Exhibit 10.69
SAKS FIFTH AVENUE
PENSION PLAN
1998 RESTATEMENT
TO INCORPORATE AMENDMENTS NO. 1-6
CONTENTS
ARTICLE I Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Active Participant. . . . . . . . . . . . . . . . . . . . . 2
1.3 Actuarial Equivalent or Actuarially Equivalent. . . . . . . 2
1.4 Actuary . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Adjustment Factor . . . . . . . . . . . . . . . . . . . . . 2
1.6 Affiliated Company. . . . . . . . . . . . . . . . . . . . . 2
1.7 Annual Addition . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Benefit Commencement Date . . . . . . . . . . . . . . . . . 3
1.10 Board of Directors . . . . . . . . . . . . . . . . . . . . 4
1.11 Cash or Deferred Contributions . . . . . . . . . . . . . . 4
1.12 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Company. . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.14 Compensation . . . . . . . . . . . . . . . . . . . . . . . 4
1.15 Continued Employee . . . . . . . . . . . . . . . . . . . . 4
1.16 Credited Service . . . . . . . . . . . . . . . . . . . . . 4
1.17 Defined Benefit Plan Fraction. . . . . . . . . . . . . . . 5
1.18 Defined Contribution Plan Fraction . . . . . . . . . . . . 5
1.19 Determination Date . . . . . . . . . . . . . . . . . . . . 5
1.20 Earliest Retirement Age. . . . . . . . . . . . . . . . . . 5
1.21 Early Retirement Date. . . . . . . . . . . . . . . . . . . 6
1.22 Early Retirement Pension . . . . . . . . . . . . . . . . . 6
1.23 Effective Date . . . . . . . . . . . . . . . . . . . . . . 6
1.24 Eligibility Service. . . . . . . . . . . . . . . . . . . . 6
1.25 Eligible Employee. . . . . . . . . . . . . . . . . . . . . 6
1.26 Employee . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.27 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.28 [Deleted]. . . . . . . . . . . . . . . . . . . . . . . . . 7
1.29 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . 7
1.30 Forfeiture Event . . . . . . . . . . . . . . . . . . . . . 7
1.31 '415' Compensation . . . . . . . . . . . . . . . . . . . . 8
1.32 '414(s)' Compensation. . . . . . . . . . . . . . . . . . . 8
1.33 Highly Compensated Employee. . . . . . . . . . . . . . . . 8
1.34 Hour of Service. . . . . . . . . . . . . . . . . . . . . . 9
1.35 Inactive Participant . . . . . . . . . . . . . . . . . . . 9
1.36 Investment Manager . . . . . . . . . . . . . . . . . . . . 9
1.37 Key Employee . . . . . . . . . . . . . . . . . . . . . . . 9
1.38 Limitation Year. . . . . . . . . . . . . . . . . . . . . . 9
1.39 Maternity or Paternity Leave . . . . . . . . . . . . . . . 9
1.40 Named Fiduciary. . . . . . . . . . . . . . . . . . . . . .10
1.41 Normal Retirement Age. . . . . . . . . . . . . . . . . . .10
1.42 Normal Retirement Date . . . . . . . . . . . . . . . . . .10
1.43 Normal Retirement Pension. . . . . . . . . . . . . . . . .10
1.44 One-Year Break in Service. . . . . . . . . . . . . . . . .10
1.45 Participant. . . . . . . . . . . . . . . . . . . . . . . .10
1.46 Pension. . . . . . . . . . . . . . . . . . . . . . . . . .11
1.47 Pension Fund Committee . . . . . . . . . . . . . . . . . .11
1.48 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . .11
1.49 Plan Administrator . . . . . . . . . . . . . . . . . . . .11
1.50 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . .11
1.51 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . .11
1.52 Prior Plan Benefit . . . . . . . . . . . . . . . . . . . .11
1.53 Qualified Domestic Relations Order . . . . . . . . . . . .11
1.54 Retirement . . . . . . . . . . . . . . . . . . . . . . . .11
1.55 Service. . . . . . . . . . . . . . . . . . . . . . . . . .11
1.56 Social Security Retirement Age . . . . . . . . . . . . . .12
1.57 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . .12
1.58 Top Heavy Year . . . . . . . . . . . . . . . . . . . . . .12
1.59 Trust Agreement. . . . . . . . . . . . . . . . . . . . . .13
1.60 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . .13
1.61 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .13
1.62 Valuation Date . . . . . . . . . . . . . . . . . . . . . .13
1.63 Vesting Service. . . . . . . . . . . . . . . . . . . . . .13
1.64 Year of Service. . . . . . . . . . . . . . . . . . . . . .13
ARTICLE II Service . . . . . . . . . . . . . . . . . . . . . . . .13
2.1 Hour of Service . . . . . . . . . . . . . . . . . . . . . .14
2.2 Year of Service . . . . . . . . . . . . . . . . . . . . . .14
2.3 One-Year Break in Service . . . . . . . . . . . . . . . . .14
2.4 Service . . . . . . . . . . . . . . . . . . . . . . . . . .15
2.5 Eligibility Service . . . . . . . . . . . . . . . . . . . .16
2.6 Vesting Service . . . . . . . . . . . . . . . . . . . . . .16
2.7 Credited Service. . . . . . . . . . . . . . . . . . . . . .16
ARTICLE III Participation. . . . . . . . . . . . . . . . . . . . .16
3.1 Commencement of Active Participation. . . . . . . . . . . .16
3.2 Consent . . . . . . . . . . . . . . . . . . . . . . . . . .17
3.3 Commencement of Inactive Participation. . . . . . . . . . .17
3.4 Termination of Participation. . . . . . . . . . . . . . . .17
3.5 Military Absence under USERRA . . . . . . . . . . . . . . .17
ARTICLE IV Company Contributions . . . . . . . . . . . . . . . . .17
4.1 Company Contributions . . . . . . . . . . . . . . . . . . .17
4.2 Time and Method of Payment of Company
Contributions. . . . . . . . . . . . . . . . . . . . . . .17
4.3 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . .18
4.4 Return of Company Contributions . . . . . . . . . . . . . .18
ARTICLE V Participant Contributions. . . . . . . . . . . . . . . .19
5.1 Participant Contributions . . . . . . . . . . . . . . . . .19
ARTICLE VI Requirements For Retirement Benefits . . . . . . .19
6.1 Normal Retirement . . . . . . . . . . . . . . . . . . . . .19
6.2 Early Retirement. . . . . . . . . . . . . . . . . . . . . .19
6.3 Late Retirement . . . . . . . . . . . . . . . . . . . . . .19
6.4 Termination of Employment Prior to Normal
Retirement Age. . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII Amount Of Retirement Benefit . . . . . . . . . . . . .20
7.1 Normal Retirement Pension . . . . . . . . . . . . . . . . .20
7.2 Early Retirement Pension. . . . . . . . . . . . . . . . . .23
7.3 Deferred Vested Pension . . . . . . . . . . . . . . . . . .24
7.4 Maximum Annual Benefit. . . . . . . . . . . . . . . . . . .24
7.5 Reemployment After Pension Commencement . . . . . . . . . .28
7.6 Nonreduction in Benefits on Account of Social
Security Benefit Increases. . . . . . . . . . . . . . . .28
7.7 Top Heavy Minimum Benefit . . . . . . . . . . . . . . . . .29
7.8 Benefits From Other Plans . . . . . . . . . . . . . . . . .30
ARTICLE VIII Method Of Payment Of Pension. . . . . . . . . . . . .30
8.1 Normal Form of Pension. . . . . . . . . . . . . . . . . . .30
8.2 Optional Pension Forms. . . . . . . . . . . . . . . . . . .31
8.3 Married Participant's Election of Optional
Pension Form . . . . . . . . . . . . . . . . . . . . . .34
8.4 Pre-Retirement Surviving Spouse Annuity . . . . . . . . . .36
8.5 Lump-Sum Cashout Distribution . . . . . . . . . . . . . . .38
8.6 Special Provisions Applicable to Former
Participants in the Gimbel Brothers, Inc. Profit
Sharing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
8.7 [Deleted] . . . . . . . . . . . . . . . . . . . . . . . . .41
8.8 Special Rule for Annuities Distributed to
Participants. . . . . . . . . . . . . . . . . . . . . . .41
8.9 Commencement of Participant's Benefits. . . . . . . . . . .41
8.10 Distributions. . . . . . . . . . . . . . . . . . . . . . .42
8.11 No Other Death Benefits. . . . . . . . . . . . . . . . . .43
8.12 Special Retirement Program . . . . . . . . . . . . . . . .43
8.13 Optional Direct Rollovers. . . . . . . . . . . . . . . . .44
ARTICLE IX Administration of Plan. . . . . . . . . . . . . . . . .45
9.1 Appointment of Plan Administrator . . . . . . . . . . . . .45
9.2 Resignation and Removal of Plan Administrator . . . . . . .45
9.3 Appointment of Successor. . . . . . . . . . . . . . . . . .45
9.4 Power and Duties of the Plan Administrator. . . . . . . . .45
9.5 Delegation of Duties. . . . . . . . . . . . . . . . . . . .46
9.6 Plan Administrator's Account. . . . . . . . . . . . . . . .46
9.7 Compensation of Plan Administrator. . . . . . . . . . . . .46
9.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .47
9.9 Information Required From Participants. . . . . . . . . . .47
9.10 Records. . . . . . . . . . . . . . . . . . . . . . . . . .47
9.11 Reports to Participants. . . . . . . . . . . . . . . . . .47
9.12 Multiple Fiduciary Capacity. . . . . . . . . . . . . . . .47
ARTICLE X Pension Fund Committee . . . . . . . . . . . . . . . . .47
10.1 Appointment of Pension Fund Committee. . . . . . . . . . .47
10.2 Resignation and Removal of Members . . . . . . . . . . . .48
10.3 Appointment of Successors. . . . . . . . . . . . . . . . .48
10.4 Committee Powers . . . . . . . . . . . . . . . . . . . . .48
10.5 Allocation and Delegation of Duties. . . . . . . . . . . .49
10.6 Investment Manager . . . . . . . . . . . . . . . . . . . .49
10.7 Committee Procedure. . . . . . . . . . . . . . . . . . . .49
10.8 Compensation and Expenses of Committee . . . . . . . . . .50
10.9 Records. . . . . . . . . . . . . . . . . . . . . . . . . .50
10.10 Funding Policy. . . . . . . . . . . . . . . . . . . . . .50
ARTICLE XI Claims. . . . . . . . . . . . . . . . . . . . . . . . .50
11.1 Claims for Benefits. . . . . . . . . . . . . . . . . . . .50
11.2 Appeals Procedure. . . . . . . . . . . . . . . . . . . . .51
ARTICLE XII Amendment and Termination. . . . . . . . . . . . . . .51
12.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . .51
12.2 Termination, Partial Termination, or
Discontinuance of Accruals . . . . . . . . . . . . . . .51
12.3 Procedure on Termination . . . . . . . . . . . . . . . . .52
12.4 Partial Termination. . . . . . . . . . . . . . . . . . . .52
12.5 Liquidation of Trust Fund. . . . . . . . . . . . . . . . .52
12.6 Reversion of Residual Amounts. . . . . . . . . . . . . . .54
12.7 Successor Employer . . . . . . . . . . . . . . . . . . . .55
12.8 Manner of Distribution . . . . . . . . . . . . . . . . . .55
12.9 Merger or Consolidation of Plan Assets;
Mergers into the Plan; Transfers of Plan
Assets . . . . . . . . . . . . . . . . . . . . . . . . .55
ARTICLE XIII Restrictions Applicable To Highly Compensated
Employees. . . . . . . . . . . . . . . . . . . . . . . . . .56
13.1 Restriction on Benefits of Highly Compensated
Employees. . . . . . . . . . . . . . . . . . . . . . . .56
13.2 Restrictions on Distributions to Top 25 Highly
Compensated Employees. . . . . . . . . . . . . . . . . .56
13.3 Termination of Restrictions. . . . . . . . . . . . . . . .57
ARTICLE XIV Miscellaneous Provisions . . . . . . . . . . . . . . .57
14.1 No Contract of Employment. . . . . . . . . . . . . . . . .57
14.2 No Liability for Benefits. . . . . . . . . . . . . . . . .57
14.3 Exclusive Benefit of Trust Fund. . . . . . . . . . . . . .57
14.4 Nonalienation. . . . . . . . . . . . . . . . . . . . . . .58
14.5 Trust Assets . . . . . . . . . . . . . . . . . . . . . . .60
14.6 Responsibility of Fiduciaries. . . . . . . . . . . . . . .60
14.7 Indemnity by Companies . . . . . . . . . . . . . . . . . .60
14.8 Address for Notification; Inability to Locate
Participants or Beneficiaries. . . . . . . . . . . . . .60
14.9 Payment in Case of Incapacity. . . . . . . . . . . . . . .61
14.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . .61
14.11 Applicable Law. . . . . . . . . . . . . . . . . . . . . .61
14.12 Agent for Service . . . . . . . . . . . . . . . . . . . .61
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SAKS FIFTH AVENUE
PENSION PLAN
PREAMBLE
This instrument sets forth the terms and conditions of the
Saks Fifth Avenue Pension Plan (the "Plan") adopted by Saks &
Company effective as of July 2, 1990, as thereafter amended and
in effect as of the date of the execution of this instrument (the
"1998 Restatement"). This 1998 Restatement of the Plan
incorporates Amendments No. 1 through No. 6 to the Plan. Such
amendments are effective as of the dates set forth in the
amendments and instruments setting forth the terms of such
amendments. Saks & Company is a New York corporation with
offices headquartered in New York, New York.
The Plan and the trust established under the Trust Agreement
to implement the Plan are intended to comply with the provisions
of Sections 401(a) and 501(a) of the Code and the requirements of
ERISA, and the corresponding provisions of any subsequent laws,
and the provisions of the Plan and Trust Agreement shall be
construed to effectuate such intention.
ARTICLE I
Definitions
For all terms used in this Plan, whether or not defined in
this Article I, the masculine gender shall include the feminine
and the feminine gender shall include the masculine and the
singular shall include the plural and the plural shall include
the singular unless the context clearly indicates otherwise. The
following terms used in this Plan shall have the meanings set
forth in this Article I.
1.1 Accrued Benefit
"Accrued Benefit" of a Participant means the greater of
(a) the amount of Pension payable to a Participant in
the normal form described in Section 8.1(a) hereof, as
computed under Section 7.1 for periods prior to April 1,
1998, as limited by Sections 7.4, 7.5 and 7.8, to which a
Participant would be entitled commencing upon his Normal
Retirement Date, based upon his years of Credited Service
and Compensation prior to April 1, 1998 that are taken into
account as of the date as of which his Accrued Benefit is
determined, or
(b) the amount of Pension payable to a Participant in
the normal form described in Section 8.1(a) hereof that is
the Actuarial Equivalent (determined using the interest and
mortality factors set forth in Section 1.03 of Appendix A)
of the Participant's Cash Balance Account, as computed under
Section 7.1(b), as limited by Sections 7.4, 7.5 and 7.8, to
which a Participant would be entitled commencing upon his
Normal Retirement Date, based upon such Participant's
opening account balance, if applicable, and Benefit Credits
and Interest Credits allocated to his Cash Balance Account
for each Plan Year commencing on and after January 1, 1998,
which are taken into account as of the date as of which his
Accrued Benefit is determined.
Notwithstanding the above, a Participant's Accrued Benefit
derived from Company contributions shall not be less than the
minimum Accrued Benefit, if any, provided pursuant to the top-
heavy rules contained in Section 7.7. The value of a
Participants Accrued Benefit as of the first day of any Plan Year
shall not be less than the value of his Accrued Benefit as of the
first day of any prior Plan Year.
1.2 Active Participant
"Active Participant" means a person who has commenced, and
remains in, active participation in the Plan pursuant to
Article III.
1.3 Actuarial Equivalent or Actuarially Equivalent
"Actuarial Equivalent" or "Actuarially Equivalent" means
equality in value of the aggregate sums expected to be received
under different forms of payment, based on the actuarial
principles set forth in Appendix A, except as expressly provided
in the Plan.
1.4 Actuary
"Actuary" means an enrolled actuary, within the meaning of
Section 7701(a)(35) of the Code, or a firm of actuaries with
which an enrolled actuary is associated selected by the Pension
Fund Committee to provide actuarial services in connection with
the administration of the Plan.
1.5 Adjustment Factor
"Adjustment Factor" means the cost of living adjustment
factor prescribed by the Secretary of the Treasury under Section
415(d) of the Code.
1.6 Affiliated Company
"Affiliated Company" means:
(a) each Company;
(b) any corporation which is a member of a controlled
group of corporations with a Company within the meaning of
Section 414(b) of the Code as of or after the Effective
Date;
(c) any trade or business (including a sole
proprietorship, partnership, trust, estate or corporation)
which is under common control with a Company within the
meaning of Section 414(c) of the Code as of or after the
Effective Date;
(d) any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined
in Section 414(m) of the Code) which includes a Company as
of or after the Effective Date;
(e) any other entity required to be aggregated with
the Companies pursuant to regulations under Section 414(o)
of the Code as of or after the Effective Date; and
(f) any other entity deemed to be an Affiliated
Company by the Board of Directors;
provided that an entity identified in subsection (b), (c), (d) or
(e) shall constitute an "Affiliated Company" only for the period
of time during which its relationship to the Company satisfies
the requirements of subsection (b), (c), (d) or (e).
1.7 Annual Addition
"Annual Addition" means, with respect to any defined
contribution plan (within the meaning of Code Section 415(k)(1))
sponsored, maintained, or contributed to by an Affiliated
Company, the sum, in any Limitation Year, of:
(a) employer contributions (including elective
deferrals) made on behalf of a Participant;
(b) the Participant's after-tax contributions;
(c) forfeitures, if any, allocated as such to the
Participant's accounts, but reduced by any amount permitted
by regulations promulgated by the Secretary of the Treasury;
and
(d) all other amounts defined in Section 415(c)(2) of
the Code that are allocated to a Participant's accounts,
including any amount allocated to an individual medical
account of the Participant as described in Section 415(1) of
the Code, and (if the Participant is a Key Employee) any
amount allocated to his post-retirement medical benefit
account as described in Section 419A(d) of the Code.
1.8 Beneficiary
"Beneficiary" means the one or more persons who are entitled
to receive distribution under the Plan after the Participant's
death, as determined under the following rules. If such
Participant has a surviving Spouse, the Beneficiary shall be such
Spouse, unless the Participant has elected otherwise pursuant to
Section 8.3. When such an election has been made and in all
cases in which the Participant does not have a surviving Spouse,
the Beneficiary shall be the one or more persons most recently
designated as such by the Participant. If no Beneficiary is
validly designated or if no such validly designated Beneficiary
survives the Participant, the Participant's Beneficiary shall be
his Spouse, or, if there is no Spouse, the Participant's children
per stirpes, or, if there is no Spouse or surviving child or
lineal descendant of a child, the Participant's estate.
1.9 Benefit Commencement Date
"Benefit Commencement Date" means the first day of the first
period for which an amount is payable as an annuity hereunder,
or, in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which
entitle the Participant to such benefit, regardless of whether
payment is actually made. The Benefit Commencement Date shall be
the "as of" date on which an amount becomes payable or on which
all events have occurred which entitle the Participant to
payment, as specified above, as opposed to the actual date of
payment. For purposes of this Section, an annuity shall not be
considered payable pursuant to Section 6.2 or 6.4 prior to Normal
Retirement Date unless the Participant has elected earlier
commencement in accordance with Section 6.2 or 6.4.
1.10 Board of Directors
"Board of Directors" means the board of directors of Saks &
Company or any officer or officers of Saks & Company authorized
by the Board of Directors to take action on its behalf.
1.11 Cash or Deferred Contributions
"Cash or Deferred Contributions" means any amounts that
would qualify as compensation but for the Participant's agreement
to forego receipt thereof pursuant to a cash or deferred
arrangement under Section 401(k)(2) of the Code, a cafeteria plan
under Section 125 of the Code, a simplified employee pension
under Section 402(h) of the Code, or an annuity contract under
Section 403(b) of the Code.
1.12 Code
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.13 Company
"Company" means Saks & Company or any other company, or
division or department of a company, having employees to whom the
Board of Directors has extended the benefits of the Plan, or any
successor entities (collectively, the "Companies"). Any action
by a Company provided for under the Plan may be taken by the
board of directors of that Company or by an officer or officers
of that Company authorized by such board of directors to take
such action. Any reference to the board of directors or officers
of a Company shall, with respect to a Company which is a division
or department of a company, be deemed to refer to the board of
directors or officers of the company of which such Company is a
division or department.
1.14 Compensation
"Compensation" means '414(s)' Compensation with respect to
employment as an Eligible Employee.
1.15 Continued Employee
"Continued Employee" means an Eligible Employee employed by
the Companies as of July 2, 1990.
1.16 Credited Service
"Credited Service" means Service used to determine a
Participant's Accrued Benefit, as the term is defined in Section
2.7.
1.17 Defined Benefit Plan Fraction
"Defined Benefit Plan Fraction" means for any Limitation
Year a fraction, the numerator of which is the Participant's
projected annual benefit under all defined benefit plans (within
the meaning of Section 414(j) of the Code) of the Affiliated
Companies, which are qualified under Sections 401 and 501 of the
Code, determined as of the close of the Limitation Year, and the
denominator of which is the lesser of:
(a) 1.25 (1.0 for any Limitation Year beginning in a
Top Heavy Year) multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for that
Limitation Year, or
(b) 1.4 multiplied by the amount that may be taken
into account under Section 415(b)(1)(B) of the Code with
respect to the Participant for that Limitation Year,
provided that if such defined benefit plan(s) (or prior plan(s)
from which assets and liabilities have been transferred to such
defined benefit plan(s)) satisfied the applicable requirements of
Section 415 of the Code as in effect for all limitation years
beginning before January 1, 1987, the denominator of the Defined
Benefit Fraction shall be determined in accordance with rules
prescribed by the Secretary of the Treasury.
1.18 Defined Contribution Plan Fraction
"Defined Contribution Plan Fraction" means for any
Limitation Year a fraction, the numerator of which is the sum of
the Participant's Annual Additions for all Limitation Years as of
the close of such Limitation Year and the denominator of which is
the sum of the lesser of the following amounts for such
Limitation Year and for each prior Limitation Year of service
with the Affiliated Companies:
(a) 1.25 (1.0 for any Limitation Year beginning in a
Top Heavy Year) multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for that
Limitation Year (determined without regard to Section
415(c)(6) of the Code), or
(b) 1.4 multiplied by the amount that may be taken
into account under Section 415(c)(1)(B) of the Code with
respect to the Participant for that Limitation Year.
1.19 Determination Date
"Determination Date" means, with respect to any Plan Year,
the last day of the immediately preceding Plan Year or, with
respect to the first Plan Year of the Plan, the last day of such
Plan Year.
1.20 Earliest Retirement Age
"Earliest Retirement Age" means the earliest date on which
the Participant could elect to receive retirement benefits under
the Plan.
1.21 Early Retirement Date
"Early Retirement Date" means the date on which the
Participant retires in accordance with Section 6.2 or the date on
which he attains age fifty-five (55), if later.
1.22 Early Retirement Pension
"Early Retirement Pension" means a Pension payable to a
Participant who satisfies the requirements of Section 6.2 hereof.
1.23 Effective Date
"Effective Date" means July 2, 1990, the original effective
date of the Plan.
1.24 Eligibility Service
"Eligibility Service" means Service used to determine an
Eligible Employee's eligibility to become a Participant under the
Plan, as the term is defined in Section 2.5.
1.25 Eligible Employee
"Eligible Employee" means any Employee (including any
officer) employed (whether or not such person is an exempt
employee under Section 13(a)(l) of the Fair Labor Standards Act)
in a Company. Eligible Employee shall not include, however, the
following individuals:
(a) any Employee who is a nonresident alien with no
U.S. source income,
(b) any Employee covered by a collective bargaining
agreement which does not provide for participation in the
Plan,
(c) any leased employee within the meaning of Section
414(n)(2) of the Code included within the definition of
"Employee" in this Article I, unless such leased employee's
participation in the Plan is necessary for the Plan to be or
remain qualified under Section 401(a) of the Code, or
(d) any person who is recorded on the books and
records of an Affiliated Company as an independent
contractor, a worker provided by a temporary staffing
agency, and an individual with respect to whom a written
agreement governing the relationship between such person and
an Affiliated Company provides in substance that such person
shall not be an Eligible Employee hereunder.
(e) The preceding provisions of this Section 1.25
shall be given effect notwithstanding any classification or
reclassification of a person as an employee or common law
employee of an Affiliated Company or as a member of any
other category of person not excluded under the preceding
provisions of this Section 1.25 by reason of action taken by
any tax, or other governmental authority. In the event that
a person rendering services to an Affiliated Company in an
excluded category is classified or reclassified by reason of
action taken by any tax, or other governmental authority, or
by the Affiliated Company, such individual shall continued
to be excluded under this Plan unless specifically included
hereunder by the terms of an amendment to this Plan or by
the terms of a written instrument executed by such person
and the Company.
(f) The categories of excluded persons described above
in this Section 1.25 are not mutually exclusive, it being
contemplated that certain categories described above may
include persons in one or more other categories, with the
result that an individual may be excluded under more than
one category set forth herein.
1.26 Employee
"Employee" means any person employed by an Affiliated
Company (but only while the Affiliated Company is, or was, an
Affiliated Company), including an Eligible Employee. Employee
shall, to the extent permitted by Section 406 of the Code, be
deemed to include any United States citizen employed by a foreign
subsidiary or affiliate of an Affiliated Company. Employee shall
not include, however, any director of a Company not otherwise
employed as an Employee.
For purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements
of Section 414(n)(3) of the Code, Employee shall also include,
effective for services performed after December 31, 1986, leased
employees within the meaning of Section 414(n)(2) of the Code,
provided that if such leased employees constitute less than 20%
of the combined nonhighly compensated work force of the
Affiliated Companies within the meaning of Section
414(n)(5)(C)(ii) of the Code, Employee shall not include those
leased employees covered by a plan described in Section 414(n)(5)
of the Code.
1.27 ERISA
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.28 [Deleted]
1.29 Forfeiture
"Forfeiture" means the value of the nonvested portion of a
Participant's Accrued Benefit upon the occurrence of a Forfeiture
Event.
1.30 Forfeiture Event
"Forfeiture Event" means, with respect to a Participant who
is not 100% vested in his Accrued Benefit, the occurrence of the
earlier of:
(a) the distribution of the entire nonforfeitable
portion of the Participant's Accrued Benefit not later than
the close of the second Plan Year following the Plan Year in
which the Participant ceased to be an Employee and, prior to
such distribution, continued not to be an Employee; or
(b) five (5) consecutive One-Year Breaks in Service.
1.31 '415' Compensation
"'415' Compensation" means a Participant's wages as defined
in Section 3401(a) of the Code for purposes of income tax
withholding at the source plus Cash or Deferred Contributions,
but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed, for a Plan Year,
Limitation Year or other period, as applicable, from the
Affiliated Companies. '415' Compensation shall include only
those amounts required to be included in compensation for
purposes of Section 415 of the Code.
1.32 '414(s)' Compensation
"'414(s)' Compensation" means '415' Compensation minus the
following:
(a) any allowances, reimbursements and other similar
benefits;
(b) severance benefits; and
(c) bonuses and executive incentive payments;
provided that '414(s)' Compensation shall not include unpaid
accrued compensation; and provided further that, for Plan Years
beginning on and after January 1, 1989, and prior to January 1,
1994, '414(s)' Compensation shall not exceed $200,000, and for
Plan Years beginning on and after January 1, 1994, '414(s)'
Compensation shall not exceed $150,000, in each case multiplied
by the ratio of the Adjustment Factor in effect for the Plan Year
to the Adjustment Factor in effect for the Plan Year that
constitutes the appropriate base period.
1.33 Highly Compensated Employee
"Highly Compensated Employee" means any Employee who
performed services for an Affiliated Company at any time during
the Plan Year and who:
(a) was at any time during the Plan Year or the
immediately preceding Plan Year a "5-percent owner" within
the meaning of Section 414(q)(3) of the Code; or
(b) received during the immediately preceding Plan
Year '415' Compensation equal to $80,000 multiplied by the
Adjustment Factor, without regard to whether the Employee
also was in the top-paid group of Employees of the
Affiliated Companies, within the meaning of
Section 414(q)(3) of the Code, during such Plan Year.
A former Employee shall be treated as a Highly Compensated
Employee if he was a Highly Compensated Employee either:
for the last Plan Year during which he performed
services for an Affiliated Company; or
for any Plan Year ended after he attained age 55.
The provisions of this Section shall be interpreted in a
manner consistent with, and so as not to treat any person as
a Highly Compensated Employee except to the extent required
by, Section 414(q) of the Code.
1.34 Hour of Service
"Hour of Service" means each hour so defined in Section 2.1.
1.35 Inactive Participant
"Inactive Participant" means a person who has commenced, and
remains in, inactive participation in the Plan pursuant to
Section 3.3.
1.36 Investment Manager
"Investment Manager" means the one or more investment
managers within the meaning of ERISA Section 3(38) appointed
pursuant to Section 10.6.
1.37 Key Employee
"Key Employee" means any Employee who was at any time during
the Plan Year ending on the Determination Date or during any one
of the four Plan Years immediately preceding such Plan Year, any
one or more of the following, interpreted in accordance with
Section 416(i)(l) of the Code:
(a) an officer of any Affiliated Company whose '415'
Compensation for the Plan Year exceeded 50% of the amount in
effect under Section 415(b)(1)(A) of the Code on December 31
in the Plan Year;
(b) one of the 10 Employees whose '415' Compensation
for the Plan Year exceeded the amount in effect under
Section 415(c)(1)(A) of the Code on December 31 in the Plan
Year and who owned (or are considered to have owned) the
largest interests, exceeding one-half of one percent (1/2%),
in the Affiliated Companies;
(c) a "5-percent owner" of any Company of which he is
an Employee; or
(d) a "1-percent owner" of any Company of which he is
an Employee and whose '415' Compensation for the Plan Year
exceeded $150,000.
1.38 Limitation Year
"Limitation Year" means the Plan Year; provided that for the
Plan Year ending December 31, 1990, Limitation Year shall mean
the twelve (12) consecutive month period ending December 31,
1990.
1.39 Maternity or Paternity Leave
"Maternity or Paternity Leave" means any period of absence
from employment beginning in any Plan Year commencing after
December 31, 1984 by reason of the pregnancy of a Participant or
the birth of a child of a Participant, or by reason of the
placement of a child with a Participant in connection with its
adoption by the Participant, or for the purpose of caring for
such child during the period immediately following such birth or
placement. Notwithstanding the foregoing, a period of absence
from employment shall not be regarded as a Maternity or Paternity
Leave if the Participant shall fail to comply with a request by
the Company to furnish the Plan Administrator such timely
information as may be reasonably required to establish that the
absence from employment was for a reason set forth above and the
number of days for which there was such an absence.
1.40 Named Fiduciary
"Named Fiduciary" means the Plan Administrator, the Pension
Fund Committee, the Trustee and the Investment Manager(s). Each
such Named Fiduciary shall constitute a named fiduciary within
the meaning of ERISA Section 402(a)(2).
1.41 Normal Retirement Age
"Normal Retirement Age" means
(a) age 65 for Continued Employees with at least three
(3) years of vesting service under the Prior Plan as of
January 1, 1989, and
(b) in all other cases, the later of age 65 and the
earlier of
(1) the completion of five (5) years of Vesting
Service or
(2) the fifth anniversary of the date the Employee
first becomes a Participant herein;
provided that the term shall refer to an earlier normal
retirement age with respect to a Continued Employee if such
age was applicable to such Continued Employee under the
Prior Plan.
1.42 Normal Retirement Date
"Normal Retirement Date" means the last day of the month in
which the Participant reaches his Normal Retirement Age.
1.43 Normal Retirement Pension
"Normal Retirement Pension" means the Pension payable to a
Participant who satisfies the requirements of Section 6.1 hereof.
1.44 One-Year Break in Service
"One-Year Break in Service" means each one-year computation
period so defined in Section 2.3.
1.45 Participant
"Participant" means an Active Participant or an Inactive
Participant. A Participant shall be deemed to be a Participant
in respect of the Company in which he is, or was most recently,
an Eligible Employee.
1.46 Pension
"Pension" means a series of monthly amounts which are
payable to a person who is entitled to receive benefits under the
Plan.
1.47 Pension Fund Committee
"Pension Fund Committee" means the committee appointed
pursuant to Section 10.1.
1.48 Plan
"Plan" means the Saks Fifth Avenue Pension Plan, effective
as of July 2, 1990, as amended from time to time.
1.49 Plan Administrator
"Plan Administrator" means the officer appointed pursuant to
Section 9.1, who shall constitute the administrator of the Plan
within the meaning of ERISA Section 3(16).
1.50 Plan Year
"Plan Year" means the period from the Effective Date through
December 31, 1990, and thereafter each successive one-year period
ending on any December 31.
1.51 Prior Plan
"Prior Plan" means the BATUS Retail Group Pension Plan.
1.52 Prior Plan Benefit
"Prior Plan Benefit" means a Continued Employee's accrued
benefit under the Prior Plan as of July 2, 1990 (after reduction
by any applicable offsets under the Prior Plan) with respect to
which and to the extent that the Plan has received a transfer of
assets and liabilities from the Prior Plan.
1.53 Qualified Domestic Relations Order
"Qualified Domestic Relations Order" means a "qualified
domestic relations order" within the meaning of Section 206(d) of
ERISA and Section 414(p) of the Code.
1.54 Retirement
"Retirement" means the termination of employment for reasons
other than death after a Participant has fulfilled all the
requirements for a Normal Retirement or Early Retirement Pension.
Retirement shall be considered as commencing on the day
immediately following a Participant's last day of employment (or
authorized leave of absence, if later).
1.55 Service
"Service" means a sum of computation periods so defined in
Section 2.4.
1.56 Social Security Retirement Age
"Social Security Retirement Age" means the retirement age
under Section 216(1) of the Federal Social Security Act, applied
without regard to the age increase factor and as if the early
retirement age under Section 216(1)(2) of such Act were age
sixty-two (62). Accordingly, the Social Security Retirement Age
is sixty-five (65) for a Participant attaining age sixty-two (62)
before January 1, 2000 (i.e., born before January 1, 1938),
sixty-six (66) for a Participant attaining age sixty-two (62)
after December 31, 1999 but before January 1, 2017 (i.e., born
after December 31, 1937 but before January l, 1955), and sixty-
seven (67) for a Participant attaining age sixty-two (62) after
December 31, 2016 (i.e., born after December 31, 1954).
1.57 Spouse
"Spouse" means the person to whom a Participant is lawfully
married as of the earlier of his Benefit Commencement Date or
death, provided that Spouse shall instead mean another spouse of
a Participant to the extent required by a Qualified Domestic
Relations Order.
1.58 Top Heavy Year
"Top Heavy Year" means a Plan Year for which the Plan is Top
Heavy, as defined below and interpreted in accordance with
Section 416 of the Code and applicable regulations thereunder:
(a) The Plan shall be Top Heavy for any Plan Year if
it is included in, or it alone constitutes, an Aggregation
Group (defined below) under which, as of the Determination
Date, the sum of the present value of the cumulative accrued
benefits for all Key Employees (and their beneficiaries)
under all defined benefit plans included in such group plus
the aggregate of the accounts of all Key Employees (and
their beneficiaries) under all defined contribution plans
included in such group exceeds 60% of the analogous sum for
all participants (and their beneficiaries) under such plans.
For purposes of this subsection (a):
(1) the foregoing sums shall not include any
amounts in respect of participants who have performed
no service for any Affiliated Company during the five
(5) year period ending with the Determination Date, but
they otherwise shall include distributions made during
the five (5) year period ending with the Determination
Date, and
(2) the accrued benefits of an Employee other
than a Key Employee shall be determined
(A) under the method that uniformly applies
for accrual purposes under all defined benefit
plans maintained by the Affiliated Companies, or
(B) if there is no such method, as if such
benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.
(b) "Aggregation Group" means all existing and
terminated plans (even if only one plan) maintained by all
Affiliated Companies in which, during the Plan Year
containing the Determination Date or any of the preceding
four (4) Plan Years, a Key Employee was a participant or
which, during the Plan Year containing the Determination
Date or any of the preceding four (4) Plan Years, was
combined with any of such plans in order to meet the
coverage or nondiscrimination requirements of Sections 410
or 401(a)(4) of the Code. The Aggregation Group shall also
include those additional plans, if any, which are selected
from time to time by the Board of Directors to be included
in the Aggregation Group if their inclusion would not
prevent the Aggregation Group from meeting the requirements
of Sections 410 and 401(a)(4) as of the particular
Determination Date.
1.59 Trust Agreement
"Trust Agreement" means the trust agreement established to
implement the Plan, as amended from time to time.
1.60 Trust Fund
"Trust Fund" means the fund, including the earnings thereon,
held by the Trustee into which all contributions of the Company
are deposited pursuant to the Plan.
1.61 Trustee
"Trustee" means the trustee or trustees, from time to time,
of the trust established under the Trust Agreement.
1.62 Valuation Date
"Valuation Date" means the last business day of each month
or such other or additional days as the Pension Fund Committee
may determine.
1.63 Vesting Service
"Vesting Service" means Service used to determine the extent
to which a Participant's Accrued Benefit is nonforfeitable, as
the term is defined in Section 2.6.
1.64 Year of Service
"Year of Service" means each one-year computation period so
defined in Section 2.2.
ARTICLE II
Service
The following terms used in this Plan shall have the
meanings set forth in this Article II.
2.1 Hour of Service
"Hour of Service" means:
(a) each hour for which an Employee is directly or
indirectly paid or entitled to payment as an Employee for
the performance of duties;
(b) each hour for which an Employee is directly or
indirectly paid or entitled to payment as an Employee for
reasons other than the performance of duties, regardless of
whether the employment relationship has terminated; and
(c) each hour for which back pay to an Employee,
irrespective of mitigation of damage, has been either
awarded or agreed to by the Company or any Affiliated
Company;
provided that an Employee who is not paid on an hourly basis and
who is not a part-time exempt employee shall be credited with 190
Hours of Service for each calendar month in which the Employee
would be required to be credited with at least 1 Hour of Service
hereunder.
Hours shall be credited under subsections (b) and (c) above in
accordance with Section 2530.200b-2(b) and (c) of Title 29 of the
Code of Federal Regulations, as amended from time to time.
However, not more than 501 Hours of Service shall be credited to
any Employee or Participant during any computation period for any
single, continuous period during which the Employee or
Participant performs no duties.
2.2 Year of Service
"Year of Service" means each one-year computation period,
described herein, during which an Employee is credited with at
least 1000 Hours of Service; provided that in determining Years
of Service for purposes of Credited Service, a Year of Service
shall only include computation periods in which an individual has
attained age twenty-one (21) and is credited with at least 1000
Hours of Service as an Eligible Employee. In determining Years
of Service for purposes of Eligibility Service, the computation
periods shall be the one-year period commencing on the date the
individual became an Employee and each one-year period ending on
the last day of each Plan Year ending after the end of that first
computation period. In determining Years of Service for purposes
of Vesting Service and Credited Service, the computation periods
shall be each one-year period ending on the last day of each Plan
Year ending after the date the individual became an Employee.
2.3 One-Year Break in Service
"One-Year Break in Service" means each one-year computation
period used for determining Years of Service during which an
Employee is credited with no more than 500 Hours of Service;
provided that solely for the purpose of determining whether an
Employee has incurred a One-Year Break in Service, the Employee
shall be credited with:
(a) Hours of Service which otherwise would normally
have been credited to an Employee but for a Maternity or
Paternity Leave, or
(b) if the Plan Administrator is unable to determine
the Hours of Service described in subsection (a) above, 8
Hours of Service for each such day of Maternity or Paternity
Leave,
except that the total number of Hours of Service so credited
shall not exceed 501. Any Hours of Service credited for a
Maternity or Paternity Leave under this Section shall be credited
only in the computation period in which the Maternity or
Paternity Leave began, if the Employee otherwise would incur a
One-Year Break in Service in that computation period, and
otherwise shall be credited in the immediately following
computation period.
2.4 Service
"Service" means the sum (expressed as an integer, except as
provided below with respect to Credited Service) of all Years of
Service, provided that Years of Service, or portions thereof,
shall be disregarded to the extent required by one or more of the
following rules:
(a) If a person incurs a One-Year Break in Service,
all Years of Service prior to the One-Year Break in Service
shall be disregarded in determining Vesting Service with
respect to benefit accruals following the One-Year Break in
Service and in determining Eligibility Service and Credited
Service unless and until the person completes a Year of
Service after the One-Year Break in Service.
(b) If an Employee who has no nonforfeitable interest
in his Accrued Benefit, if any, incurs five (5) consecutive
One-Year Breaks in Service, all Years of Service prior to
those One-Year Breaks in Service shall be disregarded.
(c) Upon the occurrence of a Forfeiture Event in
respect of a Participant, all Years of Service in
determining Credited Service shall be disregarded; provided
that if a Participant who has incurred one or more
Forfeiture Events, but has not incurred a Forfeiture Event
due to five (5) consecutive One-Year Breaks in Service,
timely repays to the Plan in one lump sum the entire amount
of the distribution which occasioned the Forfeiture Event
with interest on the amount of the distribution compounded
annually at the rate of (a) five percent (5%) per annum for
the period from the date of distribution through the earlier
of the date of repayment or December 31, 1987, and (b) the
rates in use by the Pension Benefit Guaranty Corporation for
valuing annuities at plan termination for the period
beginning on the later of January 1, 1988, or the date of
distribution, to the date of repayment, then the Credited
Service disregarded upon the occurrence of the Forfeiture
Event shall be restored. A Participant's repayment to the
Plan under this subsection is timely only if the repayment
is received by the Plan Administrator while the Participant
is an Eligible Employee and before the earlier of (1) the
termination of the Plan and (2) five (5) years after the
first date on which the Participant thereafter becomes an
Eligible Employee.
(d) In determining Credited Service, a Participant
shall be credited with a Year of Service for the computation
period during which he was an Active Participant herein and
completed at least one Hour of Service but failed to
complete 1000 Hours of Service due to Retirement, death or
disability in such period.
(e) No Years of Service dependent upon Hours of
Service credited prior to January l, 1990 shall be included
in determining Vesting Service.
(f) No Years of Service dependent upon Hours of
Service credited prior to the Effective Date shall be
included in determining Eligibility Service.
Notwithstanding the above, in determining Eligibility and Vesting
Service with respect to a Continued Employee following the
transfer of assets and liabilities attributable to Continued
Employees from the Prior Plan, all years of service recognized
for eligibility and vesting purposes, respectively, under the
terms of the Prior Plan with respect to such Continued Employee
as of July 2, 1990, to the extent not otherwise credited under
this Article II shall be credited to such Continued Employee
under this Plan as of the Effective Date; provided that no
Continued Employee shall be credited with more than one (1) Year
of Eligibility or Vesting Service with respect to calendar year
1990.
2.5 Eligibility Service
"Eligibility Service" means Service used to determine an
Eligible Employee's eligibility to become a Participant.
2.6 Vesting Service
"Vesting Service" means Service used to determine the extent
to which the Participant's Accrued Benefit is nonforfeitable.
2.7 Credited Service
"Credited Service" means Service used to determine a
Participant's Accrued Benefit.
ARTICLE III
Participation
3.1 Commencement of Active Participation
A person shall commence or recommence active participation
in the Plan in accordance with the following rules:
(a) A Continued Employee who was a participant in the
Prior Plan as of July 1, 1990, shall become an Active
Participant as of the Effective Date.
(b) A person who does not become a Participant under
Section 3.1(a) shall become an Active Participant as of the
first day following the end of the applicable eligibility
computation period if he is then an Eligible Employee who
has attained age twenty-one (21) and been credited with a
year of Eligibility Service. If an Eligible Employee has
been credited with a year of Eligibility Service but has not
attained age twenty-one (21), he shall become an Active
Participant on his twenty-first (21st) birthday.
(c) An Inactive Participant or a former Participant
who is or becomes credited with a year of Eligibility
Service shall become an Active Participant as of the later
of:
(1) the date on which he again became an Eligible
Employee, and
(2) the first day of the Plan Year in which was
credited the last Hour of Service necessary to qualify
for such year of Eligibility Service.
3.2 Consent
Each Eligible Employee shall become an Active Participant in
the Plan pursuant to Section 3.1 without a requirement of notice
by the Company, the Trustee, or any other person and without the
consent of the Employee.
3.3 Commencement of Inactive Participation
An Active Participant shall become an Inactive Participant
as of the date he ceases to be an Eligible Employee.
3.4 Termination of Participation
An Active Participant or an Inactive Participant shall cease
to be a Participant as of the date he no longer has, under the
provisions of the Plan, an Accrued Benefit hereunder.
3.5 Military Absence under USERRA
Notwithstanding any provision of this 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.
ARTICLE IV
Company Contributions
4.1 Company Contributions
Subject to the requirements of Section 412 of the Code the
Company may make such contributions as are specified in the
Actuary's valuation reports for the applicable period of time.
All contributions will be paid into the Trust fund. The
actuarial assumptions used for purposes of computing Company
contributions to the Plan shall be the same as those set forth in
the actuarial valuations filed with the Internal Revenue Service
in connection with the Plan. Notwithstanding the foregoing, the
Company reserves the right to reduce, suspend or discontinue
making contributions to the Plan at any time.
4.2 Time and Method of Payment of Company Contributions
The Company may make its annual and/or quarterly
contribution(s) in one (1) or more installments. The Company's
annual contribution shall be due on the last day of its fiscal
year, and, unless paid before, shall be payable not later than
the time prescribed by law for filing the Company's federal
income tax return (including extensions thereof) for such fiscal
year. If the contribution is on account of the Company's
preceding fiscal year, the contribution shall be accompanied by
the Company's signed statement to the Trustee that payment is on
account of such fiscal year. Contributions may be paid in cash,
or other property, as the Company may determine. Property shall
be valued at its fair market value at the time of contribution.
Each annual contribution shall be deemed to be paid as of the
last day of the Company's fiscal year to which it relates.
4.3 Forfeitures
Forfeitures arising under this Plan, because of a severance
of employment before a Participant becomes eligible to receive a
Pension, or for any other reason, shall not be used to increase
the benefits otherwise payable to Participants, but shall be
applied to reduce the cost of the Plan to the Company.
4.4 Return of Company Contributions
Notwithstanding any provision contained herein to the
contrary:
(a) Mistake of Fact. In the case of a contribution
which is made by a Company by a mistake of fact, such
contribution shall be returned to the contributing Company
as promptly as practicable after the discovery of such
mistake, but in no event later than one year after the date
such contribution was made. Earnings attributable to a
mistaken contribution shall not be returned to the Company,
but losses attributable thereto shall reduce the amount of
such contributions to be returned.
(b) Failure of Qualification of Plan and Trust. All
contributions of the Companies to the Plan are conditioned
upon the qualification of the Plan under Section 401 of the
Code. If the Plan receives an adverse determination as to
its qualification in respect of a Company, the Trustee
shall, after paying any applicable expenses, return to such
Company any remaining contributions made by such Company.
Such remaining contributions shall be returned as promptly
as practicable, but in no event later than one year after
the date of the final denial of qualification of the Plan as
to such Company, including the final resolution of any
appeals before the Internal Revenue Service or the courts.
This subsection (b) shall apply only to applications for
determination as to initial qualification which are made
within the time prescribed by law for filing the Company's
return for the tax year in which the Plan was adopted, or
such later date as the Secretary of the Treasury may
prescribe.
(b) Disallowance of Deduction. All contributions by
the Companies to the Plan are conditioned upon the
deductibility thereof under Section 404 of the Code. If and
to the extent the deduction for any contribution of a
Company is disallowed by the Internal Revenue Service, the
Trustee shall, after deducting attributable losses but not
including any attributable earnings, return the disallowed
portion of the contribution as soon as practicable, but in
no event later than one year after the date of the final
disallowance of the contribution, including the final
resolution of any appeals before the Internal Revenue
Service or the courts.
ARTICLE V
Participant Contributions
5.1 Participant Contributions
Participant contributions shall be neither required nor
permitted.
ARTICLE VI
Requirements For Retirement Benefits
6.1 Normal Retirement
(a) A Participant's Accrued Benefit shall be vested
and nonforfeitable upon attainment of his Normal Retirement
Age or any later age while an Employee.
(b) A vested Participant shall be eligible for a
Normal Retirement Pension if he ceases to be an Employee on
his Normal Retirement Date. The Participant shall be
entitled to receive his Normal Retirement Pension commencing
as of his Normal Retirement Date, with payment to commence
within a ninety (90) day period commencing on his Normal
Retirement Date.
6.2 Early Retirement
A Participant shall be eligible for an Early Retirement
Pension if he ceases to be an Employee under the conditions
described in either subsection (a) or subsection (b):
(a) A Participant who has completed at least ten (10)
years of Vesting Service and attained age fifty-five (55)
shall be eligible to retire early on the first day of any
month prior to his Normal Retirement Date.
(b) A Participant who is not described in subsection
(a) above shall be eligible to retire on the first day of
any month coincident with or next following the date on
which he satisfies the requirements for a Deferred Vested
Pension under Section 6.4 and the sum of his age in full
years plus his years of Vesting Service equals at least
sixty-five (65), or as of the first day of any subsequent
month prior to his Normal Retirement Date.
Payment of an Early Retirement Pension shall commence as of the
first day of the month next following a Participant's Normal
Retirement Date. However, a Participant may elect to receive his
Early Retirement Pension commencing as of the first day of any
month following the Participant's Early Retirement Date, with
payment to commence within a ninety (90) day period commencing on
the date so elected by the Participant. If a Participant's Early
Retirement Pension commences prior to his Normal Retirement Date,
the amount thereof shall be reduced as provided in Section 7.2
hereof.
6.3 Late Retirement
If a Participant continues to be an Employee after his
Normal Retirement Date, such Participant shall become entitled to
a Normal Retirement Pension determined in accordance with Section
7.1(d) hereof, if his Accrued Benefit is vested and
nonforfeitable under Section 6.1(a) as of the date he ceases to
be an Employee. The payment of a Normal Retirement Pension
payable under this Section 6.3 shall commence within a ninety
(90) day period commencing on the first day of the month next
following the Participant's date of Retirement.
6.4 Termination of Employment Prior to Normal Retirement Age
If a Participant ceases to be an Employee prior to his
attainment of Normal Retirement Age for any reason other than
satisfaction of the conditions under Section 6.2(a) or 6.2(b) or
death after he has completed at least five (5) years of Vesting
Service (or, for Top Heavy Years, has a nonforfeitable benefit
under the following schedule:
Years of Vesting Service Vested Percentage
Less than 3 years 0%
3 years or more 100%)
then he shall be eligible to receive a Deferred Vested Pension
(herein so called). Payment of a Participant's Deferred Vested
Pension shall commence as of the first day of the month next
following his Normal Retirement Date. However, a Participant may
elect to receive his Deferred Vested Pension commencing as of the
first day of any month after the Participant's termination of
employment, subject to the provisions of Section 8.9. If a
Participant's Deferred Vested Pension commences prior to his
Normal Retirement Date, the amount thereof shall be reduced as
provided in Section 7.3 hereof.
Any Participant who terminates employment prior to
qualifying for any Pension hereunder shall be deemed to receive a
distribution of his $0 vested Accrued Benefit (which shall be
immediately distributable regardless of the Participant's age)
pursuant to Section 8.5(a), and shall forfeit his nonvested
Accrued Benefit immediately, subject to restoration under the
provisions of Section 8.5(b). Forfeitures shall be used to
reduce Company contributions in accordance with Article IV
hereof.
ARTICLE VII
Amount Of Retirement Benefit
7.1 Normal Retirement Pension
(a) Prior Normal Retirement Pension. Subject to the
limitations of Sections 7.4, 7.5, 7.7, and 7.8 hereof, the
annual amount of the Normal Retirement Pension, computed in
the normal form specified in Section 8.1(a) hereof to a
Participant commencing on the date specified in Section 6.1,
shall be equal to, for each computation period in which the
Participant has a year of Credited Service, one percent (1%)
of his Compensation for that Plan Year. A Participant's
Pension under this subsection (a) shall not take into
account computation periods prior to January 1, 1990 or
Compensation before July 2, 1990, except as provided with
respect to Continued Employees under subsection (c), and
shall not take into account computation periods ending after
March 31, 1998 or Compensation after March 31, 1998. The
requirement in the first sentence of this subsection (a)
that a Participant have a year of Credited Service shall not
apply for Plan Year 1998 in the case of a Participant whose
termination of employment occurs in 1998 (whether before or
after April 1, 1998), provided that such Participant
otherwise would be eligible to accrue a benefit hereunder
for such year.
(b) Cash Balance Normal Retirement Pension Formula.
Subject to the limitations of Sections 7.4, 7.5, 7.7 and 7.8
hereof, the annual amount of the Normal Retirement Pension
to any Participant who is an Active Participant on or after
January 1,1998, computed in the normal form specified in
Section 8.1(a) hereof commencing on the date specified in
Section 6.1, shall be equal to the greater of the Actuarial
Equivalent of the Participant's Normal Retirement Pension
determined as of March 31, 1998 under subsection (a) above
or the Actuarial Equivalent of the Participant's Cash
Balance Account determined in accordance with the following
provisions of this subsection (b).
(1) A Participant's Cash Balance Account for
purposes of this subsection (b) shall mean the
hypothetical account maintained for the Participant to
which are allocated the following:
(A) Hypothetical Benefit Credits and
Interest Credits computed in accordance with
paragraphs (2) and (3) below for Plan Years
commencing on and after January 1, 1998, plus
(B) Hypothetical Benefit Credits as of
January 1, 1998 (or if later, the date of a
Participant's rehire and recommencement of
participation) equal to the single sum equivalent
of the Participant's Normal Retirement Pension
determined under subsections(a) above and (c)
below as of December 31, 1997 calculated using an
interest rate of 9% per annum, the 1983 Group
Annuity Mortality Table (50% Male/50% Female) and
an assumed Benefit Commencement Date equal to the
later of age 65 or attained age at January 1,
1998. In the case of a Participant who is hired
during 1997, Hypothetical Benefit Credits
allocated under this subparagraph (B) as of
December 31, 1997 shall take into account the
computation period that begins in the 1997 Plan
Year.
All allocations to a Participant's Cash Balance
Account shall be hypothetical and in no event shall an
actual account be maintained for any Participant nor
shall any Participant have any claim to any particular
assets of the Plan.
(2) For each Plan Year beginning on or after
January 1, 1998 in which a Participant is an Active
Participant at any time during the Plan Year and has a
year of Vesting Service in such Plan Year, Benefit
Credits equal to a percentage of the Participant's
Compensation for the Plan Year shall be allocated to
the Participant's Cash Balance Account. Such
percentage shall be determined in accordance with the
schedule below and shall be allocated to the
Participant's Cash Balance Account as of the last day
of each Plan Year, except that in the case of a
Participant whose employment terminates prior to the
last day of the Plan Year, any Benefit Credits for the
Plan Year shall be allocated as of the last day of the
month in which the Participant's employment terminates.
In the case of an Active Participant whose employment
terminates during a Plan Year due to death or
disability, within the meaning of Section 72 of the
Code, or whose employment terminates after the sum of
the Participant's age and Years of Vesting Service
equal at least 65, Benefit Credits for such Plan Year
shall be allocated to the Participant's Cash Balance
Account without regard to the requirement for a year of
Vesting Service for that year. For purposes of
applying the schedule below, an Active Participant's
Years of Vesting Service shall take into account both
periods before and periods after January 1, 1998, and
shall take into account years prior to the date on
which the Active Participant became an Active
Participant, provided, however, that no years of
Vesting Service shall be taken into account for an
individual until the individual becomes an Active
Participant.
Years of Vesting Service Annual Benefit Credits
1 to 2 2.0% of Compensation
3 to 6 2.5% of Compensation
7 to 10 3.0% of Compensation
11 to 15 4.0% of Compensation
16 to 20 5.0% of Compensation
21 or more 6.0% of Compensation
(3) A Participant's Interest Credits for a Plan Year shall
be credited automatically to the Participant's Cash Balance
Account as of the last day of each Plan Year that ends prior to
his Benefit Commencement Date (and, in the year in which such
Benefit Commencement Date occurs, a pro rata Interest Credit),
based on the Participant's Cash Balance Account as of the first
day of each such Plan Year and the interest rate on 3-year
Treasury notes determined as of December 31 of the preceding Plan
year, as published in the Federal Reserve Statistical Release (or
other equivalent publication designated by the Committee), but in
no event shall the annual rate for any Plan Year be less than an
annual rate of 4.75%.
(c) Special Rules for Continued Employees.
(1) Subject to the limitations of Sections 7.4,
7.5, 7.7 and 7.8 hereof, following the transfer to the
Plan of assets and liabilities attributable to
Continued Employees from the Prior Plan, the annual
amount of the Normal Retirement Pension, computed in
the normal form specified in Section 8.1(a) hereof to a
Continued Employee who had an accrued benefit under the
Prior Plan as of July 2, 1990, commencing on the date
specified in Section 6.1, shall be equal to the sum of
the amount determined under subsections (a) and (c) of
this Section 7.1 and the Continued Employees Prior Plan
Benefit, if any, (reduced in accordance with Section
1.04 of Appendix A with respect to GBI Participants, as
defined in Section 8.6(a), who elect a form of payment
under paragraph (1) or (2) of Section 8.6(d)), provided
that Compensation for the entire calendar year 1990
shall be taken into account for such Continued Employee
for purposes of subsection (a) and provided further
that no such Continued Employee shall accrue under the
Plan, with respect to calendar year 1990, more than one
percent (1%) of his Compensation for calendar year
1990.
(2) Subject to the limitations of Sections 7.4,
7.5, 7.7 and 7.8 hereof, the annual amount of the
Normal Retirement Pension, computed in the normal form
specified in Section 8.1(a) hereof to a Participant who
meets the definition of Continued Employee but who did
not have an accrued benefit under the Prior Plan as of
July 2, 1990, commencing on the date specified in
Section 6.1, shall be equal to the sum of the amount
determined under subsection (a) of this Section 7.1 and
the amount, if any, determined under Appendix C,
provided that no such Continued Employee shall accrue,
under the Plan, with respect to calendar year 1990,
more than one percent (1%) of his Compensation for
calendar year 1990.
(d) Late Retirement. A Participant who retires
pursuant to Section 6.3 after his Normal Retirement Date
shall receive a Pension in an amount equal to the amount
determined under the Normal Retirement Pension formula of
subsections (a), (b) and (c), if applicable, as of the date
the Participant ceases to be an Employee, provided, however,
that in the case of a Participant who continues in
employment after age 70-1/2, the annual increases in his
Accrued Benefit, if any, shall be reduced to reflect the
cumulative amount of any distributions made to the
Participant pursuant to Section 8.9.
(e) Special Rules for Prior ILGWU Employees. Subject
to the limitations of Section 7.4, 7.5, 7.7 and 7.8 hereof,
any Employee employed by the Employer in its women's'
alterations department at its 611 Fifth Avenue store, New
York, New York, who becomes an Eligible Employee as of
December 9, 1994, due to the decertification of the ILGWU,
Local 22, AFL-CIO, shall receive a special Normal Retirement
Pension for employment prior to January 1, 1995. The annual
amount of this special Normal Retirement Pension, computed
in the normal form specified in Section 8.1(a) hereof and
commencing on the date specified in Section 6.1, shall be
equal to A minus B, where A is seventy-five percent (75%) of
the benefit that would have been earned as of December 31,
1994, under the terms of this Plan if the Employee had been
eligible for this Plan prior to January 1, 1995, and B is
any benefit amount, computed in the normal form specified in
Section 8.1(a) hereof and commencing on the date specified
in Section 6.1, to which the Employee is entitled as of
December 31, 1994, due to participation in a pension plan
for ILGWU members. On and after January 1, 1995, any
Employee referenced in the first sentence of this subsection
shall earn an additional amount of Normal Retirement Pension
based on the formula in Section 7.1(a) and Section 7.1(b) as
applicable.
7.2 Early Retirement Pension
Subject to the provisions of Sections 7.4, 7.5, 7.7 and 7.8
hereof, the annual amount of the Early Retirement Pension,
computed in the normal form specified in Section 8.1(a) hereof,
payable to a Participant, commencing as of the first day of the
month next following a date elected by the Participant which is
on or after his Early Retirement Date, shall be equal to the
Actuarial Equivalent of his vested Accrued Benefit. However, if
payment commences as of an Early Retirement Date and such
Participant's Accrued Benefit is determined under Section 1.1(a)
and not under Section 1.1(b), the amount of his Pension shall be
reduced by 1/2 of 1% per month for each of the first sixty (60)
months and by 1/4 of 1% per month for each of the next sixty (60)
months that the Benefit Commencement Date precedes the
Participant's Normal Retirement Date; provided that, with respect
to a Continued Employee's Prior Plan Benefit, if any, the
reduction shall be as specified in the Prior Plan, if less.
7.3 Deferred Vested Pension
Subject to the provisions of Sections 7.4, 7.5, 7.7 and 7.8
hereof, the annual amount of the Deferred Vested Pension,
computed in the normal form specified in Section 8.1(a) hereof,
payable to a Participant commencing as of his Benefit
Commencement Date shall be equal to the Actuarial Equivalent of
his vested Accrued Benefit. However, if payment of a Deferred
Vested Pension commences as of a date prior to the Participant's
Normal Retirement Date and such Participant's Accrued Benefit is
determined under Section 1.1(a) and not under Section 1.1(b), the
amount of his Pension shall be reduced as follows:
Age in Years and Percentage of Pension
Completed Months When Commencing at Normal
Pension Commences Retirement Date
---------------------- --------------------
65 and no months 100%
64 and no months 89%
63 and no months 79%
62 and no months 71%
61 and no months 64%
60 and no months 58%
59 and no months 52%
58 and no months 47%
57 and no months 42%
56 and no months 38%
55 and no months 34%
If a Pension begins at a date between the above-stated ages, the
reduction shall be calculated by straight-line interpolation of
the applicable above-stated percentages. If a Pension begins
prior to attainment of age fifty-five (55) the reduction prior to
age fifty-five (55) shall be determined as provided in Appendix
A.
7.4 Maximum Annual Benefit
(a) General Limitation. Notwithstanding any provision
contained herein to the contrary and subject to the
requirements of subsection (e) below, the amount of annual
Pension, determined in accordance with Sections 7.1, 7.2,
and 7.3, attributable to a Participant's Accrued Benefit
that is payable to a Participant under this Plan and any
other defined benefit plan (as defined in Section 414(j) of
the Code) maintained by the Company or any Affiliated
Company (whether or not terminated) shall not exceed the
lesser of:
(1) $90,000, multiplied by the Adjustment Factor,
or
(2) One hundred percent (100%) of the
Participant's average '415' Compensation for the three
(3) consecutive calendar years while a Participant in
the Plan in which his earnings were the highest.
(b) Adjustments and Special Provisions.
(1) Commencement Before Social Security
Retirement Age. If any Participant begins to receive a
Pension under this Plan before such Participant's
Social Security Retirement Age but after he attains age
sixty-two (62), the maximum annual Pension that such
Participant may receive hereunder shall be actuarially
adjusted as follows:
(A) If a Participant's Social Security
Retirement Age is sixty-five (65), the applicable
dollar limitation under Section 7.4(a)(1) for
benefits commencing on or after age sixty-two (62)
shall be reduced by 5/9 of 1% for each month by
which benefits commence before the month in which
the Participant attains age sixty-five (65).
(B) If a Participant's Social Security
Retirement Age is greater than sixty-five (65),
the dollar limitation under Section 7.4(a)(1) for
benefits commencing on or after age sixty-two (62)
shall be determined by reducing the applicable
dollar limitation under Section 7.4(a)(1) by 5/9
of 1% for each of the first thirty-six (36) months
and 5/12 of 1% for each of the additional months
(up to twenty-four (24) months) by which benefits
commence before the month of the Participant's
Social Security Retirement Age.
(C) The dollar limitation for benefits
commencing prior to age sixty-two (62) shall be
the Actuarial Equivalent of the limitation for
benefits commencing at age sixty-two (62), with
the dollar limitation for benefits commencing at
age sixty-two (62) reduced for each month by which
benefits commence before the month in which a
Participant attains age sixty-two (62).
(2) Commencement After Social Security Retirement
Age. If a Participant begins to receive a Pension
hereunder after he attains his Social Security
Retirement Age, the maximum annual Pension permitted
hereunder shall be the Actuarial Equivalent of the
applicable dollar limitation under Section 7.4(a)(1)
per year beginning at his Social Security Retirement
Age.
(3) Adjustments to Dollar Limitation. For
purposes of determining actuarial equivalence pursuant
to Section 7.4(b)(1)(C), if the benefit is not a lump
sum payment, the factors used to determine the
equivalent maximum benefit for benefits that commence
prior to age sixty-two (62) shall be the reductions
specified in Section 7.4(b)(1) for the period after age
sixty-two (62), and (i) the reductions specified in
Section 7.2 to the extent such factors are applicable
for the period prior to age sixty-two (62), or (ii) an
interest rate of five percent (5%) and the mortality
table based on the 1983 Group Annuity Mortality Table
specified in Appendix A for Single Sum Payments on and
after January 1, 1996, whichever produces the lower
Pension. If the benefit is a lump sum payment, the
reduction for commencement prior to age sixty-two (62)
shall be based on the interest rate and mortality table
set forth in Appendix A for Single Sum Payments on and
after January 1, 1996.
For purposes of determining actuarial equivalence
under Section 7.4(b)(2), the interest rate and
mortality assumptions shall be (i) the interest rate
and mortality assumption specified in Appendix A for
Single Sum Payments on and after January 1, 1996, or
(ii) the mortality table specified in Appendix A for
Single Sum Payments on and after January 1, 1996, and
an interest rate of five percent (5%) per annum,
whichever produces the lower Pension.
In making an actuarial adjustment to any benefit
pursuant to the terms of paragraphs (1) and (2), no
Adjustment Factor to Section 7.4(a)(1) shall be taken
into account before the year in which such Adjustment
Factor is made.
(4) Exemption for Pensions Under $10,000. Except
as provided in paragraph (5), which imposes additional
limitations on the amounts payable to Participants with
less than ten (10) years of Vesting Service, the
foregoing limitations shall not be applicable with
respect to any Participant whose annual Pension under
this Plan and any other defined benefit maintained by
the Company or an Affiliated Company does not exceed
$10,000 if such Participant has not at any time
participated in any defined contribution plan (as
defined in section 415(k) of the Code) maintained by
the Company or any Affiliated Company.
(5) Special Provision for Participants with Less
Than Ten (1O) Years of Service. In the event that a
Participant has been credited with less than ten (10)
years of Vesting Service, the compensation limit in
Section 7.4(a)(2) and the special $10,000 limit
detailed in paragraph (4) shall be reduced by
multiplying the maximum annual pension determined
thereunder by a fraction, the numerator of which is the
number of such Participant's years of Vesting Service
(or part thereof) and the denominator of which is ten
(10).
In addition, in the event that a Participant has
fewer than ten (10) years of Plan participation, the
dollar limitation under Section 7.4(a)(1) shall be
reduced by multiplying the maximum annual pension
determined thereunder by a fraction, the numerator of
which is the Participant's years of Plan participation
and the denominator of which is ten (10). In no event,
however, shall the adjustments for less than ten (10)
years of Vesting Service or participation described
above reduce the limitations of Section 7.4(a)(1), on
the one hand, or Section 7.4(a)(2) and the special
$10,000 limitation, on the other hand, to amounts less
than one-tenth (1/10) of such limitations determined
without such adjustments. The adjustments for less
than ten (10) years of participation or Vesting
Service, as applicable, shall apply separately to each
change in benefit structure of the Plan, to the extent
provided by Treasury regulations.
(6) Other Adjustments. The determination of
whether a Participant's Pension payable under the Plan
exceeds the limitations of this Section 7.4 shall be
made by adjusting such Pension so that it is the
Actuarial Equivalent of a straight life annuity with no
ancillary benefits (such adjustment being made in
accordance with regulations promulgated by the
Secretary of the Treasury or his delegate pursuant to
Code Section 415); provided, however, that any portion
of an annuity that constitutes a Qualified Joint and
Survivor Spouse Annuity (as described in
Section 8.1(b)) shall not be taken into account.
For purposes of the preceding paragraph, if the
benefit is not a lump sum payment, it shall be equal to
the greater of the benefit determined using the factors
specified in Appendix A for Single Sum Payments after
January 1, 1996, or the benefit determined using an
interest rate of five percent (5%) and the mortality
table referenced in Appendix A for Single Sum Payments
on and after January 1, 1996, as applicable. If the
benefit is a lump sum payment, it shall be determined
using the factors set forth in Appendix A for Single
Sum Payments on and after January 1, 1996.
(7) Special Provision Concerning Accrued Benefit
Under Prior Plan. In no event shall the limitations of
Section 7.4(a) be reduced to an amount less than the
accrued benefit under the Prior Plan as of January 1,
1987 with respect to a Continued Employee.
(c) All Defined Contribution and Defined Benefit
Plans. For Limitation Years commencing prior to January 1,
2000, subject to the requirements of subsection (e) below,
in any case in which a Participant is a participant in both
a defined benefit plan maintained by any Affiliated Company
(as described in subsection (e)) and a defined contribution
plan maintained by that or any other Affiliated Company (as
described in subsection (e)), the sum of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction for
any Limitation Year may not exceed one (1.0); provided that
if such defined contribution plan(s) (or prior plan(s) from
which assets and liabilities have been transferred to such
defined contribution plan(s)) satisfied the applicable
requirements of Section 415 of the Code as in effect for all
limitation years beginning before January l, 1987, the
numerator of the Defined Contribution Plan Fraction shall be
reduced (but not below zero) by an amount, prescribed by the
Secretary of the Treasury, in determining whether this
requirement is satisfied.
(d) Benefit Reductions, If Necessary. If the
limitation imposed by this Section 7.4 otherwise would be
exceeded in respect of a Participant in a Limitation Year,
then the amount of the maximum annual Pension that can be
paid to such Participant under Section 7.4(a) shall be
reduced to the extent required to permit such compliance.
(e) Special Definition of "Affiliated Companies". For
purposes of this Section 7.4, all defined benefit plans
(whether or not terminated) of the Affiliated Companies
shall be treated as one defined benefit plan, and all
defined contribution plans (whether or not terminated) of
the Affiliated Companies shall be treated as one defined
contribution plan; provided that in applying the definition
of "Affiliated Company" in Article I of the Plan to
determine those companies that are an "Affiliated Company"
for the purposes of this Section 7.4, the phrase "more than
50 percent" shall be substituted for the phrase "at least 80
percent" each time it appears in Section 1563(a) of the
Code.
(f) Construction Consistent With Code. This Section
is intended to satisfy the requirements imposed by Section
415 of the Code and shall be construed in a manner that will
effectuate this intent, without imposing limitations that
are more stringent than those required by Section 415 of the
Code.
7.5 Reemployment After Pension Commencement
(a) A Participant whose employment has terminated and
who is receiving a Pension who is subsequently reemployed by
the Company or an Affiliated Company prior to his Normal
Retirement Date shall reenter the Plan in accordance with
the provisions of Section 3.1. Payment of his Pension shall
be continued until the Participant is credited with one year
of Eligibility Service following his reemployment, at which
time payment of his Pension shall cease. Upon his
subsequent termination of employment, his Pension shall
recommence as of the first day of the month next following
his termination. This recommencement shall be treated as a
new Benefit Commencement Date and the Participant shall have
the same election rights as Participants who have not
previously had a Benefit Commencement Date. The recommenced
Pension shall consist of the sum of the Pension such
Participant was receiving prior to such reemployment and any
additional Pension earned during the period of reemployment
pursuant to Section 7.1 or 7.2 as if no prior payments had
been made, and the resulting amount shall then be reduced by
the Actuarial Equivalent of any Pension payments he received
prior to his reemployment, but in no event shall such
actuarial adjustment reduce such Participant's Pension to an
amount that is less than the Pension such Participant was
receiving prior to reemployment.
(b) A Participant whose employment has terminated and
who is receiving a Pension who is subsequently reemployed by
the Company or an Affiliated Company after his Normal
Retirement Date shall continue to receive his Pension until
the Plan Year in which he has completed 1000 Hours of
Service. Upon completion of such 1000 Hours of service, his
Pension shall cease. Upon his subsequent termination of
employment, his Pension shall recommence as of the first day
of the month next following his termination. This
recommencement shall not be treated as a Benefit
Commencement Date and the Pension shall be paid in the same
form in which his Pension was being paid when it ceased in
accordance with this Section 7.5(a). The recommenced
Pension shall consist of the sum of the Pension such
Participant was receiving prior to reemployment and any
additional Pension earned during the period of reemployment
pursuant to Section 7.1 or 7.2 as if no prior payments had
been made, and the resulting amount shall then be reduced by
the Actuarial Equivalent of any Pension payments he received
prior to the cessation of Pension payments to him, but in no
event shall such actuarial adjustment reduce such
Participant's Pension to an amount that is less than the
Pension such Participant was receiving prior to
reemployment.
7.6 Nonreduction in Benefits on Account of Social Security
Benefit Increases
Notwithstanding any other provisions of the Plan:
(a) A benefit from the Plan being received by a
Participant or Beneficiary shall not be decreased by reason
of an increase in a benefit level or wage base under title
II of the Federal Social Security Act (whether such increase
is a result of an amendment of such title II or is the
result of the application of the provisions of such title
II) (any such increase being referred to hereinafter as a
"Social Security Benefit Increase") effective after the
later of (1) September 2, 1974; or (2) the date of first
receipt of any Plan benefit by the Participant or
Beneficiary (whichever receipt occurs first).
(b) The Pension of an Inactive Participant shall not
be decreased by reason of a Social Security Benefit Increase
effective after the later of (1) September 2, 1974; or (2)
the date of the Inactive Participant's ceasing to be an
Employee.
(c) If a Participant ceases to be an Employee and
subsequently becomes an Employee and resumes participation
in the Plan, the Plan benefits to which he would have been
entitled had he not again become an Employee after his
separation shall not be decreased by reason of a Social
Security Benefit Increase effective after September 2, 1974,
and during the period in which he was not an Employee.
7.7 Top Heavy Minimum Benefit
(a) General. Except as is provided in subsection (b),
during any Top Heavy Year, the Accrued Benefit derived from
Company contributions of each Participant who is a non-Key
Employee and has completed 1000 Hours of Service in that
Plan Year, when expressed as an annual retirement benefit,
shall not be less than the lesser of two percent (2%)
multiplied by the number of the Participant's years of
Credited Service or twenty percent (20%) of the
Participant's average "415" Compensation during the period
of five (5) consecutive years during which the Participant
had the greatest aggregate "415" Compensation from the
Company. Years of Credited Service for purposes of the
immediately preceding sentence shall not include any year of
Service ending in a Plan Year beginning before January l,
1984, and shall not include any year of Service that begins
after the close of the last year which was a Top Heavy Year.
For the purposes of this Section, an annual retirement
benefit is a benefit payable annually in the form of a
single life annuity (with no ancillary benefits) beginning
at Normal Retirement Age.
An Employee who is not a Key Employee may not fail to
accrue a minimum benefit under this Section because either
(l) such Employee is otherwise excluded from participation
(or accrues no benefit) merely because the Employee's "415"
Compensation is less than a stated amount or (2) the
Employee is otherwise excluded from participation (or
accrued no benefit) merely because of a failure to make
mandatory Employee contributions. If the Plan becomes Top
Heavy and subsequently ceases to be Top Heavy, a
Participant's Accrued Benefit shall not be reduced as a
result of the Plan's ceasing to be Top Heavy and shall at no
time after the Plan ceases to be Top Heavy be less than the
Participant's Accrued Benefit at the end of the last year
which was a Top Heavy Year.
(b) Coordination with Other Plans. Notwithstanding
the preceding provisions of this Section, the following
rules shall apply for purposes of determining whether the
minimum benefit requirements of this Section have been
satisfied in the event that during a Plan Year the Company
maintains two or more qualified plans (within the meaning of
Section 1.401-1(b) of the Treasury Regulations) that are Top
Heavy:
(1) If the Company maintains during a Plan Year
two or more defined benefit plans (within the meaning
of Section 414(j) of the Code), the minimum benefits
required by this Section on behalf of a Participant who
is not a Key Employee and who participates in both this
Plan and such other plans shall, unless provided
otherwise in such other plans, be provided under this
Plan to the extent this Plan provides for a benefit
accrual sufficient to satisfy such minimum, and only to
the extent that such minimum is not provided under this
Plan shall any portion of such minimum benefits be
provided under such other plans.
(2) If during a Plan Year, the Company maintains
this Plan and a defined contribution plan (within the
meaning of section 414(i) of the Code) and a
Participant who is not a Key Employee participates in
both of such plans, then if such Participant is
entitled to accrue a benefit under this Plan with
respect to such Plan Year, and such Participant has
accrued a benefit equal to or in excess of two percent
(2%) multiplied by his number of years of Credited
Service (excluding years of Service accrued during Plan
Years, if any, commencing prior to January 1, 1984, and
non-Top Heavy Years) multiplied by the Participant's
average '415' Compensation during the five (5)
consecutive year period during which the Participant
had the greatest aggregate '415' Compensation from the
Company, the Company shall not be required to provide
for such Participant under such other plan the minimum
contribution otherwise required under section 416 of
the Code. For purposes of determining whether the
minimum benefit provisions of this Section have been
satisfied, the minimum benefit accrual under this Plan
shall be offset by the benefits provided under such
other plan for such Plan Year as provided in section
1.416-I, M-l2, of the Treasury Regulations.
(c) Construction Consistent With Code. This Section
is intended to satisfy the requirements imposed by Section
416 of the Code and shall be construed in a manner that will
effectuate this intent, without imposing minimum benefit
requirements that are greater than those required by Section
416 of the Code.
7.8 Benefits From Other Plans
In the event the Participant shall receive a benefit from or
under another tax-qualified pension or retirement plan of the
Company or an Affiliated Company or any predecessor thereof
(whether a defined benefit plan or defined contribution plan, but
excluding any savings or thrift plan), for any of his years of
Credited Service (or years of accrual service with respect to his
Prior Plan Benefit), his Pension under the Plan shall be reduced
by the Actuarial Equivalent of such benefit from such other plan
attributable to such years, unless and except to the extent
inconsistent with the provisions of any collective bargaining
agreement to which the Company is a party.
ARTICLE VIII
Method Of Payment Of Pension
8.1 Normal Form of Pension
(a) Unmarried Participant. The normal form of Pension
for a Participant who is not married on his Benefit
Commencement Date shall be a single life annuity commencing
on the date specified in Section 6.1.
(b) Married Participant with Spouse. If a Participant
is married on his Benefit Commencement Date, then, unless
the Participant and his Spouse elect in accordance with
Section 8.3(a) not to receive his Pension in the form
specified in this Section 8.1(b) (or the Participant elects
the Joint and 75% Surviving Spouse Annuity in accordance
with Section 8.2(c)), such Participant's Pension shall,
except to the extent modified by a Qualified Domestic
Relations Order, be paid in the form of a Qualified Joint
and Surviving Spouse Annuity (herein so called). Under the
Qualified Joint and Surviving Spouse Annuity, a reduced
amount shall be payable to the Participant for his lifetime,
and the Spouse, if surviving on the date of the
Participant's death, shall be entitled to receive thereafter
a lifetime survivorship Pension in a monthly amount equal to
50% of the reduced monthly amount that had been paid to the
Participant. The reduced amount payable to the Participant
shall be determined by applying the following reduction
formula: the monthly Pension that would have been payable
to the Participant had he received a single life annuity,
after the reduction (if any) for surviving spouse death
benefit coverage in accordance with Section 8.4, shall be
reduced by fifteen percent (15%), provided that, effective
March 1, 1991, the fifteen percent (15%) reduction factor
shall be increased by 0.4% for each year in excess of ten
(10) by which the Participant's age exceeds the Spouse's age
and shall be decreased by 0.4% for each year in excess of
ten (10) by which the Spouse's age exceeds the Participant's
age; provided that in no event shall the monthly Pension to
the Participant be less than that determined by applying the
fifteen percent (15%) reduction factor without regard to any
age difference with respect to his Accrued Benefit as of
February 28, 1991.
8.2 Optional Pension Forms
(a) Single Life Annuity. A Participant who is married
on his Benefit Commencement Date may elect to receive a
Pension payable in the form of a single life annuity in lieu
of a Qualified Joint and Surviving Spouse Annuity by making
an election in accordance with Section 8.3(a).
(b) Period Certain Option. A Participant may elect to
receive a reduced Pension for the life of the Participant or
for 120 months, whichever is longer, determined by applying
the following reduction formula: the monthly Pension that
would have been payable to the Participant had he received a
single life annuity, after the reduction (if any) for
surviving spouse death benefit coverage in accordance with
Section 8.4, shall be reduced by ten percent (10%). A
Participant who is married on his Benefit Commencement Date
may elect this option only in accordance with Section 8.3.
In the case of a Participant who is not married on his
Benefit Commencement Date, the Participant may elect the
Period Certain Option during a period commencing no earlier
than ninety (90) days prior to his Benefit Commencement Date
and after having received written notice describing
(l) the normal form of benefit available under
Section 8.1(a),
(2) the Period Certain Option,
(3) the right of the Participant to revoke, prior
to the later of his Benefit Commencement Date and the
receipt of the notice, an election of the Period
Certain Option, and
(4) such other information as may be required
under applicable regulations.
The election of the Period Certain Option described in
Section 8.2(b) must be in writing on a form prescribed by
the Plan Administrator and shall become effective on the
later of the Participant's Benefit Commencement Date and
thirty (30) days following his receipt of the notice
described above or in Section 8.3(b), whichever is
applicable, and may be revoked at any time prior to the
Benefit Commencement Date; provided, however, that if a
Participant other than (1) a Participant who has provided
the Plan Administrator with a certificate of good health as
of such Participant's Benefit Commencement Date, by a doctor
satisfactory to the Plan Administrator, or (2) a Participant
who dies of accidental causes, dies within two (2) years
after his Benefit Commencement Date, such election shall be
null and void as to any Beneficiary or the Participant's
estate and the Participant's Spouse (if any) shall receive
the benefit that would have been payable to the survivor
under the Qualified Joint and Surviving Spouse Annuity form
had no election been made hereunder. A Participant who has
received the notice described above or in Section 8.3(b),
whichever is applicable, may waive the 30-day notice
requirement by making an affirmative election of the Period
Certain Option, provided payment does not commence prior to
the expiration of the seven (7) day period that begins on
the day after the notice is given.
If the Participant works beyond his Normal Retirement Date,
the election (even if made earlier than ninety (90) days
prior to his Benefit Commencement Date) may become effective
as a death benefit for the period from his Normal Retirement
Date (or the date of election, if later) up to his Benefit
Commencement Date, provided that it is accompanied by a
waiver of the Pre-Retirement Surviving Spouse Annuity under
Section 8.4(c), if applicable. If the election of a Period
Certain Option is made on or after the Participant's Normal
Retirement Date but more than ninety (90) days prior to his
Benefit Commencement Date, the election shall not be
effective as a post-retirement benefit form unless the
Participant reelects the benefit option within the period
described above or in Section 8.3(a), whichever is
applicable.
If the Participant dies prior to the effective date of the
Period Certain Option, the election shall be null and void
except, if applicable, as a death benefit as described
above. If the Beneficiary dies during the Participant's
lifetime whether before or after the effective date of the
option, the option election shall remain in effect and the
Participant may make a new election pursuant to the above or
Section 8.3(a), whichever is applicable, to designate a new
Beneficiary. If a Participant who has elected a Period
Certain Option continues in employment after his Normal
Retirement Date and dies before retiring, the amount payable
to his Beneficiary shall be determined as if the Participant
had retired on the day before his death, except that the
requirement that the Participant survive for two (2) years
set forth above shall be disregarded. If the Beneficiary
shall survive the Participant and die before receipt of all
payments due under the Period Certain Option, the remaining
payments shall be made to the first alternative Beneficiary
designated by the Participant who shall be then surviving,
or if none, the Actuarial Equivalent of such remaining
payments shall be paid to the estate of such Beneficiary in
a single sum.
(c) Joint and 75% Surviving Spouse Annuity. A
Participant who is married on his Benefit Commencement Date
may elect to receive a reduced Pension for his lifetime, and
the Spouse, if surviving on the date of the Participant's
death shall be entitled to receive thereafter a lifetime
survivorship Pension in a monthly amount equal to 75% of the
reduced monthly amount that had been paid to the
Participant. The reduced amount payable to the Participant
shall be determined by applying the following reduction
formula: the monthly Pension that would have been payable
to the Participant had he received a single life annuity,
after the reduction (if any) for surviving spouse death
benefit coverage in accordance with Section 8.4, shall be
reduced by twenty-one percent (21%), provided that effective
March 1, 1991, the twenty-one percent (21%) reduction factor
shall be increased by 0.55% for each year in excess of ten
(10) by which the Participant's age exceeds the Spouse's age
and shall be decreased by 0.55% for each year in excess of
ten (10) by which the Spouse's age exceeds the Participant's
age; provided that in no event shall the monthly Pension to
the Participant be less than that determined by applying the
twenty-one percent (21%) reduction factor without regard to
any age difference with respect to his Accrued Benefit as of
February 28, 1991.
Election of the Joint and 75% Surviving Spouse Annuity
must be in writing on a form prescribed by the Plan
Administrator and must be filed by the Participant with the
Plan Administrator no earlier than ninety (90) days prior to
the earlier of his Benefit Commencement Date and his Normal
Retirement Date. Such an election shall be effective on the
later of the Participant's Benefit Commencement Date and
thirty (30) days following his receipt of the notice
described in Section 8.3(b) and may be revoked at any time
prior to the later of his Benefit Commencement Date and
thirty (30) days after his receipt of the notice described
in Section 8.3(b); provided, however, that if a Participant
other than (1) a Participant who has provided the Plan
Administrator with a certificate of good health as of such
Participant's Benefit Commencement Date, by a doctor
satisfactory to the Plan Administrator, or (2) a Participant
who dies of accidental causes, dies within two (2) years
after his Benefit Commencement Date, the benefit payable to
the surviving Spouse shall be limited to that which would
have been payable under the Qualified Joint and Surviving
Spouse Annuity form had no election been made hereunder. A
Participant who has received the notice described in Section
8.3(b) may waive the 30-day notice requirement by making an
affirmative election of the Joint and 75% Surviving Spouse
Annuity, provided payment does not commence prior to the
expiration of the seven (7) day period that begins on the
day after the notice is given.
If the Participant dies prior to his Benefit
Commencement Date with respect to the Joint and 75%
Surviving Spouse Annuity, the election shall be null and
void, except as a Pre-Retirement Surviving Spouse Annuity.
If a Participant who has elected the Joint and 75% Surviving
Spouse Annuity continues in employment after his Normal
Retirement Date and dies before retiring, the amount payable
to his Spouse shall be determined as if the Participant had
retired on the day before his death, except that the
requirement that the Participant survive for two (2) years
set forth above shall be disregarded.
(d) Single Sum Payment Option. A Participant whose
vested Accrued Benefit has an Actuarial Equivalent value as
of his Benefit Commencement Date (determined using the
interest and mortality factors set forth in Section 1.03 of
Appendix A) of more than $5,000 may elect to receive a
Single Sum Payment of the Actuarial Equivalent value of his
vested Accrued Benefit.
8.3 Married Participant's Election of Optional Pension Form
(a) General. A Participant who would otherwise
receive a Qualified Joint and Surviving Spouse Annuity
pursuant to Section 8.1(b) and is eligible to elect to
receive his Pension on one or more of the forms described in
subsections (a) and (b) of Section 8.2, Section 8.6 or
Section 8.7(c) may make such an election, or revoke such an
election, provided that the Participant notifies the Plan
Administrator in writing of such election or revocation of
election on an appropriate form supplied by the Plan
Administrator for this purpose. Notwithstanding any of the
foregoing, no election made under this Section 8.3(a) during
any Plan Year shall be effective unless made not more than
90 days before the Participant's Benefit Commencement Date
and unless:
(1) the Participant's Spouse (if any) consents,
or has consented, in writing, within the applicable
period, to such election (which consent shall be
irrevocable with respect to the election to which it
was given), and
(A) such consent is witnessed by a notary
public who is not in the employ of an Affiliated
Company;
(B) the form of benefits (including the
Beneficiary, if any) designated by the election
may not be changed (other than revoked) without
the Spouse's similarly notarized written consent
(except to the extent, if any, that the Spouse's
consent expressly permits further form of benefits
elections (or Beneficiary designations) by the
Participant without the Spouse's further consent);
and
(C) the Spouse's consent acknowledges the
effect of such election; or
(2) it is established to the satisfaction of the
Plan Administrator that such consent cannot be obtained
(A) because the Participant has no Spouse;
(B) because the Spouse cannot be located; or
(C) because of such other circumstances as
the Secretary of the Treasury may by regulations
prescribe.
Any such consent given by the Participant's Spouse shall be
irrevocable. If a Participant's then Spouse consents as required
above to the Participant's election to receive a Pension in a
form other than a Qualified Joint and Survivor Annuity and the
Participant subsequently remarries, the subsequent Spouse shall
not be bound by the former Spouse's consent. Only a consent by
the subsequent Spouse pursuant to the second sentence of this
Section 8.3(a) shall bind such subsequent Spouse.
(b) Notification to Participant. The Plan
Administrator shall furnish to each Participant who is
eligible to make an election under Section 8.3(a) a written
explanation in nontechnical language intended to be
understood by the Participant and his Spouse, if any, of
(1) the terms and conditions of the Qualified
Joint and Surviving Spouse Annuity as specifically
applicable to the Participant and his Spouse, if any,
(2) the Participant's right to make, and the
effect of, an election to waive the Qualified Joint and
Surviving Spouse Annuity form of benefit,
(3) the rights of the Participant's Spouse under
Section 8.3(a) with respect to such waiver election,
(4) the right to make, and the effect of, a
revocation of an election to waive the Qualified Joint
and Surviving Spouse Annuity form of benefit, and
(5) such other information as may be required
under applicable regulations.
If such notification is made by mail or personal delivery,
it shall be made by such time as to reasonably assure that
it will be received by the Participant not more than ninety
(90) and not less than thirty (30) days prior to the
Participant's Benefit Commencement Date. Notice of the
election may be given by alternative means, which must be
reasonably calculated to reach the attention of the
Participant on or about the time period specified in the
preceding sentence and continue to reach the attention of
the Participant during the period in which he may make the
election (as, for example, by posting or repeated
publication.)
(c) Request for Further Information. A Participant
may request additional information regarding the Qualified
Joint and Surviving Spouse Annuity during the sixty (60) day
period following the date the above explanation is mailed or
personally delivered or otherwise communicated to such
Participant. If the Participant requests additional
information, the Participant may make an election not to
take a Qualified Joint and Surviving Spouse Annuity at any
time during the sixty (60) day period following the date the
originally requested information is mailed or personally
delivered to such Participant. Notwithstanding the
preceding provisions, in no event shall the period during
which a Participant may elect not to take a Qualified Joint
and Surviving Spouse Annuity in favor of a Pension payable
in a form specified in Section 8.2(a) or (b) hereof or to
revoke such election expire earlier than the Participant's
Benefit Commencement Date.
(d) Revocation of Election. A Participant may revoke
an election made pursuant to Section 8.3(a) during the
ninety (90) day period ending on the Participant's Benefit
Commencement Date, and the Participant may make a new
election thereafter if it otherwise complies with Section
8.3(a). A Participant's election not to take a Qualified
Joint and Surviving Spouse Annuity, if timely made, is
effective on the Participant's Benefit Commencement Date. A
Participant's revocation of an election not to take a
Qualified Joint and Surviving Spouse Annuity is effective on
the date the Participant notifies the Plan Administrator
thereof in accordance with this Section 8.3(d). Any such
new election or revocation of any election previously made
shall be made in accordance with the provisions of Section
8.3(a) or this Section 8.3(d), whichever is applicable.
8.4 Pre-Retirement Surviving Spouse Annuity
(a) General. If a Participant who has a vested
Accrued Benefit dies before his Benefit Commencement Date, a
death benefit equal to the Actuarial Equivalent value of the
Accrued Benefit shall be payable. If the Participant does
not have a surviving Spouse, then, except to the extent
modified by a Qualified Domestic Relations Order, such death
benefit will be paid to the Participant's Beneficiary in a
single lump sum amount as soon as practicable after
establishment of the Participant's death and the completion
of such standard application as the Plan Administrator may
prescribe. If the Participant has a surviving Spouse,
unless coverage is waived pursuant to subsection (c) or the
value of the Participant's vested Accrued Benefit does not
exceed $5,000, there shall automatically be provided for
such Spouse a Pre-Retirement Surviving Spouse Annuity
(herein so called), except to the extent modified by a
Qualified Domestic Relations Order. A Pre-Retirement
Surviving Spouse Annuity is a monthly annuity beginning on
the Starting Date (as defined below) and ending with the
payment made on the first day of the month in which the
Spouse's death occurs, which annuity is the Actuarial
Equivalent of the value of the Participant's Accrued
Benefit. If the value of the Participant's vested Accrued
Benefit does not exceed $5,000, the death benefit shall be
paid in a single sum payment as soon as practicable after
establishment of the Participant's death and the completion
of such standard application as the Plan Administrator may
prescribe.
If the Participant's Spouse dies before the
Participant, the Pre-Retirement Surviving Spouse Annuity
coverage shall be revoked at the date of the Spouse's death.
The term "Starting Date" for purposes of payment of the
Pre-Retirement Surviving Spouse Annuity means
(1) in the case of a Participant who dies before
his Normal Retirement Date and before his Benefit
Commencement Date, the day that would have been the
Participant's Normal Retirement Date, or if the
surviving Spouse so elects, the first day of any
earlier month that is as soon as practicable after the
establishment of the Participant's death and the
completion of such standard application as the Plan
Administrator may prescribe, and
(2) in the case of a Participant who dies after
his Normal Retirement Date and before his Benefit
Commencement Date, the first day of the month that is
as soon as practicable after the establishment of the
Participant's death and the completion of such standard
application as the Plan Administrator may prescribe.
(b) Reduction for Coverage.
(1) The coverage described in this Section 8.4
shall be provided automatically and without charge for
periods of coverage from and after January 1, 1998.
(2) In the event that a Participant elected
similar coverage under the Prior Plan on a basis that
the benefits otherwise payable to him under the Prior
Plan would be reduced on account of such coverage (or
was subject to a reduction because of a failure to
reject such coverage after his separation from
service), such reduction shall be applied to the
benefits in respect of the Participant under this Plan,
as if it had been made under this Plan.
(c) Waiver of Coverage.
(1) A Participant's waiver of coverage and
designation of a Beneficiary other than the surviving
Spouse shall be subject to the consent of the
Participant's Spouse and may be elected by the
Participant at any time prior to the date of the
Participant's death. If the Participant waives
coverage prior to the first day of the Plan Year in
which the Participant attains age thirty-five (35) and
the Participant completes an Hour of Service on or
after the first day of such Plan Year, the waiver shall
automatically become invalid as of the first day of
that Plan Year and the provisions of Section 8.4(a)
shall apply as of such date, unless on or after the
first day of the Plan Year in which the Participant
attains age thirty-five (35), the Participant again
waives coverage in accordance with this subsection (c)
with the consent of his Spouse. The consent of the
Participant's Spouse shall be under such conditions and
in such manner as would be comparable to the rules set
forth in paragraph (1) or (2) of Section 8.3(a). If a
Participant has a surviving Spouse, and has waived the
Pre-Retirement Surviving Spouse Annuity and designated
a Beneficiary other than such Spouse in accordance with
this Section 8.4, a death benefit equal to the
Actuarial Equivalent value of the Accrued Benefit shall
be payable to the non-Spouse Beneficiary in a single
lump sum amount as soon as practicable after
establishment of the Participant's death and the
completion of such standard application as the Plan
Administrator may prescribe.
(2) A surviving Spouse entitled to the Pre-Retirement
Surviving Spouse Annuity may, after the Participant's death
and in such form and manner as the Plan Administrator may
prescribe, waive the Pre-Retirement Surviving Spouse Annuity
and elect, in lieu of such annuity, a single sum payment
which is equal to the Actuarial Equivalent value of the
Participant's Accrued Benefit and payable as soon as
practicable after establishment of the Participant's death
and the completion of such standard application as the Plan
Administrator may prescribe.
(d) Notification to Participant. Each Participant
shall be provided, within a reasonable time after he
commences or recommences active participation, and within
the Notice Period (as defined below), a written explanation
of the Pre Retirement Surviving Spouse Annuity and his right
to waive the Pre-Retirement Surviving Spouse Annuity and
designate a Beneficiary other than his surviving Spouse.
Such explanation shall be in such terms and in such manner
as would be comparable to the explanation provided for
meeting the requirements of Section 8.3(b). For purposes of
this subsection (d), Notice Period means the period
beginning on the first day of the Plan Year in which the
Active Participant reaches age thirty-two (32) and ending
with the date the Participant reaches age thirty-five (35).
(e) Commencement. Notwithstanding the above, the
Starting Date shall be adjusted to the extent required by
the following rules:
(1) in satisfaction of Section 417(e) of the
Code, if the Spouse's entire benefits payable exceed
$5,000 at the time they are payable and prior to the
commencement of the distribution, no portion thereof
shall be paid prior to the date the Participant, if he
had not died, would have reached his Normal Retirement
Age without the Spouse's written consent given at least
thirty (30) and no more than ninety (90) days prior to
payment;
(2) in satisfaction of Section 401(a)(9) of the
Code and subject to any additional requirements or
exceptions set forth in regulations promulgated under
that Section by the Secretary of the Treasury (and not
by way of providing any benefit or form or delay in
commencement of benefit not otherwise provided under
this Plan), payment of the Spouse's benefits shall,
upon the election of the Spouse on a form provided by
the Plan Administrator:
(A) be completed not later than the last day
of the calendar year containing the fifth
anniversary of the Participant's death; or
(B) if the benefits will be distributed over
the Spouse's life or over a period not exceeding
the Spouse's life expectancy, commence not later
than (i) the last day of the calendar year next
following the calendar year in which the
Participant died, or (ii) if later, and the Spouse
does not die before the commencement of payment of
her benefits, not later than the last day of the
calendar year in which the Participant, if he had
not died, would have reached age 70-1/2.
8.5 Lump-Sum Cashout Distribution
(a) Immediate Distribution. If a Participant ceases
to be an Employee for any reason and as of a proposed
distribution date thereafter the present value of the
Participant's vested Accrued Benefit does not exceed $5,000,
or never exceeded $5,000 as of the date of any prior
distribution, the Plan Administrator shall distribute the
value of such vested Accrued Benefit (including a deemed
distribution of $0 pursuant to Section 6.4); provided such
distribution occurs by the end of the second Plan Year
following the date of such termination. The present value
of a vested Accrued Benefit shall be determined using the
factors set forth in Section 1.03 of Appendix A.
(b) Repayment. If a distribution is made to a
Participant in accordance with (a) above or a Participant
elects a single sum distribution under Section 8.2(d), the
Participant shall thereafter not be entitled to receive any
credit for years of Credited Service and Years of Vesting
Service for Annual Benefit Credits under Section 7.1(b)(2)
upon which the Accrued Benefit distributed was determined in
the event the Participant should be reemployed by the
Company and reparticipate in the Plan, unless the
Participant returns to employment as an Eligible Employee
prior to the earlier of the Plan's termination or incurring
five (5) consecutive One-Year Breaks in Service and makes
payment to the Trust of the full amount specified in
accordance with the provisions of Section 2.4(c). If the
reemployed Participant fails to repay the Trust within the
time limit specified, the years of Credited Service and
Years of Vesting Service for Annual Benefit Credits under
Section 7.1(b)(2) completed by the Participant prior to the
date of distribution shall be disregarded. An automatic
repayment as of his reemployment commencement date shall be
credited to a Participant who suffered a deemed cash-out as
specified above, as long as such Participant returns to
employment as an Eligible Employee prior to the earlier of
(1) the Plan's termination, or (2) incurring five (5)
consecutive One-Year Breaks in Service.
8.6 Special Provisions Applicable to Former Participants in the
Gimbel Brothers, Inc. Profit Sharing Plan
(a) Application. This Section applies to those
Continued Employees who had been participants in the Gimbel
Brothers, Inc. Profit Sharing Plan ("GBI Participants").
(b) Profit Sharing Account. For the purposes of this
Section, the term "Profit Sharing Account" means the amount
standing to the credit of a GBI Participant under the Gimbel
Brothers, Inc. Profit Sharing Plan as of December 31, 1975.
(c) Payment of Profit Sharing Account. Upon
retirement, death, or other termination of employment of a
GBI Participant, the unpaid amount of his Profit Sharing
Account as of December 31, 1975, plus 5.5% interest
compounded annually to December 31, 1984 and 8.25% interest
compounded annually thereafter up to the date payments first
commence (the "Profit Sharing Amount"), shall be paid in the
form, at the time, and to the person hereinafter described.
(d) Form of Payment. A GBI Participant's Profit
Sharing Amount shall be paid in one of the following forms,
as the Participant may elect, subject to Sections 8.1(b) and
8.4:
(1) as a single lump sum payment; or
(2) in Actuarially Equivalent level installments
(calculated using the interest rate of 8.25% compounded
annually) over a period of 120 months; or
(3) payment of the Pension to which he would be
entitled under the Plan if no reduction were made
therein under Section 7.1(b) on account of his Profit
Sharing Account, provided, that the portion of such
Pension thus attributable to his Profit Sharing Account
shall be payable as a full cash refund annuity.
(e) Time of Payment. Payment of a GBI Participant's
Profit Sharing Amount shall be made or shall commence
either:
(1) not later than the 60th day after the close
of the Plan Year in which the Participant's employment
is terminated, including termination by reason of
retirement or death, or
(2) at the same time payment of the Participant's
Pension commences,
as the Participant may elect.
(f) Payment to Beneficiary.
(1) If a GBI Participant dies before any part of
his Profit Sharing Amount has been distributed to him,
then his Profit Sharing Amount shall be paid to his
Beneficiary.
(2) If prior to a GBI Participant's death, it has
been determined that payment of the Participant's
Profit Sharing Amount will be made in accordance with
Section 8.6(d)(2) and not all such installments have
been paid, then the unpaid part of said installments
shall be paid to the GBI Participant's Beneficiary;
provided, that if payments to the GBI Participant had
not begun before his death, the installments shall be
paid to his Beneficiary over a 60-month period
beginning at the date of the GBI Participant's death.
(3) If such Beneficiary shall survive the GBI
Participant and die before receipt of all installments
due him under the preceding sentence, the remaining
payments shall be made to the first alternative
Beneficiary designated by the GBI Participant who shall
be then surviving, or if none, the remaining balance of
his Profit Sharing Account shall be paid to the estate
of such GBI Participant's Beneficiary in a single sum.
(4) The Beneficiary's benefits shall commence as
of and as soon as practicable after the Participant's
death; provided that in satisfaction of Section
401(a)(9) of the Code and subject to any additional
requirements set forth in regulations promulgated under
that Section by the Secretary of the Treasury (and not
by way of providing any form or delay in commencement
of benefit not otherwise provided under this Plan),
payment of the Beneficiary's benefits shall be
completed not later than the last day of the calendar
year containing the fifth anniversary of the
Participant's death, except that if the Participant's
Beneficiary is his Spouse:
(A) payment of the Spouse's benefits shall
commence not later than the later of (a) the last
day of the calendar year next following the
calendar year in which the Participant died and
(b) the last day of the calendar year in which the
Participant, if he had not died, would have
reached age 70-1/2, and
(B) if the Spouse dies before the
commencement of payment of her benefits, payment
of the Beneficiary's benefits shall be completed
not later than the last day of the calendar year
containing the fifth anniversary of the Spouse's
death.
(g) Payment as Cash Refund Annuity. If payment of a
GBI Participant's Profit Sharing Amount is made in the form
of a cash refund annuity and the aggregate amount of
payments made to the GBI Participant and his Spouse or other
Beneficiaries on account of his Profit Sharing Amount shall,
upon the expiration of such payments, be less than the
amount of his Profit Sharing Amount as of the last day of
the month immediately preceding the date as of which such
payments commenced, the amount of the deficiency shall be
paid to the Participant's Beneficiary forthwith in a single
lump sum.
(h) ERISA Allocation. For purposes of the allocation
of Plan assets under Section 13.5, the Profit Sharing
Amounts of Participants shall be deemed allocable under
section 4044(a)(l) of ERISA.
8.7 [Deleted]
8.8 Special Rule for Annuities Distributed to Participants
An annuity contract purchased to provide a benefit under
this Plan and distributed to or owned by a Participant must
comply with the Qualified Joint and Surviving Spouse Annuity and
Pre-Retirement Surviving Spouse Annuity requirements of this
Plan, including the applicable consent and present value
requirements, to the same extent such requirements would apply if
benefits were paid directly from the Trust Fund.
8.9 Commencement of Participant's Benefits
To the extent required by the following rules, a
Participant's benefits shall commence as of and as soon as
practicable after the applicable Valuation Date:
(a) in satisfaction of Section 411(a)(11) of the Code,
if the value of a Participant's entire benefits payable
exceed $5,000 at the time they are payable and prior to the
commencement of distribution, or at the time of any earlier
distribution, no portion thereof shall be paid during the
Participant's life before he reaches his Normal Retirement
Age without his written consent given no more than 90 days
prior to such payment;
(b) in satisfaction of Section 401(a)(14) of the Code,
unless the Participant otherwise elects, payment of the
Participant's benefits shall begin not later than the 60th
day after the close of the Plan Year in which the last of
the following occurs:
(1) the Participant attains his Normal Retirement
Age;
(2) the tenth anniversary of the Participant's
commencement of participation in the Plan; or
(3) the Participant ceases to be an Employee;
and
(c) in satisfaction of Section 401(a)(9) of the Code
and subject to any additional requirements set forth in
regulations promulgated under that Section by the Secretary
of the Treasury, including Proposed Treas. Reg.
Section 1.40l(a)(9)-2 (and not by way of providing any form or
delay in commencement of benefit not otherwise provided
under this Plan),
(1) payment of the Participant's benefits shall
commence not later than April l of the calendar year
following the later of (A) the calendar year in which
the Participant attains age 70-1/2, or (B) in the case
of a Participant who attained age 70-1/2 after
December 31, 1998, and who was not a 5% owner as that
term is defined in Section 416(i)(l)(B)(l) of the Code
and the regulations thereunder with respect to the
calendar year in which he attained age 70-1/2, the
calendar year in which the Participant's Retirement
occurs;
(2) the Participant's entire interest shall be
distributed either (A) over his life or over his and
his Beneficiary's joint lives, or (B) over a period not
extending beyond his life expectancy or his and his
Beneficiary's joint life expectancies; and
(3) if the Participant dies after benefit
payments begin and before his entire interest has been
distributed, the form of distribution in effect before
his death shall not be changed unless his remaining
interest shall be distributed at least as rapidly as
under the form of distribution in effect before he
died.
(4) To the extent required under
Section 401(a)(9)(C) of the Code, if a Participant's
Retirement occurs in a calendar year after the calendar
year in which he attains age 70-1/2, the Participant's
Cash Balance Account shall be each increased each year
by the greater of (A) any additional Benefit Credits
and Interest Credits allocated under Section 7.1(b), or
(B) the actuarial adjustment to take into account the
period after age 70-1/2 in which the Participant was
not receiving benefit payments under the Plan. Such
actuarial adjustment shall be calculated using the
interest rate specified in Section 7.1(b)(3).
(5) In the case of an Active Participant who was
required by the provisions of Section 401(a)(9)(C) of
the Code as in effect prior to January 1, 1997 to
commence payments before Retirement due to attainment
of age 70-1/2, such Participant shall be entitled to
make an irrevocable election to suspend benefit
payments until after his Retirement, but in no event to
later than the April 1 of the calendar year following
the calendar year in which his Retirement occurs. If
such a Participant elects to suspend payments, the
provisions of paragraph (4) above requiring an
actuarial adjustment shall apply in each year prior to
Retirement that payments are suspended. Upon
Retirement, the Participant shall have the same
election rights as Participants who had not previously
started benefit payments and his Pension shall be
recalculated as provided in Section 7.5(a) to take into
account benefits previously paid and any additional
benefits earned after payments started.
(d) Any benefit under the Plan shall satisfy the
"incidental benefit" requirements of Code Section 401(a)(9),
including the requirements of Prop. Treas. Reg.
Section 1.401(a)(9)-2.
8.10 Distributions
All distributions hereunder shall be made by the Trustee as
of the date(s) specified in this Article VIII. The Trustee shall
be entitled to receive written instructions and proper notice
from the Plan Administrator with respect to any distribution and
shall not be required to make such distributions until such
instructions have been received in a form which in the opinion of
the Trustee is sufficiently clear with respect to the
distributions required.
8.11 No Other Death Benefits
There are no death benefits payable under this Plan
following a Participant's death except as expressly provided in
this Article VIII.
8.12 Special Retirement Program
(a) This Section shall be applicable to Participants
on the payroll of an Affiliated Company as of January 2,
1994, who (1) will have been credited with five (5) or more
years of Vesting Service and have attained the age of sixty-
two (62) on or before December 31, 1993, or (2) will have
been credited with one (1) or more years of Eligibility
Service and have attained the age of sixty-five (65) on or
before December 31, 1993. A Participant who meets such
conditions may elect to retire under the Special Retirement
Program on any date between January 12, 1994, and March 11,
1994, provided that such Participant must terminate
employment on or before April 15, 1994, and must execute a
Special Retirement Program Agreement and General Release
Form. The Participant's Pension shall begin on the first
day of the month on or following his date of retirement.
This Section shall also apply to Participants who retired on
or after October 1, 1993, and otherwise meet the above age
and service requirements.
(b) In addition to his Accrued Benefit computed under
the preceding provisions of the Plan, a Participant who
retires under the Special Retirement Program and was
credited with a year of Credited Service during the 1993
Plan Year shall receive an increase in his Accrued Benefit
equal to three percent (3%) of the Participant's
Compensation as determined for the 1993 Plan Year. Each
Participant who retires under the Special Retirement Program
shall also receive a benefit with a present value equal to
his Compensation for 1993 multiplied by the ratio of his
years of Credited Service as of December 31, 1993, to fifty-
two (52). The present value of such benefit shall be
converted to an increase in his Accrued Benefit hereunder on
the basis of the immediate interest assumption in use by the
Pension Benefit Guaranty Corporation on January 1, 1994, and
the UP-84 Mortality Table set back one (1) year. Each
Participant who retires under the Special Retirement Program
shall also have no reduction for early retirement under
Section 7.2 applied to his Accrued Benefit. All
Participants who retire under the Special Retirement Program
will be deemed to be fully vested.
(c) A participant who retires under this Section 8.12
may elect, with Spouse consent if applicable, to receive his
Pension in any of the forms of payment permitted by Section
8.1 or Section 8.2. Alternatively, the Participant may
elect, with Spouse consent if applicable, to receive the
present value of the entire special retirement benefit in a
single sum, calculated on the basis of the immediate
interest assumption in use by the Pension Benefit Guaranty
Corporation on January 1, 1994, and the UP-84 Mortality
Table set back one (1) year.
(d) If a Participant who is eligible to retire under
the Special Retirement Program dies prior to retirement, a
Death benefit may be payable hereunder as described below:
(1) If the Participant dies on or after January
12, 1994, and on or before March 11, 1994, without
having elected to retire under the Special Retirement
Program his surviving Spouse, if any, may be entitled
to a death benefit determined in accordance with
Section 8.4. Any such death benefit shall be
calculated without regard to the provisions of this
Section 8.12."
(2) If the Participant dies after having elected
to retire under the Special Retirement Program but
without having elected a method of payment of his
benefit, his surviving Spouse, if any, shall be
entitled to receive a death benefit equal to the
benefit that would have been payable to such Spouse had
the Participant retired on the day before his date of
death and chosen to receive the benefit in the form of
the Qualified Joint and Surviving Spouse Annuity. The
Spouse may choose to receive the death benefit as a
monthly Pension payable for life or in a single sum
payment equal to the present value of the monthly
Pension that would otherwise have been paid. If this
Participant is not married, the death benefit shall be
calculated as if he had a surviving Spouse of the same
age as the Participant. The present value of the death
benefit shall be paid to the Participant's Beneficiary
in a single sum. The present value of this death
benefit shall be determined on the basis of the
immediate interest assumption in use by the Pension
Benefit Guaranty Corporation on January 1, 1994, and
the UP-84 Mortality Table set back one (1) year.
(3) If the Participant dies after electing to
retire under the Special Retirement Program and after
electing, with Spouse consent, if applicable, the form
of payment of his benefit, the death benefit shall be
paid to the Participant's Spouse or Beneficiary in
accordance with the form of payment chosen by the
Participant.
(e) If a Participant who is eligible to retire under
this Section 8.12 does not elect to retire during the period
from January 12, 1994, through March 11, 1994 this Section
8.12 shall be null and void and have no future effect on the
determination of the Participant's benefit under the Plan.
(f) This provision was added to the Plan January 12,
1994.
8.13 Optional Direct Rollovers
Any Participant or Spouse entitled to receive an eligible
rollover distribution which is two hundred dollars ($200) or more
at date of distribution, in any Plan Year beginning on or after
January 1, 1993, may elect to have such distribution paid
directly to an eligible retirement plan, in which case such
person shall specify to the Affiliated Company, in such form and
manner as the Affiliated Company may require, the eligible
retirement plan to which such eligible rollover distribution is
to be transferred. If the Participant or Spouse makes such an
election, the distribution shall be made by the Trustee in the
form of a direct transfer the eligible retirement plan.
For purpose of the preceding paragraph, an eligible rollover
distribution is a distribution of all or any portion of the
balance to the credit of the Participant in this Plan, excluding
any distribution which (1) is one of a series of substantially
equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) or the joint lives (or joint
life expectancies) of the recipient and the recipient's
designated beneficiary; (2) is for a specified period of ten (10)
years or more; or (3) is required to be made under Section
401(a)(9) of the Code. An eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code (other than an endowment contract), a trust
described in Section 401(a) of the Code that is exempt from tax
under Section 501(a) of the Code, or an annuity plan described in
Section 403(a) of the Code.
ARTICLE IX
Administration of Plan
9.1 Appointment of Plan Administrator
There shall be a Plan Administrator who shall be an officer
of the Company appointed by the Board of Directors and identified
in Appendix B hereto. The Plan Administrator shall hold office
until his death, resignation, disqualification or removal.
9.2 Resignation and Removal of Plan Administrator
The Plan Administrator may resign at any time by giving
written notice to the Board of Directors, effective as therein
stated. The Plan Administrator may, at any time, be removed by
the Board of Directors.
9.3 Appointment of Successor
Upon the death, resignation, disqualification or removal of
the Plan Administrator, the Board of Directors may appoint a
successor. Notice of appointment of a successor shall be given
by the Board of Directors in writing to the Plan Administrator
and to the Trustee.
9.4 Power and Duties of the Plan Administrator
The Plan Administrator shall have full power and authority
to control and manage the operation and administration of the
Plan and to construe and apply all of its provisions, provided
that the Plan Administrator shall have no power, authority, or
responsibility with respect to those matters which are the
responsibility of the Trustee. Any action taken in good faith by
the Plan Administrator in the exercise of authority conferred
upon him by this Plan shall be conclusive and binding upon
Participants, their Beneficiaries and all other persons. All
discretionary powers conferred upon the Plan Administrator shall
be absolute, provided that no discretionary power shall be
exercised in such manner as to cause or create discrimination in
favor of Highly Compensated Employees. The authority of the Plan
Administrator shall include, but not by way of limitation, the
following:
(a) Authority to interpret the provisions of the Plan
and to determine any questions arising under the Plan or in
connection with the administration or operation thereof,
except with respect to issues and questions described in
Section 10.4(g);
(b) Authority to determine all questions affecting the
eligibility of any person to be, become or remain a
Participant in the Plan;
(c) Authority to determine the Service of any person
and to compute the amount of benefit or other sum payable
under the Plan to any person;
(d) Authority to determine all questions regarding the
status of any person as a Participant;
(e) Authority to authorize and direct all
disbursements of benefits and other sums under the Plan and
to determine the manner in which benefits shall be payable
to Participants;
(f) Authority to adopt such rules as he may deem
desirable for the purpose of regulating the conduct and
discharge of his business and duties in the administration
of the provisions of the Plan, provided that such rules
shall not be inconsistent with the provisions of the Plan;
(g) Authority to employ such counsel and agents, and
to obtain such clerical, administrative, accounting,
medical, legal, insurance and actuarial services as he may
deem necessary or appropriate in carrying out the provisions
of the Plan, including authority to employ one or more
persons to render advice with regard to any responsibility
which any person may have under the Plan; and
(h) Authority to purchase such liability insurance and
bonds as he may deem appropriate in connection with the
operation and administration of the Plan.
9.5 Delegation of Duties
The Plan Administrator may designate other persons (or
committee(s) of persons) to carry out fiduciary or other
responsibilities (other than responsibilities for the management
or control of Plan assets) under the Plan. The Plan
Administrator, and any person delegated under the provisions
hereof to carry out any responsibilities under the Plan, shall be
entitled to rely upon information, data, and documentation
furnished by any Company; tables, valuations, certificates, and
reports furnished by actuaries; and upon certificates, reports,
and opinions made or given by any accountant, legal counsel or
other expert or advisor (who may be employed or retained by one
or more Affiliated Companies) selected or approved by the Plan
Administrator; and the Plan Administrator and any delegate
thereof shall not be liable, except to the extent provided by
law, for any action taken, suffered or omitted by them in good
faith or for any such action in reliance upon any such actuary,
accountant, legal counsel or other expert or advisor, or upon any
information, data, documentation, report, or opinion furnished by
the same or by any Company.
9.6 Plan Administrator's Account
A Plan Administrator who is also a Participant hereunder
shall not rule on any question involving his own interest under
the Plan, as distinguished from interests of others similarly
situated. In such event, the determination shall be made by a
person appointed by the majority of the Pension Fund Committee
(excluding the Plan Administrator if he is a member of the
Pension Fund Committee).
9.7 Compensation of Plan Administrator
The Plan Administrator shall serve as such without
compensation from the Plan, but may receive compensation from an
Affiliated Company for so serving.
9.8 Expenses
Ordinary and necessary expenses incurred in connection with
the establishment or termination of the Plan may be paid from the
Trust Fund to the extent allowed under Section 403(c)(1) of
ERISA. Ordinary and necessary expenses incurred for any Plan
Year in connection with administering the Plan (including the
cost of any bond required under Section 412 of ERISA), other than
establishment or termination expenses, may be paid from the Trust
Fund. To the extent expenses incurred in establishing,
administering or terminating the Plan are not paid from the Trust
Fund they shall be paid by the Affiliated Companies.
9.9 Information Required From Participants
Each Participant or Beneficiary will furnish to the Plan
Administrator such information in writing as the Plan
Administrator considers necessary or desirable for purposes of
administering the Plan, and the provisions of the Plan respecting
any payments thereunder are conditional upon the Participant's or
Beneficiary's furnishing promptly such true, full and complete
information as the Plan Administrator may request. Any notice or
information which, according to the terms of the Plan or the
rules of the Plan Administrator, must be filed with the Plan
Administrator shall be deemed so filed at the time that it is
actually received by the Plan Administrator.
9.10 Records
The Plan Administrator shall keep, or cause to be kept, all
such books, accounts, records or other data as may be necessary
or advisable in his judgment for the administration of the Plan
and properly to reflect the affairs thereof.
9.11 Reports to Participants
The Plan Administrator shall furnish to each Participant who
so requests in writing, a report of the Participant's Accrued
Benefit as of the most recent Valuation Date. In no case shall a
Participant be entitled to more than one such report during any
one twelve-month period. In the case of a Participant who is no
longer an Employee, a mailing of such report to his last known
home address by first class mail shall be sufficient.
9.12 Multiple Fiduciary Capacity
Nothing in this Plan shall be deemed to prohibit any person
or group of persons from serving in more than one fiduciary
capacity with respect to the Plan.
ARTICLE X
Pension Fund Committee
10.1 Appointment of Pension Fund Committee
There shall be a Pension Fund Committee which shall consist
of not fewer than three (3) members appointed by the Board of
Directors. Members of the Pension Fund Committee may, but need
not, include the Plan Administrator. Members of the Pension Fund
Committee shall hold office until their death, resignation,
disqualification or removal. The Pension Fund Committee shall
constitute the Named Fiduciary with respect to the
responsibilities allocated to it by the provisions of this Plan.
10.2 Resignation and Removal of Members
Any member of the Pension Fund Committee may resign at any
time by giving written notice to the other members and to the
Board of Directors, effective as therein stated. Any member of
the Pension Fund Committee may, at any time, be removed by the
Board of Directors.
10.3 Appointment of Successors
Upon the death, resignation, disqualification or removal of
any member of the Pension Fund Committee, the Board of Directors
may appoint a successor. Notice of appointment of a successor
member shall be given by the Board of Directors in writing to the
Trustee and to the Pension Fund Committee.
10.4 Committee Powers
The Pension Fund Committee shall have full power and
authority to discharge the responsibilities allocated to it
pursuant to the Plan. The Pension Fund Committee shall have no
power, authority or responsibility with respect to those matters
which are the responsibility of the Plan Administrator. Any
action taken in good faith by the Pension Fund Committee in the
exercise of authority conferred upon it by this Plan shall be
conclusive and binding upon Participants, their Beneficiaries and
all other persons. All discretionary powers conferred upon the
Pension Fund Committee shall be absolute, provided that no
discretionary power shall be exercised in such manner as to cause
or create discrimination in favor of Highly Compensated
Employees. Except to the extent delegated to the Trustee under,
or pursuant to, the Trust Agreement, the authority of the Pension
Fund Committee shall include, but not by way of limitation, the
following:
(a) Authority to control, invest, reinvest, manage and
dispose of all assets of the Trust Fund;
(b) Authority to select and to direct the Trustee with
respect to investment and reinvestment of the assets of the
Plan and authority to make any decision respecting assets of
the Plan;
(c) Authority to direct the Trustee to undertake and
assume the authority and responsibility to invest and
reinvest the assets of the Plan and to make any decision
respecting assets of the Plan, provided that any such
direction shall be in writing;
(d) Authority to make or provide for the making of any
audit or examination of the investment affairs of the Plan;
(e) Authority to engage such legal, actuarial,
accounting and other professional services as it may deem
proper, including authority to employ one or more persons to
render advice with regard to any responsibility which the
Pension Fund Committee, any member thereof or any other
person designated under Section 10.5 may have under the
Plan;
(f) Authority to select the Actuary, to establish the
Plan's funding policy and investment guidelines, and to
establish and maintain a funding standard account and to
make credits and charges to such account to the extent
required by and in accordance with the provisions of Section
412 of the Code;
(g) Authority to interpret and construe the Plan with
respect to the investment, reinvestment, and disposition of
Plan assets; and
(h) Authority to perform or cause to be performed such
further acts as it may deem to be necessary, appropriate or
convenient in the exercise of its power and authority under
the Plan.
10.5 Allocation and Delegation of Duties
By action of the Pension Fund Committee, duly reflected in
its minutes, the Pension Fund Committee may allocate its
fiduciary responsibilities among its members and may designate
other persons to carry out fiduciary or other responsibilities
under the Plan. Pursuant to this Section 10.5, the Pension Fund
Committee may appoint from among its members a chairman and may
appoint a secretary who need not otherwise be a member of the
Committee, each of whom shall have such powers as the Pension
Fund Committee may provide from time to time. The foregoing
provisions of this Section 10.5 shall not limit the authority of
the Pension Fund Committee to appoint one or more Investment
Managers in accordance with Section 10.6. The Pension Fund
Committee, and any person delegated under the provisions hereof
to carry out any responsibilities under the Plan, shall be
entitled to rely upon information, data, and documentation
furnished by any Company; tables, valuations, certificates, and
reports furnished by actuaries; and upon certificates, reports,
and opinions made or given by any accountant, legal counsel or
other expert or advisor (who may be employed or retained by one
or more Affiliated Companies) selected or approved by the Pension
Fund Committee; and the members of the Pension Fund Committee and
any delegate thereof shall not be liable, except to the extent
provided by law, for any action taken, suffered or omitted by
them in good faith or for any such action in reliance upon any
such actuary, accountant, legal counsel or other expert or
advisor, or upon any information, data, documentation, report, or
opinion furnished by the same or by any Company.
10.6 Investment Manager
The Pension Fund Committee may appoint one or more
Investment Managers (as defined in Section 3(38) of ERISA) to
manage all or any part of the assets of the Plan. Such
appointment shall be reflected in the minutes of the Pension Fund
Committee. The Investment Manager(s) shall discharge its duties
in accordance with applicable law and in particular in accordance
with Section 404(a)(l) of ERISA. The Investment Manager(s), when
appointed, shall have such responsibility to manage the assets of
the Plan as the Pension Fund Committee shall designate, and the
Pension Fund Committee shall thereafter have no responsibility
for the management of such assets to the extent that
responsibilities are designated to be the responsibilities of the
Investment Manager(s).
10.7 Committee Procedure
A majority of the members of the Pension Fund Committee at
any time shall constitute a quorum, and any action by a majority
of the members present at any meeting, or authorized by a
majority of the members in writing without a meeting, shall
constitute the action of the Pension Fund Committee. A member of
the Pension Fund Committee who is also a Participant hereunder
shall not vote on any question involving his own interest under
the Plan, as distinguished from interests of others similarly
situated. The Pension Fund Committee may authorize each or any
one or more of its members to execute any document or documents
on behalf of the Pension Fund Committee, in which event it shall
notify the Trustee in writing of such action and the name or
names of its members so designated, and the Trustee may
thereafter accept and rely upon any document executed by such
member or members as representing action by the Pension Fund
Committee until the Pension Fund Committee shall file with the
Trustee a written revocation of such designation.
10.8 Compensation and Expenses of Committee
Members of the Pension Fund Committee shall serve as such
without compensation from the Plan, but may receive compensation
from an Affiliated Company for so serving. The compensation, or
fees, as the case may be, of all officers, agents, counsel, the
Trustee, the Investment Manager(s), or other persons retained or
employed by the Pension Fund Committee shall be fixed by the
Pension Fund Committee. Expenses other than the compensation of
members of the Pension Fund Committee shall be paid in accordance
with Section 9.8.
10.9 Records
The Pension Fund Committee shall keep a record of all its
proceedings and shall keep, or cause to be kept, all such books,
accounts, records or other data as may be necessary or advisable
in its judgment to carry out its responsibilities hereunder and
properly to reflect its affairs, provided that nothing in this
Section 10.9 shall require the Pension Fund Committee or any
member thereof to perform any act which, pursuant to law or the
provisions of this Plan, is the responsibility of the Plan
Administrator, nor shall this Section 10.9 relieve the Plan
Administrator of such responsibility.
10.10 Funding Policy
The Pension Fund Committee shall periodically review
pertinent Employee information and Plan data in order to
establish the Plan's funding policy and to determine the
appropriate methods of carrying out the Plan's objectives. The
Pension Fund Committee shall periodically communicate to the
Trustee and Investment Manager, if any, the Plan's short-term and
long-term financial needs so investment policy can be coordinated
with Plan financial requirements.
ARTICLE XI
Claims
11.1 Claims for Benefits
Any claim for benefits by a Participant or anyone claiming
through a Participant under the Plan shall be delivered in
writing by the claimant to the Plan Administrator. The claim
shall identify the benefits being requested and shall include a
statement of the reasons why the benefits should be granted. The
Plan Administrator shall grant or deny the claim. If the claim
is denied in whole or in part, the Plan Administrator shall give
written notice to the claimant setting forth: (a) the reasons for
the denial, (b) specific reference to pertinent Plan provisions
on which the denial is based, (c) a description of any additional
material or information necessary to request a review of the
claim and an explanation of why such material or information is
necessary, and (d) an explanation of the Plan's claim review
procedure. The notice shall be furnished to the claimant within
a period of time not exceeding 90 days after receipt of the
claim, except that such period of time may be extended, if
special circumstances should require, for an additional 90 days
commencing at the end of the initial 90-day period. Written
notice of any such extension shall be given to the claimant
before the expiration of the initial 90-day period and shall
indicate the special circumstances requiring the extension and
the date by which the final decision is expected to be rendered.
11.2 Appeals Procedure
A claimant who has been denied a claim for benefits, in
whole or in part, may, within a period of 60 days following his
receipt of the denial, request a review of such denial by filing
a written notice of appeal with the Plan Administrator. In
connection with an appeal, the claimant (or his authorized
representative) may review pertinent documents and may submit
evidence and arguments in writing to the Plan Administrator. The
Plan Administrator shall decide the questions presented by the
appeal, either with or without holding a hearing, and shall issue
to the claimant a written notice setting forth: (a) the specific
reasons for the decision and (b) specific reference to the
pertinent Plan provisions on which the decision is based. The
notice shall be issued within a period of time not exceeding 60
days after receipt of the request for review; except that such
period of time may be extended, if special circumstances
(including, but not limited to, the need to hold a hearing)
should require, for an additional 60 days commencing at the end
of the initial 60-day period. Written notice of any such
extension shall be provided to the claimant prior to the
expiration of the initial 60-day period. The decision of the
Plan Administrator shall be final, binding, and conclusive.
ARTICLE XII
Amendment and Termination
12.1 Amendment
The Board of Directors shall have the right at any time, and
from time to time, to modify or amend in whole or in part, any or
all of the provisions of the Plan, but, except as otherwise
provided in this Article XII or Section 4.4, or as otherwise
permitted by Section 411(d)(6) of the Code, no such amendment or
modification shall have the effect of revesting in the Companies
any part of the Trust Fund or reducing the accrued benefits of
Participants or of diverting any part of the Trust Fund to any
purpose other than for the exclusive benefit of Participants and
their Beneficiaries and the payment of reasonable Plan
administration expenses.
12.2 Termination, Partial Termination, or Discontinuance of
Accruals
The Board of Directors shall have the right, at any time, to
suspend or discontinue (i.e., "freeze") all future benefit
accruals and new participation hereunder, to suspend or
discontinue the Company's contributions hereunder, or to
terminate or partially terminate the Plan. The Plan shall
terminate upon the first to occur of the following: (a) the date
terminated by action of the Board of Directors; (b) the date
terminated by action of the Pension Benefit Guaranty Corporation;
(c) the date the Company shall be judicially declared bankrupt or
insolvent; or (d) the dissolution, merger, consolidation, or
reorganization of the Company, unless the successor makes
provision to continue the Plan as provided in this Article XII,
in which event the successor shall be substituted as the Company
under the Plan. Upon the termination or partial termination of
the Plan, the Accrued Benefit of affected Participants, to the
extent funded as of such date, shall be nonforfeitable. This
provision shall be interpreted in accord with the rules of
Section 411(d)(3) of the Code and the Treasury regulations
thereunder.
Any Company may, by action of its board of directors,
withdraw at any time from participation in the Plan, at which
point the Participants who are its Eligible Employees shall
become Inactive Participants.
12.3 Procedure on Termination
In the event of termination of the Plan, the Company shall
wind up and liquidate the Plan and Trust and distribute the
assets thereof, after deduction of all expenses, to the
Participants and Beneficiaries in accordance with their
respective Accrued Benefits as determined as of the date of Plan
termination (taking into account only Service credited through
such date).
12.4 Partial Termination
Upon termination of this Plan with respect to a group of
Participants which constitutes a partial termination of the Plan,
the Trustee shall allocate and segregate for the benefit of the
Participants with respect to which the Plan is being terminated
the proportionate interest of such Participants in the Trust
Fund. Such proportionate interest shall be determined by the
Actuary. The Actuary shall make this determination upon the
basis of the contributions made by the Company, Accrued Benefits
of the affected Participants as of the date of partial
termination, the provisions of this Article XII, and such other
considerations as the Actuary deems appropriate. The Plan
fiduciaries shall have no responsibility with respect to the
determination of any such proportionate interest.
The funds so allocated and segregated shall be used by the
Trustee to pay benefits to or on behalf of the affected
Participants in accordance with Section 12.5 hereof.
12.5 Liquidation of Trust Fund
Upon termination or partial termination of the Plan, the
assets of the Trust Fund or the portion thereof segregated in
accordance with Section 12.4, shall be liquidated (after
provision is made for the expenses of liquidation) by the payment
or provision for the payment of benefits in the following order
of priority:
(a) Certain Benefits Payable Three Years Prior to
Termination. The available assets of the Trust Fund shall
first be allocated to provide Pensions that were in pay
status three (3) or more years before the effective date of
Plan termination, or that could have been in pay status at
the beginning of such three-year period had the Participant
not deferred the commencement of his Pension by failing to
elect earlier commencement, or that could have become
payable had a Participant's Retirement occurred immediately
prior to the beginning of such three-year period, provided
that:
(1) the portion of the Pension payable to a
Participant or the Beneficiary of a Participant (or
that could have been payable) shall be based on the
provisions of the Plan in effect five (5) years prior
to the effective date of Plan termination; and for this
purpose, the first Plan Year in which an amendment
became effective, or was adopted, if later, shall
constitute the first year an amendment was in effect;
and further provided that,
(2) if the Pension payable under the Plan had
been changed, either by amendment or due to the form in
which the Pension is being paid, during the three-year
period ending on the effective date of Plan
termination, then the lowest benefit in pay status
during such three-year period shall be considered the
benefit in pay status for purposes of this category
(a).
(b) Other Benefits Eligible for Termination Insurance.
To the extent that the amount of a Pension has not been
provided in the foregoing category (a), the remaining assets
shall be allocated to provide any Pension provided under the
Plan for a Participant whose employment terminated prior to
the effective date of Plan termination, or any immediate or
deferred Pension that would have been payable, without
regard to Section 12.2 hereof, to or on behalf of a
Participant, had his employment terminated for a reason
other than death, on the effective date of Plan termination,
provided that the amount of a Pension to be provided under
this category (b) shall be determined as follows:
(1) the portion of the Pension payable to a
Participant or the Beneficiary of a Participant (or
that could have been payable) based on the provisions
of the Plan in effect five (5) years prior to the
effective date of Plan termination; and for this
purpose, the first Plan Year in which an amendment
became effective, or was adopted, if later, shall
constitute the first year an amendment was in effect;
plus
(2) the portion of the Pension payable to a
Participant or the Beneficiary of a Participant which
would have been included in (1) above had the Plan or a
Plan amendment been in effect five (5) years prior to
the effective date of Plan termination, determined as
follows: twenty percent (20%) for each Plan Year (less
than five (5)) that the Plan or an amendment thereto
was in effect, multiplied by the amount that would have
been included under paragraph (1) for such Participant
or Beneficiary had the Plan or the amendment been in
effect for five (5) Plan Years as of the effective date
of Plan termination; provided that,
(3) no benefit payable under this category (b) to
a Participant or Beneficiary shall exceed an amount
with an actuarial value of a monthly benefit in the
form of a life only annuity commencing at age sixty-
five (65) equal to $750 multiplied by a fraction, the
numerator of which is the contribution and benefit base
determined under Section 230 of the Social Security Act
in effect at the effective date of Plan termination and
the denominator of which is such contribution and
benefit base in effect in calendar year 1974.
(c) Other Vested Benefits. To the extent that the
amount of a Pension has not been provided in the foregoing
categories (a) and (b), the remaining assets shall be
allocated to provide the benefit payable under the Plan to
or on behalf of a Participant whose employment terminated
prior to the effective date of Plan termination, or that
would have been payable to or on behalf of a Participant had
his employment terminated for a reason other than death on
the effective date of Plan termination, in the following
order of preference:
(1) to any Participant who retired prior to the
effective date of Plan termination under Sections 6.1
or 6.2 or Beneficiary who was receiving benefits under
the Plan on the effective date of Plan termination;
(2) to any Participant who satisfied the
requirements for a Normal Retirement Pension specified
in Section 6.1, but who was not receiving benefits
under the Plan on the effective date of Plan
termination;
(3) to any Participant who satisfied the
requirements for an Early Retirement Pension specified
in Section 6.2, but who was not receiving benefits
under the Plan on the effective date of Plan
termination; and
(4) to any Participant whose employment had
terminated prior to the effective date of Plan
termination with entitlement to a Deferred Vested
Pension under Section 6.4, or who would have been
eligible, without regard to Section 12.2 hereof, for a
Deferred Vested Pension under said section had his
employment terminated on the effective date of Plan
termination.
(d) Other Benefits. To the extent that the amount of
a Pension has not been provided in the foregoing categories
(a), (b) and (c), the Plan assets shall be further allocated
to provide the benefits accrued under the Plan, without
regard to the satisfaction of the vesting requirements of
this Plan, with respect to each Participant whose employment
had not terminated as of the effective date of Plan
termination, according to the respective actuarial value of
each such Participant's Accrued Benefit as of the date of
Plan termination. In no event may a Participant receive
benefits hereunder for Service which may accrue after the
date of Plan termination.
If the assets of the Trust Fund applicable to any of
the above categories are insufficient to provide full
benefits for all persons in such group, the benefits
otherwise payable to such persons shall be reduced
proportionately. The Actuary shall calculate the allocation
of the assets of the Trust Fund in accordance with the above
priority categories, and certify his calculations to the
Plan fiduciaries. No liquidation of assets and payment of
benefits (or provision therefor) shall actually be made by
the Trustee until after it is advised by the Company in
writing that applicable requirements, if any, of ERISA
governing termination of "Employee Pension Benefit Plans"
have been, or are being, complied with or that appropriate
authorizations, waivers, exemptions, or variances have been,
or are being obtained.
12.6 Reversion of Residual Amounts
All residual amounts shall revert to the Company. For
purposes of this Section, the term "residual amounts" shall mean
all Plan assets remaining after the payment of all Plan expenses
and the satisfaction of all benefit liabilities accrued hereunder
as of the date of Plan termination, without regard to any Service
or benefits which may accrue after the date of Plan termination.
12.7 Successor Employer
In the event of the dissolution, merger, consolidation, or
reorganization of the Company, provision may be made by which the
Plan and Trust will be continued by the successor, and, in that
event, such successor shall be substituted for the Company under
this Plan. The substitution of the successor shall constitute an
assumption of Plan liabilities by the successor and the successor
shall have all of the powers, duties and responsibilities of the
Company under the Plan.
12.8 Manner of Distribution
Subject to the provisions of this Article XII, any
distribution after termination of the Plan may be made, in whole
or in part, to the extent that no discrimination in value
results, in cash, in securities, or other assets in kind, or in
nontransferable annuity contracts, as the Plan Administrator, in
its discretion, shall determine.
12.9 Merger or Consolidation of Plan Assets; Mergers into the
Plan; Transfers of Plan Assets
Subject to satisfying the requirements of this Section and
Section 411(d)(6) of the Code:
(a) Upon the approval of the Board of Directors and
the new or successor employer of the affected Participants,
the Plan may be merged into or consolidated with another
defined benefit plan, and all or a portion of its assets or
liabilities may be transferred to another plan; provided
that such other plan and its related trust (1) are qualified
within the meaning of Sections 401(a) and 501(a) of the Code
("tax-qualified"), and (2) assume the Plan liabilities of
all affected Participants.
(b) Upon the approval of the Board of Directors and
the employer of the affected Participants, any other tax-
qualified defined benefit plan sponsored by an Affiliated
Company may be merged into this Plan, with this Plan as the
surviving instrument. Thereupon:
(1) The Affiliated Company shall become a co-
sponsor of the Plan, included in the definition of
Company hereunder. In any such case, the Plan shall
remain a single plan with any and all of its assets
(regardless of the entity to whose contributions such
assets can be traced) available to pay the benefits of
each Participant and Beneficiary hereunder and any
other liabilities of the Plan.
(2) The assets of the merged plan shall be
transferred to the Trustee and be assets of the Plan,
and the liabilities of the merged plan shall be
liabilities of the Plan.
(3) Each participant in the merged plan shall
become a Participant in the Plan on the merger date,
with accrued or vested benefits under the Plan equal to
his accrued or vested benefits under the merged plan,
and thereafter shall continue to participate in the
Plan in accordance with its terms.
(4) If so directed by the Board of Directors,
there shall be a separate accounting of the benefits of
a Participant transferred from the merged plan and any
other benefits of the Participant under the Plan, such
that contributions, gains, losses, withdrawals,
forfeitures, and other credits or charges are allocated
between the transferred benefits and any other benefits
on a reasonable and consistent basis.
(c) Upon the approval of the Pension Fund Committee,
the assets and liabilities of the Prior Plan with respect to
the Prior Plan Benefit of Continued Employees may be
transferred to this Plan. Upon the approval of the Board of
Directors and the employer of the affected Participants, the
assets and liabilities of any other tax-qualified defined
benefit plan may be transferred to this Plan.
To the extent that Section 401(a)(12) or 414(1) of the Code is
applicable and in accordance therewith, no merger, consolidation,
or transfer pursuant to this Section 12.9 shall be consummated
unless each Participant and Beneficiary under the Plan (or, in
the case of subsection (a), each participant in the merged,
transferee, or successor plan) would, if the resulting plan (or,
in the case of subsections (b) or (c), the Plan) then terminated,
receive a benefit immediately after the merger, consolidation, or
transfer that is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger,
consolidation, or transfer, if the Plan (or, in the case of
subsections (b) and (c), the transferor or predecessor plan) had
then terminated; provided that the foregoing provisions of this
Section shall not apply if such alternative requirements that may
be imposed by the regulations under Section 414(1) of the Code
are satisfied.
ARTICLE XIII
Restrictions Applicable To Highly Compensated Employees
13.1 Restriction on Benefits of Highly Compensated Employees
In the event of termination of the Plan, the benefit of any
Highly Compensated Employee shall be limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
13.2 Restrictions on Distributions to Top 25 Highly Compensated
Employees
(a) General Rule. Annual payments to a Highly
Compensated Employee in the group consisting of the twenty-
five (25) Highly Compensated Employees paid the greatest
'414(s) Compensation' shall be restricted to an amount equal
to the payments that would be made on behalf of the Highly
Compensated Employee under a single life annuity that is the
Actuarial Equivalent of the sum of such Employee's Accrued
Benefit and such Employee's other benefits (including loans
in excess of the amounts set forth in Section 72(p)(2)(A) of
the Code, any periodic income, any withdrawal values payable
to a living employee or former employee, and any death
benefits not provided for by insurance on the employee's or
former employee's life) under the Plan.
(b) Exception to the General Rule. The restrictions
of subsection (a) of this Section 13.2 shall not apply if:
(1) After taking into account payment to or on
behalf of the employee of all benefits payable to or on
behalf of that employee under the Plan, the value of
Plan assets equals or exceeds one hundred and ten
percent (110%) of the value of current liabilities. as
defined in Section 412(1)(7) of the Code;
(2) The value of the benefits payable to or on
behalf of such Employee are less than one percent (1%)
of the value of the Plan's current liabilities before
the distribution; or
(3) The value of the benefits payable to or on
behalf of the Employee does not exceed the amount
described in Section 411(a)(11)(A) of the Code.
13.3 Termination of Restrictions
In the event it is determined by the Internal Revenue
Service that the provisions of this Article are no longer
necessary for the Plan to qualify under section 401 of the Code,
this Article shall thereupon be void without the necessity of
further amendment of the Plan.
ARTICLE XIV
Miscellaneous Provisions
14.1 No Contract of Employment
The adoption and maintenance of this Plan shall not be
deemed to constitute a contract of employment or otherwise
between any Affiliated Company and any Employee, former Employee
or Participant, or to be a consideration for, or an inducement or
condition of, any employment. Nothing contained herein shall be
deemed to give to any Employee, former Employee or Participant
the right to be retained in the service of any Affiliated Company
or to interfere with the right of any Affiliated Company
employing such person to discharge, with or without cause, any
Employee, former Employee or Participant at any time.
14.2 No Liability for Benefits
Any benefits payable under this Plan shall be paid or
provided for solely from the Trust Fund and are limited to the
then available assets of the Trust Fund, and the Affiliated
Companies assume no liability or responsibility therefor. In
addition, the Companies do not guarantee the Trust Fund from loss
or depreciation, or the payout of any money which may be or
becomes due to any person from the Trust Fund. The obligations
of the Companies hereunder are limited solely to the making of
contributions to the Trust Fund as provided for in this Plan.
14.3 Exclusive Benefit of Trust Fund
Except as otherwise provided in Section 4.4 and Article XII,
the assets of the Trust Fund shall be held for the exclusive
purposes of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering
the Plan and shall not inure to the benefit of any Company or
Affiliated Company.
14.4 Nonalienation
(a) General. None of the benefits, payments,
proceeds, claims or rights of any Participant or Beneficiary
hereunder shall be subject to any claims of any creditor of
such person, nor shall any such Participant or Beneficiary
have any right to alienate, anticipate, commute, pledge,
encumber or assign any claim or right hereunder or any of
the benefits or payments of proceeds which he may expect to
receive, contingent or otherwise, under the provisions
hereof. In the event any person attempts to take any action
contrary to this Section 14.4, such action shall be null and
void and of no effect, and the Companies, the Plan
Administrator, the Pension Fund Committee, the Trustee, the
Investment Manager(s) and all persons having any interest in
the Trust Fund and their Beneficiaries shall disregard such
action and are not in any manner bound thereby, and they,
and each of them, shall suffer no liability for any such
disregard thereof, and shall be reimbursed on demand out of
the Trust Fund or by the responsible Participant or
Beneficiary for the amount of any loss, cost or expense
incurred as a result of disregarding or of acting in
disregard of such action. The preceding provisions of this
Section 14.4 shall not apply to situations where a
Participant is indebted to the Trust Fund. In cases where a
Participant is indebted to the Trust Fund, the Trustee is
permitted to levy against the Accrued Benefit of the
Participant to the extent necessary to collect indebtedness
owing from the Participant to the Trust Fund and any unpaid
interest, late charges, or other amounts.
(b) Exception for Qualified Domestic Relations Orders.
(1) The nonalienation rule of Section 14.4(a)
shall apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order,
except that Section 14.4(a) shall not apply if the Plan
Administrator or his delegate determines that such
order is a Qualified Domestic Relations Order. A
Qualified Domestic Relations Order
(A) may not require payment
(i) in a form other than as a single life annuity or
other form available to the Participant, excluding, however,
any joint and survivor annuity form under which survivor
payments would be made to the recipient's subsequent spouse;
(ii) to a recipient under such order of benefits which
are required to be paid to another recipient under another
such order previously filed with the Plan; or
(iii) of increased benefits (determined on the
basis of actuarial equivalents),
(B) but may require payment of benefits to
the recipient under the order
(i) at any time after the date of the order and on or
after the Participant's Earliest Retirement Age (which may
be determined in the case of a Participant who has attained
age fifty (50) by assuming he has separated from service),
(ii) as if the Participant's Benefit Commencement Date
had occurred on the date on which such payment is to begin
under such order (taking into account only the present
benefits in which the Participant is then vested) and
(iii) in any form permitted under subparagraph
(A)(i) above; provided, however, that such benefit shall be
determined based on the life expectancy of the recipient.
(2) Upon receipt of a domestic relations
order, the Plan Administrator or his delegate
shall promptly notify the Participant and any
other alternative payee of the receipt of such
order and the Plan's procedures for determining
the qualified status of domestic relations orders.
(3) Within a reasonable period after the
receipt of a domestic relations order, the Plan
Administrator or his delegate shall determine the
qualified status of such order, and thereafter
notify the Participant and each alternate payee of
such determination. During any period in which
the issue of whether a domestic relations order is
a Qualified Domestic Relations Order is being
determined by the Plan Administrator or his
delegate, or if the Plan Administrator or his
delegate has notice that the parties are
attempting to rectify any deficiencies in the
order, the Plan Administrator or his delegate
shall segregate in a separate account in the Plan
or in an escrow account the amounts which would
have been payable to the alternate payee during
such period if the order had been determined to be
a Qualified Domestic Relations Order.
(4) If within 18 months after the date on
which the first payment would be required to be
made under an order, the order is determined to be
a Qualified Domestic Relations Order, the Plan
Administrator or his delegate shall pay the
segregated amounts (plus interest thereon, if any)
to the person or persons entitled thereto. If
within such 18 month period (A) it is determined
that the order is not a Qualified Domestic
Relations Order or (B) the issue as to whether
such order is a Qualified Domestic Relations Order
is not resolved, the Plan Administrator or his
delegate (unless under a restraining order
prohibiting the disposition of benefits pending
resolutions of a suit) shall pay the segregated
amounts (plus interest thereon, if any) to the
person or persons who would have been entitled to
such amounts if there had been no order. Any
determination that an order is a Qualified
Domestic Relations Order which is made after the
close of the 18 month period shall be applied
prospectively only from the date of such
determination.
(5) For purposes of Section 414(p)(4)(A)(ii)
of the Internal Revenue Code, the interest rate
for determining the present value of any Accrued
Benefit shall be the interest rate then in effect
for determining the amount of contributions under
the Plan.
(6) The Participant's Pension shall be
appropriately adjusted to reflect any distribution
made pursuant to a Qualified Domestic Relations
Order. In addition, if any Qualified Domestic
Relations Order should require payment to any
person prior to the retirement or other separation
from service of a Participant, the portion of the
benefits of such Participant payable to the
alternate payee shall be actuarially reduced in
accordance with Section 7.3 to reflect payment
prior to Normal Retirement Date, regardless of
whether such payment would have been paid as an
Early Retirement Pension or other benefit
providing an actuarial subsidy had the Participant
actually retired.
14.5 Trust Assets
No Employee shall have any right to, or interest in, any
assets of the Trust Fund upon termination of his employment or
otherwise, except as provided from time to time under this Plan,
and then only to the extent of the benefits payable under the
Plan to such Employee out of the assets of the Trust Fund.
14.6 Responsibility of Fiduciaries
The Plan Administrator, and the members of the Pension Fund
Committee, together with their assistants and representatives who
are Employees, shall be free from all liability for their acts
and conduct in the administration of the Plan and Trust under the
Trust Agreement, except for acts of willful misconduct or gross
negligence; provided that the foregoing shall not relieve any of
them from any responsibility or liability for any responsibility,
obligation or duty that they may have under ERISA.
14.7 Indemnity by Companies
In the event and to the extent not insured against by any
insurance company under the provisions of any applicable
insurance policy, the Companies shall indemnify, hold harmless
and, if requested, defend the members of the boards of directors
and officers of the Companies and other persons who are
Employees, from and against any and all claims, demands, suits or
proceedings in connection with the Plan or Trust under the Trust
Agreement that may be brought by Employees, Participants or
Beneficiaries or their legal representatives, or by any other
person, corporation, entity, government or agency thereof and
from and against any and all costs or other expenses, including
but not limited to attorneys' fees incurred by such individuals
in connection with such claims, demands, suits or proceedings;
provided that such indemnification shall not apply to any such
person for such person's acts of willful misconduct or gross
negligence as determined by a no longer appealable final judgment
of a court of competent jurisdiction.
14.8 Address for Notification; Inability to Locate Participants
or Beneficiaries
(a) Each Participant shall keep the Plan Administrator
advised of his current address and the current address of
each of his potential Beneficiaries. Any payment,
distribution or communication hereunder addressed to a
Participant or Beneficiary, at the last address filed with
the Plan Administrator, or if no such address has been
filed, then the last address indicated on the records of the
Company in respect of the Participant, shall be deemed to
have been delivered to the Participant or Beneficiary three
(3) days after such distribution or communication is
deposited in the United States Mail, postage prepaid.
(b) If the Plan Administrator cannot, by making a
reasonably diligent attempt by mail, locate either the
Participant, his Beneficiary or contingent Beneficiary, as
the case may be, within three (3) years following the date
as of which the person's benefits become payable under the
Plan, the total amount shall be forfeited and shall be used
to reduce Company contributions under the Plan; provided,
that if such person to whom a benefit is payable makes a
claim in writing for such benefit after the expiration of
the three (3) year period, the benefit shall be reinstated.
In the event of such reinstatement, payment shall commence
to such person in the same form and amount as initially
applicable, commencing as soon as practicable after the
Valuation Date coincident with or next following the date on
which the Plan Administrator receives his written claim.
14.9 Payment in Case of Incapacity
In the event that the Plan Administrator shall find that any
Participant or Beneficiary to whom a benefit is payable under
this Plan is unable to manage his own affairs because of illness,
accident, or other mental or physical incompetence, or is unable
to give a valid receipt, the Plan Administrator may cause the
payment becoming due to such Participant or Beneficiary to be
paid to another person selected by the Plan Administrator in his
sole discretion for the benefit of the Participant or Beneficiary
without responsibility on the part of the Plan Administrator, the
Pension Fund Committee, any Affiliated Company or the Trustee to
follow the application of such payment; provided that if claim
shall have been made therefor by an existing and duly appointed
guardian, conservator, committee or other duly appointed legal
representative, payment shall be made to such representative.
Any such payment shall be a payment for the account of the
Participant or Beneficiary and shall operate as a complete
discharge of all liability therefor under this Plan.
14.10 Headings
Article, Section and subsection headings are for convenient
reference only and shall not be deemed to be a part of the
substance of this instrument or in any way to enlarge or limit
the contents of any Article.
14.11 Applicable Law
Except as may otherwise specifically be required by the
Trust Agreement, all legal questions pertaining to the Plan shall
be determined in accordance with ERISA and, to the extent not
preempted by federal law, the laws of the State of New York. All
contributions made hereunder shall be deemed to have been made in
New York.
14.12 Agent for Service
The General Counsel of Saks & Company shall be the agent for
service of any legal process upon this Plan.
EXECUTED on ____________________, 1998, in New York, New
York.
SAKS & COMPANY
By:__________________________
Title:_______________________
Appendix A
Unless otherwise expressly provided in the Plan, the
following actuarial assumptions shall be used to determine
benefits under the Plan.
1.01 Reemployed Pensioners. For purposes of reducing the
recomputed Pension of a Participant who is reemployed after
receiving a Pension, as provided under Section 7.5(a) of the
Plan, the following shall be used:
(a) Interest: 8.25%
(b) Mortality: The 1971 Group Annuity Mortality Table
projected to 1978 according to Scale E (males, 3 year
setback).
1.02 Pre-Retirement Surviving Spouse Annuity. For purposes
of determining the reduction for coverage for a Pre-Retirement
Surviving Spouse Annuity under Section 8.4 of the Plan prior to
January 1, 1998, the following table shall apply:
Months of Coverage Preceding Monthly
Normal Retirement Date Percentage Rate
----------------------------- -----------------
First 120 months (ages 55-64) .041667% (1/2% per yr.)
Next 120 months (ages 45-55) .016667% (1/5% per yr.)
Next 120 months (ages 35-45) .008333% (1/10% per yr.)
All preceding months No Reduction
provided that effective March 1, 1991, the following table shall
apply:
Months of Coverage Preceding Montly
Normal Retirement Date Percentage Rate
-------------------------- ---------------------
First 60 months (ages 60-64) .04l667% (0.50% per yr.)
Next 60 months (ages 55-59) .033333% (0.40% per yr.)
Next 60 months (ages 50-54) .025000% (0.30% per yr.)
Next 60 months (ages 45-49) .016667% (0.20% per yr.)
Next 60 months (ages 40-44) .008333% (0.10% per yr.)
Next 60 months (ages 35-39) .004167% (0.05% per yr.)
All preceding months No reduction
1.03 Single Sum Payments. For purposes of determining the
present value of Accrued Benefits under Sections 8.2(d) and 8.5
of the Plan, the following factors shall be used -
(a) Interest: With respect to benefits calculated
prior to January 1, 1996, whichever of the following
immediate or deferred interest rates (as the case may be)
results in the smaller payment: (1) the interest rate that
would be used by the Pension Benefit Guaranty corporation
(the "PBGC") (as of the January 1 preceding or coincident
with the Benefit Commencement Date) or (2) 120% of that
interest rate, provided that the payment amount determined
using the rate provided for in this item (2) may not be less
than $25,000; and with respect to benefits calculated on and
after January 1, 1996, the annual interest rate on 30-year
Treasury Constant Maturities as published in Federal Reserve
releases in effect for the second month before the first day
of the Plan Year in which the annuity starting date occurs
(which shall be the "stability period" for purposes of this
Plan).
(b) Mortality: With respect to benefits determined
prior to January 1, 1996, the Mortality Table specified by
the PBGC for males (set back two years), or such other table
as the PBGC may publish from time to time for similar
purposes on a unisex basis, to determine the present value
of a lump sum distribution on plan termination, and with
respect to benefits calculated on and after January 1, 1996,
the Mortality Table set forth in Revenue Ruling 95-6, based
on a blend of fifty percent (50%) of the male and female
rates set forth in the 1983 Group Annuity Mortality Table as
such Table may be updated or replaced in the future.
(c) Expected Retirement Age: For distributions to
Participants who terminate prior to satisfying the
conditions under Section 6.2(a) or 6.2(b) - age 65; for
Participants who terminate on or after their earliest
retirement age - their age upon actual termination; for all
others, age 55.
1.04 Actuarial Equivalent of Amounts Received from GBI
Profit Sharing Plan Upon Termination or Retirement. The
reduction under Section 7.1(c) of the Plan for amounts
distributed under the GBI Profit Sharing Plan upon termination or
retirement shall be determined by crediting the Participant's
Profit Sharing account balance from January 1, 1976 through
December 31, 1984 with 5.50% interest compounded annually through
December 31, 1984 and by 8.25% compounded annually thereafter
through the Participant's Normal Retirement Date (or actual
retirement date, if later), and thereupon by converting such
amount to a full cash refund annuity based on the following
factors determined as of the Participant's Normal Retirement Date
(or actual retirement date, if later): (1) an interest rate of
8.25%, and (2) the 1971 CAM projected to 1978 according to Scale
E (males, 3 year setback).
1.05 All Other Equivalencies. For purposes of all
calculations not expressly set forth in the Plan or this Appendix
A, the following shall be used:
(a) Interest: The interest rate then in effect under
Section 1.03 of this Appendix A.
(b) Mortality. The mortality table then in effect
under Section 1.03 of this Appendix A.
Appendix B
The Plan Administrator shall be the highest-ranking
corporate officer in the Human Resources Department.
Appendix C
C1.1 Definitions. For purposes of this Appendix C,
(a) "Appendix C Participant" means a Participant who
meets the definition of Continued Employee under Section
1.15 of the Plan but who did not have an accrued benefit
under the Prior Plan as of July 2, 1990 solely because of a
failure to meet as of July 2, 1990 the requirement in
Section 2.01(b) of the Prior Plan that he complete one
Eligibility Year of Service.
(b) "Covered Compensation" means the amount determined
in accordance with the following table:
CALENDAR YEAR COVERED
OF BIRTH COMPENSATION
---------------- ---------------
1907 $ 4,488
1908 $ 4,704
1909 $ 5,004
1910 $ 5,316
1911 $ 5,664
1912 $ 6,060
1913 $ 6,480
1914 $ 7,044
1915 $ 7,692
1916 $ 8,460
1917 $ 9,300
1918 $10,236
1919 $11,232
1920 $12,276
1921 $13,368
1922 $14,520
1923 $15,708
1924 $16,968
1925 $18,228
1926 $19,476
1927 $20,724
1928 $21,972
1929 $23,208
1930 $24,444
1931 $25,680
1932 $26,916
1933 $28,152
1934 $29,388
1935 $30,612
1936 $31,800
1937 $32,988
1938 $35,280
1939 $36,432
1940 $37,572
1941 $38,688
1942 $39,756
1943 $40,752
1944 $41,712
1945 $42,648
1946 $43,548
1947 $44,412
1948 $45,132
1949 $45,768
1950 $46,284
1951 $46,740
1952 $47,088
1953 $47,376
1954 $47,616
1955 $47,904
1956 OR LATER $48,000
C1.2 1989 Benefit. Subject to the limitations of Sections
7.4, 7.5, 7.7 and 7.8 of the Plan, if an Appendix C Participant
completed 1000 Hours of Service as an Eligible Employee during
calendar year 1989, such Appendix C Participant shall have
included in the calculation of his Normal Retirement Pension,
computed in the normal form specified in Section 8.1(a) of the
Plan and payable commencing on the date specified in Section 6.1
of the Plan, an annual amount equal to the sum of
(a) 1% of his Compensation during calendar year 1989,
and
(b) .5% of the excess of his Compensation during
calendar year 1989 over his Covered Compensation.
C1.3 Pre-July 2, 1990 Benefit. Subject to the limitations
of Sections 7.4, 7.5, 7.7 and 7.8 of the Plan, if an Appendix C
Participant completed 1000 Hours of Service as an Eligible
Employee during calendar year 1990, such Appendix C Participant
shall have included in the calculation of his Normal Retirement
Pension, computed in the normal form specified in Section 8.1(a)
of the Plan and payable commencing on the date specified in
Section 6.1 of the Plan, an annual amount equal to 1% of his
Compensation for the period from January 1, 1990 to July 1, 1990.