AVONDALE INDUSTRIES, INC. PENSION PLAN
As Amended and Restated
Effective January 1, 1997
AVONDALE INDUSTRIES, INC.
PENSION PLAN
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Accrued Benefit .................................... I-1
Actuarial Equivalent ............................... I-2
Actuary ............................................ I-2
Affiliated Company ................................. I-2
Avondale ESOP ...................................... I-2
Beneficiary ........................................ I-3
Code ............................................... I-3
Committee .......................................... I-3
Company ............................................ I-3
Compensation ....................................... I-3
Compensation Year .................................. I-5
Deferred Retirement Date ........................... I-5
Disability Retirement Date ......................... I-5
Early Retirement Date .............................. I-5
Effective Date ..................................... I-5
Eligible Employee .................................. I-5
Employee ........................................... I-6
Employer ........................................... I-6
Employment Year .................................... I-6
Entry Date ......................................... I-6
ERISA .............................................. I-6
Final Average Compensation ......................... I-6
Hour of Service .................................... I-7
Investment Manager ................................. I-8
Leased Employee .................................... I-8
Non-Participating Employer ......................... I-9
Normal Retirement Date ............................. I-9
One Year Break in Service for Benefit Accrual ...... I-9
One Year Break in Service .......................... I-10
Parental Absence ................................... I-10
Participant ........................................ I-10
Plan ............................................... I-10
Plan Year .......................................... I-10
Prior Plan ......................................... I-11
Service Termination Date ........................... I-11
Social Security Retirement Age ..................... I-11
Straight Life Annuity .............................. I-11
Ten Year Certain and Life Annuity .................. I-11
Trustee ............................................ I-11
Trust Agreement .................................... I-11
Trust Fund or Fund ................................. I-12
Year of Service .................................... I-12
Year of Benefit Service ............................ I-12
ARTICLE II - PARTICIPATION
Eligibility Requirements ........................... II-1
Commencement of Participation ...................... II-1
Termination of Participation ....................... II-1
Transfers .......................................... II-1
Reemployment of an Eligible Employee
or Former Participant .......................... II-2
Rights of Returning Veterans ....................... II-5
ARTICLE III - ELIGIBILITY FOR RETIREMENT INCOME
Normal Retirement Date ............................. III-1
Deferred Retirement Date ........................... III-1
Early Retirement Date .............................. III-1
Disability Retirement Date ......................... III-1
Vesting Date ....................................... III-2
ARTICLE IV - AMOUNT OF RETIREMENT INCOME AND PAYMENTS
Normal Retirement Income ........................... IV-1
Deferred Retirement Income ......................... IV-3
Early Retirement Income ............................ IV-4
Disability Retirement Income ....................... IV-5
Deferred Vested Retirement Income .................. IV-8
Maximum Retirement Income .......................... IV-9
Timing of Payments ................................. IV-12
Transfer Benefit ................................... IV-12
Direct Rollover Rules .............................. IV-13
Notice ............................................. IV-14
ARTICLE V - PRE-RETIREMENT DEATH BENEFITS
Immediate Pre-Retirement Surviving
Spouse's Benefit ............................... V-1
Deferred Pre-Retirement Surviving
Spouse's Benefit ............................... V-1
ARTICLE VI - NORMAL AND OPTIONAL PAYMENT FORMS
OF RETIREMENT INCOME
Normal Form of Payment ............................. VI-1
Waiver of Normal Form and Election of Optional
Form of Payment ................................ VI-1
Waiver Period ...................................... VI-2
Temporary Non-Payment of Retirement Income ......... VI-2
Optional Forms of Payment .......................... VI-2
General Limitations ................................ VI-3
Distribution Rules ................................. VI-4
Limitation in Case of Domestic Relations Order ..... VI-5
Minimum Required Distributions ..................... VI-7
ARTICLE VII - CONTRIBUTIONS
No Contributions by Participants ................... VII-1
Employer Contributions ............................. VII-1
Expenses ........................................... VII-1
Contingent Nature of Contributions ................. VII-1
ARTICLE VIII - ADMINISTRATION
Appointment of Committee ........................... VIII-1
Notice to Trustee .................................. VIII-1
Administration of Plan ............................. VIII-1
Reporting and Disclosure ........................... VIII-1
Records ............................................ VIII-1
Committee Compensation and Expenses ................ VIII-1
Rules and Regulations .............................. VIII-2
Secretary of the Committee ......................... VIII-2
Claims Review Procedure ............................ VIII-2
Information from Participants and Beneficiaries .... VIII-3
ARTICLE IX - NAMED FIDUCIARIES
Identity of Named Fiduciaries ...................... IX-1
Responsibilities and Authority of Committee ........ IX-1
Responsibilities and Authority of Trustee .......... IX-1
Responsibilities of the Company .................... IX-1
Responsibilities Not Shared ........................ IX-1
Dual Fiduciary Capacity Permitted .................. IX-2
Advice ............................................. IX-2
Indemnification .................................... IX-2
ARTICLE X - PROVISIONS TO PREVENT DISCRIMINATION
Prevention of Discrimination ....................... X-1
Highly Compensated Employees ....................... X-1
Unrestricted Benefit ............................... X-1
Restriction on Payment of Benefit .................. X-1
Repeal ............................................. X-2
ARTICLE XI - AMENDMENT OF THE PLAN
Right to Amend ..................................... XI-1
Restrictions on Amendment .......................... XI-1
ARTICLE XII - TERMINATION OF THE PLAN
Events Constituting Termination .................... XII-1
Partial Termination ................................ XII-1
Allocation of Assets ............................... XII-2
Manner of Distribution ............................. XII-3
Liquidation of Trust Fund .......................... XII-3
Internal Revenue Service Approval for Distribution . XII-3
ARTICLE XIII - TOP-HEAVY PLAN REQUIREMENTS
General Rule ....................................... XIII-1
Vesting Provisions ................................. XIII-1
Minimum Benefit Provisions ......................... XIII-1
Limitation on Compensation ......................... XIII-2
Limitation on Benefits ............................. XIII-2
Coordination With Other Plans ...................... XIII-3
Top-Heavy Plan Definition .......................... XIII-3
Key Employee ....................................... XIII-6
Non-Key Employee ................................... XIII-7
Change from Top-Heavy Status ....................... XIII-7
ARTICLE XIV - GENERAL PROVISIONS
Plan Voluntary ..................................... XIV-1
Payments to Minors and Incompetents ................ XIV-1
Nonalienation of Benefits .......................... XIV-1
Merger, Consolidation or Transfer .................. XIV-1
Return of Contributions to Participating Employers . XIV-2
Payment of Small Benefits .......................... XIV-2
Recovery of Payments Made Due to a Mistake of Fact . XIV-2
Internal Revenue Service Approval .................. XIV-2
Construction of Agreement .......................... XIV-2
Headings ........................................... XIV-2
Use of Masculine and Feminine; Singular and Plural . XIV-3
Return of Employer Contributions in Excess of
Amount Deductible ............................. XIV-3
PREAMBLE
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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 was
amended and restated effective January 1, 1989, unless
otherwise provided herein, to comply with the Tax Reform Act
of 1986 and subsequent legislation. The Plan is amended and
restated effective January 1, 1997, unless otherwise provided
herein, to incorporate prior amendments and to comply with the
Family and Medical Leave Act of 1993, the Uniformed Services
Employment and Reemployment Rights Act of 1994 and the Small
Business Job Protection Rights Act of 1996.
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.
If a Participant who was a divisional or former
divisional employee referred to above received an allocation
under the Avondale ESOP, and if any or all of such
Participant's Avondale ESOP Account is distributed to such
Participant prior to the Participant's commencement of
benefits under the Plan, then for purposes of calculating the
Accrued Benefit under the provisions of the Prior Plan the
following provisions apply:
a. the value of the distributed ESOP Account, as
described in (b) below, for purposes of
determining the amount of his Accrued Benefit
under the Prior Plan as of his Early or Normal
Retirement Date, will be added to his remaining
ESOP Account before calculating the annuitized
value of his ESOP Account, and
b. The value of the distributed ESOP Account is
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 following the month the Participant
received a distribution(s) from his ESOP
Account. This initial value is increased for
assumed investment return at the rate of 7% per
annum for each year and completed month from the
date of the distribution of all or a portion of
the ESOP Account to the Participant's Early or
Normal Retirement Date under the 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 (a) 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 (b) 7.0% annual interest. Provided,
however, that the interest factor used in determining a lump
sum value shall be as follows: (i) prior to 1997, the interest
rate used by the Pension Benefit Guaranty Corporation as of
January 1 of the calendar year in which the determination date
occurs; and (ii) on or after January 1, 1997, the Applicable
Interest Rate. The Applicable Interest Rate is the annual
rate of interest on 30-year Treasury securities for the second
calendar month preceding the Plan Year in which the date of
determination occurs. Further, on or after January 1, 1997,
the determination of a lump sum benefit shall be based on the
Applicable Mortality Table. The Applicable Mortality Table is
the mortality table prescribed in Revenue Ruling 95-6 or any
successor publication of the Service. 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.
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. For years beginning on or after January 1, 1994, a
Participant's annual Compensation taken into account under the
Plan for any Plan Year shall not exceed $150,000, as adjusted
from time to time in accordance with Section 401(a)(17) of the
Code. For years beginning on or after January 1, 1997, the
adjusted amount is $160,000.
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 c. 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 c.
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 c.
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 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.
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, 1997, unless
otherwise provided herein.
1.16 An Eligible Employee shall mean any Employee of a
Participating Employer; provided, however, that an Eligible
Employee shall not include: (a) any Employee who is included
in a unit of employees covered by a negotiated collective
bargaining agreement which does not provide for his
participation in this Plan; (b) any Employee who is providing
services pursuant to an oral or written contract or leasing
arrangement with an unrelated employer, including any Employee
who under a Participating Employer's standard personnel
practices, is deemed a subcontractor or a leased employee;
(c) any Employee who is a Leased Employee; (d) any Employee
who, under a Participating Employer's standard personnel
practices, is deemed an independent contractor (without regard
to such person's status for Federal income tax purposes and
without regard to any subsequent determination that such
person is a common law employee) and (e) any Employee who,
under a Participating Employer's standard personnel practices,
is deemed a contractor, jobber, or a consultant. All
determinations shall be made in the sole discretion of the
Participating Employer in a uniform non-discriminating manner.
1.17 Employee shall mean any person who is employed by a
Participating Employer or Non-Participating Employer as a
common law employee receiving remuneration subject to
withholding for purposes of the Federal Insurance Contribution
Act (except that Leased Employees as described in Section
414(n)(2) of the Code shall be considered Employees solely for
purposes of determining whether the requirements of Section
414(n)(3) of the Code are satisfied). A director of the
Company is not eligible for participation in the Plan unless
he is also an Employee.
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 Employment Year shall mean the twelve consecutive
month period of employment commencing on the date the Eligible
Employee performs his first Hour of Service for the Employer
and each anniversary thereof. The Employment Year for a
reemployed Eligible Employee is determined in Section 2.5.
1.20 Entry Date shall mean January 1 or July 1 for anyone
who does not become a Participant on or before December 31,
1997. Any other reemployed Eligible Employee will become a
Participant on the date on which he meets the eligibility
requirements that were in effect at the time his employment
began.
1.21 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.
1.22 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.
1.23 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, or leave of absence, provided that:
i. no more than 501 Hours of Service shall be
credited under this Section 1.23(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 1.23(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
1.23(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 1.23(c) with respect to periods
described in Section 1.23(b) above shall be
subject to the limitation therein set forth; and
d. If an Employee is absent from his or her
employment with the Employer for any period on
account of (i) Parental Absence, or (ii) any
paid period of leave recognized under the Family
and Medical Leave Act of 1993, such Employee
shall be credited with sufficient Hours of
Service (not in excess of 501 in any Plan Year)
so that a Break in Service does not occur in
either the Employment Year in which such absence
begins (if credit is required to preclude a
Break in Service in such year) or in the
immediately following Employment Year (if no
credit was awarded in the preceding year). For
purposes of computing Hours of Service credited
under this paragraph (d), an Employee shall be
credited with (i) Hours of Service which would
otherwise be credited to such Employee without
regard to the absence, or (ii) 8 Hours of
Service for each day of the absence. The
Committee, in its sole discretion, may require
(i) evidence that the absence is on account of a
reason enumerated in this paragraph (d), and
(ii) evidence as to the duration of the absence.
The number of Hours of Service to be credited under Section
1.23(b), (c) or (d) 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 1.23(a),
(b), (c) or (d) 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.
1.24 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.
1.25 A Leased Employee shall mean any person (excluding a
person who is a common law employee of the Participating
Employer or Non-Participating Employer) who, pursuant to an
agreement between a Participating Employer (or an Affiliated
Company) and any other person ("leasing organization") has
performed services for the Participating Employer (or an
Affiliated Company) and related persons determined in
accordance with Section 414(n)(6) of the Code, on a
"substantially full-time basis" for a period of at least one
year and: for Plan Years after 1996, such services are
performed under the primary direction or control of a
Participating Employer (or an Affiliated Employer); for Plan
Years prior to 1997, such services are of the type
historically performed, in the business field of the
Participating Employer (or an Affiliated Employer) by
employees.
A person is considered to have performed services on
a "substantially full-time basis" for a period of at least one
year if: (a) during any consecutive 12-month period such
person has performed at least 1,500 Hours of Service for the
Employer or (b) during any consecutive 12-month period such
person performed services for the Employer for a number of
Hours of Service at least equal to 75% of the average number
of hours that are customarily performed by an employee of the
Employer in the particular position.
Such a person will not be a Leased Employee if the
person (a) is covered by a money purchase pension plan
providing (i) a nonintegrated employer contribution rate of at
least 10% of such person's W-2 wages, (ii) immediate
participation, and (iii) full and immediate vesting, and (b)
provided, the Leased Employee, determined without regard to
whether such person is a participant in the above described
money purchase plan, do not constitute more than 20 percent of
the recipient's nonhighly compensated workforce.
In the event that any Leased Employee subsequently
becomes an Eligible Employee, then unless the Plan is
otherwise excluded by applicable Treasury Regulations from the
requirements of Code Section 414(n), the total period that
such former Leased Employee provided services to the
Participating Employer shall be treated under the Plan, for
participation eligibility and vesting purposes as though he
had been an Employee of the Participating Employer or Non-
Participating Employer.
1.26 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.
1.27 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.
1.28 One Year Break in Service for Benefit Accrual, for
purposes of benefit accrual, 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. An Employee's One Year Break in Service for Benefit
Accrual includes all periods counted for benefit accrual
purposes prior to 1997 under Plan provisions then in effect.
1.29 One Year Break in Service shall mean an Employment
Year in which a Participant has 500 or less Hours of Service,
effective as to each Employee as of his Employment Year
beginning on or after January 1, 1997.
1.30 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.
1.31 Participant shall mean (a) any Eligible Employee who
satisfies the participation requirements set forth in Article
II, and (b) any former Employee on whose behalf an Account
continues to be maintained in the Plan pursuant to Article II.
In the event the Plan fails to pass the coverage
requirements of Section 410(b) of the Code for a Plan Year,
certain Employees will be given "Eligible Employee" status in
a number necessary to satisfy the coverage requirements of
Section 410(b) of the Code. "Eligible Employee" status will
be given to certain Employees beginning first with the
Employee who has both satisfied the participation requirements
of Article II and has the most recent original employment date
and continuing in descending original employment date order,
to the extent necessary for the Plan to pass the coverage
requirements of Section 410(b) of the Code. If two or more
Employees have satisfied the participation requirements of
Article II and have the same original employment date,
Employees will be given "Eligible Employee" status determined
in alphabetical order of the Employees' last names until the
coverage requirements are met. Coverage under this paragraph
only applies to the year in question.
1.32 Plan shall mean the Avondale Industries, Inc.
Pension Plan as set forth in this document and appendices and
as amended from time to time.
1.33 Plan Year shall mean each 12-month period commencing
on January 1 and ending on the next following December 31.
1.34 Prior Plan shall mean the following plans that were
previously sponsored by the Company: (a) the Avondale
Industries, Inc. Pension Plan (reference is to the plan prior
to restatement in 1988); (b) the Danly Machine Corporation
Pension Plan for Salaried Employees; and (c) the Danly Machine
Corporation Hourly (Non-Union) Pension Plan.
1.35 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 1.35(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.
1.36 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.
1.37 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.
1.38 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.
1.39 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.
1.40 Trust Agreement shall mean the agreement by and
between the Employer and the Trustee, as said Agreement may
from time to time be amended.
1.41 Trust Fund or Fund shall mean all assets held by the
Trustee in accordance with this Plan and the Trust Agreement.
1.42 Year of Service shall mean, for purposes of
eligibility to participate and vesting, any Employment Year
beginning on or after January 1, 1997 in which an Employee
completes 1000 Hours of Service with the Employer. An
Employee's Years of Service include all periods counted as the
Employee's Years of Service earned prior to 1997 under Plan
provisions then in effect.
All of the Employee's Years of Service with the
Employer shall be taken into account including service prior
to the year the Employee meets the definition of Eligible
Employee, for purposes of satisfying the Plan's eligibility
requirements and for calculating a Participant's Vested
Interest in his Employer Contribution Account unless such
periods of service are disregarded pursuant to Section 2.5 of
the Plan.
1.43 Year of Benefit Service shall mean a 12-month period
commencing on the date the Eligible Employee completes one
Hour of Service, but counting only months while an Eligible
Employee, (or such later date of participation as specified in
Appendix A) or anniversary thereof during which he is employed
by a Participating Employer, provided that:
a. An Employee shall be credited with one Year of
Benefit Service for each 12 complete months of
employment, whether or not consecutive.
b. An Employee 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 Benefit Service shall include any one
or more of the following, if they occur while
the Employee is an Eligible Employee:
i. any period of absence because of Service in
the Uniformed Services for a Returning
Veteran;
ii. any period of layoff not in excess of one
year in duration;
iii. any period while the Eligible 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 Eligible Employee does not incur a One
Year Break in Service for Benefit Accrual;
provided the Employee returns to work as an
Eligible Employee 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 1.43, 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.
An Employee's Years of Benefit Service include all
periods counted for benefit accrual purposes prior to 1997
under the Plan then in effect. 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 Eligibility Requirements. An Employee is eligible
to participate only after he (a) attains age 21; (b) has
completed one Year of Service; and (c) is an Eligible
Employee.
2.2 Commencement of Participation. An Employee shall
become a Participant on the first Entry Date on which he is an
Eligible Employee and which coincides with or immediately
follows the completion of the requirements set forth in
Section 2.1. However, no Employee shall become a Participant
prior to the effective date of the adoption of the Plan by his
Employer.
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 Benefit 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 Benefit 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 Sections 1.16 and 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 Benefit 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 Benefit 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 Benefit Service.
2.5 Reemployment of an Eligible Employee or Former
Participant. Except as provided in Section 2.4, when
applicable, the following reemployment rules apply:
a. Reemployment Within One Month. If an Eligible
Employee (whether or not a Participant)
terminates employment and is reemployed before
the end of the month of termination, his
termination is ignored for all purposes.
b. Reemployment of a Former Participant. Except as
provided in Section 2.5(f), a "Former
Participant" is an Employee who terminated
employment after the Entry Date following the
date on which he met the requirements of Section
1.16 and 2.1. A Former Participant who is
reemployed within twelve (12) months from his
Service Termination Date becomes a Participant
on his reemployment date. His termination date
is ignored for benefit accrual purposes and he
has a Year of Service for vesting purposes for
each Employment Year in which he has completed
1000 Hours of Service.
A Former Participant who is reemployed after
twelve months from his Service Termination Date,
shall become a Participant (without waiting
until an Entry Date) after he completes One Year
of Benefit Service from his date of
reemployment. If reinstated as a Participant
past Years of Benefit Service for purposes of
benefit accrual purposes will be added to any
Years of Benefit Service earned after
reemployment and past Years of Service for
purposes of vesting will be added to any Years
of Service earned after reemployment. If the
Former Participant is not reinstated as a
Participant, he will not accrue any additional
vesting or Benefit Service.
c. Resetting the Employment Year. If an Eligible
Employee (whether or not a Participant) is
reemployed, his Employment Year, for purposes of
eligibility to participate and vesting, is reset
based on his reemployment date if the following
conditions are met:
i. the Eligible Employee is not reemployed
until after the end of the Employment Year
of his Service Termination Date, and
ii. the Eligible Employee has a One Year Break
in Service in the Employment Year prior to
the Employment Year of his reemployment
date.
d. Reemployment of a Non-Participant.
i. If an Eligible Employee who had not become
a Participant is reemployed and his
Employment Year is not reset, he becomes a
Participant on the first Entry Date after
he meets the requirements of Sections 1.16
and 2.1.
ii. If an Eligible Employee who had not become
a Participant is reemployed and his
Employment Year is reset, he becomes a
Participant on the first Entry Date after
he meets the requirements of Sections 1.16
and 2.1. Hours of Service prior to
reemployment are not considered for
purposes of determining eligibility to
participate.
iii. If an Eligible Employee who had previously
met the requirements of Sections 1.16 and
2.1 but had not yet become a Participant
because he was not employed on an Entry
Date is reemployed and his Employment Year
is not reset, he shall become a Participant
as of the first Entry Date following
reemployment. If such Eligible Employee is
reemployed and his Employment Year is
reset, he shall become a Participant on the
first Entry Date following the completion
of one Year of Service.
e. Reemployment of Non-Vested Participant. If a
Participant who was not fully vested in his
Accrued Benefit terminates employment and had
accrued less than five Years of Benefit Service,
is reemployed after incurring five consecutive
One Year Breaks in Service for Benefit Accrual,
he shall be treated as a new employee for
purposes of his Accrued Benefit and any Years of
Benefit Service accumulated by him prior to
termination shall be disregarded.
If a Participant who was not fully vested in his
Accrued Benefit terminates employment and is
reemployed after incurring the greater of (i)
five consecutive One Year Breaks in Service or
(ii) the aggregate number of Years of Service
prior to termination, he shall be treated as a
new employee for purposes of vesting and any
Years of Service accumulated by him prior to
termination shall be disregarded. For purposes
of participation, see Section 2.5(b).
f. Reemployment of Vested Participant. If a
Participant who was vested in his Accrued
Benefit terminates employment and is reemployed
after any number of One Year Breaks in Service
or any number of One Year Breaks in Benefit
Service, he shall be reinstated as a
Participant, if he is an Eligible Employee,
after he completes a Year of Benefit Service
from his date of reemployment. His Years of
Service and Years of Benefit Service accumulated
before his termination shall be added to any
Years of Service and Years of Benefit Service
which subsequently accumulate. However, his
Employment Year may be reset based on the rules
stated in Section 2.5(c).
g. Reemployment After Commencement of Benefits. 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 Benefit 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(h) 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.
2.6 Rights of Returning Veterans. This Section applies
to Returning Veterans who apply for reemployment on or after
December 12, 1994.
a. Definitions
i. Compensation. The Compensation of a
Returning Veteran for a prior year in which
a makeup contribution is required under the
Uniformed Services Employment and
Reemployment Rights Act shall be (a) the
pay the Returning Veteran would have
received if not in the Uniformed Services
(including wage increases and bonuses) or
(b) if it is not "reasonably certain" what
the pay rate during the Uniformed Services
would have been, the Returning Veteran's
average earnings during the twelve months
(or shorter period, if applicable) prior to
the Service in the Uniformed Services.
ii. Returning Veteran means a reemployed
Employee who gave notice to the Company of
his impending service in the Uniformed
Services, (unless such notice was precluded
by military necessity or was otherwise
impossible or unreasonable), and the
cumulative length of absence from the
Company by reason of Service in the
Uniformed Services does not exceed five
years.
iii. Service in the Uniformed Services means the
performance of duty on a voluntary or
involuntary basis in a "Uniformed Service"
and includes: active duty, active duty for
training, initial active duty for training,
inactive duty training, full-time National
Guard duty, and a period for which a person
is absent from a position of employment for
the purpose of an examination to determine
the fitness of the person to perform any
such duty. The "Uniformed Services"
include the Armed Forces, the Army National
Guard, and the Air National Guard when
engaged in active duty for training,
inactive duty training, or full-time
National Guard duty; the commissioned corps
of the Public Health Service; and any other
category of persons designated by the
President of the United States in time of
war or emergency.
b. Years of Benefit Service shall mean any period
of absence because of Service in the Uniformed
Services for a Returning Veteran.
c. Break in Service. If a Returning Veteran was
absent from his or her employment with the
Employer on account of Service in the Uniformed
Services, the Returning Veteran shall be
credited with sufficient Hours of Service so
that a Break in Service does not occur.
d. Vesting. To the extent not credited above,
Hours of Service will also be credited, for
vesting purposes, based on the customary work
week of the Employee for periods of Service in
the Uniformed Services (as required by
applicable law).
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 Benefit 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.
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 twelve 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 twelve 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 has completed at
least five Years of Service shall be vested in his Accrued
Benefit and entitled to a deferred vested retirement income
determined pursuant to Section 4.5. Prior to January 1, 1989,
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.
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 reemployment, 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 Benefit 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 (and any account
derived from such Participant's account or
any account from which such Participant's
account was derived, as the case may be)
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 Benefit Service
accrued after September 27, 1985;
ii. Equals 1.5% of the Participant's Final
Average Compensation multiplied by the
Participant's Years of Benefit 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 (and any account
derived from such Participant's account or
any such account from which such
Participant's account was derived, as the
case may be) 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 (and any account
derived from such Participant's account or any
such account from which such Participant's
account was derived, as the case may be) 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 Benefit
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 Benefit 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 Benefit
Service as of his actual retirement date
and the denominator of which is the
Participant's Years of Benefit 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 Benefit 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 Benefit Service and Final Average
Compensation at actual retirement.
If the Participant has completed ten or more
Years of Benefit 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 Benefit 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 Benefit
Service as of his actual retirement date
and the denominator of which is the
Participant's Years of Benefit 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 Benefit 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 Benefit Service earned
prior to his Disability Retirement Date and
Years of Benefit Service accrued after he is
reemployed in the same manner as though all his
Years of Benefit 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
Benefit 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 Benefit 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 Benefit
Service as of his actual termination date
and the denominator of which is the
Participant's Years of Benefit 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 Benefit 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 Benefit Service and Final
Average Compensation at termination.
If such Participant has completed ten or more
Years of Benefit 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 commences prior
to the Participant's Social Security
Retirement Age and on or after age 62, the
limitation under (ii) shall be reduced by
5/9ths of one percent for each of the first
thirty-six (36) months and 5/12ths of one
percent for each of the additional months
(up to 24 months) by which the benefit
commences before the month of the
Participant's Social Security Retirement
Age. If the benefit commences before the
Participant's 62nd birthday, the limitation
described in (ii) shall be the Actuarial
Equivalent of the limitation for benefits
commencing at age 62.
iv. In the case where a Participant has
completed less than ten Years of Benefit
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 Benefit 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.
vii. Notwithstanding the foregoing, the benefit
payable to a Participant shall not be
considered to exceed the limitation under
(ii) if the Participant's Accrued Benefit
as of December 31, 1986, exceeds that
dollar limitation, but was not in violation
of the requirements of Code Section 415 for
1986 and prior years.
For the purpose of determining the Actuarial
Equivalent amount described in (v), above, or in
(iii) above if the benefit is payable prior to
the Social Security Retirement Age, the interest
rate shall be the greater of 5% or the rate
specified in Section 1.2 of the Plan. To
determine the Actuarial Equivalent amount in
(iii) above if the benefit is payable after the
Social Security Retirement Age, the interest
rate shall be the lesser of 5%, or the rate
specified in Section 1.2 of the Plan, with no
mortality. In any event, the mortality table
shall be as set forth in Revenue Ruling 95-6 or
any successor publication of the Service. If
the standard rate for determining Actuarial
Equivalent benefits under Section 1.2 is
modified, the above "greater of" rate will
change accordingly. If the rate specified in
Code Section 415(b)(2)(E) is modified the above
"lesser of" rate will change accordingly.
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 for Plan Years prior to
January 1, 1998 and $5,000 for Plan Years beginning after
January 1, 1998. 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
married on the date his distribution of benefits commences, or
the Participant has not been legally married throughout the
one-year period ending on the earlier or (i) the date as of
which distribution of his benefit commences or (ii) the date
of the Participant's death.
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 an immediate 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. The payments
under a 50% Joint and Survivor Spouse Annuity,
will commence effective immediately upon
election by the Participant.
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 Required Beginning Date, as defined in
Section 6.9, 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.
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.
6.9 Minimum Required Distributions. The following
provisions apply in the event that a Participant reaches his
Required Beginning Date, as defined below:
a. Such Participant is required to receive a
benefit.
b. If the Participant elects a lump-sum benefit or
an annuity, the date as of which an annuity
benefit or lump sum benefit is required to
begin, shall be no later than the Participant's
Required Beginning Date.
c. If the Participant elects to be paid in annual
installments, two annual installments may be
made in the year of the Participant's Required
Beginning Date. Subsequent annual installments
must be made by the December 31 of that year.
The first payment cannot be made later than the
Participant's Required Beginning Date. The
second annual installment must be made by the
December 31 immediately following the
Participant's Required Beginning Date.
Required Beginning Date shall mean, for anyone,
other than a 5% owner (as defined in Code
Section 416(i)(1)(B)(i)), who obtains age 70-1/2
after December 31, 1998, April 1st of the
calendar year following the later of (a) the
calendar year in which the Employee attains age
70-1/2, or (b) the calendar year in which the
Employee terminates employment with the
Employer.
A Participant (other than a 5% owner) who
attained the age of 70-1/2 in 1996 and has not
retired by the end of 1996 may (i) delay
commencement of minimum distributions until no
later than April 1 following the calendar year
in which the Participant retires from employment
with the Employer or (ii) request make-up
distributions for payments that would have been
made in 1997. Such make-up distributions must
be made by December 31, 1997.
A Participant (other than a 5% owner) who
attains the age of 70-1/2 in 1997 or 1998 and
remains employed with an Employer, may elect to
delay commencement of minimum distributions
until no later than April 1 following the
calendar year in which the Participant retires
from employment with an Employer.
A Participant, other than a 5% owner, who
attained age 70-1/2 before 1997 but did not
retire from employment with a Participating
Employer before January 1, 1997, may elect at
any time prior to December 31, 1997, with the
consent of his spouse and subject to the terms
of any applicable qualified domestic relations
order, to cease further distributions until a
later date. Pursuant to IRS Notice 97-75 Q&A-
8(b), if such Participant elects to cease
minimum distributions, there will be no new
annuity starting date upon recommencement.
The Required Beginning Date of a Participant who
is a five percent owner (as defined in Code
Section 416(i)(1)(B)(i)) of the Employer shall
be April 1st following the calendar year in
which the Participant reaches age 70-1/2.
For Plan Years beginning prior to January 1,
1997, Required Beginning Date was defined as
April 1st of the calendar year following the
calendar year in which a Participant attains age
70-1/2.
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.
13.10 Change 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. Effective January 1,
1998, if the Actuarial Equivalent present value of monthly
payments of retirement income to any person would amount to
less than $5,000 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. Prior to January 1, 1998, the reference to $5,000
was $3,500.
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.
14.10 Headings. 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.
14.11 Use 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.
14.12 Return 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 30th day of December, 1997.
AVONDALE INDUSTRIES, INC
BY: /s/ Thomas M. Kitchen
-----------------
Thomas M. Kitchen,
Secretary
ATTEST
/s/ Eugene K. Simon, Jr.
------------------------
(Corporate Seal)
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF JEFFERSON
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Pension Plan as a free act and deed on behalf
of Avondale Industries, Inc. for the purposes therein set
forth.
/s/ Thomas M. Kitchen
---------------------
Thomas M. Kitchen
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 30TH DAY
OF DECEMBER, 1997.
/s/ Rudolph R. Ramelli
----------------------
NOTARY PUBLIC
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, Inc. July 1, 1989
Avondale Transportation Co., Inc. July 1, 1989
Avondale Enterprises, Inc. January 1, 1990
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 to age 65
At least 55 but under 60 .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.