EXHIBIT 10.3(g)(i)
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COVANTA ENERGY
PENSION PLAN
TABLE OF CONTENTS
SECTION 1. INTRODUCTION AND PURPOSE............................................1
SECTION 2. DEFINITIONS.........................................................2
SECTION 3. PARTICIPATION......................................................16
3.1. Date of Participation..............................................16
3.2. Enrollment and Adjustment..........................................17
3.3. Duration...........................................................17
3.4. Reemployment.......................................................17
SECTION 4. RETIREMENT DATE....................................................18
4.1. Normal Retirement and Deferred Retirement Dates....................18
4.2. Early Retirement Date..............................................19
SECTION 5. ACCRUED BENEFIT....................................................19
5.1. Computation of Accrued Benefit.....................................19
5.2. Effect of Reemployment on Accrued Benefit..........................20
SECTION 6. NORMAL RETIREMENT BENEFIT..........................................20
6.1. Normal Retirement Benefit..........................................20
SECTION 7. EARLY RETIREMENT BENEFIT...........................................21
7.1. Early Retirement Benefit...........................................21
7.2. Deferral of Payment After Early Retirement Age.....................21
SECTION 8. TERMINATION OF SERVICE BEFORE RETIREMENT...........................22
8.1. Vesting............................................................22
8.2. Payment after Termination of Service at Early Retirement Date......22
8.3. Consent of Participant.............................................22
8.4. Forfeitures........................................................23
SECTION 9. DISABILITY BEFORE RETIREMENT.......................................23
9.1. Disability Prior to Retirement.....................................23
SECTION 10. DEATH BENEFITS BEFORE RETIREMENT..................................24
10.1. Death Benefit Before Retirement....................................24
10.2. Consent............................................................24
SECTION 11. METHOD OF PAYMENT.................................................25
11.1. Payment of Benefits................................................25
11.2. Optional Forms of Benefits.........................................25
11.3. Preretirement Survivor Annuity.....................................27
11.4. Commencement of Payment............................................31
11.5. Explanation of Annuities...........................................34
11.6. Small Amounts......................................................35
11.7. Suspension of Retirement Benefits..................................35
11.8. Consent............................................................36
11.9. Deemed Distribution................................................36
11.10. Automatic Payment of Retirement Benefits...........................36
11.11. Direct Rollover....................................................37
11.12. Military Service Credit............................................37
SECTION 12. MAXIMUM AMOUNT OF RETIREMENT BENEFIT..............................37
12.1. Application of Section 12..........................................37
12.2. Maximum Benefit....................................................38
12.3. Adjustments to Maximum Benefit.....................................38
12.4. Inapplicability of Section 12......................................41
12.5. Limitation Prior to October 3, 1973................................42
12.6. Limitation Prior to December 31, 1982..............................42
12.7. Additional Limitations.............................................43
12.8. Maximum Limitations................................................44
SECTION 13. DESIGNATION OF BENEFICIARIES......................................45
13.1. Beneficiary Designation............................................45
13.2. Failure to Designate Beneficiary...................................46
SECTION 14. FUNDING AND CONTRIBUTIONS.........................................46
14.1. Funding............................................................46
14.2. Actuarial Assumptions..............................................47
14.3. Trustee............................................................47
14.4. Expenses...........................................................48
14.5. Return of Contributions............................................48
SECTION 15. ADMINISTRATION OF THE PLAN........................................49
15.1. Powers and Duties of Administrative Committee......................49
15.2. Powers and Duties of Investment Committee..........................49
15.3. Agents; Reports to Board of Directors..............................50
15.4. Structure of Committees............................................51
15.5. Adoption of Procedures of Committee................................52
15.6. Demands for Money..................................................52
15.7. Trust Agreement; Powers and Duties of Trustee; Trust Fund..........52
15.8. Hold Harmless; Indemnification.....................................53
15.9. Claims for Benefits................................................54
15.10. Communications.....................................................55
15.11. Agent for Service of Process.......................................56
15.12. Specific Power and Duties..........................................57
SECTION 16. TERMINATION OF PARTICIPATING COMPANY PARTICIPATION................57
16.1. Termination of Participating Company Participation.................57
16.2. Rights of Former Participants......................................58
16.3. Transfer to Successor Plan.........................................59
SECTION 17. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST................59
17.1. Right to Amend, Suspend or Terminate Plan..........................59
17.2. Retroactivity......................................................60
17.3. Notices............................................................61
17.4. Termination........................................................61
17.5. Not a Title IV Termination.........................................61
17.6. Title IV Termination...............................................62
17.7. Asset Allocation by Court..........................................64
17.8. Partial Termination................................................64
SECTION 18. TOP HEAVY PROVISIONS..............................................65
18.1. Top Heavy Plan.....................................................65
18.2. Definition for Section 18..........................................66
18.3. Minimum Vesting....................................................71
18.4. Minimum Benefits...................................................72
18.5. Limitations on Benefits............................................73
18.6. Other Plans........................................................73
SECTION 19. GENERAL LIMITATIONS AND PROVISIONS................................74
19.1. No Right to Continued Employment...................................74
19.2. Trust is Sole Source of Benefits...................................74
19.3. Payment on Behalf of Payee.........................................75
19.4. No Alienation......................................................75
19.5. Missing Payee......................................................76
19.6. Subject to Trust Agreement.........................................77
19.7. Required Information...............................................77
19.8. Subject to Insurance Contract......................................77
19.9. Communications to Committees.......................................78
19.10. Communications from Participating Company or Committees............78
19.11. Gender, Tense......................................................78
19.12. Captions...........................................................78
19.13. Applicable Law.....................................................79
APPENDIX I....................................................................78
SECTION 1.
INTRODUCTION AND PURPOSE
1.1 The purpose of the Covanta Energy Pension Plan (the "Plan") is to
provide retirement benefits and certain other benefits to eligible employees of
Covanta Energy and its participating subsidiaries and other participating
companies, or to the beneficiaries of such employees, and thereby to continue to
encourage employees to make and continue careers with Covanta Energy, all as set
forth herein and in the related trust thereunder (the "Trust") adopted as a part
of the Plan.
1.2 In accordance with the terms of the Plan, the Company has the right
to amend the Plan from time to time. The Company has amended and restated the
Plan, generally effective January 1, 2001 (the "Restatement Date"), to comply
with the provisions of the Small Business Jobs Protection Act of 1996 ("SBJPA"),
the Uniformed Services Employment and Reemployment Rights Act of 1994
("USERRA"), the Community Renewal Tax Relief Act of 2000, and other applicable
Internal Revenue Service guidance, although certain provisions may have a later
effective date to comply in good faith with the requirements of the Economic
Growth and Tax Reconciliation Relief Act ("EGTRRA").
The Trust agreement entered into in connection with the Plan shall
continue in full force and effect pursuant to the applicable provisions of the
amended and restated Plan. Except as may be otherwise specifically provided in
the Plan or required by law, the nonforfeitable interests of Participants who
retired or terminated their Employment with Covanta Energy prior to the
Restatement Date or prior to the effective date of any Plan provision which is
different than the Restatement Date, shall be determined solely under the
applicable provisions of the Plan as of the date of their retirement or
termination.
The Plan and Trust is intended to be a plan and trust qualifying under
Sections 401(a) and 501(a) of the Code, respectively, and covered by the
Employee Retirement Income Security Act of 1974 ("ERISA").
SECTION 2.
DEFINITIONS
When used herein the following terms shall have the following meanings:
2.1 "Accrued Benefit" means a Straight Life Annuity commencing at age
65 or at any later date specified under the Plan, whichever is applicable.
2.2 "Act" means the Employee Retirement Income Security Act of 1974, as
now in effect or as hereafter amended.
2.3 "Actuary" means the enrolled actuary (within the meaning of the
Act) engaged by the Administrative Committee.
2.4 "Administrative Committee" means the Covanta Administrative
Committee as provided for in Section 15. For purposes of the Act, the
Administrative Committee shall be the administrator of the Plan.
2.5 "Affiliate" means any corporation which is included in a controlled
group of corporations (within the meaning of Section 414(b) of the Code) which
includes the, Company, any trade or business (whether or not incorporated) which
is under common control with the Company (within the meaning of Section 414(c)
of the Code), any organization included in the same "affiliated service group"
(within the meaning of Section 414(m) of the Code) as the Company, and any other
entity required to be aggregated with the Company pursuant to Regulations under
Section 414(o) of the Code; except that for purposes of applying the provisions
of Sections 12 and 18 with respect to the limitations on benefits, Section
415(h) of the Code shall apply.
2.6 "Beneficiary" means the beneficiary or beneficiaries designated by
a Participant pursuant to Section 13 to receive the amount, if any, payable
under the Plan upon the death of such Participant.
2.7 "Board" means the board of directors of the Company.
2.8 "Break in Service" means a Plan Year during which an individual has
not completed more than 500 Hours of Service, as determined by the
Administrative Committee in accordance with the Regulations. Solely for purposes
of determining whether a Break in Service has occurred, an individual shall be
credited with the Hours of Service which such individual would have completed
but for a maternity or paternity absence, as determined by the Administrative
Committee in accordance with this Section 2.8 and the Labor Department
Regulations; provided, however, that the total Hours of Service so credited
shall not exceed 501 Hours and that the individual timely provide the
Administrative Committee with such information as it shall require. Hours of
Service credited for a maternity or paternity absence shall be credited entirely
(i) in the Plan Year in which the absence began if such Hours of Service are
necessary to prevent a Break in Service in such Plan Year, or (ii) in the
following Plan Year. For purposes of this Section 2.8, "maternity or paternity
absence" shall mean an absence from work by reason of the individual's
pregnancy, the birth of the individual's child, or the placement of a child with
the individual in connection with adoption of the child by such individual, or
for purposes of caring for a child for the period immediately following such
birth or placement.
2.9 "Code" means the Internal Revenue Code of 1986, as now in effect or
as hereafter amended. All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.
2.10 "Committee" means the Administrative Committee and the Investment
Committee.
2.11 "Company" means Covanta Projects, Inc.
2.12 "Compensation" means the Participant's "wages" within the meaning
of Section 3401(a)(1) of the Code for each Plan Year, including performance
bonuses and all other payments of compensation made to a Participant in the
course of the Employer's trade or business which must be reported on a Form W-2,
but excluding any special or irregular payments made to the Participant such as
hiring bonuses and income which arises from non-performance based restricted
stock awards. Compensation includes any amount otherwise included in
Compensation which is contributed by the Employer pursuant to a salary reduction
agreement and which is not includible in the gross income of the Employee under
Sections 125, 402(e)(3), 402(h), or 132(f)(4).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the
Compensation of each Employee taken into account under the Plan shall not exceed
the limit on Compensation prescribed in Section 401(a)(17) of the Code (the
"Section 401(a)(17) Limit"). The Section 401(a)(17) Limit is $150,000, as
adjusted for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. Effective January 1, 2002, the Section 401(a)(17)
Limit increases to $200,000, as adjusted for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code. The cost of living adjustment
in effect on January 1 of any calendar year shall apply to any determination
period beginning in such calendar year. For this purpose, the "determination
period" is any period not exceeding 12 months, over which Compensation is
determined. If a determination period consists of fewer than 12 months, the
Section 401(a)(17) Limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
Any reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall be deemed a reference to the Section 401(a)(17) Limit. If
Compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the Section
401(a)(17) Limit in effect for that prior determination period. For this
purpose, for determination periods beginning prior to January 1, 1994, the
Section 401(a)(17) Limit is $150,000.
Notwithstanding the foregoing, in determining benefit accruals for Plan
Years beginning after December 31, 2001, the Section 401(a)(17) Limit for
determination periods beginning before January 1, 2002 shall be $200,000.
2.13 "Covered Compensation" means, for a Plan Year, the average
(without indexing) of the Taxable Wage Bases in effect for such calendar year
during the 35-year period ending with the last day of the calendar year in which
the Participant attains (or will attain) Social Security Retirement Age. No
increase in Covered Compensation shall decrease a Participant's Accrued Benefit
under the Plan. In determining a Participant's Covered Compensation for a Plan
Year, the Taxable Wage Base in effect for the current Plan Year and any
subsequent Plan Year shall be assumed to be the same as the Taxable Wage Base in
effect as of the beginning of the Plan Year for which the determination is being
made. A Participant's Covered Compensation for a Plan Year before the 35-year
period ending with the last day of the calendar year in which the Participant
attains Social Security Retirement Age is the Taxable Wage Base in effect as of
the beginning of the Plan Year. A Participant's Covered Compensation for a Plan
Year after such 35-year period is the Participant's Covered Compensation for the
Plan Year during which the 35-year period ends.
2.14 "Credited Service" means the number of full years and months of
employment beginning on the date the Employee first performed an Hour of Service
with the Employer and ending on the date of his retirement or other termination
of employment. If an Employee was a participant of the Prior Plan on December
31, 1988 and thereafter becomes a Participant of the Plan, Credited Service
shall also include his period of Service under the Prior Plan, as defined by
such Prior Plan. Years and months of employment shall be determined by the
Administrative Committee in accordance with the Regulations.
2.15 "Direct Rollover" means a distribution by the Plan to an Eligible
Retirement Plan as specified by a Distributee.
2.16 "Disabled" or "Disability" means a Participant's inability to
perform the duties of employment with an Employer as would constitute disability
under the Employer's long term disability plan.
2.17 "Distributee" means a Participant or a former Participant. A
Participant's or former Participant's spouse or a former spouse of a Participant
or former Participant who is an alternate payee under a Qualified Domestic
Relations Order to which a distribution is to be made under the Plan shall also
be deemed to be a Distributee.
2.18 "Early Retirement Age" means the date on which a Participant has
attained age 55 and has completed 10 years of Credited Service.
2.19 "Early Retirement Date" means the first day of the month
coincident with or next following a Participant's retirement after reaching his
Early Retirement Age but prior to his Normal Retirement Age.
2.20 "Effective Date" means, for this amendment and restatement,
January 1, 2001, and for the Plan, January 1, 1989.
2.21 "Eligible Employee" means any Employee who completes at least
1,000 Hours of Service during a Plan Year, but excluding (i) any nonresident
alien, (ii) any Leased Employee, and (iii) any Employee who is included in a
unit of Employees covered by a collective bargaining agreement which does not
provide for participation in the Plan. A director of the Employer is not
eligible for participation in the Plan unless he is also an Eligible Employee.
2.22 "Eligible Retirement Plan" means (i) an individual retirement
account, as described in Section 408(a) of the Code, (ii) an individual
retirement annuity, as described in Section 408(b) of the Code, (iii) an annuity
plan, as described in Section 403(a) of the Code, and (iv) a qualified plan and
trust, as described in Sections 401(a) and 501(a) of the Code; provided,
however, that in the case of an Eligible Rollover Distribution to a spouse, an
Eligible Retirement Plan means an individual retirement account or an individual
retirement annuity, as described in Sections 408(a) and 408(b) of the Code,
respectively.
Effective January 1, 2002, the term "Eligible Retirement Plan" shall
also include an annuity contract described in Section 403(b) of the Code and an
eligible plan described in Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state. Effective January 1, 2002, the
definition of Eligible Retirement Plan shall apply in the case of an Eligible
Rollover Distribution to a Participant's surviving spouse, or to a spouse or
former spouse who is the alternate payee under a Qualified Domestic Relations
Order, as defined in Section 414(p) of the Code.
2.23 "Eligible Rollover Distribution" means any distribution from the
Plan of all or any portion of the balance to the credit of a Distributee, except
that an Eligible Rollover Distribution shall not include: (i) any distribution
to the extent such distribution is required under Section 11.4 and Section
401(a)(9) of the Code, (ii) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's Beneficiary, or for a period of ten
years or more, and (iii) the portion of any distribution that is not includible
in gross income.
2.24 "Employee" means any individual in the employ of the Employer.
2.25 "Employer" means the Company and each other Participating Company.
2.26 "Equivalent Actuarial Value" or "Actuarial Equivalent" means,
unless otherwise specified in the Plan, a benefit of equivalent value to the
benefit for which it is to be substituted, computed on the basis of the
actuarial tables and interest rates specified in Appendix I attached hereto;
provided, however, that effective January 1, 2000, the interest rate used to
determine the Equivalent Actuarial Value of any lump sum payment that may be
made under the Plan shall be determined based on the applicable mortality table
and applicable interest rate pursuant to Section 417(e)(3) of the Code.
In accordance with Section 417(e)(3) of the Code, the term "applicable
interest rate" shall mean the annual rate of interest on 30-year Treasury
securities as specified by the Commissioner each October and shall remain fixed
for annuity starting dates which occur during October of each Plan Year through
September 30 of the following Plan Year. The term "applicable mortality rate"
shall mean the table prescribed by the Secretary in accordance with Section
417(e)(3)(A)(ii) of the Code. Such table shall be based on the prevailing
commissioners' standard table (described in Section 807(d)(5)(A)) used to
determine reserves for group annuity contracts issued on the date as of which
present value is being determined (without regard to any other subparagraph of
Section 807(d)(5) of the Code).
2.27 "Final Average Compensation" means a Participant's average annual
Compensation for the five consecutive calendar years out of his last 10 (or
fewer) consecutive Years of Service rendered immediately prior to his Normal
Retirement Date, or his earlier retirement or other termination of employment,
as the case may be, during which his Compensation was the highest.
2.28 "High 3 Year Average Compensation" means the average annual amount
of the Participant's total Compensation from the Company for the three
consecutive Years of Service during which such Compensation was the highest.
2.29 "Hours of Service" means the hours for which an Employee shall
receive credit for purposes of the Plan, as follows:
(a) One hour for each hour for which he is directly or indirectly
paid, or entitled to payment, by the Company or an Affiliate for the performance
of duties during the applicable computation period for which his Hours of
Service are being determined under the Plan. (These hours shall be credited to
the Employee for the computation period or periods in which the duties were
performed, and shall include hours for which back pay has been either awarded or
agreed to by the Company or an Affiliate as provided by the Regulations under
the Act, with no duplication of credit for hours.)
(b) One hour for each hour, in addition to the hours in paragraph
(a) above, for which he is directly or indirectly paid, or entitled to payment,
by the Company or an Affiliate, for reasons other than for the performance of
duties during the applicable computation periods, such as paid vacation, paid
holiday, paid sickness, and similar paid periods of nonworking time. (These
hours shall be counted in the computation period or periods in which the hours
for which payment is made occur).
(c) One hour for each hour of the normally scheduled work hours
for each day during any period he is on leave of absence from work with the
Company or an Affiliate for military service with the armed forces of the United
States, but not to exceed the period required under the law pertaining to
veterans' reemployment rights; provided, that if he fails to report for work at
the end of such leave during which he has reemployment rights he shall not
receive credit for hours on such leave.
(d) The number of normally scheduled work hours for each day of
authorized leave of absence granted by the Company or an Affiliate in accordance
with reasonable policies established therefor for which he is not compensated.
When no time records are available, the Employee shall be given credit for Hours
of Service based upon the number of normally scheduled work hours for each day
he is on the Company's or an Affiliate's payroll, as determined in accordance
with reasonable standards and policies from time to time adopted by the
Administrative Committee under Section 2530.200b-2(b) and (c) of the
Regulations, which are incorporated herein by this reference thereto.
Notwithstanding the foregoing, an Employee shall be credited with 45 Hours of
Service with respect to each week for which he is entitled to be credited with
at least one Hours of Service. The Administrative Committee may, on a uniform,
nondiscriminatory basis, give credit to Participants for Hours of Service for
employment with employers other than the Company or an Affiliate.
2.30 "IRS" means the United States Internal Revenue Service.
2.31 "Investment Committee" means the Investment Committee as provided
for in Section 15. For purposes of the Act, the members of the Investment
Committee shall be "named fiduciaries" (with respect to the matters for which
they are hereby made responsible under the Plan) of the Plan.
2.32 "Labor Department" means the United States Department of Labor.
2.33 "Leased Employee" means any person who is not an Employee of the
Employer and who provides services to the Employer if (i) such services are
provided pursuant to an agreement between the Employer and any other person,
(ii) such person has performed such services for the Employer on a substantially
full-time basis for a period of at least one year, and (iii) such services are
performed under the primary direction or control of the Employer. Contributions
or benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient Employer shall be treated
as provided by such Employer.
For purposes of this Plan, a Leased Employee shall be considered an
Employee unless: (i) such Employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10% of
compensation, (2) immediate participation, and (3) full and immediate vesting;
and (ii) Leased Employees do not constitute more than 20% of the recipient
Employer's "nonhighly compensated workforce," as defined in Section 414(n)(5) of
the Code.
2.34 "Normal Retirement Age" means the date which is the Participant's
65th birthday.
2.35 "Normal Retirement Date" means the first day of the month
coincident with or next following a Participant's attainment of his Normal
Retirement Age.
2.36 "Participant" means any Eligible Employee who is enrolled in the
Plan as provided in Section 3.
2.37 "Participating Company" means an Affiliate of the Company,
designated by the Board as such, the board of directors or equivalent governing
body of which shall adopt the Plan and the Trust Agreement by appropriate action
and the Employees of which shall be eligible to participate in the Plan in the
manner and to the extent determined by the Board so long as such Affiliate
remains so designated. Any such Affiliate so designated and which adopts the
Plan shall be deemed thereby to appoint the Company, the Administrative
Committee, the Investment Committee, and the Trustee its exclusive agents to
exercise on its behalf all of the powers and authority conferred hereby, or by
the Trust Agreement, upon the Company and shall make its allocable contributions
to the Plan. The authority of the Company, the Administrative Committee, the
Investment Committee, and the Trustee to act as such agent shall continue until
the Plan has terminated as to such Affiliate and the relevant Trust assets have
been distributed by the Trustee as provided in Section 16 of the Plan.
2.38 "PBGC" means the Pension Benefit Guaranty Corporation.
2.39 "Plan" means the Covanta Energy Pension Plan, as set forth herein
and as may be amended from time to time.
2.40 "Plan Year" means the calendar year.
2.41 "Preretirement Survivor Annuity" means a benefit providing for
payment of a survivor annuity to a Participant 's Surviving Spouse, if any, for
the life of such Surviving Spouse equal to 50% of the annuity which would have
been payable for the life of the Participant under a Qualified Joint and
Survivor Annuity.
2.42 "Prior Plan" means the Ogden Corporation Pension Plan.
2.43 "Qualified Domestic Relations Order" means any judgment, decree,
or order (including approval of a property settlement agreement) which has been
determined by the Administrative Committee in accordance with procedures
established under the Plan, to constitute a "qualified domestic relations order"
within the meaning of Section 414(p)(1) of the Code.
2.44 "Qualified Joint and Survivor Annuity" means a benefit providing
an annuity for the life of the Participant, ending with the payment due on the
first day of the month coincident with or preceding the date of his death, and,
if the Participant dies leaving a Surviving Spouse, a survivor annuity for the
life of such Surviving Spouse equal to 50% of the annuity payable for the life
of the Participant under his Qualified Joint and Survivor Annuity, commencing on
the first day of the month following the date of the Participant 's death and
ending with the payment due on the first day of the month coincident with or
preceding the date of such Surviving Spouse's death.
2.45 "Regulations" means the applicable regulations issued under the
Code (referred to herein as "IRS Regulations"), the Act (referred to herein as
"Labor Department Regulations") or other applicable law, by the IRS, the PBGC,
the Labor Department or any other governmental authority and any temporary
regulations or rules promulgated by such authorities pending the issuance of
such regulations.
2.46 "Retirement Benefit" means a benefit payable on the dates, in the
forms, and in the amounts specified in Sections 6, 7, and 8, whichever is
applicable.
2.47 "Retirement Date" means a Participant 's Early Retirement Date,
Normal Retirement Date or any other retirement date that has become effective in
lieu thereof pursuant to Section 4.
2.48 "Service" means employment or reemployment (whether or not as an
Eligible Employee) with the Company, any Participating Company, or with any
subsidiary of or other corporation or entity affiliated or associated with the
Company which is a Participant of the same controlled group of corporations
(within the meaning of Section 1563(a) of the Code). Service includes all
periods of employment credited to an Employee while a participant under the
Prior Plan.
2.49 "Social Security Retirement Age" means age 65 in the case of a
Participant attaining age 62 before January 1, 2000 (i.e., born before January
1, 1938), age 66 for a Participant attaining age 62 after December 31, 1999, and
before January 1, 2017 (i.e., born after December 31, 1937, but before January
1, 1955), and age 67 for a Participant attaining age 62 after December 31, 2016
(i.e., born after December 31, 1954).
2.50 "Straight Life Annuity" means an annuity payable for the life of
a Participant, ending with the payment due on the first day of the month
coincident with or preceding the date of the annuitant's death.
2.51 "Surviving Spouse" means the survivor of a deceased Participant or
a deceased former Participant to whom such deceased Participant or deceased
former Participant has been legally married (as determined by the Administrative
Committee) throughout the one-year period ending on the earlier of (i) the date
as of which payments commence under the Plan, or (ii) the date of the
Participant 's death. For purposes of Section 11, if a Participant marries
within one year of the date as of which payments commence under the Plan and was
married to that spouse for at least a one-year period ending on or before the
date of the Participant's death, such Participant and his spouse shall be
treated as having been married throughout the one-year period ending on the date
as of which payments commence.
2.52 "Taxable Wage Base" means the contribution and benefit base under
Section 230 of the Social Security Act at the beginning of the Plan Year.
2.53 "Trust" or "Trust Fund" means the Trust established by the Company
pursuant to the Trust Agreement as a part of the Plan.
2.54 "Trustee" means the trustee or trustees of the Trust.
2.55 "Trust Agreement" means the agreement entered into between the
Company and the Trustee regarding the investment and holding of Plan assets, as
provided in the Plan, as amended or restated from time to time.
2.56 "Year of Service" means any Plan Year during which an individual
completed at least 1,000 Hours of Service as determined by the Administrative
Committee in accordance with the Regulations. In addition, solely for purposes
of determining whether an Eligible Employee is enrolled as a Participant as
provided in Section 3 and his vested interest under Sections 8.1 and 18.3, if an
Employee does not complete 1,000 Hours of Service during the Plan Year in which
his Service commenced but does complete at least 1,000 Hours of Service during
the 12 consecutive month period beginning on the date his Service commenced, as
determined by the Administrative Committee, then he shall be credited with a
Year of Service for such 12 consecutive month period. In determining the number
of Years of Service a Participant is credited with, he shall be credited with
all years of service he had completed, as of December 31, 1988, under the terms
of the Prior Plan.
SECTION 3.
PARTICIPATION
3.1. Date of Participation.
(a) Each Eligible Employee who was a Participant of the Plan on
December 31, 2000 shall continue to be a Participant of the Plan after such
date. Each Eligible Employee in Service on December 31, 2000, but who was not
then a Participant of the Plan shall be enrolled in the Plan on the first day of
the month coincident with or next following the earlier of:
(i) the date on which he satisfies the requirements for
participating in the Plan as in effect on December 31, 2000; and
(ii) the date on which he satisfies the requirements of
Section 3.1(b) for enrollment in the Plan.
(b) Each Eligible Employee who commences Service on or after
January 1, 2001 shall be automatically enrolled in the Plan on the first day of
the month coincident with or next following the date on which the Eligible
Employee has (i) attained age 21, and (ii) the later of (a) the completion of
one Year of Service, and (b) the date which is the anniversary of the Eligible
Employee's date of hire, provided that he is an Eligible Employee on such date.
3.2. Enrollment and Adjustment.
The Administrative Committee shall take any necessary or appropriate
action to enroll each Eligible Employee who has met the requirements of this
Section 3 and, if it is determined that an Eligible Employee has for any reason
not been enrolled in the Plan or, if an administrative adjustment is required,
such Employee shall be retroactively enrolled or such administrative adjustment
shall be made.
3.3. Duration.
The participation of a Participant shall cease upon his Retirement
Date, death, or upon any Break in Service. The participation of a Participant
who, without any Break in Service, ceases to be an Eligible Employee shall not
cease on account thereof but, notwithstanding Section 2.47, no subsequent
Service shall be treated as Credited Service unless and until he again becomes
an Eligible Employee.
3.4. Reemployment.
(a) If a Participant without any vested right to his Retirement
Benefit (as determined under Section 8.1) incurs any Break in Service, and if
the number of consecutive Plan Years in which he incurs a Break in Service
equals or exceeds the greater of five (5) or the aggregate number of his Years
of Service prior to such Break in Service (excluding any Years of Service
previously disregarded under this Section), then, in the event that he returns
to Service, he shall be treated as a new Employee for all purposes of the Plan.
(b) In all other cases following a Break in Service, if a former
Participant completes one Year of Service, he shall again be enrolled in the
Plan as of the first day of the month coincident with or next following the date
such Year of Service commenced, except that, if he is not then an Eligible
Employee, he shall again be enrolled in the Plan as of the first day of the
month coincident with or next following the date, if any, on which he again
becomes an Eligible Employee.
SECTION 4.
RETIREMENT DATE
4.1. Normal Retirement and Deferred Retirement Dates.
Any Participant may retire on his Normal Retirement Date.
Notwithstanding the previous sentence, a Participant may elect to defer his
Normal Retirement Date if he has not had a termination of Service on or prior to
his Normal Retirement Age. A retiring Participant shall submit a written
application for benefits to the Administrative Committee not less than 30 days
nor more than 90 days prior to the day the Participant will retire from Service.
The Deferred Retirement Date of a Participant shall be the first day of the
month coincident with or next following the date of his termination of Service
following his Normal Retirement Age. Notwithstanding any provision in the Plan
to the contrary, a Participant shall have a 100% vested right to his Retirement
Benefit upon attaining his Normal Retirement Age.
4.2. Early Retirement Date.
A Participant may retire on his Early Retirement Date. A Participant
must make written application to the Administrative Committee specifying an
Early Retirement Date which is the first day of a month and not less than 30 nor
more than 90 days following the date of the filing of the application.
SECTION 5.
ACCRUED BENEFIT
5.1. Computation of Accrued Benefit.
For Plan Years beginning prior to January 1, 2002, a Participant's
Accrued Benefit is equal to (a) less (b) where:
(a) is 1.5% of his Final Average Compensation multiplied by his years
of Credited Service; and
(b) is the amount of his Prior Plan accrued benefit determined as of
December 31, 1988.
For Plan Years beginning on or after January 1, 2002, a Participant's
Accrued Benefit is equal to (1) less (2) plus (3), where:
(1) equals [(A+B) x C] + (D x E):
(A) is .95% of Final Average Compensation up to Covered
Compensation;
(B) is 1.5% of Final Average Compensation in excess of Covered
Compensation;
(C) is years of Credited Service up to 35;
(D) is .95% of Final Average Compensation; and
(E) total years of Credited Service in excess of 35 which are
credited on or after January 1, 2002; and
(2) equals the amount of the Participant's Prior Plan accrued benefit
determined as of December 31, 1988.
5.2. Effect of Reemployment on Accrued Benefit.
If a Participant who incurs a Break in Service for any reason returns
to Service and is treated as a new Eligible Employee pursuant to Section 3.4,
then on his subsequent retirement or termination of Service, his Accrued Benefit
shall be based only upon his Credited Service subsequent to his return to
Service. In all other cases following a Break in Service, a Participant 's
Accrued Benefit shall be based on his total Credited Service (provided this does
not decrease his Accrued Benefit), reduced by the Equivalent Actuarial Value of
any payments to him before his return to Service.
SECTION 6.
NORMAL RETIREMENT BENEFIT
6.1. Normal Retirement Benefit.
Subject to Section 11.4, a Participant who retires from Service on his
Normal Retirement Date shall be entitled to receive a Retirement Benefit equal
to his Accrued Benefit (or any larger Retirement Benefit he could have received
commencing on any date which could have been his Early Retirement Date),
commencing on the first day of the month in which his Normal Retirement Date
occurs. Notwithstanding the foregoing, for Plan Years beginning on or after
January 1, 2002, in no event shall any Participant's Accrued Benefit commencing
on the Participant's Normal Retirement Date and payable in the Normal Form be
less than $50 per month.
SECTION 7.
EARLY RETIREMENT BENEFIT
7.1. Early Retirement Benefit.
A Participant who retires from Service on an Early Retirement Date
shall be entitled to receive, commencing on the first day of the month in which
his Early Retirement Date occurs, a Retirement Benefit which is the Actuarial
Equivalent of the Retirement Benefit which would be payable on his Normal
Retirement Date reduced by an early retirement factor of .5% for each month
between the day on which his payments would have commenced if he had not retired
until the first date of the month coincident with or next following the
Participant's Normal Retirement Age and the Participant's Early Retirement Date.
7.2. Deferral of Payment After Early Retirement Age.
Subject to Section 11.4, a Participant who retires on an Early
Retirement Date may elect, at least 60 days prior to his Early Retirement Date,
to defer commencement of the payment of his Retirement Benefit until the first
day of any month after his Early Retirement Date but no later than the first
month in which his Normal Retirement Date could have occurred. Such an election
may be revoked only with the consent of the Administrative Committee. If a
Participant makes such an election and dies before the payment of his Retirement
Benefit commences, then except as provided in Section 10 or 11.3, no benefit
shall be payable under the Plan.
SECTION 8.
TERMINATION OF SERVICE BEFORE RETIREMENT
8.1. Vesting
Subject to Section 11.4, a Participant whose Service terminates, after
his completion of five (5) Years of Service, for any reason other than death,
Disability or retirement shall have a nonforfeitable right to a Retirement
Benefit equal to his Accrued Benefit as of the date of his termination of
Service and shall be entitled to receive his Retirement Benefit commencing on
the first day of the month following the month in which he attains his Normal
Retirement Age.
8.2. Payment after Termination of Service.
A Participant who has completed 10 years of Credited Service and who
has terminated his Service as described in Section 8.1 may elect, by written
notice to the Administrative Committee at least 30 days prior to his Early
Retirement Date, to commence payment of his Retirement Benefit on his Early
Retirement Date or on the first day of any subsequent month, but not later than
the first day of the month in which the first date which could have been his
Normal Retirement Date occurs, actuarially reduced. Such an election may be
revoked only with the consent of the Administrative Committee.
8.3. Consent of Participant.
(a) Notwithstanding any other provisions of this Section 8, to the
extent required by the Code and IRS Regulations, if the Equivalent Actuarial
Value of the Retirement Benefit of a Participant is in excess of $3,500 ($5,000
effective January 1, 1998) at the time of the distribution or any prior
distribution, no benefit shall be paid pursuant to this Section 8 prior to his
Normal Retirement Date without the Participant's written consent, and if the
Participant is married at the date payments would otherwise commence and his
benefit is to be paid in a form other than a Qualified Joint and Survivor
Annuity, the written consent of the Participant's Surviving Spouse. Absence of
any required consent shall be deemed to be an election under Section 8.2 to
receive the Actuarial Equivalent of the Participant's Retirement Benefit
commencing at the earlier of (i) the later of (A) the first day of the month
following receipt of the required consent by the Administrative Committee or (B)
the date otherwise designated under Section 8.2, or (ii) the Participant's
Normal Retirement Date.
8.4. Forfeitures.
If a Participant's Service terminates for any reason other than death,
Disability or retirement (as provided in Sections 6, 7, 9 and 10) prior to his
completion of five (5) Years of Service, no benefit shall be payable under the
Plan. In determining whether a Participant has completed five (5) Years of
Service for this purpose, his Years of Service before any Break in Service shall
be disregarded if he had not then completed five (5) Years of Service and if the
number of consecutive Plan Years in which he incurred a Break in Service equals
or exceeds the greater of five or the aggregate number of his Years of Service
prior to such Break in Service (excluding any Years of Service previously
disregarded under this Section).
SECTION 9.
DISABILITY BEFORE RETIREMENT
9.1. Disability Prior to Retirement.
A Participant who is Disabled shall have a nonforfeitable right to a
Retirement Benefit, determined as of the date of the Participant's Disability,
in accordance with the provisions of Section 5.1 and shall not thereafter be
credited with Credited Service. Such Retirement Benefit shall commence on his
Normal Retirement Date.
SECTION 10.
DEATH BENEFITS BEFORE RETIREMENT
10.1. Death Benefit Before Retirement.
Subject to Section 11.3, the Beneficiary of a Participant with a
nonforfeitable right to his Accrued Benefit who dies before the payment of his
Retirement Benefit commences shall have a nonforfeitable right to a Retirement
Benefit equal to the Participant's Accrued Benefit, such Retirement Benefit to
commence on his Early Retirement Date, reduced as provided in Section 7.1. A
Participant shall receive any death benefit to which he was entitled under the
Prior Plan as in effect on December 31, 1984 for benefits accrued prior to
January 1, 1985.
10.2. Consent.
Notwithstanding the foregoing, to the extent required by the Code and
IRS Regulations, if, immediately prior to his death, the Participant had a
Retirement Benefit and the Equivalent Actuarial Value of such Retirement Benefit
is in excess of $3,500 ($5,000, effective January 1, 1998) at the time of the
distribution or any prior distribution, no lump sum cash payment shall be made
under Section 10.1 to the Participant's Surviving Spouse prior to the date which
was or would have been the Participant's Normal Retirement Date (had he lived)
without the Surviving Spouse's written consent.
SECTION 11.
METHOD OF PAYMENT
11.1. Payment of Benefits.
The Retirement Benefit to which an unmarried Participant or a
Participant who has not been legally married for at least one year ending on the
date as of which payment of his Retirement Benefit commences, is entitled under
the Plan shall, except as otherwise provided in this Section 11, be payable in
the form of a Straight Life Annuity. The Equivalent Actuarial Value of the
Retirement Benefit to which a Participant who has been legally married for at
least one year ending on the date as of which payment of his Retirement Benefit
commences is entitled under the Plan shall, except as otherwise provided in this
Section 11, be payable in the form of a Qualified Joint and Survivor Annuity.
11.2. Optional Forms of Benefits.
(a) Subject to the provisions of Sections 11.4 and 11.5, in lieu
of receiving his Benefit in the form described in Section 11.1, a Participant
may elect to receive his Retirement Benefit in any one of the optional forms
described in Sections 11.2(a)(i) through (iv) below; provided, however, that the
benefits under such options shall be the Equivalent Actuarial Value of the
Retirement Benefits described in Section 11.1.
(i) Contingent Annuitant Option. A Participant may elect a
benefit of Equivalent Actuarial Value payable to him for life with payments to
be made, after his death, in 100% of such amount or 50% of such amount, to the
Beneficiary designated by such Participant, if living, for the life of such
Beneficiary. The designation of a Beneficiary may be revoked or changed at any
time prior to the date the Participant's Retirement Benefit is to begin. In the
event of the death of either the Participant or the Beneficiary prior to the
date such Retirement Benefit is to begin, the election of this option shall be
inoperative.
(ii) Contingent Annuitant Option; Ten Year Certain Payment
Period. A Participant may elect a benefit of Equivalent Actuarial Value payable
to him for life with monthly payments to be made, after his death, in the same
amount, or 50% of such amount, to the Beneficiary designated by him, if living,
for the life of such Beneficiary. If the Participant dies after the date his
Retirement Benefit commences but prior to receiving 120 monthly payments, the
remainder of such 120 monthly payments will be paid to his Beneficiary (or, in
the event of the death of the Beneficiary after the death of the Participant, to
the Beneficiary's estate). After such 120 monthly payments have been made, the
Beneficiary shall receive monthly payments for life in the same amount, or 50%
of such amount, in accordance with the Participant's election. The designation
of a Beneficiary may be revoked or changed at any time prior to the date payment
of such Retirement Benefit commences. In the event of the death of the
Participant prior to the date payment of the Participant's Retirement Benefit
begins, the election of the contingent annuitant portion of this option shall be
inoperative.
(iii) Ten Year Certain and Life Annuity. A Participant may elect
to receive the Equivalent Actuarial Value of his Retirement Benefit in the form
of a Ten Year Certain and Life Annuity. In lieu of receiving the continuing
monthly payments as provided by a Ten Year Certain and Life Annuity, the
Participant's Beneficiary may elect, within 60 days after the date of the
Participant's death, to receive in one lump cash sum the Actuarial Equivalent of
such payments.
(b) If a Participant has elected an option in accordance with
this Section 11.2 and dies prior to the date payment of his Retirement Benefit
commences (i) without leaving a Surviving Spouse, or (ii) leaving a Surviving
Spouse and having made a valid election to waive the Preretirement Survivor
Annuity in accordance with Section 11.5, then such optional form of benefit
shall become payable to his Beneficiary in the same amount, if any, that would
have been payable to such Beneficiary if the payments thereunder had commenced
to the Participant on the first day of the month coincident with or preceding
the date of the Participant's death. If such Participant dies prior to the date
payment of his Retirement Benefit commences, leaving a Surviving Spouse and
without having made a valid election to waive the Preretirement Survivor Annuity
in accordance with Section 11.5, then the election under this Section 11.2 shall
be null and avoid, and the Surviving Spouse shall receive the Preretirement
Survivor Annuity in accordance with Section 11.3.
(c) If a person entitled to receive payments under this Section
11.2 is not the spouse of the Participant, the Equivalent Actuarial Value of the
benefits allocated to such person shall not be greater than one-half of the
Equivalent Actuarial Value of the Retirement Benefit which the Participant could
otherwise have received.
11.3. Preretirement Survivor Annuity.
(a) Married Participants.
(i) Subject to Section 11.5, a Preretirement Survivor Annuity
shall be paid to the Surviving Spouse of a Participant or former Participant
who, after earning a nonforfeitable right to his Accrued Benefit, dies before
the commencement of payment of his Retirement Benefit. In the case of a
Participant who dies on or after the first date which could have been his Early
Retirement Date but before payment of his Retirement Benefit has commenced, the
Preretirement Survivor Annuity shall be based on the Qualified Joint and
Survivor Annuity which would have been payable if the Participant had retired
and payments under the Qualified Joint and Survivor Annuity had commenced on the
first day of the month coincident with or preceding the date of his death. In
the case of a Participant who dies before the first date which could have been
his Early Retirement Date, the Preretirement Survivor Annuity shall be based on
the Qualified Joint and Survivor Annuity which would have been payable if the
Participant had terminated Service on the date of death, survived until the
first date which could have been his Early Retirement Date, immediately began
receiving payments under the Qualified Joint and Survivor Annuity and died on
the day following such Early Retirement Date.
(ii) Designation of Non-Spouse Beneficiary. In accordance with
the notice and waiver provisions of Section 11.5, a Participant and his Spouse
may designate a non-Spouse Beneficiary to receive the Preretirement Survivor
Annuity. The designation of the non-Spouse Beneficiary must be made prior to the
death of the Participant. Notwithstanding anything in this Section 11.3 to the
contrary, the actuarial present value of the Preretirement Survivor Annuity
payable to a designated non-Spouse Beneficiary of a Married Participant will be
no larger than the actuarial present value of the Preretirement Survivor Annuity
that would have been payable to the Spouse pursuant to paragraph (a), above.
(iii) Simultaneous Death. If the Surviving Spouse of a
Participant described in subparagraph (i) dies within thirty (30) days following
the date of death of the Participant, a benefit shall be paid to a surviving
contingent Beneficiary previously designated by the Participant in addition to
any final payment which may be due to the Surviving Spouse. The amount of the
benefit payable to the contingent Beneficiary shall be determined pursuant to
paragraph (b), as if the Participant had been single at the time of death. If no
contingent Beneficiary is designated by the Participant, the benefit which would
have been payable pursuant to paragraph (b), determined as though the
Participant was single and failed to designate a Beneficiary, will be paid to
the Participant's estate. Additionally, in the event the Participant and
Participant's Spouse die simultaneously and no contingent Beneficiary has been
designated by the Participant, any benefit payable, also determined as though
the Participant was single and failed to designate a Beneficiary, shall be paid
to the Participant's estate.
(b) Unmarried Participants. A Preretirement Survivor Annuity
shall be paid to the designated Beneficiary of an unmarried Participant or
unmarried former Participant who, after earning a nonforfeitable right to his
Accrued Benefit, dies before the commencement of payment of his Retirement
Benefit. In the case of a Participant who dies on or after the first date which
could have been his Early Retirement Date but before payment of his Retirement
Benefit has commenced, the Preretirement Survivor Annuity shall be based on the
Joint and Survivor Annuity which would have been payable if the Participant had
retired and payments under the Joint and Survivor Annuity had commenced on the
first day of the month coincident with or preceding the date of his death. In
the case of a Participant who dies before the first date which could have been
his Early Retirement Date, the Preretirement Survivor Annuity shall be based on
the Joint and Survivor Annuity which would have been payable if the Participant
had terminated Service on the date of death, survived until the first date which
could have been his Early Retirement Date, immediately began receiving payments
under the Joint and Survivor Annuity and died on the day following such Early
Retirement Date.
Notwithstanding the foregoing, if the designated Beneficiary is more
than five (5) years younger than the Participant, the amount of the
Preretirement Survivor Annuity payable to the Designated Beneficiary will be
actuarially reduced to be of the same value as the Preretirement Survivor
Annuity which would be paid to a Designated Beneficiary only five (5) years
younger than the Participant. If an unmarried Participant or unmarried former
Participant does not designate a Beneficiary, his estate will receive a lump sum
payment which is actuarially equivalent to the benefit that would have been
provided to a designated Beneficiary who is the same age as the Participant.
(c) Payment of Preretirement Survivor Annuity. Payment of a
Preretirement Survivor Annuity shall commence on the last day of the month
following the later of (i) the first month in which the Participant could have
attained his Normal Retirement Date (had he lived), or (ii) the month in which
the Participant dies; provided, however, to the extent required by the Code and
IRS Regulations, if the Equivalent Actuarial Value of a Preretirement Survivor
Annuity is in excess of $3,500 ($5,000, effective January 1, 1998) at the time
of distribution or any prior distribution, it shall not commence to be paid
prior to the date which was or would have been the Participant's Normal
Retirement Date (had the Participant lived) without the written consent of the
Participant's Surviving Spouse. In the absence of consent, payment of the
Preretirement Survivor Annuity shall not be made until the earlier of (i) the
first day of the month following receipt of the required consent by the
Administrative Committee, or (ii) the date which would have been the
Participant's Normal Retirement Date had the Participant lived. Notwithstanding
anything in the Plan to the contrary, in the event that a Preretirement Survivor
Annuity is payable pursuant to this Section 11.3 to the Spouse or child of the
Participant or to the guardian of a child of the Participant, the recipient of
the benefit may elect to commence the benefit early, on an actuarially reduced
basis.
11.4. Commencement of Payment.
(a) Notwithstanding any other provision of the Plan, effective
for Plan Years beginning after December 31, 1996, a Participant's benefits shall
be distributed to him not later than April 1st of the calendar year following
the later of (i) the calendar year in which the Participant attains age 70 1/2
or (ii) the calendar year in which the Participate retires, provided, however,
that this clause (ii) shall not apply in the case of a Participant who is a
"five (5) percent owner" at any time during the five-plan year period ending in
the calendar year in which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner" during any subsequent Plan
Year, clause (ii) shall no longer apply and the required beginning date shall be
the April 1st of the calendar year following the calendar year in which such
subsequent Plan Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under the preceding
sentence and must be made over a period certain measured by the life expectancy
of the Participant (or the life expectancies of the Participant and his
designated Beneficiary) in accordance with Regulations.
With respect to distributions under the Plan made for
calendar years beginning on or after January 1, 2001, the Plan will apply the
minimum distribution requirements of Section 401(a)(9) of the Code in accordance
with the regulations under Section 401(a)(9) that were proposed on January 17,
2001 (the 2001 Proposed Regulations), notwithstanding any provision of the Plan
to the contrary. This provision shall continue in effect until the last calendar
year beginning before the effective date of the final regulations under Section
401(a)(9) or such other date as may be published by the Internal Revenue
Service. In the case of any such Participant whose benefits commence upon his
termination of Service after attaining age 70-1/2 pursuant to this Section, such
Participant's Accrued Benefit shall be no less than the Accrued Benefit at the
end of the calendar year during which the Participant attains age 70-1/2,
actuarially increased from that date to the date of his termination of Service,
plus benefits accrued (if any) for each Plan Year thereafter actuarially
increased from the end of each Plan Year to the date of his termination of
Service.
(b) If distribution of a Participant's benefit has commenced
prior to a Participant 's death, and such Participant dies before his entire
benefit is distributed to him, distribution of the remaining portion of the
Participant 's benefit to the Participant 's Beneficiary shall be made at least
as rapidly as under the method of distribution in effect as of the date of the
Participant 's death.
(c) If a Participant dies before distribution of his benefit has
commenced, distributions to any Beneficiary shall be made on or before the
December 31st of the calendar year which contains the fifth anniversary of the
date of such Participant's death; provided, however, at the Beneficiary's
irrevocable election, duly filed with the Administrative Committee before the
applicable commencement date set forth in the following sentence, any
distribution to a Beneficiary may be made over the life of the Beneficiary or a
period not extending beyond the life expectancy of the Beneficiary. Such
distribution shall commence not later than the December 31st of the calendar
year immediately following the calendar year in which the Participant died or,
in the event such Beneficiary is the Participant's spouse, on or before the
December 31st of the calendar year in which such Participant would have attained
age 70-1/2, if later (or, in either case, on any later date prescribed by IRS
Regulations). If such Participant's spouse dies after such Participant's death
but before distributions to such spouse commence, this Section 11.4(c) shall be
applied to require payment of any further benefits as if such spouse were the
Participant.
(d) Pursuant to IRS Regulations, any benefit paid to a child
shall be treated as if paid to a Participant's spouse if such amount will become
payable to such spouse on the child's attaining majority, or other designated
event permitted by the Regulations.
(e) All distributions made hereunder shall be made in accordance
with the provisions of Section 401(a)(9) of the Code and IRS Regulations
thereunder.
(f) Notwithstanding the foregoing, distributions to a
Participant may be made in accordance with a written designation made before
January 1, 1984 by the Participant if such designation satisfied the
requirements of Section 242(b)(2) of the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA).
11.5. Explanation of Annuities.
(a) The Administrative Committee shall furnish or cause to be
furnished to each married Participant, to the extent required by the Code and
IRS Regulations at least 30 days but no more than 90 days prior to the date a
distribution is to be made under the Plan, explanations of the Qualified Joint
and Survivor Annuity and the Preretirement Survivor Annuity under procedures
developed by the Administrative Committee in accordance with the Code and IRS
Regulations. A Participant may, with the written consent of his Surviving Spouse
(unless the Administrative Committee makes a written determination in accordance
with the Code and IRS Regulations that no such consent is required), elect in
writing (i) to receive his Retirement Benefit in one of the optional forms
described in Section 11.2 in lieu of a Qualified Joint and Survivor Annuity
within the 90-day period ending on the date payment of his Retirement Benefit
commences, or (ii) to waive the Preretirement Survivor Annuity within the period
beginning on the first day of the Plan Year in which the Participant attains age
35 and ending on the date of his death. Any election made pursuant to this
Section 11.5 may be revoked by a Participant, without spousal consent, at any
time within which such election could have been made. Such an election or
revocation must be made in accordance with procedures developed by the
Administrative committee in accordance with the Code and IRS Regulations.
(b) The Administrative Committee may provide the explanation
of the Qualified Joint and Survivor Annuity after the date on which payment of
the Participant's Retirement Benefit commences, provided that the election
period described above shall not end before the 30th day following the date on
which the explanation was provided. Subject to the above, a Participant may
elect to waive the requirement that the explanation must be provided at least 30
days before the date payment of his Retirement Benefit is to commence or at
least 30 days before the end of the election period (as applicable). In the
event of such a waiver, distribution of the Participant's Retirement Benefit
must commence more than seven (7) days after the explanation was provided.
11.6. Small Amounts.
Notwithstanding any other provisions of this Section 11, any annuity
amounting to less than $10 per month shall be paid in quarterly or semi-annual
installments, and payment of any Retirement Benefit with an Equivalent Actuarial
Value of $3,500 or less ($5,000, effective January 1, 1998) at the time of the
distribution or any prior distribution shall be made in a lump sum cash payment
in full settlement of the Plan's liability therefore; provided, however, that in
the case of a Participant, no such lump sum payment shall be made after benefits
have commenced without the consent of the Participant and, if the Participant is
married at the time such payment would otherwise commence, the consent of the
Participant and his spouse or, if the Participant has died, the Participant's
Surviving Spouse or Beneficiary.
11.7. Suspension of Retirement Benefits.
Except as may be otherwise required in Section 11.4 and notwithstanding
any other provisions of this Section 11, if a Participant for any reason returns
to Service, payment of his Retirement Benefit, if any, shall, to the extent
permitted under the Regulations, be suspended until his subsequent termination
of Service or retirement. To the extent that the application of this Section
11.7 constitutes a suspension of benefits, such suspension shall be in
accordance with the Act, the Code and the Regulations.
11.8. Consent.
Notwithstanding any other provisions of this Section 11, to the extent
required by the Code and IRS Regulations, if the Equivalent Actuarial Value of
the Retirement Benefit of a Participant who retires is, or has been, in excess
of $3,500 ($5,000, effective January 1, 1998) no benefit shall be paid until the
Participant's Normal Retirement Date without the Participant's written consent,
and if the Participant is married at the date payment would otherwise commence
and his benefit is to be paid in a form other than a Qualified Joint and
Survivor Annuity, no benefit shall be paid without the written consent of the
Participant's Surviving Spouse, unless it is paid on the Participant's Normal
Retirement Date.
11.9. Deemed Distribution.
If the Participant's nonforfeitable Retirement Benefit on the date he
terminates Service equals zero, such Participant shall be deemed to have
received his Retirement Benefit on the date he terminates Service.
11.10. Automatic Payment of Retirement Benefits.
Notwithstanding any other provision of the Plan, unless a Participant
elects to otherwise defer his distribution, payment of his Retirement Benefit
shall commence on the 60th day after the close of the Plan Year following (i)
the date the Participant reaches his Normal Retirement Date, (ii) the 10th
anniversary of the date the Participant's participation in the Plan began, or
(iii) the date the Participant terminates Service with the Employer, whichever
is the latest to occur.
11.11. Direct Rollover.
A Distributee may elect, at a time and manner prescribed by the
Administrative Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by such
Distributee in the form of a Direct Rollover. A Distributee may not elect to
make a Direct Rollover if the total Eligible Rollover Distributions to which the
Distributee is entitled during the calendar year equal, or are reasonable
expected to equal, less than $200. A Distributee may not elect to make a Direct
Rollover of any portion of an Eligible Rollover Distribution if that portion is
not at least $500 or more. A Distributee may not make a Direct Rollover of less
than the entire amount of an Eligible Rollover Distribution if the entire
Eligible Rollover Distribution equals less than $500.
11.12. Military Service Credit.
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the Code.
SECTION 12.
MAXIMUM AMOUNT OF RETIREMENT BENEFIT
12.1. Application of Section 12.
The provisions of this Section 12 shall govern the benefits to which it
is applicable notwithstanding any other provision of the Plan. The benefits to
which this Section 12 is applicable are: (i) any annuity payable to a
Participant for life as part of a Qualified Joint and Survivor Annuity or as
part of a survivorship option elected by the Participant under Section 11.2 and
having the effect of a Qualified Joint and Survivor Annuity (excluding in either
case any survivor annuity payable to a Surviving Spouse thereunder); (ii) any
Single Life Annuity payable to a Participant under Section 11.1 or elected by a
Participant under Section 11.2; and (iii) any other option elected by a
Participant under Section 11.2 (including both the annuity payable to the
Participant and any other annuity or benefit payable thereunder).
12.2. Maximum Benefit.
The benefits to which this Section 12 is applicable may not exceed the
Actuarial Equivalent of a Single Life Annuity equal to the lesser of (i)
$140,000 (the "Dollar Limitation"), or (ii) 100 percent of the Participant's
High 3 Year Average Compensation (the "Compensation Limitation"), subject,
however, to the following provisions of section 12.
12.3. Adjustments to Maximum Benefit.
The limitations on the maximum amount of benefits contained in Section
12.2 shall be adjusted as follows:
(a) The Dollar Limitation shall be adjusted annually, for Plan
Years beginning after December 31, 1987, for increases in the cost-of-living in
accordance with IRS Regulations and, in the case of Participants who have
separated from Service, the Compensation Limitation shall be adjusted annually
for increases in the cost-of-living in accordance with IRS Regulations. As a
result of such an adjustment, a benefit which had been limited by the provisions
of this Section in a previous Plan Year may be increased with respect to future
payments to the least of (i) the adjusted Dollar Limitation amount, (ii) the
adjusted Compensation Limitation or (iii) the amount of benefit which would have
been payable under the Plan without regard to the provisions of this Section 12.
(b) Effective for Plan Years beginning before January 1, 2002,
in the case of a benefit beginning prior to a Participant's "social security
retirement age", as defined in Section 415(b)(8) of the Code, but on or after
age 62, the Dollar Limitation applicable to such benefit shall be reduced as
follows:
(i) If a Participant's social security retirement age is
65, the Dollar Limitation for benefits commencing on or after age 62 is
determined by reducing the Dollar Limitation by 5/9 of one percent for each
month by which benefits commence before the month in which the Participant
attains age 65.
(ii) If a Participant'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 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 benefits commence before the month of the
Participant's social security retirement age. The adjustment provided for in
this Section 12.3(b) the preceding sentence shall be made in such manner as IRS
Regulations may prescribe which is consistent with the reduction for old-age
insurance benefits commencing before the social security retirement age under
the Social Security Act.
(iii) If the annual benefit of a Participant commences prior
to age 62, the Dollar Limitation shall be the actuarial equivalent of an annual
benefit beginning at age 62 reduced for each month by which benefits commence
before the month in which the Participant attains age 62. A decrease in the
Dollar Limitation determined in accordance with this Section 12.3(b)(iii) shall
not reflect the mortality decrement to the extent that benefits will not be
forfeited upon the death of the Participant.
(c) Effective for Plan Years beginning before January
1, 2002, in the case of a benefit beginning after the Participant's social
security retirement age, the Dollar Limitation shall be adjusted in accordance
with IRS Regulations to an amount which is equal to a Straight Life Annuity
commencing at the same time, which is the Actuarial Equivalent of a Single Life
Annuity equal to the Dollar Limitation commencing at social security retirement
age.
For the purposes of this Section 12.3, actuarial equivalence shall have
the same meaning as described in Section 2.25, except the interest rate
assumptions for the purposes of Section 12.3(b) and (d)(i) shall not be less
than the greater of the interest rate assumptions provided in the Plan or five
percent, and the interest rate assumption for the purposes of this Section
12.3(c) and (d)(ii) shall not be greater than the lesser of five percent or the
rate specified in the Plan.
(d) Effective for Plan Years beginning on or after January 1,
2002:
(i) in the case of a benefit beginning prior to a Participant
attaining age 62, the determination of whether the Dollar Limitation applicable
to such benefit has been satisfied shall be made, in accordance with
Regulations, by reducing the Dollar Limitation so that such limitation (as so
reduced) equals an annual benefit (beginning when such benefit begins) which is
equivalent to a annual benefit equal to the amount of such limitation beginning
at age 62; and
(ii) in the case of a benefit beginning after a Participant
attains age 65, the determination of whether the Dollar Limitation applicable to
such benefit has been satisfied shall be made, in accordance with Regulations,
by increasing the Dollar Limitation so that such limitation (as so reduced)
equals an annual benefit (beginning when such benefit begins) which is
equivalent to a annual benefit equal to the amount of such limitation beginning
at age 65.
(e) If a Participant has fewer than 10 years of Plan
participation, the Dollar Limitation shall be multiplied by a fraction, the
numerator of which is the number of years (computed to fractional parts of a
year) of participation in the Plan, and the denominator of which is 10. If the
Participant has fewer than 10 Years of Service, the Compensation Limitation
shall be multiplied by a fraction, the numerator being the Participant's Years
of Service (computed to fractional parts of a year) and the denominator of which
is 10.
(f) In no event shall Section 12.3(e) above reduce
the Dollar Limitation and the Compensation Limitation to an amount less than
one-tenth of the applicable limitation (determined without regard to Section
12.3(e)). To the extent provided by IRS Regulations and pronouncements, Section
12.3(e) above shall be applied separately with respect to each change in the
benefit structure of the Plan.
12.4. Inapplicability of Section 12.
The limitations contained in Section 12.2 shall not be applicable if
(i) the annual benefits subject to Section 12 with respect to the Participant do
not exceed $10,000 and (ii) the Participant has not participated in any defined
contribution plan (within the meaning of Section 414(i) of the Code) maintained
by the Company; provided, however, that the $10,000 limitation contained in this
Section 12.4 shall be reduced in the same manner as the Compensation Limitation
is reduced under Section 12.3(d).
12.5. Limitation Prior to October 3, 1973.
In the case of any individual who was a Participant prior to October 3,
1973, the benefits to which section 12 is applicable may not exceed the greater
of (i) the limitations contained in either Section 12.2 or Section 12.4,
adjusted as described in Section 12.3, or (ii) the smallest of (A) the Actuarial
Equivalent of a Single Life Annuity (as described in Section 11.2) equal to 100%
of the Participant's annual rate of Compensation on October 2, 1973 (or the date
of his termination of Service, if earlier), (B) the Actuarial Equivalent of the
benefits which would have been provided under the Plan as in effect on October
2, 1973 without taking account of any increases in his annual rate of
compensation after such date, or (C) in the case of a Participant whose Service
terminated prior to October 2, 1973, the Actuarial Equivalent of his
nonforfeitable benefits after his termination of Service.
12.6. Limitation Prior to December 31, 1982.
Notwithstanding the foregoing provisions of this Section 12, the
maximum limitation on a Participant's Retirement Benefits, with respect to any
person who was a Participant prior to December 31, 1982 and whose Retirement
Benefit (determined without regard to any changes in the Plan after July 1, 1982
and without regard to cost-of-living adjustments, if any, occurring after July
1,1982) as of December 31, 1982, exceeds the limitations set forth in section
12.2, shall be such Participant's Retirement Benefit as of December 31, 1982;
provided that such Participant's Retirement Benefit did not exceed the maximum
limitation thereon as of December 31, 1982.
12.7. Additional Limitations.
(a) Effective for Plan Years beginning before January 1,
2000, notwithstanding the foregoing provisions of this Section 12, and subject
to the provisions of Section 12.7(c), if a Participant in the Plan also
participates or ever participated in any defined contribution plan (as defined
in Sections 414(i) and 415(k) of the Code) currently or formerly maintained by
the Company or any of its Affiliates, the sum of the Participant's "Defined
Benefit Fraction" (as defined in Section 12.7(b)(1)) and the Participant's
"Defined Contribution Fraction" (as defined in Section 12.7(b)(2)) shall not
exceed 1.0. If the Plan satisfied the applicable requirements of Section 415 of
the Code as in effect for all Limitation Years beginning before January 1, 1987,
an amount shall be subtracted from the numerator of the Defined Contribution
Fraction (not exceeding such numerator) as prescribed by IRS Regulations so that
the sum of the defined benefit plan fraction and defined contribution plan
fraction computed under Section 415(e)(1) of the Code does not exceed 1.0 for
such Limitation Year. In the event that in any Plan Year the sum of a
Participant's Defined Benefit Fraction and the Participant's Defined
Contribution Fraction exceeds 1.0, then the Retirement Benefit payable under the
Plan shall be reduced so that the sum of such fractions in respect of that
Participant will not exceed 1.0.
(b) For purposes of Section 12.7(a) the following terms
shall have the meanings set forth below:
(1) "Defined Benefit Fraction" shall mean as to any
Participant for any Plan Year, a fraction, (A) the numerator of which is the
projected annual Retirement Benefit the Participant is expected to receive under
the Plan determined as of the end of the Plan Year and in accordance with the
IRS Regulations and (B) the denominator of which is the lesser of (i) the
product of 1.25 multiplied by the dollar limitation in effect under clause (i)
of Section 12.2 for the Plan Year, or (B) the product of 1.4 multiplied by the
amount which may be taken into account under clause (ii) of Section 12.2 with
respect to the Participant for the Plan Year; and
(2) "Defined Contribution Fraction" shall mean,
as to any Participant for any Plan Year, a fraction, (A) the numerator of which
is the sum of the annual additions (as defined in Section 415(c)(2) of the Code)
credited to the accounts of the Participant under any defined contribution plan
(as defined in Sections 414(i) and 415(k) of the Code) maintained by the Company
or any of its Affiliates for the Plan Year and for all prior Plan Years, and (B)
the denominator of which is the sum of the lesser of the following amounts,
determined for such Plan Year and for each prior Year of Service (regardless of
whether the Participant was a participant in the defined contribution plan
during any such prior Year of Service): (i) the product of 1.25 multiplied by
the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such
year, or (ii) the product of 1.4 multiplied by the amount which may be taken
into account under Section 415(c)(1)(B) of the Code with respect to the
Participant for such year.
12.8. Maximum Limitations.
Notwithstanding the foregoing provisions of this Section 12, the
maximum limitation on Retirement Benefits, with respect to any person who is a
Participant prior to January 1, 1987 and whose Retirement Benefit (determined
without regard to any changes in the Plan after May 6, 1986 and without regard
to cost of living adjustments occurring after December 31, 1986), exceeds the
limitations set forth in Section 12.2, then, for purposes of such section and
Section 415(b) and (e) of the Code, the Dollar Limitation with respect to such
Participant shall be equal to such Participant's accrued Retirement Benefit as
of December 31, 1986; provided that such Participant's Retirement Benefit did
not exceed the maximum limitation as in effect for all Plan Years commencing
prior to January 1, 1987.
SECTION 13.
DESIGNATION OF BENEFICIARIES
13.1. Beneficiary Designation.
Each Participant shall file with the Administrative Committee a written
designation of one or more persons as the Beneficiary who, subject to Section
11.5, shall be entitled to receive the amount, if any, payable under the Plan
upon his death. Subject to the requirements of Section 11, a Participant may
from time to time revoke or change his Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the
Administrative Committee. The last such designation received by the
Administrative Committee shall be controlling, provided, however, that no
designation, or change or revocation thereof, shall be effective unless received
by the Administrative Committee prior to the Participant's death, and in no
event shall it be effective as of a date prior to such receipt. However, if a
Participant is married, his Beneficiary shall be his spouse unless such spouse
has consented in writing to such other designation, on a form supplied by the
Administrative Committee and has waived her rights pursuant to Section 11.5 of
the Plan.
13.2. Failure to Designate Beneficiary.
If no such Beneficiary designation is in effect at the time of a
Participant's death, or if no designated Beneficiary survives the Participant,
the payment of the amount, if any, payable under the Plan upon his death shall
be made to the Participant's Surviving Spouse, if any, or if the Participant has
no Surviving spouse, then the following persons (if then living) in the
following order of priority; (i) children, in equal shares, (ii) parents, in
equal shares, and (iii) the Participant's estate. If the Administrative
Committee is in doubt as to the right of any person to receive such amount, the
Administrative Committee may direct the Trustee to retain such amount, without
liability for any interest thereon, until the rights thereto are determined, or
the Administrative Committee may direct the Trustee to pay such amount into any
court of appropriate jurisdiction and such payment shall be a complete discharge
of the liability of the Plan and the Trust therefor.
SECTION 14.
FUNDING AND CONTRIBUTIONS
14.1. Funding.
Subject to the provisions of Sections 16 and 17, the Company shall
contribute to the Trust, not less frequently than quarterly during each Plan
Year, the amounts recommended by the Actuary to the Administrative Committee as
necessary to maintain the Plan on a sound actuarial basis, in accordance with
the Act and the Code. The Administrative Committee shall arrange for the
establishment and maintenance by the Actuary, or in accordance with his
recommendations, of such funding accounts as are required by the Act.
14.2. Actuarial Assumptions.
The Administrative Committee shall adopt and may change from time to
time, in accordance with the provisions of the Act and the Code, such actuarial
assumptions and methods as are recommended by the Actuary for purposes of
actuarial valuations of the Plan. The Actuary shall make an annual actuarial
valuation of the Plan and shall estimate the contributions required under
Section 14.1 on the basis thereof. At least once in each three year period the
Actuary shall make an actuarial study of the mortality, Service and compensation
experience of the Participants of the Plan and the investment experience and any
other relevant experience gains and losses under the Plan, including such
calculations as may be necessary to determine whether the Plan is adequately
funded, and shall report the results of its study to the Administrative
Committee. Prior to termination of the Plan, forfeitures of benefits arising
from termination of Service, death, or any other reason under the Plan shall not
be applied to increase the benefits that any Participant would otherwise be
entitled to receive under the Plan, but may be anticipated in estimating costs
under the Plan and shall be applied to reduce the Company's contributions under
the Plan.
14.3. Trustee.
All monies, securities or other property received as contributions
under the Plan shall be delivered to the Trustee under the Trust, to be managed,
invested, reinvested and distributed in accordance with the Plan, the Trust and
any agreement with an insurance company or other financial institution
constituting a part of the Plan and the Trust.
14.4. Expenses.
The expenses of administering the Plan including (i) the fees and
expenses of any Employee and of the Trustee for the performance of their duties
under the Trust, (ii) the expenses incurred by the members of the Administrative
Committee and of the Investment Committee in the performance of their duties
under the Plan (including reasonable compensation for any legal counsel,
certified public accountants and any agents and cost of services rendered in
respect of the Plan), and (iii) all other proper charges and disbursements of
the Trustee or the members of the Administrative Committee and of the Investment
Committee (including settlements of claims or legal actions approved by counsel
to the Plan) are to be paid by the Employer unless the Administrative Committee
determines that such expenses may be paid out of the Trust. In estimating costs
under the Plan, administrative costs may be anticipated.
14.5. Return of Contributions.
Any contribution made by an Employer because of a mistake of fact shall
be returned to the Employer which made such contribution within one year of such
contribution. Any contribution made by an Employer that is conditioned upon the
contribution's deductibility or the Plan's initial qualification under the Code,
and if either the deduction or the initial qualification is denied, such
contribution shall be returned to the Employer which made such contribution
within one year after the date such deduction or qualification is denied.
SECTION 15.
ADMINISTRATION OF THE PLAN
15.1. Powers and Duties of Administrative Committee.
The Administrative Committee shall have general responsibility and
discretionary authority for the administration, establishment, and
interpretation of the Plan (including, but not limited to, complying with
reporting and disclosure requirements, establishing and maintaining Plan
records, adopting amendments to the Plan as described in Section 17.1, deciding
all questions arising in connection with the Plan, including eligibility,
benefit payments, vesting and factual questions). The Administrative Committee
shall engage the Actuary and such certified public accountants, who may be
accountants for the Company, as it shall require or may deem advisable for
purposes of the Plan. The Administrative Committee shall have sole discretionary
authority to determine, a Participant's or Beneficiary's benefit eligibility.
The Administrative Committee shall communicate any requirements and objectives
of the Plan, and any audit information which may be pertinent to the investment
of Plan assets to the Investment Committee, which shall establish investment
standards and policies and communicate the same to the Trustee (or other funding
agencies under the Plan). The Administrative Committee shall have no
responsibility for the investment of assets under the Plan and the Trust.
15.2. Powers and Duties of Investment Committee.
The Investment Committee shall periodically review the investment
performance and methods of the Trustee and any other funding agency, including
any insurance company under the Plan and may appoint and remove or change the
Trustee and any such funding agency. The Investment Committee shall have the
power to appoint or remove one or more Investment Managers and to delegate to
such Investment Manager authority and discretion to manage (including the power
to acquire and dispose of) the assets of the Plan, or any portion thereof,
provided that (i) each Investment Manager with such authority and discretion
shall be either a bank, an insurance company or a registered investment adviser
under the Investment Advisers Act of 1940, and shall acknowledge in writing that
it is a fiduciary with respect to the Plan and (ii) the Investment Committee
shall periodically review the investment performance and methods of each
Investment Manager with such authority and discretion. The Administrative
Committee shall communicate any requirements and objectives of the Plan
(including any interest rate or other actuarial assumptions) which may be
pertinent to the investment of Plan assets, to the Investment Committee which
shall establish investment standards and policies incorporating such
requirements and objectives and communicate the same to the Trustee (or other
funding agencies under the Plan). If annuities are to be purchased under the
Plan, the Investment Committee shall determine what contracts should be made
available to terminated Participants or purchased by the Trust.
15.3. Agents; Reports to Board of Directors.
The Administrative Committee and the Investment Committee may arrange
for the engagement of legal counsel, who may be counsel for the Company, and
make use of such agents and clerical or other personnel as they each shall
require or may deem advisable for purposes of the Plan. The Committees may rely
upon the written opinion of such counsel and the Actuary and accountants engaged
by the Administrative Committee and may delegate to any agent or to any
sub-committee or members of such Committee its authority to perform any act
hereunder, including, without limitation, those matters involving the exercise
of discretion (including the appointment of an Investment Manager), provided
that such delegation shall be subject to revocation at any time at the
discretion of the Committee. The Committees shall report to the Board, or to a
committee of the Board designated for that purpose, no less frequently than at
each annual meeting ad shall be specified by the Board, or such committee with
respect to the Board with regard to the matters for which it is responsible
under the Plan.
15.4. Structure of Committees.
The Administrative Committee and the Investment Committee shall consist
of at least three members, each of whom shall be appointed by, shall remain in
office at the will of, and may be removed, with or without cause, by the Board.
Any member of either of said Committees may resign at any time. No member of
either of said Committees shall be entitled to act on or decide any matter
relating solely to himself or any of his rights or benefits under the Plan. The
members of the Administrative Committee and of the Investment Committee shall
not receive any special compensation for serving in their capacities as members
of such Committees but shall be reimbursed for any reasonable expenses incurred
in connection therewith. Except as otherwise required by the Act, no bond or
other security need be required of the Administrative Committee or the
Investment Committee or any member thereof in any jurisdiction. Any person may
serve on both Committees, and any member of either Committee, any sub-Committee
or agent to whom either Committee delegates any authority, and any other person
or group of persons, may serve in more than one fiduciary capacity (including
service both as a trustee and administrator) with respect to the Plan.
15.5. Adoption of Procedures of Committee.
Each Committee shall elect or designate its own Chairman, establish its
own procedures and the time and place for its meetings, and provide for the
keeping of minutes of all meetings. A majority of the members of a Committee
shall constitute a quorum for the transaction of business at a meeting of such
Committee. Any action of a Committee may be taken upon the affirmative vote of a
majority of the members of such Committee at a meeting or, at the direction of
its Chairman, without a meeting by mail, telegraph, telex, telecopier or
telephone, provided that all of the members of such Committee are informed by
mail, telegraph, telex, telecopier or telephone, of their right to vote on the
proposal and of the outcome of the vote thereon.
15.6. Demands for Money.
All demands for money of the Plan shall be signed by an officer or
officers or such other person or persons as the Administrative Committee may
from time to time designate in writing who shall cause to be kept full and
accurate accounts of receipts and disbursements of the Plan, shall cause to be
deposited all funds of the Plan to the name and credit of the Plan, in such
depositories as may be designated by the Investment Committee, shall cause to be
disbursed the monies and funds of the Plan when so authorized by the
Administrative Committee and shall generally perform such other duties as maybe
assigned to him from time to time by either such Committee.
15.7. Trust Agreement; Powers and Duties of Trustee; Trust Fund.
The Company has entered into the Trust Agreement with the Trustee
providing for the administration and management of the Trust Fund. The Trustee
shall have responsibility under the Plan for the management and control of the
assets of the Plan but shall have no discretionary responsibility for the
investment and management of such assets unless, and if so, only to the extent
that the Trustee has been appointed an investment adviser pursuant to Section
15.2. All benefits and other amounts payable hereunder shall be paid exclusively
from the Trust Fund, and neither the Company, any Affiliate, any Trustee, nor
any director, officer, Employee or agent of the Company assumes any
responsibility or liability therefor. The Trust Fund may be commingled for
investment purposes with like separate trust funds of any other plans and trusts
of the Company or any Affiliate which meet the requirements of Sections 401(a)
and 501(a) of the Code.
15.8. Hold Harmless; Indemnification.
Each Participant, each Beneficiary, or each other person who shall
claim the right to any payment under the Plan shall look exclusively to the
Trust Fund therefor and shall not have any right or claim therefor against the
Company, any Participating Company, any Trustee, or any director, officer,
Employee or agent of the Company. Except as otherwise required by the Act,
neither the Company, nor any member of the Administrative Committee or the
Investment Committee, any director, officer, Employee or agent of the Company
shall be required to inquire into or be responsible for any act or failure to
act of any Trustee or any Participant. To the maximum extent permitted by the
Act and applicable state law, each Trustee, each member of the Administrative
Committee and the Investment Committee, each director and officer of the
Company, any Participating Company and each Employee who performs service on
behalf of the Plan or the Trust, shall be indemnified and saved harmless by the
Company and by the Participating Company out of their own assets (including the
proceeds of any insurance policy the premiums of which are paid by the Company)
from and against any and all losses, costs and expense (including any amounts
paid in settlement of a claim with the Company's or Administrative Committee's
approval) to which any of them may be subjected by reason of any act done or
omitted to be done in good faith in their official capacities with respect to
the Plan or the Trust Agreement, including all expenses reasonably incurred in
their defense.
15.9. Claims for Benefits.
Benefits under this plan will be paid only if the Administrative
Committee decides in its discretion that the claimant is entitled to them.
(a) All claims for benefits under the Plan shall be
submitted to, and within a reasonable period of time decided by, a person or
persons designated in writing by the Administrative Committee. If the claim is
wholly or partially denied, written notice of the denial shall be furnished
within 90 days after receipt of the claim; provided that, if special
circumstances require an extension of time for processing the claim, an
additional 90 days from the end of the initial period shall be allowed for
processing the claim, in which event the claimant shall be furnished with a
written notice of the extension prior to the termination of the initial 90 day
period indicating the special circumstances requiring an extension. The written
notice denying the claim shall set forth the reasons for the denial, including
specific reference to pertinent provisions of the Plan on which the denial is
based, a description of any additional information necessary to perfect the
claim, and information regarding review of the claim and its denial.
(b) A claimant may review all pertinent documents and may request
a review by the Administrative Committee of such a decision denying the claim.
Such a request shall be made in writing and filed with the Administrative
Committee within 60 days after delivery to the claimant of written notice of the
decision. Such written request for review shall contain all additional
information which the claimant wishes the Administrative Committee to consider.
The Administrative Committee may hold a hearing or conduct any independent
investigation, and the decision on review shall be made as soon as possible
after the Administrative Committee's receipt of the request for review. Written
notice of the decision on review shall be furnished to the claimant within 60
days after receipt by the Administrative Committee of a request for review,
unless special circumstances require an extension of time for processing, in
which event an additional 60 days shall be allowed for review and the claimant
shall be so notified in writing. Written notice of the decision on review shall
include specific reasons for the decision. For all purposes under the Plan, such
decisions on claims (where no review is requested) and decisions on review
(where review is requested) shall be final, binding and conclusive on all
interested persons as to participation and benefits eligibility, the amount of
benefits and as to any other matter of fact or interpretation relating to the
Plan.
15.10. Communications.
Any notice, election, application, instruction, designation or other
form of communication required to be given or submitted by any Participant,
other Employee or Beneficiary shall be in such form as is prescribed from time
to time by the Administrative Committee or Investment Committee, sent by first
class mail or delivered in person, and shall be deemed to be duly given only
upon actual receipt thereof by such Committee. Any notice, statement, report and
other communication from the Company or either Committee to any Participant,
other Employee or Beneficiary required or permitted by the Plan shall be deemed
to have been duly given when delivered to such person or mailed by first class
mail to such person at his address last appearing on the records of the Company
or the Committee. Each person entitled to receive a payment under the Plan shall
file in accordance herewith his complete mailing address and each change
therein. A check or communication mailed to any person at his address on file
with the Company or the appropriate Committee shall be deemed to have been
received by such person for all purposes of the Plan, and no Employee or agent
of the Company, or a Participating company or Participant of the Administrative
Committee or the Investment Committee, shall be obliged to search for or
ascertain the location of any such person except as required by the Act.
If the Administrative Committee shall be in doubt as to whether
payments are being received by the person entitled thereto, it may, by
registered mail addressed to such person at his address last known to the
Administrative Committee, notify such person that all future payments will be
withheld until such person submits to the Administrative Committee his proper
mailing address and such other information as the Administrative Committee may
reasonably request.
15.11. Agent for Service of Process.
The agent for the service of legal process of the Plan shall be the
Secretary of the Company or such other person as may from time to time be
designated by the Board.
15.12. Specific Power and Duties.
The Administrative Committee and the Investment Committee each shall
have only those specific powers, duties, responsibilities, and obligations as
are specifically given them under the Plan or the Trust, as may be amended from
time to time. It is intended that each Committee shall be responsible for the
proper exercise of its own powers, duties, responsibilities and obligations and
shall not be responsible for any act or failure to act on the part of the other
committee or of another fiduciary.
SECTION 16.
TERMINATION OF PARTICIPATING COMPANY PARTICIPATION
16.1. Termination of Participating Company Participation.
Any Participating Company may terminate its participation in the Plan
by giving the Administrative Committee prior written notice specifying a
termination date which shall be the last day of a month at least 60 days
subsequent to the date such notice is received by the Administrative Committee.
The Administrative Committee may terminate any Participating Company's
participation in the Plan, as of any termination date specified by the
Administrative Committee, for the failure of the Participating Company to make
proper contributions or to comply with any other provision of the Plan. In the
event of any such termination, the Administrative Committee shall promptly
notify counsel to the Plan and take such action as counsel may recommend and as
the Administrative Committee may deem desirable, including contacting the IRS
and requesting a determination.
16.2. Rights of Former Participants.
To the maximum extent permitted by the Act, any rights of Participants
no longer employed by the Participating Company, former Participants and their
Beneficiaries, Surviving Spouses and other eligible survivors under the Plan
shall be unaffected by a termination of the Plan as to any Participating
Company. Subject to the provisions of Section 17.8, the benefits provided under
the Plan with respect to each Participant who is employed by such Participating
Company as of the termination date will be paid or forfeited in accordance with
the Plan as if such termination had not occurred, except that the Administrative
Committee may direct the Trustee to segregate such portion of the assets of the
Trust (the "Distributable Reserve") as the Actuary shall determine to be
properly allocable in accordance with the Act to the Participants who are
Employees of such Participating Company and direct the Trustee to apply the
Distributable Reserve for the benefit of the Participants employed by the
Participating Company as of the termination date in such matter as the
Administrative Committee shall determine. This may include, without limitation,
payment to such Participants in lump cash sums, cash installments, or the
purchase of immediate or deferred annuities, a transfer to a successor employee
benefit plan which is qualified under Section 401(a) of the Code, or any
combination thereof; provided, however, that in the event of any transfer of
assets to a successor employee benefit plan, the provisions of Section 16.3 will
apply.
Any such payments or transfers of the Distributable Reserve shall
constitute a complete discharge of all liabilities under the Plan with respect
to such Participating Company's participation in the Plan and any Participant
then employed by such Participating Company. To the maximum extent permitted by
the Act, the termination of the Plan as to any Participating Company shall not
in any way affect any other Participating Company's participation in the Plan.
16.3. Transfer to Successor Plan.
No transfer of the Plan's assets and liabilities to a successor
employee benefit plan (whether by merger or consolidation with such successor
plan or otherwise) shall be made unless each Participant would, if either the
Plan or such successor plan then terminated, receive a benefit immediately after
such transfer which (after taking account of any distributions or payments to
them as part of the same transaction) is equal to or greater than the benefit he
would have been entitled to receive immediately before such transfer if the Plan
had then been terminated. The Administrative Committee or the Investment
Committee or both of the Committees may also request appropriate indemnification
from the employer or employers maintaining such successor plan before making
such a transfer.
SECTION 17.
AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST
17.1. Right to Amend, Suspend or Terminate Plan.
(a) Subject to the provisions of section 17.1(b), the
Board reserves the right at any time, by majority consent in writing or by a
meeting, to amend, suspend or terminate the Plan, any contributions thereunder,
the Trust or any contract issued by an insurance carrier forming a part of the
Plan, in whole or in part and for any reason and without the consent of any
Participating Company, Participant, other Employee Beneficiary, or Surviving
Spouse. Each Participating Company by its adoption of the Plan shall be deemed
to have delegated this authority to the Board and the Administrative Committee.
(b) The Administrative Committee may adopt amendments, by
majority consent in writing or by a meeting, which may be necessary or
appropriate to facilitate the administration, management, or interpretation of
the Plan or to conform the Plan thereto, or to qualify or maintain the Plan and
the Trust as a plan and trust meeting the requirements of Sections 401(a) and
501(a) of the Code or any other applicable section of law (including the Act)
and the Regulations, provided that any such amendment does not materially
increase the cost to the Employer of maintaining the Plan.
(c) No amendment or modification shall be made which
would retroactively impair any right to any benefit under the Plan which any
Participant, Beneficiary, or Surviving Spouse would otherwise have had at the
date of such amendment by reason of the contributions theretofore made, except
as provided in Section 17.2 below, or (ii) make it possible for any part of the
funds of the Plan (other than such part as is required to pay taxes, if any, and
administrative expenses as provided in Section 13.4) to be used for or diverted
to any purposes other than for the exclusive benefit of Participants and their
Beneficiaries and Surviving Spouses under the Plan prior to the satisfaction of
all liabilities with respect thereto.
17.2. Retroactivity.
Subject to the provisions of Section 17.1, any amendment, modification,
suspension or termination of any provisions of the Plan may be made
retroactively if necessary or appropriate to qualify or maintain the Plan, the
Trust, and any contract with an insurance company which may form a part of the
Plan as a plan and trust meeting the requirements of Sections 401(a) and 501(a)
of the Code, or any other applicable section of law (including the Act) and the
Regulations issued thereunder.
17.3. Notices.
Notice of any amendment, modification, suspension or termination of the
Plan shall be given by the Board or the Administrative Committee, whichever
adopts the amendment, to the other and to the Trustee, all Participating
Companies and, where and to the extent required by law, to Participants and
other interested parties.
17.4. Termination.
Upon termination of the Plan, no amount shall thereafter be payable
under the Plan to or in respect of any Participant except as provided in this
Section 17. To the maximum extent permitted by the Act, transfers, distributions
or other disposition of the assets of the Plan as provided in this Section 17
shall constitute a complete discharge of all liabilities under the Plan. The
Administrative and Investment Committees shall remain in existence and all of
the provisions of the Plan which in the opinion of the Administrative Committee
are necessary for the execution of the Plan and the administration and
distribution transfer or other disposition of the assets of the Plan in
accordance with this Section 17.4 shall remain in force.
17.5. Not a Title IV Termination.
If the termination of the Plan does not constitute a plan termination
for purposes of Title IV of the Act, the assets of the Plan shall be applied for
the benefit of Participants, former Participants, Beneficiaries and Surviving
Spouses in such manner as the Administrative Committee shall determine;
provided, however, that in the event of any transfer of assets to a successor
employee benefit plan, the provisions of section 16.3 will apply.
17.6. Title IV Termination.
(a) If the termination of the Plan does constitute a
plan termination for purposes of Title IV of the Act, then the rights of all
Participants to their Retirement Benefits accrued to the date of such
termination shall thereupon be nonforfeitable, but only to the extent that such
Retirement Benefits have then been funded by contributions made prior to such
termination and that such funds are available to provide such Retirement
Benefits upon the allocations hereinafter provided in this Section 17.6.
(b) Upon receipt by the Administrative Committee of all necessary
PBGC regulatory approvals with respect to the sufficiency of the assets of the
Plan to discharge when due all obligations thereunder with respect to benefits
which are guaranteed by the PBGC under Title IV of the Act, the assets of the
Plan which remain after reservation of an amount sufficient to pay all expenses
of final administration shall be allocated, to the extent sufficient, in the
following order of priority:
(i) To provide for the benefits payable under Section 11 of
the Plan or, if the Plan existed on December 31, 1975, the corresponding Section
or Sections of the Plan as in effect on December 31, 1975, to or in respect of
Participants who retired or died, who could have retired, or who, having
terminated Service, either began receiving payments of such benefits or could
have begun receiving such payments if they had not elected to defer commencement
of such payments, at least three years prior to the termination date, determined
in each case on the basis of the provisions of the Plan at anytime during the
five year period ending on the termination date when such benefits were or would
have been the lowest and without regard to any increases in such benefits which
accrued less than three years prior to the termination date; then
(ii) To provide all other benefits under the Plan which
are guaranteed by the PBGC under Title IV of the Act, or which would be
guaranteed if Sections 4022B(a) and 4022(b)(5) of the Act were not applicable,
but which have not been allocated under (i) above; then
(iii) To provide all other benefits which had become
nonforfeitable under the Plan prior to the termination date but which have not
been allocated under (i) or (ii) above; then
(iv) To provide all other benefits which had accrued under the
Plan prior to the termination date but which have not been allocated under
(i), (ii) or (iii) above; then
(v) Any surplus assets of the Plan remaining after the payment
of all expenses of final administration and after the satisfaction of all
liabilities accrued to the termination date with respect to Participants,
former Participants, Beneficiaries and Surviving Spouses under the Plan shall
revert to the Company.
(c) The foregoing allocations shall be made by the Administrative
Committee in accordance with determinations made pursuant to the Labor
Department Regulations. If the balance remaining for allocation under any of the
foregoing Sections 17.6 (b) (i), (ii), (iii),(iv) or (v) is insufficient to
provide in full the allocations under such Section, allocations to individuals
under such Section shall be reduced pro rata (except that, under Section
17.6(b)(iii) only, such balance shall first be allocated to provide the benefits
described therein determined on the basis of the provisions of the Plan which
were in effect at the beginning of the five year period ending on the
termination date and then, if the balance remaining for allocation is
sufficient, to provide the benefits described therein which result from each
successive amendment to the Plan during such five year period until the first
such amendment as to which such balance is insufficient before reducing such
allocation pro rata) and no allocations shall be made under a subsequent
Section. The assets of the Plan allocated in accordance with Sections
17.6(b)(i), (ii), (iii) and (iv) above shall be distributed in such manner as
the Administrative Committee shall determine, including without limitation, lump
sum cash payments, cash installments, the purchase of immediate or deferred
annuities, or any combination of the foregoing as the PBGC and, if applicable,
the IRS, may approve.
17.7. Asset Allocation by Court.
Notwithstanding the provisions of Section 17.6, if the PBGC notifies
the Administrative Committee that it is unable to determine whether the assets
of the Plan are sufficient (or that such assets are insufficient) to discharge
when due all obligations thereunder with respect to benefits which are
guaranteed by the PBGC under Title IV of the Act, then the assets of the Plan
shall be allocated and distributed only as a court having competent jurisdiction
over the Plan and the Trust, or a trustee appointed by such court, shall direct
or permit.
17.8. Partial Termination.
In the event of a partial termination (within the meaning of the Act)
of the Plan has occurred then (i) the rights of all Participants affected
thereby to their Accrued Benefits accrued to the date of such partial
termination shall thereupon be nonforfeitable, but only to the extent that such
Accrued Benefits have then been funded by such portion of the assets of the
Trust as are determined to be properly allocable to such Participants and that
such portion of assets is available to provide such Retirement Benefits upon the
allocations provided in Section 17.6, and (ii) the provisions of Sections 16.3,
17.2, 17.3, 17.4 and 17.7, which in the opinion of the Administrative Committee
are necessary for the execution of the Plan and the allocation and distribution
of the assets of the Plan, shall apply. If a partial termination of the Plan has
occurred as to any Participating Company, then to the maximum extent permitted
by the Act, only the Participating Company as to which the partial termination
of the Plan has occurred shall be liable to the PBGC for any insufficiency of
assets.
SECTION 18.
TOP HEAVY PROVISIONS
18.1. Top Heavy Plan.
The Plan will be considered a Top Heavy Plan for any Plan Year if it is
determined to be a Top Heavy Plan as of the last day of the preceding Plan Year
(or, with respect to the first Plan Year, the last day of such Plan Year). For
purposes of determining whether the Plan is a Top Heavy Plan, when appropriate,
actuarial assumptions which reflect reasonable mortality experience and a
reasonable interest rate that uniformly applies for accrual purposes under all
plans maintained by the Company and its Affiliates shall be used. Such actuarial
assumptions shall be the same assumptions used to determine benefits under
Section 11. The present value of a Participant's Accrued Benefit shall be
determined as of the last Valuation Date used for computing Plan costs for
minimum funding purposes which occurs within the Plan Year in which the
determination is being made, and shall include amounts distributed to or on
behalf of the Participant within the five-year period ending on the
Determination Date, as defined in Section 18.2(a). Effective January 1, 2002,
however, the phrase "five-year period" shall refer instead to a "one-year
period" with respect to distributions made on account of a Participant's
termination of service, death or Disability. Notwithstanding any other
provisions of the Plan, the provisions of this Section 18 shall apply and
supersede all other provisions of the Plan during each Plan Year with respect to
which the Plan is determined to be a Top Heavy Plan.
18.2. Definition for Section 18.
For purposes of this Section 18 and as otherwise used in the Plan, the
following terms shall have the meanings set forth below:
(a) "Determination Date" means the last day of the
preceding Plan Year or the last day of the first Plan Year.
(b) "Key Employee" means:
(i) For Plan Years beginning prior to
January 1, 2002, each Employee or former Employee (including a deceased
Employee) and his Beneficiary who at any time during the five Plan Years ending
on the Determination Date:
(A) was an officer of the Company or an Affiliate
having an "annual compensation," as defined in Section 415(c)(3) of the Code,
greater than 50% of the amount in effect under Section 415(b)(1)(A) of the Code,
for any such Plan Year;
(B) was one of the 10 Employees owning the largest
interest of the Company and its Affiliates, but only if he received annual
compensation equal to or greater than the dollar amount applied for purposes of
Section 415(c)(1)(A) of the Code for the calendar year ending coincident with or
immediately after the Determination Date;
(C) owned at least five percent of an Employer's outstanding
shares of stock or at least five percent of the total combined voting power of
an Employer's shares of stock (a "five-percent owner"); or
(D) owned at least one percent of an Employer's shares of
stock or at least one percent of the total combined voting power of an
Employer's shares of stock (a "one-percent owner") and whose annual compensation
from the Employer exceeds $150,000.
(ii) For Plan Years beginning on or after January 1, 2002, any
Employee or former Employee (including any deceased Employee) and his
Beneficiary who at any time during the Plan Year that includes the Determination
Date:
(A) was an officer of the Employer having annual compensation
greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002);
(B) was a five-percent owner of the Employer; or
(C) was a one-percent owner of the Employer having annual
Compensation of more than $150,000.
(iii) The following special rules apply to
this definition:
(A) No more than 50 officers, or, if less,
the greater of three or 10% of all Employees will be Key Employees under Section
18.2(b)(i)(A) and (b)(ii)(A).
(B) A person is an officer only if he is in regular
and continued service as an administrative executive of the Company or a
Participating Company.
(C) No person will be a Key Employee under more than one
paragraph ofthis definition unless he also is a Beneficiary of a deceased
Key Employee.
(D) A person will be treated as owning all shares of stock
which he owns directly or constructively by application Section 318 of the Code.
(E) For purposes of determining whether a person is a
one-percent or five-percent owner of the Company or any Affiliate, his ownership
interest in any entity related to the Company solely by reason of Sections
414(b), (c) and (m) of the Code shall be disregarded.
(F) For purposes of determining whether a person receives
annual Compensation of more than $150,000, amounts received from each Employer
required to be aggregated under Sections 414(b), (c) and (m) of the Code shall
be taken into account.
(G) The determination of who is a Key Employee will be made
in accordance with Section 416(i) of the Code and the applicable Regulations and
other guidance of general applicability issued thereunder.
(c) "Non-Key Employee" means (i) any Employee or former Employee
who is not a Key Employee, or (ii) a Beneficiary of a Non-Key Employee.
(d) "Permissive Aggregation Group" means all qualified
employee pension benefit plans in the Required Aggregation Group and any
qualified employee pension benefit plans sponsored by the Company or an
Affiliate which are not part of the Required Aggregation Group, but which
satisfy the requirements of Sections 401(a)(4) and 410 of the Code when
considered together with the Required Aggregation Group and which the Company
elects to have included in the Permissive Aggregation Group.
(e) "Required Aggregation Group" means the Plan and any
other qualified employee pension benefit plan that was sponsored by the Company
or an Affiliate (i) in which a Key Employee participates or (ii) which enables
the Plan to meet the requirements of Sections 401(a)(4) or 410 of the Code.
(f) "Top Heavy Group" means all qualified employee pension
benefit plans of the Company and its Affiliates in the Required Aggregation
Group and any other qualified employee benefit plan of the Company and its
Affiliates which the Company elects to aggregate as part of a Permissive
Aggregation Group if, on any Determination Date, the Value of the cumulative
annual accrued benefits for Key Employees under all defined benefit plans and
the aggregate Value of all Key Employees' accounts under all defined
contribution plans exceed 60% of a similar sum determined for all Employees. For
purposes of this computation, the account balances and cumulative annual accrued
benefits of a Participant (i) who is a Non-Key Employee but who was a Key
Employee in a prior Plan Year, or (ii) who has not been credited with at least
one Hour of Service with any Employer at any time during the five year period
ending on the Determination Date will be disregarded. Effective January 1, 2002,
clause (ii) of the preceding sentence shall be applied by replacing the phrase
"five year period" with "one year period. If the aggregated plans do not have
the same Determination Date, this test will be made using the Value calculated
as of each plan's Determination Date occurring during the same Plan Year.
(g) "Top Heavy Plan" means the Plan if, on any Determination
Date, the present Value of the cumulative accrued benefits under the Plan for
Key Employees exceeds 60% of the Value of the cumulative accrued benefits under
the Plan for all Employees. For purposes of the comparison, the cumulative
accrued benefits of all Non-Key Employees who were, but no longer are, Key
Employees will be disregarded.
(h) "Top Heavy Plan Year" means any Plan Year during which the
Plan is Top Heavy or part of a Top Heavy Group.
(i) "Value" means:
(i) for all defined benefit plans, the present
value calculated as provided in those plans; and
(ii) for all defined contribution plans, the fair
market value of each Participant's account (including amounts attributable to
voluntary employee contributions from a qualified employee pension benefit plan
sponsored by the Company or an Affiliate) determined as of the most recent
Determination Date increased by:
(A) distributions made during the five Plan Years ending on
the Determination Date (except distributions already included in determining the
Value of the accounts and distributions made during the five Plan Years
preceding the Determination Date under a terminated plan which, if it had not
been terminated, would have been required to be included in the Required
Aggregation Group), provided that effective January 1, 2002, the phrase "five
plan years" shall be replaced by "plan year" with respect to distributions made
on account of a Participant's termination of service, death, or Disability; and
(B) all rollover contributions distributed from the plans
to a qualified employee benefit plan not sponsored by the Company or an
Affiliate, and decreased by;
(C) any deductible employee contributions; and
(D) rollover contributions received by the plans
from a qualified employee benefit plan not sponsored by the Company or an
Affiliate; and
(E) rollover contributions distributed from the Plan to a
qualified employee pension benefit plan sponsored by the Company or an
Affiliate.
18.3. Minimum Vesting.
(a) If a Plan is a Top Heavy Plan with respect to any Plan Year,
the nonforfeitable percentage of the Accrued Benefit derived from Company
contributions of each Participant who is credited with at least one Hour of
Service on or after the date the Plan becomes Top Heavy shall not be less than
the amount determined in accordance with the following vesting schedule:
Years of Service Percentage
---------------- ----------
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 or more 100%
(b) In the event the vesting provisions of Section 8.1
are amended, or changed on account of the Plan becoming or ceasing to be a Top
Heavy Plan, any Participant who has completed at least three Years of Service,
may elect to have the amount of his nonforfeitable right to his Retirement
Benefit computed under the Plan without regard to such amendment or change by
notifying the Administrative Committee in writing within the election period
hereinafter described. The election period shall begin on the date such
amendment is adopted or the date such change is effective, as the case may be,
and shall end no earlier than the latest of the following dates: (i) the date
which is 60 days after the day such amendment is adopted; or (ii) the date which
is 60 days after the day such amendment or change becomes effective; or (iii)
the date which is 60 days after the day the Participant is given written notice
of such amendment or change by the Administrative Committee. Any election made
pursuant to this Section 18.3(b) shall be irrevocable.
18.4. Minimum Benefits.
(a) Subject to the provisions of Section 18.5, if the Plan is a
Top Heavy Plan at any point in time, the Accrued Benefit derived from the
Company's contributions for each Participant who has completed a Year of Service
regardless of whether he is employed by the Employer on the last day of the Plan
Year and who is a Non-Key Employee shall not, regardless of the Participant's
Compensation, at such point be less than such Participant's Average
Compensation, multiplied by the lesser of (i) two percent multiplied by the
number of Years of Service or (ii) 20%. For purposes of the preceding sentence,
Years of Service shall not include any Year of Service credited with respect to
Plan Years which began prior to January 1, 1984, or any other Year of Service
credited with respect to a Plan Year during which the Plan was not a Top Heavy
Plan.
(b) For purposes of this Section 18.4, "Average Compensation"
shall mean the average of a Participant's aggregate annual compensation (or to
the extent required by the Code or Section 1.415-2(d) of the IRS Regulations)
for the period of five consecutive years (or, if the Participant does not have
five consecutive years, his actual number of consecutive years) during which the
Participant had the greatest annual compensation (or to the extent required by
the Code or Section 1.415-2(d) of the IRS Regulations).
18.5. Limitations on Benefits.
(a) This Section 18.5 shall apply only with respect to Plan
Years beginning before January 1, 2000.
(b) For each Plan Year that the Plan is a Top Heavy Plan, 1.0
shall be substituted for 1.25 as the
multiplicand of the Dollar Limitation in determining the denominator of the
Defined Benefit Fraction and of the Defined Contribution Fraction for purposes
of Section 12.
(c) If, after substituting 90% for 60% wherever the latter
appears in Section 416(g) of the Code, the Plan is not determined to be a Top
Heavy Plan, then the provisions of Section 18.5(a) shall not be applicable if
the Accrued Benefit of any Participant who is a Non-Key Employee is determined
in accordance with Section 18.4(a) by substituting "three percent" for "two
percent" in Section 18.4(a) and increasing "20%" in Section 18.4(a) by one
percent for each Plan Year described in the last sentence of Section 18.4(a),
but not beyond "30%".
18.6. Other Plans.
If, with respect to a Non-Key Employee who benefits in a Plan Year
under both a defined contribution and defined benefit plan which are Top Heavy
Plans maintained by the Employer, a top heavy minimum benefit is not provided
for such Plan Year under both plans, then such determination for such Plan Year
shall be made in conformity with the comparability analysis described in Q&A
M-12 of Section 1.416-1 of the IRS Regulations. Effective for Plan Years
beginning prior to January 1, 2000, such analysis shall be modified, where a
factor of 1.25 is utilized for such Plan Year in connection with the
satisfaction of the limitations set forth in Section 415(e) of the Code, in
accordance with the last sentence of Q&A M-14 of Section 1.416-1 of the IRS
Regulations.
SECTION 19.
GENERAL LIMITATIONS AND PROVISIONS
19.1. No Right to Continued Employment.
Nothing contained in the Plan shall give any Employee the right to be
retained in the employment of the Company, any Participating Company, or any of
its subsidiaries or affiliated or associated corporations, or affect the right
of any such Employer to dismiss any Employee. The adoption and maintenance of
the Plan shall not constitute a contract between the Employer and any Employee
or consideration for, or an inducement to or condition of, the employment of any
Employee.
19.2. Trust is Sole Source of Benefits.
The Trust shall be the sole source of benefits under the Plan and,
except as otherwise required by the Act, the Employer, the Administrative
Committee, and the Investment Committee assume no liability or responsibility
for payment of such benefits, and each Participant, Surviving Spouse,
Beneficiary, or other person who shall claim the right to any payment under the
Plan shall be entitled to look only to the Trust for such payment and shall not
have any right, claim or demand therefor against the Employer, the
Administrative Committee or the Investment Committee, or any member thereof, or
any Employee or director of the Employer.
19.3. Payment on Behalf of Payee.
If the Administrative Committee shall find that any person to whom any
amount is payable under the Plan is found by a court of competent jurisdiction
to be unable to care for his affairs because of illness or accident, or is a
minor, or has died, then any payment due his or his estate (unless a prior claim
therefor has been made by a duly appointed legal representative) may, if the
Administrative Committee so elects, be paid to his spouse, a child, a relative,
an institution maintaining or having custody of such person, or any other person
deemed by the Administrative Committee to be a proper recipient on behalf of
such person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Plan and the Trust therefor.
19.4. No Alienation.
(a) Except insofar as may otherwise be required by law or
pursuant to the terms of a Qualified Domestic Relations Order, no amount
payable at any time under the Plan and the Trust shall be subject in any manner
to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge or encumbrance of any kind nor in any manner be subject to
the debts or liabilities of any person and any attempt to so alienate or subject
any such amount, whether presently or thereafter payable, shall be void. If any
person shall attempt to, or shall, alienate, sell, transfer, assign, pledge,
attach, charge or otherwise encumber any amount payable under the Plan and
Trust, or any part thereof, or if by reason of his bankruptcy or other event
happening at any such time such amount would be made subject to his debts or
liabilities or would otherwise not be enjoyed by him, then the Administrative
Committee, if it so elects, may direct that such amount be withheld and that the
same or any part thereof be paid or applied to or for the benefit of such
person, his spouse, children or other dependents, or any of them, in such manner
and proportion as the Administrative Committee may deem proper.
(b) Notwithstanding Section 19.4(a), with respect to
judgments, orders, decrees issued and settlement agreements entered into on or
after August 5, 1997, a Participant's benefit may be reduced if a court order or
requirement to pay arises from: (1) a judgment of conviction for a crime
involving the Plan; (2) a civil judgment (or consent order or decree) that is
entered by a court in an action brought in connection with a breach (or alleged
breach) of fiduciary duty under ERISA; or (3) a settlement agreement entered
into by the Participant and either the Secretary of Labor or the PBGC in
connection with a breach of fiduciary duty under ERISA by a fiduciary or any
other person. The court order, judgment, decree, or settlement agreement must
specifically require that all or part of the amount to be paid to the Plan be
offset against the Participant's Plan benefits. If the survivor annuity
requirements of Section 401(a)(11) of the Code apply with respect to
distributions from the Plan to the Participant and the Participant has a spouse
at the time at which the offset is to be made, such offset shall not be made
unless the Plan complies with Section 401(a)(13)(C)(ii) of the Code.
19.5. Missing Payee.
If the Administrative Committee cannot ascertain the whereabouts of any
person to whom a payment is due under the Plan, and if, after five years from
the date such payment is due, a notice of such payment due is mailed to the last
known address of such person, as shown on the records of the Administrative
Committee or the Employer, and within three months after such mailing such
person has not made written claim therefor, the Administrative Committee, if it
so elects, after receiving advice from counsel to the Plan, may direct that such
payment and all remaining payments otherwise due to such person be canceled on
the records of the Plan. The amount thereof shall be applied to reduce the
contributions of the Participating Company that had employed the Participant,
and upon such cancellation, the Plan and the Trust shall have no further
liability therefore. Notwithstanding the foregoing, in the event such person
later notifies the Administrative Committee (prior to termination of the Plan)
of his whereabouts and requests the payment or payments due to him under the
Plan, the amount so applied shall be paid to him as provided in Section 11 of
the Code.
19.6. Subject to Trust Agreement.
Any and all rights or benefits accruing to any persons under the Plan
shall be subject to the terms of the Trust Agreement which the Company shall
enter into with the Trustee providing for the administration of the Trust Fund.
19.7. Required Information.
Each Participant shall file with the Administrative Committee such
pertinent information concerning himself, his spouse, his Beneficiary, or any
other person as the Administrative Committee may specify and in such manner and
form as the Administrative Committee may specify or provide, and no Participant,
Surviving Spouse or Beneficiary, or other person shall have any rights or be
entitled to any benefits or further benefits under the Plan unless such
information is filed by or with respect to him.
19.8. Subject to Insurance Contract.
If the payment of any benefit under the Plan is provided for by a
contract with an insurance company, the payment of such benefit shall be subject
to all the provisions of such contract.
19.9. Communications to Committees.
All elections, designations, requests, notices, instructions, and other
communications from a Participating Company, a Participant, Beneficiary,
Surviving Spouse, or other person to the Administrative Committee required or
permitted under the Plan shall be in such form as is prescribed from time to
time by the Administrative Committee, shall be mailed by first class mail or
delivered to such location as shall be specified by the Administrative
Committee, and shall be deemed to have been given and delivered only upon actual
receipt thereof by the Administrative Committee at such location.
19.10. Communications from Participating Company or Committees.
All notices, statements, reports and other communications from a
Participating Company or either Committee, to any Eligible Employee,
Participant, Beneficiary, or other person required or permitted under the Plan
shall be deemed to have been duly given when delivered to, or when mailed by
first class mail, postage prepaid and addressed to, such Eligible Employee,
Participant, Beneficiary, or other person at his address last appearing on the
records of the Administrative Committee.
19.11. Gender, Tense.
Whenever used in the Plan, the masculine gender includes the feminine
gender and the singular includes the plural, unless the content indicates
otherwise.
19.12. Captions.
The captions preceding the Sections of the Plan have been inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provisions of the Plan.
19.13. Applicable Law.
The Plan and all rights thereunder shall be governed by and construed
in accordance with the Act and the laws of the State of New Jersey.
COVANTA ENERGY
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By:
Date:
COVANTA ENERGY PENSION PLAN
APPENDIX I
ACTUARIAL ASSUMPTIONS AND TABLES
Except as limited in Section 2.26, the actuarial tables and interest
rates used to calculate the Equivalent Actuarial Value or Actuarial Equivalent
of a particular form of benefit shall be as follows:
Interest: Eight percent, compounded annually.
Mortality: 1983 Group Annuity Table weighted to reflect 80% of
the male and 20% of the female annuity rates.
Provided, however, that for purposes of calculating Equivalent Actuarial Values
under Section 11.6 for Plan Years beginning on or after January 1, 2000, the
"applicable interest rate" and "applicable mortality table" shall be used in
accordance with Section 417(e)(3) of the Code.