AVONDALE INDUSTRIES, INC. PENSION PLAN
As Amended and Restated
Effective January 1, 1989
AVONDALE INDUSTRIES, INC.
PENSION PLAN
TABLE OF CONTENTS
Article Contents Section
I. DEFINITIONS
Accrued Benefit 1.1
Actuarial Equivalent 1.2
Actuary 1.3
Affiliated Company 1.4
Avondale ESOP 1.5
Beneficiary 1.6
Code 1.7
Committee 1.8
Company 1.9
Compensation 1.10
Compensation Year 1.11
Deferred Retirement Date 1.12
Disability Retirement Date 1.13
Early Retirement Date 1.14
Effective Date 1.15
Eligible Employee 1.16
Employee 1.17
Employer and Participating Employer 1.18
ERISA 1.19
Final Average Compensation 1.20
Hour of Service 1.21
Investment Manager 1.22
Non-Participating Employer 1.23
Normal Retirement Date 1.24
One Year Break In Service 1.25
Parental Absence 1.26
Participant 1.27
Plan 1.28
Plan Year 1.29
Prior Plan 1.30
Service Termination Date 1.31
Social Security Retirement Age 1.32
Straight Life Annuity 1.33
Ten Year Certain and Life annuity 1.34
Trustee 1.35
Trust Agreement 1.36
Trust Fund or Fund 1.37
Year of Service 1.38
II. PARTICIPATION
Eligible Class 2.1
Commencement of Participation 2.2
Termination of Participation 2.3
Transfers 2.4
Reemployment of a Former Participant 2.5
III. ELIGIBILITY FOR RETIREMENT INCOME
Normal Retirement Date 3.1
Deferred Retirement Date 3.2
Early Retirement Date 3.3
Disability Retirement Date 3.4
Vesting Date 3.5
IV. AMOUNT OF RETIREMENT INCOME AND PAYMENTS
Normal Retirement Income 4.1
Deferred Retirement Income 4.2
Early Retirement Income 4.3
Disability Retirement Income 4.4
Deferred Vested Retirement Income 4.5
Maximum Retirement Income 4.6
Timing of Payments 4.7
Transfer Benefit 4.8
Direct Rollover Rules 4.9
Notice 4.10
V. PRE-RETIREMENT DEATH BENEFITS
Immediate Pre-Retirement Surviving Spouse's Benefit
5.1
Deferred Pre-Retirement Surviving Spouse's Benefit5.2
VI. NORMAL AND OPTIONAL PAYMENT FORMS
OF RETIREMENT INCOME
Normal Form of Payment 6.1
Waiver of Normal Form and Election of
Optional Form of Payment 6.2
Waiver Period 6.3
Temporary Non-Payment of Retirement Income 6.4
Optional Forms of Payment 6.5
General Limitations 6.6
Distribution Rules 6.7
Limitation in Case of Domestic Relations Order 6.8
VII. CONTRIBUTIONS
No Contributions by Participants 7.1
Employer Contributions 7.2
Expenses 7.3
Contingent Nature of Contributions 7.4
VIII. ADMINISTRATION
Appointment of Committee 8.1
Notice to Trustee 8.2
Administration of Plan 8.3
Reporting and Disclosure 8.4
Records 8.5
Committee Compensation and Expenses 8.6
Rules and Regulations 8.7
Secretary of the Committee 8.8
Claims Review Procedure 8.9
Information from Participants and Beneficiaries 8.10
IX. NAMED FIDUCIARIES
Identity of Named Fiduciaries 9.1
Responsibilities and Authority of Committee 9.2
Responsibilities and Authority of Trustee 9.3
Responsibilities of the Company 9.4
Responsibilities Not Shared 9.5
Dual Fiduciary Capacity Permitted 9.6
Advice 9.7
Indemnification 9.8
X. PROVISIONS TO PREVENT DISCRIMINATION
Prevention of Discrimination 10.1
Highly Compensated Employees 10.2
Unrestricted Benefit 10.3
Restriction on Payment of Benefit 10.4
Repeal 10.5
XI. AMENDMENT OF THE PLAN
Right to Amend 11.1
Restrictions on Amendment 11.2
XII. TERMINATION OF THE PLAN
Events Constituting Termination 12.1
Partial Termination 12.2
Allocation of Assets 12.3
Manner of Distribution 12.4
Liquidation of Trust Fund 12.5
Internal Revenue Service Approval
for Distribution 12.6
XIII. TOP-HEAVY PLAN REQUIREMENTS
General Rule 13.1
Vesting Provisions 13.2
Minimum Benefit Provisions 13.3
Limitation on Compensation 13.4
Limitation on Benefits 13.5
Coordination With Other Plans 13.6
Top-Heavy Plan Definition 13.7
Key Employee 13.8
Non-Key Employee 13.9
Change from Top-Heavy Status 13.10
XIV. GENERAL PROVISIONS
Plan Voluntary 14.1
Payments to Minors and Incompetents 14.2
Nonalienation of Benefits 14.3
Merger, Consolidation or Transfer 14.4
Return of Contributions to Participating
Employers 14.5
Payment of Small Benefits 14.6
Recovery of Payments Due to a Mistake of Fact 14.7
Internal Revenue Service Approval 14.8
Construction of Agreement 14.9
Headings 14.10
Use of Masculine and Feminine; Singular
and Plural 14.11
Return of Employer Contributions in Excess
of Amount Deductible 14.12
PREAMBLE
The Avondale Industries, Inc. Pension Plan, originally
established effective July 1, 1967 as the Retirement Plan for
Employees of Avondale Shipyards, Inc. and amended from time to
time thereafter, has been adopted by Avondale Industries, Inc.
and was amended and restated in its entirety, effective January
1, 1988, unless stated otherwise. The Plan is amended and
restated effective January 1, 1989, unless otherwise provided
herein, to comply with the Tax Reform Act of 1986 and subsequent
legislation.
This Plan is the continuation of the original Avondale
Industries, Inc. Pension Plan after such Plan and its assets were
merged into the Danly Machine Corporation Pension Plan for
Salaried Employees on December 1, 1987 and then further merged
into the Danly Machine Corporation Hourly (Non-Union) Pension
Plan on December 2, 1987.
The purpose of this Plan is to provide a uniform program of
retirement benefits payable to employees of Avondale Industries,
Inc. and certain related companies upon their retirement, death,
or disability. It is intended that this plan be qualified and
exempt under Sections 401(a) and 501(a) of the Internal Revenue
Code of 1986, as amended from time to time.
If the Plan shall fail to qualify under these sections of
the Internal Revenue Code, it shall be null and void, and all
contributions which may have been made hereunder shall be treated
in accordance with Section 14.8.
ARTICLE I
DEFINITIONS
The following words and phrases when used in the Plan shall
have the following meanings, unless a different meaning is
plainly required by the context:
1.1 Accrued Benefit as of any date shall mean the
Participant's accrued retirement benefit determined as of such
date in accordance with the Plan's benefit formulas described in
Section 4.1 and including any additional Accrued Benefit under
Section 4.8 and before application of any Actuarial Equivalent
factor or any other reduction factor in the Plan. The Accrued
Benefit of Participants who are Employees of Avondale Services
Corporation shall be payable as a Ten-Year Certain and Life
Annuity. These forms of payment shall be used in determining the
annuitized value of the Participant's account under the Avondale
ESOP for purposes of Section 4.1(a)(iv) and Section 4.1(b)(iii)
of the Plan.
For divisional employees or former divisional employees
as such terms are defined in the Asset Purchase Agreement between
Avondale Industries, Inc. and Connell Limited Partnership dated
January 27, 1987, and for participants under the Danly Machine
Corporation Pension Plan for Salaried Employees and the Danly
Machine Corporation Hourly (Non-Union) Pension Plan, Accrued
Benefit shall mean such employees' Accrued Benefit as of January
16, 1987 or as of March 31, 1987, as determined under the
applicable provisions of a Prior Plan.
1.2 Actuarial Equivalent shall mean a benefit of equivalent
current value to the benefit which otherwise would have been
provided to the Participant, determined on the basis of the UP-
1984 Mortality Table set forward one year for males, set back
four years for females and weighted 95% male and 5% female and
7.0% annual interest. Provided, however, the determination of a
lump sum benefit shall be based on the UP-1984 Mortality Table
set forward one year for males, set back four years for females
and weighted 95% male and 5% female and on the interest rates
used by the Pension Benefit Guaranty Corporation as in effect on
the January 1 of the calendar year in which the date of
determination occurs. Provided further, however, the
determination of the annuitized value of the Participant's
account under the Avondale ESOP for purposes of Section
4.1(a)(iv) and Section 4.1(b)(iii) of the Plan shall be based on
no mortality and 7% annual interest for the period, if any, from
(i) the date the Participant terminates employment with the
Participating Employer or Non-Participating Employer, retires or
becomes totally and permanently disabled, whichever is earlier,
to (ii) the Participant's Normal Retirement Date.
In the event this Section 1.2 is amended, the Actuarial
Equivalent of a Participant's Accrued Benefit on or after the
date of such amendment shall be the greater of (1) the Actuarial
Equivalent of the Participant's Accrued Benefit as of the
effective date of the amendment, computed on the old basis
without regard to the amendment, or (2) the Actuarial Equivalent
of the Participant's Accrued Benefit determined as of the date
the calculation is made and giving effect to the amendment.
The above notwithstanding, for Participants whose
Accrued Benefits are frozen as described in Section 1.1,
Actuarial Equivalent of a benefit shall mean a benefit of
equivalent value to the benefit which would otherwise have been
provided determined under the terms of a Prior Plan.
1.3 Actuary shall mean an individual who is an "enrolled
actuary" in accordance with regulations issued by the Joint Board
for the Enrollment of Actuaries and who has been selected by the
Committee.
1.4 Affiliated Company shall mean any corporation which is
included with the Company in a controlled group of corporations,
as determined in accordance with Section 414(b) of the Code, or
any unincorporated trade or business which is under common
control with the Company in accordance with Section 414(c) of the
Code, or any organization (whether or not incorporated) which is
a member of an affiliated service group with the Company in
accordance with Section 414(m) of the Code, or any other entity
required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code.
1.5 Avondale ESOP shall mean the Avondale Industries, Inc.
Employee Stock Ownership Plan, effective September 1, 1985, as
amended from time to time.
1.6 Beneficiary shall mean the person or persons designated
by the Participant or former Participant to receive benefits
under the Plan in the event of the Participant's death. Each
Beneficiary designation shall be in a form prescribed by the
Committee.
If the Participant is married and designates someone
other than his legal spouse, his Beneficiary designation must
include the written consent of his spouse at the time the
designation is made. Such written consent must approve the
Beneficiary designated and acknowledge the effect of such
designation and must be notarized by a notary public. If it is
established to the satisfaction of the Committee that the
Participant has no spouse, or that the spouse's consent cannot be
obtained because the spouse cannot be located, or because of such
other circumstances as may be prescribed in regulations issued
pursuant to Section 417 of the Code, such written consent shall
not be required.
If no valid Beneficiary designation is in effect at the
time of the Participant's death, then, to the extent, if any,
benefits are payable under the Plan after such death, Beneficiary
shall mean the Participant's legal spouse, if he is married at
the time of his death, or otherwise the Participant's estate.
1.7 Code shall mean the Internal Revenue Code of 1986, as
amended from time to time and any Regulations issued thereunder.
Reference to any Section of the Code will include any successor
provision thereto.
1.8 Committee shall mean the Pension Plan Administrative
Committee designated by the Company to administer the Plan in
accordance with Section 8.1 hereof.
1.9 Company shall mean Avondale Industries, Inc. and any
successor company that may continue the Plan.
1.10 Compensation shall mean, for Employees who are not
Employees of Avondale Services Corporation the monthly base wages
or salary paid to such Employees by their Employer in effect on
July 1 of each year, excluding bonuses, overtime pay, shift
differentials, severance pay, imputed income or other non-cash
compensation, contributions or benefits under this Plan, the
Performance Share Plan, the Stock Appreciation Plan, or any other
employee benefit plan, or reimbursed expenses. Compensation
shall include, however, any pre-tax contributions Employees elect
to have their Employer contribute to a plan under Section 125 of
the Code or a qualified plan under Section 401(k) of the Code.
The monthly base wages for Employees who are paid on an hourly
basis shall be determined by multiplying the basic hourly rate of
pay in effect on July 1 by 2,080 and dividing the result by 12.
The monthly base salary for Employees who are paid on a salaried
basis shall be such Employees' base monthly salary in effect on
July 1 of each year. The monthly compensation for Employees who
are commission-based Employees or who are classified by their
Employer as temporary or part-time employees shall be the
Employees' Compensation for the previous calendar year divided by
12.
For Employees of Avondale Services Corporation,
Compensation shall mean the total annual salaries, wages, bonuses
and base car allowance paid to such Employees by their Employer,
but shall exclude severance pay, any contributions or benefits
under this Plan, the Performance Share Plan, the Stock
Appreciation Plan, or any other employee benefit plan, or
reimbursed expenses. Compensation shall include, however, any
pretax contributions Employees elect to have their Employer
contribute to a plan under Section 125 of the Code or a qualified
plan under Section 401(k) of the Code.
For years beginning prior to December 31, 1993, a
Participant's annual Compensation taken into account under the
Plan for any Plan Year shall not exceed $200,000, as adjusted
from time to time in accordance with Section 401(a)(17) of the
Code.
Unless otherwise provided under the Plan, each Section
401(a)(17) Employee's Accrued Benefit under this Plan will be the
greater of the Accrued Benefit determined for the Employee under
a. or b. below minus c. below:
a. the Employee's Accrued Benefit before subtracting
the annuitized value of the Participant's ESOP
account described in 3 below determined with
respect to the benefit formula as applied to the
Employee's total Years of Service taken into
account under the Plan for the purposes of benefit
accruals, or
b. the sum of:
i. the Employees Accrued Benefit before
subtracting the annuitized value of the
Participant's ESOP account described in 3
below as of the last day of the last Plan
Year beginning before January 1, 1994, frozen
in accordance with Section 1.401(a)(4)-13 of
the treasury regulations and
ii. the Employee's Accrued Benefit before
subtracting the annuitized value of the
Participant's ESOP account described in 3
below determined under the benefit formula as
applied to the Employee's Years of Service
credited to the Employee for Plan Years
beginning on or after January 1, 1994, for
purposes of benefit accruals.
c. the annuitized value of the Participant's ESOP
account as described in Section 4.1(a)(iv).
A Section 401(a)(17) Employee means an Employee whose current
Accrued Benefit as of December 31, 1993 is based on Compensation
that exceeded $150,000.
1.11 Compensation Year shall mean each calendar year in
which an Employee is employed by a Participating Employer or Non-
Participating Employer on December 31st of such year, or if not
employed on such date is reemployed by a Participating Employer
or Non-Participating Employer within 12 months of his termination
of employment; provided, however, an Employee must be employed on
or before July 1st to receive credit for his initial Compensation
Year.
1.12 Deferred Retirement Date shall mean the date on which a
Participant retires with a deferred retirement benefit under the
Plan, as determined in accordance with Section 3.2.
1.13 Disability Retirement Date shall mean the date on which
a Participant retires with a disability retirement benefit under
the Plan, as determined in accordance with Section 3.4.
1.14 Early Retirement Date shall mean the date on which a
Participant retires with an early retirement benefit under the
Plan, as determined in accordance with Section 3.3.
1.15 Effective Date shall mean January 1, 1988, unless
otherwise provided herein.
1.16 Eligible Employee shall mean an Employee who is
included in the eligible class described in Article II.
1.17 Employee shall mean any person employed by a
Participating Employer or Non-Participating Employer. A leased
employee as described in Section 414(n)(2) of the Code shall be
considered an Employee but shall not be considered a Participant
under this Plan; provided, however, that any leased employee who
subsequently becomes a Participant shall have his previous
service as a leased employee used in calculating his Years of
Service under the Plan.
1.18 Employer shall mean the Company, Avondale Services
Corporation, and any Affiliated Company, subsidiary or related
entity that adopts this Plan pursuant to authorization by the
Board of Directors of the Company. The list of Employers and the
date such Employers adopted this Plan shall be contained in
Appendix A. A Participating Employer shall mean an entity,
including the Company, included in this definition of Employer.
1.19 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time. References
to any section of ERISA include any successor provision thereto.
1.20 Final Average Compensation shall mean for a Participant
who is not an Employee of Avondale Services Corporation, such
Participant's average monthly Compensation for the five
consecutive Compensation Years out of the ten (or fewer) calendar
years immediately prior to his actual retirement date, or the
date of his earlier termination of employment, as the case may
be, during which his Compensation was highest. If a Participant
has less than five Compensation Years on the date of the
calculation of his Final Average Compensation, then those
Compensation Years which the Participant had accumulated on such
date shall be utilized.
For Participants who are Employees of Avondale Services
Corporation, Final Average Compensation shall mean the average
annual Compensation for the five consecutive Compensation Years
out of the ten (or fewer) calendar years immediately prior to his
actual retirement date, or the date of his earlier termination of
employment, as the case may be, during which his Compensation was
highest. If a Participant has less than five Compensation Years
on the date of the calculation of his Final Average Compensation,
then those Compensation Years which the Participant has
accumulated on such date shall be utilized.
1.21 Hour of Service shall mean:
a. Each hour for which an Employee is directly or
indirectly paid or entitled to payment by a
Participating Employer or Non-Participating
Employer for the performance of duties, including
periods of vacation and holidays;
b. Each hour for which an Employee is directly or
indirectly paid or entitled to payment by a
Participating Employer or Non-Participating
Employer (including payments made or due from a
trust fund or insurer to which the Participating
Employer or Non-Participating Employer contributes
or pays premiums) on account of a period of time
during which no duties are performed (irrespective
of whether the employment relationship has
terminated) due to illness, incapacity,
disability, layoff, jury duty, military duty, or
leave of absence, provided that:
i. no more than 501 Hours of Service shall be
credited under this Section 1.21(b) to an
Employee on account of any single continuous
period during which the Employee performs no
duties; and
ii. Hours of Service shall not be credited under
this Section 1.21(b) to an Employee for a
payment which solely reimburses the Employee
for medically related expenses incurred by
the Employee or which is made or due under a
plan maintained solely for the purpose of
complying with applicable workers'
compensation, unemployment compensation or
disability insurance laws;
c. Each hour not already included under Section
1.21(a) or (b) above for which back pay,
irrespective of mitigation of damages, is either
awarded or agreed to by such Employer, provided
that crediting of Hours of Service under this
Section 1.21(c) with respect to periods described
in Section 1.21(b) above shall be subject to the
limitation therein set forth; and
The number of Hours of Service to be credited
under Section 1.21(b) or (c) above on account of a
period during which an Employee performs no
duties, and the Plan Years to which Hours of
Service shall be credited under Sections 1.21(a),
(b) or (c) above shall be determined by the
Committee in accordance with Sections 2530.200b-
2(b) and (c) of the Regulations of the U.S.
Department of Labor.
To the extent not credited above, Hours of Service
will also be credited based on the customary work
week of the Employee for periods of military duty
(as required by applicable law) and approved
leaves of absence.
1.22 Investment Manager shall mean the individual,
individuals or institution appointed by the Committee to direct
the investment of all or a part of the Trust Fund. Such
Investment Manager must:
a. be (i) registered in good standing under the
Investment Advisors Act of 1940; or (ii) a bank as
defined in such Act; or (iii) an insurance company
qualified to perform investment management
services under the laws of more than one State of
the United States; and
b. acknowledge in writing its status as a "Named
Fiduciary" under the Plan.
1.23 Non-Participating Employer shall mean an Affiliated
Company, subsidiary or related entity which is not participating
in the Plan or which is no longer participating in the Plan by
reason of the recision of a prior designation of participation by
the Board of Directors of the Company.
1.24 Normal Retirement Date shall mean the later of (a) a
Participant's 65th birthday, or (b) the first day of the month
coincident with or next following a Participant's fourth
anniversary of commencement of participation in the Plan.
1.25 One Year Break In Service shall mean a 12-month
consecutive period following an Employee's Service Termination
Date during which the Employee fails to be credited with an Hour
of Service.
1.26 Parental Absence shall mean an Employee's absence from
work, on or after January 1, 1985, which has commenced for any of
the following reasons:
a. the pregnancy of the Employee;
b. the birth of the Employee's child;
c. the adoption of a child by the Employee; or
d. the need to care for the Employee's child
immediately following its birth or adoption.
Provided, however, that the Committee, in its sole
discretion, may require evidence that any absence is on account
of a reason enumerated herein and evidence as to the duration of
such absence.
1.27 Participant shall mean any Employee who is
participating in the Plan pursuant to Article II.
1.28 Plan shall mean the Avondale Industries, Inc. Pension
Plan as set forth in this document and appendices and as amended
from time to time.
1.29 Plan Year shall mean each 12-month period commencing on
January 1 and ending on the next following December 31.
1.30 Prior Plan shall mean the following plans that were
previously sponsored by the Company: (a) the Avondale
Industries, Inc. Pension Plan; (b) the Danly Machine Corporation
Pension Plan for Salaried Employees; and (c) the Danly Machine
Corporation Hourly (Non-Union) Pension Plan.
1.31 Service Termination Date shall mean the earliest of the
following:
a. the date on which an Employee resigns, is
discharged, retires or dies;
b. the first anniversary of the date on which an
Employee is laid off, starts an authorized leave
of absence, or is absent from work for any other
reason (other than those instances covered under
Sections 1.31(a) and (c)), including holidays,
paid vacations, sick leaves and absence on account
of disability;
c. the second anniversary of the date on which an
Employee commenced a Parental Absence, if such
Employee has not yet returned to work with a
Participating or Non-Participating Employer.
1.32 Social Security Retirement Age shall mean the age used
as the retirement age for the Participant under Section 216(1) of
the Social Security Act, except that such section shall be
applied without regard to the age increase factor, and as if the
early retirement age under Section 216(1)(2) of such Act were 62.
1.33 Straight Life Annuity shall mean an annuity for life,
ending with the payment due on the last day of the month
coincident with or preceding the date of the Participant's death.
1.34 Ten Year Certain and Life Annuity shall mean a benefit
providing an annuity for the life of the Participant, ending with
the payment due on the first day of the month coincident with or
preceding the date of his death, with a guaranteed payment period
of 120 months, and as further described in Article VI.
1.35 Trustee shall mean the individual, individuals or
institution appointed by the Board of Directors of Avondale
Industries, Inc. to act in accordance with the applicable
provisions of the Plan.
1.36 Trust Agreement shall mean the agreement by and between
the Employer and the Trustee, as said Agreement may from time to
time be amended.
1.37 Trust Fund or Fund shall mean all assets held by the
Trustee in accordance with this Plan and the Trust Agreement.
1.38 Year of Service shall mean a 12-month period commencing
on the first day on which an Employee is credited with an Hour of
Service (or such Employee's date of rehire in the case of an
Employee who has not previously become a Participant and who has
incurred five or more consecutive One Year Breaks in Service) (or
such later date of participation as specified in Appendix A) or
anniversary thereof during which he is continuously employed by a
Participating Employer or Non-Participating Employer, provided
that:
a. An Employee shall be credited with one Year of
Service for each 12 complete months of employment,
whether or not consecutive.
b. An Employee who is not absent from work due to a
Parental Absence shall cease accruing Years of
Service on his Service Termination Date, except if
such Employee performs an Hour of Service within
the 12-month period commencing on his Service
Termination Date, his period of absence shall be
treated as employment.
c. Years of Service shall include any one or more of
the following:
i. any period of absence because of service in
the military forces of the United States,
provided the Employee returns to work within
90 days after first becoming eligible for
discharge from active duty;
ii. any period of layoff not in excess of one
year in duration;
iii. any period while the Employee is on an
approved leave of absence with or without pay
(including any leave of absence for maternity
or paternity reasons);
iv. any other period of absence approved by a
Participating Employer or Non-Participating
Employer including paid holidays, paid
vacations and sick leaves;
v. any other period of absence during which the
Employee does not incur a One Year Break In
Service; provided the Employee returns to
work with a Participating Employer or Non-
Participating Employer within the one-year
period after his Service Termination Date;
vi. to the extent not otherwise credited above,
the first 12 months of a Parental Absence if
the Employee provides the Committee with any
evidence it may reasonably require to
determine that the absence is on account of
such Parental Absence.
Except as otherwise specifically provided under this
Section 1.38, a partial Year of Service shall be determined by
dividing the number of days of employment, whether or not
consecutive, by the number of days in the calendar year.
Notwithstanding anything in the Plan to the contrary,
the Years of Service of any Participant determined as of January
1, 1988 shall not be less than the number of years he would have
had on such date under the terms of a Prior Plan as in effect on
December 31, 1987.
ARTICLE II
PARTICIPATION
2.1 Eligible Class. Each Employee who meets the following
requirements shall be an Eligible Employee:
a. he is employed by a Participating Employer;
b. he has attained age 21;
c. he has completed one Year of Service; and
d. he is not covered by the terms of a collective
bargaining agreement to which there has been good-
faith bargaining relating to participation under
the Plan unless such agreement provides for
participation under the Plan.
2.2 Commencement of Participation. Each Participant on the
Effective Date who is in the eligible class will continue as a
Participant in the Plan on the Effective Date. Every other
Employee shall become a Participant on the first day of the month
coincident with or next following the date on which he becomes an
Eligible Employee.
Employees or former employees whose Accrued Benefits
are frozen as described in Section 1.1 under the applicable
provisions of a Prior Plan shall not be entitled to a benefit in
excess of their frozen Accrued Benefit.
2.3 Termination of Participation. A Participant shall
terminate his active participation hereunder on the date he
retires, dies, becomes permanently disabled, or terminates
employment with his Participating Employer for any reason.
2.4 Transfers. The following provisions shall govern in
the case of Employees who change employment status:
a. In the event that a Participant transfers directly
from one Participating Employer to another
Participating Employer, he shall not be deemed to
have terminated his participation under the Plan
but shall thereafter be considered for all
purposes of the Plan as an Eligible Employee of
the succeeding Participating Employer from the
date of such transfer.
b. In the event that an Employee of a Participating
Employer either (i) transfers directly to a Non-
Participating Employer or (ii) becomes a member of
an ineligible class of Employees so that he is no
longer considered an Eligible Employee, he shall
be credited with Years of Service during such
period of employment with the Non-Participating
Employer for vesting purposes under this Plan, but
shall not be credited with Years of Service during
such period of employment for purposes of
determining the amount of his Accrued Benefit
under this Plan. Such Participant shall be
entitled only to benefits under the provisions of
the Plan as in effect on the date he ceased to be
an Eligible Employee.
c. In the event that an Employee of a Non-
Participating Employer either (i) transfers
directly to a Participating Employer or (ii)
otherwise becomes an Eligible Employee, he shall
be credited with Years of Service during his
employment with the Non-Participating Employer or
during a period in which he was not an Eligible
Employee for vesting purposes under this Plan, but
he shall not be credited with Years of Service
during such period of employment for purposes of
determining the amount of his Accrued Benefit
under this Plan. Such Employee shall become a
Participant on the date of such transfer, provided
he meets the requirements of Section 2.1 or if
later, the date on which he meets such
requirements.
d. In the event that a Participant transfers from any
Participating Employer (other than Avondale
Services Corporation) or Avondale Services
Corporation (the "Transferor Employer") to any
Participating Employer (other than Avondale
Services Corporation) or Avondale Services
Corporation (the "Transferee Employer"), such
Participant's Accrued Benefit shall be equal to
the sum of (i) the Participant's Accrued Benefit
based on his years of Service earned while an
Employee of the Transferor Employer and his Final
Average Compensation as of the date of his
transfer, and (ii) the Participant's Accrued
Benefit based on his Years of Service earned while
an Employee of the Transferee Employer and his
Final Average Compensation as of the date of his
termination of employment with such Transferee
Employer. Notwithstanding the previous sentence,
in no event shall a Participant's Accrued Benefit
be less than the Accrued Benefit to which he would
have been entitled had he always been an Employee
of the Transferor Employer for the entire period
during which he earned Years of Service.
2.5 Reemployment of a Former Participant. Except as
provided for in Section 2.4, a Participant who terminates
employment and who is subsequently reemployed shall be reinstated
as a Participant on the day he first performs an Hour of Service
following reemployment, provided (a) he meets the requirements of
Section 2.1 on such date, or if later, the date on which he meets
such requirements and (b) he completes one Year of Service from
his date of rehire, if he had incurred a One Year Break In
Service prior to such reemployment. If such reemployed
Participant fails to complete one Year of Service from his date
of rehire, he shall not be reinstated as a Participant.
Reemployed Participants who do complete one Year of Service from
their date of rehire shall be treated as follows:
a. If the Participant was not vested in his Accrued
Benefit, such Participant shall automatically be
reinstated as a Participant and his Years of
Service accumulated before his termination shall
be added to any Years of Service which he may
subsequently accumulate, provided he is reemployed
before incurring the greater of five consecutive
One Year Breaks In Service or his Years of Service
earned prior to such Break; otherwise such former
Participant shall be treated as a new employee and
any Years of Service accumulated by him prior to
termination shall be disregarded.
b. If the Participant was vested in his Accrued
Benefit, but payment of such benefits has not yet
commenced, such Participant shall automatically be
reinstated as a participant and his Years of
Service accumulated before his termination shall
be added to any Years of Service which he may
subsequently accumulate.
c. If the Participant was vested in his Accrued
Benefit and payment of such benefits had commenced
or if the Participant otherwise received a
distribution pursuant to Section 14.6,
i. his benefit payments shall be suspended
during the period of his resumed employment
for any month in which he is regularly
scheduled in "Section 203(a)(3)(B) service"
within the meaning of ERISA and, if
suspended, shall recommence on the first day
of the month next following cessation of his
employment;
ii. he shall be eligible for additional Years of
Service as a result of his resumed
participation in accordance with the
provisions of the Plan;
iii. if he shall die during the period of resumed
participation, benefits shall be payable in
accordance with the provisions of Article VI;
and
iv. any benefits subsequently payable under the
Plan shall be reduced on account of any
benefit payments previously made; but
notwithstanding any other provision of this
Section 2.5(c) to the contrary, any benefits
subsequently payable shall not be reduced
below the level of benefits (or Actuarial
Equivalent thereof) which would have been
payable in the absence of the Participant's
resumed participation.
ARTICLE III
ELIGIBILITY FOR RETIREMENT INCOME
3.1 Normal Retirement Date. A participant's Normal
Retirement Date shall be the later of (a) a Participant's 65th
birthday, or (b) the first day of the month coincident with or
next following a Participant's fourth anniversary of commencement
of participation in the Plan. Upon reaching his Normal
Retirement Date, a Participant's right to his Accrued Benefit
shall be fully vested and non-forfeitable. A Participant who
attains his Normal Retirement Date shall be entitled to a normal
retirement income determined pursuant to Section 4.1.
3.2 Deferred Retirement Date. A Participant may continue
his employment after his Normal Retirement Date and retire on the
first day of any month thereafter, such date being known as his
Deferred Retirement Date. An Employee continuing his employment
beyond his Normal Retirement Date shall be eligible for
participation in the Plan on the same basis as any other
Employee. A Participant retiring on a Deferred Retirement Date
shall be entitled to a deferred retirement income determined
pursuant to Section 4.2.
Notwithstanding the foregoing, if required by the Board
of Directors of the Company, a high-ranking executive or other
policy-making individual with an aggregate anticipated annual
retirement benefit, including benefits not provided under the
Plan, of $44,000 or more, when expressed as a Straight Life
Annuity, shall not be allowed to continue his employment after
his Normal Retirement Date and shall retire on such Normal
Retirement Date, all as determined by the Board of Directors
under uniform rules and in accordance with applicable law and
Regulations.
3.3 Early Retirement Date. A Participant who has completed
at least ten Years of Service may retire on the first day of any
month following his 55th birthday, such date being known as his
Early Retirement Date; provided, however, that such Participant
provides the Committee with written notice at least 60 days prior
to his Early Retirement Date. A Participant retiring on an Early
Retirement Date shall be entitled to an early retirement income
determined pursuant to Section 4.3.
3.4 Disability Retirement Date. A Participant who has
completed at least ten Years of Service may retire on the first
day of any month following six months of total and permanent
disability, such date being known as his Disability Retirement
Date. Effective January 1, 1989, a Participant who has completed
at least five Years of Service may retire on the first day of any
month following six months of total and permanent disability,
such date being known as his Disability Retirement Date.
For purposes of the Plan, a Participant shall be
considered totally and permanently disabled if he suffers an
illness or injury which prevents him from performing duties of
any substantially gainful activities due to any medically
determinable cause, as determined by the Committee, and which
qualifies him for commencement of benefits for permanent and
total disability under Federal Old Age and Survivor Insurance. A
Participant retiring on a Disability Retirement Date shall be
entitled to a disability retirement income determined pursuant to
Section 4.4; provided, however, that such disability retirement
income shall not be payable during any period of time prior to
the Participant's Normal Retirement Date during which the
Participant receives disability income benefits under a long-term
disability program provided by the Participating Employer,
including any Worker's Compensation benefits, or under a
disability program made available to the Participant by the
Participating Employer through payroll deductions.
3.5 Vesting Date. A Participant who terminates his
employment with a Participating Employer or a Non-Participating
Employer before he is eligible to retire on a Normal, Early or
Disability Retirement Date but on or after completing at least
ten Years of Service, shall be vested in his Accrued Benefit and
entitled to a deferred vested retirement income determined
pursuant to Section 4.5. Effective January 1, 1989, a
Participant who has completed at least five Years of Service
shall be vested in his Accrued Benefit.
The above notwithstanding, an employee or former
employee whose Accrued Benefit is frozen as described in Section
1.1 under the applicable provisions of a Prior Plan shall be
fully vested in such Benefit.
For purposes of this Section 3.5, if a Participant
terminates employment with zero vesting, the Participant will be
deemed to have received a distribution and the non-vested portion
shall be immediately forfeited. For a Participant first credited
with an Hour of Service after December 31, 1987 who terminates
employment with a zero benefit, such Participant will be deemed
to have received his full benefit, vested and nonvested. A
Participant can have a benefit restored after re-employment, but
only under the circumstances described in Section 2.5.
ARTICLE IV
AMOUNT OF RETIREMENT INCOME AND PAYMENTS
4.1 Normal Retirement Income. A Participant who retires in
accordance with Section 3.1 shall be entitled to receive a normal
retirement income equal to his Accrued Benefit computed as
follows:
a. For a Participant who is not an Employee of
Avondale Services Corporation, his monthly Accrued
Benefit shall equal the product of [(i) times
(ii)], minus (iii), minus (iv) plus (v) where:
i. Equals 25% of the Participant's Final Average
Compensation not in excess of $550 plus 40%
of such Participant's Final Average
Compensation in excess of $550;
ii. Equals a fraction the numerator of which is
the Participant's Years of Service up to a
maximum of 30 years and the denominator of
which is 30;
iii. Equals the amount, if any, of monthly annuity
purchased on behalf of the Participant in
1985 to be paid directly to the Participant,
commencing at retirement, from Massachusetts
Mutual Life Insurance Company; and
iv. Equals the monthly annuitized value of the
Participant's account under the Avondale
ESOP, which is the Actuarial Equivalent value
of the market value of the Participant's
Avondale ESOP account determined by using the
market price for the shares and other assets
held in such Account as of the close of
business on the last trading day of the month
which is coincident with or precedes the date
the Participant terminates employment with
the Participating Employer or Non-
Participating Employer, retires or becomes
totally and permanently disabled, whichever
is earlier, excluding any shares or other
assets allocated to such Account on or after
the date the Participant terminates
employment with the Participating Employer or
Non-Participating Employer, retires or
becomes totally and permanently disabled,
whichever is earlier (other than allocations
for the preceding ESOP plan year occurring in
the first quarter of the Plan Year of such
termination).
Pursuant to the provisions of Sections 4.7
and 6.1, such retirement income determined
under this Section 4.1(a) shall be payable
monthly, beginning on the Participant's
Normal Retirement Date and ending upon the
Participant's death.
v. an additional Accrued Benefit pursuant to
Section 4.8, if applicable.
b. For a Participant who is an Employee of Avondale
Services Corporation, his annual Accrued Benefit
shall equal the greater of the benefit obtained in
(i) or (ii), minus (iii) plus (iv) where:
i. Equals 1.5% of the Participant's Final
Average Compensation multiplied by the
Participant's Years of Service accrued after
September 27, 1985;
ii. Equals 1.5% of the Participant's Final
Average Compensation multiplied by the
Participant's Years of Service (including
such service with Ogden American
Corporation), minus the benefit, if any,
which the Participant receives under the
Ogden American Corporation Pension Plan,
minus the amount, if any, of the annual
annuity purchased on behalf of the
Participant in 1985 to be paid directly to
the Participant, commencing at retirement,
from Massachusetts Mutual Life Insurance
Company; and
iii. Equals the monthly annuitized value of the
Participant's account under the Avondale
ESOP, which is the Actuarial Equivalent value
of the market value of the Participant's
Avondale ESOP account determined by using the
market price for the shares and other assets
held in such Account as of the close of
business on the last trading day of the month
which is coincident with or precedes the date
the Participant terminates employment with
the Participating Employer or Non-
Participating Employer, retires or becomes
totally and permanently disabled, whichever
is earlier, excluding any shares or other
assets allocated to such Account on or after
the date the Participant terminates
employment with the Participating Employer or
Non-Participating Employer, retires or
becomes totally and permanently disabled,
whichever is earlier (other than allocations
for the preceding ESOP plan year occurring in
the first quarter of the Plan Year of such
termination).
Pursuant to the provisions of Sections 4.7
and 6.1, such retirement income determined
under this Section 4.1(b) shall be payable
monthly in equal amounts of 1/12 of such
annual Accrued Benefit, beginning on the
Participant's Normal Retirement Date for his
lifetime, with the provision that if the
Participant's death occurs before he has
received 120 monthly payments, the remaining
number of such payments shall be paid to the
person designated as his Beneficiary.
iv. an additional Accrued Benefit pursuant to
Section 4.8, if applicable.
For purposes of determining the amount by which a
Participant's Accrued Benefit shall be reduced as
determined under Section 4.1(a)(iv) and Section
4.1(b)(iii), the number of shares held in the
Participant's account in the Avondale ESOP shall
be increased by the number, including fractions,
of any shares which have been distributed to the
Participant prior to the date of the calculation
of the Participant's Accrued Benefit.
4.2 Deferred Retirement Income. A Participant who retires
on a Deferred Retirement Date in accordance with Section 3.2
shall be entitled to receive a deferred retirement income equal
to the normal retirement amount described in Section 4.1(a) or
(b), whichever is applicable, determined as of his actual
retirement date, based on his Years of Service and Final Average
Compensation at retirement. Pursuant to the provisions of
Sections 4.7 and 6.1, for Participants who are not Employees of
Avondale Services Corporation, such retirement income shall be
payable beginning on the Participant's Deferred Retirement Date
and ending upon the Participant's death. Pursuant to the
provisions of Sections 4.7 and 6.1, for Participants who are
Employees of Avondale Services Corporation, such retirement
income shall be payable monthly in equal amounts of 1/12 of such
Benefit, beginning on the Participant's Deferred Retirement Date
for his lifetime, with the provision that if the Participant's
death occurs before he has received 120 monthly payments, the
remaining number of such payments shall be paid to the person
designated as his Beneficiary.
4.3 Early Retirement Income. A Participant who retires on
an Early Retirement Date in accordance with Section 3.3 shall be
entitled to receive a retirement income beginning at his Normal
Retirement Date determined as follows:
a. For a Participant who is not an Employee of
Avondale Services Corporation, his early
retirement income shall be equal to the product of
[(i) times (ii)] minus (iii) plus (iv) where:
i. Equals the product obtained by multiplying
the amount determined under Section 4.1(a)(i)
times the amount determined under Section
4.1(a)(ii), based on his Final Average
Compensation as of his actual retirement
date. For purposes of calculating the amount
described in Section 4.1(a)(ii), Years of
Service shall be calculated assuming the
Participant remained employed until his
Normal Retirement Date (up to a maximum of 30
years);
ii. Equals a fraction, the numerator of which is
the Participant's years of Service as of his
actual retirement date and the denominator of
which is the Participant's Years of Service
assuming the Participant remained employed
until his Normal Retirement Date; and
iii. Equals the sum of the amounts determined
under Section 4.1(a)(iii) and Section
4.1(a)(iv).
iv. an additional Accrued Benefit pursuant to
Section 4.8, if applicable.
If the Participant has completed ten or more Years
of Service and elects to begin receiving his early
retirement income on his Early Retirement Date,
such early retirement income shall be reduced by a
percentage amount specified in Appendix B for each
month that commencement upon his actual retirement
date of his early retirement income precedes his
Normal Retirement Date. Pursuant to the
provisions of Sections 4.7 and 6.1, such
retirement income determined under this Section
4.3(a) shall be payable monthly beginning on the
Participant's Early Retirement Date and ending
upon the Participant's death.
b. For a Participant who is an Employee of Avondale
Services Corporation, his early retirement income
shall be equal to the normal retirement amount
described in Section 4.1(b), determined as of his
actual retirement date based on his Years of
Service and Final Average Compensation at actual
retirement.
If the Participant has completed ten or more Years
of Service and elects to begin receiving his early
retirement income on his Early Retirement Date,
such early retirement income shall be reduced by a
percentage amount specified in Appendix B for each
month that commencement upon his actual retirement
date of his early retirement income precedes his
Normal Retirement Date. Pursuant to the
provisions of Sections 4.7 and 6.1, such
retirement income determined under this Section
4.3(b) shall be payable monthly in equal amounts
of 1/12 of such annual Accrued Benefit beginning
on the Participant's Early Retirement Date for his
lifetime, with the provision that if the
Participant's death occurs before he has received
120 monthly payments, the remaining number of such
payments shall be paid to the person designated as
his Beneficiary.
4.4 Disability Retirement Income. A Participant who
retires on a Disability Retirement Date in accordance
with Section 3.4 shall be entitled to receive a
retirement income beginning at his Normal Retirement
Date determined as follows:
a. For a Participant who is not an Employee of
Avondale Services Corporation, his disability
retirement income shall be equal to the product of
[(i) times (ii)] minus (iii) plus (iv) where:
i. Equals the product obtained by multiplying
the amount determined under Section 4.1(a)(i)
times the amount determined under Section
4.1(a)(ii), based on his Final Average
Compensation as of his actual retirement
date. For purposes of calculating the amount
described in Section 4.1(a)(ii), Years of
Service shall be calculated assuming the
Participant remained employed until his
Normal Retirement Date (up to a maximum of 30
years);
ii. Equals a fraction, the numerator of which is
the Participant's Years of Service as of his
actual retirement date and the denominator of
which is the Participant's Years of Service
assuming the Participant remained employed
until his Normal Retirement Date; and
iii. Equals the sum of the amounts determined
under Section 4.1(a)(iii) and Section
4.1(a)(iv). For Participants who elect to
begin receiving disability retirement income
prior to the commencement of the annuity
amounts described in Section 4.1(a)(iii), the
retirement income payable under this Plan
shall be increased by the amount of such
annuity (reduced as provided under this
paragraph for early commencement). Such
retirement income shall be subsequently
reduced by the same amount at such time the
Participant is eligible to receive the
annuity amounts described in Section
4.1(a)(iii).
iv. an additional Accrued Benefit pursuant to
Section 4.8, if applicable.
If the Participant has completed five or more
Years of Service (ten Years of Service prior to
January 1, 1989) and elects to begin receiving his
disability retirement income on his Disability
Retirement Date, such early retirement income
shall be reduced by a percentage amount specified
in Appendix B for each of the first 120 months,
and the Actuarial Equivalent of each additional
month thereafter that commencement, upon his
actual retirement date, of his disability
retirement income precedes his Normal Retirement
Date. Pursuant to the provisions of Sections 4.7
and 6.1, such retirement income determined under
this Section 4.4(a) shall be payable monthly
beginning on the Participant's Disability
Retirement Date and ending upon the Participant's
death.
b. For a Participant who is an Employee of Avondale
Services Corporation, his disability retirement
income shall be equal to the normal retirement
amount described in Section 4.1(b), determined as
of his actual retirement date, based on his Years
of Service and Final Average Compensation at
actual retirement.
If the Participant has completed five or more
Years of Service (ten Years of Service prior to
January 1, 1989) and elects to begin receiving his
disability retirement income on his Disability
Retirement Date (or the first of any month prior
to his Normal Retirement Date), such early
retirement income shall be reduced by a percentage
amount specified in Appendix B for each of the
first 120 months, and the Actuarial Equivalent of
each additional month thereafter that
commencement, upon his actual retirement date, of
his disability retirement income precedes his
Normal Retirement Date. Pursuant to the
provisions of Sections 4.7 and 6.1, such
retirement income determined under this Section
4.4(b) shall be payable monthly in equal amounts
of 1/12 of such Benefit beginning on the
Participant's Disability Retirement Date for his
lifetime, with the provision that if the
Participant's death occurs before he has received
120 monthly payments, the remaining number of such
payments shall be paid to the person designated as
his Beneficiary.
c. Retirement Benefits payable under this Section 4.4
shall not be payable during any period of time
prior to the Participant's Normal Retirement Date
during which the Participant receives disability
income benefits under a long-term disability
program provided by the Participating Employer
including any Worker's Compensation benefits, or
under a disability program made available to the
Participant by the Participating Employer through
payroll deductions.
d. In the event a Participant covered by this Section
4.4 recovers from total and permanent disability
prior to his Normal Retirement Date and is
reemployed by the Employer, payment of his
disability retirement benefit shall cease and his
subsequent benefits under the Plan shall be based
on his Years of Service earned prior to his
Disability Retirement Date and Years of Service
accrued after he is reemployed in the same manner
as though all his Years of Service had been
continuous.
e. In the event a Participant covered by this Section
4.4 recovers from total and permanent disability
prior to his Normal Retirement Date and is not
reemployed by a Participating Employer, his
retirement benefit shall cease and he shall be
entitled to a retirement benefit pursuant to
Section 4.3 based on his Years of Service earned
prior to his Disability Retirement Date and Final
Average Compensation at his Disability Retirement
Date.
4.5 Deferred Vested Retirement Income. If a Participant is
entitled to a deferred vested retirement income pursuant to
Section 3.5, such retirement income shall be determined in
accordance with the following provisions:
a. If a Participant who is not an Employee of
Avondale Services Corporation does not make
written request for his retirement income to begin
before his Normal Retirement Date, his deferred
vested retirement income payable on his Normal
Retirement Date shall be equal to the product of
[(i) times (ii)] minus (iii) plus (iv) where:
i. Equals the product obtained by multiplying
the amount determined under Section 4.1(a)(i)
times the amount determined under Section
4.1(a)(ii), based on his Final Average
Compensation as of his actual termination
date. For purposes of calculating the amount
described in Section 4.1(a)(ii), Years of
Service shall be calculated assuming the
Participant remained employed until his
Normal Retirement Date (up to a maximum of 30
years);
ii. Equals a fraction, the numerator of which is
the Participant's Years of Service as of his
actual termination date and the denominator
of which is the Participant's Years of
Service assuming the Participant remains
employed until his Normal Retirement Date;
iii. Equals the sum of the amounts determined
under Section 4.1(a)(iii) and Section
4.1(a)(iv); and
iv. An additional Accrued Benefit pursuant to
Section 4.8, if applicable.
If such Participant has completed ten or more
Years of Service and gives 60 days' written notice
for retirement income to begin on an Early
Retirement Date, such deferred vested retirement
income shall be reduced by a percentage amount
specified in Appendix B for each month that
commencement, upon his actual retirement date, of
his deferred vested retirement income precedes his
Normal Retirement Date. Pursuant to the
provisions of Sections 4.7 and 6.1, such
retirement income determined under this Section
4.5(a) shall be payable monthly beginning on the
Participant's Early Retirement Date and ending
upon the Participant's death.
b. If a Participant who is an Employee of Avondale
Services Corporation does not make written request
for his retirement income to begin before his
Normal Retirement Date, his deferred vested
retirement income payable on his Normal Retirement
Date shall be equal to the normal retirement
amount described in Section 4.1(b), determined as
of his date of termination, based on his Years of
Service and Final Average Compensation at
termination.
If such Participant has completed ten or more
Years of Service and gives 60 days' written notice
for retirement income to begin on an Early
Retirement Date, such deferred vested retirement
income shall be reduced by a percentage amount
specified in Appendix B for each month that
commencement, upon his actual retirement date, of
his deferred vested retirement income precedes his
Normal Retirement Date. Pursuant to the
provisions of Sections 4.7 and 6.1, such
retirement income determined under this Section
4.5(b) shall be payable monthly in equal amounts
of 1/12 of such Benefit beginning on the
Participant's Early Retirement Date for his
lifetime, with the provision that if the
Participant's death occurs before he has received
120 monthly payments, the remaining number of such
payments shall be paid to the person designated as
his Beneficiary.
4.6 Maximum Retirement Income.
a. Any other provision of the Plan to the contrary
notwithstanding, in no event may a Participant's
annual retirement income payment under the Plan,
expressed as a benefit payable in the form of a
Straight Life Annuity with no ancillary benefits
(exclusive of any benefit not required to be
considered for purposes of applying the
limitations of Section 415 of the Code), together
with the annual benefit payable under any other
defined benefit plan of the Company or an
Affiliated Company, exceed the lesser of (i) or
(ii) below, but subject to (iii), (iv), (v) and
(vi) below:
i. 100% of the Participant's average
compensation (as defined under Section 415(b)
of the Code) in the three consecutive highest
paid calendar years.
ii. $94,023, as adjusted from time to time in
accordance with Section 415(d) of the Code.
iii. In the case where a benefit is payable prior
to the Social Security Retirement Age, or in
the case where a benefit is payable after age
65, the Actuarial Equivalent of the amount
described in (ii) payable at the Social
Security Retirement Age shall apply in lieu
of the amount described in (ii).
iv. In the case where a Participant has completed
less than ten Years of Service as a
Participant, the amount otherwise determined
under this Section 4.6(a)(ii) shall be
multiplied by a fraction with a numerator
equal to the number of whole Years of Service
as a Participant and a denominator equal to
ten.
v. Except in the case where a benefit is payable
in the form of a 50% Joint and Survivor
Annuity with the Participant's spouse
designated as the joint annuitant, where a
benefit is payable in a benefit form other
than a Straight Life Annuity the amount
otherwise determined under this Section
4.6(a) shall be the Actuarial Equivalent of
the amount payable as a Straight Life
Annuity.
vi. Notwithstanding the foregoing, the benefit
payable to a Participant shall not be
considered to exceed the limitations imposed
under this Section 4.6(a) if the aggregate
retirement benefit payable to the Participant
under the Plan does not exceed $10,000 (and
has not exceeded $10,000 in any prior year);
provided, however, that this paragraph shall
not apply if the Participant has participated
in a defined contribution plan maintained by
the Company or an Affiliated Company.
For the purpose of determining the Actuarial
Equivalent amount described in (iii) above, the
interest assumption applied to determine the
Actuarial Equivalent value of a benefit payable
prior to the Social Security Retirement Age shall
be the greater of 5%, or the rate specified in
Section 1.2 of the Plan, and to determine the
Actuarial Equivalent value of a benefit payable
after the Social Security Retirement Age, an
interest assumption of the lesser of 5% or the
rate specified in Section 1.2 of the Plan shall be
used with no mortality.
b. In the case of a Participant who has participated
in a defined contribution plan maintained by the
Company or an Affiliated Company, the sum of a
Participant's "defined benefit plan fraction" and
"defined contribution plan fraction", determined
as of the close of any Plan Year, shall not exceed
one. For the purpose of this Section 4.6(b), a
Participant's defined benefit plan fraction and
defined contribution plan fraction shall have the
meanings described in (i) and (ii) below:
i. Defined benefit plan fraction shall mean a
fraction with a numerator equal to the
Participant's projected annual benefit (other
than any benefit attributable to employee
contributions) under the Plan (assuming the
Participant continues in employment to his
Normal Retirement Date at his current rate of
compensation), and a denominator equal to the
lesser of (1) 1.25 multiplied by the amount
described in Section 4.6(a)(ii) or (2) 1.4
multiplied by the amount described in Section
4.6(a)(i).
ii. Defined contribution plan fraction shall mean
a fraction with a numerator equal to (1)
below and a denominator equal to (2) below:
(1) The sum of the annual additions made to
the Participant's account under any
defined contribution plan maintained by
the Company or an Affiliated Company,
where the annual additions are equal to
the sum of (a) any Participating
Employer contributions allocated to the
account (including any pre-tax
contributions), (b) any forfeitures
allocated to the account and (c) any
Participant after-tax contributions
allocated to the account.
(2) The sum for each calendar year of the
Participant's employment with the
Company or Affiliated Company of the
lesser of (a) 1.4 multiplied by 25% of
the Participant's earnings (as defined
under Section 415 of the Code) for the
calendar year, or (b) for each calendar
year after 1982, 1.25 multiplied by
$30,000 as adjusted for increases in the
cost-of-living as provided under rules
and regulations adopted by the Secretary
of the Treasury, and for each calendar
year prior to 1983, 1.25 multiplied by
the amount for such calendar year
determined in accordance with Section
415(e)(3)(B)(i) of the Code.
In the event that the aforesaid limitation would
otherwise be exceeded with respect to a Participant, it is
intended that the benefit accrual under this Plan shall be
limited as necessary, except that an Employee may elect to reduce
his contributions, whether pre-tax or after-tax, under any
defined contribution plan in which he participates if he
determines this method of compliance would be in his best
interest.
For purposes of this Section 4.6, an Affiliated Company
shall be determined by assuming the phrase "more than 50 percent"
is substituted for the phrase "at least 80 percent" wherever it
appears in Section 1563 of the Code.
4.7 Timing of Payments. Notwithstanding anything in the
Plan to the contrary the actual payment of a Participant's
retirement income under the Plan shall be deferred until the
March 1 of the calendar year immediately following the
Participant's actual retirement date. Upon such date, the
Participant (or his Beneficiary, if applicable) shall receive (a)
a lump sum payment representing the sum of the monthly retirement
income, determined pursuant to the provisions of Article IV,
deferred from his actual retirement date until such March 1 and
(b) monthly retirement income, determined pursuant to the
provisions of Article VI, thereafter.
4.8 Transfer Benefit
a. With the consent of the Committee, amounts may be
transferred from the Avondale ESOP to the Trust
Fund by Participants who retire in accordance with
Article III and who are eligible to receive
benefits, subject to the following conditions:
i. The transfer will not jeopardize the tax
exempt status of this Plan or Trust Fund or
create adverse tax consequences to the
Employer.
ii. The amount transferred must be the entire
vested Avondale ESOP account balance of such
Participant.
iii. The transfer must be based upon a voluntary
election by the Participant and all notice
and consent requirements of the Avondale ESOP
must be met;
iv. The amounts transferred shall be considered
an additional Accrued Benefit (as provided in
Section 4.8(b)) and shall be so identified.
Such benefit shall be fully vested at all
times and shall not be subject to forfeiture
for any reason.
v. Pursuant to Section 414(l) of the Code, after
the transfer, the Participant is entitled to
receive a benefit, on a termination basis,
with respect to the transferred assets, which
is equal to or greater than the benefit he or
she would have been entitled to receive
immediately before the transfer.
vi. Prior to accepting the transfer to which this
Section applies, the Committee may require
the Participant to establish that the amounts
to be transferred to the Trust Fund meet the
requirements of this Section.
b. If a Participant elects to transfer his or her
Avondale ESOP account balance to the Trust Fund
pursuant to Section 4.8(a), such Participant shall
be entitled to an Accrued Benefit equal to the
amount determined under Section 4.1(a)(iv) or
Section 4.1(b)(iii), whichever is applicable.
c. The benefits provided under this Section 4.8 shall
be paid as part of and subject to the same terms
and provisions as the other benefits provided
under the Plan.
4.9 Direct Rollover Rules. This Section 4.9 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.
a. The term Eligible rollover distribution means 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 expectancies) 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 includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
b. An Eligible retirement plan includes 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. The term 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. The term Direct rollover means a payment by the
plan to the eligible retirement plan specified by
the distributee.
4.10 Notice. The notice required by Section 1.411(a)-11(c)
of the Income Tax Regulations must be provided to the Participant
no less than 30 days and no more than 90 days before the date of
distribution. The notice explains a Participant's right to defer
receipt of the distribution if the Actuarial Equivalent present
value of monthly payments of retirement income exceeds $3,500. A
Participant will also receive an explanation of distribution
options no less than 30 days and no more than 90 days before the
date of distribution. Effective January 1, 1994, if a
distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
a. the Committee clearly informs the Participant that
the Participant has a right to a period of at
least 30 days after receiving the notice to
consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
ARTICLE V
PRE-RETIREMENT DEATH BENEFITS
5.1 Immediate Pre-Retirement Surviving Spouse's Benefit.
In the event of the death of an active or vested terminated
Participant after becoming eligible to retire on an Early
Retirement Date but before his actual retirement date, a monthly
retirement benefit shall be payable to his surviving legal
spouse. Such amount shall be determined as if:
a. the Participant had retired and elected retirement
income payments to begin on the first day of the
month coinciding with or next preceding his date
of death, and
b. his retirement income was payable in the form of a
50% Joint and Survivor Spouse Annuity with his
spouse entitled to receive 50% of the amount of
the Participant's retirement income.
Benefits shall be payable to the surviving spouse on
the first day of the month following the Participant's death.
Pursuant to the provisions of Section 4.7, payments shall
commence on the Participant's death and shall continue to be made
on the first day of the month thereafter during the surviving
spouse's lifetime. In lieu of the joint and survivor spouse
annuity payments described in this Section 5.1, such spouse may
elect to receive such payments in one lump sum; provided,
however, that the Actuarial Equivalent value of such retirement
payments is $5,000 or less.
Notwithstanding the foregoing, no benefit shall be
payable under this Section 5.1 if the Participant is not survived
by a legal spouse.
5.2 Deferred Pre-Retirement Surviving Spouse's Benefit. In
the event of the death of an active or vested terminated
Participant on or after completing the vesting requirements under
Section 3.5, but prior to being eligible for early retirement
pursuant to Section 3.3, a monthly retirement benefit shall be
payable to his surviving legal spouse. Such amount shall be
determined as if:
a. the Participant separated from service as of his
date of death, then
b. survived until reaching the earliest retirement
age under the Plan, or if later, the age at death,
c. retired, electing immediate payment of benefits
under the 50% Joint and Survivor Spouse Annuity,
with his surviving spouse entitled to receive 50%
of the amount of the Participant's reduced
retirement income, and then
d. died on the day after the date in (b) above.
Benefits shall be payable to such surviving spouse on
the first day of the month coincident with or next following the
month in which the Participant would have reached the earliest
retirement age under the Plan or, if later, the age at death.
Pursuant to the provisions of Section 4.7, payments shall
commence on the first day of the month coincident with or next
following the month in which the Participant would have reached
age 55 or, if later, the Participant's death and shall continue
to be made on the first day of each month thereafter during such
surviving spouse's lifetime. In lieu of the joint and survivor
spouse annuity payments described in this Section 5.2, such
spouse may elect to receive such payments in one lump sum;
provided, however, that the Actuarial Equivalent value of
retirement payments is $5,000 or less.
If a benefit is payable under Section 5.1, no benefit
shall be payable under this Section 5.2.
Notwithstanding the foregoing, no benefit shall be
payable under this Section 5.2 if the Participant is not survived
by a legal spouse.
ARTICLE VI
NORMAL AND OPTIONAL PAYMENT FORMS OF RETIREMENT INCOME
6.1 Normal Form of Payment. Retirement income under the
Plan shall be payable as follows:
a. If a Participant is married on the date his
retirement income begins, the normal form of
payment shall be a 50% Joint and Survivor Spouse
Annuity with the legal spouse entitled to receive
50% of the Participant's reduced amount of
retirement income, which shall be the Actuarial
Equivalent of the amount determined pursuant to
Article IV.
b. If a Participant who is not an Employee of
Avondale Services Corporation is not married on
the date his retirement income begins, the normal
form of payment shall be a Straight Life Annuity,
which shall be equal to the amount determined
pursuant to Article IV with no retirement income
payable after the Participant's death.
c. If a Participant who is an Employee of Avondale
Services Corporation is not married on the date
his retirement income begins, the normal form of
payment shall be a Ten Year Certain and Life
Annuity, which shall be equal to the amount
determined pursuant to Article IV with the
provision that if the Participant's death occurs
before he has received 120 monthly payments, the
remaining number of such payments shall be paid to
his Beneficiary.
6.2 Waiver of Normal Form and Election of Optional Form of
Payment. A Participant may waive his normal form of payment
described in Section 6.1 provided that concurrently with such
waiver he shall elect an optional form of payment from those
provided for in Section 6.5. Such waiver and election may be
made only during the waiver period specified in Section 6.3;
otherwise, payment shall be made to him in the normal form. The
Participant shall file such forms and provide such information as
the Committee may reasonably require to comply with all
applicable laws and to determine his eligibility, qualification
of his spouse and his amount of retirement income.
Such election shall be made in writing and shall not
take effect unless either:
a. the Participant's legal spouse consents in writing
to such election and the spouse's consent
acknowledges the effect of such election and is
witnessed by a notary public, or
b. it is established to the satisfaction of the
Committee that the Participant has no legal
spouse, or that such spouse's consent cannot be
obtained because the spouse cannot be located, or
because of such other circumstances as may be
prescribed in regulations issued pursuant to
Section 417 of the Code.
6.3 Waiver Period. The Committee shall make an election
form available to each Participant not less than nine months
before the Participant meets the requirements for early
retirement described in Section 3.3; provided, however, that such
election form shall not be distributed if the Committee
determines in a uniform and non-discriminatory manner that no
retirement income is payable under this Plan, as determined under
the provisions of Article IV. Such form shall describe in plain
language the terms and conditions of the optional forms of
benefit and shall provide for election of optional forms of
benefit and a benefit commencement date. The completed election
form must be returned to the Committee within the 90 day period
ending on the designated benefit commencement date. If a
Participant files a subsequent election form, the prior form
shall be of no effect. If no election has been made at the
expiration of the election period, retirement benefits will be
payable in accordance with Section 6.1.
The Committee shall, when necessary, mail the form to
the Participant via certified mail, at his last address on the
records of the Committee or, if deemed appropriate, through any
facilities made available by the United States Social Security
Administration. During the waiver period, the Participant may
request information with respect to the financial effect of his
waiver on the normal form of payment and the election of any
available optional form of payment. Any waiver may be revoked,
or election changed, at any time up to the due date for the
Participant's first retirement income payment, on a form approved
by the Committee.
6.4 Temporary Non-Payment of Retirement Income. If a
Participant or Beneficiary fails to submit the form required
under Section 6.2 or fails to furnish information reasonably
requested by the Committee which is necessary to determine
whether such Participant or Beneficiary has satisfied all
requirements for payment of benefits, the Committee shall delay
payment of benefits until the requested information is furnished
and shall make reasonable efforts to obtain such information.
After the requested information has been furnished and the
Committee has determined that the Participant or Beneficiary has
met the requirements for payment of benefits, such benefits shall
be payable as if the Participant or Beneficiary had furnished the
requested information in a timely manner.
6.5 Optional Forms of Payment. The forms of benefit
payment available to each Participant shall be the Actuarial
Equivalent of his normal form of retirement income pursuant to
Section 6.1. A Participant may elect to receive that portion of
his Accrued Benefit which accrued prior to January 1, 1988 in the
form of any one of the options which he could have elected under
the terms of the Plan on December 31, 1987. A Participant may
also elect to receive that portion of his Accrued Benefit
accruing on or after January 1, 1988, or his entire Accrued
Benefit, in the form of any one of the following optional forms
of benefit:
a. Straight Life Annuity, under which retirement
income payments are made to the Participant during
his lifetime, with no further payments from the
Plan on his behalf after his death.
b. 50% Joint and Survivor Spouse Annuity, under which
reduced retirement income payments are made to the
Participant during his lifetime, based on
Actuarial Equivalent factors, with payments from
the Plan upon his death equal to 50% of the
payment previously payable to the Participant to
be continued to and for the lifetime of his legal
spouse.
i. If a Participant elects the 50% Joint and
Survivor Spouse Annuity and his legal spouse
dies before benefit payments commence, his
election of the 50% Joint and Survivor Spouse
Annuity shall be null and void.
ii. If a Participant elects the 50% Joint and
Survivor Spouse Annuity and benefit payments
have commenced, his retirement income
payments thereafter shall not be changed by
reason of the death of his legal spouse
during his own lifetime.
c. Ten Year Certain and Life Annuity, under which
reduced retirement income payments are made to the
Participant during his lifetime, based on
Actuarial Equivalent factors, with the provision
that if the Participant's death occurs before he
has received 120 monthly payments, the value of
the remaining number of such payments shall be
paid to the person designated as his Beneficiary.
d. Lump Sum Option, under which the present value of
retirement income payments are paid to a
Participant in one lump sum. This option is
available to Participants whose Actuarial
Equivalent value of retirement income payments is
$5,000 or less.
6.6 General Limitations. Anything in this Article VI to
the contrary notwithstanding, no method of distribution shall be
made under a normal or optional payment form of retirement income
which would result in the actuarial value of a Beneficiary's
interest exceeding 50% of the actuarial value of the
Participant's own interest on a life annuity basis, both being
determined as of the Participant's Normal Retirement Date or the
earlier date on which he becomes entitled to first payment of his
retirement income. This limitation shall not apply where the
Beneficiary is the Participant's legal spouse.
An election under this Article VI of a Beneficiary
other than the Participant's legal spouse is effective only if
the Participant's spouse consents to the beneficiary designated,
the consent is witnessed by a notary public, and the spouse's
consent acknowledges the effect of such designation. Such
spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Committee that the consent
cannot be obtained because the spouse cannot be located, or
because of such other circumstances as may be prescribed in
regulations issued pursuant to Section 417 of the Code. Any
consent by a spouse (or establishment that consent cannot be
obtained) is effective only with respect to that spouse.
6.7 Distribution Rules. Unless the Participant elects
otherwise, retirement income payments shall commence no later
than the 60th day after the close of the Plan Year in which the
latest of the following occurs:
a. the Participant attains age 65, or
b. the 10th anniversary of the date the Participant
commenced participation, or
c. the Participant terminates employment.
Further, distribution of benefits shall not be deferred
beyond the April 1 following the calendar year in which the
Participant attains age 70-1/2, or if later (but only in the case
of a Participant other than a 5% owner of the Company or
Affiliated Company for the Plan Year ending in the calendar year
in which such Participant attains age 70-1/2), the April 1
following the calendar year in which the Participant terminates
employment, and payments after the initial payment shall be made
monthly, except in the case of a lump sum payment where no
additional payments are due. Effective January 1, 1989,
distribution of benefits to a Participant shall commence no later
than the April 1 following the calendar year in which he attains
age 70-1/2, whether or not he is employed by a Participating
Employer.
Upon the death of a Participant after payment of
retirement income has commenced, any remaining payments shall be
made no less rapidly than under the form of payment in effect at
the Participant's death. Upon the death of a Participant prior
to the date payment of retirement income has commenced, payment
of a death benefit, if any, to the Participant's spouse shall
commence no later than the April 1 following the calendar year in
which the Participant would have attained age 70-1/2, or if
later, within one year following the date of the Participant's
death; and payment of a death benefit to a person other than the
Participant's spouse shall commence no later than one year
following the Participant's death.
Notwithstanding the foregoing, an earlier distribution
shall be made where provided by the applicable provisions of the
Plan. However, in the case of a Participant who is a 5% owner of
the Company or an Affiliated Company, no distribution of any
amounts attributable to Employer contributions while he was a 5%
owner shall be made before the earlier of the date such
Participant dies, becomes disabled within the meaning of Section
72(m)(7) of the Code or attains age 59-1/2, unless such
Participant acknowledges in writing that he understands that such
premature distribution will be subject to the penalties imposed
by Section 72(m)(5)(B) of the Code.
6.8 Limitation in Case of Domestic Relations Order. All
rights and benefits including election rights, provided to
Participants pursuant to this Plan, are subject to the rights
afforded to any "alternate payee" pursuant to a "qualified
domestic relations order," as those terms are defined below.
Pursuant to the provisions of Section 414(p) of the
Code, a "qualified domestic relations order" shall mean a
judgment, decree or order (including approval of a property
settlement agreement) made pursuant to a State domestic relations
law (including a community property law) that relates to the
provision of child support, alimony payments, or marital property
rights to a spouse, former spouse, child or other dependent of a
Participant ("alternate payee") and which:
a. creates or recognizes the existence of an
alternate payee's right to, or assigns to an
alternate payee the right to, receive all or a
portion of the benefits payable to a Participant
under this Plan; and
b. specifies (i) the name and last known mailing
address (if any) of the Participant and each
alternate payee covered by the order (ii) the
amount or percentage of the Participant's benefits
under the Plan to be paid to each such alternate
payee, or the manner in which such amount or
percentage is to be determined and, (iii) the
number of payments or the period to which the
order applies; and
c. does not require this Plan to:
i. provide any type or form of benefit, or any
option, not otherwise provided hereunder;
ii. pay any benefits to any alternate payee prior
to the earlier of:
(1) the earliest date benefits are payable
hereunder to a Participant, or
(2) the later of the date the Participant
attains age 50 or the earliest date on
which the Participant could obtain a
distribution under the Plan if the
Participant terminated employment;
iii. pay any benefits which are not vested under
the Plan;
iv. provide increased benefits (as actuarially
determined using such assumptions for
Actuarial Equivalence as are required under
Section 414(p) of the Code), or
v. pay benefits to an alternate payee which are
required to be paid to another alternate
payee under a prior qualified domestic
relations order.
For purposes of this Plan, an alternate payee who had
been married to the Participant for at least one year may be
treated as a spouse with respect to the portion of the
Participant's Accrued Benefit in which such alternate payee has
an interest provided that the qualified domestic relations order
provides for such treatment. However, under no circumstances may
the spouse of an alternate payee (who is not a Participant
hereunder) be treated as a spouse under the terms of the Plan.
Upon receipt of any judgment, decree or order
(including approval of a property settlement agreement) relating
to the provision of payment by the Plan to an alternate payee
pursuant to a State domestic relations law, the Committee shall
promptly notify the affected Participant and any alternate payee
of the receipt of such judgment decree order and shall notify the
affected Participant and any alternate payee of the Committee's
procedure for determining whether or not the judgment, decree or
order is a qualified domestic relations order.
The Committee shall establish procedures to determine
the status of a judgment, decree or order as a qualified domestic
relations order and to administer Plan distributions in
accordance with any such qualified domestic relations order.
Such procedures shall be in writing, shall include provisions
specifying the notification requirements enumerated in the
preceding paragraph, shall permit an alternate payee to designate
a representative for receipt of communications from the
Committee, and shall include such other provisions as the
Committee shall determine, including such provisions required
under Regulations promulgated by the Secretary of the Treasury.
During any period in which the issue of whether a
judgment, decree or order is a qualified domestic relations order
is being determined (by the Committee, a court of competent
jurisdiction or otherwise), the Committee shall separately
account for the portion of the Participant's Accrued Benefit, if
any, which would have been payable to the alternate payee during
such period if the judgment, decree or order were determined to
be a qualified domestic relations order.
If the judgment, decree or order is determined to be a
qualified domestic relations order within the 18-month period
following the receipt by the Committee of the qualified domestic
relations order, then payment of the portion of the Participant's
Accrued Benefit shall be paid to the appropriate alternate payee
at the time and in the form specified in such order. If such a
determination is not made within the 18-month period, the
Participant's Accrued Benefit under the Plan shall be paid at the
time and in the manner provided under the Plan as if no order,
judgment or decree had been received by the Committee.
ARTICLE VII
CONTRIBUTIONS
7.1 No Contributions by Participants. No Participant shall
be required or permitted to make a contribution under the Plan.
7.2 Employer Contributions. All contributions to provide
benefits under the Plan shall be made by each Participating
Employer or the Company on behalf of Participating Employers from
time to time, any forfeiture of the interest of any Participant
in the Trust Fund being applied to reduce the amount of such
contributions. The Committee, on the basis of actuarial
estimates made by the Actuary, will recommend the amount of
contributions which will accomplish the purposes of the Plan and
be in compliance with ERISA and the Code. Such contributions for
each Plan Year shall be remitted to the Trustee no later than the
date prescribed by law for filing the Participating Employer's
federal income tax return, including extensions, for such
Employer's taxable year ending with or within such Plan Year.
7.3 Expenses. The reasonable expenses incident to the
operation of the Plan, including premiums for termination
insurance payable to the Pension Benefit Guaranty Corporation,
fees for professional services and the costs of such other
technical or clerical assistance as may be required, shall be
paid out of the Fund, to the extent not paid by all Participating
Employers.
7.4 Contingent Nature of Contributions. Unless the
Employer notifies the Committee and the Trustee in writing to the
contrary, all contributions made to this Plan are conditioned
upon their deductibility under Section 404 of the Code.
ARTICLE VIII
ADMINISTRATION
8.1 Appointment of Committee. The Board of Directors of
the Company will appoint a Committee which may, but need not,
consist of Plan Participants or Employees of an Employer. Such
Committee shall be known as the Pension Plan Administrative
Committee. The Committee shall consist of three or more members,
each of whom shall be appointed by and shall remain in office at
the will of the Board of Directors of the Company. The Board of
Directors may also remove any Committee member at any time, with
or without cause. A Committee member may resign at any time by
filing his written resignation with the Board of Directors of the
Company.
8.2 Notice to Trustee. The Company will notify the Trustee
in writing of each Committee member's appointment, and the
Trustee may assume such appointment continues in effect until
written notice to the contrary is given by the Company.
8.3 Administration of Plan. The Committee will have all
powers and authority necessary or appropriate to carry out its
responsibilities with respect to the operation and administration
of the Plan. It will interpret and apply all Plan provisions and
may supply any omission, or reconcile any inconsistency or
ambiguity in such manner as it deems advisable. It will make all
final determinations concerning eligibility, benefits and rights
hereunder, and all other matters concerning Plan administration
and interpretation. All determinations and actions of the
Committee will be conclusive and binding upon all persons, except
as otherwise provided herein or by law, except that the Committee
may revoke or modify a determination or action previously made in
error. The Committee will exercise all powers and authority
given to it in a nondiscriminatory manner, and will apply uniform
administrative rules of general application in order to assure
similar treatment to persons in similar circumstances.
8.4 Reporting and Disclosure. The Committee will prepare,
file, submit, distribute, or make available any Plan
descriptions, reports, statements, forms or other information to
any government agency, Employee, Participant, or Beneficiary as
may be required by law.
8.5 Records. The Committee will record its proceedings,
acts and decisions, and will keep all data, records, books of
account and instruments pertaining to Plan administration, which
will be subject to inspection or audit by the Company at any
time. The Company will supply all information required by the
Committee to administer the Plan, and the Committee may rely upon
the accuracy of such information.
8.6 Committee Compensation and Expenses. The Committee,
and each Committee member, will serve without compensation unless
otherwise determined by the Company; provided that in no event
will an Employee receive extra compensation for his services as a
Committee member. All reasonable expenses incurred by the
Committee in administering the Plan will be paid by the
Participating Employers.
8.7 Rules and Regulations. Any action or decision
concurred in by a majority of the Committee members, either at a
meeting or in writing without a meeting, will constitute an
action or decision of the Committee. The Committee may adopt and
amend such rules for the conduct of its business and
administration of the Plan as it deems advisable.
8.8 Secretary of the Committee. The Committee at its
option may elect any Committee member or other person to serve as
Secretary, and may remove him at any time. The Committee will
notify the Trustee in writing of such election, and the Trustee
may assume the Secretary's authority to act as Secretary
continues until written notice to the contrary is given the
Committee. The Secretary, or a majority of the Committee members
then in office, will have the authority to execute all
instruments or memoranda necessary or appropriate to carry out
the actions and decisions of the whole Committee; and any person
may rely upon any instrument or memoranda so executed as evidence
of the Committee action or decision indicated thereby.
8.9 Claims Review Procedure. Any request for benefits (the
"claim") by a Participant or his Beneficiary (the "claimant")
will be filed in writing with the Committee. Within 90 days
after receipt of a claim or, 180 days if the Committee determines
that special circumstances exist which require extension of the
time for processing a claim, the Committee will provide written
notice to any claimant whose claim has been wholly or partly
denied, including:
a. the reasons for the denial,
b. the Plan provisions on which the denial is based,
c. any additional material or information necessary
to perfect the claim and the reasons it is
necessary, and
d. the Plan's claims review procedure.
A claimant will be given a full and fair review by the
Committee of the denial of his claim if he requests a review in
writing within 60 days after notification of the denial. The
claimant may review pertinent documents and may submit issues and
comments orally, in writing, or both. The Committee will render
its decision on review in writing within 60 days after receipt by
the Committee of the application for review, or within 120 days
if the Committee determines that special circumstances exist
which require extension of the time for processing the
application for review, and will include specific reasons for the
decision and references to the Plan provisions on which the
decision is based.
8.10 Information from Participants and Beneficiaries. Each
Participant and Beneficiary shall be required to furnish to the
Committee, in the form prescribed by it, such personal data,
affidavits, authorization to obtain information, and other
information as the Committee may deem appropriate for the proper
administration of the Plan.
ARTICLE IX
NAMED FIDUCIARIES
9.1 Identity of Named Fiduciaries. The Company, the
Trustee, the Committee, and any Investment Manager will be the
"Named Fiduciaries" under the Plan and will control and manage
the Plan and its assets to the extent and in the manner indicated
in this Plan. Any responsibility assigned to a "Named Fiduciary"
will not be deemed to be a duty of a "Fiduciary" (as that term is
defined in ERISA) solely by reason of such an assignment.
9.2 Responsibilities and Authority of Committee. The
Committee will control and manage the operation and
administration of the Plan. The Committee will also
(a) recommend candidates for Trustee to the Company, (b) appoint
any Investment Manager to the Plan, and (c) monitor the
performance of such Trustee and Investment Manager. The
Committee will recommend Plan amendments to the Company as
necessary and will communicate such information to the Trustee
and Investment Manager as they may need for the proper
performance of their duties.
9.3 Responsibilities and Authority of Trustee. The Trustee
will manage and control the assets of the Plan, except to the
extent that such responsibilities are specifically vested in the
Company or the Committee under the terms of the Plan, or are
delegated to one or more Investment Managers appointed by the
Committee.
9.4 Responsibilities of the Company. The Company will have
the following responsibilities and authority with respect to
control and management of the Plan and its assets:
a. to amend the Plan;
b. to merge or consolidate the Plan with, or transfer
all or part of the assets or liabilities to, any
other plan or to accept the transfer of assets
from another qualified plan;
c. to establish a funding policy;
d. to appoint, remove, and replace Trustee(s) and
Committee members; and
e. to perform such additional duties as are imposed
by law.
9.5 Responsibilities Not Shared. Except as otherwise
specified herein or required by law, each "Named Fiduciary" will
have only those responsibilities that are specifically assigned
to it hereunder, and no "Named Fiduciary" will incur liability
because of improper performance or nonperformance of
responsibilities specifically assigned to another "Named
Fiduciary".
9.6 Dual Fiduciary Capacity Permitted. Any person or group
of persons may serve in more than one fiduciary capacity,
including service both as Trustee and Committee member.
9.7 Advice. A "Named Fiduciary" may employ or retain such
attorneys, accountants, investment advisors, consultants,
specialists, and other persons or firms, including such persons
or firms that may also perform services for the Company, as he
deems necessary or desirable to advise or assist him in the
performance of his duties. Unless otherwise provided by law, the
"Fiduciary" will be fully protected with respect to any action
taken or omitted by him in reliance upon any such person or firm.
9.8 Indemnification. The Company to the extent permitted
by law, will indemnify and hold harmless every person serving as
a "Fiduciary" (whether a "Named Fiduciary" or otherwise) from and
against all loss, damages, liability, and reasonable costs and
expenses, incurred in carrying out his fiduciary
responsibilities, unless due to the bad faith or willful
misconduct of such person, provided that a "Fiduciary's" counsel
fees and amount paid in settlement must be approved by the
Company. The preceding sentence will not apply to a corporate
Trustee or to an investment manager as defined in ERISA, except
as the Company and such corporate Trustee or investment manager
may otherwise agree in writing.
ARTICLE X
PROVISIONS TO PREVENT DISCRIMINATION
10.1 Prevention of Discrimination. With a view of
preventing any discrimination in favor of highly compensated
Employees and notwithstanding anything in the Plan to the
contrary, the use of the assets of the Fund is subject to the
limitations specified in this Article.
10.2 Highly Compensated Employees. For the purpose of this
Article, "Highly Compensated Employees" means the twenty-five
highest paid Employees of any Employer as of the Effective Date
or the date the Plan was most recently amended in a manner
substantially affecting benefits for such Employees, but
excluding any Employee to whom, on the basis of his annual rate
of compensation on such date, an annual retirement benefit to
which he may be entitled upon retirement on or after his Normal
Retirement Date will not exceed $1,500.
10.3 Unrestricted Benefit. For the purpose of this Article,
the term unrestricted benefit means the amount of any highly
compensated Employee's retirement benefit which is not in excess
of that provided by the greater of:
a. $20,000, or
b. 20% of his average annual compensation over a
period of at least five consecutive years, or
$10,000, whichever is less, multiplied by the
number of years from the date determined pursuant
to Section 10.2 and prior to any date on which
benefits are restricted under Section 10.4(a)(ii),
or
c. a dollar amount which equals the present value of
the maximum benefit described in Section
4022(b)(3)(B) of ERISA (determined on the earlier
of the date the Plan terminates or the date
benefits commence, and determined in accordance
with regulations of the PBGC) without regard to
any other limitations in Section 4022 of ERISA.
10.4 Restriction on Payment of Benefit
a. During the ten years after the date determined
pursuant to Section 10.2, the retirement benefits
payable on account of highly compensated Employees
shall be subject to the following conditions,
notwithstanding any other provisions in the Plan
to the contrary:
i. Any highly compensated Employee who is
retired may receive his full benefit while
the Plan is in full effect.
ii. If, during the aforesaid ten years,
contributions are terminated or the Plan is
terminated or an Employer is dissolved or
liquidated, no highly compensated Employee
shall receive any benefit which is in excess
of his unrestricted benefit.
b. The conditions of Section 10.4(a) shall not
restrict the full payment of benefit payments to
the Beneficiary of any highly compensated Employee
who dies while the Plan is in full effect.
10.5 Repeal. If the provisions of this Article X are no
longer required by the Code or ERISA, such provisions shall have
no further force or effect.
ARTICLE XI
AMENDMENT OF THE PLAN
11.1 Right to Amend. The Company, through its Board of
Directors, reserves the right, subject to the limitation
hereinafter provided, to amend the Plan from time to time without
the consent of any Participating Employer, Participant,
Beneficiary, or other eligible survivor. Each amendment of the
Plan shall be in writing, and shall become effective on the date
specified therein. Each Participating Employer by its adoption
of the Plan shall be deemed to have delegated this authority to
the Company.
11.2 Restrictions on Amendment. No amendment of the Plan
may be made which shall either:
a. deprive any Participant or Beneficiary of any part
of his Accrued Benefit as constituted at the time
of such amendment; or
b. result in the reversion to any Participating
Employer of any part of the Fund prior to the
satisfaction of all liabilities of the Plan.
ARTICLE XII
TERMINATION OF THE PLAN
12.1 Events Constituting Termination.
a. It is expressly declared to be the desire and
intention of each Participating Employer to
continue the Plan and Fund in existence for an
indefinite period of time. However, circumstances
not now anticipated or foreseeable may arise in
the future, as a result of which each
Participating Employer may deem it to be
impracticable or unwise to continue the Plan
established hereunder, and each Participating
Employer therefore reserves the right to terminate
the Plan insofar as it affects its Employees at
any time. Any Participating Employer may
terminate its participation in the Plan by action
of its Board of Directors. Such termination shall
be evidenced by a written instrument of
termination executed by an officer of the
Participating Employer pursuant to authorization
by its Board of Directors and shall be delivered
to the Company, the Committee, the Trustee and to
each other Participating Employer. To the maximum
extent permitted by ERISA, the termination of the
Plan as to any Participating Employer shall not in
any way affect any other Participating Employer's
participation in the Plan.
b. With respect to any Participating Employer which
has adopted the Plan, its adjudication of
bankruptcy or insolvency by any court of competent
jurisdiction, its making of a general assignment
for the benefit of creditors, its dissolution,
merger, consolidation, other reorganization or
discontinuance of business, unless coverage for
its Employees under the Plan is continued by a
successor company, or its complete discontinuance
of contributions, shall operate to terminate the
Plan with respect to such Employer.
c. Subject to applicable requirements of ERISA
governing termination of employee pension benefit
plans, the Committee shall direct the Trustee to
segregate the assets of the appropriate Fund
allocable to a terminating Participating Employer
for payment of benefits in accordance with the
provisions of this Article.
12.2 Partial Termination. Upon a partial termination of the
Plan as determined by the Committee under applicable law with
respect to a group of Participants, the Committee shall direct
the Actuary to determine the proportionate interests of the
Participants affected by such partial termination. After such
proportionate interests have been determined, the Committee shall
direct the Trustee to segregate the assets of the appropriate
Fund allocable to such group of Participants for payment of
benefits in accordance with the provisions of this Article,
subject to applicable requirements of ERISA.
12.3 Allocation of Assets. Upon termination or partial
termination under Sections 12.1 and 12.2, the Accrued Benefits of
Participants affected thereby shall become fully vested and non-
forfeitable. The assets of the Fund shall be allocated by the
Committee (after payment or provision for expenses) to such
Participants in the following manner and order:
a. There shall first be set aside an amount which
will provide for a return of the Participant's
account balance attributable to voluntary
contributions.
b. There shall next be set aside an amount which will
provide retirement income for Participants and
Beneficiaries who were receiving benefits or who
were eligible to receive benefits at least three
years prior to termination of the Plan based on
the lowest benefit under Plan provisions in effect
during the five years preceding the date of the
Plan's termination.
c. There shall next be set aside an amount which will
provide all other guaranteed benefits as provided
under ERISA, but determined without regard to
Sections 4022(b)(5) and 4022(b)(6).
d. There shall next be set aside an amount which will
provide all other non-forfeitable benefits, under
the provisions of the Plan at its termination, but
which are not guaranteed under ERISA.
e. Finally, there shall be set aside an amount which
will provide all other Accrued Benefits as of the
date of Plan termination.
If the appropriate assets of the Fund by the Trustee
for retirement income for Participants of the Plan, as of the
date the Plan is terminated, are not sufficient to provide in
whole the amounts required within the classes described above,
such assets will be allocated pro rata within the class in which
the amounts first cannot be provided in full. Allocation in any
of the above listed categories is to be adjusted for any
allocation already made to the same Participant under a prior
category so as to avoid any duplication of benefits payable under
a prior category.
12.4 Manner of Distribution. Subject to the foregoing
provisions of this Article XII, any distribution after
termination of the Plan may be made, in whole or in part, to the
extent that no discrimination results, in cash, securities or
other assets in kind (based on their fair market value as of the
date of distribution), or in nontransferable annuity contracts,
as the Committee in its sole discretion shall determine. Any
amounts remaining in the Fund after the satisfaction of all
liabilities of the Plan shall be returned to the Company and the
respective Participating Employer who made contributions
hereunder.
12.5 Liquidation of Trust Fund. The Fund shall continue in
existence after the termination of the Plan for such period of
time as may be required to complete the liquidation thereof in
accordance with the terms of this Article XII.
12.6 Internal Revenue Service Approval for Distribution. In
the event that the Committee applies to the Internal Revenue
Service for a determination on the qualification of the Plan upon
termination, no person shall have any right or claim to any
assets of the Fund before the Internal Revenue Service shall
determine that the proposed distribution of assets under this
Article does not result in the discrimination prohibited by
Section 401(a) of the Code.
ARTICLE XIII
TOP-HEAVY PLAN REQUIREMENTS
13.1 General Rule. For any Plan Year for which this Plan is
a Top-Heavy Plan (as defined in Section 13.7), any other
provisions of the Plan to the contrary notwithstanding, the Plan
shall be subject to the following provisions:
a. The vesting provisions of Section 13.2;
b. The minimum benefit provisions of Section 13.3;
c. The limitation on compensation set by Section
13.4; and
d. The limitation on benefits set by Section 13.5.
13.2 Vesting Provisions. Each Participant who has completed
an Hour of Service during any Plan Year in which the Plan is Top-
Heavy shall have a non-forfeitable right to his Accrued Benefit
under this Plan determined by the following schedule to the
extent that such schedule is more liberal than the vesting
provided in Section 3.5:
------------------------------------------------------------------
| Years of Service | Vesting Percentage |
------------------------------------------------------------------
|less than 2 | 0% |
|2 but less than 3 | 20 |
|3 but less than 4 | 40 |
|4 but less than 5 | 60 |
|5 but less than 6 | 80 |
|6 or more | 100 |
------------------------------------------------------------------
13.3 Minimum Benefit Provisions. Each Participant who is a
Non-Key Employee (as defined in Section 13.9) shall be entitled
to an Accrued Benefit attributable to Company or Affiliated
Company contributions in the form of an annual retirement benefit
(as defined in Section 13.3(a)) that shall not be less than the
applicable percentage (as defined in Section 13.3(b)) of the
Participant's average annual earnings (as determined under
Section 415 of the Code) for years in the testing period (as
defined in Section 13.3(c)):
a. Annual retirement benefit means a benefit payable
annually in the form of a Straight Life Annuity
(with no ancillary benefits) beginning at a
Participant's Normal Retirement Date.
b. Applicable percentage means the lesser of 2%
multiplied by the number of Years of Service in
which the Plan is Top-Heavy or 20%.
c. Testing Period means, with respect to a
Participant, the period of consecutive Years of
Service (not exceeding five) during which the
Participant had the greatest aggregate earnings
from his Employer. The testing period shall not
include any Year of Service that ends in a Plan
Year beginning before January 1, 1984 or during
which the Plan was not a Top-Heavy Plan.
Benefits taken into account under this Section 13.3
shall not include any benefits payable under the Social Security
Act or any other Federal or State law.
13.4 Limitation on Compensation. Annual compensation taken
into account under this Article XIII for purposes of computing
benefits under this Plan shall not exceed the first $200,000,
provided that such limit shall be adjusted automatically for each
Plan Year to the amount prescribed by the Secretary of the
Treasury pursuant to regulations for the calendar year in which
such Plan Year commences.
13.5 Limitation on Benefits. In the event that the Company
or an Affiliated Company also maintains a defined contribution
plan providing benefits on behalf of Participants in this Plan,
one of the two following provisions shall apply:
a. If for the Plan Year this Plan would not be a Top-
Heavy Plan if "90%" were substituted for "60%,"
then Section 13.3 shall apply for such Plan Year
as if amended so that the "applicable percentage"
means the lesser of 3% multiplied by the number of
Years of Service during which the Plan would be
Top-Heavy and the overall applicable percentage
does not exceed the lesser of 30% or 20% plus 1%
for each Year the Plan is taken into account under
this Section 13.5(a).
b. If for the Plan Year (1) if this Plan is subject
to Section 13.5(a) but does not provide the
required additional minimum benefit as required
therein or (2) this Plan would continue to be a
Top-Heavy Plan if "90%" were substituted for
"60%," then the denominator of both the defined
contribution plan fraction and the defined benefit
plan fraction shall be calculated as set forth in
Section 4.6 for the limitation year ending in such
Plan Year by substituting "1.0" for "1.25" in each
place such figure appears, except with respect to
any individual for whom there are no employer
contributions, forfeitures or voluntary
nondeductible contributions allocated or any
accruals for such individual under the defined
benefit plan.
13.6 Coordination With Other Plans. In the event that
another defined contribution or defined benefit plan maintained
by the Company or an Affiliated Company provides contributions or
benefits on behalf of Participants in this Plan, such other plan
shall be treated as a part of this Plan pursuant to the
applicable principles set forth in Revenue Ruling 81-202 in
determining whether the plans are providing benefits at least
equal to the minimum benefit required under this Plan. If the
Plan is subject to Section 13.5(b) but the Company or an
Affiliated Company does not substitute "1.0" for "1.25" as
required, the applicable percentage provided in Section 13.3
shall be increased by one percentage point (up to a maximum of 10
percentage points). Such determination shall be made by the
Committee.
13.7 Top-Heavy Plan Definition. This Plan shall be a Top-
Heavy Plan for any Plan Year if, as of the Determination Date,
the present value of the cumulative Accrued Benefits under the
Plan for Participants (including former Participants) who are Key
Employees exceeds 60% of the present value of the cumulative
Accrued Benefits under the Plan for all Participants, or if this
Plan is required to be in an Aggregation Group which for such
Plan Year is a Top-Heavy Group. For purposes of making this
determination, the present value of Accrued Benefits for a
Participant (i) who is not a Key Employee, but who was a Key
Employee in a prior year, or (ii) for Plan Years beginning after
December 31, 1984, who has not performed any service for the
Employer at any time during the five-year period ending on the
Determination Date, shall be disregarded.
a. Determination Date means for any Plan Year the
last day of the immediately preceding Plan Year
(except that for the first Plan Year the
Determination Date means the last day of such Plan
Year).
b. The present value shall be determined as of the
most recent valuation date that is within the 12-
month period ending on the Determination Date and
as described in the regulations under the Code
using the assumptions for determining an Actuarial
Equivalent under the Plan, except the interest
assumption shall be an annual rate of 5%.
c. Aggregation Group means the group of plans, if
any, that includes both the group of plans that
are required to be aggregated and, if the
Committee so elects, the group of plans that are
permitted to be aggregated.
i. The group of plans that are required to be
aggregated (the "Required Aggregation Group")
includes: (a) each plan of the Employer in
which a Key Employee is a Participant,
including collectively-bargained plans, and
(b) each other plan of the Company or an
Affiliated Company including collectively-
bargained plans, which enables a plan in
which a Key Employee is a Participant to meet
the requirements of the Code prohibiting
discrimination as to contributions or
benefits in favor of employees who are
officers, shareholders or the highly-
compensated or prescribing the minimum
participation standards.
ii. The group of plans that are permitted to be
aggregated (the "Permissive Aggregation
Group") includes the Required Aggregation
Group plus one or more plans of the Company
or an Affiliated Company that is not part of
the Required Aggregation Group and that the
Committee certifies as constituting a plan
within the Permissive Aggregation Group.
Such plan or plans may be added to the
Permissive Aggregation Group only if, after
the addition, the Aggregation Group as a
whole continues not to discriminate as to
contributions or benefits in favor of
officers, shareholders or the highly-
compensated and to meet the minimum
participation standards under the Code.
d. Top-Heavy Group means the Aggregation Group, if as
of the applicable Determination Date, the sum of
the present value of the cumulative accrued
benefits for Key Employees under all defined
benefit plans included in the Aggregation Group
plus the aggregate of the accounts of Key
Employees under all defined contribution plans
included in the Aggregation Group exceeds 60% of
the sum of the present value of the cumulative
accrued benefits for all Employees under all such
defined benefit plans plus the aggregate accounts
for all Employees under such defined contribution
plans. For purposes of making this determination,
the present value of the accrued benefits for a
Participant (i) who is not a Key Employee, but who
was a Key Employee in a prior year or (ii) who has
not performed services for the Company or an
Affiliated Company at any time during the five-
year period ending on the Determination Date,
shall be disregarded.
If the Aggregation Group that is a Top-Heavy Group
is a Required Aggregation Group, each plan in the
Group will be Top-Heavy. If the Aggregation Group
that is a Top-Heavy Group is a Permissive
Aggregation Group, only those plans that are part
of the Required Aggregation Group will be treated
as Top-Heavy. If the Aggregation Group is not a
Top-Heavy Group, no plan within such Group will be
Top-Heavy.
e. In determining whether this Plan constitutes a
Top-Heavy Plan, the Committee shall make the
following adjustments in connection therewith:
i. When more than one plan is aggregated, the
Committee shall determine separately for each
plan as of each plan's determination date the
present value of the accrued benefits or
account balance. The results shall then be
aggregated by adding the results of each plan
as of the determination dates for such plans
that fall within the same calendar year.
ii. In determining the present value of the
cumulative accrued benefit or the amount of
the account of any Employee, such present
value or account shall include the dollar
value of the aggregate distributions made to
such Employee under the applicable plan
during the five-year period ending on the
determination date, unless reflected in the
value of the accrued benefit or account
balance as of the most recent valuation date.
Such amounts shall include distributions to
Employees which represented the entire amount
credited to their accounts under the
applicable plan, and distributions made on
account of the death of a Participant to the
extent such death benefits do not exceed the
present value of the accrued benefit or
account.
iii. Further, in making such determination, such
present value or such account shall include
any rollover contribution (or similar
transfer), as follows:
(1) If the rollover contribution (or similar
transfer) is initiated by the Employee
and made to or from a plan maintained by
another employer, the plan providing the
distribution shall include such
distribution in the value of such
account; the plan accepting the
distribution shall not include such
distribution in the value of such
account unless the plan accepted it
before December 31, 1983.
(2) If the rollover contribution (or similar
transfer) is not initiated by the
Employee or made from a plan maintained
by another employer, the plan accepting
the distribution shall include such
distribution in the present value of
such account, whether the plan accepted
the distribution before or after
December 31, 1983; the plan making the
distribution shall not include the
distribution in the present value of
such account.
13.8 Key Employee. The term Key Employee means any Employee
or former Employee under this Plan who, at any time during the
Plan Year containing the Determination Date or during any of the
four preceding Plan Years, is or was one of the following:
a. An officer of the Company having annual
compensation from the Employer of 150% of the Code
Section 415 dollar limitation for the calendar
year in which the Plan Year ends. Whether an
individual is an officer shall be determined by
the Committee on the basis of all the facts and
circumstances, such as an individual's authority,
duties and term of office, and not on the mere
fact that the individual has the title of an
officer. For any such Plan Year, there shall be
treated as officers no more than the lesser of:
i. 50 Employees, or
ii. the greater of three Employees or 10% of the
Employees of the Company during the Plan Year
containing the Determination Date or any of
the preceding four Plan Years.
For this purpose, the highest-paid officers shall
be selected.
b. One of the ten Employees owning (or considered as
owning, within the meaning of the constructive
ownership rules of the Code) both more than a .50%
interest in value and the largest interests in the
Company. An Employee who has more than a .50%
ownership interest is considered to be one of the
top ten owners unless at least ten other Employees
own a greater interest than that Employee.
However, an Employee will not be considered a top
ten owner for a Plan Year if the Employee earns
less than the maximum dollar limitation under
Section 415 of the Code on contributions and other
annual additions to a Participant's account in a
defined contribution plan for the calendar year in
which the Determination Date falls.
c. Any person who owns (or is considered as owning
within the meaning of the constructive ownership
rules of the Code) more than 5% of the outstanding
stock of the Company or stock possessing more than
5% of the combined total voting power of all stock
of the Company.
d. Any person having annual compensation from the
Company of more than $150,000 who owns (or is
considered as owning within the constructive
ownership rules of the Code) more than 1% of the
outstanding stock of the Company or stock
possessing more than 1% of the combined total
voting power of all stock of the Company.
For purposes of this Section 13.8, "Compensation" means
all items includable as compensation for purposes of applying the
limitations on contributions and other annual additions to a
Participant's account in a defined contribution plan under the
Code, and a Beneficiary of a Key Employee shall be treated as a
Key Employee.
13.9 Non-Key Employee. The term "Non-Key Employee" means
any Employee (and any Beneficiary of an Employee) who is not a
Key Employee.
13.10Change from Top-Heavy Status. In the event the Plan
should become a Top-Heavy Plan for a Plan Year and subsequently
reverts to a Plan which is not Top-Heavy, (a) and (b) below shall
apply:
a. The change from a Top-Heavy Plan to a plan which
is not Top-Heavy shall not reduce a Participant's
non-forfeitable right to any benefit he has
accrued under the Plan, and any Participant who
has completed five or more Years of Service at the
time the Plan reverts to a plan which is not Top-
Heavy shall have his non-forfeitable right to
benefits under the Plan determined in accordance
with Section 13.2.
b. The change from a Top-Heavy Plan to a Plan which
is not Top-Heavy shall not reduce a Participant's
Accrued Benefit.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Plan Voluntary. Although it is intended that the Plan
shall be continued and that contributions shall be made as herein
provided, this Plan is entirely voluntary on the part of the
Participating Employer and the continuance of this Plan and the
payment of contributions hereunder are not to be regarded as
contractual obligations of such Participating Employer. The
Participating Employers do not guarantee or promise to pay or to
cause to be paid any of the benefits provided by this Plan. Each
person who shall claim the right to any payment or benefit under
this Plan, shall be entitled to look only to the Trust Fund for
any such payment or benefit and shall not have any right, claim,
or demand therefore against the Participating Employer, except as
provided by law. The Plan shall not be deemed to constitute a
contract between the Participating Employer and any Employee or
to be a consideration for, or an inducement for, the employment
of any Employee by the Participating Employer. Nothing contained
in the Plan shall be deemed to give any Employee the right to be
retained in the service of the Participating Employer or to
interfere with the right of the Participating Employer to
discharge or to terminate the service of any Employee at any time
without regard to the effect such discharge or termination may
have on any rights under the Plan.
14.2 Payments to Minors and Incompetents. If a Participant
or Beneficiary entitled to receive any benefits hereunder is a
minor or is deemed by the Committee, or is adjudged, to be
legally incapable of giving valid receipt and discharge for such
benefits, such benefits will be paid to such person or
institution as the Committee may designate or to the duly
appointed guardian. Such payment shall, to the extent made, be
deemed a complete discharge of any liability for such payment
under the Plan.
14.3 Nonalienation of Benefits. Except as provided under a
qualified domestic relations order, as defined in Section 414(p)
of the Code, no amount payable to, or held under the Plan for the
account of, any Participant or Beneficiary shall be subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge the same shall be void. Nor shall any amount payable to,
or held under the Plan for the account of, any Participant of
Beneficiary be in any manner liable for his debts, contracts,
liabilities, engagements or torts, or be subject to any legal
process to levy upon or attach the same.
14.4 Merger, Consolidation or Transfer. In the event that
the Plan is merged or consolidated with any other plan, or should
the assets or liabilities of the Plan be transferred to any other
plan, each Participant shall be entitled to a benefit immediately
after such merger, consolidation or transfer if the Plan should
then terminate equal to or greater than the benefit he would have
been entitled to receive immediately before such merger,
consolidation or transfer if the Plan had then terminated.
14.5 Return of Contributions to Participating Employers.
The Plan is created for the exclusive benefit of Participants and
their Beneficiaries. Except as specifically otherwise provided
in Sections 12.4, 14.8 and 14.12, at no time shall any
contributions to the Plan by a Participating Employer or any
assets of the Trust Fund ever revert to or be used by a
Participating Employer.
14.6 Payment of Small Benefits. If the Actuarial Equivalent
present value of monthly payments of retirement income to any
person would amount to less than $3,500 before such payments have
commenced, the Committee shall direct the Trustee to pay such
person the then present value of such retirement income in one
lump sum payment.
14.7 Recovery of Payments Made Due to a Mistake of Fact. If
it is determined that the retirement income under the Plan
actually being paid to a Participant due to a mistake of fact,
including, but not limited to, the calculation of the offset to a
Participant's Accrued Benefit for the value of the Participant's
account under the Avondale ESOP, is greater than the income such
Participant is entitled to receive pursuant to Articles IV, V and
VI, the Committee may elect to alter subsequent payments to such
Participant in order to recover the value of such overpayments.
14.8 Internal Revenue Service Approval. If the Plan shall
not be initially approved and qualified by the Internal Revenue
Service so as to permit the Employer to deduct its contributions
to the Trust Fund for income tax purposes, or shall not remain so
approved and qualified, all Participating Employer contributions
shall be returned to the applicable Participating Employer.
This Section 14.8 shall apply only if contributions are
returned within one year from the date on which the Internal
Revenue Service issues a notice that the Plan is not qualified.
14.9 Construction of Agreement. The Plan shall be
administered, construed and enforced according to the laws of the
State of Louisiana; provided, however, wherever applicable the
provisions of ERISA shall govern, and in such event the laws of
the United States of America shall be applied and to the extent
necessary, its courts shall have competent jurisdiction.
14.10Headings. The headings of Articles and Sections of
this Plan are for convenience of reference only, and in the case
of any conflict between any such headings and the text of this
Plan, the text shall govern.
14.11Use of Masculine and Feminine; Singular and Plural.
Wherever used in this Plan, the masculine gender will include the
feminine gender and the singular will include the plural, unless
the context indicates otherwise.
14.12Return of Employer Contributions in Excess of Amount
Deductible. A contribution conditioned upon its deductibility
under Section 404 of the Code, may be returned, to the extent the
deduction is disallowed, to the Employer within one (1) year
after the disallowance.
IN WITNESS WHEREOF, Avondale Industries, Inc. has caused
this instrument to be executed by its officers thereunto duly
authorized and its corporate seal to be hereunto affixed, as of
the 28th day of December, 1994.
AVONDALE INDUSTRIES, INC.
BY:\s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President & Chief Financial
Officer & Secretary
AVONDALE SERVICES CORPORATION
BY:\s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President & Secretary
AVONDALE GULFPORT MARINE, INC.
BY:\s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President, Secretary
& Treasurer
AVONDALE INDUSTRIES OF NEW YORK,
INC.
BY: \s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President, Treasurer
& Secretary
AVONDALE TRANSPORTATION COMPANY,
INC.
BY: \s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President & Secretary
AVONDALE ENTERPRISES, INC.
BY: \s\ Thomas M. Kitchen
Thomas M. Kitchen
Vice President. Secretary
& Treasurer
ATTEST:
\s\ Thomas M. Kitchen
Secretary
(CORPORATE SEAL)
AVONDALE INDUSTRIES, INC. PENSION PLAN
APPENDIX A
PARTICIPATING EMPLOYERS
The following Participating Employers have entered under this
Plan as of the following dates. Such dates of participation
shall be used for purposes of determining such Participating
Employers' Employees' eligibility to participate under the Plan.
Such dates shall also be used for determining Years of Service
for both vesting and benefit accrual purposes under the Plan, if
later than the dates specified in Section 1.38 of this Plan.
------------------------------------------------------------------
Participating Employer Date of Participation
------------------------------------------------------------------
Avondale Industries, Inc. October 1, 1985
------------------------------------------------------------------
Avondale Services Corporation October 1, 1985
------------------------------------------------------------------
Avondale Gulfport Marine, Inc. July 2, 1988
Avondale Industries of New York, July 1, 1989
Inc.
July 1, 1989
Avondale Transportation Co.,
Inc. January 1, 1990
Avondale Enterprises, Inc.
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AVONDALE INDUSTRIES, INC. PENSION PLAN
APPENDIX B
REDUCTION FACTORS FOR EARLY RETIREMENT
------------------------------------------------------------------------------------------------------------------
|Age | MONTHS |
------------------------------------------------------------------------------------------------------------------
| |0 |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |11 |
------------------------------------------------------------------------------------------------------------------
|55 |0.4960 |0.4988 |0.5016 |0.5044 |0.5072 |0.5100 |0.5128 |0.5156 |0.5184 |0.5212 |0.5240 |0.5268 |
------------------------------------------------------------------------------------------------------------------
|56 |0.5296 |0.5324 |0.5352 |0.5380 |0.5408 |0.5436 |0.5464 |0.5492 |0.5520 |0.5548 |0.5576 |0.5604 |
------------------------------------------------------------------------------------------------------------------
|57 |0.5632 |0.5660 |0.5688 |0.5716 |0.5744 |0.5772 |0.5800 |0.5828 |0.5856 |0.5884 |0.5912 |0.5940 |
------------------------------------------------------------------------------------------------------------------
|58 |0.5968 |0.5996 |0.6024 |0.6052 |0.6080 |0.6108 |0.6136 |0.6164 |0.6192 |0.6220 |0.6248 |0.6276 |
------------------------------------------------------------------------------------------------------------------
|59 |0.6304 |0.6332 |0.6360 |0.6388 |0.6416 |0.6444 |0.6472 |0.6500 |0.6528 |0.6556 |0.6584 |0.6612 |
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
|60 |0.6640 |0.6696 |0.6752 |0.6808 |0.6864 |0.6920 |0.6976 |0.7032 |0.7088 |0.7144 |0.7200 |0.7256 |
------------------------------------------------------------------------------------------------------------------
|61 |0.7312 |0.7368 |0.7424 |0.7480 |0.7536 |0.7592 |0.7648 |0.7704 |0.7760 |0.7816 |0.7872 |0.7928 |
------------------------------------------------------------------------------------------------------------------
|62 |0.7984 |0.8040 |0.8096 |0.8152 |0.8208 |0.8264 |0.8320 |0.8376 |0.8432 |0.8488 |0.8544 |0.8600 |
------------------------------------------------------------------------------------------------------------------
|63 |0.8656 |0.8712 |0.8768 |0.8824 |0.8880 |0.8936 |0.8992 |0.9048 |0.9104 |0.9160 |0.9216 |0.9272 |
------------------------------------------------------------------------------------------------------------------
|64 |0.9328 |0.9384 |0.9440 |0.9496 |0.9552 |0.9608 |0.9664 |0.9720 |0.9776 |0.9832 |0.9888 |0.9944 |
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
|65 |1.000 | | | | | | | | | | | |
------------------------------------------------------------------------------------------------------------------
NOTES:
- Factors determined as follows:
----------------------------------------------------------------------------
Age Factor
----------------------------------------------------------------------------
65 1.000
At least 60 but under 65 1.000 minus .56% for each month prior
At least 55 but under 60 to age 65
.6640 minus .28% for each month prior
to age 60
----------------------------------------------------------------------------
- Multiply benefit payable at age 65 by factor above to determine a benefit
payable at an earlier retirement date.