EXHIBIT 10(d)
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PEOPLES BANCORP INC. ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1995
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
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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
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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
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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
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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
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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 three-fourths 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. Such waiver shall only be applicable
to a distribution for which Code Sections 401(a)(11) and 417 are
not applicable, and for which the plan administrator has
informed the participant of the right to a period of at least 30
days after receipt of the notice to consider the decision to
elect a distribution. 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. Notwithstanding the above, no such distribution shall
be made if, at any previous time, the Actuarial Equivalent of
the benefit exceeded $3,500 and the Participant was eligible to
begin receipt of immediate monthly payments.
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.
Notwithstanding the above, no such distribution shall be made
if, at any previous time, the Actuarial Equivalent of the
benefit exceeded $3,500 and the Participant was eligible to
begin receipt of immediate monthly payments.
If the Actuarial Equivalent present value of the Participant's
vested Accrued Benefit is greater than $3,500, distribution of
such benefit will be in accordance with 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. Notwithstanding the above,
no such distribution shall be made if, at any previous time, the
Actuarial Equivalent of the benefit exceeded $3,500 and the
Participant was eligible to begin receipt of immediate monthly
payments.
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.
The Accrued Benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer, or (b) if there is no such method,
as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Internal Revenue Code.
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 five-year 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 ownership under subsections (b),
(c) and (d) above, 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 determining the minimum benefit of Section 8.6,
Compensation shall mean compensation as defined in Section
14.1(c) of the Plan. 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 Top-Heavy 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 Top-Heavy 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
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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
aribution.
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
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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
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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
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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
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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 pension or annuity 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 Code Sections 415(l)(2) and
419A(d)(2).
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
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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
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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 26th day of December,
1995.
PEOPLES BANCORP, INC.
/s/ ROBERT E. EVANS
Robert E. Evans
Authorized Officer
ATTEST:
/s/ CHARLES R. HUNSAKER
Charles R. Hunsaker
General Counsel