APL Limited
Regular Excess-Benefit Plan
SECTION 1. ESTABLISHMENT AND PURPOSE OF THE PLAN.
The Excess-Benefit Plan of American President Companies, Ltd.
was established by the Company effective September 1, 1983.
Effective November 9, 1996, the Excess-Benefit Plan was amended
to form two plans: The APL Limited Regular Excess-Benefit Plan
(the "Plan") and the APL Limited Pure Excess-Benefit Plan (the
"Pure Excess-Benefit Plan"). Effective as of the same date, the
Excess-Benefit Plan was amended by transferring all benefits
relating to the SMART Plan Reserve Account to the Deferred
Compensation Plan. This document constitutes an amendment and
restatement of the Excess-Benefit Plan. The purpose of the Plan
is to supplement certain benefits under the Retirement Plan.
SECTION 2. ELIGIBILITY AND PARTICIPATION.
Participation in this Plan shall be limited to the following:
(a) Any participant in the Retirement Plan whose benefits under
the Retirement Plan are affected by the limitations imposed
under section 401(a)(17) or 415 of the Code;
(b) Any participant in the Retirement Plan whose benefits under
the Retirement Plan are affected by the Code's requirement
that salaries or bonuses deferred under the Deferred
Compensation Plan cannot be taken into account in computing
such benefits; and
(c) Any participant in the Retirement Plan:
(i) Whose actual benefits under the Retirement Plan,
at retirement, are lower than the benefits that he or
she would have received absent the modification of the
Retirement Plan's benefit formula that was adopted
effective June 1, 1989, had he or she terminated
employment with the Affiliated Group as of
December 31, 1992, or, if earlier, the actual date of
such termination of employment; and
(ii) Whose "average annual compensation" under the
Retirement Plan equals or exceeds $125,000 at any time
after May 31, 1989.
On June 1 of each year, starting with June 1, 1990, the
$125,000 amount set forth in the preceding sentence shall
be adjusted for inflation by multiplying it by a fraction.
The numerator of such fraction shall be the CPI-W for U.S.
Cities on the immediately preceding February 1, and the
denominator of such fraction shall be the CPI-W for U.S.
Cities on February 1, 1989.
Any other provision of the Plan notwithstanding, an individual
who was not a Participant on May 31, 1994, shall in no event
become a Participant thereafter.
SECTION 3. PLAN BENEFITS.
(a) Amount of Retirement Plan Supplement. Each Participant
whose pension benefits under the Retirement Plan are
reduced by section 401(a)(17) or 415 of the Code, by the
exclusion of salaries and bonuses deferred under the
Deferred Compensation Plan from pension calculations or by
the modification of the formula for calculating his or her
"retirement income" (not including cost-of-living
adjustments) that was adopted on July 10, 1990, effective
as of June 1, 1989, shall be entitled to receive a monthly
benefit under this Plan. The amount of such benefit shall
be equal to:
(1) The monthly benefit that would have been payable
to the Participant under the Retirement Plan as of
December 31, 1994, if the limitations of sections
401(a)(17) and 415 of the Code, such exclusion and
such modification (to the extent that such
modification results in a benefit reduction) did not
apply; minus
(2) The actual monthly benefit payable to the
Participant under the Retirement Plan as of December
31, 1994, giving effect to such exclusion, such
modification and the limitations of sections
401(a)(17) and 415 of the Code (as in effect when the
benefit under this Plan is calculated).
For purposes of this Subsection (a), the modification of
the Retirement Plan formula that was adopted on July 10,
1990, effective as of June 1, 1989, shall be deemed to have
resulted in a benefit reduction only to the extent that a
Participant's actual monthly benefit payment under the
Retirement Plan is less than the monthly benefit payment
that such Participant would have received if such
modification had not been adopted and the Participant had
separated from employment with all members of the
Affiliated Group as of the earlier of December 31, 1992, or
the Participant's actual employment termination date. The
Retirement Plan's Actuarial Equivalency factors shall be
used to make this comparison.
(b) Transition Rules. Any other provision of the Plan
notwithstanding:
(1) The amount of a Participant's benefit under
Subsection (a) above shall in no event be greater than
the benefit to which the Participant would have been
entitled under Subsection (a) above if his or her
employment in the Affiliated Group had terminated on
December 31, 1994; and
(2) The amendment of this Plan adopted effective
December 31, 1994, shall in no event cause the amount
of a Participant's benefit under Subsection (a) above
to be smaller than the benefit to which the
Participant would have been entitled under Subsection
(a) above if his or her employment in the Affiliated
Group had terminated on December 31, 1994, but the
amount of such benefit may decline for reasons
unrelated to such amendment.
(c) Calculation and Payment of Pure Excess Portion of
Retirement Plan Supplement. The portion (if any) of a
Participant's Retirement Plan Supplement determined under
Subsection (a) that is attributable solely to the monthly
benefit that would be payable to the Participant under the
terms of the Retirement Plan if the limitations of sections
401(a)(17) and 415 of the Code did not apply shall be
deemed earned and payable under the Pure Excess-Benefit
Plan and not this Plan.
(d) Payment of Retirement Plan Supplement. A Participant's
Retirement Plan Supplement under Subsection (a) above, less
the pure excess portion (if any) determined under
Subsection (c), shall be payable to the Participant or to
any other person (including, without limitation, a
surviving spouse) who is receiving benefits under the
Retirement Plan which are derived from the Participant.
Such a Retirement Plan Supplement shall be payable in the
same form and at the same times as the Participant's
benefit under the Retirement Plan (and in no event
earlier), unless the Participant's benefit under the
Retirement Plan is paid in the form of a single lump sum.
In that event, the Retirement Plan Supplement shall be
payable in the normal form of benefit provided under the
Retirement Plan, computed as if the benefit actually paid
to the Participant under the Retirement Plan were also
payable in the normal form, unless:
(1) The Participant requests in writing to receive
the benefit under Subsection (a) above in a single
lump sum; and
(2) The Committee expressly approves the
Participant's request.
In the case of a Participant who is entitled to a "COLA-
Adjusted Retirement Income" under the Retirement Plan, the
amount of any periodic Retirement Plan Supplement shall be
recalculated each year in accordance with the provisions of
the Retirement Plan relating to the adjustment of pension
benefits to reflect changes in the cost of living. The
recalculation shall be performed upon the total of the
Retirement Plan Supplement being paid under this Plan and
the Retirement Plan Supplement (if any) being paid under
the Pure Excess-Benefit Plan, but the full amount of any
resulting increase shall be payable from this Plan, not the
Pure Excess-Benefit Plan.
SECTION 4. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee
shall make such rules, interpretations and computations as it
may deem appropriate. Any decision of the Committee with
respect to the Plan, including (without limitation) any
determination of eligibility to participate in the Plan and any
calculation of benefits hereunder, shall be conclusive and
binding on all persons.
SECTION 5. CLAIMS AND INQUIRIES.
(a) Application for Benefits. Applications for benefits and
inquiries concerning the Plan (or concerning present or
future rights to benefits under the Plan) shall be
submitted to the Company in writing and addressed to the
Chair of the Committee. An application for benefits shall
be submitted on the prescribed form and shall be signed by
the Participant or, in the case of a benefit payable after
his or her death, by the beneficiary.
(b) Denial of Application. In the event that an application
for benefits is denied in whole or in part, the Chair of
the Committee shall notify the applicant in writing of the
denial and of the right to a review of the denial. The
written notice shall set forth, in a manner calculated to
be understood by the applicant, specific reasons for the
denial, specific references to the provisions of the Plan
on which the denial is based, a description of any
information or material necessary for the applicant to
perfect the application, an explanation of why the material
is necessary, and an explanation of the review procedure
under the Plan. The written notice shall be given to the
applicant within a reasonable period of time (not more than
90 days) after the Chair of the Committee received the
application, unless special circumstances require further
time for processing and the applicant is advised of the
extension. In no event shall the notice be given more than
180 days after the Chair of the Committee received the
application.
(c) Review Panel. The Committee shall serve as the "Review
Panel" under the Plan. The Review Panel shall have the
authority to act with respect to any appeal from a denial
of benefits or a determination of benefit rights.
(d) Request for Review. An applicant whose application for
benefits was denied in whole or in part, or the applicant's
duly authorized representative, may appeal from the denial
by submitting to the Review Panel a request for a review of
the application within 90 days after receiving written
notice of the denial from the Chair of the Committee. The
Chair of the Committee shall give the applicant or his or
her representative an opportunity to review pertinent
materials, other than legally privileged documents, in
preparing the request for a review. The request for a
review shall be in writing and addressed to the Committee.
The request for a review shall set forth all of the grounds
on which it is based, all facts in support of the request,
and any other matters that the applicant deems pertinent.
The Review Panel may require the applicant to submit such
additional facts, documents or other material as it may
deem necessary or appropriate in making its review.
(e) Decision on Review. The Review Panel shall act on each
request for a review within 60 days after receipt, unless
special circumstances require further time for processing
and the applicant is advised of the extension. In no event
shall the decision on review be rendered more than 120 days
after the Review Panel received the request for a review.
The Review Panel shall give prompt written notice of its
decision to the applicant. In the event that the Review
Panel confirms the denial of the application for benefits
in whole or in part, the notice shall set forth, in a
manner calculated to be understood by the applicant, the
specific reasons for the decision and specific references
to the provisions of the Plan on which the decision is
based.
(f) Rules and Interpretations. The Review Panel shall adopt
such rules, procedures and interpretations of the Plan as
it deems necessary or appropriate in carrying out its
responsibilities under this Section 5.
(g) Exhaustion of Remedies. No legal action for benefits under
the Plan shall be brought unless and until the claimant
(1) has submitted a written application for benefits in
accordance with Subsection (a) above, (2) has been notified
by the Chair of the Committee that the application is
denied, (3) has filed a written request for a review of the
application in accordance with Subsection (d) above and
(4) has been notified in writing that the Review Panel has
affirmed the denial of the application; provided, however,
that legal action may be brought after the Chair of the
Committee or the Review Panel has failed to take any action
on the claim within the time prescribed by Subsections (b)
and (e) above, respectively.
SECTION 6. AMENDMENT AND TERMINATION.
The Company expects to continue the Plan indefinitely. Future
conditions, however, cannot be foreseen, and the Company shall
have the authority to amend or terminate the Plan at any time.
In the event of an amendment or termination of the Plan, a
Participant's benefits hereunder shall not be less than the
benefits to which the Participant would have been entitled if
his or her employment in the Affiliated Group had terminated
immediately prior to such amendment or termination.
SECTION 7. EMPLOYMENT RIGHTS.
Nothing in the Plan shall be deemed to give any person a right
to remain in the employ of any Affiliated Group member or affect
the right of the Affiliated Group members to terminate such
person's employment with or without cause.
SECTION 8. NO ASSIGNMENT.
The rights of any person to payments or benefits under the Plan
shall not be made subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors. Any act in violation of
this Section 8, whether voluntary or involuntary, shall be void.
SECTION 9. PLAN UNFUNDED.
Participants shall have the status of general unsecured
creditors of the Company. The Plan constitutes a mere promise
by the Company to make benefit payments in the future. It is
the Company's intent that the Plan be considered unfunded for
tax purposes and for purposes of Title I of ERISA.
SECTION 10. CHOICE OF LAW.
The validity, interpretation, construction and performance of
the Plan shall be governed by ERISA and, to the extent they are
not preempted, by the laws of the State of California.
SECTION 11. DEFINITIONS.
(a) "Affiliated Group" means a group of one or more chains of
corporations connected through stock ownership with the
Company, if:
(1) Stock possessing at least 80% of the total
combined voting power of all classes of stock entitled
to vote or at least 80% of the total value of shares
of all classes of stock of each of the corporations,
except the Company, is owned by one or more of the
other corporations; and
(2) The Company owns stock possessing at least 80% of
the total combined voting power of all classes of
stock entitled to vote or at least 80% of the total
value of shares of all classes of stock of at least
one of the other corporations excluding, in computing
such voting power or value, stock owned directly by
such other corporations.
In addition, the term "Affiliated Group" includes any other
entity which the Company has designated in writing as a
member of the Affiliated Group for purposes of this Plan or
the Retirement Plan. An entity shall be considered a
member of the Affiliated Group only with respect to periods
for which such designation is in effect or during which the
relationship described in Paragraphs (1) and (2) above
exists.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Benefits Committee appointed by the
Company's Board of Directors.
(d) "Company" means APL Limited, a Delaware corporation.
(e) "Deferred Compensation Plan" means the Deferred
Compensation Plan of American President Companies, Ltd., as
amended, the 1988 Deferred Compensation Plan of American
President Companies, Ltd., as amended, the 1995 Deferred
Compensation Plan of American President Companies, Ltd., as
amended, the 1988 Deferred Compensation Plan of APL
Limited: Pure Excess Deferral Plan, as amended, the 1988
Deferred Compensation Plan of APL Limited: Regular Deferral
Plan, as amended, the 1995 Deferred Compensation Plan of
APL Limited: Pure Excess Deferral Plan, as amended, and the
1995 Deferred Compensation Plan of APL Limited: Regular
Deferral Plan.
(f) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(g) "Participant" means a participant in the Retirement Plan
who participates in this Plan under Section 2.
(h) "Plan" means this APL Limited Regular Excess-Benefit Plan.
(i) "Retirement Plan" means the APL Limited Retirement Plan, as
amended, or its successor.
SECTION 12. EXECUTION.
To record this amendment and restatement of the Plan, the
Company has caused its duly authorized officer to affix the
corporate name hereto.
APL Limited
By: /s/ Timothy J. Windle