EXHIBIT 10.3
RETIREMENT PLAN FOR EMPLOYEES
-----------------------------
OF
--
UNIFIED WESTERN GROCERS, INC.
-----------------------------
(Amended and Restated as of March 1, 1997)
TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................................................... 2
Section 1.01 - Accrued Benefit................................................................... 2
Section 1.02 - Actuarial Equivalent.............................................................. 2
Section 1.03 - Affiliated Company................................................................ 4
Section 1.04 - Benefit Commencement Date......................................................... 4
Section 1.05 - Code.............................................................................. 4
Section 1.06 - Company........................................................................... 4
Section 1.07 - Conversion Date................................................................... 5
Section 1.08 - Early Retirement Age.............................................................. 5
Section 1.09 - Early Retirement Date............................................................. 5
Section 1.010 - Effective Date.................................................................... 5
Section 1.011 - Employee.......................................................................... 5
Section 1.012 - Gender............................................................................ 6
Section 1.013 - Member............................................................................ 6
Section 1.014 - Month of Service.................................................................. 6
Section 1.015 - Normal Retirement Age............................................................. 6
Section 1.016 - Normal Retirement Date............................................................ 6
Section 1.017 - Plan.............................................................................. 6
Section 1.018 - Plan Administrator................................................................ 6
Section 1.019 - Plan Year......................................................................... 6
Section 1.020 - Restatement Date.................................................................. 7
Section 1.021 - Retirement Date................................................................... 7
Section 1.022 - Service........................................................................... 7
Section 1.023 - Social Security Covered Compensation.............................................. 7
Section 1.024 - Social Security Retirement Age.................................................... 7
Section 1.025 - Social Security Taxable Wage Base................................................. 7
Section 1.026 - Spouse............................................................................ 8
Section 1.027 - Unified Employee.................................................................. 8
Section 1.028 - Unified Member.................................................................... 8
Section 1.029 - United Employee................................................................... 8
Section 1.030 - United Member..................................................................... 8
ARTICLE II SERVICE...................................................................................... 8
Section 2.01 - Hour of Service................................................................... 8
Section 2.02 - Benefit Accrual Service........................................................... 9
(a) For Service Prior to March 1, 1976....................................................... 9
(b) For Service on and After March 1, 1976 and Prior to Conversion Date (March 1, 1983)...... 10
-i-
(c) For Service on and After the Conversion Date (March 1, 1983)........................... 10
(d) Benefit Accrual Service for Certain Union Unified Employees............................ 11
(e) Benefit Service for United Members..................................................... 11
(f) Ceasing of Benefit Accrual Service..................................................... 11
Section 2.03 - Vesting Service................................................................... 11
Section 2.04 - Break in Service.................................................................. 12
(a) One Year Break in Service for Unified Employees........................................ 12
(b) One Year Break in Service for United Employees......................................... 12
(c) Effect of a One Year Break in Service for Unified Employees............................ 13
(d) Effect of a One Year Break in Service for United Employees............................. 13
Section 2.05 - Eligibility Service............................................................... 13
(a) For Unified Employees.................................................................. 13
(b) For United Employees................................................................... 14
Section 2.06 - Years of Employment............................................................... 14
Section 2.07 - USERRA Service Credit............................................................. 14
ARTICLE III MEMBERSHIP.................................................................................. 14
Section 3.01 - Eligibility to be a Unified Member................................................ 14
Section 3.02 - Unified Employees Not Eligible to be a Unified Member and
Entry Date........................................................................ 15
Section 3.03 - United Employees Not Eligible to be a United Member............................... 15
Section 3.04 - Employment by Affiliates.......................................................... 15
Section 3.05 - Acquisitions of Affiliates........................................................ 16
Section 3.06 - Reemployment of Unified Member.................................................... 16
Section 3.07 - Reemployment of Unified Member Following Forfeiture............................... 16
Section 3.08 - Reemployment of United Member..................................................... 16
ARTICLE IV ELIGIBILITY FOR PLAN BENEFITS................................................................ 16
Section 4.01 - Normal Retirement Benefit......................................................... 16
Section 4.02 - Deferred Retirement Benefit....................................................... 17
Section 4.03 - Early Retirement Benefit.......................................................... 17
Section 4.04 - Vested Deferred Benefit........................................................... 17
Section 4.05 - Pre-Retirement Death Benefit...................................................... 17
ARTICLE V RETIREMENT BENEFIT............................................................................ 18
Section 5.01 - Normal Retirement Benefits for Unified Members.................................... 18
Section 5.02 - Normal Retirement Benefits for United Members..................................... 21
Section 5.03 - Early Retirement Benefits for Unified Members..................................... 22
Section 5.04 - Early Retirement Benefits for United Members...................................... 24
Section 5.05 - Deferred Retirement Benefits for Unified Members.................................. 24
Section 5.06 - Deferred Retirement Benefits for United Members................................... 24
-ii-
Section 5.07 - Termination of Service before Early or Normal Retirement Age...................... 25
Section 5.08 - Pre-Retirement Death Benefit...................................................... 25
Section 5.09 - Maximum Amount of Benefit......................................................... 26
Section 5.010 - Small Benefit Payments............................................................ 30
Section 5.011 - When Benefits Begin............................................................... 30
Section 5.012 - Suspension of Benefits Upon Reemployment or After Normal Retirement Date.......... 30
ARTICLE VI MANNER AND FORM OF PAYMENT................................................................... 31
Section 6.01 - Form of Retirement Benefit........................................................ 31
Section 6.02 - Joint and Survivor Annuity for Married Member..................................... 32
Section 6.03 - Life Annuity for Unmarried Members................................................ 35
Section 6.04 - Joint and Survivor Annuity for Other Members...................................... 35
(a) 50% Joint and Survivor Life Annuity.................................................... 36
(b) 100% Joint and Survivor Life Annuity................................................... 36
Section 6.05 - Period Certain Life Annuity Benefit............................................... 36
Section 6.06 - Optional Temporary Annuity for Unified Members.................................... 36
Section 6.07 - Disability Retirement Benefit for United Members.................................. 36
Section 6.08 - Retirement Benefit From United Member Contributions............................... 36
Section 6.09 - Lump Sum Benefits................................................................. 37
Section 6.010 - Minimum Distribution of Benefits.................................................. 37
Section 6.011 - Minimum Distribution Following Death.............................................. 37
ARTICLE VII CONTRIBUTIONS AND FUNDING................................................................... 37
Section 7.01 - Funding of Plan................................................................... 37
Section 7.02 - Company Contributions............................................................. 38
Section 7.03 - Contributions to Group Annuity Contract........................................... 38
Section 7.04 - No Return of Company Contributions; Exceptions.................................... 38
Section 7.05 - United Employee Contributions..................................................... 38
ARTICLE VIII ADMINISTRATION............................................................................. 39
Section 8.01 - Named Fiduciary................................................................... 39
Section 8.02 - Benefits Committee as Plan Administrator.......................................... 39
Section 8.03 - Additional Duties of Benefits Committee........................................... 39
Section 8.04 - Authority of Benefits Committee................................................... 40
ARTICLE IX AMENDMENT AND TERMINATION OF THE PLAN........................................................ 40
Section 9.01 - Amendment of the Plan............................................................. 40
Section 9.02 - Termination of the Plan........................................................... 41
Section 9.03 - Allocation of Assets Upon Plan Termination........................................ 41
-iii-
Section 9.04 - Merger or Consolidation........................................................... 42
ARTICLE X LIMITATION OF BENEFITS FOR HIGHLY PAID MEMBER................................................. 42
Section 10.01 - Limitation on Certain Distributions............................................... 42
ARTICLE XI TOP HEAVY PROVISIONS......................................................................... 44
Section 11.01 - Top Heavy Definitions............................................................. 44
Section 11.02 - Special Top Heavy Rules........................................................... 45
Section 11.03 - Top Heavy Benefits and Vesting.................................................... 46
ARTICLE XII MISCELLANEOUS PROVISIONS.................................................................... 47
Section 12.01 - Evidence of Survival.............................................................. 47
Section 12.02 - Non-Alienation of Benefits........................................................ 48
Section 12.03 - Payments to Incompetents.......................................................... 48
Section 12.04 - Misstated Information............................................................. 48
Section 12.05 - Beneficiary....................................................................... 48
Section 12.06 - Forfeiture Upon Failure to Locate................................................. 49
Section 12.07 - Direct Transfer of Benefits....................................................... 49
Section 12.08 - Claims Procedure.................................................................. 50
Section 12.09 - Applicable Law.................................................................... 52
-iv-
RETIREMENT PLAN FOR EMPLOYEES
-----------------------------
OF
--
UNIFIED WESTERN GROCERS, INC.
-----------------------------
THIS AGREEMENT, executed by Unified Western Grocers, Inc., a
California corporation (hereinafter called the "Company"), evidences the terms
of the Retirement Plan for Employees of Unified Western Grocers, Inc., as
amended and restated as of March 1, 1997. The plan was originally adopted and
made effective on March 1, 1957, and subsequently amended from time to time
thereafter. Unless otherwise indicated, this amendment and restatement is
effective for the Plan Year beginning on or after March 1, 1997.
In addition, effective as of December 31, 2001, the United Grocers,
Inc., Pension Plan and Trust (the "United Plan") is merged with and into the
Plan. Accordingly, effective as of such merger date, the terms and conditions
governing the former participants in the United Plan shall be as set forth in
this Plan. As to the employees of the Company who are employed at a United
Grocers facility, the terms of the United Plan that existed prior to the merger
date shall be effective until December 30, 2001, and the terms of this Plan
shall only be applicable for one day (i.e., December 31, 2001) for the 2001 Plan
Year. Furthermore, as of January 1, 2002, the Plan Year will be the calendar
year. Notwithstanding the foregoing, those provisions of the Plan that relate
to the Uruguay Round Agreements Act, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997, the Internal Revenue Service Restructuring and
Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000 ("GUST")
shall be applicable to the United Employees as of the dates required by GUST.
Furthermore, as of December 31, 2001, Unified Members will cease to
earn additional Years of Benefit Accrual Service and United Members will cease
to earn additional years of Benefit Service (as defined in Section 1.6 of the
United Plan), and no additional Employees shall become eligible to become
Members of the Plan.
Nothing contained in this Agreement shall be deemed to divest, or
accelerate the vesting of, the interest of any Member herein or to deprive any
Member of any rights which that Member had as of the execution date or the
effective date of this Agreement. The rights and benefits of all employees of
the Company after the effective date of this Agreement shall be as set forth
herein.
-1-
ARTICLE I
---------
DEFINITIONS
-----------
The following words and phrases when used throughout this Plan and any
subsequent amendment thereof shall have the meanings set forth below, whether or
not capitalized, unless a different meaning is clearly required by the context.
Section 1.01 - Accrued Benefit
- ------------ ---------------
The "Accrued Benefit" of a Unified Member, as of his termination of
service, means the greater of (a) or (b):
(a) his normal retirement benefit determined under Section 5.01,
calculated on the basis of his Years of Benefit Accrual Service as of his
termination of service; or
(b) the actuarial equivalent based on a single life annuity of the
benefit accrued on the Conversion Date under the terms of the Plan, including
the normal form of benefit, in effect immediately preceding the Conversion Date.
The "Accrued Benefit" for a United Member, as of his termination of
service, means his normal retirement benefit determined under Section 5.02,
calculated on the basis of his years of Benefit Service (as defined in Section
1.6 of the United Plan) as of his termination of service.
Notwithstanding the foregoing, as of December 31, 2001, Unified
Members will cease to earn additional Years of Benefit Accrual Service and
United Members will cease to earn additional years of Benefit Service.
Section 1.02 - Actuarial Equivalent
- ------------ --------------------
(a) For Unified Members, "Actuarial Equivalent" or "Actuarially
Equivalent" means an amount of equivalent value when computed on the basis of a
specified mortality table and interest rate assumption. Unless a different
mortality table and interest rate assumption is specified elsewhere in the
document for a specific purpose, an Actuarially Equivalent amount shall be
computed on the basis of the 1971 Towers, Perrin, Forster and Crosby Forecast
Mortality Table with an interest rate assumption of 8% per annum.
For the purpose of determining the lump sum value of a Member's
benefit under the Plan as provided under Sections 5.03(d) and 5.010, such lump
sum value shall be calculated using the Applicable Interest Rate and Applicable
Mortality Table.
-2-
"Applicable Interest Rate" means the annual rate of interest on thirty
(30) year Treasury securities in effect for November of the Plan Year preceding
the Plan Year in which payment is made, or such other interest rate as may be
required under code section 417(e) and the regulations thereunder.
"Applicable Mortality Table" means the 1983 Group Annuity Mortality
Table (as published in IRS Revenue Ruling 95-6) or other such mortality table as
may be required under code section 417(e) and the regulations thereunder.
For purposes of determining maximum benefits under Section 5.09, the
assumptions set forth in such section shall be limited pursuant to Code Section
415(b)(2)(E).
(b) For United Members, "Actuarial Equivalent" or "Actuarially
Equivalent" means a benefit of equivalent value when computed at the rate of 7
percent interest and on the basis of the 1971 Group Annuity and Mortality Table,
male rates, pre- and post-retirement.
In the event of a change in the Plan's actuarial equivalent factors,
the Actuarial Equivalent of the Accrued Benefit on or after the date of a change
is the greater of the Actuarial Equivalent of the Accrued benefit as of the date
of the change computed on the old basis or the Actuarial Equivalent of the total
Accrued Benefit computed on the new basis.
For the purpose of cashing out any United Member's benefits and
determining whose consent is necessary for a cash out, the interest rate used in
such present value determination as of the date of the distribution shall not be
greater than the "applicable interest rate." The "applicable interest rate"
shall mean the interest rate or rates that would have been used by the Pension
Benefit Guaranty Corporation ("PBGC"), as of the first day of the Plan Year that
contains the date that distribution commences, for the purpose of determining
the present value of that Participant's benefits under the Plan if the Plan had
terminated on the date distribution commences with insufficient assets to
provide benefits guaranteed by the PBGC on that date.
For the purpose of determining the lump sum value of a Member's
benefit under the Plan as provided under Sections 5.03(d), 5.010 and 6.09, such
lump sum value shall be calculated using the Applicable Interest Rate and
Applicable Mortality Table.
"Applicable Interest Rate" means the annual rate of interest on thirty
(30) year Treasury securities in effect for November of the Plan Year preceding
the Plan Year in which payment is made, or such other interest rate as may be
required under code section 417(e) and the regulations thereunder.
-3-
"Applicable Mortality Table" means the 1983 Group Annuity Mortality
Table (as published in IRS Revenue Ruling 95-6) or other such mortality table as
may be required under code section 417(e) and the regulations thereunder.
For purposes of determining maximum benefits under Section 5.09, the
assumptions set forth in such section shall be limited pursuant to Code Section
415(b)(2)(E).
Section 1.03 - Affiliated Company
- ------------ ------------------
"Affiliated Company" means:
(a) Any corporation which is included in a controlled group of
corporations, within the meaning of Section 414(b) of the Code, of which group
the Company is also a member,
(b) Any trade or business which is under common control with the
Company within the meaning of Section 414(c) of the Code,
(c) Any member of an affiliated service group, within the meaning of
Section 414(m) of the Code, that includes the Company, and
(d) Any other entity required to be aggregated with the Company
pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, an entity shall be deemed to be an
Affiliated Company only with respect to periods during which the test under Code
Section 414(b) (c), (m), or (o), as applicable, is met.
Section 1.04 - Benefit Commencement Date
- ------------ -------------------------
"Benefit Commencement Date" means the date on which a Member's benefit
commences under the Plan. The Benefit Commencement Date for a Unified Member who
continues employment after his Normal Retirement Date and who dies prior to
receiving benefits under the Plan shall be the first day of the month following
his date of death. The Benefit Commencement Date for a United Member who
continues employment after his Normal Retirement Date is set forth in Section
6.11(F) of the United Plan.
Section 1.05 - Code
- ------------ ----
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
Section 1.06 - Company
- ------------ -------
-4-
"Company" means Unified Western Grocers, Inc. (formerly Certified
Grocers of California, Ltd.) and any Affiliated Company which has adopted the
Plan.
Section 1.07 - Conversion Date
- ------------ ---------------
"Conversion Date" means March 1, 1983.
Section 1.08 - Early Retirement Age
- ------------ --------------------
"Early Retirement Age" for a Unified Member means either (a) or (b)
below:
(a) The date the Unified Member has both attained his 55th birthday
and completed at least 5 Years of Vesting Service.
(b) For any Unified Member who on or before March 1, 1983 has both
attained his 40th birthday and completed at least 20 years of service, the date
such Unified Member has both attained his 45th birthday and completed at least
25 years of service.
"Early Retirement Age" for a United Member means either (c) or (d)
below:
(c) The date the United Member has both attained his 60th birthday
and completed at least 10 Years of Vesting Service.
(d) The date the United Member has both attained his 55/th/ birthday
and completed at least 15 Years of Vesting Service.
Section 1.09 - Early Retirement Date
- ------------ ---------------------
"Early Retirement Date" means the first day of any month before his
Normal Retirement Age in which a Member elects to retire provided he has
attained his Early Retirement Age.
Section 1.010- Effective Date
- ------------- --------------
"Effective Date" means March 1, 1997.
Section 1.011- Employee
- ------------- --------
"Employee" means a Unified Employee or a United Employee.
-5-
Section 1.012- Gender
- ------------- ------
"Gender" means the masculine pronoun whenever used shall include the
feminine.
Section 1.013- Member
- ------------- ------
"Member" means a Unified Member or a United Member.
Notwithstanding the foregoing, as of December 31, 2001, no additional
Employees may become eligible to become a Member of the Plan.
Section 1.014- Month of Service
- ------------- ----------------
"Month of Service" means the month, or a four or five week period,
regularly used by the Company for its payroll records during which a Member is
credited with an Hour of Service.
Section 1.015- Normal Retirement Age
- ------------- ---------------------
"Normal Retirement Age" means the date a Member attains his 65th
birthday.
Section 1.016- Normal Retirement Date
- ------------- ----------------------
"Normal Retirement Date" means the first day of the month next
following a Member's Normal Retirement Age.
Section 1.017- Plan
- ------------- ----
"Plan" means the provisions of the Retirement Plan for Employees of
Unified Western Grocers, Inc., as set forth herein and as may be amended from
time to time. Effective as December 31, 2001, the United Plan is merged with
and into the Plan.
Section 1.018- Plan Administrator
- ------------- ------------------
"Plan Administrator" or "Plan Administration Committee" means the
person or persons named pursuant to Article VIII who exercise discretionary
authority and control with respect to the administration and management of the
Plan.
Section 1.019- Plan Year
- ------------- ---------
"Plan Year" means each twelve month period beginning on March 1 and
ending on the last day of February. However, effective as of January 1, 2002,
the Plan Year shall be the calendar year, and for the Plan, there shall be a
short Plan Year
-6-
beginning on March 1, 2001 and ending on December 31, 2001, and for the United
Plan, there shall be a short Plan Year beginning on October 1, 2001 and ending
on December 31, 2001.
Section 1.020- Restatement Date
- ------------- ----------------
"Restatement Date" means March 1, 1997.
Section 1.021- Retirement Date
- ------------- ---------------
"Retirement Date" means the Member's Normal Retirement Date or, if
applicable, Early Retirement Date.
Section 1.022- Service
- ------------- -------
"Service" means an Employee's period of employment with the Company
credited in accordance with Article II.
Section 1.023- Social Security Covered Compensation
- ------------- ------------------------------------
"Social Security Covered Compensation" means for any Plan Year, the
average (without indexing) of the Social Security Taxable Wage Base in effect
for each calendar year during the thirty-five (35) year period ending with the
last day of the calendar year in which the Member attains (or will attain)
Social Security Retirement Age. In determining a Member's Social Security
Covered Compensation for a Plan Year, the Social Security Taxable Wage Base for
the current Plan Year and any subsequent Plan Year shall be assumed to be the
same as in effect for the Plan Year for which the determination is being made. A
Member's Covered Compensation for any Plan Year after the thirty-five (35) year
period is the Member's Social Security Covered Compensation for the Plan Year in
which the Member attained Social Security Retirement Age.
Section 1.024- Social Security Retirement Age
- ------------- ------------------------------
"Social Security Retirement Age" means:
(a) For a Member born prior to 1938, the first day of the calendar
month coincident with or next following his sixty-fifth birthday;
(b) For a Member born after 1937 and before 1955, the first day of
the calendar month coincident with or next following his sixty-sixth birthday;
and
(c) For a Member born after 1954, the first day of the calendar month
coincident with or next following his sixty-seventh birthday.
Section 1.025- Social Security Taxable Wage Base
- ------------- ---------------------------------
-7-
"Social Security Taxable Wage Base" means the contribution and benefit
limit in effect under Section 3121(a)(1) of the Code.
Section 1.026- Spouse
- ------------- ------
"Spouse" means the person to whom a Member has been legally married
during the twelve month period immediately preceding the Member's date of death,
if such death is earlier than his Early, Normal or Deferred Retirement Date, or
the person to whom the Member is married commencing at his benefit commencement
date commencing at his Early, Normal or Deferred Retirement Date, if applicable.
Section 1.027- Unified Employee
- ------------- ----------------
"Unified Employee" means a person employed by the Company, except a
person who is a United Employee.
Section 1.028- Unified Member
- ------------- --------------
"Unified Member" means a Unified Employee who satisfies the
requirements for membership pursuant to Article III, and whose membership shall
not have terminated pursuant to such Article.
Section 1.029- United Employee
- ------------- ---------------
"United Employee" means a person employed by the Company at a United
Grocers facility.
Section 1.030- United Member
- ------------- -------------
"United Member" means a United Employee who satisfies the requirements
for membership pursuant to Article II of the United Plan, and whose membership
shall not have terminated pursuant to such Article.
ARTICLE II
----------
SERVICE
-------
Section 2.01 - Hour of Service
- ------------ ---------------
A Unified Employee shall receive credit for an Hour of Service for:
(a) Each hour for which he is directly or indirectly paid or entitled
to payment by the Company for the performance of duties during the applicable
Computation Period. These hours shall be credited to the Unified Employee in the
Computation Period or periods in which the duties were performed; and
-8-
(b) Each hour not credited in (a) for which back pay has been either
awarded or agreed to by the Company. These hours shall be credited to the
Unified Employee in the Computation Period or periods to which the award or
agreement pertains rather than the Computation Period in which the award,
agreement, or payment is made; and
(c) Each hour not credited in (a) or (b) for which a Unified Employee
is directly or indirectly paid, or entitled to such payment by the Company for
reasons other than the performance of duties during an applicable Computation
Period. The completion of the non-work hours described in this paragraph shall
be computed in accordance with the provisions of Department of Labor Regulations
2530.200b-2. These hours shall be credited in the Computation Period in which
either payment is actually made or amounts payable to the Unified Employee
become due. These hours shall be determined by dividing the payments received or
due by the Unified Employee's most recent hourly rate of Compensation for the
performance of duties;
(d) Each hour not credited in (a), (b) or (c) while a Unified
Employee is on Authorized Leave of Absence. These hours shall be credited for
purposes of Sections 2.02 and 2.03; and
(e) Each hour not credited in (a), (b), (c) or (d) that is required
to be credited under federal law. The nature and extent of such credit shall be
determined under such law.
Notwithstanding subsections (a)-(e) above, a United Employee shall
receive credit for an Hour of Service as determined under Section 1.19 of the
United Plan.
Section 2.02 - Benefit Accrual Service
- ------------ -----------------------
(a) For Service Prior to March 1, 1976
----------------------------------
A Unified Member shall be credited with a Year of Benefit Accrual
Service for each full year of continuous service with the Company, except that
an employee of an Affiliated Company on the date of acquisition by Unified
Western Grocers, Inc., shall be credited with a Year of Benefit Accrual Service
for each full year of membership in the Plan, as determined in accordance with
the provisions of the Plan as in effect prior to March 1, 1976. Service under
any other plan and not a predecessor of this Plan shall not be considered
service hereunder.
A Unified Member shall also be credited with a fractional Year of
Benefit Accrual Service for the period measured from his last anniversary of
employment immediately preceding March 1, 1976 to March 1, 1976, if such period
is
-9-
less than twelve months. The applicable fraction shall be determined by
dividing the number of completed months of employment during such period, by 12.
For purposes of this subsection (a), an Authorized Leave of
Absence as described in 2.01(d) shall not be deemed to have interrupted the
continuity of employment.
(b) For Service on and After March 1, 1976 and Prior to Conversion
--------------------------------------------------------------
Date (March 1, 1983)
--------------------
A Unified Member who completes 1800 Hours of Service during an
"Accrual Computation Period" shall be credited with a Year of Benefit Accrual
Service for such "Accrual Computation Period".
A Unified Member who completes at least 1000 Hours of Service but
less than 1800 Hours of Service during an "Accrual Computation Period" shall be
credited with a fractional Year of Benefit Accrual Service for such "Accrual
Computation Period" by dividing the number of Hours of Service credited to him
by 1800.
The "Accrual Computation Period" shall be the twelve month period
measured from March 1 commencing with the later of March 1, 1976 and March 1 of
(a) the Plan Year in which he is employed by the Company or (b) with respect to
an Employee of an Affiliated Company on the date of acquisition by Unified
Western Grocers, Inc., the Plan Year in which he becomes a Unified Member of the
Plan.
Notwithstanding the above, if either (a) a Unified Employee is
employed by the Company, (b) a Unified Employee of an Affiliated Company becomes
a Unified Member of the Plan or (c) a Unified Employee terminates employment
with the Company while a Unified Member of the Plan, on a date other than the
first day of an Accrual Computation Period, such Unified Employee shall receive
credit for a Year of Benefit Accrual Service or fraction thereof during such
Accrual Computation Period provided he completes the "Minimum Hours of Service"
requirement. The "Minimum Hours of Service" requirement is the product of 1000
and a fraction, the numerator being the number of months of employment with the
Company during such Accrual Computation Period and the denominator being 12.
A Unified Member who completes the Minimum Hours of Service shall be
credited with a Year of Benefit Accrual Service, or fraction thereof, by
dividing the number of Hours of Service credited to him by 1800.
(c) For Service on and After the Conversion Date (March 1, 1983)
------------------------------------------------------------
-10-
A Unified Member shall be credited with 1/12th of a Year of
Benefit Accrual Service for each Month of Service credited on or after the
Conversion Date; provided, however, a Year of Benefit Accrual Service for a
Unified Member who is not actively performing services for the Company as an
Employee because of a disability shall be determined under paragraph (b).
Years of Benefit Accrual Service shall be the sum of each year,
and fractional part thereof, of Benefit Accrual Service described in (a), (b)
and (c) above, not forfeited due to a Break in Service in accordance with
Section 2.04. Service under any other plan and not a predecessor of this Plan
shall not be considered service hereunder.
(d) Benefit Accrual Service for Certain Union Unified Employees
-----------------------------------------------------------
Notwithstanding any of the provisions contained herein to the
contrary, any Unified Employee who is a Unified Member prior to March 1, 1983
(and who was an active employee of the Company on January 1, 1984), who became a
Unified Member between March 1, 1976 and March 1, 1983 by no longer being
excluded as a Unified Member of the Plan under Section 3.02(a), shall be deemed
to have received credit for a Year of Benefit Accrual Service calculated from
the first date of continuous employment with the Company to becoming a Unified
Member, provided that the amount of the normal retirement benefit calculated
pursuant to Section 5.01 for such Unified Member shall be reduced by the amount,
if any, of the retirement benefit earned by the Unified Member under any other
retirement plan while employed by the Company, but during which such Unified
Member was excluded as a Unified Member under Section 3.02(a), at any time from
employment with the Company between March 1, 1976 and March 1, 1983.
(e) Benefit Service for United Members
----------------------------------
Notwithstanding (a)-(d) above, a United Member receives Benefit
Service as determined in Section 4.1 of the United Plan.
(f) Ceasing of Benefit Accrual Service
----------------------------------
Notwithstanding the foregoing, as of December 31, 2001, Unified
Members will cease to earn additional Years of Benefit Accrual Service and
United Members will cease to earn additional years of Benefit Service (as
defined in Section 1.6 of the United Plan).
Section 2.03 - Vesting Service
- ------------ ---------------
(a) For Unified Employees
---------------------
-11-
A Unified Employee who completes 1000 Hours of Service during a
"Vesting Computation Period" shall be credited with a Year of Vesting Service.
The "Vesting Computation Period" shall be the twelve consecutive month period
measured from the date of hire and each anniversary thereafter and including all
such similar periods of service with the Company or any Affiliated Company, but
not including any such periods with any Company prior to the time such Company
became a member of a controlled group with the Unified Western Grocers, Inc.
Years of Vesting Service shall be the sum of each Year of Vesting
Service with the exception of the following:
(A) Each Year of Vesting Service forfeited due to a Break
in Service in accordance with Section 2.04; and
(B) Each Year of Vesting Service before January 1, 1971
unless the Unified Employee has had at least three Years of
Vesting Service after December 31, 1970.
(b) For United Employees
--------------------
A United Employee shall be credited with a year of Vesting Service as
determined in Section 4.2 of the United Plan.
Section 2.04 - Break in Service
- ------------ ----------------
(a) One Year Break in Service for Unified Employees
-----------------------------------------------
A Unified Employee who completes less than three Months of
Service during an Accrual Computation Period shall incur a One Year Break in
Service for purposes of determining Benefit Accrual Service. For purposes of
determining whether a Break in Service Year has occurred for participation and
vesting purposes, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight Hours of Service per day of
such absence. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence by reason of the pregnancy of the
individual, by reason of a birth of a child of the individual, by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited in the computation period in
which the absence begins if the crediting is necessary to prevent a Break in
Service in that period, or in all other cases, in the following computation
period.
(b) One Year Break in Service for United Employees
----------------------------------------------
-12-
A United Employee shall incur a One Year Break in Service as
determined under Section 1.7 of the United Plan.
(c) Effect of a One Year Break in Service for Unified Employees
-----------------------------------------------------------
If a Unified Employee incurs a One Year Break in Service during a
Vesting Computation Period and before he is eligible for a Vested Deferred
Benefit and the number of consecutive One Year Breaks in Service equals or
exceeds the greater of five or his Years of Vesting Service prior to such Break
in Service, he shall forfeit his Years of Vesting Service credited prior to his
Break in Service.
If a Unified Employee incurs a One Year Break in Service during
an Eligibility Computation Period and before he is eligible for a Vested
Deferred Benefit and the number of consecutive One Year Breaks in Service equals
or exceeds the greater of five or his Years of Eligibility Service credited
prior to such Break in Service, he shall forfeit the Years of Eligibility
Service.
If a Unified Employee incurs a One Year Break in Service during
an Accrual Computation Period and before he is eligible for a Vested Deferred
Benefit and the number of consecutive One Year Breaks in Service equals or
exceeds the greater of five, he shall forfeit his Years of Benefit Accrual
Service previously credited to him.
(d) Effect of a One Year Break in Service for United Employees
----------------------------------------------------------
If a United Employee incurs a One Year Break in Service,
forfeiture of Eligibility Service and Benefit Service will be determined
pursuant to Section 4.3 of the United Plan.
Section 2.05 - Eligibility Service
- ------------ -------------------
(a) For Unified Employees
---------------------
A Unified Employee who completes 1000 Hours of Service during an
"Eligibility Computation Period" shall be credited with a Year of Eligibility
Service on the last day of such computation Period, whether or not he is an
Employee as of such date.
The "Eligibility Computation Period" shall be each twelve month period
measured from the first day the Unified Employee is credited with an Hour of
Service or, if he fails to complete 1000 Hours of Service during such period,
the twelve month period shall then be measured from the first day of each Plan
Year following such date of employment.
-13-
Years of Eligibility Service for a Unified Employee shall be the sum
of each Year of Eligibility Service not forfeited due to a Break in Service in
accordance with Section 2.04.
(b) For United Employees
--------------------
A United Employee shall be credited with a Year of Eligibility Service
as determined under Section 2.2 of the United Plan.
Years of Eligibility Service for a United Employee shall be the sum of
each Year of Eligibility Service not forfeited due to a Break in Service in
accordance with Section 1.7 of the United Plan.
Section 2.06 - Years of Employment
- ------------ -------------------
Years of Employment shall be the sum of each calendar year in which an
Employee completes at least one Hour of Service.
Section 2.07 - USERRA Service Credit
- ------------ ---------------------
Effective as of December 12, 1994, notwithstanding any provision to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u).
ARTICLE III
-----------
MEMBERSHIP
----------
Section 3.01 - Eligibility to be a Unified Member
- ------------ ----------------------------------
Each Unified Employee who is a Unified Member of the Plan as of March
1, 1976 or thereafter shall continue to participate in accordance with the
provisions of the Plan in effect on and after March 1, 1976, unless excluded
under the terms of Section 3.02. Each other Unified Employee, except any
Unified Employee who is not eligible to become a Member as provided in Section
3.02, provided he has met the minimum Hours of Service requirement under Section
2.05, shall become a Unified Member of the Plan on the later of:
(i) March 1, 1976; or
(ii) The Entry Date which is March 1 occurring during the first
eligibility computation period during which the Unified Employee is
credited with a year of eligibility service.
Notwithstanding the foregoing, as of December 31, 2001, no additional
Unified Employees may become eligible to become a Unified Member in the Plan.
-14-
Section 3.02 - Unified Employees Not Eligible to be a Unified Member and Entry
- ------------ ---------------------------------------------------------------
Date
----
The following persons shall not be eligible to be Unified Members in
the Plan:
(a) Any Unified Employee who is included in a collective bargaining
unit covered by a collective bargaining agreement, which agreement does not
provide for coverage of such Unified Employee, provided, that the matter of
retirement benefits was the subject of good faith bargaining between the Company
and the collective bargaining unit of which the Unified Employee is a part;
(b) Directors, unless otherwise employed as Unified Employees and
otherwise eligible; and
(c) Any Unified Employee on a retainer or fee basis or as an
independent contractor, as determined by the Employer (except an Employee of an
Affiliated Company).
(d) Any Employee employed at a United Grocers facility.
Notwithstanding the foregoing, if an Unified Employee who is a Unified Member of
the Plan is transferred to employment at a United Grocers facility on or after
December 1, 1999, such Employee shall continue to be a Unified Member of the
Plan and his employment at the United Grocers facility shall be treated as
eligible employment for all purposes under the Plan.
(e) Any United Employee who becomes a Unified Employee due to a
transfer to a Unified Grocers facility on or after December 1, 1999.
Section 3.03 - United Employees Not Eligible to be a United Member
- ------------ ---------------------------------------------------
United Employees who meet one or more of the qualifications of Section
2.1(A)-(D) of the United Plan shall not be eligible to become a United Member.
Notwithstanding the foregoing, as of December 31, 2001, no additional
United Employees may become eligible to become a United Member in the Plan.
Section 3.04 - Employment by Affiliates
- ------------ ------------------------
The Employees of any Affiliated Company shall be entitled to
participate in the Plan subject to the approval of the Board of Directors;
provided further, that only those Employees of an affiliate who otherwise meet
the requirements for membership as set forth in the Plan shall be entitled to
participate in the Plan, subject to the requirements of Section 3.04.
-15-
Section 3.05 - Acquisitions of Affiliates
- ------------ --------------------------
Each Employee of an Affiliated Company who was employed by such
Affiliated Company on the date of its acquisition shall be entitled to become a
Member in the Plan on March 1 coinciding with or next following the date on
which he or she completes six calendar months measured from date of employment.
In no event shall an Employee who completes one year of service fail to qualify.
Section 3.06 - Reemployment of Unified Member
- ------------ ------------------------------
In the event a Unified Member who has previously terminated employment
returns to the employ of the Company as a Unified Employee covered under the
Plan, he shall resume his membership in the Plan immediately unless, prior to
his reemployment, he forfeited his Years of Eligibility Service and Years of
Benefit Accrual Service due to a Break in Service in accordance with Section
2.04, in which case the provisions of 3.07 shall apply.
Section 3.07 - Reemployment of Unified Member Following Forfeiture
- ------------ ---------------------------------------------------
A Unified Member of the Plan who forfeits his Years of Eligibility
Service and Years of Benefit Accrual Service due to a Break in Service in
accordance with Section 2.04 shall cease to be entitled to any benefits under
the Plan with respect to such Service. He may reenter the Plan as a new Unified
Member by again satisfying the membership requirements in accordance with
Section 3.02.
Section 3.08 - Reemployment of United Member
- ------------ -----------------------------
In the event a United Member who has previously terminated employment
returns to the employ of the Company as a United Employee covered under the
Plan, he shall resume his membership in the Plan as determined under Section 2.4
(Resumption) of the United Plan.
A United Member of the Plan who forfeits his Years of Eligibility
Service and Years of Benefit Accrual Service due to a Break in Service in
accordance with Section 2.04(d) above shall be reinstated in accordance with
Section 4.4 of the United Plan.
ARTICLE IV
----------
ELIGIBILITY FOR PLAN BENEFITS
-----------------------------
Section 4.01 - Normal Retirement Benefit
- ------------
-16-
Except as provided in Section 4.02, a Unified Member shall be eligible
for a Normal Retirement Benefit if his employment is terminated on or after he
attains his Normal Retirement Age.
Notwithstanding the foregoing, a United Member shall be eligible for a
Normal Retirement Benefit in accordance with Section 5.2 of the United Plan.
Section 4.02 - Deferred Retirement Benefit
- ------------ ---------------------------
A Unified Member who continues employment after his Normal Retirement
Date shall be eligible for a Deferred Retirement Benefit when he terminates
employment.
Notwithstanding the foregoing, a United Member shall be eligible for a
Deferred Retirement Benefit in accordance with Section 5.3 of the United Plan.
Section 4.03 - Early Retirement Benefit
- ------------ ------------------------
A Unified Member shall be eligible for an Early Retirement Benefit if
his employment is terminated before he attains his Normal Retirement Age but on
or after he attains his Early Retirement Age. A terminated Unified Member who
is entitled to a Vested Deferred Benefit shall be eligible for an Early
Retirement Benefit on or after he attains his Early Retirement Age.
Notwithstanding the foregoing, a United Member shall be eligible for
an Early Retirement Benefit in accordance with Section 5.1 of the United Plan.
Section 4.04 - Vested Deferred Benefit
- ------------ -----------------------
A Unified Member who has completed at least five Years of Vesting
Service shall be eligible for a Vested Deferred Benefit if his employment with
the Company is terminated on or after March 1, 1987, for any reason other than
death and before he is eligible for a retirement benefit. If employment with
the Company is terminated for any reason other than death and before the Unified
Member's retirement
(a) prior to March 1, 1987 but on or after March 1, 1976, then ten
Years of Vesting Service is required; and
(b) prior to March 1, 1976, then fifteen Years of Vesting Service
is required.
Notwithstanding the foregoing, a United Member's Vested Deferred
Benefit shall be determined under Section 7.1 of the United Plan.
Section 4.05 - Pre-Retirement Death Benefit
- ------------ ----------------------------
-17-
If a Unified Member dies after Early Retirement Age and while employed
by the Company, then the surviving Spouse of the Unified Member shall be
entitled to a survivor's benefit as set forth in Section 5.05 of the Plan.
Notwithstanding the foregoing, if a United Member dies, his or her
spouse may be entitled to a survivor's benefit as set forth in Section 6.10 of
the United Plan.
ARTICLE V
---------
RETIREMENT BENEFIT
------------------
Section 5.01 - Normal Retirement Benefits for Unified Members
- ------------ ----------------------------------------------
For the Plan Year commencing March 1, 1989, upon the termination of
service of any Unified Member on his Normal Retirement Date, such Unified Member
shall be entitled to receive a monthly annuity for life equal to the greater of
either his accrued benefit or the greater of (a) or (b) below plus (c) as
follows:
(a) An amount equal to the sum of:
(i) .95% of his Average Monthly Earnings not in excess of his
Social Security Covered Compensation multiplied by his Years of Benefit
Accrual Service (up to 33-1/3 years); plus
(ii) .0145% of his Average Monthly Earnings in excess of his
Social Security Covered Compensation multiplied by his Benefit Accrual
Service (up to 33-1/3 years).
(b) An amount equal to $22.50 multiplied by his Years of Benefit
Accrual Service subject to a maximum of $750.00.
(c) An amount equal to the Unified Member's annualized gross base
rate of pay from the Company in effect on November 1, 1986, multiplied by the
fraction 2/280, multiplied by a fraction (not greater than 1), the numerator of
which is the Unified Member's Benefit Accrual Service in the Plan and the
denominator of which is 10, or if greater, the Unified Member's Benefit Accrual
Service under the Plan if the Unified Member would have continued to participate
in the Plan until the Unified Member became age 55; provided, however, for
purposes of this subparagraph, any Unified Member who is an officer of the
Company on November 1, 1986, shall be limited to annualized gross base rate of
pay from the Company of no greater than $50,000.00, and shall use a fraction of
1/280 instead of 2/280 mentioned above.
-18-
(d) For purposes of this Plan, the following additional definitions
shall be as follows:
(i) "Earnings" before March 1, 1976, means gross compensation
received by the Company.
(ii) "Earnings" on and after March 1, 1976, means 1/12th of a
Unified Member's annual gross compensation derived from employment by the
Company, plus such additional amounts as may be reduced from the Unified
Member's compensation and contributed by the Company under the Unified
Western Grocers, Inc. Sheltered Savings Plan (formerly the Certified
Grocers of California, Ltd. Employees' Sheltered Savings Plan) and the
Spending Account Plan, but excluding any retiree unused sick leave payoff
and severance pay; provided, however, Earnings shall not include any
amounts in excess of $200,000 (and as adjusted by the Secretary of the
Treasury in the same manner and time as provided under Section 415(d) of
the Code) for the Plan Year commencing March 1, 1989 through the Plan Year
ending February 28, 1994, and for Plan Years commencing on or after March
1, 1994, Earnings shall not include amounts in excess of $150,000, as
adjusted by the Secretary of the Treasury for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code. For a Unified
Member who completed less than 1800 Hours of Service during any calendar
year, Earnings shall be such Unified Member's actual monthly earnings.
(iii) Effective January 1, 1980, "Average Monthly Earnings"
means the average of the Unified Member's monthly "Earnings" during any three
calendar years within the last ten calendar years in which Earnings were
highest. If a Unified Member has Earnings for a period of less than three
calendar years, his "Average Monthly Earnings" shall be the average of his
monthly "Earnings" for the total period worked.
(e) Notwithstanding anything contained in this section to the
contrary, with respect to each Unified Member, the monthly retirement Benefit
shall be the greater of either the amount of the retirement Benefit that accrued
through February 29, 1992, for all Unified Employees (except Unified Employees
who are highly compensated employees described in Section 414(q)(1)(A) or (B) of
the Code (hereinafter "Super Highly Compensated Employee") limited to the
retirement benefit that accrued through February 28, 1989), as determined under
the provisions (including the definition of Credited Service) in the Plan in
effect for the Plan Year ending February 28, 1989, or the amount determined
hereunder. A Unified Member who is a Super Highly Compensated Employee for the
Plan Years commencing on or after March 1, 1990 (but not for the 1989 Plan
Year), will be limited to the greater of the retirement Benefit that accrued
through February 28, 1989, as determined under
-19-
the provisions (including the definition of Credited Service) in the Plan in
effect for the Plan Year ending February 28, 1989, or the amount determined
hereunder.
(f) Effective March 1, 1989 through February 28, 1994, for purposes
of providing a transition for the implementation of the limitation on Earnings
in excess of $200,000 (as adjusted) as provided in paragraph (d)(ii)
(hereinafter the "$200,000 Compensation Limitation"), the Unified Member's
Accrued Benefit shall be the greater of (i) or (ii), but in no event greater
than (iii), as follows:
(i) the Unified Member's Accrued Benefit as of November 30,
1989, determined without regard to the Compensation Limitation, plus the
Unified Member's Accrued $200,000 Benefit accrued from December 1, 1989,
with regard to the $200,000 Compensation Limitation,
(ii) the Unified Member's Accrued Benefit determined on the
basis of the total Years of Benefit Accrual Service and by applying the
$200,000 Compensation Limitation to all such Years of Benefit Accrual
Service,
(iii) the Unified Member's Accrued Benefit determined on the
basis of total Years of Benefit Accrual Service without regard to the
$200,000 Compensation Limitation.
(g) Effective March 1, 1994, for purposes of providing a transition
for the implementation of the limitation on Earnings in excess of $150,000 (as
adjusted) as provided in paragraph (d)(ii) (hereinafter "$150,000 Compensation
Limitation"), the Unified Member's Accrued Benefit shall be the greater of (i)
or (ii), but in no event greater than (iii), as follows:
(i) the Unified Member's Accrued Benefit as of February 28,
1994, in accordance with subsection (f), plus the Unified Member's Accrued
Benefit accrued from March 1, 1994, with regard to the $150,000
Compensation Limitation,
(ii) the Unified Member's Accrued Benefit determined on the
basis of the total Years of Benefit Accrual Service and by applying the
$150,000 Compensation Limitation to all such Years of Benefit Accrual
Service,
(iii) the Unified Member's Accrued Benefit determined on the
basis of total Years of Benefit Accrual Service without regard to the
$150,000 Compensation Limitation.
(h) For purposes of this section, a Unified Employee who received the
compensation as a Unified Employee from more than one of the Companies
-20-
participating in this Plan shall have his average monthly compensation from all
Companies used to determine his total credit hereunder, for each Year in which
he was employed by all such Companies. The retirement Benefits to be provided by
each such Company shall be determined by prorating such credit by the ratio of
the average monthly compensation received from such Company over the total
average monthly compensation received from all Companies.
(i) Monthly Benefits, if any, accrued to a Unified Employee of such an
Affiliated Company under a Plan in effect prior to the date of acquisition of
such affiliate by Unified Western Grocers, Inc., shall be in accordance with the
terms of the prior Plan, if any, of that affiliate which was in existence prior
the date of acquisition and shall be in addition to benefits provided under this
Plan.
(j) In determining the Earnings of a Unified Employee for purposes of
the Compensation limitation under paragraphs (f) or (g), as adjusted, the rules
of Section 414(q)(6) of the Code shall apply, except that in applying such
rules, the term "family" shall include only the spouse of the Unified Employee
and any lineal descendants of the Unified Employee who have not attained age 19
before the close of the Plan Year. If the Compensation limitation under
paragraphs (f) or (g), as adjusted, applies to the combined Earnings of the
Unified Employee or one or more Family Members, the benefit provisions of this
Article will be applied by prorating the Compensation limitation under
paragraphs (f) or (g), as adjusted, among the Unified Employee and his Family
Members in proportion that each such individual's Compensation determined prior
to the application of this limitation bears to the total Earnings of all such
individuals determined prior to the application of this limitation.
(k) The number of Years of Benefit Accrual Service taken into account
under paragraph a(i) for any Unified Member will not exceed the Unified Member's
cumulative permitted disparity limit. The Unified Member's cumulative permitted
disparity limit is equal to 35 minus the number of years credited to the Unified
Member for purposes of the benefit formula or the accrual method under the Plan
under one or more qualified plans or simplified employee pensions (whether or
not terminated) ever maintained by the Company, other than years for which a
Unified Member earned a year of Service under the benefit formula in paragraph
(a)(i). For purposes of determining the Unified Member's cumulative permitted
disparity limit, all years ending in the same calendar year are treated as the
same year. If the Unified Member's cumulative permitted disparity limit is less
than the period of years specified in paragraph (a)(i), then for years after the
Unified Member reaches the cumulative permitted disparity limit and through the
end of the period specified in paragraph (a)(i), the Unified Member's benefit
will be equal to the excess benefit percentage.
Section 5.02 - Normal Retirement Benefits for United Members
- ------------ ---------------------------------------------
-21-
Normal Retirement Benefits for United Members shall be determined as
set forth in Section 6.2 of the United Plan.
Section 5.03 - Early Retirement Benefits for Unified Members
- ------------ ---------------------------------------------
(a) Except as provided in Section 5.03(c), a Unified Member who
elects to retire at an Early Retirement Date shall receive a monthly benefit
equal to the amount determined in Section 5.01(a) multiplied by the appropriate
percentage in accordance with the following schedule.
Schedule of Early Retirement Factors
- ------------------------------------
Years Prior to Normal
Retirement Date Percentage
--------------------- -------------------
0 100
1 95
2 90
3 85
4 80
5 75
6 70
7 65
8 60
9 55
10 or more 50
Straight line interpolation of these percentages will be employed where
fractional completed years prior to Normal Retirement Date are involved.
(b) Notwithstanding the foregoing, a Unified Member who on March 1,
1983 is both age 40 or older and has 20 or more years of service, will be
eligible to retire at any time after reaching age 45 or older and having 25 or
more years of service, and will receive a monthly benefit equal to the amount
determined in Section 5.01(a) multiplied by the appropriate percentage in
accordance with the following schedule:
Age at Early Benefit Reduction
Retirement Factor
------------------ --------------------
54 48%
53 46%
52 44%
-22-
51 42%
50 40%
49 38%
48 36%
47 34%
46 32%
45 30%
(c) A Unified Member who elects to retire at an Early Retirement Date
shall receive a monthly benefit equal to the amount determined in Section
5.01(c) multiplied by the appropriate percentage in accordance with the
following schedule:
Schedule of Early Retirement Factors
- ------------------------------------
Years Prior to Normal
Retirement Date Percentage
--------------------------------- -----------------------
0 through 5 100
6 95
7 90
8 85
9 80
10 75
11 73
12 71
13 69
14 67
15 65
16 63
17 61
18 59
19 57
20 55
(d) Notwithstanding the foregoing, a Unified Member who elects to
retire at an Early Retirement Date and who:
(i) is a non-union employee;
(ii) will have attained at least age fifty-five (55) on December
31, 1999;
-23-
(iii) will have attained at least sixty-five (65) Points under the
1999 Early Retirement Program of the Company on December 31, 1999;
(iv) filed a written notice with the Company, pursuant to Early
Retirement Program, on or before September 30, 1999, electing to retire
from employment with the Company; and
(v) agreed to continue to work for the Company through the date,
as required and specified by the Company based on its business needs,
between December 31, 1999 and December 31, 2000,
shall, for purposes of Section 5.03(a) and Section 5.03(c) above, have his age
be determined by adding up to an additional five (5) years of age on December
31, 1999. However, such determined age shall not exceed sixty-five (65) years
of age.
In addition to the five (5) years of age credit described above, a
Unified Member who will have attained at least eighty-five (85) Points under
Early Retirement Program on December 31, 1999, will also be entitled to a
Supplemental Pension Benefit as described in Appendix A. A Unified Member
entitled to a Supplemental Pension Benefit may elect to receive such Benefit in
a lump sum amount using the Actuarial Equivalent basis as described in Section
5.010.
For purposes of this Section 5.03(d), a Unified Member's "Points"
under the Early Retirement Program shall mean the sum of (i) such Unified
Member's age (in whole years) on December 31, 1999, and (ii) such Unified
Member's completed years of service (in whole years) on December 31, 1999.
Section 5.04 - Early Retirement Benefits for United Members
- ------------ --------------------------------------------
Normal Retirement Benefits for United Members shall be determined as
set forth in Section 6.1 of the United Plan.
Section 5.05 - Deferred Retirement Benefits for Unified Members
- ------------ ------------------------------------------------
If a Unified Member continues to be employed by the Company after his
Normal Retirement Date and after March 1, 1988, an additional retirement benefit
will accrue to the Unified Member for Credited Service with the Company after
his Normal Retirement Date and for such subsequent service as provided in
Section 5.01(a). Upon retirement at a Deferred Retirement Date, the Unified
Member shall receive the retirement benefit.
Section 5.06 - Deferred Retirement Benefits for United Members
- ------------ -----------------------------------------------
Normal Retirement Benefits for United Members shall be determined as
set forth in Section 6.3 of the United Plan.
-24-
Section 5.07 - Termination of Service before Early or Normal Retirement Age
- ------------ ------------------------------------------------------------
In the event of the termination of service of a Unified Member on or
after March 1, 1987, for any reason other than death or disability prior to the
attainment of Early Retirement Date or Normal Retirement Date, a Unified
Member's vested retirement benefit commencing at his Normal Retirement Date
shall be equal to a percentage of the amount determined in (a) or (b) below, in
accordance with the following schedule:
Years of Vesting Service Percentage
------------------------ ----------
0 - 4 0%
5 or more 100%
On attainment of Normal Retirement Age, a Unified Member's Normal
Retirement Benefit shall be non-forfeitable.
(a) The monthly amount payable on a single life annuity form shall
be equal to his accrued benefit at his date of termination of service.
(b) The monthly amount on a form other than the single life annuity
shall be the actuarial equivalent of the amount equal to his accrued benefit at
his date of termination of service.
If a Unified Member elects to receive his Vested Deferred Benefit at
an Early Retirement Date, this benefit shall be equal to the amount determined
in this Section 5.010 multiplied by the appropriate percentages in accordance
with the "Schedule of Early Retirement Factors" in Section 5.03.
Section 5.08 - Pre-Retirement Death Benefit
- ------------ ----------------------------
(a) If a Unified Member with a vested benefit dies while employed
by the Company, or if a Unified Member with a vested benefit terminates
employment with the Company after his Early Retirement Age and dies prior to his
Benefit Commencement Date, then the surviving Spouse of such Unified Member
shall be entitled to a survivor's benefit, provided that such Unified Member and
surviving Spouse have been married to each other throughout the one year period
preceding such Unified Member's death.
(b) For a Unified Member who dies after attaining Early Retirement
Age, the survivor's benefit payable hereunder shall be in an amount equal to the
monthly benefit which such Spouse would have received under Section 5.07(a) of
the Plan had the Unified Member retired immediately prior to his death and
elected to receive benefits under Section 5.07(a) of the Plan, provided that
such Unified Member
-25-
and surviving Spouse have been married to each other throughout the one year
period preceding such Unified Member's death. Upon the death of the Spouse, no
other benefit shall be payable under the Plan. If the Unified Member dies prior
to his earliest retirement age, the survivor's benefit hereunder shall be in a
monthly payment commencing on the first day of the calendar month following the
month in which the Unified Member would have attained his earliest retirement
age and ending with the calendar month in which the spouse dies, equal to 50% of
the monthly amount the Unified Member would have received if he retired electing
a joint and survivor annuity under Section 5.07(a), and if such Unified Member
had:
(i) a Separation from Service on or prior to the date of death,
(ii) survived to the earliest retirement age,
(iii) retired with an immediate qualified Joint and Survivor
Annuity at the earliest retirement age, and
(iv) died on the day after the day on which such Unified Member
would have attained the earliest retirement age.
(c) The provisions of this Section shall apply only if:
(i) a Unified Member has at least one Hour of Service with the
Company on or after August 23, 1984; or
(ii) a Unified Member has at least one Hour of Service on or
after January 1, 1976, and when such Unified Member incurred a Separation
from Service, he had ten (10) or more Years of Vesting Schedule Service; or
(iii) a Unified Member who has one Hour of Service on or after
September 2, 1974, was employed by the Company after the earliest date on
which such Unified Member was eligible for early retirement benefits under
the Plan; and
(iv) such Unified Member dies after August 23, 1984, prior to
reaching his Annuity Starting Date.
(d) Notwithstanding the foregoing, the Pre-Retirement Death Benefit
for a United Member shall be determined in accordance with Section 6.10 of the
United Plan.
Section 5.09 - Maximum Amount of Benefit
- ------------ -------------------------
(a) The amount of annual benefit payable to a Member shall not exceed
the lesser of:
-26-
(i) the defined benefit limitation in effect at the beginning
of each Plan Year (which, effective for the Plan Year commencing March 1,
1991, is $115,641, and for each Plan Year thereafter shall be adjusted
automatically as provided by the Secretary of the Treasury as provided by
Section 415(d) of the Code); or
(ii) 100% of the Member's average Compensation for the three
consecutive calendar years while a Member of the Plan in which his
Compensation was highest.
(b) If the annual benefit of the Member commences before the Member's
Social Security Retirement Age, but on or after age 62, the defined benefit
dollar limitation as reduced above, if necessary, shall be determined as
follows:
(i) If a Member's Social Security Retirement Age is 65, the
dollar limitation for benefits commencing on or after age 62 is determined
by reducing the defined benefit dollar limitation by 5/9 of one percent for
each month by which benefits commence before the month in which the Member
attains age 65.
(ii) If a Member's Social Security Retirement Age is greater
than 65, the dollar limitation for benefits commencing on or after age 62
is determined by reducing the defined dollar limitation by 5/9 of one
percent for each of the first 36 months and 5/12 of one percent for each of
the additional months (up to 24 months) by which benefit commence before
the month of the Member's Social Security Retirement Age.
If the annual benefit of a Member commences prior to age 62, the
determination as to whether the limitations described in this Section have been
satisfied shall be made in accordance with the Regulations prescribed by the
Secretary of the Treasury or his delegate by adjusting the dollar limitation so
it is the Actuarial Equivalent of the dollar limitation applicable at age 62.
Actuarial Equivalent for this purpose shall be subject to the limitations of
Code Section 415(b)(2)(E).
If the annual benefit of a Member commences after the Member's Social
Security Retirement Age, the determination as to whether the limitations
described in this Section have been satisfied shall be made in accordance with
the Regulations prescribed by the Secretary of the Treasury or his delegate by
adjusting the dollar limitation so it is the Actuarial Equivalent of the dollar
limitation applicable at the Member's Social Security Retirement Age. Actuarial
Equivalent for this purpose shall be subject to the limitations of Code Section
415(b)(2)(E).
(c) If the Member has less than 10 years of participation with the
Company, the defined benefit dollar limitation is reduced by one-tenth for each
year of
-27-
participation (or part thereof) less than ten. If the Member has less than ten
years of service with the Company, the compensation limitation is reduced by
one-tenth for each year of service (or part thereof) less than ten. The
adjustments of this section (c) shall be applied in the denominator of the
defined benefit fraction based upon years of service. Years of service shall
include future years occurring before the Member's normal retirement age. Such
future years shall include the year which contains the date the Member reaches
normal retirement age, only if it can be reasonably anticipated that the Member
will receive a year of service for such year.
If the Member's benefit payable under this Plan is payable in a form
other than a benefit payable on a Life Annuity or a Qualified Joint and Survivor
Life Annuity, the determination as to whether the limitations described in this
Section have been satisfied shall be made in accordance with Regulations
prescribed by the Secretary of the Treasury or his delegate by adjusting such
benefit so that it is the Actuarial Equivalent to a benefit in the form of a
Life Annuity.
(d) If the Company maintains, or at any time maintained, another
defined of any Member's benefits from all such plans may not exceed the maximum
benefit described in paragraph (a). Actuarial Equivalent for this purpose shall
be subject to the limitations of Code Section 415(b)(2)(E).
(e) In the case of any Employee who is a Member in this Plan and any
defined contribution plan of the Company, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any year shall not
exceed 1.0. In the event the sum of such fractions exceeds 1.0 the Committee
shall prescribe the manner in which the annual benefits to this Plan or the
annual addition under any of the other of the Company's defined contribution
plans shall be reduced in order that no plans shall be disqualified under
applicable sections of the Code.
Effective for Plan Years beginning after December 31, 1999, the
defined benefit/defined contribution 1.0 rule of repealed Code Section 415(e) is
deleted from the Plan.
(f) For purposes of applying the limitations of (b), the following
rules shall prevail:
(i) The term "defined benefit plan fraction" shall mean a
fraction the numerator of which is the projected annual benefit payable
under this Plan or any other defined benefit plan of the Company,
(determined as of the close of the year) and the denominator of which is
the lesser of (a) the product of 1.25 multiplied by the dollar limitation
in effect under Section 415(b)(1)(A) of the Code for such year, or (b) the
amount which may
-28-
be taken into account under Section 415(b)(1)(B) of the Code with respect
to such Employee under the defined benefit plan for such year multiplied by
1.4.
(ii) The term "defined contribution plan fraction" shall mean the
aggregate annual additions to all defined contribution plans of the
Company, if any, determined as of the close of the year without regard to
limitations on contributions over the sum of the lesser of the following
amounts determined for such year and for each prior Year of Service with
the Company: (a) the dollar limitation in effect under Section 415(c)(1)(a)
of the Code for such year (determined without regard to Section 415(c)(6)
of the Code) multiplied by 1.25, or (b) the amount which may be taken into
account under Section 415(c)(1)(B) (or Section 415(c)(7) or (8), if
applicable) of the Code with respect to such Employee under such plan for
such year multiplied by 1.4.
(g) For purposes of (a)(ii), "Compensation" means a Member's earned
income, wages, salaries, and fees for professional services, and other amounts
received for personal services actually rendered in the course of employment
with the Company (including, but not limited to, commissions paid salesmen,
Compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips and bonuses), and excluding the following:
(i) Company contributions to a plan of Deferred Compensation
which are not included in the Member's gross income for the taxable year in
which contributed or Company contributions under a simplified Employee
pension plan to the extent such contributions are deductible by the Member,
or any distributions from a plan of Deferred Compensation;
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Member either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) other amounts which received special tax benefits, or
contributions made by the Company (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section 403(b)
of the Code (whether or not the amounts are actually excludable from the
gross income of the Member).
Compensation for any limitation year is the Compensation actually paid
or includable in gross income during such year. The limitation year shall be the
Plan Year.
-29-
Section 5.010 - Small Benefit Payments
- ------------- ----------------------
If the Actuarial Equivalent of a Member's vested Accrued Benefit does
not exceed $5,000 at the time of distribution (or any prior distribution) such
Actuarial Equivalent shall be paid to the Member in a single lump cash payment.
Such payment will be made as soon as practicable following termination of the
Member's employment. The lump sum cash payment shall be an amount equal to the
Actuarial Equivalent of the Member's vested Accrued Benefit which would
otherwise be payable at the Member's Normal Retirement Date in the Single Life
Annuity form.
In determining the amount of a lump sum payment under this Section
5.010 for Unified Members, the interest rate to be used shall be the Applicable
Interest Rate (as defined in Section 1.02), and the mortality table to be used
shall be the Applicable Mortality Table (as defined in Section 1.02); however,
the amount of a lump sum payment determined at any time after February 28, 1998
shall not be less than the lump sum Actuarial Equivalent of the Unified Member's
Accrued Benefit as of February 28, 1998, determined using an 8% interest rate
and the 1971 Towers, Perrin, Forster and Crosby Forecast Mortality Table.
If the Actuarial Equivalent value of the Unified Member's vested
Accrued Benefit is zero, the member shall be deemed to have received a
distribution hereunder of such vested Accrued Benefit. Notwithstanding the
foregoing, a partial or total distribution may not be made after the Benefit
Commencement Date, regardless of the present value of the non-forfeitable
Accrued Benefit, without appropriate consent of the Unified Member and the
Unified Member's Spouse.
Section 5.011 - When Benefits Begin
- ------------- -------------------
Unless the Member elects otherwise, benefit payments must begin not
later than the sixtieth day after the close of the Plan Year in which the latest
of the following events occurs:
(a) The Member attains age 65 or earlier normal retirement age; or
(b) The tenth anniversary of the time when the Member commenced
participation in the Plan; or
(c) The Member terminates his service with the Company.
Section 5.012 - Suspension of Benefits Upon Reemployment or After Normal
- ------------- --------------------------------------------------------
Retirement Date
---------------
(a) If any Unified Member again becomes an Employee and completes
at least forty (40) Hours of Service in any month (hereinafter "Section
203(a)(3)(B) Service") after his Early, Normal or Late Retirement Date, all
-30-
Benefit payments under this Article shall cease. Similarly, for a Unified Member
who continues to be employed in Section 203(a)(3)(B) Service after his Normal
Retirement Date, the actuarial value of Benefits which commence later than
Normal Retirement Date will be computed without regard to the deferred
commencement date and without regard to amounts which would have been suspended
under the preceding sentence had the Unified Member been receiving Benefits
since his Normal Retirement Date.
(b) If Benefit payments have been suspended, payments shall resume no
later than the first day of the third calendar month after the calendar month in
which the Unified Member ceases to be employed in Section 203(a)(3)(B) Service.
The initial payment upon resumption shall include the payment scheduled to occur
in the calendar month when payments resume. Such Unified Member or his
Beneficiary shall be entitled to the Benefits provided under this Article,
reduced by the Actuarial Equivalent of Benefits or payments paid under this
Article before such re-employment.
(c) For a Unified Member who has commenced receipt of benefit
payments, no Benefit payment shall be withheld by the Plan pursuant to this
section unless the Plan notifies the Unified Employee by personal delivery or
first class mail during the first calendar month or payroll period in which the
Plan withholds payments that his Benefits are suspended. Such notifications
shall contain a description of the specific reasons why Benefit payments are
being suspended, a general description of the Plan provision relating to the
suspension of payments, a copy of such provisions, and a statement to the effect
that applicable Department of Labor regulations may be found in Section
2530.203-3 of the Code of Federal Regulations. In addition, the notice shall
inform the Unified Member of the Plan's procedures for affording a review of the
suspension of benefits in accordance with the claims procedure under Section
12.08.
(d) Notwithstanding the foregoing, if a United Member is reemployed
after Retirement, Section 6.13 of the United Plan shall apply.
ARTICLE VI
----------
MANNER AND FORM OF PAYMENT
--------------------------
Section 6.01 - Form of Retirement Benefit
- ------------ --------------------------
A Member's retirement benefit or Vested Deferred Benefit shall, except
as provided under Section 5.010, be payable as an annuity commencing on the
first day of the month next following the Member's Retirement Date. The annuity
shall be paid either as a single life annuity payable monthly during the
lifetime of the Member (hereinafter "Single Life Annuity"), or as one of the
other forms described in the following paragraphs of this Article. If the
Member selects the Single Life Annuity, no benefit shall be payable after the
Member's death.
-31-
Section 6.02 - Joint and Survivor Annuity for Married Member
- ------------ ---------------------------------------------
(a) A Member's retirement benefit shall, except as provided under
Section 5.07, be payable as an annuity commencing on the Member's Retirement
Date or as of the first day of the month coinciding with or next following his
termination of employment, if later. The annuity shall be paid either as a
Single Life Annuity payable monthly during the lifetime of the Member, or as one
of the other forms described in the following paragraphs of this Article. If the
Member selects the Single Life Annuity, no benefit shall be payable after the
Member's death. All alternative forms of benefit described in Sections 6.03,
6.04, 6.05 and 6.06 shall be the Actuarial Equivalent of the Single Life
Annuity.
(b) The provisions of this section shall take precedence over any
conflicting provisions in the Plan and shall apply to any Unified Member who is
credited with at least one Hour of Service with the Company on or after August
23, 1984, and such other Members as are covered by subsection (e) of this
section. Unless an optional form of benefit is selected within the Applicable
Election period pursuant to a Qualified Election, a Unified Member's benefit
shall be paid as follows:
(i) In the form of a Qualified Joint and Survivor Annuity
providing for an annuity for the life of the Unified Member and a survivor
annuity for the life of the Unified Member's Spouse following the Unified
Member's death, at a rate of 50% of the amount payable during the joint
lives of the Unified Member and the Unified Member's Spouse, or
(ii) If the Unified Member dies after the Earliest Retirement
Age, in the form of a 50% Qualified Pre-Retirement Survivor Annuity
providing for an immediate annuity for the life of the surviving Spouse at
a rate at least equal to the survivor annuity described in subsection (i).
(iii) If the Unified Member dies on or before the Earliest
Retirement Age, in the form of a 50% Qualified Pre-Retirement Survivor
Annuity providing for a deferred annuity for the life of the Spouse at a
rate equal to the survivor annuity which would have been payable under
subsection (i) if the Unified Member had separated from Service on his or
her date of death, survived to the Earliest Retirement Age, retired with an
immediate 50% Qualified Joint and Survivor Annuity at the Earliest
Retirement Age, and died on the day after the Earliest Retirement Age. The
annuity payable under this subsection shall begin at the Earliest
Retirement Age unless the surviving Spouse elects a later date, in which
case the payments shall be actuarially adjusted on a reasonable basis to
reflect the delayed commencement of payments.
-32-
(c) The provisions of Section 6.6(B) of the United Plan shall apply
to United Members' Joint and Survivor Annuity Benefits.
(d) Whenever any of the following terms is used in the Plan, it shall
have the meaning specified below unless the context clearly indicates to the
contrary.
(i) "Annuity Starting Date" means the first day of the first
period for which an amount is paid as an annuity or any other form.
(ii) "Applicable Election Period" shall mean with respect to
the Qualified Joint and Survivor Annuity described in subsection (b)(i),
the ninety day period ending on the date benefit payments are to commence;
and, with respect to the Qualified Pre-Retirement Survivor Annuities
described in subsections (b)(ii) and (b)(iii), the period which begins on
the first day of the Plan Year in which the Member attains age 35 or, if
earlier, the date of his or her Termination of Service and ends on the date
of the Member's death.
(iii) "Earliest Retirement Age" means the earliest date on
which, under the Plan, the Member could elect to receive retirement
benefits.
(iv) "Qualified Election" means a written election of a form of
benefit other than a Qualified Joint and Survivor Annuity or a Qualified
Pre-Retirement Survivor Annuity. An election shall be a Qualified Election
only if the Member's Spouse consents to the election in writing and his or
her consent is witnessed by a Plan representative or notary public. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless: (a) the
-
Member's spouse consents in writing to the election; (b) the election
-
designates a specific alternate beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the Spouse expressly permits designations by
the Member without any further spousal consent); (c) the spouse's consent
-
acknowledges the effect of the election; and (d) the spouse's consent is
-
witnessed by a plan representative or notary public. Additionally, a
Member's waiver of the qualified joint and survivor annuity will not be
effective unless the election designates a form of benefit payment which
may not be changed without spousal consent (or the spouse expressly permits
designations by the Member without any further spousal consent). If it is
established to the satisfaction of a Plan Administrator that such written
consent may not be obtained because there is no spouse or the spouse cannot
be located, a waiver will be deemed a Qualified Election.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall be
effective only with respect to such spouse. A consent that permits
designations
-33-
by the Member without any requirement of further consent by such Spouse
must acknowledge that the spouse has the right to limit consent to a
specific beneficiary, and a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both of such
rights. A revocation of a prior waiver may be made by a Member without the
consent of the Spouse at any time prior to the commencement of benefits.
The number of revocations shall not be limited. No consent obtained under
this provision shall be valid unless the Member has received a notice as
provided in paragraph (d). Notwithstanding this consent requirement, if the
Member establishes to the satisfaction of the Company that such written
consent cannot be obtained because the Member has no Spouse, or because the
Spouse cannot be located, the election shall be deemed a Qualified
Election.
(v) "Spouse" means Spouse or surviving Spouse of the Member
provided that a former Spouse will be treated as the Spouse to the extent
provided under a qualified domestic relations order as described in Section
414(p) of the Code, and with respect to benefits provided under subsection
(b)(ii) and (b)(iii), such Spouse and Member were married throughout the
one year period ending on the Member's death.
(e) Within no less than 30 days and no more than 90 days prior to the
Annuity Starting Date, the Company shall provide the Member with a written
explanation of the following:
(i) The terms and conditions of the Qualified Joint and
Survivor Annuity or a Qualified Pre-Retirement Survivor Annuity, as
applicable;
The Member's right to elect a benefit other than a Qualified Joint and
Survivor Annuity or a Qualified Pre-Retirement Survivor Annuity, as applicable,
and the effect of such an election;
(ii) The rights of the Member's Spouse with respect to the
Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity, as applicable;
(iii) The right of the Member to revoke a previous election and
the effect of such revocation; and
(iv) With respect to the Qualified Joint and Survivor Annuity,
the relative values of the various optional forms of benefit under the
Plan.
Notwithstanding the foregoing, the written explanation may be provided
after the Annuity Starting Date. The 90-day applicable election period to waive
the
-34-
qualified joint and survivor annuity described in Section 417(a)(6)(A) of the
Code, shall not end before the 30/th/ day after the date on which such
explanation is provided.
The Secretary may by regulations limit the period of time by which the
Annuity Starting Date precedes the provision of the written explanation other
than by providing that the Annuity Starting Date may not be earlier than
termination of employment.
A Member may elect (with applicable Spousal Consent) to waive any
requirement that the written explanation be provided at least 30 days before the
Annuity Starting Date (or to waive the 30 day requirement under the above
paragraph) if the distribution commences more than 7 days after such explanation
is provided.
(f) (i) If the present value of a Member's vested benefit exceeds
(or at the time of any prior distribution exceeded) $3,500 ($5,000 for Plan
Years beginning after August 5, 1997), and the benefit is immediately
distributable, the Member and the Member's Spouse (or where either the Member or
the Spouse has died, the survivor) must consent to any distribution of such
benefit. The consent of the Member and the Member's Spouse shall be obtained in
writing in accordance with subsection (c)(ii) .
(ii) Notwithstanding the foregoing, only the Member need
consent to the commencement of a distribution in the form of a qualified
Joint and Survivor Annuity while the benefit is immediately distributable.
Neither the consent of the Member nor the Member's Spouse shall be required
to the extent that a distribution is required to satisfy Section 401(a)(9)
or Section 415 of the Code.
(iii) A benefit is immediately distributable if any part of the
benefit could be distributed to the Member (or surviving Spouse) before the
Member attains (or would have attained if not deceased) the later of Normal
Retirement Age or age 62.
Section 6.03 - Life Annuity for Unmarried Members
- ------------ ----------------------------------
A Member who does not have an Eligible Spouse at his Benefit
Commencement Date shall have his benefit paid on the Single Life Annuity form
under Section 6.01 unless he elects to have his benefit paid in another form as
provided herein.
Section 6.04 - Joint and Survivor Annuity for Other Members
- ------------ --------------------------------------------
Benefits may be paid in one of the following forms for Unified
Members:
-35-
(a) 50% Joint and Survivor Life Annuity
-----------------------------------
A monthly benefit payable during the lifetime of the Unified
Member and upon his death 50% of such monthly benefit payable to his Eligible
Spouse for the Eligible Spouse's lifetime. No benefit shall be payable after the
death of the Unified Member and his Eligible Spouse.
(b) 100% Joint and Survivor Life Annuity
------------------------------------
A monthly benefit payable during the lifetime of the Unified
Member and upon his death 100% of such monthly benefit payable to his Eligible
Spouse for Eligible Spouse's lifetime. No benefit shall be payable after the
death of the Unified Member and his Eligible Spouse.
Section 6.05 - Period Certain Life Annuity Benefit
- ------------ -----------------------------------
This form of benefit provides for monthly payments continuing to the
first day of the month in which the Member's death occurs or the end of the
certain period of 120 months (60, 120 or 180 for United Members), whichever is
later. If the Member dies before the end of the certain period, payments in the
same amount shall be continued to his designated beneficiary to the end of such
period.
Section 6.06 - Optional Temporary Annuity for Unified Members
- ------------ ----------------------------------------------
A Unified Member whose retirement benefit or Vested Deferred Benefit
commences under the Plan before the earliest date on which his primary insurance
benefit begins under the Social Security Act may elect to receive an adjusted
benefit prior to the first date on which he becomes eligible to receive such
primary insurance benefit and a reduced benefit thereafter. The adjusted
benefit shall be calculated so that his retirement benefit or Vested Deferred
Benefit payable to the Unified Member prior to the date on which he becomes
eligible to receive his primary insurance benefit shall be equal as nearly as
possible to the sum of (a) the reduced amount payable after such date and (b)
the estimated primary insurance benefit payable to the Unified Member beginning
on such date.
A Unified Member may elect this Optional Temporary Annuity by filing a
written request with the Plan Administrator prior to his Retirement Date.
Section 6.07 - Disability Retirement Benefit for United Members
- ------------ ------------------------------------------------
A disabled United Member may be eligible for a disability benefit
under Section 6.8 of the United Plan.
Section 6.08 - Retirement Benefit From United Member Contributions
- ------------ ---------------------------------------------------
-36-
A United Member may be entitled to a monthly retirement benefit from
his or her contributions under Section 6.9 of the United Plan.
Section 6.09 - Lump Sum Benefits
- ------------ -----------------
A United Member may be eligible for quarterly, semiannual, or annual
installments or a lump sum distribution under Section 6.11(B) of the United
Plan.
Section 6.010- Minimum Distribution of Benefits
- ------------- --------------------------------
Notwithstanding any other provision contained herein to the contrary,
the entire interest of the Member will be distributed either:
(a) in the case of an employee who is not a 5-percent owner (as
described in Section 416(i) of the Code), the Member has the option to select
one of the following:
(A) beginning the April 1 of the calendar year
following the calendar year in which the Member attains age 70
1/2; or
(B) beginning the April 1 of the calendar year
following the later of the calendar year in which the Member
attains age 70 1/2 or the calendar year in which the Member
retires.
(b) in the case of an employee who is a 5-percent owner, beginning
the April 1 of the calendar year following the calendar year in which the Member
attains age 70 1/2.
Section 6.011- Minimum Distribution Following Death
- ------------- ------------------------------------
If a Member dies after his Benefit Commencement Date and before his
entire interest has been distributed to him, then the remaining portion of such
interest, if any, will continue to be distributed at least as rapidly as
provided under the form of distributions in effect prior to death.
If a Member with a vested benefit dies prior to his Benefit
Commencement Date, the only benefit payable shall be as provided in Section
5.08.
ARTICLE VII
-----------
CONTRIBUTIONS AND FUNDING
-------------------------
Section 7.01 - Funding of Plan
- ------------ ---------------
-37-
The Plan shall be funded for the exclusive purpose of providing
benefits to Members and their beneficiaries and for defraying reasonable
expenses in administering the Plan.
Section 7.02 - Company Contributions
- ------------ ---------------------
The Company shall bear the total costs of the Plan. Such costs will
include the amounts necessary to provide benefit payments to Plan Members and
their beneficiaries and the payment of administrative expenses including the
payment of premiums for Plan termination insurance to the Pension Benefit
Guaranty Corporation. Notwithstanding the foregoing, for the short Plan Year
ending December 31, 2001, the deductible limit under Section 404(a)(1) of the
Code shall be limited by the requirements of Section 5 of Revenue Procedure 87-
27.
Section 7.03 - Contributions to Group Annuity Contract
- ------------ ---------------------------------------
Contributions to the Plan and benefit payments from the Plan may be
made under one or more group annuity contracts issued by Equitable Life
Assurance Society of the United States, or any other insurance company, or may
be made under a trust established for that purpose.
Section 7.04 - No Return of Company Contributions; Exceptions
- ------------ ----------------------------------------------
Contributions to the Plan may not be returned to the Company, except
in the following instances:
(a) If the amount of a contribution is incorrect, such as an amount
based on an arithmetical error or a mistake in fact, the amount in excess of the
correct amount may be returned to the Company within one year after the payment
of the contribution.
(b) If the Plan fails to qualify under Section 401(a) of the Internal
Revenue Code, contributions made to the Plan may be returned to the Company
within one year after the date of denial of qualification of the Plan.
(c) If a contribution is disallowed as a federal tax deduction under
Section 404(a)(2) of the Internal Revenue Code, then to the extent the deduction
is disallowed the contribution may be returned to the Company within one year
after the disallowance of the contribution.
(d) If the Plan is terminated, contributions may be returned to the
Company as provided under the provisions of Article IX.
Section 7.05 - United Employee Contributions
- ------------ -----------------------------
-38-
Prior to December 10, 1979, a United Member was required to contribute
to participate in the United Plan. No United Member contributions are required
or permitted after December 9, 1979. A United Member is entitled to withdraw
required contributions with interest as described in Section 6.9 of the United
Plan on having a Break in Service (as defined in the United Plan).
ARTICLE VIII
------------
ADMINISTRATION
--------------
Section 8.01 - Named Fiduciary
- ------------ ---------------
The Company has the overall responsibility and authority as the named
fiduciary to manage and control the operation and administration of the Plan and
may designate one or more persons or committees to carry out its fiduciary
responsibilities and authority under the Plan and its duties as the Plan
Administrator.
Section 8.02 - Benefits Committee as Plan Administrator
- ------------ ----------------------------------------
The Benefits Committee, whose membership is to be determined by the
Company, is the named fiduciary to act on behalf of the Company in the
management and control of the Plan assets and to establish and carry out a
funding policy consistent with the Plan objectives and with the requirements of
any applicable law. The Benefits Committee shall carry out the Company's
responsibility and authority:
(a) To appoint one or more persons to serve as investment manager
with respect to all or part of the Plan assets, including assets maintained
under separate accounts of an insurance company;
(b) To allocate the responsibilities and authority being carried out
by the Benefits Committee among the Members of the Committee;
(c) To take any action appropriate to assure that the Plan assets are
invested for the exclusive purpose of providing benefits to Members and their
beneficiaries in accordance with the Plan and defraying reasonable expenses of
administering the Plan, subject to the requirements of any applicable law; and
(d) To employ one or more persons to render advice with respect to
any responsibility or authority being carried out by the Benefits Committee.
Section 8.03 - Additional Duties of Benefits Committee
- ------------ ---------------------------------------
The Company has also designated the Benefits Committee, whose
membership is to be determined by the Company, to carry out its fiduciary
responsibilities and authority under the Plan and its duties as the Plan
Administrator.
-39-
(a) To determine and advise the Company as to the amounts of Company
contributions to the Plan, based on appropriate information, and in a manner
consistent with the funding policy established by the Benefits Committee;
(b) To determine the amounts and time of payment of benefits and the
rights of Members and their beneficiaries to Plan benefits, to take any actions
necessary to assure timely payment of benefits to any Member or beneficiary
eligible to receive benefits under this Plan, and to assure a full and fair
review for any person who is denied a claim to any benefit under the plan;
(c) To maintain Plan records, to communicate appropriate information
to the Board of Directors, to communicate to Members and their beneficiaries,
and to submit required reports to appropriate authorities;
(d) To employ other persons to render advice with respect to any
responsibility or authority being carried out by the Benefits Committee,
including the employment of counsel, and to assist in the administration of the
Plan;
(e) To employ, on behalf of Plan Members, an enrolled actuary and an
independent qualified public accountant;
(f) To take any action necessary or appropriate to assure that the
Plan is administered for the exclusive purpose of providing benefits to Members
and their beneficiaries in accordance with the Plan and defraying reasonable
expenses of administering the Plan, subject to the requirements of any
applicable law; and
(g) Generally, to operate and administer the Plan in all matters
other than those for which the Benefits Committee has been designated.
Section 8.04 - Authority of Benefits Committee
- ------------ -------------------------------
The Benefits Committee shall have absolute discretion in carrying out
its responsibilities under Section 8.01 and 8.02, and any decision by the
Benefits Committee shall be final and binding on all Members and beneficiaries.
Without limiting the authority or responsibilities of the Benefits Committee
contained in this Article, the Benefits Committee shall have the discretionary
authority to determine eligibility for benefits and to construe the terms of the
Plan.
ARTICLE IX
----------
AMENDMENT AND TERMINATION OF THE PLAN
-------------------------------------
Section 9.01 - Amendment of the Plan
- ------------ ---------------------
-40-
The Company reserves the right to modify or amend this Plan from time
to time and to any extent that it may deem advisable including any amendment
deemed necessary to insure the continued qualification of this Plan under the
provisions of the Internal Revenue Code. Any amendment shall be made pursuant to
a resolution duly adopted by the Company's Board of Directors. No amendment
shall have the effect of re-vesting in the Company the whole or any part of the
assets of this Plan or of diverting any part of the assets of this Plan to
purposes other than for the exclusive benefit of the Members and their
beneficiaries at any time prior to the satisfaction of all the liabilities under
this Plan with respect to such persons. If such amendment reduces the accrued
benefit of any Member, such amendment shall not be valid unless approved by the
Secretary of Labor or unless he fails to take action disapproving such amendment
within 90 days after receiving notice of it. No amendment shall adversely
affect the Vested Deferred Benefit of a Member.
A Plan amendment that changes the Plan's vesting schedule shall not be
effective with respect to any Member with three Years of Vesting Service who
makes an irrevocable election during the election period to have such benefit
determined without regard to such amendment.
For purposes of the preceding paragraph, the election period shall
begin on the date the Plan amendment is adopted and end on the latest of the
following dates:
(a) The date which is 60 days after the Plan amendment is adopted;
(b) The date which is 60 days after the Plan amendment is effective;
or
(c) The date which is 60 days after the day the Member is issued
written notice of the Plan amendment by the Plan Administrator.
Section 9.02 - Termination of the Plan
- ------------ -----------------------
The Company reserves the right to terminate the Plan at any time.
Upon termination of the Plan by the Company or upon partial termination of the
Plan, the rights of all affected Members to their accrued benefits to the date
of termination or date of partial termination shall be non-forfeitable as of
such date except as provided under the provisions of Article X.
Section 9.03 - Allocation of Assets Upon Plan Termination
- ------------ ------------------------------------------
Upon termination of the Plan in accordance with the provisions of
Section 9.02 but subject to the provisions of Section 10.02, the Plan's assets
shall be allocated in accordance with the following order:
(a) Benefits payable as an annuity to
-41-
(i) Members and their beneficiaries who began receiving
benefits at least three years prior to the termination date of the Plan,
and
(ii) Members and their beneficiaries who could have been
receiving benefits as of three years prior to the termination date of the
Plan if they had retired prior to the beginning of the three year period
and if their benefits had commenced (on the single life annuity form under
this Plan) as of the beginning of such period, based on the provisions of
the Plan (as in effect during the five year period ending on such
termination date) under which benefits would be least.
(b) All other benefits, which are insured by the Pension Benefit
Guaranty Corporation, determined without regard to Section 4022(b)(5) of the
Employee Retirement Income Security Act or would have been so insured if Section
4022(b)(6) of such Act did not apply.
(c) All other non-forfeitable benefits under the Plan
(d) All other benefits under the Plan.
If the assets of the Plan available for allocation under (a) or (b)
are insufficient to satisfy in full the benefits which are described, the assets
shall be allocated pro rata among such individuals on the basis of the present
value (as of the Plan's date of termination) of their respective benefits.
Any residual assets of the Plan remaining after the satisfaction of
all liabilities of the Plan shall be distributed to the Company.
Section 9.04 - Merger or Consolidation
- ------------ -----------------------
No merger or consolidation with, or transfer of assets or liabilities
to, any other Plan shall be made unless, in the event the Plan is terminated
immediately after such merger, consolidation or transfer, each Member in this
Plan would receive a benefit equal to or greater than the benefit he would have
been entitled to receive if this Plan terminated immediately before the merger,
consolidation or transfer.
ARTICLE X
---------
LIMITATION OF BENEFITS FOR HIGHLY PAID MEMBER
---------------------------------------------
Section 10.01 - Limitation on Certain Distributions
- ------------- -----------------------------------
(a) In the event of Plan termination, the benefit of any highly
compensated Member or highly compensated former Member is limited to a benefit
that is nondiscriminatory under Section 401(a)(4) of the Code, as follows:
-42-
(i) Benefits distributed to any of the twenty-five (25) most
highly compensated Members and highly compensated former Members
("Restricted Member") are restricted such that the annual payments are no
greater than the amount equal to the payment that would be made on behalf
of the Restricted Member under a single life annuity that is the Actuarial
Equivalent of the sum of the Restricted Member's Accrued Benefit and the
Restricted Member's other benefits under the Plan.
(ii) Paragraph (i) shall not apply if:
a. after payment of the benefit to a Restricted Member,
the value of Plan assets equals or exceeds 110% of the value of
current liabilities, as defined in Section 412(1)(7) of the Code,
b. the value of the benefit for a Restricted Member is
less than 1% of the value of current liabilities, or
c. the value of the benefits payable under the Plan to a
Restricted Member does not exceed $3,500 ($5,000 for Plan Years
beginning after August 5, 1997).
(iii) for purposes of this Section, benefit includes any periodic
income, any withdrawal values payable to a living Restricted Member, and
any death benefits not provided for by insurance on the Restricted Member's
life.
(b) In the event that Congress provides by statute, or the Internal
Revenue Service provides by regulation or ruling, that the limitations set forth
in this Article X are not necessary for the Plan to meet the requirements of
Section 401(a) or other applicable provisions of the Code then in effect, such
limitations shall become void and shall no longer apply without the necessity of
further amendment to the Plan.
(c) Notwithstanding the foregoing, the limitations of (a)(i) above
shall not apply to any Restricted Member otherwise subject thereto who enters
into a prior written agreement with the Company to the effect that if the Plan
is terminated and distribution of benefits has been or will be made to such
Restricted Member regardless of the limitation of subsection (ii) above, such
Restricted Member (or, in the case of his or her death, his or her estate or
representatives) shall repay to the Trustee a sum equal to the total amounts by
which his or her benefits under the Plan shall exceed benefits determined under
the preceding limitation ("Restricted Benefits"). As security for the repayment
of the Restricted Benefits, such written agreement shall:
(i) Require the Restricted Member to deposit with a financial
institution acceptable to the Company, property having a fair market value
equal at least to 125% of the amount of the restricted benefits;
-43-
(ii) Require such Restricted Member, at any time that the fair
market value of the property falls below 110% of the amount of the
Restricted Benefits, to deposit additional property with the financial
institution to bring the value of all property held by the financial
institution up to 125% of such amount; or
(iii) Contain a provision prohibiting the financial institution
from returning any property to such Restricted Member (or his or her estate
or representatives) except upon receipt of a certification of the Company
that such property is no longer required as security for the repayment of
the obligation of the Restricted Member.
Notwithstanding the foregoing, the requirements of subsections (i) and
(ii) of the preceding sentence shall be satisfied to the extent that the
Restricted Member deposits with a financial institution acceptable to the
Company any combination of the following property: Cash, U.S. Treasury bills,
shares in money market mutual funds, a bank letter of credit, and/or federally
insured savings accounts or certificates, or certificates of deposit, in a face
or principal amount equal to 100% of the amount of the restricted benefits, or
the portion thereof secured by such property. In lieu of the written agreement
described above, the Restricted Member may enter into any other written
agreement with the Company for the repayment of the Restricted Benefits which is
determined to be acceptable by ruling of the Internal Revenue Service.
ARTICLE XI
----------
TOP HEAVY PROVISIONS
--------------------
Section 11.01 - Top Heavy Definitions
- ------------- ---------------------
Whenever any of the following terms is used in the Plan with the first
letter or letters capitalized, it shall have the meaning specified below unless
the context clearly indicates to the contrary.
(a) "Aggregation Group" means each Plan of the Company in which a Key
Employee is a Member and each other plan of the Company which enables the Plan
or Plans containing a Key Employee to meet the antidiscrimination requirements
of Sections 401(a)(4) or 410 of the Internal Revenue Code. In addition, the
Administrator may include in the Aggregation Group any other Plan of the Company
that satisfies the requirements of Sections 401(a)(4) and 410 of the Code when
considered together with the other Plans in the Aggregation Group.
-44-
(b) "Determination Date" means with respect to any Plan Year the last
day of the preceding Plan Year, or in the case of the first plan year of the
Plan, the last day of such plan year.
(c) "Key Employee" means a Member who, at any time during the Plan
Year or any of the four preceding Plan Years, is:
(i) An officer of the Company,
(ii) One of the ten Employees owning (or considering as owning
within the meaning of Section 318 of the Code) the largest interest in the
Company,
(iii) A five percent owner of the Company, or
(iv) A one percent owner of the Company having an annual
Compensation from the Company or more than $150,000.
For purposes of paragraph (i), no more than fifty Employees (or, if lesser,
the greater of three Employees or ten percent of the Employees) shall be
treated as officers. In addition, a "Non-Key Employee" means an Employee
who is not a Key Employee. The beneficiaries of an Employee acquire the
character of such Employee.
(d) "Top Heavy Group" means any Aggregation Group if the sum of the
Actuarial Equivalent of cumulative accrued benefits for Key Employees under all
defined benefit pension plans included in the Aggregation Group (using the
provisions of Section 1.02 as the actuarial assumptions for all such defined
benefit plans), and the sum of the accounts of Key Employees under all defined
contribution plans included in the Aggregation Group, exceeds 60% of such
amounts determined for all employees.
(e) "Top Heavy Plan" means each Plan of the Company or Companies
required to be included in an Aggregation Group, if the Aggregation Group is a
Top Heavy Group.
Section 11.02- Special Top Heavy Rules
- ------------- -----------------------
For purposes of determining whether a Top Heavy Group exists, the
following special rules shall apply:
(a) Benefits derived from voluntary or mandatory Member contributions
and Company contributions shall be taken into account.
-45-
(b) The Aggregate of distributions made to any Member from the Plan
or any plans in the Aggregation Group, during the five year period ending on the
Determination Date shall be taken into account in determining the Actuarial
Equivalent accrued benefit of any Member or the account of any Member under any
such plan.
(c) If a Member who was a Key Employee ceases to be a Key Employee
for a Plan Year, the cumulative accrued benefit or account of such Member will
not be taken into account for determining whether a Top Heavy Group exists for
such Plan Year.
(d) Solely for the purpose of determining if the Plan, or any other
plan included in a Top Heavy Group of which this Plan is a part, is top heavy,
the accrued benefit of a Member other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Member or by other members of an Affiliated Company
of which the Company is a member and any other entity required to be aggregated
with the Company pursuant to regulations under Section 414 of the Code, or (ii)
if there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
Section 11.03- Top Heavy Benefits and Vesting
- ------------- -------------------------------
If the Plan is a Top Heavy Plan for any Plan Year beginning after
December 31, 1983, then with respect to such Plan Year the following provisions
shall apply:
(a) Each Unified Member who has completed three or more Years of
Service with the Company shall be fully vested in his or her Accrued Benefit
derived from Company contributions.
(b) Each United Member who is not a Key Employee shall be vested in
his or her Accrued Benefit derived from Company contributions at least as
rapidly as provided under the following schedule:
Years of Vesting Service Vesting Percentage
------------------------ ------------------
2 20
3 40
4 60
5 80
6 100
-46-
(c) Notwithstanding any other provision in this plan except
subsection (d) or (e) below, each Member who is not a Key Employee and has
completed 1,000 hours of service will accrue a benefit (to be provided solely by
employer contributions and expressed as a life annuity commencing at Normal
Retirement Age) of not less than two percent of his or her highest average
Compensation for the five consecutive years for which the Member had the highest
Compensation. The minimum accrual is determined without regard to any Social
Security contribution. The minimum accrual applies even though under other plan
provisions, the Member would not otherwise be entitled to receive an accrual, or
would have received a lesser accrual for the year because:
(i) the non-key employee fails to make mandatory contributions
to the Plan;
(ii) the non-key employee's Compensation is less than a stated
amount;
(iii) the non-key employee is not employed on the last day of
the accrual computation period; or
(iv) the plan is integrated with Social Security.
(d) No additional benefit accruals shall be provided pursuant to
subsection (c) above to the extent that the total accruals on behalf of the
Member attributable to employer contributions will provide a benefit expressed
as a life annuity commencing at Normal Retirement Age that equals or exceeds 20
percent of the Member's highest average Compensation for the five consecutive
years for which the Member had the highest Compensation.
(e) The provisions in (c) above shall not apply to any Member to the
extent that the Member is covered under any other plan or plans of the Company
and the Company has provided the minimum allocation or benefit requirement
applicable to this top heavy plan in the other plan or plans.
(f) The limitation of contained in Section 5.09(g) shall be replaced
by 1.0.
ARTICLE XII
-----------
MISCELLANEOUS PROVISIONS
------------------------
Section 12.01- Evidence of Survival
- ------------- --------------------
Where a benefit payment is contingent upon the survival of any person,
evidence of such person's survival must be furnished either by personal
endorsement
-47-
of the check drawn for such payment or by other evidence satisfactory to the
Plan Administrator.
Section 12.02- Non-Alienation of Benefits
- ------------- --------------------------
Neither the Company nor the Trustee shall recognize any transfer,
mortgage, pledge, hypothecation, order or assignment by any Member or
beneficiary of all or part of his interest hereunder, and such interest shall
not be subject in any manner to transfer by operation of law, and shall be
exempt from the claims of creditors or other claimants from all orders, decrees,
levies, garnishment and/or executions and other legal or equitable process or
proceedings against such Member or beneficiary to the fullest extent which may
be permitted by law. The preceding sentence shall apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Member pursuant to a domestic relations order, unless such order is determined
to be a qualified domestic relations order as defined in Section 414(p) of the
Code, or upon approval of the committee in its sole discretion any domestic
relations order entered before January 1, 1985. Notwithstanding any other
provisions contained in the Plan that limit the right of a Member to commence to
receive a distribution from the Plan, payment of benefits from the Plan to an
alternate payee under a qualified domestic relations order shall commence at
such time as provided in the qualified domestic relations order or as soon
thereafter as administratively feasible.
Section 12.03- Payments to Incompetents
- ------------- ------------------------
If the Company receives evidence satisfactory to it that (a) a payee
entitled to receive any payment under the Plan is physically or mentally
incompetent to receive such payment or is a minor, (b) another person or an
institution is then maintaining or has custody of such payee and (c) no
guardian, Committee or other representative of the estate of such payee has been
appointed, the Plan Administrator may direct that payments be made (in the case
of a minor at a rate not exceeding $50.00 a month) to such other person or
institution.
Section 12.04- Misstated Information
- ------------- ---------------------
If any information has been misstated on which a benefit under the
Plan with respect to a person was based, such benefit shall not be invalidated
but the amount of the benefit shall be adjusted to the proper amount as
determined on the basis of the correct information. Overpayments, if any, with
interest as determined by the Plan Administrator shall be charged against any
payments accruing with respect to the person. The Plan Administrator reserves
the right to require proof of age of any person entitled to a benefit under this
Plan.
Section 12.05- Beneficiary
- ------------- -----------
-48-
Subject to the consent of the member's spouse as provided in Section
6.02, a Member shall designate, with the right to change such designation, a
beneficiary to receive any payment or payments to which a beneficiary may become
entitled under the Plan in the event retirement benefits are distributed in
accordance with Section 6.05. Any other person to whom periodic payments are
payable under this Plan may designate, with the right to change such
designation, a beneficiary to receive any remaining periodic payments becoming
due upon the death of such person, provided that no prior conflicting
designation by a Member is then in effect with respect thereto. If no
designated beneficiary is surviving when a payment is to be made to a
beneficiary, the commuted value of any remaining periodic payments shall be made
to the person or persons in the first surviving class of the following classes
of successive preference beneficiaries: (a) the Member's widow or widower, (b)
the Member's surviving children, or (c) the executors or administrators of the
person upon whose death the payments become due.
Section 12.06- Forfeiture Upon Failure to Locate
- ------------- ---------------------------------
The Committee shall declare a forfeiture of any Account of any Member
or beneficiary under the Plan who cannot be found within one year after the
benefit would have otherwise been payable under the Plan. Neither the Company,
the Committee or the Trustee shall be obligated to search for the whereabouts of
any person. Any amounts forfeited shall be used to reduce Company
contributions. In the event such Member or beneficiary is thereafter located,
such previously forfeited benefit shall be restored.
Section 12.07- Direct Transfer of Benefits
- ------------- ---------------------------
(a) This paragraph 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 (defined below) election under this paragraph, a
Distributee may elect, at the time and in the manner prescribed by the
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.
(b) The following definitions apply to paragraph (a):
(i) An Eligible Rollover Distribution is any distribution of all
or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually), made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life 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)
-49-
of the Code; effective March 1, 1999, any hardship distribution described
in Code Section 401(k)(2)(B)(i)(IV); and the portion of any distribution
that is not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(ii) An Eligible Retirement Plan is an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described
in Section 403(a) of the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to
the surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(iii) A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are Distributees with regard to the interest of
the spouse or former spouse.
(iv) A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
Section 12.08- Claims Procedure
- ------------- ----------------
(a) Any Member or beneficiary of a deceased Member or duly authorized
representative of either (such Member or beneficiary or duly authorized
representative being referred to below as a "Claimant") may deliver to the
Benefits Committee a written claim for a determination with respect to the (i)
Claimant's Accrued Benefits, or (ii) benefits distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within 60 days after such notice was
received by the Claimant. The claim must state with particularity the benefit
determination desired by the Claimant.
(b) The Benefits Committee shall consider a Claimant's claim within a
reasonable time, but not later than 90 days after receipt of the claim by the
Plan, unless the Benefits Committee determines that special circumstances
require an extension of time for processing the claim. If the Benefits Committee
determines that an extension of time for processing is required, written notice
of the extension shall be furnished to the Claimant prior to the termination of
the initial 90-day period. In no event shall such extension exceed a period of
90 days from the end of such initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Benefits Committee expects to render the
-50-
benefit determination. Once the benefit determination is made in accordance with
the foregoing, the Benefits Committee shall notify the Claimant in writing:
(i) that the Claimant's requested benefit determination has
been made, and that the claim has been allowed in full; or
(ii) that the Benefits Committee has reached a conclusion
adverse, in whole or in part, to the Claimant's requested benefit
determination. The Benefits Committee's notice of adverse benefit
determination must be written in a manner calculated to be understood by
the Claimant, and it must contain:
a. the specific reason(s) for the adverse benefit
determination;
b. reference to the specific provisions of the Plan upon
which such adverse benefit determination was based;
c. a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of
why such material or information is necessary; and
d. a description of the Plan's claim review procedures set
forth in (c) below and the time limits applicable to such procedures,
including a statement of the Claimant's right to bring a civil action
under Section 502(a) of the Employee Retirement Income Security Act of
1974, as amended, ("ERISA") following an adverse benefit determination
on review.
(c) Within 60 days after receiving a notice from the Benefits
Committee of an adverse benefit determination, a Claimant may file with the
Board of Directors a written request for a review of such adverse determination.
Thereafter, but not later than 30 days after the review procedure began, the
Claimant:
(i) may submit written comments, documents, records, and other
information relating to the claim for benefits;
(ii) shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the Claimant's claim for benefits; and/or
(iii) may request a hearing, which the Board of Directors, in its
discretion, may grant.
-51-
The Board of Directors shall take into account all comments, documents, records,
and other information submitted by the Claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial
benefit determination.
(d) The Board of Directors shall render its decision on review within
a reasonable time, and not later than 60 days after the receipt of the
Claimant's review request, unless a hearing is held or other special
circumstances require additional time, in which case the Board of Directors'
decision must be rendered within 120 days after the receipt of the Claimant's
review request. If the Board of Directors determines that an extension of time
for processing is required, written notice of the extension shall be furnished
to the Claimant prior to the termination of the initial 60-day period. In no
event shall such extension exceed a period of 60 days from the end of the
initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Board of Directors
expects to render the benefit determination on review. The Board of Directors'
decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:
(i) specific reasons for the decision;
(ii) reference to the specific Plan provisions upon which the
decision was based;
(iii) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the Claimant's claim
for benefits;
(iv) a statement of the Claimant's right to bring an action
under ERISA Section 502(a) concerning an adverse benefit determination; and
(v) such other matters as the Board of Directors deems
relevant.
For purposes of this Article, a document, record, or other information shall be
considered "relevant" to a Claimant's claim if such document, record, or other
information was relied upon in making the benefit determination; was submitted,
considered, or generated in the course of making the benefit determination,
without regard to whether such document, record, or other information was relied
upon in making the benefit determination; or demonstrates compliance with the
administrative processes and safeguards required under ERISA in making the
benefit determination.
Section 12.09- Applicable Law
- ------------- --------------
-52-
The law of the State of California shall be the controlling state law
in all matters relating to the Plan and shall apply to the extent it is not
preempted by the laws of the United States of America.
-53-
IN WITNESS WHEREOF, the undersigned has executed this instrument on
the 19/th/ day of December, 2001.
UNIFIED WESTERN GROCERS, INC.
By: /s/ Don Gilpin
---------------------------------
Its: Vice President, Human Resources
---------------------------------
-54-
Appendix A
----------
The Supplemental Pension Benefit identified in Section 5.03(d) is determined as
of the Unified Member's retirement date by multiplying such Unified Member's
completed years of service (in whole years, limited to 26) on December 31, 1999,
by such Unified Member's Weekly Rate of Pay, the product then divided by the
Actuarial Equivalent factor for converting an immediate annuity to a cash lump
sum amount under Section 5.010.
Weekly Rate of Pay, for purposes of this Appendix A, shall mean such Unified
Member's weekly base pay, excluding bonuses or other compensation such as unused
sick leave payoff, but including amounts reduced from such Unified Member's
compensation and contributed by the Company under the Unified Western Grocers,
Inc. Employees' Sheltered Savings Plan and the Spending Account Plan.
-55-