EXHIBIT 10 (d)
PEOPLES BANCORP INC. RETIREMENT PLAN
As Amended and Restated
Effective January 1, 1989
PEOPLES BANCORP INC. RETIREMENT PLAN
Peoples Bancorp, Inc., a corporation organized under the laws of
the State of Ohio, herein referred to as Employer, does hereby
amend and restate and, as amended and restated, continue a
Pension Plan for the benefit of its Eligible Employees on the
terms and conditions described hereinafter.
ARTICLE 1
PREFACE
Section 1.1.
Effective Date.
Except as otherwise provided herein, the effective date of the
Plan as amended and restated herein is January 1, 1989.
Section 1.2.
Purpose of the Plan.
The purpose of the Plan is to provide a systematic program for
the retirement of the Eligible Employees of the Employer by
continuing the program under which the Employer makes regular
contributions to a Trust Fund, which contributions are accepted,
invested and disbursed by a Trustee or Trustees to provide
definitely determinable benefits for such Employees or their
Beneficiaries.
Section 1.3.
Legal Effect.
The terms and conditions of the Plan as restated herein shall
amend and supersede prospectively and in their entirety the
terms and conditions of the Prior Plan originally effective
January 1, 1982, and as amended and restated effective January
1, 1984, and all subsequent amendments thereto except as
otherwise expressly stated herein; notwithstanding, however, the
provisions of such Prior Plan shall continue to govern the
rights of all Employees who retired or otherwise ceased to work
for the Employer prior to the date of execution hereof, except
as is otherwise expressly stated herein.
Section 1.4.
Form of Plan.
The Plan shall be a single plan of a controlled group, as
defined in Code Sections 414(b), 414(c) and 414(m). Only
service and Compensation with the Employer by an Eligible
Employee shall be used to determine the amount of any benefit
under the Plan.
Section 1.5.
Governing Law.
This Plan shall be regulated, construed and administered under
the laws of the State of Ohio, except when preempted by federal
law.
Section 1.6.
Headings.
The headings and subheadings in this Plan have been inserted for
convenience and reference only and are to be ignored in any
construction of the provisions hereof.
Section 1.7.
Gender and Number.
The masculine gender shall be deemed to include the feminine,
the feminine gender shall be deemed to include the masculine,
and the singular shall include the plural unless otherwise
clearly required by the context.
ARTICLE 2
DEFINITIONS
The words and phrases defined and used hereinafter shall have
the following meaning, unless a different meaning is clearly
required by the context of the Plan.
Section 2.1.
Accrual Date shall mean the first day of the month coincident
with or next following the date a Participant is no longer
employed by the Employer.
Section 2.2.
Accrued Benefit of a Participant as of the Accrual Date, before
his Normal Retirement Age shall equal the product of (a) and (b)
where:
(a) is a fraction, not exceeding 1, the numerator
of which is the total number of his Years of Service as of such
Accrual Date and the denominator of which is the total number
of Years of Service he would have if he separated from service
at his Normal Retirement Age; and
(b) is the projected annual normal retirement
benefit, defined in Section 5.1, calculated to reflect the number
of Years of Service he would have if he separated from service
at his Normal Retirement Age and his Average Compensation as if he had
attained his Normal Retirement Age on the Accrual Date.
The minimum Accrued Benefit shall not be less than the Accrued
Benefit as of the date this Plan is executed under the
provisions of the Peoples Bancorp Inc. Retirement Plan and Trust
or the Peoples Banking and Trust Company Employees' Pension
Plan, as appropriate, except as otherwise provided by actions
taken in accordance with Internal Revenue Service Notice 88-131,
Notice 89-92, IRS Revenue Procedure 89-65, IRS Notice 91-38,
IRS Announcement 92-29, IRS Notice 92-36, or any other such IRS
guidance regarding the timing of the implementation of changes
made by the Tax Reform Act of 1986 affecting the Plan.
The Accrued Benefit of a Participant who has attained his Normal
Retirement Age shall be based on the benefits provided under
Section 5.4.
Section 2.3.
Act shall mean the Employee Retirement Income Security Act of
1974 as amended or as it may be amended from time to time.
Section 2.4.
Actuarial Equivalent shall mean equality in value of the
aggregate amounts expected to be received under different forms
of payment. Such equality in value shall be based on
assumptions as to the occurrence of future events. The future
events to be taken into account are mortality for Participants,
mortality for Beneficiaries, and an interest discount for the
time value of money. For this Plan, the actuarial assumptions
are as follows:
(a) Mortality assumption for payments to
Participants: UP Mortality Table projected to 1984, adjusted
for twenty percent (20%) female content.
(b) Mortality assumption for payments to
Beneficiaries and survivors: UP Mortality Table projected to
1984, adjusted for eighty percent (80%) female content.
(c) Interest assumption: Interest rate used as
of the first day of the current Plan Year by the Pension Benefit
Guaranty Corporation for purposes of valuing immediate or
deferred (as appropriate) annuities for terminating plans under
Act Section 4062. The interest rate in effect during the Plan Year
in which benefits are to commence shall be applied exclusively in
all determinations of actuarial equivalence.
The Actuarial Equivalent of the Accrued Benefit as of the date
this amendment and restatement is executed shall be the greater
of:
(a) the Actuarial Equivalent of the Accrued
Benefit as of such date under the terms of the Plan as in effect
on the day preceding the date this amendment and restatement
is executed, or
(b) the Actuarial Equivalent as determined under
the definition of Actuarial Equivalent as amended herein.
Section 2.5.
Actuary shall mean an enrolled actuary or firm of actuaries
which has on its staff an enrolled actuary selected by the
Committee to provide actuarial services for the Plan.
Section 2.6.
Age shall mean attained age at latest anniversary of birth.
Section 2.7.
Annuity Starting Date shall mean:
(a) the first day of the first period for which an
amount is payable as an annuity, or
(b) in the case of a benefit not payable in the
form of an annuity, the first day on which all events have occurred
which entitle the Participant to such benefit.
Section 2.8.
Average Compensation shall mean the average of the Participant's
annual Compensation paid during five consecutive Years of
Service out of the last ten Years of Service preceding the Plan
Year which contains the Participant's accrual date, such five
consecutive years chosen so as to produce the highest average.
If a Participant has less than five consecutive years of actual
Compensation, the average will be taken over his total Years of
Service during such period.
Section 2.9.
Beneficiary shall mean the person or persons or legal entity
designated as such by a Participant or Inactive Participant to
receive the benefits, if any, payable in the event of the
Participant's or Inactive Participant's death. A Beneficiary
may only be designated as appropriate, pursuant to Article 5 or
Article 7. When Article 5 or Article 7 allows the designation
of a Beneficiary, each Participant or Inactive Participant may
name a Beneficiary on a form provided by the Plan Administrator
and delivered to the Plan Administrator. Such designation may
include more than one person with one or more secondary or
contingent Beneficiaries and shall be subject to change upon
written request of such Participant or Inactive Participant in
the same manner as the original designation.
Section 2.10.
Board shall mean the Board of Directors of the Employer.
Section 2.11.
Break in Service shall mean the failure of an Employee to
complete more than 500 Hours of Service during a Plan Year.
Such Break in Service shall be effective as of the first day of
the Plan Year in which such event occurs. A Break in Service
shall not result solely from Disability or illness, an
authorized leave of absence, or military service.
Section 2.12.
Code shall mean the Internal Revenue Code of 1986, as amended or
as it may be amended from time to time.
Section 2.13.
Committee shall mean the Committee, as described in Article 9
hereof.
Section 2.14.
Compensation, except for purposes of Articles 8 and 14 herein,
shall mean remuneration paid by the Employer to an Employee for
services rendered as reported or reportable on Form W-2 for
federal income tax withholding purposes (or similar form
required for such purposes) including incentive pay, overtime
and bonuses, but excluding directors fees. Compensation shall
also include any employee deferrals under a Code Section 401(k)
plan maintained by the Employer and salary reduced under a Code
Section 125 arrangement maintained by the Employer.
Compensation in excess of $200,000 shall not be considered for
any Plan Year. The $200,000 limitation shall be adjusted for
cost-of-living increases as allowed by the Secretary of the
Treasury pursuant to Code Section 401(a)(17). In determining
the Compensation of a Participant for purposes of this
limitation, the family aggregation rules of Code Section
414(q)(6) shall apply, except that in applying such rules, the
term "family" shall include only the Spouse of the Participant
and any descendants of the Participant who have not attained Age
19 before the close of the Plan Year. The $200,000 limitation
shall be applied to a family aggregation unit on a pro rata
basis according to each such Participant's Compensation without
regard to such limitation.
Section 2.15.
Covered Compensation shall mean, with respect to a Participant,
the average of the taxable wage bases (rounded to the nearest
multiple of $600) in effect under Section 230 of the Social
Security Act for each year during the 35 year period ending with
the year in which the Participant attains his Social Security
Retirement Age. In determining a Participant's Covered
Compensation for a Plan Year, the taxable wage base for the
current Plan Year and any subsequent Plan Year shall be assumed
to be the same as the taxable wage base in effect as of the
first day of the Plan Year for which the determination is being
made.
Section 2.16.
Date of Employment shall mean the first date on which an
Employee completes an Hour of Service.
Section 2.17.
Date of Reemployment shall mean the first date on which an
Employee completes an Hour of Service following a Break in
Service. If an Employee incurs a Break in Service without
terminating employment, such date will be deemed to occur on the
first day of the first Plan Year following the year in which
such Break in Service occurs.
Section 2.18.
Disability shall mean the permanent and total inability of a
Participant, by reason of physical or mental infirmity or both,
to perform the work customarily assigned to him by the Employer.
The determination of the existence or nonexistence of Disability
shall be made by the Committee pursuant to a medical examination
by a medical doctor selected or approved by the Committee.
Section 2.19.
Early Retirement Age shall mean the first day of the month
coincident with or next following Age 50 and the completion of
10 Years of Service.
Section 2.20.
Early Retirement Date shall mean the date on or after his Early
Retirement Age on which the Participant elects, pursuant to
Section 5.2, to retire from employment and begin receipt of
early retirement benefits.
Section 2.21.
Eligible Employee shall mean any Employee who is not included in
a unit of Employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining agreement between
Employee representatives and the Employer. In no event shall a
"leased employee," as defined in Code Section 414(n)(2), be an
Eligible Employee.
Section 2.22.
Employee shall mean any person who is employed by the Employer.
Section 2.23.
Employer shall mean Peoples Bancorp, Inc. or any Related
Employer who, with the written consent of the Board of Directors
of Peoples Bancorp, Inc., agrees in writing to be a party hereto.
Section 2.24.
Entry Date shall mean the first day of each Plan Year.
Section 2.25.
Fund, Trust or Trust Fund shall mean the sum of the
contributions made by the Employer and held by the Trustee in a
trust created herein, increased by the profits and income
thereto and decreased by any losses and reasonable expenses
incurred in the administration of the trust and any payments
made therefrom under the Plan.
Section 2.26.
Hour of Service shall mean:
(a) Each hour for which an Employee is paid or
entitled to payment for the performance of duties for the Employer.
These hours shall be credited to the Employee for the computation
period in which the duties are performed, and
(b) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence.
Notwithstanding the preceding sentence:
(1) No more than 501 hours will be credited under
this paragraph to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not
such period occurs in a single computation period);
(2) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during
which no duties are performed will not be credited to the Employee if
such payment is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation, or
unemployment compensation or disability insurance laws; and
(3) Hours will not be credited for a 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 or damages, is either awarded or agreed to by the Employer.
The same hours shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These
hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(d) Each hour for which an Employee is required to be
credited for military service under applicable law and regulations and
which is not otherwise credited under this Section.
(e) Hours under this Section shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor
Regulations which is incorporated herein by reference.
(f) Solely for purposes of determining whether
a Break in Service for vesting and participation has occurred, an
Employee or former Employee who is absent from work for maternity or
paternity leave shall receive credit either for the Hours of Service, as
described in subsections (a) - (e) above, which would otherwise have been
credited to such Employee or former Employee but for such absence, or
in any case in which such Hours of Service cannot be determined, eight
Hours of Service per day of absence. The total number of Hours of
Service credited under this subsection (f) shall not exceed 501.
Hours of Service pursuant to this paragraph shall be credited in the
computation period during which the absence begins if doing so
would prevent a Participant from incurring a one-year Break in Service
in that computation period. In any other case, these hours shall be
credited in the following computation period. For purposes of this
paragraph, an absence from work for maternity or paternity leave means
an absence (1) by reason of pregnancy of the Employee or former Employee,
(2) by reason of the birth of a child of the Employee or former Employee,
(3) by reason of placement of a child with the Employee or former
Employee in connection with the adoption of such child by such Employee
or former Employee, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Notwithstanding the above, no credit shall be given for Hours of
Service pursuant to this subsection (f) unless the Employee or former
Employee furnishes sufficient information to the Plan Administrator or
the Committee to establish that the absence is due to maternity or
paternity leave and the number of days of such absence.
Section 2.27.
Inactive Participant shall mean a person who terminates employment
or otherwise ceases to be a Participant but who is entitled to receive an
immediate or a deferred vested benefit from the Plan.
Section 2.28.
Limitation Year shall mean the calendar year.
Section 2.29.
Normal Form of Benefit shall mean an annuity paid in equal monthly
installments on the first day of each calendar month in which the
Participant shall have lived the entire preceding calendar month.
Section 2.30.
Normal Retirement Age shall mean for Participants who entered the
Plan before the first day of the first Plan Year beginning after
December 31, 1987, the sixty-fifth birthday of the Participant.
For Participants who entered the Plan on or after the first day of
the first Plan Year beginning after December 31, 1987, it shall mean
the later of the sixty-fifth birthday of the Participant or the first
day of the Plan Year which includes the fifth anniversary of the
date the Participant commences participation in the Plan.
Section 2.31.
Normal Retirement Date shall mean the first day of the month coincident
with or next following the Normal Retirement Age.
Section 2.32.
Participant shall mean every Eligible Employee who has met the
requirements of Article 3 and who is not an Inactive Participant.
Section 2.33.
Plan shall mean the Peoples Bancorp Inc. Retirement Plan, as amended
and restated herein and as it may be subsequently amended.
Section 2.34.
Plan Administrator shall mean the Chairman of the Committee.
Section 2.35.
Plan Year shall mean the 12-month period ending on December 31.
Section 2.36.
Prior Plan shall mean the Peoples Bancorp Inc. Retirement Plan
and Trust and the Peoples Banking and Trust Company Employees'
Pension Plan.
Section 2.37.
Related Employer shall mean a corporation which is a member of a
controlled group of corporations, within the meaning of Sections
1563(a)(1), (a)(2) and (a)(3) of the Code, of which the Employer
is also a member. Related Employer shall also mean any other trade
or business, whether or not incorporated, which is under common
control with the Employer, within the meaning of Section 414(c) of
the Code, and/or all members of an affiliated service group within the
meaning of Section 414(m) of the Code. For purposes of Article
14, however, the phrase "more than 50 percent" shall be
substituted for the phrase "at least 80 percent" each place it
appears in Section 1563(a)(1) of the Code.
Section 2.38.
Social Security Retirement Age shall mean generally the Age at
which unreduced old-age insurance benefits will commence under
the Social Security Act as shown below.
DATE OF BIRTH SOCIAL SECURITY RETIREMENT AGE
Before January 1, 1938 65
After December 31, 1937 but
Before January 1, 1955 66
After December 31, 1954 67
Section 2.39. Spouse shall mean the Participant's
or Inactive Participant's spouse as determined under the laws of
the state or commonwealth in which the Participant or Inactive
Participant resides.
Section 2.40. Trustee shall mean the bank, trust
company, other financial institution or individual or
individuals holding and managing the Fund according to the terms
of Peoples Bancorp Inc. Retirement Plan Trust Agreement.
Section 2.41. Year of Service shall mean a Plan
Year during which an Employee has completed at least 1,000 Hours
of Service, subject to the following qualifications and
exceptions:
(a) Service performed prior to a Break in
Service shall be disregarded if such Break in
Service commenced prior to July 1, 1976.
(b) In the case of a nonvested Participant,
Years of Service before any period of consecutive one-year Breaks
in Service shall be disregarded if the number of consecutive one-year
Breaks in Service equals or exceeds the greater of five or the
aggregate number of Years of Service before such period.
Any Years of Service disregarded pursuant to the previous sentence
shall also be disregarded when applying the provisions of that sentence to
a subsequent period of Breaks in Service.
If an individual would have lost credit
for Years of Service under the rule of parity as stated in the
Prior Plan as of the end of the Plan Year beginning in 1984,
the rules of this paragraph shall not apply to that individual
with respect to Years of Service before the Plan Year
beginning in 1985. Credit for those prior years in such a case
is forever lost. If an individual would not have lost credit for
Years of Service under the rule of parity as stated in the Prior Plan
as of the end of the Plan Year beginning in 1984, the
rules of this paragraph shall apply to that individual with
respect to all Years of Service.
(c) Service after Normal Retirement Date shall
be credited, including such service before
January 1, 1988, for any Employee who has at least one Hour of
Service in any Plan Year beginning after
December 31, 1987, subject to the other provisions of this
Section.
(d) For purposes of vesting, Years of Service,
as determined above, with a Related
Employer for the period of time during which employers are
related shall be counted as service with
the Employer.
(e) Where the Employer maintains the plan of a
predecessor employer, as defined in Section
1.411(a)-5(b) of the Income Tax Regulations, Years of Service,
as determined above, with such predecessor
employer shall be treated as Years of Service with the
Employer for purposes of vesting.
(f) For purposes of vesting, an Employee who
was covered by the Peoples Banking & Trust
Company Employees' Pension Plan as of January 1, 1989 and who is
credited with at least 1,000 Hours of
Service in both the period beginning January 1, 1989 and
ending on December 31, 1989, and the period
beginning on July 1, 1988 and ending on
June 30, 1989 shall be credited with two Years of Service.
(g) For purposes of determining a
Participant's Accrued Benefit, with respect to those
Participants covered by the Peoples Banking & Trust
Company Employees' Pension Plan as of January 1, 1989, the
accrual computation period beginning July 1 shall be changed to the
12-consecutive-month period beginning on January 1. The period
from July 1, 1988 to January 1, 1989, shall be treated as a
partial accrual computation period. In order to receive pro rata credit
for purposes of benefit accrual for service in the partial accrual
computation period, such a Participant must be credited with 1,000 Hours
of Service.
(h) Any Employee who has at least one Hour of
Service in any Plan Year beginning after
December 31, 1987 and who was previously excluded from
participation because he was hired after
Age 60 shall receive retroactive service from their Date of
Employment, subject to the other provisions of
this Section.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
Section 3.1. Eligibility. An Eligible Employee
who has attained Age 20 1/2 and who has been an Employee for six
months shall become a Participant at the time specified in
Section 3.2. The Age 60 exclusion contained in the Prior Plan
is eliminated effective January 1, 1988.
Section 3.2. Participation. Any Eligible
Employee who has satisfied the requirements of Section 3.1 shall
become a Participant on the first Entry Date coincident with or
next following the date on which such requirements are met
unless such Employee separated from service and did not return
to employment before his Entry Date.
Once an Eligible Employee becomes a Participant he
shall remain a Participant until he terminates employment with
an Employer regardless of the number of Hours of Service he
completes in a Plan Year.
An Eligible Employee who terminates employment
before his Entry Date, after meeting the requirements of Section
3.1, and is rehired before his Entry Date shall become a
Participant on his Entry Date.
An Eligible Employee who terminates employment or
who incurs a Break in Service without terminating employment,
after meeting the requirements of Section 3.1, and is rehired or
avoids a Break in Service in a Plan Year shall become a
Participant on his Date of Reemployment.
Section 3.3. Transfer to or from Eligible Class
of Employees. In the event a Participant is no longer an
Eligible Employee and becomes ineligible to participate but has
not terminated employment or incurred a Break in Service, such
Employee will participate immediately upon again becoming an
Eligible Employee. If such a Participant terminates employment
or incurs a Break in Service, eligibility to participate will be
determined under the Break in Service rules of Section 3.2 above.
In the event an Employee who is not an Eligible
Employee becomes an Eligible Employee, such Eligible Employee
will participate immediately if such Eligible Employee has
satisfied the minimum age and service requirements and would
otherwise have previously become a Participant.
Notwithstanding, such Eligible Employee shall be subject to the
Break in Service rules of Section 3.2 above.
Section 3.4. Service with a Related Employer.
Service with a Related Employer not adopting this Plan shall be
considered service with the Employer when determining if an
Employee has completed the service requirement for eligibility.
A Participant who transfers employment to a
company which is a Related Employer not adopting this Plan shall
remain covered by the Plan, but such Inactive Participant shall
receive credit, for purposes of determining his Accrued Benefit,
for service only to the extent of his service while an Eligible
Employee of the Employer. For vesting purposes, such Inactive
Participant shall continue to accrue Years of Service hereunder.
If such Inactive Participant is transferred again to the
Employer as an Eligible Employee, he shall participate in the
Plan on his date of transfer. If such individual remains in the
employ of a Related Employer not adopting this Plan until his
termination of employment, his benefits shall be calculated
based on the provisions of Articles 5, 6 and 7.
Section 3.5. Service as a Leased Employee. Each
"leased employee" who performs services for the Employer or
Related Employer on a substantially full-time basis for a period
of at least one year shall be considered an Employee or an
employee of a Related Employer as appropriate for purposes of
determining if this Plan satisfies the minimum coverage
requirements of Code Section 410(b). An individual will be
considered to have performed services on a substantially
full-time basis if that individual is credited with the lesser
of 1,500 Hours of Service or 75% of the Hours of Service that
are customarily performed in the particular position by an
Employee or an employee of a Related Employer.
If a "leased employee" becomes an Eligible
Employee by being hired in a capacity other than as a "leased
employee," service in any Plan Year beginning in or after 1984,
while a "leased employee" shall be considered when determining
such Employee's Years of Service for vesting purposes.
ARTICLE 4
CONTRIBUTIONS
Section 4.1. Contributions by the Employer. The
Employer contemplates that the contributions to the Trust under
this Plan shall be made by the Employer, based upon the
recommendation of the Actuary, as recommended by the Committee.
All Employer contributions under this Plan are expressly
conditioned on their current deductibility under the Code.
Section 4.2. Gains from Terminations. Any gains
arising from the death of Participants or from forfeitures shall
not be utilized to increase the benefits to the remaining
Participants.
Section 4.3. Funding Requirements. The Employer
shall fund the Plan in a manner consistent with the provisions
of the Code, the Act, and such other laws and regulations as
shall be applicable, to the end that the Plan shall be funded on
a lawful and sound actuarial basis; but to the extent permitted
by governing law, the Employer shall be free to determine the
manner and means of making provision for funding the Plan.
Section 4.4. Contributions by Participants.
Contributions by Participants are neither required nor
permitted.
ARTICLE 5
RETIREMENT
Section 5.1. Normal Retirement. As of his Normal
Retirement Date, a Participant shall be eligible to retire and
to receive his normal retirement benefit. The annual normal
retirement benefit, subject to the provisions of Articles 8 and
14, shall be calculated as the Normal Form of Benefit as
follows:
(a) Forty percent (40%) of the
Participant's Average Compensation, plus
(b) Seventeen percent (17%) of the excess of
the Participant's Average Compensation over
his Covered Compensation;
(c) Such sum multiplied by the ratio of his
total Years of Service to 30, such ratio not to
exceed 1.
In no event shall the normal retirement benefit
for any Participant other than a highly compensated Employee (as
defined in Code Section 414(q)) be less than his minimum
projected benefit under the Prior Plan at Age 65 using his
Compensation as of January 1, 1993.
In no event shall the normal retirement benefit be
less than the highest early retirement benefit that would have
been payable to the Participant as of the beginning of any Plan
Year.
In no event shall the normal retirement benefit
under this Plan be less than the Accrued Benefit to the credit
of the Participant as of the date before this amendment and
restatement is executed.
Section 5.2. Early Retirement. A Participant who
has not attained his Normal Retirement Age, but has attained his
Early Retirement Age, may elect to retire as of the first day of
any calendar month following written notice to the Employer and
to the Committee. At the option of the Participant, subject to
Section 5.10, benefits may begin as of any calendar month
following his early retirement and preceding the date which
would have been his Normal Retirement Date had he remained an
Employee. Such early retirement benefit of a Participant shall
be calculated as the Normal Form of Benefit payable pursuant to
Section 5.1 hereof and shall equal his Accrued Benefit as of his
Early Retirement Date, reduced by one-fifteenth for each of the
first five years and one-thirtieth for each of the next ten
years by which his Early Retirement Date precedes his Normal
Retirement Date.
Section 5.3.
Disability Retirement. A Participant who has not attained his
Normal Retirement Age, and suffers Disability may retire as of
the first day of any calendar month next following the date the
Committee determines that he is disabled. Payment of his
Disability benefit may begin on the first day of any calendar
month prior to his Normal Retirement Age at the request of the
disabled Participant, subject to Section 5.8.
If the Participant is covered under a long-term
disability insurance plan maintained by the Employer and
receives disability payments thereunder, his benefits shall
begin on the first day of the month chosen by the Participant,
but in no event before the termination of the long-term
disability plan payments, subject to the provisions of Section
15.8.
The Disability retirement benefit shall equal his
Accrued Benefit as of the first day of the month following last
receipt of Compensation from the Employer reduced for each year
by which the starting date of the Disability retirement benefit
precedes his Normal Retirement Date in the same manner as
described in Section 5.2 and actuarially reduced for each
additional year before Age 50. The Disability retirement
benefit shall be payable under one of the methods of payment
specified in Section 5.6, subject to Section 5.7.
Section 5.4. Delayed Retirement. If a
Participant is in service following his Normal Retirement Date,
payment of his normal retirement benefit shall be deferred until
the first day of the calendar month coincident with or next
following his actual retirement, hereinafter called his Delayed
Retirement Date. In no event shall benefit payments be delayed
beyond the date specified in Article 15. Notwithstanding the
above, a Participant may elect to begin receiving payment on the
first day of any month following his Normal Retirement Date.
If a Participant is in service following his
Normal Retirement Date, his benefit shall continue to accrue
until his actual retirement date. In no event, however, shall a
Participant's benefit at actual retirement be less than the
Accrued Benefit at the Normal Retirement Date increased
actuarially to his actual date of retirement. For purposes of
this adjustment the assumptions shall be those specified in the
definition of Actuarial Equivalent except that when determining
the increase in value for the period between Normal Retirement
Date and Delayed Retirement Date, only the interest assumption
shall be used.
Section 5.5. Reemployment Following
Retirement. If a Participant begins to receive a periodic
benefit following early retirement and is subsequently
reemployed prior to attaining Normal Retirement Age, benefit
payments shall cease during the period of reemployment. If a
Participant begins to receive a benefit following Disability
retirement, recovers and resumes employment prior to attaining
his Normal Retirement Age, benefit payments shall cease. Upon
his subsequent retirement, his benefit accrued to that date
shall be based on the total of both periods of Years of Service
and shall reflect Compensation as if the period of employment
were contiguous to the prior period of employment. However, the
benefit paid to such Participant shall be adjusted by the
Actuarial Equivalent of any benefits previously paid. If a
Participant begins to receive a benefit following Normal
Retirement Age, early retirement or Disability and is
subsequently reemployed after attaining Normal Retirement Age he
shall be treated as a Participant eligible for delayed
retirement. The continuation or cessation of benefit payments
as well as the continuation of benefit accrual shall be
consistent with the provisions of Section 5.4.
If an individual receives a distribution from the
Plan which then represents the Actuarial Equivalent of the
present value of his full Accrued Benefit and is subsequently
reemployed or otherwise earns additional service under the Plan,
his Years of Service for purposes of determining his Accrued
Benefit shall include service prior to his termination on which
the earlier distribution was based. However, the benefit
subsequently paid to such Participant shall be adjusted by the
Actuarial Equivalent of the benefit previously paid.
Section 5.6. Methods of Payment. Each retiring
Participant shall be offered the optional methods of payment
listed below. Any benefits payable under such optional methods
of payment shall be the Actuarial Equivalent of the Normal Form
of Benefit and shall be subject to the distribution restrictions
of Article 15.
(a) Life Annuity: An annuity payable in equal
monthly installments during the
Participant's lifetime only, on the first day of each calendar
month in which the Participant has lived
the entire preceding month.
(b) Five Years Certain and Life Annuity: An
annuity payable in monthly installments on
the first day of each calendar month for 60 months certain and
thereafter on the first day of each
calendar month in which the Participant has lived the entire
preceding month.
(c) Ten Years Certain and Life
Annuity: An annuity payable in monthly installments on
the first day of each calendar month for 120 months
certain and thereafter on the first day of
each calendar month in which the Participant has lived the
entire preceding month.
(d) Joint and Full Survivor Annuity: An
annuity whereby a monthly installment shall be
paid to the Participant during his lifetime and thereafter in
the same monthly amount to the Beneficiary
during the Beneficiary's lifetime, on the first day of each
calendar month in which the Participant or
his Beneficiary has lived the entire preceding
month.
(e) Joint and One-Half Survivor Annuity: An
annuity, whereby a monthly installment
shall be paid to the Participant during his lifetime and
thereafter in one-half of such monthly
amount to the Beneficiary during the Beneficiary's lifetime, on
the first day of each calendar month in
which the Participant or his Beneficiary has lived the entire
preceding month.
(f) Joint and Three-Fourths Survivor Annuity:
An annuity, whereby a monthly installment
shall be paid to the Participant during his lifetime and
thereafter in threefourths of such monthly amount to the
Beneficiary during the Beneficiary's lifetime,
on the first day of each calendar month in which the
Participant or his Beneficiary has lived
the entire preceding month.
(g) Lump Sum: A single lump sum payment shall
be distributed. Such lump sum payment
shall be the Actuarial Equivalent of the vested Accrued Benefit
payable at the time of distribution as the
Normal Form of Benefit. The commencement of a lump
sum benefit shall be effective as of the later of the
effective date of the Participant's
retirement unless the Participant or Inactive Participant
specifically elects to waive the 30 day
advance notice requirement. Any such lump sum which is $200 or
more shall include the right of the
Participant to make a direct rollover under Code Section
401(a)(31), as provided in Article 16.
Section 5.7. Election of Option. The provisions
of Sections 5.7, 5.8 and 5.9 shall apply to any Participant or
Inactive Participant who is credited with at least one Hour of
Service on or after August 23, 1984. A payment option as set
forth in Section 5.6 shall be elected, changed or revoked by the
Participant, his guardian, or attorney-in-fact, by written
notice filed with the Committee during the election period
specified below; provided, however: (a) A
married Participant shall be deemed to have elected a joint and
one-half survivor annuity with his Spouse
as his Beneficiary unless he makes an affirmative election not
to take such an annuity.
(b) If the Beneficiary under a joint and
survivor option dies before the commencement of
payments, the election shall be inoperative.
(c) If a timely election shall not have been
made, payment shall be made under the
Normal Form of Benefit to an unmarried Participant, unless
otherwise provided herein.
Notwithstanding the above, any election by a
Participant not to provide a joint and one-half (or greater)
survivor annuity with his Spouse as the named Beneficiary shall
not take effect unless the Participant's Spouse consents in
writing to such election and the consent acknowledges the effect
of such election. The Spouse's consent must be witnessed by a
Plan representative or a notary public or it must be established
to the satisfaction of a Plan representative that the consent
cannot be obtained because there is no Spouse, because the
Spouse cannot be located or because of such other circumstances
as the Secretary of the Treasury may prescribe by regulations.
A Spouses's consent under this Section must generally recognize
the specific non-spouse Beneficiary, if applicable, and the
specific method of payment. A Spouse may elect to irrevocably
release all rights to a qualified joint and survivor annuity and
may expressly permit that subsequent elections within the
election period be made by the Participant without any
requirement of further consent by the Spouse. A Spouse has the
right to restrict consent to a specific Beneficiary and/or
method of payment.
For purposes of this Section a former Spouse will
be treated as the Spouse to the extent provided under a
qualified domestic relations order as described in Code Section
414(p).
Section 5.8. Election Period. A Participant may
elect the method of benefit payment during the 90-day period
ending on his Annuity Starting Date. Any election made during
the election period shall be revocable, and another such
election may be made at any time prior to the close of the
election period, at which time the last such election which
shall have been made shall be irrevocable. Any such election,
and any revocation thereof, shall be made by notice in writing
to the Committee in a form which is satisfactory to the
Committee.
In the case of a Participant who elects to begin
receiving retirement benefit payments on a date such that there
is not sufficient time to provide notice under this Section at
least 30 days before his Annuity Starting Date, interim payments
under the method of payment elected shall be made unless a lump
sum payment is elected, but the initial election shall be
revocable by the Participant or his Spouse within 30 days of the
date the notice is given.
Section 5.9. Information to be Given
Participants. Consistent with regulations prescribed by the
Secretary of the Treasury and no less than 30 days and no more
than 90 days before his Annuity Starting Date, a written
statement shall be mailed or personally delivered to him setting
forth a general description of the joint and one-half survivor
annuity, as well as the circumstances under which it shall be
provided unless the Participant shall elect another form of
payment, the availability of such election, and a general
explanation of the financial effect of such election. Such
written statement shall also include a statement of the rights
of the Participant's Spouse as provided in Section 5.7. It
shall further notify the Participant that he may make a written
request at any time during the election period specified above,
for an additional written statement of the terms and conditions
of the joint and one-half survivor annuity and the financial
effect of payment in some method other than the joint and
one-half survivor annuity.
Section 5.10. Consent Requirement.
Notwithstanding anything in this Plan to the contrary, no
distribution shall commence to a Participant before his Normal
Retirement Age without the written consent of the Participant or
Inactive Participant and his Spouse, if any (except in the case
of a qualified joint and survivor annuity), unless the Actuarial
Equivalent present value of the Participant's vested Accrued
Benefit does not exceed $3,500.
Section 5.11. Payment of Small Benefits. If the
Actuarial Equivalent present value of the Participant's vested
Accrued Benefit does not exceed $3,500, such amount shall be
distributed to the Participant at the time at which such
retirement benefits are to commence, as a lump sum without his
consent, provided such distribution represents the Participant's
entire vested interest in the Plan. Such distribution shall be
made within the time period specified in Article 15. Any such
lump sum which is $200 or more shall include the right of the
Participant to make a direct rollover under Code Section
401(a)(31), as provided in Article 16.
Section 5.12. Transition Rule. (a)
Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one
Hour of Service under this Plan or a predecessor plan on or
after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits
paid in accordance with subsection (c) of this Section 5.12.
(b) The opportunity to elect (as described in
subsection (a) above) must be afforded to the
appropriate Participants during the period commencing on August
23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
(c) Any Participant who has elected, pursuant
to subsection (a) of this Section, shall have
his or her benefits distributed in accordance with all of the
following requirements if benefits would
have been payable in the form of a life annuity:
(1) Automatic joint and
survivor annuity. If benefits in the form of a life annuity
become payable to a married Inactive
Participant who:
(A) begins to
receive payments under the Plan on or after Normal
Retirement Age; or
(B) begins to receive payments on or after the Qualified Early
Retirement Age; or
(C) separates from service on or after attaining Normal
Retirement Age (or the
Qualified Early Retirement Age) and after satisfying the
eligibility requirements for the
payment of benefits under the plan and
thereafter dies before beginning to receive such
benefits;
then such benefits will be
received under this Plan in the form of a qualified
joint and survivor annuity, unless the
Participant has elected otherwise during
the election period. The election period must be at least
a 90-day period and must not end
more than 90 days before the commencement of benefits. Any
election hereunder will be in writing
and may be changed by the Participant at
any time.
(2) For purposes of this
Section 5.12 only.
(A) Qualified Early Retirement Age is the latest of:
1)the earliest date,
under the Plan, on which the Participant may
elect to receive retirement benefits,
2)the first day of the
120th month beginning before the
Participant reaches Normal Retirement Age, or
3)the date the
Participant begins participation.
(B)Qualified joint and survivor annuity is an annuity for the
life of the Participant
with a one-half (or greater, if applicable) survivor annuity
for the life of his Spouse as
described in Section 5.6.
ARTICLE 6
VESTING
Section 6.1. General. The Accrued Benefit of
each Participant, subject to the provisions of Article 8, shall be
fully vested in him (that is, not subject to forfeiture) upon
the first to occur of the following dates:
(a) Attainment of his Normal Retirement Age
(whether or not the Participant actually retires),
(b) Date on which he first becomes
eligible to elect early retirement (whether or not he actually elects
such early retirement),
(c) Date on which he first qualifies for Disability
retirement, or
(d) Date of completion of five or more Years
of Service.
Section 6.2. Payments Following Termination of
Service.
(a) If a Participant shall terminate
employment for any reason other than normal
retirement, Disability retirement, early retirement or death and
is not later reemployed, payment of his
vested Accrued Benefit, as determined pursuant to this
Article, shall be deferred until he is eligible for
and elects to receive an early retirement
benefit under the Plan or his Normal Retirement Date, whichever
is earlier. On that date, if he is then
living, he shall receive his vested Accrued Benefit
payable to or with respect to him in the same manner as
if he were then a Participant entitled to
an early or Normal Retirement Benefit under the Plan.
(b) If the Actuarial Equivalent present value
of the Participant's vested Accrued Benefit
does not exceed $3,500, such amount shall be distributed as a
lump sum without the Participant's consent,
provided such distribution represents the Participant's entire
vested interest in the Plan.
If the Actuarial Equivalent present value
of the Participant's vested Accrued Benefit is
greater than $3,500, the Participant may request to receive
such amount as a lump sum. In lieu of such
lump sum, a married Participant shall have the right to elect an
immediate joint and one-half survivor
annuity as described in Section 5.6, subject to
the provisions of Section 5.7. An unmarried Participant
shall have the right to elect an immediate
life annuity, in lieu of such lump sum. Such benefit shall be
reduced in the same manner as early
retirement benefits in Section 5.2 and actuarially reduced
for each additional year before he would have
attained his Early Retirement Age.
Any lump sum distribution under this
subsection (b) shall be made as soon as
administratively feasible following the Plan Year in which such
termination occurs. Any such lump sum
which is $200 or more shall include the right of the Participant
to make a direct rollover under Code
Section 401(a)(31), as provided in Article 16.
(c) If an individual receives a
distribution from the Plan which then represents the
Actuarial Equivalent of the present value of his full
Accrued Benefit and is subsequently
reemployed or otherwise earns additional service under the Plan,
his Years of Service for purposes of
determining his Accrued Benefit shall include service
prior to his termination on which the earlier
distribution was based. However, the
benefit subsequently paid to such Participant shall be adjusted
by the Actuarial Equivalent of the benefit
previously paid.
Section 6.3. Rights of Employees. The adoption
of the Plan shall not be construed as conferring any legal or
other rights upon any Employee or any persons for continuation
of employment, nor shall it interfere with the right of the
Employer to discharge any Employee or to deal with him without
regard to the effect thereof under the Plan.
Section 6.4. Deemed Distribution. Any individual
whose employment with the Employer, or a Related Employer, has
terminated prior to that individual obtaining any nonforfeitable
Accrued Benefit under the Plan shall be treated as having been
cashed-out of the Plan on his termination date, and his status
as a Participant in the Plan shall cease as of that date,
subject to his right to again commence participation, as
otherwise provided by the Plan.
ARTICLE 7
DEATH
Section 7.1. General. Except as otherwise
provided in Article 5 and in this Article 7, no death benefit
shall be payable under the Plan.
Section 7.2. Death Prior to the Annuity Starting
Date. If a vested married Participant or vested married
Inactive Participant dies prior to his Annuity Starting Date,
his surviving Spouse, if any, shall be entitled to an annuity
equal to the following amount.
In the case of a married Participant who dies on
or before his earliest retirement date, the survivor annuity
shall be computed as if the Participant had separated from
service on the date of his death, survived to the earliest
retirement date under the Plan, had commenced receiving payment
of a joint and one-half survivor annuity as provided in Section
5.6, then died on the day after his earliest retirement date.
In the case of a married Inactive Participant who
dies on or before his earliest retirement date, the survivor
annuity shall be computed in the same manner as for an active
Participant, except that the date he separated from service
instead of the date of his death shall be used.
In the case of a married Participant or a married
Inactive Participant who dies after his earliest retirement
date, such survivor annuity shall be computed as if such
Participant had begun receiving a joint and one-half survivor
annuity on the day before his death.
Section 7.3. Payment of Small Benefits.
Notwithstanding the above, if the lump sum Actuarial Equivalent
of the benefit described in Section 7.2 is $3,500 or less, then
payment shall be made to the Spouse in a lump sum.
Section 7.4. Commencement of and Period for
Payment of Death Benefits. The Spouse shall elect a benefit
commencement date which falls within the period beginning on the
date the Participant or Inactive Participant would have attained
his earliest retirement date and ending on the date on which the
deceased Participant or Inactive Participant would have attained
Age 70 1/2.
If the Participant's or Inactive
Participant's Spouse, if any, does not survive, no death benefit
will be paid.
Section 7.5. Death Following the Annuity Starting
Date. If a Participant or Inactive Participant dies after the
Annuity Starting date, payments (if any are appropriate) shall
be made in accordance with the method of payment elected by the
Participant or Inactive Participant pursuant to Article 5, and
shall in all events be payable at least as rapidly as under the
method of payment in effect prior to the Participant's or
Inactive Participant's death.
Section 7.6. Qualified Domestic Relations Order.
For purposes of this Article 7, a former Spouse shall be treated
as the Spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
Section 7.7. Transition Rule. Any living married
Inactive Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by
Section 7.2 shall have Section 7.2 apply to him if he is
credited with at least one Hour of Service under this Plan or a
predecessor plan in any Plan Year beginning on or after January
1, 1976, and if he had at least ten Years of Service for vesting
and had at least a partially vested interest in the Plan at the
time he separated from service.
Section 7.8. Death After Election of Joint and
Survivor Annuity. If a Participant or Inactive Participant who
had made a valid election under Section 5.7 of a qualified joint
and survivor annuity with a survivorship portion payable to his
Spouse greater than 50% dies before his Annuity Starting Date,
the survivor annuity otherwise payable under this Article shall
not be less than the monthly amount the Spouse would have
received under the method of payment elected had the Participant
or Inactive Participant died on the day after his Annuity
Starting Date.
ARTICLE 8
TOP-HEAVY PLAN PROVISIONS
Section 8.1. Determination Date. If, as of the
Determination Date, the Plan is a Top-Heavy Plan, as defined in
Section 8.3, the provisions of this Article 8 shall apply.
The Determination Date with respect to any Plan
Year shall be the last day of the preceding Plan Year.
Section 8.2. Valuation Date. The Valuation Date
is the date on which a Participant's Accrued Benefit is
determined for purposes of determining if this Plan is a
Top-Heavy Plan.
Except as provided below, the Valuation Date shall
be the most recent date falling within the 12-month period
ending on the Determination Date, on which a computation was
made for purposes of computing plan costs for minimum funding
purposes.
In the first Plan Year the Accrued Benefit for a
Participant shall be determined either (a) as if that
Participant terminated service as of the Determination Date or
(b) as if that Participant terminated service as of the
Valuation Date, taking into account the estimated Accrued
Benefit as of the Determination Date.
For the second Plan Year, the Accrued Benefit for
a Participant must not be less than his Accrued Benefit taken
into account for the first Plan Year unless the difference is
attributable to using an estimate of the Accrued Benefit as of
the Determination Date for the first Plan Year and using the
actual Accrued Benefit as of the Determination Date for the
second Plan Year.
For any Plan Year after the second Plan Year the
Accrued Benefit for a Participant must be determined as if the
Employee terminated service as of the Valuation Date.
Section 8.3. Top-Heavy Plan. (a)
The Plan shall be considered a Top-Heavy Plan, if, as of the
Determination Date, either:
(1)the
aggregate of the present value of the Accrued Benefits for Key
Employees under the Plan exceeds
60% of the sum of the present value of the Accrued
Benefits of all Employees under the Plan, or
(2)the Plan is part of a
Top-Heavy Group, as defined in Section 8.5.
Notwithstanding anything in this
subsection (a), if this Plan is part of an aggregation
group, as defined in Section 8.5, that is found not to
be Top-Heavy, then this Plan shall not be a
Top-Heavy Plan.
(b) The present value of Accrued Benefits for
purposes of this Section shall be determined
according to the following actuarial assumptions:
Annual effective interest
rate of 5%
Mortality:PBGC I for males
PBGC II for females
For purposes of this Section the actuarial
assumptions used for all plans within the Top-Heavy Group must
be the same.
(c) For purposes of determining whether the
Top-Heavy rules apply for any Plan Year:
(1)Rollover contributions
initiated by an Employee and accepted by this Plan
after December 31, 1983, shall not be recognized
with respect to this Plan if the
rollover contribution came from a plan not maintained by the
Employer or Related Employer.
(2)Any Accrued Benefit for
an Employee who is not currently a Key Employee,
but at one time was a Key Employee, shall not be
recognized for the Plan Year
ending on the Determination Date.
(3)Except as provided in (4)
below, the Accrued Benefit for an Employee shall
include aggregate distributions made with respect
to such Employee under the Plan
during the five-year period ending on the Determination Date,
except for the distributions made
to former Key Employees excluded above, and
distributions rolled over to a plan maintained by the
Employer or Related Employer.
(4)Effective for Plan Years
beginning after December 31, 1984, if an individual
has not performed any service for the Employer
at any time during the fiveyear period ending on the
Determination Date, any Accrued Benefit for such
individual shall not be taken into account.
(5)The Accrued Benefit shall
include any non-proportional subsidies but shall
exclude proportional subsidies.
(d) Notwithstanding, when two or
more plans constitute an aggregation group, the present
value of the accrued benefits shall be determined
separately for each plan as of each plan's
Determination Date and then aggregated for each plan as of the
Determination Date for such plans that fall
within the same calendar year.
Section 8.4. Key Employee shall mean any Employee
or former Employee who, at any time during the Plan Year or any
of the four preceding Plan Years, is: (a) an
officer of the Employer having an annual Compensation greater
than 50% of the defined benefit dollar
limitation under Section 415(b)(1)(A) of the Code (as it may be
increased by the Secretary of the Treasury
for any applicable cost of living increases);
however, the maximum number of officers considered Key
Employees may not exceed (i) three if there
are less than 30 Employees, (ii) ten percent of all Employees
if there are between 30 and 500 Employees, or
(iii) 50 if there are more than 500
Employees. Officers shall include only those administrative
executives who regularly and continuously
serve as such. Title alone shall not be determinative of
officer status;
(b) one of the ten Employees earning an annual
Compensation which exceeds the maximum
defined contribution annual additions dollar limit under Code
Section 415 and owning (or considered as
owning within the meaning of Code Section 318) more
than both 1/2 percent interest and the largest interests
in the Employer;
(c) a five-percent owner of the Employer,
meaning if the employer is a Corporation, any
person who owns (or is considered as owning within the meaning
of Section 318) more than five percent of
the outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting
power of all stock of the corporation, or
if the employer is not a corporation, any person who owns more
than five percent of the capital or profits
interest in the Employer; or
(d) a one-percent owner of the Employer having
an annual Compensation from the Employer of
more than $150,000, meaning if the employer is a corporation,
any person who owns (or is considered as
owning within the meaning of Section 318)
more than one percent of the outstanding stock of the Employer
or stock possessing more than one percent
of the total combined voting power of all stock of the
corporation, or if the Employer is not a corporation,
any person who owns more than one percent
of the capital or profits interest in the Employer.
For purposes of this Section 8.4, Employee shall
mean any Employee, as defined in Article 2, of the Employer, or
any employee of a Related Employer if the Plan is part of a
Top-Heavy Group with the plan of a Related Employer. Employee
and Key Employee shall include any beneficiary of an Employee or
a Key Employee, and former Key Employee shall include any
beneficiary of a former Key Employee.
For purposes of subsections (b), (c),
and (d) above, constructive ownership rules of Code Section 318
shall be applied by substituting "5 percent" for "50 percent" in
Code Section 318(a)(2).
For purposes of determining one percent and five
percent ownership, the aggregation rules of Code Section 414(b),
(c), and (m) shall not apply.
Notwithstanding anything above, the criteria used
in the determination of Key Employees shall be consistent with
Code Section 416, which is incorporated herein by reference.
Non-Key Employee shall mean any Employee who is
neither a Key Employee nor a former Key Employee.
Section 8.5. Top-Heavy Group. (a)
Top-Heavy Group shall mean an aggregation group where the sum,
as of the Determination Date, of (1) and
(2) exceeds 60% of the same amount determined for
all Employees, under all plans included in the group, and
(1)is the present value of
the cumulative accrued benefits for Key Employees
under any defined benefit plan included in the
group, and
(2)is the sum of the account
balances of Key Employees under any defined
contribution plan included in the group.
(b) The aggregation group must include:
(1)any plan of the Employer
or Related Employer in which a Key Employee is a
participant, and
(2)any plan on which a plan
covering a Key Employee depends for qualification
under the requirements of Code Section 401(a)(4)
or 410.
(c) The aggregation group may also include, at
the election of the Employer, any plan not
required to be included in an aggregation group if such group
would continue to meet the qualification
requirements of Code Sections 401(a)(4) and 410. If such an
aggregation group is found not to be Top-Heavy,
then no plan shall be considered Top-Heavy.
If the aggregation group is found to be Top-Heavy, then all
plans in the group, except the plan which
was not required to be included, would be considered
Top-Heavy Plans.
(d) All plans maintained by the Employer
(including plans that have terminated) during
the 5-year period ending on a Determination Date must be
considered in determining the Top-Heavy
Group as of that Determination Date.
Section 8.6. Minimum Benefits for
Top-Heavy Plans. If the Plan is or becomes a Top-Heavy Plan,
then, notwithstanding the provisions of Section 2.2, the minimum
accrued benefit expressed as a single life annuity beginning at
Normal Retirement Age for each Non-Key Employee who is a
Participant shall be the lesser of: (a) two
percent of his Top-Heavy Average Compensation times Top-Heavy
Years of Service, or
(b) 20% of his Top-Heavy Average Compensation.
If the form of benefit is other than a single life
annuity, the minimum benefit must be an amount that is the
Actuarial Equivalent of the above minimum benefit. If the
benefit commences at a date other than at Normal Retirement Age,
the Participant will receive an amount that is at least the
Actuarial Equivalent of the single life annuity benefit
commencing at Normal Retirement Age.
Each Non-Key Employee who is a Participant shall
receive this minimum benefit regardless of the Non-Key
Employee's level of Compensation and regardless of whether the
Non-Key Employee is employed on a specified date.
Section 8.7. Top-Heavy Group Minimum Benefits.
In the case of a Top-Heavy Group consisting of both defined
benefit and defined contribution plans, the required minimum
accrued benefit or Employer contribution for each Top-Heavy Year
of Service for Employees participating in each type of Plan
shall be satisfied by the minimum accrued benefit under this
Plan.
The required minimum accrued benefit or Employer
contribution for each Top-Heavy Year of Service for Employees
who do not participate in this Plan but who do participate in
another plan of the Top-Heavy Group shall be satisfied by
providing the minimum accrued benefit or contribution under that
plan.
Section 8.8. Compensation and Top-Heavy Average
Compensation. For purposes of this Article 8, Compensation
shall mean compensation as defined in Section 414(q)(7) of the
Code. Top-Heavy Average Compensation shall mean the average
Compensation paid during the consecutive Top-Heavy Years of
Service, not to exceed five years, which produces the highest
average Compensation. In determining the Top-Heavy Average
Compensation, years during which the Employee did not earn a
Year of Service shall be disregarded.
Section 8.9. Years of Service.
Top-Heavy Years of Service shall mean all Years of Service,
excluding any Year of Service after which the Plan was not a
Top-Heavy Plan for the Plan Year ending during such Year of
Service and further excluding any Year of Service completed in a
Plan Year beginning before January 1, 1984.
Section 8.10. No Duplication of Minimum Benefit.
If the Employer maintains another qualified plan which provides
a minimum benefit or contribution, then the minimum benefit or
contribution provided under this Plan shall not, when combined
with the benefit or contribution provided by the other plan,
exceed the amount required by Section 416(c) of the Code.
Section 8.11. Minimum Vesting Requirements. If
the Plan is or becomes a Top-Heavy Plan, as defined in Section
8.3, then, notwithstanding the provisions of Section 6.1, a
Participant shall be 100% vested in his Accrued Benefit after
three Years of Service.
Years of Service for the purposes of vesting in a
Top-Heavy Plan shall include all Years of Service, including
years prior to January 1, 1984, and years during which the Plan
is not considered to be a Top-Heavy Plan. Vesting pursuant to
this Section 8.11 shall apply to each Participant's entire
Accrued Benefit. However, when the Plan becomes a Top-Heavy
Plan, the Accrued Benefit of any Employee who does not complete
at least one Hour of Service after the Plan becomes Top-Heavy is
not required to be subject to the minimum vesting schedule for
Top-Heavy Plans.
When the Plan ceases to be a Top-Heavy Plan, the
vesting schedule shall not revert to the schedule defined in
Section 6.1. Section
8.12. Adjustments in Section 415 Limits for Top-Heavy Plans.
If this Plan is a TopHeavy Plan or if the Plan and one or more
other plans maintained by the Employer or Related Employer in
the aggregate are or become a Top-Heavy Group, then the defined
benefit plan fraction, as defined in Section 14.8, shall be
applied by substituting 1.0 for 1.25, and the defined
contribution plan fraction as defined in Section 14.8 shall be
applied by substituting 1.0 for 1.25.
The above paragraph shall not apply if (a) and (b)
below are satisfied:
(a) In the case of a Top-Heavy Group
consisting of both defined contribution and defined
benefit plans, a minimum benefit shall be provided for
each Non-Key Employee who participates in
defined benefit plans equal to the lesser of three percent (3%)
of TopHeavy Average Compensation as defined in Section 8.8, per
Top-Heavy Year of Service after January 1,
1984, or thirty percent (30%) of Top-Heavy Average
Compensation, as defined in Section 8.8.
Notwithstanding, a minimum contribution of
four percent (4%) of Top-Heavy Average
Compensation shall be provided for each Non-Key Employee covered
only by a defined contribution plan in the
Top-Heavy Group.
(b) The present value of the cumulative
accrued benefits of all Key Employees does not
exceed ninety percent (90%) of the present value of the
cumulative accrued benefits of all
Employees participating in this Plan or participating in this
Plan and any other plans included in the
Top-Heavy Group, excluding former Key Employees.
Section 8.13. Transition Fraction. If this Plan
is a Top-Heavy Plan to which the above Section 8.12 applies,
then $41,500 shall be substituted for $51,875 in the Transition
Fraction defined in Article 14.
ARTICLE 9
ADMINISTRATION BY COMMITTEE Section
9.1. The Committee shall consist of not less than three nor
more than five individuals who shall be appointed by the Board
to serve at the pleasure of the Board. Any member of the
Committee may resign, and his successor, if any, shall be
appointed by the Board. The Committee shall be responsible for
the general administration and interpretation of the Plan and
for carrying out its provisions, except to the extent all or any
of such obligations are specifically imposed on the Trustee or
the Board. The Committee shall constitute a named fiduciary
under the Plan. Section 9.2. The members of the
Committee shall elect a Chairman and may elect an acting
Chairman. They shall also elect a Secretary and may elect an
acting Secretary, either one of whom may be, but need not be,
members of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee
shall determine and may authorize one or more of its members, or
any agent, to execute or deliver any instruments or to make any
payment on behalf of the Committee.
Section 9.3. The Committee shall hold such
meetings upon such notice at such places and at such intervals
as it may from time to time determine. Notice of meetings shall
not be required if notice is waived in writing by all of the
members of the Committee or if all such members are present at
the meeting.
Section 9.4. A majority of the members of the
Committee shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the
Committee at any meeting shall be by vote of a majority of those
present and entitled to vote at any such meeting. Resolutions
may be adopted or other action taken without a meeting only upon
written consent thereto signed by all of the members of the
Committee.
Section 9.5. The Committee shall maintain full
and complete records of its deliberations and decisions. Its
records shall contain all relevant data pertaining to individual
Participants and their rights under the Plan and in the Fund.
Section 9.6. Subject to the
limitations of the Plan and of the Act, the Committee may from
time to time establish rules or by-laws for the administration
of the Plan and the transaction of its business.
Section 9.7. No individual member of the
Committee shall have any right to vote or decide upon any matter
relating solely to himself or to any of his rights or benefits
under the Plan. Such member, however, may sign any unanimous
written consent to resolutions adopted or other action taken
without a meeting.
Section 9.8. The Committee may correct errors
and, insofar as practicable, may adjust any benefit or credit or
payment accordingly.
Section 9.9. Subject to the claims procedure set
forth in Article 11, the Committee shall have the duty and
authority to interpret and construe the provisions of the Plan
and to decide any dispute which may arise regarding the rights
of Participants thereunder. Such determinations shall apply
uniformly to all persons similarly situated and shall be binding
and conclusive upon all interested persons.
Section 9.10. The Committee may, at its option,
instruct the Trustee to purchase annuity contracts from a legal
reserve life insurance company to provide any benefits due from
the Plan. Any such annuity contracts shall be nontransferable
and nonforfeitable.
Section 9.11. The Committee may engage an
actuary, attorney, accountant or any other technical advisor to
perform such other duties as shall be required regarding the
operation of the Plan and may employ such clerical and related
personnel as the Committee shall deem necessary or desirable in
carrying out the provisions of the Plan. Subject to the
provisions of the Act, the Committee may determine and recommend
annually to the Board the amount of contribution to be made to
the Fund for the year.
Section 9.12. No fee or compensation shall be
paid to any member of the Committee for his services as such.
Section 9.13. The Committee shall be
entitled to reimbursement out of the Trust Fund for reasonable
expenses properly and actually incurred in the performance of
its duties in the administration of the Plan.
ARTICLE 10
ALLOCATION OF RESPONSIBILITIES AMONG NAMED
FIDUCIARIES, MANAGEMENT OF FUNDS
AND AMENDMENT OR TERMINATION OF PLAN
Section 10.1. The responsibilities allocated to
the named fiduciaries are as follows: (a)
Board: (1) to amend the Plan,
(2)to appoint and remove members of the
Committee, (3)to appoint and
remove Trustees under the Plan,
(4)to determine the amount to be contributed to the Plan each
year by the Employer, and
(5)to terminate the Plan.
(b) Committee:
(1)to interpret the
provisions of the Plan and to determine the rights of the
Participants under the Plan including eligibility for participation
or benefits, except to the extent otherwise provided in Article 11
relating to the claims procedure,
(2)to administer the Plan in
accordance with its terms, except to the extent powers to administer
the Plan are specifically delegated to another named
fiduciary or other person or persons as provided in the Plan,
(3)to calculate the service
and to account for the Accrued Benefits of Participants
and to maintain service and employment records, and
(4)to direct the Trustees in
the distribution of Trust assets and benefit payments.
(c) Plan Administrator:
(1)to file such reports as
may be required to the United States Department of Labor, the
Internal Revenue Service, the Pension Benefit Guaranty
Corporation and any other government agencies for which reports may be
required to be submitted from time to time,
(2)to comply with
requirements of law for disclosure of Plan provisions and
other information relating to the Plan, to Participants and other
interested parties,
(3)to administer the claims
procedure, as provided in Article 11,
(4)to direct the Trustee to
withhold from distributions made pursuant to this Plan those amounts
required by law and further to direct the Trustee to make any
reports to Participants and to any others as may be required by
the Internal Revenue Code or other controlling law, rules or
regulations, and
(5)to establish and execute
the funding policy of the Plan.
(d) Trustees:
(1)to invest and reinvest
Trust assets,
(2)to make benefit payments
to Plan Participants as directed by the Committee,
(3)to render annual or other
periodic or terminal accountings to the Employer as
provided in the Trust Agreement, and
(4)otherwise to hold,
administer and control the assets of the Trust as provided in
the Plan and Trust Agreement.
(e) Investment Manager:
If appointed in accordance with the terms
of the Trust Agreement, the Investment
Manager shall have the power to manage, acquire and dispose of
any assets under the Plan, or to direct the
Trustee in the management, acquisition or disposition of any
such assets.
Section 10.2. Except as otherwise provided in the
Act, a named fiduciary shall not be responsible or liable for
acts or omissions of another named fiduciary with respect to its
fiduciary responsibilities. A named fiduciary of the Plan shall
be responsible and liable only for its own acts or omissions
with respect to fiduciary duties specifically allocated to it
and designated as its responsibility.
Section 10.3. All assets of the Plan shall be
held in a Trust forming part of the Plan. The Trust shall be
administered as a Fund to provide for the payment of benefits
out of the income and principal of the Trust to the Participants
or their successors in interest as provided in the Plan. All
fiduciaries (as defined in the Act) with respect to the Plan
shall discharge their duties as such solely in the interest of
the Participants and their successors in interest (a) for the
exclusive purposes of providing benefits to Participants and
their successors in interest and of defraying reasonable
expenses of administering the Plan and Trust, (b) with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, and (c) in
accordance with the Plan and Trust Agreement, except to the
extent such documents may be inconsistent with the Act. Except
when specifically provided in this Plan or in the Trust, the
assets of the Plan shall never inure to the benefit of the
Employer.
At no time shall it be possible for the Plan
assets to be used for, or diverted to, any purpose other than
for the exclusive benefit of the Participants and their
Beneficiaries. Notwithstanding the foregoing, contributions
made by the Employer may be returned to the Employer if:
(a) the contributions were conditioned on the
initial qualification of the Plan under the
Code, the Commissioner of Internal Revenue determines the Plan
is not initially qualified under the
Internal Revenue Code and all assets attributable to such
employer contributions are returned within
one year after the plan is found to not so qualify; or
(b) the contribution was made due to a mistake
of fact; the contribution is returned within
one year of the mistaken payment of the contribution and the
return satisfies the requirements of
paragraph (d) below; or
(c) the contribution was conditioned on its
current deductibility, under Code Section 404,
the deduction is disallowed, the contribution is returned
within one year of the disallowance of the
deduction, the return satisfies the requirements of paragraph
(d) below.
(d) The return of a Plan contribution to the
Employer satisfies the requirements of this
paragraph if the amount so returned does not exceed the amount
contributed over
(1) the amount that would have been contributed had there been
no mistake of fact or
(2) the amount that would have been contributed
had the contribution been limited to the amount that is deductible
after any disallowance by the Internal Revenue Service.
Earnings attributable to such contributions may not be returned.
However, a return will not satisfy the requirements of this
paragraph unless the amount of the contribution so returned
is reduced by any losses attributable to the contribution.
Section 10.4. The Employer and the Trustee shall
enter into an appropriate Trust Agreement, which shall be a part
of the Plan, for the administration of the Trust under the Plan.
Such Trust Agreement shall contain such powers and reservations
as to investment, reinvestment, control and disbursement of the
funds of the Trust and such other provisions as shall be agreed
upon and set forth therein which are not inconsistent with the
provisions of this Plan, its nature and purposes, and the Act.
Said Trust Agreement shall provide that the Board may remove the
Trustee at any time upon reasonable notice, that the Trustee may
resign at any time upon reasonable notice, and that upon such
removal or resignation of any Trustee, the Board shall designate
a successor Trustee.
Section 10.5. All requests,
directions, requisitions and instructions of the Committee to
the Trustee shall be in writing and signed by the Secretary of
the Committee or by any one member of the Committee authorized
by the majority to sign.
Section 10.6. The Employer hereby reserves the
right, by action of the Board, to amend or terminate the Plan
and Trust or Trust Agreement at any time. Except, however, as
provided in Sections 10.3 and 12.3, no such amendment or
termination shall have the effect of diverting the Trust Funds
to purposes other than for the exclusive benefit of the
Participants.
ARTICLE 11
CLAIMS PROCEDURE
Section 11.1. Filing of a Claim for Benefits. If
either a Participant or a Beneficiary believes he is entitled to
a benefit from the Plan which he is not receiving, he (the
"claimant") shall file a written claim with the Plan
Administrator or any member of the Committee upon a form
approved by the Committee. In the event the Plan Administrator
is the claimant, all actions which are required to be taken by
the Plan Administrator pursuant to this Article shall be taken
instead by a member of the Committee as designated by the
Employer.
Section 11.2. Notification to Claimant of
Decision. Notice of a decision with respect to a claim shall be
furnished to the claimant within 90 days following the receipt
of the claim by the Plan Administrator or any member of the
Committee unless special circumstances require an extension of
time for processing the claim. If there is a need for such an
extension, written notice of the extension shall be furnished by
the Committee to the claimant prior to the expiration of the
initial 90 day period. In no event shall such extension exceed
a period of 90 days from the end of the initial 90 day period.
The notice of extension shall indicate the special circumstances
requiring the extension and the date by which the notice of
decision with respect to the claim shall be furnished.
Commencement of benefit payments shall constitute notice of
approval of a claim to the extent of the amount of the approved
benefit. If such claim shall be wholly or partially denied,
such notice shall be in writing and worded in a manner
calculated to be understood by the claimant and shall set forth:
(a) the specific reason or reasons for the denial, (b) specific
reference to pertinent provisions of the Plan on which the
denial is based, (c) a description of any additional material or
information necessary for the claimant to perfect the claim and
an explanation of why such material or information is necessary
and (d) an explanation of the Plan's claims review procedure.
If the claimant is not notified of the decision regarding his
claim in accordance with this Article, the claim shall be deemed
denied and the claimant shall then be permitted to proceed with
the claims review procedure provided in Section 11.3.
Section 11.3. Claims Review Procedure. Within 60
days following receipt by the claimant of notice of the claim
denial or within 60 days following the close of the 90 day
period referred to in Section 11.2, if the claimant is not
notified of the decision within such 90 day period, the claimant
may appeal denial of the claim. The claimant shall be given an
opportunity to review pertinent documents and to submit issues
and comments in writing. A request for review by the Committee
shall be in writing and shall contain all additional information
which the claimant wishes considered. Following such request
for review, the Committee shall fully and fairly review the
decision denying the claim.
Section 11.4. Decision on Review. The decision
on review of a denied claim shall be made in the following
manner.
(a) The Committee shall make its decision regarding the merits
of the denied claim within 60 days following receipt by the
Committee of the request for review (or within 120 days
after such receipt in a case where there are special
circumstances requiring extension of time
for reviewing the appealed claim). It shall deliver the
decision to the claimant in writing. If an
extension of time for reviewing the appealed claim is
required because of special circumstances, written
notice of the extension shall be furnished to the claimant prior
to the commencement of the extension. If the decision
on review is not furnished within the prescribed time, the
claim shall be deemed denied on review.
(b) The decision on review shall set forth specific reasons for
the decision, shall be written in a manner calculated to be
understood by the claimant and shall cite specific references to the
pertinent Plan provisions on which the decision is based.
Section 11.5. Action by Authorized Representative
of Claimant. All actions set forth in this Article to be taken
by the claimant may likewise be taken by a representative of the
claimant duly authorized by him to act in his behalf on such
matters. The Plan Administrator or the Committee may require
such evidence of the authority to act of any such representative
as either may deem reasonably necessary or advisable.
ARTICLE 12
TERMINATION OF PLAN AND TRUST
Section 12.1. In the event of termination of the
Plan, all Employer contributions shall cease, and no additional
Participants shall enter the Plan. The net assets of the Trust,
after reduction for expenses of administration and liquidation,
shall be allocated to the Participants in the following order:
(a) First, to the benefits attributable to
voluntary Employee contributions, if any, which is
the portion of an Accrued Benefit of a Participant, Spouse
or other Beneficiary due to voluntary
contributions, if any, rather than contributions, if any,
required for participation in the Plan or
in any merged plan. (b) Second, to the
benefits attributable to mandatory Employee contributions, if
any, which is the portion of an Accrued
Benefit, other than those specified in subsection (a)
of a Participant, Spouse, or other Beneficiary due to
the Participant's contributions, if any,
which were required for participation in the Plan or in any
merged plan.
(c) Third, to the Actuarial Equivalent of the
Accrued Benefit, other than those specified
in subsections (a) and (b), of each Participant with respect to
whom payments under the Plan commenced at
least three years preceding the date of termination or with
respect to whom payments under the Plan would
have commenced at least three years
preceding the date of termination if such Participant had
retired as of the beginning of such three
year period, provided that there shall be excluded from this
subsection (c) any increase in benefits
resulting from amendments to the Plan at any time during the
five years preceding the date of termination.
(d) Fourth, the Actuarial Equivalent of all
Accrued Benefits, other than those specified in
subsections (a) through (c), payment of which are guaranteed
by the Pension Benefit Guaranty Corporation
referred to in the Act, determined irrespective of the
limitation to a single $750 monthly benefit
(as may be further adjusted for cost of living
expenses) where an Employee is a Participant in more than one
Plan of the Employer.
(e) Fifth, the Actuarial Equivalent of all
Accrued Benefits, other than those specified in
subsections (a) through (d), which are vested under the Plan.
(Vested interests shall be determined
without taking the termination of the Plan into account.) If,
however, the assets under the Plan are not
sufficient to pay the Actuarial Equivalent of such
vested Accrued Benefits in full, first priority shall be
given to such benefits which would have been
vested under the Plan as in effect at the beginning of the five
year period ending on the date of Plan
termination. (Any assets of the Plan in excess of
such amount shall be used to satisfy increases in
benefits due to any Plan amendments within
the five year period). Second priority shall be given to such
amendment providing for the smallest
increase in benefits and third priority to such amendment
providing for the second smallest increase in
benefits and continuing until the first to
occur of exhaustion of Plan assets or payment of the Actuarial
Equivalent of all increases in Accrued
Benefits due to amendments during such five year period.
(f) Sixth, the Actuarial Equivalent
of Accrued Benefits under the Plan in addition to the
Accrued Benefits described in subsections (a) through
(e).
If the net assets of the Trust available for
allocation as provided in the foregoing subsections (a) through
(f) are insufficient to satisfy in full all Accrued Benefits
designated in such subsections, such net assets shall be applied
to satisfaction in full of the Accrued Benefits designated in
each such subsection in the order set forth, and no part of such
assets shall be applied to satisfy Accrued Benefits designated
in any such subsection until all Accrued Benefits designated in
all preceding subsections have been satisfied in full. If such
net assets applied to satisfy the Accrued Benefits under one
subsection are insufficient to fully satisfy the Accrued
Benefits designated in that subsection, such net assets so
allocated pursuant to such subsection shall be apportioned in
satisfaction of such benefits on the basis of the present value,
as of the Plan termination date, of such Accrued Benefits.
Section 12.2. The amount allocated pursuant to
Section 12.1 hereof shall be payable to such Employees, in the
form of an annuity or any other optional methods of payment
under Section 5.6. Such distributions will insure that the
provisions of Sections 5.6 and 5.7 shall be complied with. If
the value of a married or single Participant's or Inactive
Participant's benefit is $3,500 or less, then the Committee
shall distribute the benefit in a single lump sum in any event.
Any such lump sum which is $200 or more shall include the right
of the Participant or Inactive Participant to make a direct
rollover under Code Section 401(a)(31), as provided in Article
16.
Each Participant eligible for retirement will be
given at least a reasonable period during which he can elect or
revoke his form of benefit payment.
Section 12.3. Upon complete termination of the
Plan, each Participant shall have a fully vested and
nonforfeitable interest in his Accrued Benefit to the extent
funded. In determining the funded Accrued Benefit of each such
Participant, the provisions of Sections 12.1 and 12.4 shall
apply. If, following a complete termination of the Plan, there
are assets in the Trust Fund resulting from variations in actual
experience and expected actuarial experience after all
liabilities of the Plan to the Participants have been satisfied,
such remaining assets shall be distributed to the Employer.
Section 12.4. For purposes of complying with the
requirements of Section 1.401-4(c) of the regulations of the
United States Treasury Department, the following provisions are
hereby incorporated in and made a part of this Plan.
(a) The following terms are defined for the
purposes of this Section 12.4:
(1)The term "Benefits"
includes any periodic income, any withdrawal values
payable to a living Participant and the cost of
any death benefits which may be
payable after retirement on behalf of a Participant, but does
not include the cost of any death
benefits with respect to a Participant before retirement nor
the amount of any death benefits
actually payable after the death of a
Participant whether such death occurs before or after
retirement.
(2)The term "Full Current
Costs" means the normal cost of the Plan for all years
since the effective date of the Plan, plus
interest on any unfunded liability
during such period.
(3)The term "Annual
Compensation" of a Participant means either such
Participant's average regular annual Compensation,
or such average Compensation for
the last five years, or such Participant's last annual
Compensation if such Compensation is
reasonably similar to his average
regular annual Compensation for the preceding five years.
(4)The term "Substantial
Owner" means an Employee or former Employee who
is presently or who at any time during the last 60
months was:
(A)in the case of a sole proprietorship, the sole owner of an
unincorporated trade or
business,
(B)in the case of a partnership, a partner who directly or
indirectly owns more than
ten percent of either the capital interest or the profits
interest in such partnership, or
(C)in the case of a corporation, a person who directly or
indirectly owns more than
ten percent in value of the voting stock of that corporation.
For purposes of this subsection
(a)(4), the constructive ownership rules of
Section 1563(e) of the Code (without regard to Section
1563(e)(3)(C)) shall apply.
(b) Upon the occurrence of any event described
in subsection (c) of this Section, the
Employer contribution applied for the benefit of a Participant
who is among the twenty-five highest paid
Employees of the Employer at the effective date of the Plan
and whose anticipated annual normal retirement
benefit under the Plan exceeds $1,500 shall
be restricted in accordance with subsection (d) of this Section.
(c) The restrictions described in subsection
(d) of this Section shall become applicable if:
(1)the Plan is terminated
within ten years after the original effective date of the
Plan;
(2)the Benefits of a
Participant described in subsection (b) above become payable
within ten years after the effective
date of the Plan; or
(3)the Plan is not subject to the
minimum funding requirements of Code Section
412 and the Benefits of a Participant described in (b)
above become payable after the
Plan has been in effect for ten years and the Full Current Costs
of the Plan for the first ten
years have not been funded.
(d) The restrictions required under subsection
(b) of this Section are that the Employer
contributions which may be used for the benefit of a Participant
described in such subsection (b) shall not
exceed the greater of (1) or (2) where:
(1)is the greater of
$20,000, or 20 percent of the first $50,000 of the Annual
Compensation of such Participant
multiplied by the number of years between
the effective date of the Plan and
(A)the date of termination of the Plan;
(B)in the case of a Participant described in subsection (c)(2)
of this Section, the date
the Benefit of the Participant becomes payable, if this
date is before the termination date
of the Plan; or
(C)in the case of a Participant described in subsection (c)(3)
of this Section, the date
of the failure to meet the Full Current Costs of the
Plan. However, if the Full Current
Costs of the Plan have not been
met on the date described in (A) or (B) of this subsection,
whichever is applicable,
then the date of the failure to meet such Full Current
Costs shall be substituted for the
date referred to in (A) or (B) of this
subsection. For purposes of determining the
contributions which may be
used for the Benefits of a Participant when (B) of this
subsection applies, the
number of years taken into account may be recomputed
for each year if the Full Current Costs
of the Plan are met for such
year.
(2)is a dollar amount equal
to:
(A) in the case of a
Participant described in (b) above who is also a
Substantial Owner, the present value of the
benefit guaranteed for such
Participant under Section 4022 of the Act if the Plan was
terminated or the present
value of the benefit that would be guaranteed under
Section 4022 of the Act and applicable
regulations thereunder had the
Plan terminated on the date Benefits commence; or
(B)in the case of a Participant described in (b) above who is
not a Substantial Owner,
the present value of the maximum benefit
described in Section 4022(b)(3)(B) of the Act,
determined on the earlier
of the date the Plan terminates or the date Benefits commence,
without regard to any other
limitations of Section 4022 of the Act.
(e) For the purposes of this Section, the
Employer contributions which, at a given time,
may be used for the Benefits of a Participant include any
unallocated funds which would be used for
his Benefits if the Plan were then terminated or the Participant
were then to withdraw from the Plan, as well
as all contributions allocated up to that
time exclusively for his Benefits.
(f) The provisions of this Section apply to a
former or retired Participant of the
Employer, as well as to a Participant still in the service of
the Employer.
(g) Notwithstanding the foregoing provisions
of this Section, if Benefits under the Plan
(or the predecessor or any prior Plan) shall be materially
increased, the foregoing restrictions of
this Section shall apply with respect to such increase as of the
effective date thereof. The effective date
of such increase for the purpose of applying such
restrictions will be treated as if it were the effective
date of the predecessor or prior Plan.
However, with respect to any Participant who is among the
twenty-five highest paid Employees of the
Employer on such effective date, there shall be substituted for
the limit upon the Benefit set forth in
subdivision (d)(1) above a limit which does not
exceed the greatest of the following three amounts:
(1)The Employer
contributions (or funds attributable thereto) which would have
been applied to provide the Benefits
for the Participant if the Plan (or the
predecessor or prior plan, if applicable) had been continued
without change;
(2)The sum of $20,000; or
(3)The sum of (A) and (B)
where (A) is the Employer contributions (or funds
attributable thereto) which would have been
applied to provide Benefits for the
Participant under the Plan (or the predecessor or prior Plan, if
applicable) if it had been
terminated the day before the effective date of such increase in
Benefits, and (B) is an amount
computed by multiplying the number of years
for which the current costs of the Plan after that date
are met by (i) 20% of his Annual
Compensation or (ii) $10,000, whichever is smaller.
(h) Notwithstanding anything above to the
contrary, this Section shall be applied in
accordance with the rules of Section 1.401-4(c) of the
regulations of the United States Treasury
Department which is incorporated herein by reference.
(i) In the event of Plan termination, the
benefit of any highly compensated active or
former Employee is limited to a benefit that is
nondiscriminatory under Code Section
401(a)(4).
For Plan Years beginning on or after
January 1, 1991, benefits distributed to any of
the 25 most highly compensated active and former highly
compensated Employees are restricted such
that the annual payments are no greater than an amount equal to
the payment that would be made on behalf of
the Employee under a single life annuity
that is the Actuarial Equivalent of the sum of the Employee's
Accrued Benefit and the Employee's other
benefits under the Plan.
The preceding paragraph shall not apply
if: (a) after payment of the benefit to an
Employee described in the preceding paragraph, the value of Plan
assets equals or exceeds 110% of the value
of current liabilities, as defined in Code Section 412(l)(7),
or (b) the value of the benefits for an
Employee described above is less than 1% of
the value of current liabilities.
For purposes of this Section, benefit includes loans in excess
of the amount set forth in Code Section
72(p)(2)(A), any periodic income, any withdrawal values payable
to a living Employee, and any death
benefits not provided for by insurance on the
Employee's life.
Section 12.5. The conditions of the preceding
Section 12.4 shall not restrict the payment in one lump sum of
the entire amount to which a Participant may be entitled under
the lump sum option set forth in the Article 5 of this Plan
while this Plan is in full effect and its full current cost has
been paid provided the following conditions are met:
(a) The Participant must enter into a written agreement with
the Trustee, binding upon his estate, in
which the Participant agrees to repay to the Trustee a sum equal
to the actuarially equivalent value of the
amount by which the Participant's monthly
retirement benefit would have been decreased during the
Participant's then remaining lifetime
pursuant to the provisions set forth in the preceding Section
12.4 of this Article 12 in the event the
Plan is terminated or the full current cost is not met during
the period specified in Section 12.4.
(b) The Participant must also guarantee
payment of any amount required by the agreement
by depositing with the Trustee, or with a depository
acceptable to the Trustee, simultaneously
with the aforesaid lump sum payment, property having a fair
market value equal to one hundred
twenty-five percent (125%) of the amount repayable if the
plan had been terminated on the date the lump sum
payment was made to the Participant. The
property is to be held by the depository until the receipt of a
certification by the Trustee that the
Participant (or his estate) is no longer obligated to
repay any amount under the agreement.
(c) The Participant must further agree that if
the market value of the property held by the
depository falls below one hundred twenty-five percent (125%) of
the amount which would then be repayable if
the Plan were terminated, he will deposit additional
property in the amount necessary to bring the total
value of the property held by the
depository up to the one hundred twenty-five percent (125%)
level.
Section 12.6. In the event of a partial
termination of the Plan, each affected Participant shall have a
fully vested and nonforfeitable interest in his Accrued Benefit
to the extent funded as of the date of partial termination after
reduction for expenses of administration and liquidation of the
terminated portion of the Trust. In determining the funded
Accrued Benefit of each such Participant and the method of
distribution thereof, the provisions in Sections 12.1 and 12.4
shall apply. For this purpose the portion of the Trust
constituting the funded Accrued Benefits of such Participants
will be treated as if it were the entire Trust and the affected
Participants will be treated as if they were all of the
Participants in the Plan.
ARTICLE 13
MISCELLANEOUS
Section 13.1. Merger or Consolidation of Plan.
In the event of any merger or consolidation of the Plan with any
other plan or a transfer of assets or liabilities of the Plan to
any other plan (which merged, consolidated or transferee plan
shall be referred to in this Section as the "successor plan"),
the benefit which each Participant would receive if the
successor plan (and the instant Plan, if this Plan continues in
existence and he has any interest remaining therein) were
terminated immediately after the merger, consolidation or
transfer, shall be equal to or greater than the benefit he would
have received if the instant Plan (and the successor plan, if
the successor plan existed immediately prior to the merger,
consolidation or transfer and he had any interest therein) had
been terminated immediately preceding the merger, consolidation
or transfer.
Section 13.2. Communication to Employees. In
accordance with the requirements of the Act, the Employer shall
communicate to the Participants the principal terms of the Plan
and the benefits available thereunder.
Section 13.3. Non-Assignability of Benefits. No
portion of the Accrued Benefit with respect to any Participant
shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge except
in the case of a qualified domestic relations order as described
in Code Section 414(p). Any attempt to so anticipate, alienate,
sell, transfer, assign, pledge, encumber or charge the same
shall be void except in the case of a qualified domestic
relations order as described in Code Section 414(p). No portion
of such Accrued Benefit shall in any manner be payable to any
assignee, receiver or Trustee, or be liable for the
Participant's debts, contracts, liabilities, engagements or
torts, or be subject to any legal process of attachment except
in the case of a qualified domestic relations order as described
in Code Section 414(p).
Section 13.4. Facility of Payments. If a
Participant shall be physically, mentally or legally incapable
of receiving or acknowledging receipt of any payment under the
Plan to which he is entitled, the Committee, upon the receipt of
satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him
and that no guardian or committee has been appointed for him,
may cause any payment otherwise payable to him to be made to
such person or institution so maintaining him.
Section 13.5. Amendment. No amendment
to the Plan (including a change in the actuarial basis for
determining optional or early retirement benefits) shall be
effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. Notwithstanding the preceding
sentence, a Participant's Accrued Benefit may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a plan amendment which has the
effect of (1) eliminating or reducing an early retirement
benefit or a retirement type subsidy, or (2) eliminating an
optional form of benefit, with respect to benefits attributable
to service before the amendment shall be treated as reducing
Accrued Benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a
Participant who satisfies (either before or after the amendment)
the preamendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after
retirement, but does not include a qualified disability benefit,
a medical benefit, a social security supplement, a death benefit
(including life insurance), or a plant shutdown benefit (that
does not continue after retirement age). Furthermore, if the
vesting schedule of the Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's Employer-derived Accrued Benefit will not be less
than the percentage computed under the Plan without regard to
such amendment.
If the vesting schedule under the Plan is amended
and the vesting under the new schedule is at any point not as
rapid as under the prior schedule, each Participant with at
least three Years of Service may elect to have his
nonforfeitable percentage computed under the Plan according to
the prior schedule.
For purposes of the above paragraph, a Participant
shall be considered to have completed three Years of Service if
he has completed 1,000 Hours of Service in each of three Plan
Years, whether or not consecutive, ending with or prior to the
last day of the election period described below.
The election period shall begin no later than the
date the amendment is adopted and shall end no earlier than the
later of the following dates: (a) the date
which is 60 days after the date the amendment is adopted;
(b) the date which is 60 days after the
amendment becomes effective; or
(c) the date which is 60 days after
the day the Participant is issued written notice of the
change by the Employer or the Plan Administrator.
If the vesting schedule of this Plan is changed,
the nonforfeitable percentage of any Participant's Accrued
Benefit derived from Employer contributions determined as of the
later of the date the change is effective or the date the change
is adopted shall not be less than the nonforfeitable percentage
computed under the Plan without regard to such change.
Section 13.6. Designation of Beneficiary. In any
event where a Participant or Inactive Participant may name a
Beneficiary to receive any death benefits provided, pursuant to
Article 5 or, pursuant to Article 7, such Beneficiary shall be
named on a form provided by the Plan Administrator and delivered
to the Plan Administrator. Such designation may include more
than one person with one or more secondary or contingent
Beneficiaries and shall be subject to change upon written
request of such Participant or Inactive Participant in the same
manner as the original designation. If a Beneficiary is
receiving or is entitled to receive payments from the Plan and
dies before receiving all of the payments due him, any remaining
payments shall be made to the contingent Beneficiary, if any.
The provisions of this Section are subject to the
spousal consent provisions of Article 5 and, if applicable,
Article 7. In no event shall language in this Section be
construed to allow a Participant or Inactive Participant to name
a Beneficiary other than his Spouse when Article 7 only provides
for payment to the Spouse upon the death of a married
Participant or married Inactive Participant.
Section 13.7. Fiduciary Discretion. In
discharging the duties assigned to it under the Plan, the
Trustee, Plan Administrator, the Committee, and any other
fiduciary shall have the discretion to interpret the Plan; to
adopt, amend, and rescind rules and regulations pertaining to
their duties under the Plan; and to make all other
determinations necessary or advisable for the discharge of their
duties under the Plan. Such discretionary authority shall be
absolute and exclusive if exercised in a uniform and
nondiscriminatory manner with respect to all similarly situated
individuals. The express grant in the Plan of any specific
power to a fiduciary with respect to any duty assigned to it
under the Plan shall not be construed as limiting any power or
authority of the fiduciary to discharge its duties.
ARTICLE 14
LIMITATIONS ON BENEFITS AND CONTRIBUTIONS UNDER
THE PLAN
Section 14.1. Definitions and Rules Applicable to
this Article. (a) "Annual Benefit" shall mean
the total benefit payable from this Plan calculated as a
straight life annuity.
Except as provided below, an Annual
Benefit payable in a form other than a straight
life annuity must be adjusted to an actuarially equivalent
straight life annuity before applying the
limitations of this Article. The interest rate assumption used
to determine actuarial equivalence will be
the greater of the interest rate specified in the
definition of Actuarial Equivalent in Article 2 of this
Plan or five percent. The Annual Benefit
does not include any benefits attributable to Employee
contributions or rollover contributions, or
the assets transferred from a qualified plan that was not
maintained by the Employer. No actuarial
adjustment to the benefit is required for (a)
the value of a qualified joint and survivor annuity, (b) the
value of benefits that are not directly
related to retirement benefits (such as the qualified disability
benefit, pre-retirement death benefits, and
post-retirement medical benefits), and (c) the value
of post-retirement cost-of-living increases made in
accordance with the Federal Income Tax
Regulations.
(b) "Average Compensation" shall mean a
Participant's highest average Compensation
from the Employer over a period of three consecutive calendar
years. If a Participant is employed for
less than three calendar years, his Average Compensation shall
be his average earnings over his calendar
years of employment. Average Compensation
shall include bonus payments and other taxable remuneration.
(c) "Compensation." A Participant's earned
income, wages, salaries, and fees for
professional services, and other amounts received for personal
services actually rendered in the course of
employment with the Employer (including, but not limited
to, commissions paid salesmen, compensation for
services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses),
and excluding the following:
(1)Employer contributions to
a plan of deferred compensation which are not
included in the Employee's gross income for the
taxable year in which contributed
or Employer contributions under a simplified employee pension
plan to the extent such contributions
are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2)Amounts realized from the
exercise of a nonqualified stock option, or when
restricted stock (or property) held by the Employee
either becomes freely transferable
or is no longer subject to a substantial risk of forfeiture;
(3)Amounts realized from the
sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(4)Other amounts which received special tax benefits, or
contributions made by the Employer
(whether or not under a salary reduction agreement) towards the
purchase of an annuity described in
Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross income
of the Employee).
Compensation for any Limitation Year is
the compensation actually paid or includable
in gross income during such year.
(d) "Current Accrued Benefit" shall mean a
Participant's accrued benefit under the Plan,
determined as if the Participant had separated from service as
of the close of the last Limitation Year
beginning before January 1, 1987, when expressed as an Annual
Benefit. In determining the amount of a
Participant's Current Accrued Benefit, the
following shall be disregarded:
(1)any change in the terms
and conditions of the Plan after May 5, 1986; and
(2)any cost of living
adjustment occurring after May 5, 1986.
(e) This Article 14 shall be effective on the
first day of the Limitation Year beginning
after December 31, 1986.
Section 14.2. Limitation on Annual Benefits.
Subject to the provisions of Section 14.4 below, this Plan when
aggregated with the benefits from any other defined benefit plan
(whether or not terminated) ever maintained by the Employer or
Related Employer shall not provide Annual Benefits which exceed
the lesser of $90,000 or 100% of a Participant's Average
Compensation. This limitation shall be hereinafter referred to
as the "Maximum Annual Benefit." The Maximum Annual Benefit
shall be increased by cost of living increases published in
regulations by the Secretary of the Treasury. Any adjustments
made as a result of this Section 14.2 shall not be effective
prior to the first day of the Limitation Year for which the
increase is effective as prescribed by the regulations. Such
adjustments shall also be made to the Annual Benefits of any
Inactive Participant provided that no adjustments shall be made
following the Annuity Starting Date of any Participant or
Inactive Participant.
Section 14.3. No Adjustments to Annual Benefit of
Less than $10,000. Subject to the provisions of Section 14.4
below, if the Annual Benefit payable from this Plan or from this
Plan and any other defined benefit plan maintained by the
Employer to a Participant does not exceed $10,000, the
adjustment to the Annual Benefit in Section 14.2 above shall not
be required, provided that the Participant has never been
covered by a defined contribution plan maintained by the
Employer.
Section 14.4. Adjustment of Limitation
for Years of Service or Participation.
(a) Defined Benefit Dollar Limitation. If a
Participant has completed less than ten years
of participation, the Participant's Accrued Benefit shall not
exceed the defined benefit dollar
limitation under Section 14.2 above as adjusted by multiplying
such amount by a fraction, the numerator of
which is the Participant's number of years (or part
thereof) of participation in the Plan, and the
denominator of which is ten.
(b) Other Defined Benefit Limitations. If a
Participant has completed less than ten years
of service with the Employer or Related Employers, the
percentage of Compensation limitation
described in Section 14.2 and the limitations described in
Section 14.3 shall be adjusted by
multiplying such amounts by a fraction, the numerator of which
is the Participant's number of years of
service (or part thereof), and the denominator of
which is ten.
(c) Limitations on Reductions. In no event
shall Sections 14.4(a) or 14.4(b) reduce the
limitations provided under Sections 415(b)(1) and (4) of the
Code to an amount less than one-tenth of
the applicable limitation (as determined without regard to this
Section 14.4).
(d) Application to Changes in Benefit
Structure. To the extent provided by the Secretary
of the Treasury, this Section 14.4 shall be applied
separately with respect to each change in
the benefit structure of the Plan.
Section 14.5. Benefit Payable Prior to Social
Security Retirement Age. If the $90,000 Maximum Annual Benefit
is payable to a Participant prior to his attaining his Social
Security Retirement Age, such Annual Benefit shall be adjusted
on an actuarial basis as if such Annual Benefit is payable
beginning at his Social Security Retirement Age. The above
adjustment shall be made in such manner as the Secretary of the
Treasury 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. For the
purpose of adjusting the maximum for the commencement of
benefits prior to Age 62, the interest rate assumption shall not
be less than the greater of five percent (5%) or the rate
specified in the Plan for determining actuarial equivalence for
early retirement.
Section 14.6. Benefit Payable After Social
Security Retirement Age. If retirement benefits begin after a
Participant reaches his Social Security Retirement Age, the
$90,000 Maximum Annual Benefit shall be adjusted in accordance
with regulations prescribed by the Secretary so that the Maximum
Annual Benefit shall be equivalent to the benefit which would be
payable at his Social Security Retirement Age. For the purpose
of adjusting any such maximum, the interest rate assumption
shall not be greater than the lesser of five percent (5%) or the
rate specified in the Plan for determining actuarial equivalence
for delayed retirement.
Section 14.7. Application of Maximum Limitation
to Separate Plans. If the Employer maintains one or more
defined benefit plans in addition to this Plan, the Maximum
Annual Benefit shall be applied in the aggregate to this Plan
and to all such other defined benefit plans.
Section 14.8. Limitation for Participants in
Defined Benefit Plan and Defined Contribution Plan.
(a) If an Employee is or was a Participant in one or more
defined benefit plans and one or more
defined contribution plans ever maintained by the Employer or
Related Employer (whether or not
terminated), the sum of the defined benefit plan fraction
and the defined contribution plan fraction for that
Participant shall not exceed 1.0 for any
Limitation Year. If the sum of the defined benefit plan
fraction and the defined contribution plan
fraction shall exceed 1.0 in any year for any Participant in
this Plan, the Employer shall adjust the
numerator of the defined benefit plan fraction so that the
sum of the defined benefit plan fraction and the
defined contribution plan fraction shall
not be in excess of 1.0 in any Limitation Year for such
Participant.
(b) For the purpose of this Article, the term
defined benefit plan fraction for any
Limitation Year shall mean a fraction the numerator of which is
the projected Annual Benefit payable to a
Participant as of the close of the then current Limitation Year
under all defined benefit plans maintained by
the Employer or Related Employer and the
denominator of which is the lesser of:
(1)the product of 1.25
multiplied by the maximum dollar limitation for the
Limitation Year concerned as provided under Code
Section 415, or
(2)the product of 1.4
multiplied by the applicable amount to be taken into
account according to the percentage of
compensation limit as defined for this
purpose under Code Section 415.
(c) The term defined contribution plan
fraction for any Limitation Year shall mean a
fraction the numerator of which is the aggregate amount of
annual additions made to a Participant's
accounts under all defined contribution plans, whether or not
terminated, maintained by this Employer or
Related Employer (including the annual additions
attributable to the Participant's nondeductible
contributions to this and all other defined
benefit plans maintained by this Employer or Related Employer)
as of the close of the then current
Limitation Year and the denominator of which as of the end
of any Limitation Year, is the sum of the defined
contribution denominator increments for
that Limitation Year and all prior Limitation Years of the
Participant's service with the Employer or
Related Employer (regardless of whether the Plan was in
existence during those years.)
For each Limitation Year, the defined
contribution denominator increment is the lesser
of the following amounts:
(1)the product of 1.25
multiplied by the maximum dollar limitation for the
Limitation Year concerned, as provided under
Code Section 415, or
(2)the product of 1.4 multiplied by the applicable
amount to be taken into account
according to the percentage of compensation limit as defined for
this purpose under Code Section
415.
For purposes of this Section 14.8(c),
amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Code Section 415(l),
which is part of a defined benefit plan
maintained by the Employer are treated as annual additions to a
defined contribution plan. Also, amounts
derived from contributions paid or accrued
after December 31, 1985, which are attributable to
post-retirement medical benefits allocated
to the separate account of a Key Employee, as defined in Section
8.4, under a welfare benefit fund, as
defined in Code Section 419(e), maintained by the
Employer, are treated as annual additions to a defined
contribution plan. In no event shall this
be construed as applying the limitations of Code Section
415(c)(1)(B) to individual medical accounts
or post-retirement medical benefits.
(d) With respect to any year ending after
December 31, 1982, and at the election of the
Plan Administrator, the amount taken into account in
determining the denominator of the defined
contribution plan fraction with respect to each Participant for
all years ending before January 1, 1983,
shall be an amount equal to the product of (1) and (2),
where
(1)is the denominator of the
defined contribution plan fraction as calculated for
the Limitation Year ending in 1982, and
(2)is the Transition
Fraction.
Transition Fraction means a fraction the
numerator of which is the lesser of $51,875
or 1.4 multiplied by 25% of the Compensation of the Participant
for the Limitation Year ending in 1981 and
the denominator of which is the lesser of $41,500 or 25% of
the Participant's Compensation for the Limitation
Year ending in 1981.
(e) For purposes of computing the defined
contribution plan fraction, "Annual Addition"
shall mean the amount allocated to a Participant's account
during the Limitation Year as a result of:
(1)Employer contributions,
(2)Employee contributions,
(3)Forfeitures, and
(4)Amounts described in
Sections 415(l)(1) and 419A(d)(2) of the
Code.
The Annual Addition for any Limitation
Year beginning before January 1, 1987, shall
not be recomputed to treat all employee contributions as an
Annual Addition.
If the Plan satisfied the applicable
requirements of Section 415 of the Code as in
effect for all Limitation Years beginning before January 1,
1987, an amount shall be subtracted from
the numerator of the defined contribution plan fraction (not
exceeding such numerator) as prescribed by
the Secretary of the Treasury so that the sum of the
defined benefit plan fraction and defined contribution
plan fraction computed under Section
415(e)(1) of the Code does not exceed 1.0 for such Limitation
Year.
Section 14.9. Preservation of Accrued Benefit
Under the Tax Equity and Fiscal Responsibility Act of 1982.
Notwithstanding the above provisions of this Article 14, if a
Participant was a Participant in this Plan before January 1,
1983, the Maximum Annual Benefit shall not be less than the
Participant's Accrued Benefit at the close of the 1982
Limitation Year.
Section 14.10. Preservation of Accrued Benefit
Under the Tax Reform Act of 1986.
(a) This Section 14.10 shall apply to defined
benefit plans that were in existence on May
6, 1986, and that met the applicable requirements of Section 415
of the Code as in effect for all Limitation
Years.
(b) If the Current Accrued Benefit of an
individual who is a Participant as of the first day
of the Limitation Year beginning on or after January 1,
1987, exceeds the benefit limitations under
Section 415(b) of the Code (as modified by changes made by the
Tax Reform Act of 1986) referred to above in
Sections 14.4, 14.5 and 14.6, then, for
purposes of Code Sections 415(b) and (e), the defined benefit
dollar limitation with respect to such
individual shall be equal to such Current Accrued Benefit.
ARTICLE 15
DISTRIBUTION REQUIREMENTS
Section 15.1. General Rules.
(a) Except as otherwise provided in Article 5,
regarding the joint and survivor annuity
requirements, the requirements of this Article shall apply to
any distribution of a Participant's
interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise
specified, the provisions of this Article apply to calendar
years beginning after December 31, 1984.
(b) All distributions required under this
Article shall be determined and made in
accordance with the Income Tax Regulations under Section
401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Income Tax Regulations.
Section 15.2. Required Beginning Date. The
entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's required
beginning date.
Section 15.3. Limits on Distribution Periods. As
of the first distribution calendar year, distributions, if not
made in a single-sum, may only be made over one of the following
periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a
designated Beneficiary,
(c) a period certain not extending beyond the
life expectancy of the Participant, or
(d) a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and a designated Beneficiary.
Section 15.4. Determination of Amount to be
Distributed Each Year.
(a) If the Participant's interest is to be
paid in the form of annuity distributions under the
Plan, payments under the annuity shall satisfy the
following requirements:
(1)the annuity distributions
must be paid in periodic payments made at intervals
not longer than one year;
(2)the distribution period
must be over a life (or lives) or over a period certain
not longer than a life expectancy (or joint
life and last survivor expectancy)
described in Section 401(a)(9)(A)(ii) or Section
401(a)(9)(B)(iii) of the Code,
whichever is applicable;
(3)the life expectancy (or
joint life and last survivor expectancy) for purposes of
determining the period certain shall be
determined without recalculation of life
expectancy;
(4)once payments have begun
over a period certain, the period certain may not
be lengthened even if the period certain is
shorter than the maximum permitted;
(5)payments must either be
nonincreasing or increase only as follows:
(i)with any percentage increase in a specified and generally
recognized cost-of-living
index;
(ii)to the extent of the reduction to the amount of the
Participant's payments to
provide for a survivor benefit upon death, but only if the
Beneficiary whose life was being
used to determine the distribution
period described in Section 15.3 above dies and the
payments continue
otherwise in accordance with that Section over the life of the
Participant;
(iii)to provide cash refunds of Employee contributions upon the
Participant's death; or
(iv)because of an increase in benefits under the Plan.
(6)If the annuity is a life
annuity (or a life annuity with a period certain not
exceeding 20 years), the amount which must be
distributed on or before the
Participant's required beginning date (or, in the case of
distributions after the death of
the Participant, the date distributions are required to begin
pursuant to Section 15.5 below)
shall be the payment which is required for one
payment interval. The second payment need not be
made until the end of the next
payment interval even if that payment interval ends in the next
calendar year. Payment intervals
are the periods for which payments are received,
e.g., bimonthly, monthly, semi-annually, or
annually.
If the annuity is a period
certain annuity without a life contingency (or is a life
annuity with a period certain exceeding 20
years) periodic payments for each
distribution calendar year shall be combined and treated as an
annual amount. The amount which
must be distributed by the Participant's required beginning
date (or, in the case of distributions
after the death of the Participant, the date
distributions are required to begin pursuant to Section
15.4(a)(5) above) is the annual
amount for the first distribution calendar year. The annual
amount for other distribution
calendar years, including the annual amount for the calendar
year in which the Participant's
required beginning date (or the date
distributions are required to begin pursuant to Section 15.5
below) occurs, must be distributed
on or before December 31 of the calendar year for which
the distribution is required.
(b) Annuities purchased after December 31, 1988,
are subject to the following additional
conditions:
(1)Unless the Participant's
Spouse is the designated Beneficiary, if the
Participant's interest is being distributed in the form
of a period certain annuity
without a life contingency, the period certain as of the
beginning of the first
distribution calendar year may not exceed the applicable period
determined using the table set forth
in Q and A A-5 of Section 1.401(a)(9)-2
of the Income Tax Regulations.
(2)If the Participant's
interest is being distributed in the form of a joint and
survivor annuity for the joint lives of the
Participant and a nonspouse
Beneficiary, annuity payments to be made on or after the
Participant's required beginning
date to the designated Beneficiary after the Participant's
death must not at any time exceed the
applicable percentage of the annuity
payment for such period that would have been payable to the
Participant using the table set
forth in Q and A A-6 of Section 1.401(a)(9)-2 of the Income Tax
Regulations.
(c) Transitional rule. If payments under an
annuity which complies with Section (a)
above begin prior to January 1, 1989, the minimum distribution
requirements in effect as of July 27, 1987,
shall apply to distributions from this plan, regardless of
whether the annuity form of payment is
irrevocable. This transitional rule also applies to
deferred annuity contracts distributed to or owned by
the Employee prior to January 1, 1989,
unless additional contributions are made under the Plan by the
Employer with respect to such contract.
(d) If the form of distribution is an annuity
made in accordance with this Section 15.4,
any additional benefits accruing to the Participant after his or
her required beginning date shall be
distributed as a separate and identifiable component of the
annuity beginning with the first payment
interval ending in the calendar year immediately
following the calendar year in which such amount accrues.
(e) Any part of the Participant's interest
which is in the form of an individual account
shall be distributed in a manner satisfying the requirements of
Section 401(a)(9) of the Code and the
regulations thereunder.
Section 15.5. Death Distribution Provisions.
(a) Distribution beginning before death. If
the Participant dies after distribution of his or
her interest has begun, the remaining portion of such
interest will continue to be distributed at
least as rapidly as under the method of distribution being used
prior to the Participant's death.
(b) Distribution beginning after death. If
the Participant dies before distribution of his or
her interest begins, distribution of the Participant's
entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death
except to the extent that an election is made to receive
distributions in accordance with (1) or (2)
below:
(1)if any portion of the Participant's interest is payable to a
designated Beneficiary,
distributions may be made over the life or over a period certain
not greater than the life
expectancy of the designated Beneficiary commencing
on or before December 31 of the calendar year
immediately following the calendar
year in which the Participant died;
(2)if the designated
Beneficiary is the Participant's surviving Spouse, the date
distributions are required to begin in
accordance with (1) above shall not be
earlier than the later of (1) December 31 of the calendar
year immediately following the
calendar year in which the Participant died and (2) December 31
of the calendar year in which the
Participant would have attained Age 70 1/2.
The Participant's designated
Beneficiary must elect the method of distribution
no later than the earlier of (1) December 31 of
the calendar year in which
distributions would be required to begin under this Section, or
(2) December 31 of the calendar
year which contains the fifth anniversary of the date of
death of the Participant. If the
Participant has no designated Beneficiary, or if
the designated Beneficiary does not elect a method
of distribution, distribution of
the Participant's entire interest must be completed by December
31 of the calendar year containing
the fifth anniversary of the Participant's death.
(c) For purposes of Section 15.5(b) above, if
the surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the
provisions of Section 15.5(b), with the
exception of paragraph (2) therein, shall be applied as if the
surviving Spouse were the Participant.
(d) For purposes of this Section 15.5, any
amount paid to a child of the Participant will
be treated as if it had been paid to the surviving Spouse if
the amount becomes payable to the surviving
Spouse when the child reaches the age of majority.
(e) For the purpose of this Section 15.5,
distribution of a Participant's interest is
considered to begin on the Participant's required beginning date
(or, if Section 15.5(c) above is
applicable, the date distribution is required to begin to the
surviving Spouse pursuant to Section
15.5(b) above). If distribution in the form of an annuity
described in Section 15.4 above irrevocably
commences to the Participant before the required
beginning date, the date distribution is considered to begin
is the date distribution actually commences.
Section 15.6. Definitions
(a) Applicable life expectancy. The life
expectancy (or joint and last survivor
expectancy) calculated using the attained Age of the Participant
(or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each
calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy
is being recalculated, the applicable life
expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life
expectancy is being recalculated such succeeding calendar year.
If annuity payments commence before the
required beginning date, the applicable calendar year
is the year such payments commence. If distribution is
in the form of an immediate annuity
purchased after the Participant's death with the Participant's
remaining interest, the applicable calendar
year is the year of purchase.
(b) Designated Beneficiary. The individual
who is designated as the Beneficiary under
the plan in accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
(c) Distribution calendar year. A calendar
year for which a minimum distribution is
required. For distributions beginning before the Participant's
death, the first distribution calendar year
is the calendar year immediately preceding the calendar year
which contains the Participant's required
beginning date. For distributions beginning
after the Participant's death, the first distribution calendar
year is the calendar year in which
distributions are required to begin pursuant to Section 15.5
above.
(d) Life expectancy. Life expectancy and
joint and last survivor expectancy are computed
by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the
Participant (or Spouse in the case of distributions
described in Section 15.5(b)(2) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant
(or Spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not
be recalculated.
(e) Required beginning date.
(1)General rule. The
required beginning date of a Participant is the first day of
April of the calendar year following
the calendar year in which the Participant
attains Age 70 1/2.
(2)Transitional rule. The
required beginning date of a Participant who attains
Age 70 1/2 before January 1, 1988, shall be
determined in accordance with (A)
or (B) below:
(A)Non-5-percent owners. The required beginning date of a
Participant who is not a
"5-percent owner" (as defined in (3) below) is the first
day of April of the calendar year
following the calendar year in which
the later of retirement or attainment of Age 70 1/2
occurs.
(B)5-percent owners. The required beginning date of a
Participant who is a
5-percent owner during any year beginning after December 31,
1979, is the first day of April
following the later of:
(i)the calendar year in
which the Participant attains Age 70 1/2,
or
(ii)the earlier of the
calendar year with or within which ends the
Plan Year in which the Participant
becomes a 5-percent
owner, or the calendar year in which the Participant retires.
The required
beginning date of a Participant who is not a 5-percent
owner who attains Age 70 1/2 during
1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
(3)5-percent owner. A
Participant is treated as a 5-percent owner for purposes
of this Section if such Participant is a
5-percent owner as defined in Section
416(i) of the Code (determined in accordance with Section 416
but without regard to whether the
plan is top-heavy) at any time during the plan year
ending with or within the calendar year in which
such owner attains Age 66 1/2 or
any subsequent Plan Year.
(4)Once distributions have
begun to a 5-percent owner under this Section, they
must continue to be distributed, even if the
Participant ceases to be a 5-percent
owner in a subsequent year.
(5)Plans maintained by
governments and churches. In the case of a
governmental plan (as defined in Section 414(d) of the
Code) or plans maintained by a
church (as defined in Sections 3121(w)(3)(A) or
3121(w)(3)(B) of the Code), the required beginning
date shall be the later of the
date determined under the preceding provisions of Section
15.6(e) or April 1 of the calendar
year following the calendar year in which the Employee
retires.
(f) Participant. Participant shall be as
defined in Article 2 and shall for the purposes of
this Article 15 also include the term Inactive
Participant, where appropriate.
Section 15.7. Transitional Rule.
(a) Notwithstanding the other requirements of
this Article and subject to the requirements
of Article 5 regarding joint and survivor annuity requirements,
distribution on behalf of any Employee,
including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of
when such distribution commences):
(1)The distribution by the
Trust is one which would not have disqualified such
Trust under Section 401(a)(9) of the Internal
Revenue Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
(2)The distribution is in
accordance with a method of distribution designated by
the Employee whose interest in the Trust is
being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.
(3)Such designation was in
writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
(4)The Employee had accrued
a benefit under the Plan as of December 31, 1983.
(5)The method of
distribution designated by the Employee or the Beneficiary
specifies the time at which distribution
will commence, the period over which
distributions will be made, and in the case of any distribution
upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be
covered by this transitional rule unless the
information in the designation contains the required information
described above with respect to the
distributions to be made upon the death of the Employee.
(c) For any distribution which commences
before January 1, 1984, but continues after
December 31, 1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the
method of distribution was specified in
writing and the distribution satisfies the requirements in
subsections 15.7(a)(1) and (5).
(d) If a designation is revoked any subsequent
distribution must satisfy the requirements
of Section 401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to
the date distributions are required to begin, the Trust must
distribute by the end of the calendar year
following the calendar year in which the
revocation occurs the total amount not yet distributed which
would have been required to have been
distributed to satisfy Section 401(a)(9) of the Code and the
regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the
minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax
Regulations. Any changes in the
designation will be considered to be a revocation of the
designation. However, the mere
substitution or addition of another Beneficiary (one not named
in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the
relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to
another plan, the rules in Q and A J-2 and
Q and A J-3 of Section 1.401(a)(9)-1 of the Income Tax
Regulations shall apply.
Section 15.8. Compliance with Section 401(a)(14)
of the Code. Benefits under this Plan must begin, unless the
Participant elects otherwise, no later than the 60th day after
the close of the Plan Year in which the latest of the following
events occurs:
(1) the Participant attains Normal Retirement
Age,
(2) the Participant terminates his Service
with the Employer, or
(3) the tenth anniversary of the year in which
the Participant commences participation in
the Plan.
ARTICLE 16 DIRECT
ROLLOVER ELECTIONS
Section 16.1. This Article applies to
distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Article, a distributee
may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
Section 16.2. Definitions. (a)
Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or
any portion of the balance to the credit of the distributee,
except that an eligible rollover
distribution does not include: any distribution that is one of
a series of substantially equal periodic
payments (not less frequently than annually) made for the
life (or life expectancy) of the distributee or the
joint lives (or joint life expectancy) of
the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or
more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard
to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible retirement plan: An eligible
retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in
the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A distributee includes an
employee or former employee. In addition, the
employee's or former employee's surviving spouse and the
employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section
414(p) of the Code; are distributees with
regard to the interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a
payment by the Plan to the eligible retirement
plan specified by the distributee.
Section 16.3. Additional Direct Rollover Rules.
The following additional rules apply to the Plan in addition to
the model language provided above.
(a) A distributee may elect a complete direct
rollover with respect to all of the
distribution or a partial direct rollover with respect to a
portion of the distribution and the
remainder will be paid directly to the distributee. The amount
of a partial direct rollover must be at
least $500. (b) A distributee who is
entitled to elect a direct rollover with respect to any or any
portion of a distribution but who does not
make any election shall be deemed to have
rejected the direct rollover option.
(c) A distribution of less than $200 that
would otherwise be an eligible rollover
distribution shall not be an eligible rollover distribution if
it is reasonable to expect that all such
distributions to the distributee from the Plan during the same
calendar year will total $200 or less.
(d) This rules of this Article shall be
administered in compliance with regulations issued
by the Internal Revenue Service under Sections 401(a)(31),
402(c)402(f) and 3405(c) of the Code, and
such regulations are hereby specifically incorporated by
reference. IN WITNESS WHEREOF, the Peoples Bancorp
Inc. Retirement Plan is, by the authority of the Board of
Directors of the Employer, executed on behalf of the Employer,
the 19th day of August, 1993.
PEOPLES BANCORP, INC.
ROBERT E. EVANS
Robert E. Evans
Authorized Officer
Robert E. Evans
President and Chief Executive Officer
ATTEST:
Charles R. Hunsaker