payment of Pensions............................................15
7.7 Maximum Pension Limitations....................................16
7.8 Post-Retirement Increase of Benefits of Members
Retiring before January 1, 1976................................18
7.9 Supplemental Benefit for Certain Retired Members...............18
7.10 Benefit Enhancement for Certain Employees......................20
ARTICLE 8 SURVIVORSHIP AND OPTIONAL PENSIONS.........................22
8.1 Form of Payment of Pensions....................................22
8.2 Election of Form of Payment of Pension.........................22
8.3 Notice to Members of Election of a Form of Payment of Pension..22
8.4 Optional Forms of Pensions.....................................23
8.5 Death of Member's Spouse or Beneficiary........................24
8.6 Level Income Option............................................24
8.7 Spouse's Preretirement Survivorship Pension....................25
8.8 Distribution requirements......................................26
8.9 Early Distributions............................................26
8.10 Direct Rollovers...............................................27
ARTICLE 9 CERTAIN RIGHTS AND LIMITATIONS.............................27
9.1 Benefits Payable Solely from Trust Fund........................27
9.2 Prohibition against Alienation of Benefits.....................27
9.3 Incompetency...................................................28
9.4 No Right to Continued Employment...............................28
9.5 Payment of Taxes...............................................28
9.6 Merger or Consolidations with Other Plans......................28
9.7 Purchase of Annuities..........................................29
9.8 Periods of Liquidity Shortfall.................................29
ARTICLE 10 CONTRIBUTIONS..............................................29
10.1 Manner of Funding..............................................29
10.2 Nature of Obligation...........................................30
10.3 Minimum Funding Standard.......................................30
10.4 Effect of Forfeitures..........................................30
10.5 Non-Diversion..................................................30
ARTICLE 11 ADMINISTRATION OF THE PLAN.................................30
11.1 Appointment of the Committee...................................30
11.2 Duties and Powers of Committee.................................31
11.3 Appointment of Investment Committee............................31
11.4 Conduct of Affairs of Investment Committee.....................31
11.5 Duties and Powers of Investment Committee......................31
11.6 Reports to Company.............................................31
11.7 Conduct of Affairs of Committee................................32
11.8 Actuarial Valuations...........................................32
11.9 Appointment of the Plan Administrator..........................32
11.10 Duties and Powers of the Plan Administrator....................32
11.11 Delegation of Responsibilities by the Plan Administrator.......33
11.12 Conduct of Affairs of the Plan Administrator...................34
11.13 Expenses and Liability.........................................34
11.14 Indemnification of Committee and Investment
Committee Members and Persons Serving as Plan
Administrator..................................................36
11.15 Claims Procedure...............................................36
ARTICLE 12 MANAGEMENT OF THE TRUST FUND...............................37
12.1 The Trustee....................................................37
12.2 The Trust Agreement............................................37
12.3 Compensation and Expenses......................................37
ARTICLE 13 AMENDMENT AND TERMINATION..................................37
13.1 Amendment of Plan and Trust....................................37
13.2 Termination of Plan............................................38
13.3 Special Limitation for Highly Compensated Employees............39
ARTICLE 14 OTHER PARTICIPATING COMPANIES..............................40
14.1 Additional Participating Companies.............................40
14.2 Withdrawal of Participating Company............................40
14.3 Successor Companies............................................41
ARTICLE 15 TOP HEAVY PROVISIONS.......................................41
15.1 Top Heavy Plan Requirements....................................41
15.2 Determination of Top Heavy Status..............................41
15.3 Minimum Vesting Requirement....................................43
15.4 Minimum Benefit Requirement....................................43
15.5 Limitation on Compensation and Section 415 Compensation........44
15.6 Other Definitions..............................................44
15.7 Applicability..................................................45
ARTICLE 16 CONSTRUCTION...............................................45
16.1 Plan Intended to Qualify.......................................45
16.2 Governing Law..................................................45
16.3 Words and Headings.............................................45
U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN
ARTICLE 1
HISTORY AND PURPOSE OF PLAN
This Plan is intended to provide retirement benefits to employees of U.S.
Trust Corporation and any affiliated company which chooses to participate in the
Plan upon their being retired after rendering productive and faithful service.
A retirement program was initially adopted on June 2, 1939, effective as of
the same date, and was amended and formally adopted by the Board of Directors of
the United States Trust Company of New York on August 23, 1945, effective
January 1, 1945. Under the Eighteenth Amendment and Restatement of the Plan,
adopted on November 22, 1997, the name of the Plan was formally changed to the
Employees' Retirement Plan of United States Trust Company of New York and
Affiliated Companies.
The Plan was most recently amended and restated on December 30, 1999,
effective January 1, 1997. The Plan is hereby amended and restated effective
January 1, 2001, unless otherwise provided herein, to (a) reflect the transfer
of the Plan sponsorship from United States Trust Company of New York to U.S.
Trust Corporation, (b) formally change the name of the Plan to the "U.S. Trust
Corporation Employees' Retirement Plan," (c) reflect the merger of U.S. Trust
Corporation with Charles Schwab (as hereinafter defined), (d) limit the
eligibility for benefits under the formula in effect as of December 31, 2001 to
individuals who become Employees of a Participating Company on or before such
date, (e) embody operational changes adopted to comply with recent changes
required by law, and (e) make certain other changes to the Plan.
The rights of any person who terminated employment or who retired on or
before the effective date of a particular amendment, including his eligibility
for benefits and the time and form in which benefits, if any, will be paid,
shall be determined solely under the terms of the Plan as in effect on the date
of his termination of employment or retirement, unless such person is thereafter
reemployed and again becomes a Member.
ARTICLE 2
DEFINITIONS
As used in this Plan, the following terms shall have the meanings described
in this Article 2:
2.1 "Affiliated Company" means the Company, any corporation which is
included in a controlled group of corporations (within the meaning of section
414(b) of the Code) which includes the Company, any trade or business (whether
or not incorporated) which is under common control with the Company (within the
meaning of section 414(c) of the Code), any organization included in the same
affiliated service group (within the meaning of section 414(m) of the Code) as
the Company and any other entity required to be aggregated with the Company
pursuant to the regulations under section 414(o) of the Code. In identifying
Affiliated Companies for purposes of applying the provisions of Section 7.7 with
respect to the limitations on benefits, section 415(h) of the Code shall apply
in conjunction with the preceding sentence.
2.2 "Average Final Compensation" means the average Compensation of a Member
for those five consecutive Plan Years, falling within the period of ten
consecutive Plan Years which ends with the Plan Year in which he separates from
service under Article 5 or retires under Article 6, that result in the highest
such average. If the number of Plan Years during which a Member received
Compensation is less than five Plan Years, the Member's Average Final
Compensation shall be his average Compensation for all Plan Years during which
he received Compensation.
2.3 "Beneficiary" means any person who will receive any benefits which
become payable under the Plan upon the Member's death in the case of a Member
who elects to have his Pension paid under Option 2 of Section 8.4.
2.4 "Board of Directors" means the Board of Directors of the Company and
such committees thereof as it may from time to time appoint to act on its behalf
with respect to the Plan.
2.5 "Break in Service" means any Computation Period during which an
Employee is credited with not more than 500 Hours of Service.
2.6 "Charles Schwab" means The Charles Schwab Corporation and any
corporation which is included in a controlled group of corporations (within the
meaning of section 414(b) of the Code) which includes The Charles Schwab
Corporation, any trade or business (whether or not incorporated) which is under
common control with the The Charles Schwab Corporation (within the meaning of
section 414(c) of the Code), any organization included in the same affiliated
service group (within the meaning of section 414(m) of the Code) as The Charles
Schwab Corporation and any other entity required to be aggregated with The
Charles Schwab Corporation pursuant to the regulations under section 414(o) of
the Code.
2.7 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.8 "Committee" means the administrative committee appointed by the Board
of Directors to have the powers, and to carry out the duties and
responsibilities, set forth in Section 11.2.
2.9 "Company" means U.S. Trust Corporation, and any corporation succeeding
to its rights and assuming its obligations hereunder as provided in Section
14.3.
2.10 "Compensation" for a Plan Year means the annual rate of base pay,
including a shift differential, that the Employee was receiving from a
Participating Company, for personal services rendered, as of the final day of
such Plan Year, except that for the Plan Year in which the Employee separates
from service under Article 5 or retires under Article 6, "Compensation" shall
mean the annual rate of base pay that the Employee was receiving from a
Participating Company, for personal services rendered, as of the day immediately
preceding the date on which he so separated from service or retired.
Compensation shall be determined before reduction for any contributions made on
behalf of the Employee in accordance with the Employee's election pursuant to a
cash or deferred arrangement qualified under section 401(k) of the Code, or in
accordance with the Employee's election relating to the payment of medical,
dental, or dependant care coverage pursuant to a cafeteria plan described in
section 125 of the Code, or in accordance with the Employee's election relating
to amounts that are not includable in the gross income of the Employee by reason
of Code Section 132(f)(4), and before reduction for any deductions for taxes or
other items withheld. Compensation shall not include any overtime pay, bonuses
or special pay, but shall include shift differentials, except that for purposes
of determining Average Final Compensation, the definition of Compensation for a
prior Plan Year shall include a shift differential only if the Participant was
entitled to a shift differential on the last day of such Plan Year.
Notwithstanding the above, in the case of an Employee who has incurred a
Total Disability, for Plan Years ending after the date on which such Total
Disability arose (the "Total Disability Date"), the Employee's "Compensation"
shall be his Compensation, as determined above, as of the day immediately
preceding his Total Disability Date.
For each Plan Year, the amount of Compensation taken into account under the
Plan for any Employee shall not exceed the limitation on such amount imposed by
section 401(a)(17) of the Code in effect for such Plan Year ($170,000 for 2001
and effective for Plan Years beginning on or after January 1, 2002, $200,000, as
adjusted for increases in the cost-of-living in accordance with Code Section
401(a)(17)(B) as in effect for the applicable Plan Year).
Notwithstanding the above, effective for Plan Years beginning on and after
January 1, 1994, the section 401(a)(17) limitation shall not be applied to
reduce the amount of the Pension payable under the Plan to a Member below the
amount equal to the sum of (a) the amount of the Pension that would be payable
to such Member under the Plan as of December 31, 1993, computed as if such
Member had separated from service under Article 5 or retired under Article 6, as
applicable, on December 31, 1993 and (b) the amount of the Pension payable to
such Member computed under Article 5 or Article 7, as applicable, taking into
account only Compensation received, and Years of Service and units of Credited
Service earned, for Plan Years beginning on and after January 1, 1994. In
applying the preceding sentence, the amount in clause (a) thereof shall not be
less than the amount of the Pension that would be payable to the Member under
the Plan as of December 31, 1988, computed without regard to the section
401(a)(17) limitation, and computed as if such Member had separated from service
under Article 5 or retired under Article 6, as applicable, on December 31, 1988.
2.11 "Computation Period" means the 12 consecutive month period commencing
with the date on which a person first became an Employee and each successive 12
consecutive month period commencing on the anniversary thereof. With respect to
a person who suffers a Break in Service after incurring a Severance Date, the
Computation Period shall be the 12 consecutive month period commencing with the
date upon which he last became an Employee and each successive 12 consecutive
month period commencing on the anniversary thereof.
2.12 "Covered Compensation" means, for any Member in any Plan Year, the
average of the Taxable Wage Bases (as hereinafter defined) in effect for each
calendar year during the 35 year period ending with the last day of the calendar
year in which the Member attains or will attain his Social Security Retirement
Age. In determining a Member's Covered Compensation for a Plan Year, the Taxable
Wage Base for such Plan Year and any subsequent Plan Year shall be equal to the
Taxable Wage Base in effect at the beginning of such Plan Year. A Member's
Covered Compensation for a Plan Year after the 35 year period described above is
the Covered Compensation for the Plan Year in which the Member attained his
Social Security Retirement Age. A Member's Covered Compensation shall be
redetermined each Plan Year, as described above, to reflect any change in the
Taxable Wage Base. For purposes of this definition, the Taxable Wage Base in a
given calendar year is the maximum amount of compensation which may be
considered wages for such year under section 3121(a)(1) of the Code.
2.13 "Credited Service" means that period of employment for which a Member
is entitled to receive units of credit under the Plan as provided in Article 4
for the purpose of computing the Member's accrued benefits under the Plan.
2.14 "Earliest Payment Date" means the first date as of which a Member who
has separated from service under Article 5 or who has retired under Article 6
may elect to have the payment of his Pension commence under the Plan.
2.15 "Effective Date" of the Plan means January 1, 1945. The Plan as
amended and restated herein is effective as of January 1, 1997, except as
otherwise provided herein.
2.16 "Employee" means any person who is employed by an Affiliated Company;
provided, however, that the term Employee shall not include any person who is
treated as a "leased employee" of any Affiliated Company under section 414(n)(2)
of the Code.
2.17 "Equivalent Actuarial Value" means, except as otherwise specified
below, equivalent value determined on the basis of the conversion factors
contained in Appendix A attached hereto.
For purposes of Sections 5.4, 7.3, 7.5 and 8.7(c), the term "Equivalent
Actuarial Value" means equivalent value determined on the basis of the following
assumptions, and for purposes of Section 15.2(e) the actuarial assumptions to be
utilized in computing the Present Value of Accrued Benefits shall be the
following: (1) life expectancy based on the UP-84 mortality table; and (2) an
interest rate of seven percent (7%) per year.
For purposes of Section 7.7(c), the term "Equivalent Actuarial Value" means
equivalent value determined on the basis of the following assumptions: (a) life
expectancy based on the mortality table described in section 415(b)(2)(E)(v) of
the Code; and (b) an interest rate of five percent (5%) per year in the case of
any adjustment of a benefit, or the limitation of any form of benefit, which is
a non-decreasing annuity, or the "applicable interest rate", as defined below,
in any other case.
For purposes of Sections 7.6 and 8.7(d) and, to the extent applicable,
Section 8.6, and for valuing the lump sum payment described in Section
7.10(a)(3), the term Equivalent Actuarial Value means equivalent value
determined on the basis of the following assumptions: (i) life expectancy based
on the mortality table described in section 417(e)(3)(A)(ii)(I) of the Code; and
(ii) the "applicable interest rate". For purposes of this Section 2.17, the
"applicable interest rate" shall mean the interest rate specified by the
Internal Revenue Service under section 417(e)(3)(A)(ii)(II) of the Code for the
month of August preceding the Plan Year in which the Equivalent Actuarial Value
in question is being determined.
2.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.19 "Executive/Policy-Making Member" means any Member who (a) for the two
year period immediately preceding his Normal Retirement Date has been employed
in a bona fide executive or high policy-making position and (b) is entitled, as
of his Normal Retirement Date, to immediate nonforfeitable annual retirement
benefits aggregating at least $44,000 (or such other dollar amount as may be
prescribed by law) from the Plan, the U.S. Trust Corporation 401(k) Plan and any
other deferred compensation plan of a Participating Company (other than amounts
attributable to his voluntary contributions).
2.20 "Former Member" means a person who at the time he ceased to be a
Member was entitled to a Pension under Article 5 or Article 6.
2.21 "Hour of Service", with respect to any Computation Period or Plan
Year, as the case may be, shall mean the following:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for an Affiliated Company.
(b) Each hour for which an Employee is paid, or entitled to payment,
directly or indirectly (through an insurer, trust fund or otherwise) by an
Affiliated Company for a period of time during which no duties are
performed (irrespective of whether he has ceased to be an Employee) on
account of vacation, holiday, illness, incapacity, disability, layoff, or
jury duty. It is provided, however, that except as otherwise required by
law, (1) no more than 501 hours shall be credited under this subsection (b)
for any single continuous period, (2) no such hours shall be credited under
this subsection (b) if such payment is made under a plan maintained solely
for the purpose of complying with the applicable worker's compensation,
disability insurance or unemployment compensation laws, and (3) no such
hours shall be credited under this subsection (b) for any payment which
solely reimburses an Employee for medical or medically related expenses
incurred by the Employee.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by an Affiliated Company, exclusive of
hours previously credited under subsection (a) or (b), immediately above.
No more than 501 hours shall be credited under this subsection (c) for any
single continuous period.
(d) The number of Hours of Service to be credited under subsections
(a), (b) and (c) above, and the periods to which Hours of Service are to be
credited under subsections (a), (b) and (c) above, shall be determined
under the rules set forth in Section 2530.200b-2(b) and (c) of the
regulations issued by the U.S. Department of Labor, as the same may be
amended from time to time.
(e) In the case of any Employee who incurs any Leave (whether paid or
unpaid), including a maternity or paternity absence described in section
411(a)(6)(E)(i) of the Code and any Leave which is subject to the
requirements of the Family and Medical Leave Act of 1993, the Employee
shall be credited, for the period during which he is on such Leave, with
the number of Hours of Service with which he would normally have been
credited for such period under the Plan but for such Leave, as determined
by the Plan Administrator. In the case of any Employee who has incurred a
Total Disability, the Employee shall be credited, for the period during
which he is Totally Disabled, with the number of Hours of Service with
which he would normally have been credited during such period under the
Plan but for his absence from active employment due to such Total
Disability, as determined by the Plan Administrator. It is provided,
however, that the Employee shall not be credited with any Hours of Service
under the preceding sentence which are otherwise credited to such Employee
under subsection (b) above for the period during which he is Totally
Disabled.
(f) Notwithstanding the foregoing, for the purposes of determining the
number of Hours of Service with which the Employee is to be credited in any
Computation Period or Plan Year, as applicable, an Employee shall be
credited with a number of Hours of Service computed (i) for purposes of
Section 3.1, by crediting the Employee with 190 Hours of Service for each
month in which he would be required to be credited with an Hour of Service
under subsections (a) through (e) above, and (ii) for all other purposes,
by dividing by seven the number of days in such Computation Period or Plan
Year, as applicable, for which the Employee would otherwise be credited
with at least one Hour of Service under subsections (a) through (e) above
and multiplying the result by 45.
2.22 "Investment Committee" means the Retirement and 401(k)/ESOP Investment
Committee appointed under Section 11.3.
2.23 "Joint and Survivor Pension" means a Pension payable to a Former
Member during his lifetime, with a survivorship Pension payable after the death
of such Former Member to his spouse on his Pension Starting Date who survives
him for such spouse's life (regardless of such spouse's remarriage after his
death) in the amount of 50% of the Pension paid to the Former Member prior to
his death.
2.24 "Leave" means any period during which a person is an Employee but is
absent from active employment pursuant to an authorized leave of absence,
approved by an Affiliated Company on a nondiscriminatory basis under rules
uniformly applicable to all Employees similarly situated, for a period not to
exceed five years.
2.25 "Member" means any person included in the membership of the Plan
pursuant to Article 3.
2.26 "Normal Retirement Date" means, for any Member, the first day of the
calendar month coinciding with or immediately following the later of (a) the
65th anniversary of his birth or (b) the fifth anniversary of the date on which
he became a Member.
2.27 "Participating Company" means the Company and any other Affiliated
Company participating in this Plan pursuant to Article 14 until such time as
such Affiliated Company ceases to participate in the Plan pursuant to Article
14. Appendix B provides a list of Participating Companies as of the date this
amended and restated Plan is executed.
2.28 "Pension" and "Normal Retirement Pension" means a level annual
retirement income payable under this Plan in monthly installments to a Former
Member, or his spouse, only during the lifetime of the same, with no minimum
number of monthly payments guaranteed.
2.29 "Pension Starting Date" means the date as of which the payment of a
Member's Pension is to commence, as determined under Section 7.6.
2.30 "Plan" means the U.S. Trust Corporation Employees' Retirement Plan, as
described herein and as may hereafter be amended.
2.31 "Plan Administrator" means the person or persons appointed by the
Committee to have the powers, and to carry out the duties and responsibilities,
set forth in Section 11.10.
2.32 "Plan Year" means the calendar year.
2.33 "Prior Service" means service credited to an Employee under this Plan
for service with an entity that was acquired by or merged with the Company, as
set forth in Appendix B.
2.34 "Severance Date" means the first date as of which the Employee is no
longer in the employ of any Affiliated Company. An Employee shall not be treated
as having incurred a Severance Date as a result of his absence from work unless
such absence is due to his resignation, discharge, retirement, or death.
However, an Employee who is on a Leave shall be treated as having incurred a
Severance Date (and as having ceased to be an Employee) (a) as of the expiration
of such Leave, unless prior to such expiration he resumes his active employment
with an Affiliated Company, or (b) at such earlier time as he notifies, in
writing, the Affiliated Company with which he was last in active employment that
he does not intend to resume his active employment at the expiration of such
Leave.
2.35 "Social Security Retirement Age" shall have the same meaning as is
assigned to such term under section 415(b)(8) of the Code.
2.36 "Spouse's Preretirement Survivorship Pension" means a Pension payable
after the death of a Member to the Member's surviving spouse for life
(regardless of the spouse's remarriage after the Member's death) in the amount
hereinafter determined, based upon the Member's units of Credited Service and
Final Average Compensation as of the date of his death.
(a) Death After Becoming Entitled to Retire Under Article 6. In the
case of a Member who dies after becoming entitled to retire under Article
6, other than Section 6.2(b) thereof, but before the payment of his Pension
has commenced, the Spouse's Preretirement Survivorship Pension shall be
based on the Pension which would have been payable to such surviving spouse
if (1) on the day immediately preceding the date of his death, the Member
had retired and the payment of his Pension had commenced in the form
described in Option 1 in Section 8.4, with a 100% survivor annuity, and (2)
the Member's Pension referred to in clause (1) had been computed without
the reductions described in Section 7.2(a)(2), if otherwise applicable.
(b) Death Prior to Becoming Entitled to Retire Under Article 6. In the
case of a Member who dies before becoming entitled to retire under Article
6, other than Section 6.2(b) thereof, and before the payment of his Pension
has commenced, but after his Earliest Payment Date, the Spouse's
Preretirement Survivorship Pension shall be based on the Joint and Survivor
Pension which would have been payable if the Member had incurred a
Severance Date and payments under the Joint and Survivor Pension had
commenced immediately preceding the date of his death. In the case of a
Member who dies before becoming entitled to retire under Article 6 and on
or before his Earliest Payment Date, the Spouse's Preretirement
Survivorship Pension shall be based on the Joint and Survivor Pension which
would have been payable if the Member had incurred a Severance Date on the
earlier of the date of his death or his actual Severance Date, survived
until his Earliest Payment Date, begun receiving payments under the Joint
and Survivor Pension on his Earliest Payment Date, and died on the
following day. This subsection (b) shall apply in the case of a Member who
dies after becoming entitled to retire under Section 6.2(b) but before
becoming entitled to retire under any other provision of Article 6.
2.37 "Total Disability" means a mental or physical disability which
entitles a Member to receive a benefit under the long-term disability plan
maintained by the Affiliated Companies.
2.38 "Trustee" means the United States Trust Company of New York, as
trustee, and any additional or successor trustee or trustees, who may from time
to time act as trustee of the Trust Fund pursuant to Article 12.
2.39 "Trust Fund" means the contributions deposited with and held by the
Trustee pursuant to Article 12, any property into which the same or any part
thereof may be converted, and any appreciation therein and interest thereon.
2.40 "Year of Service" means any Computation Period during which an
Employee is credited with 1,000 or more Hours of Service.
ARTICLE 3
MEMBERSHIP
3.1 Commencement of Membership. Each Employee who was a Member on December
31, 1986 shall continue as a Member. Each other Employee shall become a Member
on the January 1 or July 1 immediately following the date on which he first
satisfies each of the following conditions: (a) he receives a stated
compensation from a Participating Company other than a pension, severance pay,
retainer or fee under contract, (b) he has completed, or is scheduled to
complete, at least one Year of Service, and (c) he has attained age 21.
An Employee who receives credit for Prior Service for purposes of
eligibility to participate in the Plan shall become a Member on the first day of
the month coincident with or next following the later of (i) the date he becomes
an Employee or (ii) the date he meets the conditions in (a), (b) and (c) above,
taking into account Prior Service.
Notwithstanding the foregoing, no individual who becomes an Employee after
December 31, 2001 shall become a Member unless the Company amends the Plan in
accordance with Section 13.1 to provide for such Employee's membership in the
Plan on such terms and condition as the Company in its sole discretion may
establish.
3.2 Termination of Membership. An Employee's membership in the Plan shall
terminate:
(a) on the Employee's Severance Date;
(b) Subject to Section 5.1, on the date an Employee transfers
employment from a Participating Company directly to Charles Schwab.
3.3 Resumption of Membership after Severance Date. If an Employee's
membership in the Plan is terminated in accordance with Section 3.2(a) on
account of his incurring a Severance Date, or Section 3.2(b) on account of his
transferring employment directly to Charles Schwab, and he again becomes an
Employee of a Participating Company, his membership in the Plan shall resume as
of the date on which he again becomes such an Employee.
ARTICLE 4
CREDITED SERVICE
4.1 Service Credited as of December 31, 1975. Each person who was a Member
on or prior to December 31, 1975 shall, for purposes of this Article, be
credited with one unit (or fraction thereof to the next higher one-tenth) of
Credited Service with respect to service performed prior to January 1, 1976 for
each 12 month period of employment with a Participating Company (or part
thereof) with which each such Member was credited as of December 31, 1975 under
the terms of the Plan as in effect on that date.
4.2 Service Credited after December 31, 1975. Each Employee of a
Participating Company who is a Member at any time during a Plan Year commencing
after December 31, 1975 shall be credited with a unit or part thereof of
Credited Service for each such Plan Year, computed by dividing by 2,000 the
number of Hours of Service credited to him as an Employee of a Participating
Company for only the days falling in such Plan Year during which he is a Member
(not in excess of 2,000 Hours of Service), and increasing the resulting fraction
to the next higher one-tenth.
It is provided, however, that each person who ceased to be a Member for any
reason at any time prior to January 1, 1988 shall not be entitled to any
Credited Service he had otherwise earned for periods after he had attained his
Normal Retirement Date unless he was thereafter employed by a Participating
Company on or after January 1, 1988 and has at least one Hour of Service in a
Plan Year beginning on or after January 1, 1988, in which case he shall be
credited with units of Credited Service in accordance with the above paragraph
of this Section 4.2 with respect to all periods (including periods after such
Member's Normal Retirement Date).
4.3 Effect of Breaks in Service on Credited Service. If a Member incurs a
Severance Date after December 31, 1975 and thereby ceases to be a Member, and
subsequent to such Severance Date he again becomes a Member, all units of
Credited Service with which the Member was credited prior to such Severance Date
shall be taken into account under the Plan. It is provided, however, that if
upon his again becoming an Employee after such Severance Date the Years of
Service he performed prior to such Severance Date are not taken into account for
purposes of Section 5.1 by reason of Section 5.3 (as in effect on the date he
again became an Employee), the units of Credited Service earned by such Member
prior to such Severance Date shall not be taken into account under the Plan.
4.4 Veterans' Rights. Notwithstanding any provision of this Plan to the
contrary, benefits and service credit with respect to qualified military service
will be provided in accordance with Code section 414(u).
ARTICLE 5
VESTING
5.1 Eligibility for Vested Deferred Pension. A Member who ceases to be an
Employee for any reason other than his death and is not entitled to retire under
Article 6 shall be entitled to receive a vested deferred Pension if he is
credited with five or more Years of Service for Computation Periods during which
he was at least age 18.
For purposes of this Section 5.1, Years of Service shall include Prior
Service. With respect to an Employee of Charles Schwab who transfers employment
directly to a Participating Company, Years of Service shall include service with
Charles Schwab.
5.2 Amount and Payment of Vested Deferred Pension. The vested deferred
Pension payable under Section 5.1 shall be a deferred Pension equal to the
Pension a Member would have been entitled to receive had he remained a Member in
the Plan at all times through his Normal Retirement Date, computed in accordance
with Section 7.1 (based on his Average Final Compensation as of the date on
which he ceased to be an Employee and the number of units of Credited Service he
would have earned to his Normal Retirement Date, not in excess of 35 units,
including all units of Credited Service he had earned as of his Severance Date
and determined by assuming that the Member had remained both an Employee of a
Participating Company and a Member in the Plan during the period which begins on
the Member's Severance Date and ends on his Normal Retirement Date), multiplied
by a fraction (x) the numerator of which is the number of Years of Service
credited to the Member as of his Severance Date and (y) the denominator of which
is the number of Years of Service that would have been credited to the Member to
his Normal Retirement Date (including all Years of Service he had earned as of
his Severance Date, and determined by assuming that he had remained an Employee
of an Affiliated Company for the period which begins on his Severance Date and
ends on his Normal Retirement Date).
Notwithstanding the foregoing, Prior Service credited to a Member pursuant
to Section 5.1 and Appendix B, including service with Charles Schwab, shall not
be taken into account for purposes of determining the amount of vested deferred
Pension under this Section 5.2.
(a) Vested Members with less than 20 Years of Service. A Member
eligible for a vested deferred Pension under Section 5.1 who has completed
less than 20 Years of Service as of the date he ceased to be an Employee
shall be entitled to receive a vested deferred Pension, commencing on the
first day of the month immediately following his Normal Retirement Date, in
the amount prescribed in this Section 5.2.
(b) Vested Members with 20 or more but less than 25 Years of Service.
A Member eligible for a vested deferred Pension under Section 5.1 who has
completed 20 or more but less than 25 Years of Service as of the date he
ceased to be an Employee shall be entitled to receive a vested deferred
Pension, commencing on the first day of the month coinciding with or
immediately following the date on which he attains age 60 (or such later
date, but not later than the first day of the month immediately following
the Member's Normal Retirement Date, as he may elect) in the amount
prescribed in this Section 5.2, but actuarially reduced to an amount of
Equivalent Actuarial Value to the payments he would have received if
payment of his vested deferred Pension had started on his Normal Retirement
Date.
(c) Vested Members with 25 or more Years of Service. A Member eligible
for a vested deferred Pension under Section 5.1 of this Article who has
completed 25 or more Years of Service as of the date he ceased to be an
Employee shall be entitled to receive a vested deferred Pension, commencing
on the first day of the month coinciding with or immediately following the
date on which he attains age 55 (or such later date, but not later than the
first day of the month immediately following the Member's Normal Retirement
Date, as he may elect), in the amount prescribed in this Section 5.2, but
actuarially reduced to an amount of Equivalent Actuarial Value to the
payments he would have received if payment of his vested deferred Pension
had started on his Normal Retirement Date.
The Plan Administrator shall advise the Member in writing as to the earliest
date on which payment of his deferred vested Pension may commence.
5.3 Effect of Breaks in Service after December 31, 1975. In computing a
Member's Years of Service for purposes of Sections 5.1 and 5.2, in the case of a
Member who incurs a Severance Date after December 31, 1975, the Years of Service
he completed prior to such Severance Date shall, upon his again becoming an
Employee, be taken into account under such Sections, except as follows:
(a) If the Member has resumed employment with an Affiliated Company
after incurring a Break in Service following such Severance Date, the Years
of Service he completed before such Severance Date shall not be so taken
into account until he has completed one Year of Service after so resuming
employment.
(b) If the Member was not entitled to a vested deferred Pension
pursuant to Section 5.1 as of such Severance Date, and he has resumed
employment with an Affiliated Company after incurring a number of
consecutive Breaks in Service following such Severance Date which equals or
exceeds the greater of five years or the aggregate number of Years of
Service he completed before such Severance Date, the Years of Service he
had completed before such Severance Date shall not be so taken into
account. The number of Years of Service before any Severance Date shall not
include any Years of Service which are not taken into account under
Sections 5.1 and 5.2 because of the application of this provision (or
because of the application of this provision as in effect on December 31,
1984) with respect to an earlier Severance Date.
5.4 Restoration to Service of Vested Member. If a Member who is entitled to
a vested deferred Pension pursuant to Section 5.1 is restored to service as an
Employee, his right to such vested deferred Pension shall be cancelled and his
subsequent retirement and any Pension payable thereupon shall be governed by the
provisions of this Plan then applicable to him, taking into consideration his
Credited Service and, where appropriate, his Compensation, prior as well as
subsequent to the date he ceased to be an Employee, but such Pension shall be
actuarially reduced by the Equivalent Actuarial Value of the Pension payments
(if any) previously made to the Member under this Article. The application of
this Section 5.4 shall not result in a suspension of benefits within the meaning
of section 411(a)(3)(B) of the Code or section 203(a)(3)(B) of ERISA, unless the
requirements of the Code and ERISA which pertain to suspensions of benefits have
been satisfied.
5.5 Separation of Members Without Vested Rights. No Pension or other amount
shall be paid under this Plan in respect of a person who ceases to be a Member
before becoming eligible to receive a deferred vested Pension under this Article
5, or before he is eligible to retire under Article 6. Such person shall be
treated as if the entire amount of the benefit under the Plan in which he was
vested has been distributed to him, in a lump sum payment of zero amount, as of
his Severance Date. Thereafter, notwithstanding Section 4.3, the Credited
Service that such person had earned prior to his Severance Date shall be
disregarded for all purposes under the Plan. However, if such person
subsequently returns to employment with any Participating Company, such person
shall be treated as if he has repaid the entire such lump sum payment to the
Plan, as of the date on which he so returns to employment, and his Credited
Service earned prior to such Severance Date shall be taken into account under
the Plan, except as otherwise provided in Section 4.3.
5.6 Death of Vested Member. Subject to Section 8.7, in the event of the
death of a person entitled to a vested deferred Pension pursuant to Section 5.1
either (a) prior to the date such Pension was to commence, as provided in
Section 5.2 or (b) after such Pension was to commence and the Former Member was
to receive such Pension in the form of a straight life annuity, no Pension or
other amount shall be payable on the Former Member's behalf under this Article
or any other provision of this Plan.
ARTICLE 6
RETIREMENT
6.1 Normal Retirement. Each Member, other than an Executive/Policy-Making
Member, may retire on his Normal Retirement Date unless he has retired prior to
such date pursuant to Section 6.2 or 6.4. Each Executive/Policy-Making Member
shall retire on his Normal Retirement Date unless he has retired prior to such
date pursuant to Section 6.2 or 6.4 or unless he continues as an Employee
thereafter pursuant to Section 6.3.
6.2 Early Retirement.
(a) Rule of 80. A Member whose combined (a) attained age (in complete
years from the anniversary of the Member's birth), and (b) either Years of
Service (as computed for purposes of Section 5.1) or units of Credited
Service (as computed under Article 4), totals 80 or more shall be retired
on the first day of the calendar month immediately following receipt by the
Plan Administrator of written application for his retirement by such
Member.
(b) Age 60. Effective January 1, 1999, a Member who is an Employee of
an Affiliated Company on the date he has attained age 60 and is credited
with at least ten (10) Years of Service shall be retired on the first day
of the calendar month immediately following receipt by the Plan
Administrator of written application for his retirement by such Member.
(c) Commencement. The Pension of a Member who retires under either of
the preceding paragraphs ("early retirement") shall commence on the first
day of the month immediately following the date on which he had retired, or
such later date, but not later than the first day of the month immediately
following the Member's Normal Retirement Date, as he may elect. The Plan
Administrator shall advise the Member in writing as to the earliest date on
which payment of his early retirement Pension may commence.
6.3 Postponed Retirement. Each Member, other than an
Executive/Policy-Making Member, who continues as an Employee after his Normal
Retirement Date may retire on the first day of any calendar month thereafter on
which the Member elects to retire. An Executive/Policy-Making Member may upon
the request of the Participating Company by which he is employed and with the
consent of such Executive/Policy-Making Member be continued as an Employee after
his Normal Retirement Date, in each case for a period of one year, and, upon
further requests and consents, for successive one year periods thereafter. An
Executive/Policy- Making Member whose retirement is postponed under this Section
6.3 shall be retired at the end of the last of such one year periods, or at any
earlier date not less than thirty nor more than ninety days after a written
request for his retirement has been filed with the Plan Administrator by either
the Executive/Policy-Making Member or the Participating Company by which he is
employed.
6.4 Disability Retirement. Any Member who has incurred a Total Disability,
and who otherwise meets the requirements for retirement under Section 6.1, 6.2
or 6.3, may retire under the applicable such Section on the first day of any
calendar month after he has satisfied such requirements on which he elects to
retire.
6.5 Nonforfeitability of Pensions. A Member who becomes entitled to retire
under this Article 6 shall have a nonforfeitable right to a Pension under the
Plan. A Member who retires under this Article 6 shall be entitled to receive a
Pension, computed as under Article 7.
6.6 Restoration to Employment. Upon the request of any Participating
Company and with the consent of the Member, a Member retired pursuant to any of
the preceding Sections of this Article 6 may be restored to service as an
Employee. In this event his subsequent retirement shall be governed by whichever
of such Sections, if any, is then applicable.
ARTICLE 7
RETIREMENT PENSIONS
7.1 Normal Retirement Pension. Each Member retiring after December 31, 1988
pursuant to the provisions of Section 6.1 shall receive a Pension equal to the
sum of
(a) two and one-quarter percent (2 1/4%) of the Member's Average Final
Compensation, multiplied by the number of the Member's units of Credited
Service not in excess of 20 units, plus
(b) one percent (1%) of such Member's Average Final Compensation,
multiplied by the number of the Member's units of Credited Service in
excess of 20 units but not in excess of 35 units, reduced by
(c) one-half of one percent (.5%) of the lesser of (1) a Member's
Average Final Compensation and (2) 100% of a Member's Covered Compensation,
multiplied by the number of units of Credited Service earned by the Member
for up to the first 35 units of Credited Service so earned less any units
of Credited Service earned prior to January 1, 1976, and further multiplied
by the factor indicated below for such Member's year of birth:
Year of Birth Adjustment
1937 and earlier 1.00
1938 through 1954 .95
1955 and later . .90
provided, however, that the Normal Retirement Pension of any Member calculated
in accordance with the foregoing provisions of this Section 7.1 shall not be
less than the Normal Retirement Pension of such Member accrued pursuant to the
terms of Article VII, Paragraph A of the Plan as in effect as of December 31,
1988.
7.2 Early Retirement Pension.
(a) Rule of 80. Each Member retiring after December 31, 1975 pursuant
to the provisions of Section 6.2(a) shall receive a Pension equal,
(1) if the Member has attained age 60 at the time of his
retirement, or if he retired prior to attaining age 60 but does not
elect to have the payment of his early retirement Pension commence
prior to his 60th birthday, to an amount computed in accordance with
Section 7.1 on the basis of the Member's Average Final Compensation
and units of Credited Service at the time of his early retirement, or
(2) if the Member has not attained age 60 at the time of his
retirement and elects to have the payment of his early retirement
Pension commence prior to his 60th birthday, to an amount equal to the
Pension which he would have been entitled to receive under subsection
(a) above if he had attained age 60 at the time of his retirement, but
computed by reducing the amounts described in subsections (a) and (b)
of Section 7.1 by one-twelfth (1/12) of five percent (5%) for each
month or part thereof that the commencement of such early retirement
Pension precedes the Member's 60th birthday, and by reducing the
amount described in subsection (c) of Section 7.1 by one-twelfth
(1/12) of six percent (6%) for each month or part thereof that the
commencement of such early retirement Pension precedes the Member's
60th birthday.
(b) Age 60. Each Member retiring pursuant to the provisions of Section
6.2(b) shall receive a Pension to which the Member would be entitled under
Section 5.2, but actuarially reduced to an amount of Equivalent Actuarial
Value to the payments he would have received if payment of his vested
deferred Pension had started on his Normal Retirement Date.
7.3 Postponed Retirement Pension. A Member who is an Employee on or after
January 1, 1988, and whose retirement has been postponed pursuant to Section 6.3
for a period subsequent to his Normal Retirement Date, shall receive no Pension
during such period of postponement. Upon his retirement, such Member shall
receive a Pension computed in accordance with Section 7.1 on the basis of the
Member's Average Final Compensation and units of Credited Service at the time of
his postponed retirement. Notwithstanding the above, unless the applicable
requirements relating to a suspension of benefits under sections 411(a)(3)(B) of
the Code and 203(a)(3)(B) of ERISA have been satisfied with respect to the
Member, including any requirement that notification of such suspension be
provided to the Member, the Pension payable under this Section 7.3 shall not be
less than the Equivalent Actuarial Value of the Pension that the Member would
have received if (a) the Member had retired on his Normal Retirement Date, (b)
the payment of such Pension had commenced on the first day of the month
immediately following his Normal Retirement Date, and (c) the amount of such
Pension had been based on his Average Final Compensation and the number of his
units of Credited Service as of his Normal Retirement Date. The amount of
Pension payable under this Section shall be determined in accordance with Code
Section 411(b)(1)(H) and regulations promulgated thereunder.
7.4 Disability Retirement Pension. Each Member retiring after December 31,
1975 pursuant to the provisions of Section 6.4 shall receive a Pension, computed
in accordance with Section 7.1, 7.2 or 7.3, as applicable, on the basis of his
Average Final Compensation and units of Credited Service at the time of his
retirement.
7.5 Restoration of Retired Members to Employment. If any retired Member
again becomes an Employee, his Pension (if any was being paid) shall cease and
any prior election under Article 8 as to the form of Pension in effect
thereunder shall become void. Any Credited Service to which he was entitled when
he retired shall be restored to him, and his subsequent retirement and any
Pension payable thereupon shall be governed by the provisions of this Plan then
applicable to him, taking into consideration his Credited Service and, where
appropriate, his Compensation, prior as well as subsequent to his retirement,
but such Pension shall be actuarially reduced by the Equivalent Actuarial Value
of the Pension payments (if any) previously made to the Member. The application
of this Section 7.5 shall not result in a suspension of benefits within the
meaning of section 411(a)(3)(B) of the Code or section 203(a)(3)(B) of ERISA,
unless the requirements of the Code and ERISA which pertain to suspension of
benefits have been satisfied.
7.6 Payment of Pensions. All Pensions payable pursuant to Article 5 or
Article 6 shall, upon direction by the Plan Administrator, be paid by the
Trustee. All Pensions payable under the Plan shall, except as otherwise provided
under the Plan, be payable in level monthly installments, as of the first day of
each month. The payment of a Pension shall commence (a) in the case of a Member
who is entitled to a deferred vested Pension under Article 5, on the date
provided in subsection (a), (b) or (c), as applicable, of Section 5.2, (b) in
the case of a Member who takes early retirement under Section 6.2 (including a
Member with a Total Disability who takes an early retirement), on the date
provided in Section 6.2 or (c) in all other cases, on the first day of the month
immediately following the date on which the Member retires. Payment of a Pension
shall cease with the monthly payment immediately following the Member's death.
If the Equivalent Actuarial Value of any Pension payable to a Member as
computed under Article 5 or this Article 7 does not exceed $5,000 ($3500 prior
to January 1, 1998) as of the Member's Severance Date, then the Plan
Administrator shall direct that an amount equal to such Equivalent Actuarial
Value be paid by the Trustee to such Member in a single lump sum cash payment.
Such payment shall be made as soon as practicable following the Member's
Severance Date.
Unless a Member elects otherwise, notwithstanding the above, the payment of
the Member's Pension shall commence not later than by the 60th day after the end
of the Plan Year during which occurs the latest of (a) the Member's 65th
birthday, (b) the 10th anniversary of the year in which he first became a
Member, or (c) the Member's termination of employment with all Affiliated
Companies.
Before any Pension shall be paid to a Member or to the surviving spouse of
a deceased Member, such Member, or his surviving spouse, as applicable, shall
file with the Plan Administrator such information as the Plan Administrator
shall require to establish his or her rights to benefits under the Plan.
7.7 Maximum Pension Limitations. Notwithstanding any other provision of
this Plan to the contrary, no Pension shall be payable under this Plan in excess
of the limitations prescribed in this Section 7.7.
(a) Basic Limitation. No Pension shall be paid to or on behalf of any
Member which would, as of the last day of the Plan Year, annually exceed
the lesser of:
(1) 100% of the Member's average total compensation (as defined
in Treas. Reg. Sec. 1.415-2(d)(1), (2), (3) and (4)) but including any
elective deferrals (as defined in Code Section 402(g)(3)), any amount
which is contributed or deferred by a Participating Company at the
election of the Employee and which is not includable in the gross
income of the Employee by reason of Code Section 125 or 457, or in
accordance with the Employee's election relating to amounts that are
not includible in the gross income of the Employee by reason of Code
Section 132(f)(4) from the Participating Company or Companies by which
he was employed for the three consecutive Plan Years for which the
Member's total compensation (as so defined) was the highest (the
"Compensation Limitation") and during which he was a Member in the
Plan, or
(2) $90,000 (the "Dollar Limitation").
If the Member has fewer than 10 years of Plan participation, the Dollar
Limitation shall be multiplied by a fraction, the numerator of which is the
number of years (computed to fractional parts of a year) of participation in the
Plan, and the denominator of which is 10. If the Member has fewer than 10 Years
of Service, the Compensation Limitation shall be multiplied by a fraction, the
numerator of which is the number of the Member's Years of Service (computed to
fractional parts of a year), and the denominator of which is 10.
The Dollar Limitation shall be adjusted annually, for Plan Years beginning
after December 31, 1987, for increases in the cost of living after October 1,
1986 in accordance with the Code and applicable regulations or rulings, and, in
the case of Members who have ceased to be employed by a Participating Company,
the Compensation Limitation shall be adjusted annually for increases in the cost
of living in accordance with the Code and applicable regulations and rulings. No
such adjustment shall be taken into account hereunder before the Plan Year for
which such adjustment first takes effect pursuant to such regulations or
rulings.
(b) Combined Plan Limitation. Notwithstanding subsection (a) above,
for any Plan Year commencing prior to January 1, 2000, if a Member in this
Plan is also a member in the U.S. Trust Corporation 401(k) Plan (formerly
known as the 401(k) Plan and ESOP of United States Trust Company of New
York and Affiliated Companies) (as in effect for the Plan Year in question
or for any prior Plan Year) (the "Profit-Sharing Plan"), the sum of the
Member's Retirement Plan Fraction (as defined below) and the Member's
Profit-Sharing Plan Fraction (as defined below) shall not exceed 1.0 for
any Plan Year, and in the event that in any Plan Year the sum of the
Member's Retirement Plan Fraction and the Member's Profit-Sharing Plan
Fraction exceeds 1.0, then the Pension payable under this Plan shall be
reduced so that the sum of such fractions in respect of that Member will
not exceed 1.0 for such Plan Year.
(1) Retirement Plan Fraction. For purposes of this subsection,
"Retirement Plan Fraction" for any Plan Year shall mean a fraction,
(i) the numerator of which is the projected annual Pension the Member
is expected to receive under the Plan determined as of the end of the
Plan Year and in accordance with applicable regulations and (ii) the
denominator of which is the lesser of: (A) the product of 1.25
multiplied by the Dollar Limitation in effect under subsection (a)(2)
of this Section 7.7 for the Plan Year, or (B) the product of 1.4
multiplied by the amount which may be taken into account under
subsection (a)(1) of this Section 7.7 for the Plan Year.
(2) Profit-Sharing Plan Fraction. For purposes of this
subsection, "Profit-Sharing Plan Fraction" for any Plan Year shall
mean a fraction, (i) the numerator of which is the sum of the annual
additions (as defined in section 415(c)(2) of the Code; provided,
however, that the annual additions for any Plan Year beginning before
January 1, 1987 shall not be recomputed to treat all contributions
made on an after-tax basis by the Member as annual additions) credited
to the account of the Member under the Profit-Sharing Plan for the
Plan Year and for all prior Plan Years and (ii) the denominator of
which is the sum of the lesser of the following amounts, determined
for the Plan Year and for each prior Plan Year during which such
Member was an Employee (regardless of whether the Member was a member
in the Profit-Sharing Plan during any such prior Plan Year): (A) the
product of 1.25 multiplied by the dollar limitation in effect under
section 415(c)(1)(A) of the Code for such Plan Year (determined
without regard to section 415(c)(6) of the Code), or (B) the product
of 1.4 multiplied by the amount which may be taken into account under
section 415(c)(1)(B) of the Code with respect to the Member for the
Plan Year; provided, however, that for Plan Years ending prior to
January 1, 1976 the numerator of such fraction shall in no event be
deemed to exceed the denominator of such fraction, and provided
further that, for any Plan Year ending after December 31, 1982, the
Plan Administrator may elect to compute the Profit-Sharing Plan
Fraction for each Member by applying the transitional rule set forth
in section 415(e)(6) of the Code.
The Retirement Plan Fraction and Profit-Sharing Plan Fraction shall be computed
with regard to the limitation described in section 415(b)(5) of the Code.
(c) Special Rules. For purposes of this Section 7.7, in determining
whether an expected Pension is within the aforesaid limitations, (1) a
Pension which is paid in a form other than a straight life annuity or a
qualified joint and survivor annuity (within the meaning of section 417 of
the Code) shall be adjusted to a benefit which is of Equivalent Actuarial
Value to such Pension, and which is payable in the form of a straight life
annuity (with no ancillary benefits), (2) in the case of a Pension
beginning prior to a Member's Social Security Retirement Age, the Dollar
Limitation applicable to such Pension shall be reduced in accordance with
applicable regulations to an amount which is equal to an annual benefit
which commences at the same time as such Pension, and which is of
Equivalent Actuarial Value to an annual benefit in the amount of the Dollar
Limitation that commences at the Member's Social Security Retirement Age.
The adjustment provided for in the preceding sentence shall be made in such
manner as the applicable regulations may prescribe which is consistent with
the reduction for old age insurance benefits commencing before the Social
Security Retirement Age under the Social Security Act and (3) in the case
of a Pension beginning after the Member's Social Security Retirement Age,
the Dollar Limitation applicable to such Pension shall be increased in
accordance with the applicable regulations to an amount which is equal to
an annual benefit which commences at the same time as such Pension, and
which is of Equivalent Actuarial Value to an annual benefit in the amount
of the Dollar Limitation that commences at Social Security Retirement Age.
(d) Special Transitional Rule for Certain Members. The limitations on
the amount of any Member's Pension prescribed in this Section 7.7 shall be
computed by applying the transitional rules set forth in section 1106(i)(3)
and (4) of P.L. 99-514 and in section 235(g)(3) and (4) of P.L. 97-248.
In the case of a person who was a Member in this Plan prior to September 2,
1974 and was also a Member in the Profit-Sharing Plan as of such prior date, the
sum of such Member's Retirement Plan Fraction and his Profit-Sharing Plan
Fraction may exceed 1.4 (as described in subparagraph (2) of Paragraph G of the
Plan, as in effect on December 31, 1982), if (1) the Member's Retirement Plan
Fraction is not increased, by amendment or otherwise, after September 2, 1974
and (2) no Profit-Sharing Amounts (as defined in the Profit-Sharing Plan) are
contributed to or for the benefit of such Member under the Profit-Sharing Plan
after September 2, 1974.
7.8 Post-Retirement Increase of Benefits of Members Retiring before January
1, 1976. Effective April 1, 1977, the monthly installments of the benefit
payable to each retired Member (including a disabled retiree) who retired on or
before January 1, 1976, or to the spouse or beneficiary of such Member, as the
case may be, shall be increased, as of the April 1 of each year, by an amount
equal to two percent (2%) of the amount of the monthly installment of the
benefit which preceded the first monthly installment of the benefit to which the
increase applies.
7.9 Supplemental Benefit for Certain Retired Members.
(a) Retired Members (including disabled retirees) who retired on or
before January 1, 1979, or the spouses or beneficiaries receiving a benefit
under the Plan on account of such retired Members, shall be entitled to
receive, for each monthly installment of the benefit payable to them under
the Plan on or after November 1, 1980, an additional monthly supplemental
benefit in an amount equal to (1) such monthly installment of the benefit,
including any post-retirement increase described in Section 7.8, multiplied
by (2) the applicable percentage set forth in the following table in
accordance with the Member's last year of employment with the Company or an
Affiliated Company prior to his retirement:
Year of employment
preceding the year
in which he retired Applicable Percentage
1970 and earlier 11%
1971 10%
1972 9%
1973 8%
1974 7%
1975 6%
1976 8%
1977 6%
1978 4%
(b) Retired Members (including disabled retirees) who retired on or
before January 1, 1984, or the spouses or beneficiaries receiving a benefit
under the Plan on account of such retired Members, shall be entitled to
receive, for each monthly installment of the benefit payable to them under
the Plan on or after January 1, 1986, an additional monthly supplemental
benefit in an amount equal to (1) such monthly installment of the benefit,
including any post-retirement increases described in Section 7.8 and
subsection (a) of this Section 7.9, multiplied by (2) the applicable
percentage set forth in the following table in accordance with the Member's
last year of employment with the Company or an Affiliated Company prior to
his retirement:
Year of employment
preceding the year
in which he retired Applicable Percentage
1979 and earlier 5%
1980 4%
1981 3%
1982 2%
1983 2%
(c) Retired Members (including disabled retirees) who retired on or
before January 1, 1990, or the spouses or beneficiaries receiving a benefit
under the Plan on account of such retired Members, shall be entitled to
receive, for each monthly installment of the benefit payable to them under
the Plan on or after January 1, 1990, an additional monthly supplemental
benefit in an amount equal to (1) such monthly installment of the benefit,
including any post-retirement increases described in Section 7.8 and
subsections (a) and (b) of this Section 7.9, multiplied by (2) the
applicable percentage set forth in the following table in accordance with
the Member's last year of employment with the Company or an Affiliated
Company prior to his retirement.
Year of employment
preceding the year
in which he retired Applicable Percentage
1983 and earlier 8.84%
1984 10.69%
1985 8.84%
1986 8.27%
1987 6.22%
1988 4.31%
1989 2.34%
(d) Retired Members (including disabled retirees) who retired before
January 1, 1995, or the spouses or beneficiaries receiving a benefit under
the Plan on account of such retired Members, shall be entitled to receive,
for each monthly installment of the benefit payable to them under the Plan
on or after January 1, 1997, an additional monthly supplemental benefit in
an amount equal to (1) such monthly installment of the benefit, including
any post-retirement increases described in Section 7.8 and subsections (a),
(b) and (c) of this Section 7.9, multiplied by (2) the applicable
percentage set forth in the following table in accordance with the Member's
last year of employment with the Company or an Affiliated Company prior to
his/her retirement.
Year of employment
preceding the year
in which s/he retired Applicable Percentage
Before 1990 7.3%
1990 7.3%
1991 5.9%
1992 4.6%
1993 3.4%
1994 2.2%
After 1994 0%
(e) The minimum monthly supplemental benefit payable under subsection
(a), (b), (c) or (d) of this Section 7.9 shall be $10.00.
(f) A surviving spouse receiving a Spouse's Survivorship Pension under
Paragraph F of Article VIII of the Plan (as in effect on December 31, 1984)
shall receive the supplemental pension provided for in this Section 7.9
computed as though the year in which the member's death occurred was the
year in which retirement occurred.
7.10 Benefit Enhancement for Certain Employees.
(a) The following definitions shall apply for purposes of this
Section:
(1) "Age and Service" shall mean, for any Member, the total of
(i) his number of Years of Service, or, if greater, his number of
units of Credited Service and (ii) his attained age.
(2) "Eligible Member" shall mean a Member who is employed in the
Tax Compliance Department of the Company.
(3) "Enhanced Pension Benefit" shall mean, for any Member, an
increase in the Pension payable under the Plan to the Member by an
amount equal to the excess of (i) the amount by which his Pension
would be increased if five years or units, as applicable, were added
to each of his age, his number of Years of Service and his number of
units of Credited Service, over (ii) the amount by which his Pension
would be increased if he were entitled to have his Pension increased
by an amount which is of Equivalent Actuarial Value to a lump-sum
payment equal to three and two-tenths percent (3.2%) of his annual
base salary for each year of service with an Affiliated Company. The
Enhanced Pension Benefit, the "Equivalent Actuarial Value," and
"lump-sum payment" in clause (ii) of the preceding sentence, shall be
determined as if payment of the Member's Pension were to commence as
of, and shall be based upon the Member's Average Final Compensation,
Years of Service and units of Credited Service as of the date of the
Member's Involuntary Termination. The Enhanced Pension Benefit, as so
determined, shall not be reduced to reflect the early commencement of
payment of the Eligible Member's Pension under Section 7.10(c).
(4) "Involuntary Termination" shall mean the termination of the
Eligible Member's employment by an Affiliated Company in connection
with the elimination of the Tax Compliance Department.
(b) The Pension payable to any Eligible Member shall be increased by
the Enhanced Pension Benefit if (i) the Eligible Member incurs an
Involuntary Termination during the period which begins on January 1, 2000
and ends on June 30, 2000, (ii) his Age and Service equals or exceeds 70 on
the date of his Involuntary Termination, and (iii) he is employed in the
Tax Compliance Department on a full-time basis immediately prior to his
Involuntary Termination.
(c) The Eligible Member may elect to begin payment of the Pension
otherwise payable under the Plan and the Enhanced Pension Benefit as of the
first day of any month that coincides with or follows the date of his
Involuntary Termination. Based on actual Age and Service, if the Eligible
Member qualifies for "early retirement" under Section 7.2(a), his or her
Pension shall be calculated in accordance with Section 7.2(a). If the
Eligible Member does not qualify for "early retirement" under Section
7.2(a) of the Plan, the Pension payable to the Eligible Member will be
calculated pursuant to Section 5.2, actuarially reduced to an amount of
Equivalent Actuarial Value based on the Eligible Member's actual age as of
the Pension Starting Date.
ARTICLE 8
SURVIVORSHIP AND OPTIONAL PENSIONS
8.1 Form of Payment of Pensions. Every Pension payable under Article 5 or 6
to a Member who is not married on his Pension Starting Date shall, unless the
Member elects otherwise in accordance with the provisions of Section 8.2, be
payable in the form of a straight-life annuity payable to the Member only during
his lifetime. Every Pension payable under Article 5 or 6 to a Member who is
married on his Pension Starting Date shall, unless the Member elects otherwise
in accordance with the provisions of Section 8.2, be payable in the form of a
Joint and Survivor Pension which shall be of Equivalent Actuarial Value to the
Pension otherwise payable to the Member computed under the applicable provision
of Article 5 or Article 7.
8.2 Election of Form of Payment of Pension.
(a) Election Period. During the election period commencing on the date
a Member referred to in Section 8.3(a) receives the Notice referred to in
Section 8.3(a) and ending on the Member's Pension Starting Date, (1) a
married Member may, with the consent of his spouse (unless the Plan
Administrator makes a written determination in accordance with the Code and
the applicable regulations that no such consent is required), elect, in
writing on a form furnished by the Plan Administrator, to receive his
Pension in one of the optional forms described in Section 8.4 in lieu of a
Joint and Survivor Pension, and (2) an unmarried Member may elect, in
writing on a form furnished by the Plan Administrator, to receive his
Pension in one of the optional forms of Pension available under Section
8.4, in lieu of payment in the form of a straight-life annuity. No election
shall be effective unless such form has been executed by the Member and
delivered by him to the Plan Administrator during the election period.
During such election period, a Member may revoke his election, without
spousal consent, and such revocation shall not affect the right of the
Member to execute and file a further election with the Plan Administrator
within such election period. After the expiration of such election period,
any election timely filed with the Plan Administrator within such election
period shall become irrevocable, and any election filed thereafter by the
Member shall not be given effect.
(b) Spousal Consent. Any consent that must be provided by the Member's
spouse to the Member's election to receive his Pension in any form other
than the Joint and Survivor Pension must satisfy the following
requirements. Such consent shall be in writing. Such consent shall
acknowledge the effect of such election on the spouse's rights to benefits
under the Plan, and shall be witnessed by a notary public. In addition,
such consent shall state and acknowledge (1) the specific optional form of
payment selected by the Member and (2) where applicable, any non-spouse
Beneficiary designated by the Member. A spouse's consent so furnished shall
be irrevocable, but it shall be effective only with respect to such spouse,
such specific optional form of payment and, where applicable, such
non-spouse Beneficiary.
8.3 Notice to Members of Election of a Form of Payment of Pension.
(a) Notice to Members. No more than 90 days prior to the Member's
Pension Starting Date, the Plan Administrator shall provide such Member
with a notice (the "Notice"). The Notice shall advise the Member as to the
circumstances under which his Pension will become payable, as to the forms
in which it may be paid, as to the material features and relative values
of, and the amounts payable under, such forms and as to all elections that
may be available for the Member to make with respect to the payment of his
Pension, including information as to the eligibility conditions for, and
the time and method of, making such elections. In the case of a married
Member, the notice shall also contain an explanation of (1) the terms and
conditions of the Joint and Survivor Pension, (2) the Member's right to
make, and the effect of, an election to have his Pension paid in a form
other than the Joint and Survivor Pension, (3) the rights of the Member's
spouse in connection with such election, and (4) the Member's right to
make, and the effect of, a revocation of such election. A Member is
entitled to a period of no less than 30 days to consider this information,
but the Committee may permit the Member to waive this right in favor of a
period of seven days, provided the waiver satisfies the requirement of
applicable Treasury regulations.
(b) Member's Request for Further Information. At any time after
receipt of the Notice described above, and no less than 30 days prior to
the expiration of the election period prescribed in Section 8.2, a Member
may file a written request for further information with the Plan
Administrator. The Plan Administrator shall, within 30 days after it has
received such request, provide the Member requesting further information
with a detailed written description of each of the forms in which the
Member's Pension may be paid, and a detailed explanation of the financial
effect of receiving his Pension in each such form, including the monthly
payments which the Member, or his surviving spouse or Beneficiary, would
receive under each such form. A Member shall be entitled to make only one
such request. If a Member has filed a timely request for further
information hereunder, the election period specified in Section 8.2 shall
be extended for a period ending 90 days after the date on which the Plan
Administrator has furnished such Member with the additional information
requested. If the election period is so extended, the actual payment of a
Member's Pension shall not commence until the election period, as so
extended, has expired. However, such extension shall not change the
Member's Pension Starting Date. Any installment of the Member's Pension
that was otherwise due during such extension, based on the Member's Pension
Starting Date, shall be paid, after the expiration of the extended election
period, retroactive to the date on which such installment was otherwise
due, and the amount of such payment shall be determined on the basis of the
form in which the Member's Pension is to be paid under the Plan, taking
into account any election made by the Member during the election period, as
extended, as to the form of his Pension payments.
8.4 Optional Forms of Pensions. Any Member may, in accordance with the
provisions of Section 8.2, elect to receive his Pension in one of the optional
forms of Pension described below:
OPTION 1. A reduced Pension payable to the Member during the Member's
life, and after his death a Pension of 50%, 66-2/3%, 75%, or 100% of the
amount of the Member's reduced Pension payable during the life of, and to,
the Member's spouse on his Pension Starting Date who survives him.
OPTION 2. A reduced Pension payable to the Member during the Member's
life, with payment thereof guaranteed to be made to the Beneficiary
designated by him for a period of 60 or 120 months.
OPTION 3. A straight-life annuity payable to the Member only during
his lifetime.
A Member who elects Option 1 or Option 2 shall specify in his election made
under Section 8.2 the percentage of his reduced annuity that is to be paid to
his surviving spouse under Option 2 or the number of months for which payments
are to be guaranteed under Option 1, as applicable. If the Member elects Option
2, he shall designate on his election form filed under Section 8.2 a Beneficiary
to receive any amounts payable under Option 2 upon his death. If the Member
fails to designate a Beneficiary for such purpose, or if the Beneficiary
designated by the Member for such purpose does not survive him, the Member's
Beneficiary for such purpose shall be his surviving spouse or, if he has no
surviving spouse, his estate.
In the case of a Member who elects to have his Pension paid under Option 2
providing for payments guaranteed for a period certain, and whose death occurs
after such payments have commenced but before he receives the full number of
payments guaranteed under Option 2, the remaining number of such guaranteed
payments shall be paid to his Beneficiary at the same times and in the same
amounts as they were payable to the Member prior to his death. It is provided,
however, that if the Member's estate is his Beneficiary, an amount equal to the
lump sum Equivalent Actuarial Value of any such remaining guaranteed payments
shall be paid to his estate, in a single lump sum cash payment, in lieu of
making any monthly payments to the estate. Such lump sum payment shall be made
as soon as practicable after the Member's death, but no later than by the final
day of the Plan Year immediately following the Plan Year in which the Member
died.
Each such optional form of Pension shall be of Equivalent Actuarial Value
to the Pension to which the Member is otherwise entitled computed under the
applicable provision of Article 5 or Article 7.
8.5 Death of Member's Spouse or Beneficiary. If a Member's spouse or
Beneficiary shall die prior to the date a Member's election under Section 8.2
becomes irrevocable, the Member shall be entitled to revoke such election and to
make such other election under Section 8.2 or to designate such other
Beneficiary as the Member may deem appropriate by filing with the Plan
Administrator a further election or designation of Beneficiary prior to the
expiration date of the election period prescribed in Section 8.2 (as extended,
if applicable, pursuant to Section 8.3). If a Member's spouse or Beneficiary
shall die after the Member has received the first payment under a Joint and
Survivor Pension or other optional form of Pension elected under Section 8.2,
such Pension shall continue in accordance with its terms and the Member's
Pension shall not be increased thereby.
8.6 Level Income Option. In the case of any Member who takes an early
retirement under Section 6.2 (including a Member with a Total Disability who
takes an early retirement under such Section), and whose Pension Starting Date
precedes his 62nd birthday, the Member may elect, by filing a written notice
with the Plan Administrator during the election period described in Section 8.2
with respect to his Pension Starting Date, to have the benefit payments he is to
receive prior to his 62nd birthday increased, and to have the benefit payments
he is to receive after his 62nd birthday reduced, by the amounts determined
under the applicable table in Appendix A hereto, or, if it would produce a
greater benefit, under the interest rate and mortality assumptions provided in
Code Section 417(e). The difference between the amount of the Member's benefit
payments as so increased and the amount of the Member's benefit payments as so
decreased, as determined under such table, shall be approximately equal to the
amount of the old-age Social Security benefit that would be payable to the
Member if payment thereof were to commence as of his 62nd birthday.
8.7 Spouse's Preretirement Survivorship Pension.
(a) In General. If a Member or a Former Member who, after earning a
nonforfeitable right to a Pension, dies before his Pension Starting Date,
his surviving spouse shall be entitled to receive a Spouse's Preretirement
Survivorship Pension.
(b) Commencement of Payments. Payment of a Spouse's Preretirement
Survivorship Pension shall commence (1) in the case of a Member who dies
after his Earliest Payment Date, on the first day of the month immediately
following the month in which the Member died or (2) in any other case, on
the date which would have been the Member's Earliest Payment Date if he had
not died. It is provided, however, that prior to the Member's Normal
Retirement Date (or the date which would have been the Member's Normal
Retirement Date if he had not died), payment may not commence without the
written consent of the Member's surviving spouse, obtained within 90 days
of such commencement. Notwithstanding the foregoing, the payment of the
Spouse's Preretirement Survivorship Pension shall, in all events, commence
no later than by the later of (i) the final day of the Plan Year in which
the Member would have attained age 70 1/2 if he had not died, or (ii) the
final day of the Plan Year following the Plan Year in which he died. If the
surviving spouse dies before payment of the Spouse's Preretirement
Survivorship Pension commences, no such pension shall be payable under this
Section 8.7.
(c) Actuarial Adjustments. In the event that the payment of the
Spouse's Preretirement Survivorship Pension is delayed because of the
surviving spouse's failure to consent to the commencement thereof under
subsection (b) above, the amount of the Spouse's Preretirement Survivorship
Pension payable under this Section 8.7 shall be adjusted so that, as of the
date on which payment of such pension actually commences, it will be of
Equivalent Actuarial Value to the Pension that would have been payable if
payment thereof had commenced on the earliest date on which commencement
was permitted under subsection (b) above.
(d) Lump sum payments. Notwithstanding the above, if, as of the date
of the Member's death, the lump sum Equivalent Actuarial Value of the
Spouse's Preretirement Survivorship Pension does not exceed $5,000 ($3500
prior to January 1, 1998), an amount equal to such lump sum Equivalent
Actuarial Value shall be distributed to the Member's surviving spouse, in a
single lump sum cash payment, in lieu of any Spouse's Preretirement
Survivorship Pension. Such distribution shall be made as soon as
practicable following the Member's death, but no later than by the final
day of the Plan Year immediately following the Plan Year in which the
Member died.
8.8 Distribution requirements.
(a) Notwithstanding any other provision of the Plan, distributions
under the Plan shall comply with the provisions of Section 401(a)(9) of the
Code and Treasury Regulations issued thereunder, including Treas. Reg.
Section 1.401(a)(9)-2, which provisions are hereby incorporated herein by
reference, provided that such provisions shall override the other
distribution provisions of the Plan only to the extent that such other Plan
provisions provide for distribution that is less rapid than required under
such provisions of the Code and Regulations. Nothing contained in this
Subsection shall be construed as providing any optional form of payment
that is not available under the other distribution provision provisions of
the Plan.
(b) Effective January 1, 1997 through December 30, 1999, any Member
who is still employed on December 31 of the year in which he turns age 70
1/2 may elect to begin receiving retirement benefits in the amount that
would have been required under Code Section 401(a)(9), as in effect on
December 31, 1996.
(c) If the Member remains employed by an Affiliated Company after the
calendar year in which he turns 70 1/2 and has not begun to receive his
benefit under the Plan, the Pension payable to a Member upon retirement
shall not be less than the Equivalent Actuarial Value of the Pension that
the Member would have received if the Member had retired on April 1 of the
calendar year in which he attained age 70 1/2, plus the Equivalent
Actuarial Value of any benefits accrued after such date, and reduced by the
Equivalent Actuarial Value of any Pension distributions made to the Member
after such date. The actuarial adjustment required under Section
411(b)(1)(H)(iii)(II) of the Code, or any successor provision, shall be
reduced by the amount of the actuarial adjustment under this Section
8.8(c), as permitted under Code Section 401(a)(9)(C)(iii) and any other
applicable IRS guidance.
8.9 Early Distributions. A Member who is entitled to a deferred vested
Pension under Article 5, or to an early retirement Pension under Section 6.2
(including a Member with a Total Disability who takes an early retirement), and
wishes to elect to have payment of his Pension commence prior to his Normal
Retirement Date may, at any time, notify the Plan Administrator that he wishes
to make such an election. Upon receiving such notification, the Plan
Administrator shall furnish the Member with a written explanation of the
Member's right to elect to have payments commence prior to his Normal Retirement
Date, and the effect of any such election. After receipt of such explanation,
the Member may make the election to have the payment of his Pension commence by
filing with the Plan Administrator a written notification specifying the date on
which the Member wishes to have the payments commence. The payment commencement
date specified by the Member must be the first day of any month which is no more
than 90 days after the date on which the Plan Administrator furnishes the Member
with the written explanation described above. A Member is entitled to a period
of at least 30 days to consider this information, but the Committee may permit
the Member to waive this right in favor of a period of 7 days, provided the
waiver satisfies the requirements of applicable Treasury regulations. If the
Member is married on such payment commencement date, and his Pension is to be
paid in a form other than the Joint and Survivor Pension, the Member's election
to have Pension payments commence prior to his Normal Retirement Date shall be
accompanied by the written, notarized consent of his spouse to such payment
commencement date (unless the Plan Administrator makes a written determination
in accordance with the Code and regulations that no such consent is required).
Any election so made shall be irrevocable.
8.10 Direct Rollovers. This Section 8.10 applies to any distribution made
by the Plan on or after January 1, 1993, to the extent that such distribution is
an "Eligible Rollover Distribution". Notwithstanding any provision of the Plan
to the contrary, the "Payee" of any Eligible Rollover Distribution may elect, at
the time and in the manner prescribed by the Plan Administrator, to have all or
any portion of such distribution paid as a "Direct Rollover" to an "Eligible
Retirement Plan" specified by the Payee.
For the purpose of this Section 8.10, the following definitions shall
apply. The term "Eligible Rollover Distribution" shall have the same meaning as
such term has under section 402(c)(4) of the Code and the applicable Treasury
regulations, and, in general, shall mean any lump sum distribution of a benefit
under the Plan, other than the portion, if any, of such distribution which is
required to be made under section 401(a)(9) of the Code. The term "Eligible
Retirement Plan" shall mean an individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described in
section 408(b) of the Code, a qualified annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of the Code, that
will accept a Direct Rollover of the Payee's distribution. However, if the Payee
is the surviving spouse of a Member, only an individual retirement account or
individual retirement annuity described above shall be treated as an Eligible
Retirement Plan. The term "Payee" shall mean any person who is entitled to
receive a distribution from the Plan, and who is a Member, the surviving spouse
of a Member, or the spouse or former spouse of a Member who is entitled to
receive the distribution as the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code. The term "Direct
Rollover" shall mean a direct payment of a distribution by the Plan to the
Eligible Retirement Plan specified by the Payee, made in accordance with section
401(a)(31) of the Code and the Treasury regulations and Internal Revenue Service
rulings and notices thereunder, and made in such manner as prescribed by the
Plan Administrator.
ARTICLE 9
CERTAIN RIGHTS AND LIMITATIONS
9.1 Benefits Payable Solely from Trust Fund. All benefits payable under
this Plan shall be paid or provided for solely from the Trust Fund, and no
Participating Company in the Plan shall have any liability or responsibility
therefor.
9.2 Prohibition against Alienation of Benefits. Except insofar as may
otherwise be required by law or pursuant to the terms of a Qualified Domestic
Relations Order (as defined below), no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void; nor shall
any such benefit be in any manner liable for or subject to garnishment,
attachment, execution or levy, or liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person entitled to such benefit; and in
the event that the Plan Administrator shall find that any Former Member, spouse
or Beneficiary has become bankrupt or has attempted to anticipate, alienate,
sell, transfer, assign, pledge, encumber or charge any benefits under the Plan,
then payment of such benefit shall, in the discretion of the Plan Administrator,
cease and terminate, and in that event the Plan Administrator shall hold or
apply the same to or for the benefit of such Former Member, spouse, or
Beneficiary or the children or other dependents of the same, in such manner and
in such proportions as the Plan Administrator may deem proper, and any such
application shall be a complete discharge of all liabilities of the Plan and the
Trustee therefor. For purposes of this Section 9.2, a "Qualified Domestic
Relations Order" means any judgment, decree, or order (including approval of a
property settlement agreement) which has been determined by the Plan
Administrator, in accordance with procedures established under the Plan, to
constitute a qualified domestic relations order within the meaning of section
414(p)(1) of the Code.
Notwithstanding any provision of the Plan to the contrary, the Plan shall
honor a judgment, order, decree or settlement providing for the offset of all or
part of a Participant's benefit under the Plan, to the extent permitted under
Code Section 401(a)(13)(C); provided that the requirements of Code Section
401(a)(13)(C)(iii) relating to the protection of the Participant's spouse (if
any) are satisfied.
9.3 Incompetency. In the event that the Plan Administrator shall find that
a Member or other person entitled to a benefit under the Plan is unable to care
for his affairs because of illness or accident or because he is a minor, the
Plan Administrator may direct that any benefit payment due him, unless claim
shall have been made therefor by a duly appointed guardian, committee or other
legal representative, be paid to a spouse, child, parent or other blood relative
of such person or to anyone found by the Plan Administrator to have incurred
expense for the support and maintenance of such person, and any such payment so
made shall be a complete discharge of all liabilities of the Plan and Trustee
therefor.
9.4 No Right to Continued Employment. The establishment and continuation of
the Plan shall not confer any legal rights upon any Member or any person to
continued employment, nor shall such establishment or continuation interfere
with the rights of a Participating Company to discharge any Member and to
otherwise treat him without regard to the effect which such discharge might have
upon him as a Member.
9.5 Payment of Taxes. The Trustee shall have the right to deduct and
withhold from any benefit which it is otherwise obligated to pay under Article 5
or Article 6 any amount which it may be required to deduct or withhold pursuant
to any applicable statute, law, regulation or order of any jurisdiction
whatsoever. The Trustee shall not be required to pay any benefit to the spouse
or Beneficiary of any deceased Member pursuant to Article 8 until such spouse or
Beneficiary or the legal representatives of the deceased Member shall have
furnished the Trustee with evidence satisfactory to the Trustee of the payment
or the provision for the payment of any estate, transfer, inheritance or death
taxes which may be payable with respect thereto.
9.6 Merger or Consolidations with Other Plans. In the event that the Plan
is merged or consolidated with any other plan, or in the event of any transfer
of assets or liabilities of the Plan to any other plan, the benefit which each
Member would be entitled to receive if the Plan terminated immediately after
such merger, consolidation or transfer shall be at least equal to the benefit
which he would have been entitled to receive if the Plan had terminated
immediately before the merger, consolidation or transfer.
Moreover, the Company reserves the right, in its capacity as sponsor of the
Plan, to direct that Members' accrued benefits under the Plan be spun off and
transferred to a qualified plan maintained by the buyer in any transaction
involving the sale of assets of the Company, an Affiliated Company, or the sale
of a subsidiary of the Company, or an Affiliated Company, if such Members are
employed in the subsidiary that is being sold or in the division or operating
unit from which the assets are being sold. If such transfer of Members' accrued
benefits occurs, any Member who becomes employed by the buyer or an affiliate of
the buyer shall not be deemed to have retired or otherwise incurred a
termination of employment for purposes of Article 7 of the Plan, and any future
rights to distributions of transferred accrued benefits shall be determined
solely under the term of the plan to which the accrued benefits are transferred.
9.7 Purchase of Annuities. The Committee is authorized, in its sole
discretion, to direct the Trustee to provide for the payment of any Pension or
other benefit under the Plan through the purchase of one or more annuity or
other contracts from any established legal reserve life insurance company doing
business in the State of New York. The proceeds of any such contract shall be
paid directly to the Member, spouse or Beneficiary entitled thereto. The
ownership of the contract shall, however, be vested exclusively in the Trustee
who shall hold the same in trust for the benefit of the designated Member,
spouse or Beneficiary and the Trustee shall have the power to exercise all
rights, privileges and options contained therein and to agree with the insurance
company to any release, reduction, modification or amendment thereof.
9.8 Periods of Liquidity Shortfall. During any period for which the Plan
has a "liquidity shortfall", as defined in sections 401(a)(32)(C) and 412(m)(5)
of the Code, the Plan shall not make the following benefit payments: (a) with
respect to any benefit payable under the Plan for which the "annuity starting
date", as defined in Code section 417(f)(2), occurs during such period, any
benefit payment in excess of the monthly amount of the payment of such benefit
that would have been made if such benefit were being paid as an actuarially
equivalent single life annuity (plus the monthly amount of any Social Security
supplement described in the last sentence of Code section 411(a)(9)); (b) any
payment out of the Trust Fund for the purchase of an irrevocable commitment from
an insurer to pay a benefit under the Plan; and (c) any other payment specified
by the Secretary of the Treasury by regulation under Code section
401(a)(32)(B)(iii).
ARTICLE 10
CONTRIBUTIONS
10.1 Manner of Funding. The benefits provided by this Plan shall be paid
from the Trust Fund managed by the Trustee, to which the Participating Companies
shall contribute in accordance with the provisions of this Article 10. No Member
shall be required or permitted to make any contributions to the Trust Fund. Each
Participating Company's contribution to the Trust Fund for each Plan Year (a)
shall be accrued during the taxable year of the Participating Company which ends
coincident with such Plan Year, (b) except to the extent that earlier payment is
required under Section 10.3, shall be paid by the Participating Company to the
Trustee not later than by the date it is required to file its Federal income tax
return for such taxable year or by the last day of any extension thereof and (c)
is conditioned on its deductibility for Federal income tax purposes.
10.2 Nature of Obligation. It is the intention of each Participating
Company to continue the Plan indefinitely and to contribute to the Trust Fund
over a period of time such amounts as are sufficient to satisfy the full
actuarially computed cost of providing the Pensions payable under the Plan in
respect of the Members employed by the Participating Company in accordance with
generally accepted actuarial principles adopted by the Committee with the advice
of its actuaries. Nevertheless, subject to Section 10.3 below, each
Participating Company reserves the right to suspend such contributions from time
to time or to discontinue them altogether.
10.3 Minimum Funding Standard. During the continuance of this Plan with
respect to a Participating Company, the Participating Company shall, at such
times as shall be prescribed by the Investment Committee, make such
contributions to the Plan as shall be required to satisfy its share, as
determined by the Investment Committee, of the contributions required to meet
the minimum funding standards prescribed under section 412 of the Code,
provided, however, that a Participating Company shall not contribute to the
Trust Fund any amounts which are or may not be deductible from income under
section 404(a) of the Code.
10.4 Effect of Forfeitures. Any excess funds resulting from the termination
of any Member's employment under circumstances that do not entitle the Member,
or his spouse or Beneficiary, to a Pension or other benefit under the Plan,
shall not be applied to increase the benefits payable to any other Member,
spouse or Beneficiary, but shall remain in the Trust Fund and shall have the
effect of reducing the amount of any subsequent contributions to be made by each
Participating Company by which such Member was employed.
10.5 Non-Diversion. Prior to the satisfaction of all liabilities with
respect to Members and their spouses and Beneficiaries under the Plan, it shall
be impossible at any time for any part of the Trust Fund to be used or diverted
to purposes other than the exclusive purposes of providing benefits to Members
and their spouses and Beneficiaries, and paying the reasonable expenses of the
Plan and the Trust as determined by the Investment Committee, except under the
following circumstances:
(a) In the case of a contribution which is made by a Participating
Company by mistake of fact, such contribution shall revert to the
Participating Company within one year after the payment of the
contribution.
(b) Each contribution which a Participating Company makes under the
Plan is so made subject to the condition that such contribution is
deductible under section 404 of the Code. To the extent a deduction under
section 404 of the Code for a contribution by a Participating Company to
the Plan is disallowed, such contribution shall revert to such
Participating Company within one year after the disallowance of the
deduction.
ARTICLE 11
ADMINISTRATION OF THE PLAN
11.1 Appointment of the Committee. The Board of Directors shall appoint a
Committee, which shall consist of not less than three nor more than six officers
of the Company or any Participating Companies, all to be appointed by the Board
of Directors and to serve at the pleasure of the Board of Directors. Any vacancy
in the Committee arising by death, resignation or otherwise shall be filled by
the Board of Directors.
11.2 Duties and Powers of Committee. The Committee shall be responsible for
the control and management of the operation and administration of the Plan and
the proper execution of its provisions, except as to those powers, duties and
responsibilities hereinafter assigned to the Plan Administrator, and except as
to those powers and responsibilities hereinafter reserved or granted to the
Investment Committee, the Trustee or to the Board of Directors. The Committee
shall be a "named fiduciary" of the Plan within the meaning of section 402(a) of
ERISA.
The Committee shall appoint a person or persons to serve as Plan
Administrator in accordance with Section 11.9 below, and shall periodically
review the performance of any such persons. It shall also (a) settle
periodically the accounts of the Trustee; (b) perform such other duties and
responsibilities as are specifically assigned to the Committee under the Plan;
and (c) retain such counsel and employ such accounting, actuarial, clerical and
other such assistants as in its judgment may from time to time be required for
the proper performance of its duties and the duties of the plan Administrator
hereunder.
11.3 Appointment of Investment Committee. The Board of Directors shall
appoint an Investment Committee, which shall consist of not less than five nor
more than seven officers of the Company or any Participating Companies, all to
be appointed by the Board of Directors and to serve at the pleasure of the Board
of Directors. Any vacancy in the Investment Committee arising by death,
resignation or otherwise shall be filled by the Board of Directors.
11.4 Conduct of Affairs of Investment Committee. The Investment Committee
shall hold such meetings upon such notice at such place or places and at such
times as it may from time to time deem appropriate. The Investment Committee may
act by a majority of its members in office from time to time. The action of such
majority may be taken at a meeting of the Investment Committee or pursuant to
written consent of such majority without a meeting. The Board of Directors shall
appoint one of the Investment Committee members to act as Chairman, and a
different person, who may but need not be a member of the Investment Committee,
shall be appointed by the Board of Directors, or may be elected or appointed by
the Investment Committee, to act as Secretary. It may authorize any one or more
of its members to execute and deliver any documents on behalf of the Investment
Committee.
11.5 Duties and Powers of Investment Committee. The Investment Committee
shall establish for the Plan a funding policy, within the meaning of section
402(b)(1) of ERISA, and shall communicate the same to the Trustee. It shall also
(a) review and suggest revisions from time to time to the actuarial tables and
rates of interest to be used in all actuarial calculations which are or may
hereafter be required in connection with the Plan; (b) perform such other duties
and responsibilities as are assigned to the Investment Committee under the Plan:
and (c) retain such counsel and investment advisers and employ such accounting,
actuarial, clerical and other such assistants as in its judgment may from time
to time be required for the proper performance of its duties.
11.6 Reports to Company. Within a reasonable time after the close of each
Plan Year, the Investment Committee shall prepare a report showing in reasonable
detail the assets of the Plan held by the Trustee and the liabilities of the
Plan and giving a brief account of the operation of the Plan for the prior Plan
Year, which report shall be submitted to the Board of Directors and the Board of
Directors of each Participating Company.
11.7 Conduct of Affairs of Committee. The Committee shall hold such
meetings upon such notice at such place or places and at such times as it may
from time to time deem appropriate. The Committee may act by a majority of its
members in office from time to time. The action of such majority may be taken at
a meeting of the Committee or pursuant to written consent of such majority
without a meeting. The Board of Directors shall appoint one of the Committee
members to act as Chairman, and a different person, who may but need not be a
member of the Committee, shall be appointed by the Board of Directors, or may be
elected or appointed by the Committee, to act as Secretary. It may authorize any
one or more of its members to execute and deliver any documents on behalf of the
Committee.
11.8 Actuarial Valuations. As an aid to the Investment Committee in fixing
the rates of contributions payable under the Plan, the actuary designated by the
Investment Committee shall make annual actuarial valuations of the assets and
liabilities of the Plan, and shall submit to the Investment Committee the rates
of contribution which he recommends for use. The Investment Committee shall
maintain accounts showing the financial status of the Plan, and shall keep in
convenient form such data as may be necessary for actuarial valuations of the
Plan.
11.9 Appointment of the Plan Administrator. The Committee shall appoint a
person or persons to serve as Plan Administrator. The Committee shall determine
the number of persons who shall serve as Plan Administrator, and it may remove
and replace any persons it has appointed to so serve in its sole discretion.
11.10 Duties and Powers of the Plan Administrator. The Plan Administrator
shall have the powers, duties and responsibilities set forth below with respect
to the Plan. The Plan Administrator shall be deemed to be the "administrator" of
the Plan for purposes of section 3(16)(A) of ERISA, and is also designated the
"plan administrator" of the Plan within the meaning of section 414(g) of the
Code.
The Plan Administrator shall be responsible, and have full discretionary
authority, for the construction of the Plan and the determination of all
questions arising hereunder, including, without limitation, questions of fact.
It shall maintain all necessary books of accounts and records. In furtherance of
the foregoing, the Plan Administrator shall have the sole power and
responsibility:
(a) to interpret the provisions of the Plan (including, without
limitation, by supplying omissions from, correcting deficiencies in, or
resolving inconsistencies or ambiguities in, the language of the Plan),
(b) to establish, interpret, enforce, amend and revoke from time to
time such rules and regulations for the administration of the Plan and the
conduct of its business as it deems appropriate, provided such rules and
regulations are uniformly applicable to all persons similarly situated,
(c) to determine the eligibility of persons for membership in the
Plan, and to effect the retirement of Members,
(d) to receive elections by Members as to optional forms of benefit
payments,
(e) to determine the entitlement of Members, Former Members and their
spouses and their Beneficiaries to benefits under the Plan and the amount
of such benefits (including, to the extent necessary, making any factual
findings with respect thereto), and, in accordance with the claims
procedure set forth in Section 11.15, to decide any disputes which may
arise relative to the rights of the Members, Former Members, and their
spouses and Beneficiaries, with respect to such benefits,
(f) to direct the Trustee to pay out of the Trust Fund all amounts
which are payable hereunder to Members, Former Members or their surviving
spouses or Beneficiaries,
(g) to keep all appropriate records and data pertaining to the
interests of the Members, Former Members and their spouses and
Beneficiaries in the Plan,
(h) to file all such reports with the appropriate governmental
departments and agencies and to disclose such information to the Members,
Former Members and their spouses and Beneficiaries with respect to the Plan
as may be required under the provisions of the Code and ERISA as the same
may apply to plan administrators, and
(i) to perform such other duties and responsibilities as are
specifically assigned to the Plan Administrator under the Plan.
Any action which the Plan Administrator is required or authorized to take shall,
to the extent permitted by applicable law, be final and binding upon each and
every person who is or may become interested in the Plan or Trust Fund.
11.11 Delegation of Responsibilities by the Plan Administrator. The Plan
Administrator may delegate the following duties and responsibilities to one or
more Employees:
(a) application of Plan provisions to determine eligibility for
membership or benefits,
(b) preparation and distribution of communications to Members, Former
Members and their spouses and Beneficiaries,
(c) maintenance of compensation and employment records,
(d) preparation of reports and applications required by governmental
agencies,
(e) calculations of service, compensation, credit and benefits,
(f) orientation of new Members, advising Members, Former Members and
their spouses and Beneficiaries of their rights and options under the Plan
and monitoring completion of application, election and benefit forms by
Members, Former Members and their spouses and Beneficiaries,
(g) monitoring collection of contributions and proper application of
the contributions to effectuate the purposes of the Plan,
(h) preparation of reports concerning benefits,
(i) initial processing of claims,
(j) making recommendations to the Plan Administrator with respect to
the merits of claims and the administration of the Plan, and
(k) any other of its duties or responsibilities which the Plan
Administrator determines are administrative or ministerial in nature and
are designed to implement a policy, interpretation, system, practice or
procedure established by the Plan Administrator.
If any duties or responsibilities are delegated to any Employee pursuant to this
Section 11.11, the Plan Administrator shall periodically review the performance
of such Employee. Depending upon the circumstances, this requirement may be
satisfied by a formal review by the Plan Administrator at such time or times as
the Plan Administrator in its discretion may determine, through day-to-day
contact and evaluation or in any other manner determined to be appropriate by
the Plan Administrator.
11.12 Conduct of Affairs of the Plan Administrator. The Plan Administrator
shall meet periodically at such place or places and at such times as it may from
time to time deem appropriate. The Plan Administrator may act by a majority of
the persons serving as Plan Administrator from time to time. The action of such
majority may be taken at a meeting of the Plan Administrator or pursuant to
written consent of such majority without a meeting. It shall elect from time to
time one of the persons serving as Plan Administrator to act as Chairman and a
different person, who may but need not be a person serving as Plan
Administrator, to act as Secretary. It may authorize any one or more of the
persons serving as Plan Administrator to execute and deliver any documents on
behalf of the Plan Administrator.
11.13 Expenses and Liability. Expenses incurred in the administration of
the Plan and Trust Fund, including fees for legal, accounting and actuarial
services, all taxes levied or assessed against the Plan and Trust Fund,
insurance premiums payable to the Pension Benefit Guaranty Corporation and such
other expenses incurred in the administration of the plan and Trust Fund shall
be paid from the Trust Fund, unless paid by the Company or by a Participating
Company. The members of the Committee and the Investment Committee, and the
persons serving as Plan Administrator, shall serve without compensation for
their services as such, but shall be reimbursed by the Company for any expenses
they may individually or collectively incur in the performance of their duties
hereunder. No bond or other security shall be required of any member of the
Committee or Investment Committee, or of any person serving as Plan
Administrator, unless such member or person handles the funds or other property
of the Plan or trust established hereunder as provided in section 412 of ERISA.
The Committee, the Investment Committee and every member thereof, and the
Plan Administrator and all persons serving as such, shall perform its and their
duties with respect to the Plan solely in the interest of the Members, Former
Members, their spouses and Beneficiaries for the exclusive purpose of providing
benefits under the Plan to the same and defraying the reasonable expenses of
administering the Plan, with the care, skill, prudence and diligence under the
circumstances then prevailing that prudent men acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims, and in accordance with the provisions of this
Plan. No member of the Committee or the Investment Committee, and no person
serving as Plan Administrator, shall be personally liable for anything done or
omitted to be done by him unless it shall have been judicially determined that
such member or person failed to perform his duties under the Plan in the manner
described herein above.
No member of the Committee or the Investment Committee,, and no person
serving as Plan Administrator, shall be personally liable for any act or
omission of any other individual that constitutes a breach of such individual's
duties hereunder unless it shall have been judicially determined that such
member or person (a) knowingly participated in, or knowingly undertook to
conceal, such act or omission, knowing such act or omission constituted a breach
of such individual's duties hereunder, (b) enabled such act or omission to be
committed by failing to exercise the above described degree of care, skill,
prudence and diligence, or (c) had knowledge of such act or omission and failed
to take reasonable efforts under the circumstances to remedy the breach.
No member of the Committee shall be liable for any act or omission of the
Committee, or of any other member thereof, occurring before such member became,
or after such member ceased to be, a member of the Committee. No member of the
Investment Committee shall be liable for any act or omission of the Investment
Committee, or of any other member thereof occurring before such member became or
after such member ceased to be, a member of the Investment Committee. No person
serving as Plan Administrator shall be liable for any act or omission of the
Plan Administrator, or of any other person serving as Plan Administrator,
occurring before such person began, or after such person ceased, to serve as
Plan Administrator.
No member of the Committee shall be personally liable for any act or
omission of any person appointed to serve as Plan Administrator in accordance
with Section 11.9 unless it shall have been judicially determined that (1) the
Committee failed to act with the above described degree of care, skill, prudence
and diligence in appointing such person to serve as Plan Administrator or in
continuing such appointment, or (2) the Committee or any member thereof
knowingly participated in, or knowingly undertook to conceal, such act or
omission knowing such act or omission constituted a breach of duty by such
person. No person serving as Plan Administrator shall be personally liable for
any act or omission of an Employee to whom any duty or responsibility was
delegated by the Plan Administrator in accordance with Section 11.11 unless it
shall have been judicially determined that (i) the Plan Administrator failed to
act with the above described degree of care, skill, prudence and diligence in
selecting such Employee or in continuing such delegation to such Employee, or
(ii) the Plan Administrator or any person serving as such knowingly participated
in, or knowingly undertook to conceal, such act or omission, knowing such act or
omission constituted a breach of the Employee's duties.
11.14 Indemnification of Committee and Investment Committee Members and
Persons Serving as Plan Administrator. The Company may, to the maximum extent
permitted under applicable law, indemnify each member of the Committee and the
Investment Committee, and each person serving as Plan Administrator, from and
against any and all claims, actions, demands, losses, damages, expenses and
liabilities arising from any act or omission of such member or person with
respect to the performance of his duties hereunder and for which such member or
person is not reimbursed or otherwise made whole under any contract or contracts
of insurance. Such indemnification shall include attorneys' fees and all other
costs and expenses reasonably incurred by such member or person in defense of
any claim or action brought or asserted against him arising from such act or
omission. Notwithstanding the foregoing, the Company shall not indemnify any
member of the Committee or the Investment Committee, or any person serving as
Plan Administrator, with respect to any claims, actions, demands, losses,
damages, expenses and liabilities arising from any act or omission of such
member or person with respect to the performance of his duties hereunder if such
act or omission is deemed by the Company to constitute gross negligence, willful
misconduct, criminal conduct or dealing with the Plan or the trust established
hereunder for his own benefit or for his own account.
11.15 Claims Procedure. A Member, Former Member, Member's spouse or
Beneficiary may claim any benefits under this Plan which such person believes is
properly payable pursuant to the provisions of the Plan by filing an application
therefor. Such claim shall be filed, on a form approved by the Plan
Administrator, with the Company's Vice President, Personnel. A copy of the claim
shall promptly be transmitted to the Secretary of the Plan Administrator, and
shall be considered by the Company's Vice President, Personnel, within 90 days
of the date on which he received the claim. If the claim is denied in full or in
part, the claimant shall be given written notice setting forth, in a manner
calculated to be understood by the claimant, (a) the specific reason or reasons
for such denial, (b) specific reference to the pertinent provision or provisions
of the Plan upon which such denial was based, (c) a description of any
additional information, documentation or other material necessary for the
claimant to perfect his claim and an explanation as to why such information,
documentation or material is required, and (d) an explanation of the procedure
for obtaining a review of the denial of the claim.
The claimant or his duly authorized representative may request a review of
the denial of the claim by filing with the Secretary of the Plan Administrator a
written request for review within, and only within, the period of 60 days
commencing with the date the denial of the claim was received by the claimant.
The claimant and his duly authorized representative shall be given a reasonable
opportunity to review the documents of the Plan and trust agreement executed
thereunder and to submit their written issues and comments to the Plan
Administrator at any time prior to the expiration of the aforesaid 60 day
period.
Within the period of 60 days starting on the date a request for review of a
denial of claim is received by the Plan Administrator, the Plan Administrator
shall consider the request and post its final decision to the claimant by
registered or certified mail. In the event that the Plan Administrator in its
sole discretion determines that the case presents special circumstances, such as
the need for a hearing, requiring an extension of time for processing the
request for review, the Plan Administrator shall notify the claimant in writing,
prior to the end of the initial 60 day review period, of the need for such
extension, and shall post its final decision to the claimant by registered or
certified mail not later than 120 days after the date on which the request for
review was received by the Plan Administrator. Such final decision shall be in
writing, shall be written in a manner calculated to be understood by the
claimant, and shall fully set forth the reason or reasons for the decision, with
specific references to the pertinent provisions of the Plan upon which the
decision was based.
To the extent that a named fiduciary, as this term is defined under ERISA
Section 402(a)(2), is appointed to conduct the review procedure described above,
such named fiduciary shall have the same powers to interpret the Plan and make
factual findings with respect thereto as are granted to the Plan Administrator
under Article 11 hereof.
ARTICLE 12
MANAGEMENT OF THE TRUST FUND
12.1 The Trustee. The Trust Fund shall be administered by United States
Trust Company of New York, as Trustee, under a trust agreement, and by such
additional or successor Trustee as may be designated by the Board of Directors
or pursuant to said trust agreement.
12.2 The Trust Agreement. The Company shall establish a trust under the
Plan pursuant to which the assets of the Plan shall be held and administered.
The terms and conditions of the trust agreement shall be determined by the Board
of Directors and may be amended by the same from time to time pursuant to
Article 13, provided that at all times it must be impossible under the terms of
said agreement for any part of the trust corpus or income to be used for, or
diverted to, purposes other than for the exclusive benefit of the Members,
Former Members and their spouses and Beneficiaries and for defraying the
reasonable expenses of administering the Trust Fund. Said trust agreement shall
be deemed to form part of this Plan, and any and all rights or benefits which
may inure to any person under this Plan shall be subject to all the terms and
conditions of said agreement. The Trustee shall have the exclusive authority and
discretion to manage and control the assets of the trust, and shall exercise in
its absolute and sole discretion the powers and duties provided under the terms
of the trust agreement, including the power to invest and reinvest the principal
and income of the trust, without the prior authorization or consent of the
Committee, the Investment Committee, the Plan Administrator, any court or any
other person or persons.
12.3 Compensation and Expenses. The compensation of the Trustee and all
expenses incurred in the administration of the trust shall be paid by the
Participating Companies.
ARTICLE 13
AMENDMENT AND TERMINATION
13.1 Amendment of Plan and Trust. Subject to the provisions hereinafter set
forth, the Company reserves the right at any time and from time to time by
action of its Board of Directors to modify or amend in whole or in part any or
all of the provisions of this Plan and the trust agreement executed pursuant to
Article 12 and delegates to the Committee the authority to modify or amend the
Plan where such modification or amendment is either (a) necessary or appropriate
to facilitate the administration, management and interpretation of the Plan or
to conform the Plan thereto, or (b) necessary or appropriate to qualify or
maintain the Plan and Trust as a plan and trust meeting the requirements of
sections 401(a) and 501(a) of the Code, respectively, or any other applicable
section of law and regulations, provided that, in either case, any such
modification or amendment adopted by the Committee shall not materially increase
the cost to the Participating Companies of maintaining the Plan. Notwithstanding
the previous sentence, if a change in control occurs (as defined in Section
13.2) the provisions in Section 13.2 relative to the disposition of any balances
remaining in the Trust Fund and the definition of change in control therein
shall not be subject to any amendment, change, substitution, deletion or
revocation (except as may be necessary pursuant to clause (b) of this Section
13.1) in any respect whatsoever. No modification or amendment may be made which
by reason thereof shall (1) deprive any Former Member or other person receiving
a Pension, without his consent, of any benefits under the Plan to which he would
otherwise be entitled, or (2) adversely affect the right of any Member, in the
event that the Plan is terminated, to participate in the assets of the Plan at
termination to the extent and in the manner provided in this Article without his
consent, and provided that no such modification or amendment shall make it
possible for any part of the assets of the Plan, except amounts resulting from
erroneous actuarial computations, to be used for, or diverted to, purposes other
than for the exclusive purposes of providing benefits to Members, Former
Members, their spouses or Beneficiaries, and paying the reasonable expenses of
the Plan and the Trust as determined by the Committee, prior to the satisfaction
of all liabilities with respect to such persons under the Plan.
13.2 Termination of Plan. The Board of Directors may terminate the Plan for
any reason at any time (subject to the requirements of section 4041 of ERISA)
and any Participating Company may withdraw from participation in the Plan and
discontinue contributions under the Plan for any reason at any time. If the Plan
is terminated, the Trust Fund shall be used for defraying the reasonable
expenses of the Trust Fund and for the exclusive benefit of the Members, Former
Members and their spouses and Beneficiaries as of the date of such termination.
In the event of the complete or partial termination of the Plan, the rights of
all Members, if the Plan is completely terminated, and the rights of Members
affected by a partial termination, if the Plan is partially terminated, to
benefits accrued to the date of such termination or partial termination, to the
extent then funded, shall be nonforfeitable, and that portion of the Trust Fund
which is attributable to the interests of such Members and their spouses and
Beneficiaries, as determined by the Committee with the advice of the actuaries
of the Plan, shall be held for the benefit of such Members and shall be used for
the exclusive benefit of such Members, their spouses and Beneficiaries and shall
be applied in accordance with the provisions of this Article.
A complete termination of the Plan shall be made in accordance with either
the requirements and procedures for a "standard termination" set forth in
section 4041(b) of ERISA or the requirements and procedures for a "distress
termination" set forth in section 4041(c) of ERISA.
In the event of the complete termination of the Plan, all expenses
attributable to the liquidation and distribution of the Trust Fund shall be paid
or provided for out of the assets of the Trust Fund. After the payment or the
provision for the payment of such expenses has been completed, the remaining
assets of the Trust Fund (subject to the limitations prescribed in Section 13.3
below, if applicable) shall be converted into cash and shall be allocated to and
among and paid over to the Members, Former Members, their spouses and
Beneficiaries in accordance with the requirements of sections 4041 and 4044 of
ERISA and the regulations thereunder in complete discharge of all liability of
such Participating Company or Companies and the Trustee for the benefits payable
under this Plan. After the complete satisfaction of all liabilities to such
Members, Former Members, their spouses and Beneficiaries, any balances remaining
in the Trust Fund because of erroneous actuarial computations shall be returned
to the Participating Company or Companies in proportion to its or their
aggregate contributions to the Trust Fund; provided, however, that in the event
the Plan is terminated within four years following a "change in control" (as
such term is defined below) any surplus balances remaining in the Trust Fund
shall not be returned to the Participating Company or Companies but shall be
immediately contributed to the United States Trust Company of New York and
Affiliated Companies Executive Compensation Trust to be used for the benefit of
employees participating in the Retirement Plan.
For purpose of this Section 13.2 "change in control" means that any of the
following events has occurred after the "Closing Date", as defined in Section
1.2 of the Merger Agreement:
(a) twenty percent (20%) or more of the common shares of the
Corporation, as hereinafter defined, has been acquired by any person (as
defined by Section 3(a)(9) of the Securities Exchange Act of 1934) other
than directly from the Corporation;
(b) there has been a merger or equivalent combination after which 49%
or more of the voting stock of the surviving corporation is held by persons
other than former shareholders of the Corporation; or
(c) twenty percent (20%) or more of the directors elected by
shareholders to the Board of Directors of the Corporation are persons who
were not nominated by management in the most recent proxy statement of the
Corporation;
provided, however, that notwithstanding anything herein to the contrary no
change in control shall be deemed to have occurred to the extent that the Board
of Directors otherwise directs by resolution adopted prior to the change in
control, or not later than 45 days after the change in control (if the
percentage of common shares acquired or directors elected under clause (a) or
(c) of the definition of change in control shall be at least twenty percent
(20%) but less than twenty-five percent (25%)). For these purposes, the term
"Corporation" shall mean U.S. Trust Corporation.
In the event of a partial termination of the Plan, the benefits payable to
or on behalf of all affected Members shall be computed and paid in accordance
with the provisions of Articles 5, 6, 7 and 8, except that, if such partial
termination is attributable to a withdrawal from participation in the Plan by a
Participating Company under Section 14.2, then the interests of the affected
Members employed by such Company, and their spouses and Beneficiaries, shall be
provided for as described in Section 14.2.
13.3 Special Limitation for Highly Compensated Employees. The benefit
payable under the Plan to, or with respect to, any Highly Compensated Employee,
or any Highly Compensated Former Employee, as such terms are defined under
section 414(q) of the Code and the regulations thereunder (referred to below as
an "HCE"), shall be limited as set forth below:
(a) Each Plan Year, the benefit payments made under the Plan to, or
with respect to, any HCE, if not being paid in the form of a straight life
annuity, shall be limited to the payments that would be so made if the
benefit was being paid as an actuarially equivalent straight life annuity.
However, the preceding sentence shall not apply in any Plan Year with
respect to which at least one of the requirements set forth in Treas. Reg.
Sec. 1.401(a)(4)-5(b)(3)(iv) is satisfied.
(b) The limitation in subsection (a) above shall not apply to, or with
respect to, an HCE for any Plan Year during which such HCE is not in the
group consisting of the top 25 nonexcludable Employees and former Employees
when ranked on the basis of compensation for such Plan Year or for any
prior Plan Year. The terms "nonexcludable" and "compensation" appearing in
the preceding sentence shall have the same meaning as such terms have under
section 401(a)(4) of the Code and the Treasury regulations thereunder.
(c) Upon the termination of the Plan, the benefit payable under the
Plan to, or with respect to, any HCE shall be limited to a benefit that is
not discriminatory under section 401(a)(4) of the Code and the Treasury
regulations thereunder.
ARTICLE 14
OTHER PARTICIPATING COMPANIES
14.1 Additional Participating Companies. With the written consent of the
Committee, any Affiliated Company may become a Participating Company by
delivering to the Committee and the Trustee a certified copy of a resolution
duly adopted by its board of directors to the effect that it (a) adopts the Plan
as then in effect and as it may thereafter be amended by the Board of Directors
and (b) agrees to become a party to the trust agreement under which the assets
of the Plan are held in accordance with Article 12. If any Affiliated Company
becomes a Participating Company in accordance with the provisions of this
Section 14.1, to the extent determined by the Committee, all prior and
contemporaneous service performed as an Employee of such Participating Company
shall be credited on a cumulative basis for all purposes of the Plan, and the
prior service of a Member whose employment is transferred from one Participating
Company to another shall be credited for all purposes of the Plan.
14.2 Withdrawal of Participating Company. Any Participating Company, other
than the Company, may withdraw from participation in the Plan at any time by
delivering to the Committee and the Trustee a certified copy of a resolution
duly adopted by its board of directors terminating its participation in the
Plan. If the result of any merger, consolidation, sale of property or stock,
separation, reorganization or liquidation of any Participating Company, other
than the Company, is that such Participating Company ceases to be an Affiliated
Company, such Company shall be treated as having withdrawn from participation in
the Plan.
In the event of any withdrawal from participation in the Plan by a
Participating Company hereunder, the Committee shall direct the Trustee to
segregate and hold in further trust that portion of the Trust Fund, as
determined by the Committee with the advice of the actuaries of the Plan, which
is attributable to the interests in the Plan of the Members and Former Members
employed by such withdrawing Participating Company and their spouses and
Beneficiaries, subject to the following conditions:
(a) If such withdrawing Participating Company elects to continue the
Plan, as adopted by it, on an independent basis, then the Committee shall
direct the Trustee to hold such segregated portion of the Trust Fund in a
separate trust under the same terms and conditions as the trust agreement
executed pursuant to Article 12. The Plan, as then in effect, shall be
continued as a separate plan for the exclusive benefit of the Members and
Former Members employed by such withdrawing Participating Company and their
spouses and Beneficiaries, and the board of directors of such withdrawing
Participating Company shall succeed to all the powers and duties of the
Board of Directors, including the appointment of a Committee thereunder.
(b) If the Plan, as adopted by such withdrawing Participating Company,
is merged into, or consolidated with, another employee benefit plan which
is qualified under section 401(a) of the Code, the Committee shall direct
the Trustee to transfer the above described segregated portion of the Trust
Fund, either in cash or kind, to the trust established or to be established
under such plan, and such transfer shall be a complete discharge of the
responsibility of the Trustee and the Committee therefor.
(c) If the Plan, as adopted by such withdrawing Participating Company,
is terminated, then the above described segregated portion of the Trust
Fund shall be applied to the benefit of the Members and Former Members
employed by such withdrawing Participating Company and their spouses and
Beneficiaries in the manner prescribed in Sections 13.2 to 13.5.
14.3 Successor Companies. Any corporation which succeeds to the business or
assets of the Company shall, upon such succession and without any action by any
person, (a) be treated as having adopted this Plan and (b) have the same rights,
and have the same duties, responsibilities and obligations, as are conferred or
assigned to the Company hereunder. Any corporation which succeeds to all or any
part of the business or assets of any Participating Company, other than the
Company, may become a participant hereunder only if it is eligible to do so
under Section 14.1 and then only in the manner described therein.
ARTICLE 15
TOP HEAVY PROVISIONS
15.1 Top Heavy Plan Requirements. If the Plan becomes a Top Heavy Plan for
any Plan Year, the following provisions shall apply, notwithstanding any other
provision of this Plan to the contrary: the minimum vesting requirement under
Section 15.3, the minimum benefit requirement under Section 15.4, and the
limitation on compensation under Section 15.5.
15.2 Determination of Top Heavy Status. The Plan's status as a Top Heavy
Plan shall be determined in accordance with the following rules and definitions:
(a) The Plan shall be a "Top Heavy Plan" for any Plan Year in which,
as of the Determination Date for that year, the sum of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key Employees under this
Plan and all other plans of an Aggregation Group exceeds 60% of the sum of
the Present Value of Accrued Benefits and the Aggregate Accounts of all Key
and Non-Key Employees under this Plan and all such other plans.
(b) The Plan shall be a "Super Top Heavy Plan" for any Plan Year in
which it would be treated as a Top Heavy Plan under subsection (a) if "90%"
were substituted for "60%" therein.
(c) The "Determination Date" for any Plan Year shall mean (1) the last
day of the preceding Plan Year, or (2) in the case of the first Plan Year,
the last day of such Plan Year. When aggregating this Plan with any other
plans, the Present Value of Accrued Benefits and Aggregate Accounts under
such other plans as of the Determination Date in question shall be
calculated as of the determination dates (within the meaning of section
416(g)(4)(C) of the Code) for those plans that fall within the same
calendar year as the Determination Date in question.
(d) "Aggregate Account" shall mean, with respect to each Employee, the
value of all individual accounts maintained on the Employee's behalf under
a defined contribution plan maintained by the Employer, calculated in
accordance with the requirements of Treas. Reg. Sec. 1.416-1, T-24.
(e) "Present Value of Accrued Benefit" shall mean, in the case of this
Plan or another defined benefit plan maintained by the Employer, the
present value of an Employee's accrued benefit under this Plan or such
other plan, as determined in accordance with the requirements of Treas.
Reg. Sec. 1.416-1, T-25 to T-28 and as hereinafter provided. The actuarial
assumptions set forth in Section 2.17 shall be used in determining benefit
values for these purposes, and the same actuarial assumptions shall apply
in determining benefit values under this Plan and each other defined
benefit plan taken into consideration for top heavy purposes. The Present
Value of Accrued Benefit as of a Determination Date in the case of this
Plan, or as of a determination date (within the meaning of section
416(g)(4)(C) of the Code) in the case of another plan, shall be determined
as of the most recent valuation date for this Plan, or such other plan,
within the 12 month period ending on the Determination Date or
determination date, as applicable. Such valuation date shall be the same
date used by this Plan, or such other plan, for computing Plan costs for
minimum funding, regardless of whether a valuation is actually performed.
The Present Value of Accrued Benefit shall be determined for each Non-Key
Employee under the uniform method of benefit accrual used by all qualified
defined benefit plans of the Employer, or, if there is no such method, as
if benefits accrued not more rapidly than under the slowest accrual rate
permitted under section 411(b)(1)(C) of the Code.
(f) "Aggregation Group" shall mean either a Required Aggregation Group
or, if the Employer so elects, a Permissive Aggregation Group as determined
below:
(1) A "Required Aggregation Group" consists of (i) each qualified
plan maintained by the Employer in which, during the 5 year period
ending on the Determination Date, at least one participant is a Key
Employee, and (ii) each other qualified plan of the Employer which,
during the period described in (i), enables any plan described in (i)
to meet the requirements of section 401(a)(4) or 410 of the Code.
Each plan in the Required Aggregation Group shall be considered a Top
Heavy Plan if the Required Aggregation Group is a Top Heavy Group. No plan
in the Required Aggregation Group will be considered a Top Heavy Plan if
the Required Aggregation Group is not a Top Heavy Group.
(2) A "Permissive Aggregation Group" consists of (i) the Required
Aggregation Group and (ii) any other qualified plan the Employer
elects to include, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of sections 401(a)(4) and 410
of the Code.
In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group shall be considered a Top Heavy Plan
if the Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group shall be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) A plan that has been terminated during the 5 year period
ending on the Determination Date for the Plan Year shall not be
excluded from an Aggregation Group solely on account of the
termination.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group exceeds 60% of a similar sum
determined for all Key and Non-Key Employees.
(h) For purposes of this Section 15.2, the Present Value of Accrued
Benefits and/or Aggregate Accounts of any individual shall be disregarded
if such individual (1) has not performed any services for the Employer
during the 5 year period ending on the Determination Date for the Plan
Year, or (2) had been a Key Employee for any Plan Year but subsequently
became a Non-Key Employee for any Plan Year. Further, the Present Value of
Accrued Benefit and/or Aggregate Account of any Employee under any plan
taken into account for top heavy purposes shall be increased by the
aggregate amount of distributions made with respect to such Employee by
such plan during the 5 year period ending on the Determination Date for the
Plan Year. Rollovers shall be taken into account in computing the Present
Value of Accrued Benefits and Aggregate Accounts as required under section
416(g)(4)(A) of the Code and the Treasury regulations thereunder.
(i) For purposes of this Section 15.2, wherever required by section
416 of the Code and the Treasury regulations thereunder, the term
"Employer" includes all entities aggregated with the Employer under section
414(b), (c), (m) or (o) of the Code and the regulations thereunder.
15.3 Minimum Vesting Requirement. Any Member who earns at least one Hour of
Service during a Top Heavy Plan Year, or during any Plan Year thereafter, shall
have a nonforfeitable right to his Pension upon the completion of three Years of
Service.
15.4 Minimum Benefit Requirement. If the Plan becomes a Top Heavy Plan, the
following minimum benefit requirement shall be met:
(a) For any Plan Year which is or follows a Top Heavy Plan Year, the
accrued benefit of each Non-Key Employee who is a Member shall not be less
than a minimum accrued benefit determined under section 416(c)(1) of the
Code and the Treasury regulations thereunder. Generally, such minimum
accrued benefit shall be derived from Employer contributions and, when
expressed as a straight life annuity which is payable annually and which
commences at the Non-Key Employee's Normal Retirement Date, shall be equal
to the product of (1) the Non-Key Employee's annual Section 415
Compensation averaged over the consecutive Plan Years (not exceeding five
(5) years) which produce the highest average and (2) the lesser of (i) two
percent (2%) multiplied by the number of the Non-Key Employee's Years of
Service or (ii) 20%.
(b) For purposes of this Section, a Non-Key Employee who is not a
Member solely because (1) his Compensation or Section 415 Compensation is
below a stated amount or (2) he was not employed on a specific date will be
considered to be a Member.
(c) For purposes of this Section, Years of Service and Section 415
Compensation shall be disregarded to the maximum extent permitted by law.
(d) If a Non-Key Employee participates in this Plan and a defined
contribution plan included in a Required Aggregation Group which is a Top
Heavy Group, the minimum benefit requirement shall be met by this Plan
unless an amount equal to or greater than the minimum contribution
described in Treas. Reg. Sec. 1.416-1, Section M-12 has been contributed
for such Non-Key Employee under said defined contribution plan.
(e) In applying the limitation described in section 415(e) of the Code
to the Plan, in each Super Top Heavy Plan Year beginning before January 1,
2000, "1.0" shall be substituted for "1.25" in applying sections
415(e)(2)(B) and 415(e)(3)(B) of the Code. Further, in each Top Heavy Plan
Year, "1.0" shall be substituted for "1.25" as provided in the preceding
sentence unless benefits or contributions at least equal to those described
in Treas. Reg. Sec. 1.416-1, Section M-14 are provided for the Non-Key
Employee by this Plan or by any defined contribution plan which is included
with this Plan in a Required Aggregation Group which is a Top Heavy Group.
15.5 Limitation on Compensation and Section 415 Compensation. For each Top
Heavy Plan Year beginning before January 1, 1989, Compensation and Section 415
Compensation in excess of $200,000 shall be disregarded. In addition, for each
Plan Year, Section 415 Compensation shall be subject to the section 401(a)(17)
limitation described in Section 2.10.
15.6 Other Definitions. As used in this Article 15 the following terms
shall have the following meanings:
(a) "Key Employee" shall mean an Employee treated as a key employee
under section 416(i) of the Code and the Treasury regulations thereunder.
(b) "Non-Key Employee" shall mean any Employee who is not a Key
Employee.
(c) "Section 415 Compensation" shall mean compensation as defined in
section 415(c)(3) of the Code and Treas. Reg. Sec. 1.415-2(d)(1), (2), (3)
and (4).
(d) "Top Heavy Plan Year" shall mean any Plan Year in which the Plan
is Top Heavy under Section 15.2(a).
(e) "Super Top Heavy Plan Year" shall mean any Plan Year in which the
Plan is Top Heavy under Section 15.2(b).
15.7 Applicability. In the event that Congress should provide by statute,
or the Treasury Department or the Internal Revenue Service should provide by
regulation or ruling, that the provisions of this Article are no longer
necessary to meet the qualification requirements of section 401(a) of the Code,
this Article shall become void, and shall no longer apply, without the necessity
of any amendment to the Plan.
ARTICLE 16
CONSTRUCTION
16.1 Plan Intended to Qualify. The Plan, as amended and restated, is
intended to continue to qualify under section 401(a) of the Code.
Notwithstanding Section 13.1, the Company reserves the right to further amend
the Plan by action of the Board of Directors, retroactively if necessary, to the
extent necessary to retain such qualified status without regard to the effect
such amendment may have upon the vested interest of any Member.
16.2 Governing Law. The Plan shall be governed by and construed in
accordance with the provisions of ERISA and, to the extent that ERISA is not
applicable, with the laws of the State of New York.
16.3 Words and Headings. As used herein, the masculine gender shall be
deemed to refer to the feminine, and the singular person shall be deemed to
refer to the plural, wherever appropriate. The subject headings and subheadings
appearing in the Plan are inserted for convenience and reference only, and in
the event of any conflict between the text of any provision of the Plan and the
heading thereof, the text shall control.
Executed this 7th day of November, 2001, but effective as provided
--------------------------
herein.
U.S. TRUST CORPORATION
By: /s/ John Kirby
------------------------
Title: Executive Vice President
------------------------
B-1
APPENDIX A
U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN
REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS
DESCRIPTION OF JOINT AND SURVIVOR FACTORS
If a member elects a Joint and 100% Survivor Pension, the pension otherwise
payable as a life annuity will be multiplied by a factor of .840. The reduction
factor will increase (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant. For each of the first 10 years of age difference,
the factor will change by .007. For each of the next 10 years of age difference,
the factor will change by .003. For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.
If a member elects a Joint and 75% Survivor Pension, the pension otherwise
payable as a life annuity will be multiplied by a factor of .875. The reduction
factor will increase (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant. For each of the first 10 years of age difference,
the factor will change by .0055. For each of the next 10 years of age
difference, the factor will change by .004. For each of the next 10 years of age
difference, the factor will change by .003. For any years in excess of 30 the
factor will change by .001 for each such year. In no event may the factor exceed
.980.
If a member elects a Joint and 66?% Survivor Pension, the pension otherwise
payable as a life annuity will be multiplied by a factor of .885. The reduction
factor will increase (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant. For each of the first 10 years of age difference,
the factor will change by .005. For each of the next 10 years of age difference,
the factor will change by .004. For each of the next 10 years of age difference,
the factor will change by .003. For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.
If a member elects a Joint and 50% Survivor Pension, the pension otherwise
payable as a life annuity will be multiplied by a factor of .910. The reduction
factor will increase (decrease) for each year that the Beneficiary is older (or
younger) than the Annuitant. For each of the first 10 years of age difference,
the factor will change by .004. For each of the next 10 years of age difference,
the factor will change by .003. For each of the next 10 years of age difference,
the factor will change by .002. For any years in excess of 30 the factor will
change by .001 for each such year. In no event may the factor exceed .980.
B-2
REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS
Number of Years the
Beneficiary is
Younger than the
Member
100% 75% 66-2/3% 50%
- --------------------------------------------------------------------------------
0 .8400 .8750 .8850 .9100
1 .8330 .8695 .8800 .9060
2 .8260 .8640 .8750 .9020
3 .8190 .8585 .8700 .8980
4 .8120 .8530 .8650 .8940
5 .8050 .8475 .8600 .8900
6 .7980 .8420 .8550 .8860
7 .7910 .8365 .8500 .8820
8 .7840 .8310 .8450 .8780
9 .7770 .8255 .8400 .8740
10 .7700 .8200 .8350 .8700
11 .7650 .8160 .8310 .8670
12 .7600 .8120 .8270 .8640
13 .7550 .8080 .8230 .8610
14 .7500 .8040 .8190 .8580
15 .7450 .8000 .8150 .8550
16 .7400 .7960 .8110 .8520
17 .7350 .7920 .8070 .8490
18 .7300 .7880 .8030 .8460
19 .7250 .7840 .7990 .8430
20 .7200 .7800 .7950 .8400
21 .7170 .7770 .7920 .8380
22 .7140 .7740 .7890 .8360
23 .7110 .7710 .7860 .8340
24 .7080 .7680 .7830 .8320
25 .7050 .7650 .7800 .8300
26 .7020 .7620 .7770 .8280
27 .6990 .7590 .7740 .8260
28 .6960 .7560 .7710 .8240
29 .6930 .7530 .7680 .8220
30 .6900 .7500 .7650 .8200
31 .6890 .7490 .7640 .8190
32 .6880 .7480 .7630 .8180
33 .6870 .7470 .7620 .8170
34 .6860 .7460 .7610 .8160
35 .6850 .7450 .7600 .8150
36 .6840 .7440 .7590 .8140
37 .6830 .7430 .7580 .8130
38 .6820 .7420 .7570 .8120
39 .6810 .7410 .7560 .8110
40 .6800 .7400 .7550 .8100
B-3
REDUCTION FACTORS FOR JOINT AND SURVIVOR OPTIONS
Number of Years The
Beneficiary is
Older than the
Member
100% 75% 66-2/3% 50%
- --------------------------------------------------------------------------------
0 .8400 .8750 .8850 .9100
1 .8470 .8805 .8900 .9140
2 .8540 .8860 .8950 .9180
3 .8610 .8915 .9000 .9220
4 .8680 .8970 .9050 .9260
5 .8750 .9025 .9100 .9300
6 .8820 .9080 .9150 .9340
7 .8890 .9135 .9200 .9380
8 .8960 .9190 .9250 .9420
9 .9030 .9245 .9300 .9460
10 .9100 .9300 .9350 .9500
11 .9150 .9340 .9390 .9530
12 .9200 .9380 .9430 .9560
13 .9250 .9420 .9470 .9590
14 .9300 .9460 .9510 .9620
15 .9350 .9500 .9550 .9650
16 .9400 .9540 .9590 .9680
17 .9450 .9580 .9630 .9710
18 .9500 .9620 .9670 .9740
19 .9550 .9660 .9710 .9770
20 .9600 .9700 .9750 .9800
21 .9630 .9730 .9780 .9800
22 .9660 .9760 .9800 .9800
23 .9690 .9790 .9800 .9800
24 .9720 .9800 .9800 .9800
25 .9750 .9800 .9800 .9800
26 .9780 .9800 .9800 .9800
27 .9800 .9800 .9800 .9800
28 .9800 .9800 .9800 .9800
29 .9800 .9800 .9800 .9800
30 .9800 .9800 .9800 .9800
B-4
REDUCTION FACTORS FOR CONVERTING A LIFE PENSION
TO A CERTAIN AND LIFE PENSION
5 Year Certain 10 Year 5 Year Certain 10 Year
and Life Certain and and Life Certain and
Age Life Age Life
- --------------------------------------------------------------------------------
49 .996 .988 68 .969 .890
50 .995 .985 69 .967 .880
51 .994 .982 70 .965 .870
52 .993 .979 71 .960 .855
53 .992 .976 72 .955 .840
54 .991 .973 73 .950 .825
55 .990 .970 74 .945 .810
56 .989 .965 75 .940 .795
57 .988 .960 76 .930 .775
58 .987 .955 77 .920 .755
59 .986 .950 78 .910 .735
60 .985 .945 79 .900 .715
61 .983 .940 80 .890 .695
62 .981 .935 81 .875 .673
63 .979 .930 82 .860 .651
64 .977 .925 83 .845 .629
65 .975 .920 84 .830 .607
66 .973 .910 85 .815 .585
67 .971 .900
Description of Factors:
If a member elects the 5 year certain and life pension at age 65, the
amount otherwise payable as a life pension will be multiplied by a factor of
.975. The reduction factor will increase (decrease) by .002 for each year that
the member is between age 60 and 65 (or 65 and 70) and increase by an additional
.001 for each year prior to age 60. The factor will be further reduced after age
70 as follows: .005 for each year from 70 to 75, .010 for each year from 75 to
80, and .015 for each year after 80. The factor may not exceed 1.000.
If a member elects the 10 year certain and life pension at age 65, the
amount otherwise payable as a life pension will be multiplied by a factor of
.920. The reduction factor will increase by .005 (decrease by .010) for each
year that the member is between age 55 and 65 (or 65 and 70) and increase by an
additional .003 for each year prior to age 55. The factor will be further
reduced after age 70 as follows: .015 for each year from 70 to 75, .020 for each
year from 75 to 80, and .022 for each year after 80. The factor may not exceed
1.000.
B-5
FACTORS TO BE APPLIED TO THE ESTIMATED SOCIAL SECURITY BENEFIT
PAYABLE AT AGE 62 TO DETERMINE EQUIVALENT TEMPORARY ANNUITY
PAYABLE FROM THE PLAN FROM EARLY RETIREMENT DATE TO AGE 62
Years Benefit Months
Commences
before age 62 0 1 2 3 4 5 6 7 8 9 10 11
-----------------------------------------------------------------------------------------------------------------------------------
0 1.0000 .9925 .9850 .9775 .9700 .9625 .9550 .9475 .9400 .9325 .9250 .9175
1 .9100 .9025 .8950 .8875 .8800 .8725 .8650 .8575 .8500 .8425 .8350 .8275
2 .8200 .8150 .8100 .8050 .8000 .7950 .7900 .7850 .7800 .7750 .7700 .7650
3 .7600 .7550 .7500 .7450 .7400 .7350 .7300 .7250 .7200 .7150 .7100 .7050
4 .7000 .6950 .6900 .6850 .6800 .6750 .6700 .6650 .6600 .6550 .6500 .6450
5 .6400 .6350 .6300 .6250 .6200 .6150 .6100 .6050 .6000 .5950 .5900 .5850
6 .5800 .5750 .5700 .5650 .5600 .5550 .5500 .5450 .5400 .5350 .5300 .5250
7 .5200 .5167 .5133 .5100 .5067 .5033 .5000 .4967 .4933 .4900 .4867 .4834
8 .4800 .4767 .4733 .4700 .4667 .4633 .4600 .4567 .4533 .4500 .4467 .4434
9 .4400 .4367 .4333 .4300 .4267 .4233 .4200 .4167 .4133 .4100 .4067 .4035
10 .4000 .3967 .3933 .3900 .3867 .3833 .3800 .3767 .3733 .3700 .3667 .3635
11 .3600 .3567 .3533 .3500 .3467 .3433 .3400 .3367 .3333 .3300 .3267 .3235
12 .3200
B-6
FACTORS TO BE APPLIED TO THE ACCRUED PENSION PAYABLE
AT NORMAL RETIREMENT TO DETERMINE AMOUNT OF DEFERRED
VESTED PENSION BENEFIT PAYABLE BEFORE NORMAL RETIREMENT DATE
Years Benefit Months
Commences
before Normal
Retirement Date 0 1 2 3 4 5 6 7 8 9 10 11
- ------------------------------------------------------------------------------------------------------------------------------------
0 1.0000 .9933 .9867 .9800 .9733 .9667 .9600 .9533 .9467 .9400 .9333 .9267
1 .9200 .9133 .9067 .9000 .8933 .8867 .8800 .8733 .8667 .8600 .8533 .8467
2 .8400 .8333 .8267 .8200 .8133 .8067 .8000 .7933 .7867 .7800 .7733 .7667
3 .7600 .7533 .7467 .7400 .7333 .7267 .7200 .7133 .7067 .7000 .6933 .6867
4 .6800 .6733 .6667 .6600 .6533 .6467 .6400 .6333 .6267 .6200 .6133 .6067
5 .6000 .5967 .5933 .5900 .5867 .5833 .5800 .5767 .5733 .5700 .5667 .5633
6 .5600 .5567 .5533 .5500 .5467 .5433 .5400 .5367 .5333 .5300 .5267 .5233
7 .5200 .5167 .5133 .5100 .5067 .5033 .5000 .4967 .4933 .4900 .4867 .4833
8 .4800 .4767 .4733 .4700 .4667 .4633 .4600 .4567 .4533 .4500 .4467 .4433
9 .4400 .4367 .4333 .4300 .4267 .4233 .4200 .4167 .4133 .4100 .4067 .4033
10 .4000
B-7
U.S. Trust Corporation Employees' Retirement Plan
Extended Early Retirement Reduction Factors For Terminated Vested Members
Age Factor Age Factor
20 0.0232 38 0.0866
21 0.0249 39 0.0935
22 0.0268 40 0.1010
23 0.0287 41 0.1092
24 0.0309 42 0.1182
25 0.0332 43 0.1280
26 0.0356 44 0.1386
27 0.0383 45 0.1503
28 0.0412 46 0.1631
29 0.0443 47 0.1772
30 0.0476 48 0.1927
31 0.0513 49 0.2097
32 0.0552 50 0.2285
33 0.0594 51 0.2492
34 0.0640 52 0.2722
35 0.0690 53 0.2977
36 0.0744 54 0.3260
37 0.0802 55 0.4000
C-1
APPENDIX B
U.S. TRUST CORPORATION EMPLOYEES' RETIREMENT PLAN
PARTICIPATING COMPANIES AS OF NOVEMBER 2001
U.S. Trust Corporation
United States Trust Co. International Corp.
United States Trust Company of New York
U.S. Trust Mortgage Service Company
U.S. Trust Company of Delaware
U.S. Trust Company, National Association
U.S. Trust Company of New Jersey
UST Fiduciary Services Ltd.
UST Financial Services Corp.
UST Securities Corporation
U.S. Trust Company of Texas, National Association
U.S. Trust Company of Florida Savings Bank
U.S. Trust Company
U.S. Trust Technology and Support Services, Inc.
CTC Consulting, Inc.
U.S. Trust Company of North Carolina
SUMMARY OF BENEFIT PROVISIONS RELATING TO
MERGERS AND ACQUISITIONS
Prior Service counts as Prior Service counts as Prior Service counts as
Acquisition Credited Service? Vesting Service? Eligibility Service
Capital Trust Company No Yes(c) Yes
McMurrey No No No
Maier & Siebel No Yes(a); (c) Yes(a)
Wood Island No Yes(a); (c) Yes(a)
Radnor No Yes(a); (c) Yes(a)
North Carolina Trust No No No
Charles Schwab (as defined in No Yes(b); (c) Yes(b)
Section 2.6)
Resource Companies, Inc. No Yes(c) Yes
(a) This provision is not contained in the purchase agreement but was
agreed to during final negotiations.
(b) This provision applies only to Employees who transfer employment
directly to a Participating Company.
(c) Vesting Service is used in the calculation of the Rule of 80.