20TH CENTURY INDUSTRIES
PENSION PLAN
1994 AMENDMENT AND RESTATEMENT
CONTENTS
ARTICLE I NAME AND EFFECTIVE DATE ............................................ 1
ARTICLE II DEFINITIONS........................................................ 1
2.1 Actuarial Equivalent or Equivalent Actuarial Value ................... 1
2.2 Affiliated Company.................................................... 1
2.3 Annuity Starting Date ................................................ 1
2.4 Beneficiary........................................................... 1
2.5 Board of Directors ................................................... 2
2.6 Code ................................................................. 2
2.7 Committee............................................................. 2
2.8 Company .............................................................. 2
2.9 Compensation.......................................................... 2
2.10 Early Retirement Date................................................ 3
2.11 Effective Date ...................................................... 4
2.12 Election Period ..................................................... 4
2.13 Employee............................................................. 4
2.14 Employment Commencement Date......................................... 4
2.15 Entry Date........................................................... 4
2.16 ERISA ............................................................... 4
2.17 Funding Agreement.................................................... 4
2.17A Highly Compensated Employee......................................... 4
2.18 Investment Fund...................................................... 7
2.19 Investment Manager .................................................. 7
2.20 Late Retirement Date................................................. 7
2.21 Normal Retirement Age................................................ 7
2.22 Participant.......................................................... 7
2.23 Participating Employee............................................... 7
2.24 Pension Fund ........................................................ 7
2.25 Period of Service.................................................... 7
2.26 Period of Severance.................................................. 8
2.27 Plan................................................................. 9
2.28 Plan Administrator................................................... 9
2.29 Plan Year............................................................ 9
2.30 Qualified Election................................................... 9
2.31 Qualified Joint and Survivor Annuity ............................... 10
2.32 Qualified Preretirement Survivor Annuity............................ 10
2.33 Retirement Date .................................................... 10
2.34 Spouse ............................................................. 10
2.35 Total and Permanent Disability ..................................... 10
2.36 Trust Agreement .................................................... 10
2.37 Trust or Trust Fund................................................. 11
2.38 Trustee............................................................. 11
ARTICLE III ELIGIBILITY AND PARTICIPATION ................................... 11
3.1 Eligibility To Participate........................................... 11
3.2 Commencement of Participation ....................................... 11
3.3 Eligibility of Former Employees...................................... 11
ARTICLE IV COMPANY CONTRIBUTIONS ............................................ 11
4.1 Pension Fund and Funding Agreement .................................. 11
4.2 Contributions........................................................ 11
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4.3 Irrevocability ...................................................... 12
4.4 Company Not Obligated to Continue Contributions ..................... 12
4.5 Employee Contributions............................................... 12
ARTICLE V RETIREMENT BENEFITS................................................ 12
5.1 Normal Retirement Benefit ........................................... 12
5.2 Postponed Retirement Benefit......................................... 13
5.3 Early Retirement Benefit............................................. 13
5.4 Suspension of Benefits Upon Re-Employment On or After Normal
Retirement Date...................................................... 13
ARTICLE VI PAYMENT OF BENEFITS .............................................. 14
6.1 Commencement of Benefits ............................................ 14
6.2 Form of Benefits Provided............................................ 15
6.3 Lump Sum Distributions .............................................. 16
6.4 Payment of Small Benefits............................................ 17
6.5 Facility of Payment.................................................. 17
6.6 Designation of Beneficiary........................................... 17
6.7 In-Service Payment of Benefits on or After Required Benefit
Commencement Date.................................................... 17
6.8 Election for Direct Rollover to Eligible Retirement Plan ............ 18
ARTICLE VII SEVERANCE BENEFITS .............................................. 19
7.1 Normal Severance Benefit ............................................ 19
7.2 Payment Before Normal Retirement Age................................. 19
7.3 Coordination With Qualified Annuity Provisions ...................... 19
ARTICLE VIII VESTING......................................................... 19
8.1 No Vested Rights Except as Herein Specified ......................... 19
8.2 Vesting in Benefits.................................................. 20
ARTICLE IX DISABILITY PROVISIONS............................................. 20
9.1 Disability Retirement Benefit........................................ 20
ARTICLE X DEATH BENEFITS .................................................... 20
10.1 General Limitation on Death Benefits................................. 20
10.2 Pre-Retirement Death Benefit ........................................ 20
ARTICLE XI RESTRICTIONS ON CERTAIN DISTRIBUTIONS ............................ 20
11.1 Restrictions on Benefits at Plan Termination for Plan Years Beginning
Prior to January 1, 1994 ............................................ 20
11.2 Restrictions on Benefits at Plan Termination for Plan Years Beginning
On or After January 1, 1994 ......................................... 23
ARTICLE XII OPERATION AND ADMINISTRATION OF THE PLAN ........................ 24
12.1 Plan Administration.................................................. 24
12.2 Committee Powers..................................................... 24
12.3 Investment Manager .................................................. 26
12.4 Periodic Review...................................................... 26
12.5 Committee Procedure.................................................. 26
12.6 Compensation of Committee............................................ 26
12.8 Appointment of Successors ........................................... 27
12.9 Records.............................................................. 27
12.10 Reliance Upon Documents and Opinions ............................... 27
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12.11 Requirement of Proof................................................ 28
12.12 Reliance on Committee Memorandum.................................... 28
12.13 Multiple Fiduciary Capacity......................................... 28
12.14 Limitation on Liability ............................................ 28
12.15 Indemnification..................................................... 28
12.16 Bonding............................................................. 28
12.17 Prohibition Against Certain Actions................................. 29
12.18 Plan Expenses ...................................................... 29
ARTICLE XIII PLAN AMENDMENTS................................................. 29
13.1 Amendments .......................................................... 29
13.2 Retroactive Amendments............................................... 30
ARTICLE XIV MERGER OF COMPANY; MERGER OF PLAN................................ 30
14.1 Effect of Reorganization or Transfer of Assets....................... 30
14.2 Merger Restriction .................................................. 30
ARTICLE XV PLAN TERMINATION AND DISCONTINUANCE OF
CONTRIBUTIONS............................................................. 30
15.1 Plan Termination..................................................... 30
15.2 Discontinuance of Contributions...................................... 31
15.3 Rights of Participants............................................... 31
15.4 Allocation and Payment Priority...................................... 31
15.5 Continuation of the Funding Agreements, Etc.......................... 32
15.6 Plan Termination Date ............................................... 32
15.7 Partial Termination ................................................. 33
15.8 Failure to Contribute ............................................... 33
ARTICLE XVI APPLICATION FOR BENEFITS ........................................ 33
16.1 Application for Benefits............................................. 33
16.2 Action on Application ............................................... 33
16.3 Appeals ............................................................. 34
ARTICLE XVII LIMITATION ON BENEFITS ......................................... 34
17.1 Basic Limitation..................................................... 34
17.2 Annual Additions..................................................... 35
17.3 Membership in Other Defined Benefit Plans............................ 35
17.4 Membership in Defined Contribution Plans............................. 35
17.5 Adjustments in the Limitation........................................ 37
17.6 Benefits Not in Excess of $10,000 ................................... 39
17.7 Adjustment of Limitation for Years of Service or Participation....... 39
17.8 Affiliated Company .................................................. 39
ARTICLE XVIII RESTRICTION ON ALIENATION...................................... 39
18.1 General Restrictions Against Alienation ............................. 39
18.2 Nonconforming Distributions Under Court Order ....................... 40
ARTICLE XIX TOP-HEAVY PLAN RULES ............................................ 40
19.1 Purpose ............................................................. 40
19.2 Applicability ....................................................... 41
19.3 Definitions ......................................................... 41
19.4 Top-Heavy Status .................................................... 42
19.5 Minimum Benefits .................................................... 43
19.6 Compensation Limitation ............................................. 44
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19.7 Maximum Benefit Limitations ......................................... 44
19.8 Vesting Rules........................................................ 45
19.9 Non-Eligible Employees .............................................. 45
ARTICLE XX MISCELLANEOUS..................................................... 45
20.1 No Enlargement of Employee Rights ................................... 45
20.2 Addresses............................................................ 45
20.3 Notices and Communications........................................... 46
20.4 Reporting and Disclosure ............................................ 46
20.5 Governing Law........................................................ 46
20.6 Interpretation ...................................................... 46
20.7 Withholding for Taxes ............................................... 46
20.8 Limitation on Company, Committee and Trustee Liability .............. 46
20.9 Successors and Assigns............................................... 46
20.10 Counterparts ....................................................... 46
20.11 Application of Forfeitures ......................................... 46
20.12 Mailing of Payments; Lapsed Benefits................................ 46
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ARTICLE I
NAME AND EFFECTIVE DATE
The Plan established and adopted hereunder is known as the "20th Century
Industries Pension Plan" (hereinafter referred to as the "Plan") and was
originally effective January 1, 1988. This 1994 Amendment and Restatement
incorporates changes required to comply with the requirements of the Tax
Reform Act of 1986 and subsequent related legislation, and, except as
otherwise specifically noted herein, shall be effective as of January 1, 1989.
This Plan evidences the terms and conditions of a defined benefit
pension plan for the benefit of the covered Employees of 20th Century
Industries and any Affiliated Company that may participate in maintaining
this Plan pursuant to the provisions set forth hereinbelow. The Plan, which
is intended to constitute a qualified pension plan for purposes of Internal
Revenue Code ("Code") Sections 401(a) and 501(a), shall be maintained and
administered for the exclusive benefit of Plan Participants and their
Beneficiaries.
ARTICLE II
DEFINITIONS
2.1 ACTUARIAL EQUIVALENT OR EQUIVALENT ACTUARIAL VALUE. "Actuarial
Equivalent" or "Equivalent Actuarial Value" shall mean an equivalent or
equivalent value determined by reference to the dollar value of any benefit
(except for benefits paid in a lump sum) on a specified date, computed on the
basis of an 8% per annum rate of interest and utilizing the mortality rates
in Appendix I. The dollar value of a single sum benefit shall be computed
using the interest rate in effect on the first day of the Plan Year of the
distribution that the Pension Benefit Guaranty Corporation ("PBGC") would use
for determining present values upon a plan termination.
2.2 AFFILIATED COMPANY. "Affiliated Company" shall mean
(a) Any corporation which is included in a controlled group of
corporations, within the meaning of Section 414(b) of the Code, of which
group 20th Century Industries is also a member,
(b) Any trade or business which is under common control with 20th
Century Industries within the meaning of Section 414(c) of the Code,
(c) Any member of an affiliated service group, within the meaning of
Section 414(m) of the Code, that includes 20th Century Industries, and
(d) Any other entity required to be aggregated with 20th Century
Industries pursuant to regulations under Code Section 414(o).
2.3 ANNUITY STARTING DATE. "Annuity Starting Date" shall mean the first
day of the first period for which an amount is payable as an annuity or in
any other form.
2.4 BENEFICIARY. "Beneficiary" shall mean the person or persons last
designated as such by a Participant in accordance with the provisions of
Section 6.6 and entitled to benefits hereunder upon the death of such
Participant, or if there is no such properly
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designated Beneficiary surviving, the person or persons designated in Section
6.6 to receive the interest of a deceased Participant in such event.
2.5 BOARD OF DIRECTORS. "Board of Directors" or "Board" shall mean the
Board of Directors of 20th Century Industries.
2.6 CODE. "Code" shall mean the Internal Revenue Code of 1986, as in
effect on the date of execution of this Plan document and as thereafter
amended from time to time.
2.7 COMMITTEE. "Committee" shall mean the Committee described in Article
XII of this Plan.
2.8 COMPANY. "Company" shall, unless the context indicates otherwise,
mean 20th Century Industries or that part of any Affiliated Companies of 20th
Century Industries that, as a whole or only with respect to certain units or
divisions thereof, has been granted permission by the Board of Directors to
participate in the Plan and provided that Company contributions are being
made hereunder.
2.9 COMPENSATION.
(a) "Compensation" shall mean any cash compensation paid by the
Company during a Plan Year by reason of services performed by an Employee,
including overtime pay, bonuses, and compensation, subject, however, to the
following special rules and to the provisions of Section 2.9(b). The
following shall not be taken into account in determining Compensation:
(i) Fringe benefits, and contributions by the Company to and
benefits under any employee benefit plan;
(ii) Amounts included in any Employee's gross income with
respect to life insurance as provided by Code Section 79;
(iii) Amounts paid to Employees as special remuneration based on
profits, discretionary judgment bonuses, severance pay or other special
payments;
(b) Solely for purposes of Article XVII (relating to certain
limitations on certain annual additions to or benefits from employee pension
benefit plans) and Article XIX of this Plan (relating to special rules
applicable to certain Top-Heavy plans), the term "Compensation" shall mean
all wages, salaries, and fees for professional services and other amounts
received for personal services actually rendered in the course of employment
with the Company, and excluding the following:
(i) Company contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the taxable year
in which contributed, or Company contributions under a simplified employee
pension plan to the extent such contributions are deductible by the Employee,
or any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
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(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits, or
contributions made by the Company (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Code Section
403(b) (whether or not the amounts are actually excludable from the gross
income of the Employee).
For purposes of this Subsection (b), "Compensation" for any Plan Year is the
compensation actually paid or includible in the Participant's gross income
during such a year.
(c) For Plan Years beginning prior to January 1, 1994, the annual
Compensation of each Participant taken into account under this Section 2.9
for any Plan Year shall not exceed $200,000, as adjusted by the Secretary of
the Treasury at the same time and in the same manner as under Section 415(d)
of the Code. In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the
Spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is exceeded, then
the limitation shall be prorated among the affected individuals in proportion
to each such individual's Compensation as determined under this Section prior
to the application of this limitation.
(d) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary,
for Plan Years beginning on or after January 1, 1994, the annual Compensation
of each Employee taken into account under the Plan shall not exceed the "OBRA
'93 annual compensation limit." The OBRA '93 annual compensation limit is
$150,000, as adjusted for the Commissioner of the Internal Revenue for
increases in the cost of living in accordance with Code Section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which Compensation is
determined ("determination period") beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which
is the number of months in the determination period, and the denominator of
which is 12. For Plan Years beginning on or after January 1, 1994, any
reference in the Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision. If
Compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current Plan Year, the
Compensation for that determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2.10 EARLY RETIREMENT DATE. Any Participant who has attained age
fifty-five (55) and completed ten (10) one-year Periods of Service may elect
to retire on an Early Retirement Date selected by such Participant in
accordance with the Participant's Qualified Election, which may be made at
any time after the Participant is eligible for an early retirement benefit
pursuant to Section 7.2. Such Early Retirement Date may be the first (1st)
day of any month which is after satisfaction of such requirement and prior to
such Participant's Normal Retirement Age.
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2.11 EFFECTIVE DATE. "Effective Date" shall mean the effective date of
this Plan, which is January 1, 1989.
2.12 ELECTION PERIOD. "Election Period" shall mean, with respect to a
Qualified Election, the 90-day period ending on the Annuity Starting Date.
2.13 EMPLOYEE.
(a) "Employee" shall mean each person currently employed in any
capacity by the Company or an Affiliated Company, any portion of whose
Compensation paid by the Company or an Affiliated Company is subject to
withholding of income tax and/or for whom Social Security contributions are
made by the Company or an Affiliated Company;
(b) In addition, "Employee" shall mean leased employees within the
meaning of Section 414(n)(2) of the Code. Notwithstanding the foregoing, if
such leased employees constitute less than twenty percent of the Company's
nonhighly compensated work force within the meaning of Section
414(n)(5)(C)(ii) of the Code, the term "Employee" shall not include those
leased employees covered by a plan described in Section 414(n)(5) of the Code
unless otherwise provided by the terms of this Plan.
2.14 EMPLOYMENT COMMENCEMENT DATE. "Employment Commencement Date" shall
mean each of the following:
(a) The date on which an Employee first performs an hour of service
in any capacity for the Company or an Affiliated Company with respect to
which the Employee is compensated or is entitled to cash remuneration by the
Company or the Affiliated Company.
(b) In the case of an Employee whose employment is terminated and
who is reemployed by the Company or an Affiliated Company after he/she incurs
a Period of Severance, the term "Employment Commencement Date" shall also
mean the first day following the termination of employment on which the
Employee performs an hour of service for the Company or an Affiliated Company
with respect to which he/she is compensated or entitled to cash remuneration
by the Company or an Affiliated Company.
2.15 ENTRY DATE. "Entry Date" shall mean the first day of the next month
following the Employee's attainment of age twenty (20) and completion of
one-year Period of Service.
2.16 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974 and all amendments thereto and regulations thereunder.
2.17 FUNDING AGREEMENT. "Funding Agreement" shall mean the one or more
trust agreements, entered into by the Company in accordance with the
provisions of Article IV for the purpose of funding benefits provided under
this Plan.
2.17A HIGHLY COMPENSATED EMPLOYEE. "Highly Compensated Employee"
shall mean:
(a) Any Employee who, during the "determination year" (the current
Plan Year), or the "look-back year" (the 12-month period preceding such Plan
Year),
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(i) was at any time a five percent owner (as defined in Code
Section 416),
(ii) received Compensation from the Company in excess of
$75,000, as adjusted by the Secretary of the Treasury at the same time and
in the same manner as under Code Section 415(d),
(iii) received Compensation from the Company in excess of
$50,000, as adjusted by the Secretary of the Treasury at the same time and
in the same manner as under Code Section 415(d), and was in the top-paid
group of Employees for such Plan Year, or
(iv) was at any time an officer and received Compensation
greater than 50% of the amount in effect under Section 415(b)(1)(A) of the
Code for such Plan Year.
(b) Determination of a Highly Compensated Employee shall be in
accordance with the following special rules:
(i) In the case of the Plan Year for which the relevant
determination is being made, an Employee not described in Paragraph (ii),
(iii), or (iv) of (a) above for the preceding Plan Year (without regard to
Paragraph (i)) shall not be treated as described in Paragraph (ii), (iii), or
(iv) of (a) above unless such Employee is a member of the group consisting of
the 100 Employees paid the greatest Compensation during the Plan Year for
which such determination is being made.
(ii) An Employee shall be treated as a five percent owner for
any Plan Year if at any time during such Plan Year such Employee was a five
percent owner (as defined in Section 20.6(b)(iii)).
(iii) An Employee is in the top-paid group of Employees for any
Plan Year if such Employee is in the group consisting of the top 20% of the
Employees when ranked on the basis of Compensation paid during such Plan Year.
(iv) For purposes of Paragraph (iv) of Subsection (a) above, no
more than 50 Employees (or, if lesser, the greater of three Employees or ten
percent of the Employees) shall be treated as officers. To the extent
required by Code Section 414(q), if for any Plan Year no officer of the
Company is described in Paragraph (iv) of Subsection (a) above, the highest
paid officer of the Company for such year shall be treated as described in
that section.
(v) If any individual is a "family member" with respect to a
five percent owner or of a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid the greatest
Compensation during the Plan Year, then
(A) such individual shall not be considered a separate
Employee, and
(B) any Compensation paid to such individual (and any
applicable contribution or benefit on behalf of such individual) shall be
5
treated as if it were paid to (or on behalf of) the five percent owner or
Highly Compensated Employee.
For purposes of this Paragraph (v), the term "family member" means, with
respect to any Employee, such Employee s spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants or descendants.
(vi) For purposes of this Section, the term "Compensation"
means Compensation as set forth in Section 2.8; provided, however, the
determination under this Paragraph (vi) shall be made without regard to Code
Sections 125, 402(a)(8), and 401(h)(1)(B), and in the case of Company
contributions made pursuant to a salary reduction agreement, without regard
to Section 403(b).
(vii) For purposes of determining the number of Employees in
the top-paid group under Paragraph (iii) of Subsection (a) above, the
following Employees shall be excluded:
(A) Employees who have not completed six months of
service,
(B) Employees who normally work less than 17-1/2 hours
per week,
(C) Employees who normally work not more than six months
during any Plan Year,
(D) Employees who have not attained age 21,
(E) Except to the extent provided in Treasury
Regulations, Employees who are included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement between Employee representatives and Company, and
(F) Employees who are nonresident aliens and who receive
no earned income (within the meaning of Code Section 911(d)(2)) from the
Company that constitutes income from sources within the United States (within
the meaning of Code Section 861(a)(3)).
The Company may elect to apply Subparagraphs (A) through (D) above by
substituting a shorter period of service, smaller number of hours or months,
or lower age for the period of service, number of hours or months, or (as the
case may be) than as specified in such Subparagraphs.
(viii) A former Employee shall be treated as a Highly
Compensated Employee if:
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(A) such Employee was a Highly Compensated Employee when
the employment of such Employee with the Company and all Affiliated Companys
terminated, or
(B) such Employee was a Highly Compensated Employee at any
time after attaining age 55.
(ix) Code Sections 414(b), (c), (m), (n), and (o) shall be
applied before the application of this Section 2.17A.
(c) To the extent permissible under Code Section 414(q), the
Committee may determine which Employees shall be categorized as Highly
Compensated Employees by applying a simplified method prescribed by the
Internal Revenue Service.
2.18 INVESTMENT FUND. "Investment Fund" shall mean all assets of the
Pension Fund.
2.19 INVESTMENT MANAGER. "Investment Manager" shall mean the one or more
Investment Managers, if any, that are appointed pursuant to the provisions of
Section 12.3.
2.20 LATE RETIREMENT DATE. In the event that a Participant shall
continue to be employed by the Company beyond his/her Normal Retirement Age,
the retirement date of such a Participant will be postponed until the first
day of the month coincident with or next following the date on which he/she
actually retires. Any such Participant shall be entitled to retire at any
date beyond his/her Normal Retirement Age, or he/she may be retired by the
Company on any such Late Retirement Date, subject, however, to the
requirements of any applicable federal or state laws governing compulsory
retirements.
2.21 NORMAL RETIREMENT AGE. "Normal Retirement Age" shall mean the date
the Participant attains age sixty-five (65).
2.22 PARTICIPANT. "Participant" shall mean any Employee of the Company
who meets the eligibility requirements of this Plan.
2.23 PARTICIPATING EMPLOYER. "Participating Employer" shall mean each
unit, division or other segment of 20th Century Industries to which this Plan
is extended by action of the Board of Directors, and each unit, division or
other segment of an Affiliated Company (or similar entity), which unit,
division or segment has been granted permission by the Board of Directors to
participate in this Plan, provided contributions are being made hereunder for
Eligible Employees of such Participating Employer. This permission shall be
granted under such conditions and upon such conditions as the Board of
Directors deems appropriate.
2.24 PENSION FUND. "Pension Fund" shall mean all cash, securities and
other assets of whatsoever nature deposited with or acquired by any Trustee
selected by the Committee for the purpose of funding the benefits provided
under this Plan.
2.25 PERIOD OF SERVICE. "Period of Service" shall mean a period of time
computed under an "elapsed time" method, as follows:
(a) An Employee shall be credited with a Period of Service equal to
the elapsed time between his/her Employment Commencement Date and the date on
which he/she commences a Period of Severance.
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(b) If an Employee incurs a Period of Severance and is subsequently
reemployed by a Participating Employer, he/she shall be credited with a
Period of Service pursuant to the following rules:
(i) An Employee shall receive credit for a Period of Severance
as if it were a Period of Service if such Period of Severance commences by
reason of a quit, discharge or retirement and the Participant is reemployed
by a Participating Employer within 12 months after the commencement of such
Period of Severance.
(ii) An Employee shall receive credit for a Period of Severance
as if it were a Period of Service if such Period of Severance commences by
reason of a quit, discharge or retirement during a time in which such
Employee is absent from service for a reason other than quit, discharge or
retirement and the Employee is reemployed by a Participating Employer within
12 months after his/her initial absence from service.
(iii) Except as provided in Sections 2.25(b)(i) and (ii)
hereof, the Period of Severance shall not be included in the Employee s
Period of Service and, subject to Section 2.25(c) hereof, all of an
Employee's Periods of Service shall be aggregated for purposes of the Plan.
(c) If an Employee has a Period of Severance equal to the greater of
(i) five years, or (ii) the aggregate number of years of his/her Period of
Service before such Period of Severance, then his/her prior Periods of
Service shall be disregarded for all purposes of the Plan. Otherwise an
Employee's total Period of Service shall be determined by aggregating all of
the Employee's individual Periods of Service; however, no Periods of Service
shall be included that are not required to be taken into account under Code
Section 401(a)(5).
(d) Notwithstanding any other provision of this Plan, service
performed by Employees for an Affiliated Company (or a unit or division of
such company or the Company) prior to the date as of which such entity
becomes an Affiliated Company (or a unit or division of such company or the
Company) shall not be taken into account in computing Periods of Service for
any purpose of this Plan, except to the extent and in the manner determined
by resolution of the Board of Directors.
2.26 PERIOD OF SEVERANCE. "Period of Severance" means:
(a) The period of time commencing on the earlier of (i) the date on
which an Employee quits, retires, is discharged, or dies; or (ii) the first
anniversary of the first date of a period in which an Employee remains absent
from service (with or without pay) with the Company and all Affiliated
Companies for any reason other than quit, retirement, discharge or death
(such as vacation, holiday, sickness, disability, leave of absence or
layoff), and continuing until the first day, if any, on which the Participant
completes one or more hours of service for which he/she is directly or
indirectly paid by the Company or an Affiliated Company for the performance
of duties as an Employee.
(b) In the case of an Employee who is absent from work for maternity
or paternity reasons, no Period of Severance shall commence until the second
anniversary of the first date of such leave of absence. The period between
the date of commencement of an absence for maternity or paternity reasons and
the first anniversary thereof shall be considered a Period of Service; the
period between the first and second anniversaries of the commencement of such
absence shall be considered neither a Period
8
of Service nor a Period of Severance. For purposes of this Section 2.26(b),
an absence from work for maternity or paternity reasons means an absence:
(i) by reason of pregnancy of the Employee,
(ii) by reason of the birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee
in connection with the adoption of such child by such Employee, or
(iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
2.27 PLAN. "Plan" shall mean the 20th Century Industries Pension Plan
described herein, as it may be amended from time to time.
2.28 PLAN ADMINISTRATOR. "Plan Administrator" shall mean the
administrator of the Plan within the meaning of Section 3(16)(A) of ERISA.
The Plan Administrator shall be 20th Century Industries.
2.29 PLAN YEAR. "Plan Year" shall mean the twelve (12) month period
beginning on January 1 and ending on the following December 31.
2.30 QUALIFIED ELECTION. "Qualified Election" shall mean any Participant
election relating to a waiver of the Qualified Joint and Survivor Annuity and
election of an optional form, a designation of a Beneficiary, or a consent to
an Annuity Starting Date which is prior to his/her Normal Retirement Age,
which election acknowledges the effect of such election and is made during
the applicable Election Period in accordance with the requirements of this
Section 2.30 and in the manner and form as prescribed by the Committee.
(a) To the extent required under Section 417 of the Code, no
election by a Participant shall be deemed to be a Qualified Election unless
the Spouse, if any, of the Participant consents in writing to (i) the
designation of any Beneficiary in addition to or other than the Spouse, (ii)
the specified optional form of benefit elected by the Participant (including
remaining benefits that the Beneficiary may receive), and (iii) if the
Annuity Starting Date is prior to the Participant's Normal Retirement Age and
benefits are not paid as a Qualified Joint and Survivor Annuity, the Annuity
Starting Date. The consent of the Spouse shall acknowledge the effect of such
consent and shall be witnessed by a Plan Representative or a notary public.
(b) Notwithstanding the requirement for the consent of a Spouse, if
the Participant warrants to the Committee that such written consent may not
be obtained because there is no Spouse or the Spouse cannot be located or for
any other reason as the Committee determines to be consistent with the
requirements of Section 417 of the Code, a Participant's election without
spousal consent may be deemed a Qualified Election; provided, however, that
the Committee may require the Participant in such case to produce such
evidence of the Spouse's unavailability or other circumstances as the
Committee deems to be appropriate.
(c) A Qualified Election under this provision will be valid only
with respect to the Spouse who consented to the Qualified Election, or in the
event of a Qualified Election in which the Spouse's consent has not been
obtained, with respect to a designated Spouse (e.g., that Spouse who cannot
be located).
9
(d) Any election by a Participant to change a Qualified Election
shall be subject to the spousal consent requirements of this Section 2.30.
Subject to the foregoing (relating to a change by a Participant), the consent
by a Spouse to a Qualified Election shall be irrevocable. The number of
changes in a Qualified Election by a Participant shall not be limited during
any applicable Election Period.
(e) An election by a Participant which, by reason of a failure to
obtain required spousal consent could not be given effect when made, may
later be given effect if at the relevant date the Participant has no Spouse
or is not then otherwise required to have spousal consent.
2.31 QUALIFIED JOINT AND SURVIVOR ANNUITY. "Qualified Joint and Survivor
Annuity" means an annuity for the life of the Participant with a fifty
percent (50%) survivor annuity for the life of his/her Spouse, and which is
the Actuarial Equivalent of a single life annuity for the life of the
Participant.
2.32 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. "Qualified Preretirement
Survivor Annuity" means a survivor annuity for the life of the surviving
Spouse of the Participant under which the periodic payments to the surviving
Spouse are not less than the periodic payments that would be payable under
the Qualified Joint and Survivor Annuity (or the Actuarial Equivalent
thereof) if --
(a) In the case of a Participant who dies after reaching the earlier
of Early Retirement Date or Normal Retirement Age, the Participant had
retired with an immediate Qualified Joint and Survivor Annuity on the day
before his/her death, or
(b) In the case of a Participant who dies on or before the date on
which he/she would have attained the earlier of Early Retirement Date or
Normal Retirement Age, the Participant had separated from service on the date
of death, survived to the earlier of Early Retirement Date or Normal
Retirement Age, commenced to receive payments under an immediate Qualified
Joint and Survivor Annuity at his/her earlier of Early Retirement Date or
Normal Retirement Age, and died on the day after the day on which he/she
would have attained the earlier of Early Retirement Date or Normal Retirement
Age.
2.33 RETIREMENT DATE. "Retirement Date" shall mean a Participant's Early
Retirement Date, the date he/she attains his/her Normal Retirement Age or
his/her Late Retirement Date, whichever is applicable.
2.34 SPOUSE. "Spouse" shall mean the person to whom a Participant is
married as of the date such Participant's benefits commence or, in the case
of a deceased Participant, the person to whom such deceased Participant is
married on the date of his/her death.
2.35 TOTAL AND PERMANENT DISABILITY. An individual shall be considered
to be suffering from a Total and Permanent Disability if the Committee
determines that he/she is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment. An individual's disabled status shall be determined by the
Committee, based on such evidence as the Committee determines to be
sufficient, including, but not limited to, examination at the Company's
expense by a physician of the Company s choice.
2.36 TRUST AGREEMENT. "Trust Agreement" shall mean the Agreement between
the Company and the one or more persons serving as Trustee hereunder, under
which
10
the Trustee agrees to hold, administer, and dispose of the assets of the Plan
(or any successor Trust Agreement adopted by the Company).
2.37 TRUST FUND OR TRUST. "Trust Fund" or "Trust" shall mean the assets
(contributions and income earned thereon) of the Plan held under the Trust
Agreement.
2.38 TRUSTEE. "Trustee" shall mean the person(s) or corporation (or
successor(s) thereto) who acts as Trustee as provided in the Trust Agreement
and who signifies acceptance of this responsibility as a fiduciary of the
Plan by joining in the execution of the documents creating or amending the
Trust Agreement.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY TO PARTICIPATE. Each Employee who has as of January 1,
1988 (a) completed a one (1) year Period of Service, and (b) attained age
twenty (20) shall commence participation in the Plan on January 1, 1988. Each
Employee who is not otherwise a Participant under this Plan on January 1,
1988 shall become eligible to participate in the Plan on the date he/she (a)
completes a one (1) year Period of Service, and (b) attains age twenty (20)
while an Employee.
3.2 COMMENCEMENT OF PARTICIPATION. Each eligible Employee who does not
become a Participant on January 1, 1988 shall be entitled to commence
participation in this Plan on the first day of the month following his/her
completion of the requirements set forth in Section 3.1.
3.3 ELIGIBILITY OF FORMER EMPLOYEES. A vested Participant or a
non-vested Participant, whose Period of Service cannot be disregarded under
Section 2.25(c), whose employment terminates and who is re-employed after a
Period of Severance shall be eligible to participate on his/her subsequent
Employment Commencement Date as an Employee. A re-employed former Employee
who was not previously a Participant shall become a Participant in accordance
with the requirements of Section 3.1.
ARTICLE IV
COMPANY CONTRIBUTIONS
4.1 PENSION FUND AND FUNDING AGREEMENT. The Committee will establish a
Pension Fund pursuant to one or more Funding Agreements. Any Funding
Agreement may permit a trustee or trustees to manage and operate a trust fund
and to receive, hold, invest and disburse such contributions, interest and
other income as may be necessary to carry out this Plan. The Committee will,
pursuant to such a Funding Agreement, establish the authority of such a
trustee and such other provisions as are necessary or desirable to accomplish
the purposes of such a trust. The Committee may modify any Funding Agreement
from time to time to accomplish the purposes of this Plan.
4.2 CONTRIBUTIONS. The Company intends that this Plan shall constitute a
qualified pension plan under Code Section 401, or any amendments thereto, and
all Company contributions to the Pension Fund are conditioned upon the
deductibility thereof under Code Section 404, or any amendments thereto;
provided, however, that such contributions may be returned to the Company
only in accordance with the provisions of Section 4.3.
11
4.3 IRREVOCABILITY. The Company shall have no right or title to, nor
interest in, the Company contributions made to the Pension Fund, and no part
of the Pension Fund shall revert to the Company, except that on and after the
Effective Date funds may be returned to the Company as follows:
(a) In the case of a contribution which is made by a mistake of
fact, such contribution may be returned to the Company within one (1) year
after it is made.
(b) In the case of a contribution conditioned on the deductibility
thereof under Code Section 404 (or any successor statute thereto), such
contribution may, to the extent such deduction is disallowed, be returned to
the Company within one (1) year after such disallowance.
(c) In the case of any residual assets remaining after satisfaction
of all liabilities of this Plan, a distribution may be made of such residual
assets in accordance with the provisions of Article XV.
4.4 COMPANY NOT OBLIGATED TO CONTINUE CONTRIBUTIONS.
(a) The Company contemplates making such contributions to the Fund
for the purposes of providing benefits under the Plan as shall maintain the
Pension Fund at an amount at least equal to the amount necessary to meet the
objectives of the Plan and to satisfy the minimum funding requirements of
ERISA, if any be applicable.
(b) Nothing contained in this Plan shall, at any time or under any
circumstances, be deemed to impose any obligation or liability on the Company
to make any contributions either to the Pension Fund or to any person
whatever. Except as is provided under Subtitle D of Title IV of ERISA,
neither the Company, the Committee, nor any funding agent shall be liable in
any manner if the Pension Fund shall at any time be insufficient for the
payment of any of the benefits provided for under this Plan. Such benefits
are to be payable only from the Pension Fund to the extent that it shall
suffice therefor.
(c) The Company shall not be required to make any contribution for
any year that is not deductible for income tax purposes by the Company in
such year.
4.5 EMPLOYEE CONTRIBUTIONS. No contributions from Participants shall be
required or permitted under this Plan.
ARTICLE V
RETIREMENT BENEFITS
5.1 NORMAL RETIREMENT BENEFIT.
(a) Upon retirement at his/her Normal Retirement Age, a Participant
shall be entitled to receive an annual pension which, when expressed as a
single life annuity commencing at the Participant's Normal Retirement Age, is
equal to the sum of Paragraphs (i), (ii) and (iii) as follows:
(i) One and one-fourth percent (1-1/4%) of his/her "1987
Adjusted Compensation" not in excess of $30,000 and one and three-fourths
percent (1-3/4%) of his/her "1987 Adjusted Compensation" in excess of $30,000,
12
multiplied by the number of full or partial calendar years beginning
on the Participant's Employment Commencement Date and ending on
January 1, 1988;
(ii) For the Period of Service commencing on or after
January 1, 1988, each Participant shall be entitled to receive one and
one-fourth percent (1-1/4%) of the his/her Compensation not in excess
of $30,000 and one and three-fourths percent (1-3/4%) of his/her
Compensation in excess of $30,000. The $30,000 amount will be adjusted
to reflect an annual increase of 6% effective for the Plan Years
beginning after 1988.
(iii) For each year of Period of Service beginning on the
Effective Date, each Participant shall be entitled to receive one and
one-fourth percent (1-1/4%) of his/her Compensation not in excess of
$25,200, and one and seven-tenths percent (1-7/10%) of his/her
Compensation in excess of $25,200.
(b) For purposes of this Section 5.1, "1987 Adjusted
Compensation" shall mean the Compensation received by the Participant in
1987 except that, solely for purposes of this Section 5.1(b), "bonus" shall
mean the average bonus received by the Participant for the calendar years
1985, 1986 and 1987.
5.2 POSTPONED RETIREMENT BENEFIT. If a Participant continues
his/her employment beyond his/her Normal Retirement Age, he/she defers
his/her benefits until his/her actual termination of employment. In the case
of a Participant who defers his/her benefits until his/her actual termination
of employment, such Participant shall continue to accrue benefits pursuant to
Section 5.1(b).
5.3 EARLY RETIREMENT BENEFIT.
(a) If a Participant shall, for any reason except death,
terminate after his/her Early Retirement Date but prior to his/her Normal
Retirement Age, he/she shall be entitled to receive a benefit at Normal
Retirement Age in an amount calculated pursuant to Section 5.1, based upon
his/her benefits accrued at his/her date of termination of employment.
(b) However, a Participant who, for any reason except death,
terminates on or after his/her Early Retirement Date but prior to his/her
Normal Retirement Age, may elect to have benefit payments commence prior
to his/her Normal Retirement Age on the first day of any month on or after
his/her Early Retirement Date by sending notice of such election to the
Plan Administrator. In such event, the Participant's monthly pension
otherwise payable shall be reduced 5/12ths of one percent for each month
that his/her Early Retirement Date precedes his/her Normal Retirement Age.
Such election shall be in writing, in form satisfactory to the Committee,
and accompanied by consent of the Participant's Spouse if the Committee
determines that such consent is required by Code Section 417. Unless the
provisions of Section 6.3(a) apply, the failure by a Participant to
consent to the distribution of his/her retirement benefit prior to Normal
Retirement Age shall be deemed to be an election to defer payment to Normal
Retirement Age.
5.4 SUSPENSION OF BENEFITS UPON RE-EMPLOYMENT ON OR AFTER
NORMAL RETIREMENT DATE.
(a) If any Participant or former Participant again becomes an
Employee and completes at least forty (40) Hours of Service in any month
(hereinafter "Full Time Postretirement Service") after his/her Early,
Normal or Late Retirement
13
Date, all benefit payments under this Article V shall cease. Similarly,
for a Participant who continues to be employed in Full Time Postretirement
Service after his/her Normal Retirement Date, the actuarial value of
benefits which commence later than Normal Retirement Date will be computed
without regard to amounts which would have been suspended under the
preceding sentence had the Participant been receiving benefits since his
Normal Retirement Date.
(b) If benefit payments have been suspended, payments shall
resume no later than the first day of the third calendar month after the
calendar month in which the Participant ceases to be employed in Full Time
Postretirement Service. The initial payment upon resumption shall include
the payment scheduled to occur in the calendar month when payments resume
and any amounts withheld during the period between the cessation of Full
Time Postretirement Service and the resumption of payments. Such
Participant or his Beneficiary or contingent annuitant shall be entitled
to the benefits provided under this Article, reduced by the Actuarial
Equivalent of benefits or payments paid under this Article before such
re-employment. For purposes of this Section, a Participant shall continue
to accrue benefits during the period of suspension.
(c) No benefit payment shall be withheld by the Plan pursuant
to this section unless the Plan notifies the Employee by personal delivery
or first class mail during the calendar month or payroll period in which
the Plan withholds payments that his benefits are suspended. Such
notifications shall contain a description of the specific reasons why
benefit payments are being suspended, a general description of the Plan
provision relating to the suspension of payments, a copy of such provisions,
and a statement to the effect that applicable Department of Labor
regulations may be found in Section 2530.203-3 of the Code of Federal
Regulations. In addition, the notice shall inform the Participant of the
Plan's procedures for affording a review of the suspension of benefits in
accordance with the claims procedure under this Plan.
(d) The amount of benefits suspended shall be the amount of the
Participant's accrued benefit derived from Company contributions.
ARTICLE VI
PAYMENT OF BENEFITS
6.1 COMMENCEMENT OF BENEFITS.
(a) Provided that a Participant has applied for retirement
benefits in accordance with the provisions of Article XVI, the retirement
income payable under this Plan to a retiring Participant pursuant to the
provisions of Article V shall commence on the earlier of the dates
described in Paragraphs (i) and (ii) hereinbelow (the "Required Benefit
Commencement Date"):
(i) The 60th day after the close of the Plan Year in which
the latest of the following events occurs: (A) the Participant's
Normal Retirement Age; or (B) the Participant's termination of
employment.
(ii) April 1 of the calendar year following the calendar
year in which the Participant attains age 70-1/2 without regard to
whether the Participant has terminated employment or whether or not
the Participant (and Spouse if applicable) consents to the
distribution. Notwithstanding the foregoing; if a Participant
attained age 70-1/2 before January 1, 1988 and was not a five
percent owner (as defined in Code Section 414(i) at any time
during the Plan Year ending
14
with or within the calendar year in which such Participant attained
age 66-1/2 or any subsequent Plan Year, then distribution shall
commence not later than April 1 of the calendar year in which the
Participant (i) attains age 70-1/2 or (ii) retires, whichever is
later.
To the extent permissible under Code Sections 401(a)(9) and
401(a)(14), and regulations prescribed by the Secretary of the
Treasury thereunder, if the amount of the Participant's benefit
cannot be calculated without additional information from the
Participant, or because the Committee is unable to locate the
Participant after making reasonable efforts to do so, the payment
shall be made as soon as is administratively possible (but not more
than 60 days) after the earliest date on which the Participant (or
Beneficiary) can be located and the amount of the distributable
benefit can be ascertained. In such event the retirement benefit
shall be paid retroactively to the applicable Required Benefit
Commencement Date (if earlier than the actual date of commencement
of payments).
(b) Except as provided in Section 6.6, in no event shall any
benefits be paid to a Participant prior to the Participant's Normal
Retirement Age unless the Participant makes a Qualified Election during the
applicable Election Period to commence benefits on an Early Retirement Date.
The failure of the Participant who has attained his Early Retirement Date to
make a Qualified Election to commence payment of retirement benefits on an
Early Retirement Date shall be deemed to be an election to defer payment to
his Normal Retirement Age.
(c) Notwithstanding any provision to the contrary in this Plan,
all distributions under this Plan shall be made in accordance with Section
401(a)(9) of the Code and the regulations issued thereunder, which
provisions shall override any distribution options under this Plan which
may be inconsistent with Code Section 401(a)(9). The Committee in its sole
discretion shall determine if distributions satisfy the requirements of Code
Section 401(a)(9).
6.2 FORM OF BENEFITS PROVIDED.
(a) The normal form of benefits for a Participant
who retires and who has a Spouse is a Qualified Joint and Survivor
Annuity.
(b) The normal form of benefit for a Participant who does not
have a Spouse is a single life annuity payable for the lifetime of the
Participant and ceasing upon his/her death.
(c) The Company shall provide each Participant,
within the period beginning not more than 90 days and ending not
less than 30 days prior to the commencement of benefits, with a
written explanation of: (i) the terms and conditions of a Qualified
Joint and Survivor Annuity; (ii) the Participant's right to make
and the effect of an election to waive the Qualified Joint and
Survivor form of benefit; (iii) the rights of a Participant's
Spouse; and (iv) the right to make, and the effect of, a revocation
of a previous election to waive the Qualified Joint and Survivor
Annuity. A Participant who wishes to have his/her retirement
benefit payable in a form other than the forms provided in Section
6.2(a) or (b), whether single or married, may make a Qualified
Election during the applicable Election Period to waive the
Qualified Joint and Survivor Annuity or single life annuity
(whichever may be applicable), elect any optional form of benefit
described below in Paragraph (i) or (ii), designate a Beneficiary
to receive any benefits payable after the Participant's death,
commence to receive benefits on an Early Retirement Date (if
applicable), and change any such Qualified Election. Such optional
form of retirement benefit to be paid to the Participant in
accordance with
15
any of the following shall be the Actuarial Equivalent of the benefit to
which he/she is entitled:
(i) JOINT AND SURVIVOR ANNUITY - A monthly pension payable
to and during the lifetime of the retired Participant with the
provision that after his/her death, a pension of 50% or 100% of
his/her pension shall then be paid to and during the lifetime of
his/her Beneficiary.
(ii) TEN - YEAR CERTAIN AND LIFE ANNUITY - A monthly pension
paid during the lifetime of the retired Participant with a guarantee
of a minimum of one hundred twenty (120) monthly payments to the
Participant and/or his/her Beneficiary. If the Participant's death
occurs before such guaranteed monthly payments have been made,
the Beneficiary may elect to receive the commuted value of the
balance of the guaranteed monthly payments. Upon the subsequent
death of the Beneficiary prior to the payment of the guaranteed
payments, the lump sum value of the balance of such guaranteed
payments shall be paid to the estate of the Beneficiary.
Notwithstanding anything herein to the contrary, no optional method
of payment shall be permitted which would call for the payments
under the option to extend beyond the life expectancy of the
Participant (or a period not extending beyond the life expectancy
of the Participant); or the life expectancy of the Participant and
a Beneficiary (or a period not extending beyond the life
expectancies of the Participant and the Beneficiary). Further, the
expected payments to the Participant made under this settlement
mode must be more than fifty percent (50%) of the total payments to
be made to both the Participant and the Beneficiary unless the
benefit is payable in the form of a Qualified Joint and Survivor
Annuity or the Beneficiary is the Participant's Spouse. If
distribution of a Participant's retirement benefit has begun and
the Participant dies before his/her entire benefit is distributed,
the method of distributing the remaining portion of his/her benefit
shall be at least as rapid as that in effect as of the date of
his/her death. If the Participant dies before distribution
commences, any remaining portion of the Participant's retirement
benefit that is not payable to a Beneficiary designated by the
Participant will be distributed within five (5) years after such
Participant's death, or any remaining portion of the Participant's
interest that is payable to a Beneficiary designated by the
Participant will be distributed over the life of such Beneficiary,
commencing not later than one year after the Participant's death
(or, if the designated Beneficiary is the Participant s Spouse,
distribution shall begin no earlier than the date on which the
Participant would have attained age seventy and one-half (70-1/2)).
6.3 LUMP SUM DISTRIBUTIONS.
(a) Notwithstanding the preceding provisions of this Article VI, if
the present value of the Participant's benefit (payable in either
the Qualified Joint and Survivor Annuity or in the Qualified
Preretirement Survivor Annuity) does not exceed and has never
exceeded thirty-five hundred dollars ($3,500), the benefit may be
paid in a single lump sum without the consent of the Participant
(or the Participant's Spouse). However, no such lump sum benefit
shall be paid after commencement of benefits to the Participant,
unless the Participant and his/her Spouse (or where the Participant
has died, the surviving Spouse) consent in writing to such
distribution.
(b) For purposes of this Section 6.3, the present value of a
Qualified Joint and Survivor Annuity or a Qualified Preretirement
Survivor Annuity shall be determined as of the date of distribution
by using the interest rate that would be used (as of the date of
the distribution) by the Pension Benefit Guaranty Corporation for
purposes
16
of determining the present value of a lump sum distribution upon a
termination of the Plan.
6.4 PAYMENT OF SMALL BENEFITS. Notwithstanding any provision in
this Plan for the payment of monthly benefits, if such monthly benefit is
less than two hundred dollars ($200.00) the Committee may authorize the
payment of such benefits on a quarterly, semiannual or annual basis.
6.5 FACILITY OF PAYMENT. If any payee under the Plan is a minor,
or if the Committee reasonably believes that any payee is legally incapable
of giving a valid receipt and discharge for any payment due him, the
Committee may have such payment, or any part thereof, made to the person (or
persons or institution) whom it reasonably believes is caring for or
supporting such payee, unless it has received due notice of claim therefor
from a duly appointed guardian or conservator of such payee. Any such payment
shall be a payment for the account of such payee and shall, to the extent
thereof, be a complete discharge of any liability under the Plan to such
payee.
6.6 DESIGNATION OF BENEFICIARY. Whenever a Participant may be
permitted to designate a Beneficiary to receive benefits under this Plan,
such designation shall be made by the execution and delivery to the Committee
of an instrument in a form satisfactory to the Committee. To the extent
required by Code Section 417, such designation shall be in the form of a
Qualified Election. Subject to the requirements for a Qualified Election, a
Participant shall have the right to change or revoke any such Beneficiary
designation by filing a new designation or notice of revocation with the
Committee and no notice to any Beneficiary nor consent by any Beneficiary
shall be required to effect any such change or revocation. If a deceased
Participant shall have failed properly to designate a Beneficiary, or if the
Committee shall be unable to locate a designated Beneficiary after reasonable
efforts have been made, or if for any reason such designation shall be
legally ineffective, or if such Beneficiary shall have pre-deceased the
Participant, the Participant's designated Beneficiary shall be the person or
persons in the first of the following classes then living: (a) spouse,
(b) children, (c) parents, and (d) estate of the Participant.
6.7 IN-SERVICE PAYMENT OF BENEFITS ON OR AFTER REQUIRED BENEFIT
COMMENCEMENT DATE. In the case of a Participant who is an Employee of the
Company on or after his Required Benefit Commencement Date, as defined in
Section 6.1, benefits shall be paid or commence to be paid in accordance with
this Section 6.7.
(a) If the single sum Actuarial Equivalent Value of
the Participant's retirement benefit (payable as a Qualified Joint
and Survivor Annuity) exceeds $3500 as of the Required Benefit
Commencement Date, the Participant's Annuity Starting Date shall be
the Required Benefit Commencement Date, and benefits accrued as of
such Annuity Starting Date and any subsequent accruals shall be
paid in the form determined under Section 6.2(a) or (b), or an
optional form determined under Section 6.2(c) pursuant to a
Qualified Election by the Participant during the applicable
Election Period.
(b) If the single sum Actuarial Equivalent Value of the
Participant's Vested Interest (payable as a Qualified Joint and
Survivor Annuity) does not exceed $3500 as of the Required Benefit
Commencement Date, such Participant's Annuity Starting Date shall
be the Required Benefit Commencement Date and each subsequent
December 31. If the single sum Actuarial Equivalent Value of such
Participant's retirement benefit does not exceed $3500 as of any
Annuity Starting Date coinciding with or following the Required
Benefit Commencement Date, such retirement benefit shall be paid in
a single lump sum without the consent of the Participant (or the
Participant's Spouse). If the single sum Actuarial Equivalent Value
of such Participant's
17
retirement benefit exceeds $3500 as of any subsequent Annuity
Starting Date, benefits accrued as of such Annuity Starting Date,
and any subsequent accruals, shall be paid in accordance with (a)
above.
(c) The amount of the late retirement benefit
payable to the Participant in each Plan Year including and
subsequent to the Plan Year in which occurs the Required Benefit
Commencement Date shall be calculated as provided in Section 5.2,
but shall be offset by the value of any benefit distributions made
to the Participant by the close of the prior Plan Year.
6.8 ELECTION FOR DIRECT ROLLOVER TO ELIGIBLE RETIREMENT PLAN. To
the extent required by Code Section 401(a)(31), a Participant whose
distributable benefit becomes payable in an "eligible rollover distribution,"
as defined in (a)(i) below, shall be entitled to elect a direct rollover of
all or a portion of the taxable portion of his distributable benefit to an
"eligible retirement plan," as defined in (a)(ii) below.
(a) For purposes of this Section,
(i) an "eligible rollover distribution" shall
mean any distribution of all or any portion of a Participant's
distributable benefit, except that an eligible rollover
distribution shall not include any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of
the Participant and the Participant's designated Beneficiary, or
for a specified period of ten years or more; any distribution to
the extent such distribution is required under Section 401(a)(9) of
the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities; and
(ii) an "eligible retirement plan" shall mean
any plan described in Code Section 402(c)(8)(B), the terms of which
permit the acceptance of a direct rollover from a qualified plan.
(b) A Participant's direct rollover election under
this Section shall be made in accordance with rules and procedures
established by the Committee and shall specify the percentage or
dollar amount to be rolled over, the name and address of the
eligible retirement plan selected by the Participant and such
additional information as the Committee deems necessary or
appropriate in order to implement the Participant's direct rollover
election. It shall be the Participant's responsibility to confirm
that the eligible retirement plan designated in the direct rollover
election will accept the eligible rollover distribution. The
Committee shall be entitled to effect the direct rollover based on
its reasonable reliance on information provided by the Participant,
and shall not be required to independently verify such information,
unless it is clearly reasonable to do so.
(c) At least 30 days but not more than 90 days prior
to the date a Participant's distributable benefit becomes payable
from the Plan, the Participant shall be given written notice of any
right he may have to elect a direct rollover of all or a portion of
a eligible rollover distribution; provided, however, a Participant
who attained his Normal Retirement Date or whose distributable
benefit does not exceed (and has never exceeded) $3,500 may waive
the 30 day notice requirement by making an affirmative election to
make or not to make a direct rollover.
18
(d) If a Participant fails to file a properly completed direct
rollover election with the Committee within a reasonable time after such
notice is given, or if the Committee is unable to effect the rollover
within a reasonable time after the election is filed with the Committee due
the failure of the Participant to take such actions as may be required by
the eligible retirement plan before it will accept the rollover, the
Participant's distributable benefit shall be paid to him in accordance
with the applicable provisions of this Article VI, after withholding
applicable income taxes.
(e) To the extent required by Section 401(a)(31) of the Code, if
all or a portion of a Participant's distributable benefit is payable to
his surviving Spouse in an eligible rollover distribution, or to a former
Spouse in accordance with a "qualified domestic relations order," such
surviving Spouse or former Spouse shall be entitled to elect a direct
rollover of all or a portion of such distribution in accordance with the
provisions of this Section.
ARTICLE VII
SEVERANCE BENEFITS
7.1 NORMAL SEVERANCE BENEFIT. In the event that a Participant who has
earned a vested right to his benefit as provided in Section 8.2(a) terminates
employment with the Company and all Affiliated Companies terminates for any
reason other than his/her death, disability or retirement, and at the time of
such termination such Participant has not satisfied the requirements to
retire either at his/her Normal Retirement Age or on an Early Retirement Date
a terminated Participant shall be deemed to have elected to have his/her
benefit paid pursuant to Section 6.2(a) or (b), as appropriate, commencing at
his/her Normal Retirement Age, unless a valid written election of an
alternative option is filed with the Committee.
7.2 PAYMENT BEFORE NORMAL RETIREMENT AGE. In lieu of commencing
benefits at Normal Retirement Age, a Participant whose employment terminated
prior to attaining either his/her Normal Retirement Age or Early Retirement
Date and who has satisfied the service requirement for Early Retirement may
elect to have a reduced benefit (such reduction to be determined in
accordance with Table I in Appendix I) commence on the first day of any month
following his/her fifty-fifth (55th) birthday (such commencement date to be
determined by the Participant by notice to the Plan Administrator in
accordance with rules adopted by the Plan Administrator). Such election shall
be in writing, in form satisfactory to the Committee, and accompanied by
consent of the Participant's Spouse if the Committee determines that such
consent is required by Code Section 417.
7.3 COORDINATION WITH QUALIFIED ANNUITY PROVISIONS. The foregoing
provisions of this Article VII shall be applied after first taking into
consideration and applying, to the extent they are applicable, the provisions
of Article VI which require that the retirement benefits of certain married
Participants and/or their Spouses be paid in the form of a Qualified Joint
and Survivor Annuity (unless waived pursuant to a Qualified Election).
ARTICLE VIII
VESTING
8.1 NO VESTED RIGHTS EXCEPT AS HEREIN SPECIFIED. No Participant shall
have any vested right or interest in, nor any right to payment of, any assets
of the Pension Fund except as provided in this Plan.
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8.2 VESTING IN BENEFITS.
(a) A Participant shall be one hundred percent (100%) vested in
the Plan upon the completion of five (5) one-year Periods of Service or
his/her attainment of his/her sixty-fifth (65th) birthday. A
Participant's Periods of Service completed prior to January 1, 1988 of
the Plan will be counted for purposes of determining vesting pursuant to
this Section 8.2.
(b) If the vesting schedule under the Plan is amended or if the
Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested interest, each Participant who has
completed at least three one-year Periods of Service may elect, within a
reasonable time after the adoption of the amendment, to continue to have
his/her vested interest computed under the Plan without regard to such
amendment. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the
latest of: (i) 60 days after the amendment is adopted; (ii) 60 days after
the amendment is effective; or (iii) 60 days after the Participant is
issued written notice of the amendment.
ARTICLE IX
DISABILITY PROVISIONS
9.1 DISABILITY RETIREMENT BENEFIT. If, while employed by the Company
prior to his/her Normal Retirement Age, a Participant is suffering from a
Total and Permanent Disability, such Participant shall continue to accrue
benefits in the manner set forth in Section 5.1(a); provided, that if such
Participant becomes disabled prior to the end of a Plan Year, such
Participant's benefit accrual formula for the Plan Year in which he/she
becomes disabled shall be calculated using such Participant's Compensation
for the previous Plan Year. The disabled Participant's Compensation shall not
be adjusted to reflect any change in the benefit formula pursuant to Section
5.1(a)(ii) after such Participant becomes disabled. Such Participant shall
also be entitled to receive his/her benefit upon attaining his/her Normal
Retirement Age as if he/she retired on such date.
ARTICLE X
DEATH BENEFITS
10.1 GENERAL LIMITATION ON DEATH BENEFITS. Except for retirement
benefits expressly made payable to a Spouse or other Beneficiary in
accordance with the provisions of this Article X, or in accordance with the
express provisions of a form of benefit described in Article VI under which
payments have commenced, no benefits shall be paid under this Plan by reason
of the death of a Participant.
10.2 PRE-RETIREMENT DEATH BENEFIT. The Spouse of a vested Participant
who dies before benefits commence will be entitled to a Qualified
Preretirement Survivor Annuity.
ARTICLE XI
RESTRICTIONS ON CERTAIN DISTRIBUTIONS
11.1 RESTRICTIONS ON BENEFITS AT PLAN TERMINATION FOR PLAN YEARS
BEGINNING PRIOR TO JANUARY 1, 1994. This Section 11.1 sets forth limitations
required by the Internal Revenue Service on the benefits payable to certain
Participants in the event of Plan termination in any Plan Year beginning
prior to January 1, 1994. Notwithstanding any other provision in
20
this Plan to the contrary, the restrictions contained in this Article XI
shall govern the maximum Plan benefits attributable to Company contributions
that may be paid to the Participants who are subject to the limitations
contained in this Section.
(a) The restrictions contained in this Article XI apply to
Participants (including retired Participants) who are:
(i) Among the twenty-five (25) most highly compensated
Participants on the relevant Commencement Date, and
(ii) Whose anticipated retirement benefits under the Plan
exceed one thousand five hundred dollars ($1,500) per year.
(b) "Commencement Date" for the purposes of this Article XI
shall mean the date of establishment of the Plan and the effective date
of any amendment to this Plan that substantially increases the benefits
provided under the Plan.
(c) The restrictions contained in this Article XI shall become
effective, as to the Participants described in Subsection (a), upon the
occurrence of either of the following events:
(i) Termination of the Plan within ten (10) years following a
Commencement Date; or
(ii) The benefits of a Participant described in Subsection
(a) become payable within ten (10) years after a Commencement Date
and before the Plan is terminated. In this case, the restrictions of
this Article XI shall continue to apply until the later of ten (10)
years after the Commencement Date or the date the full current costs
are met for the first time.
(d) For the purposes of this Article XI, the term "benefits"
includes any periodic income, any withdrawal values payable to a living
Employee, and the cost of any death benefits that may be payable after
retirement on behalf of an Employee, but does not include the cost of any
death benefits with respect to an Employee before retirement nor the
amount of any death benefits actually payable after the death of an
Employee whether such death occurs before or after retirement.
(e) The maximum amount of Company contributions that may be used
to provide benefits for a Participant described in Subsection (a) after the
occurrence of an event listed in Subsection (c) is the greater of:
(i) Twenty thousand dollars ($20,000.00); or
(ii) Twenty percent (20%) of the Participant's annual
compensation multiplied by the number of years between the date of
the establishment of the Plan and whichever of the following is
applicable:
(A) The date of termination of the Plan, or
(B) In the case of a Participant described in
Subsection (c)(ii), the date the benefits become payable to the
Participant.
21
(f) In the event that by reason of a Plan amendment a new
Commencement Date ("Second Commencement Date") occurs more than ten (10)
years after the immediately preceding Commencement Date ("First
Commencement Date") and the full current costs have not been paid for the
ten (10) years following the First Commencement Date, the maximum amount
of Company contributions that may be used to provide benefits for a
Participant described in Subsection (a) upon the occurrence of an event
described in Subsection (c) following the Second Commencement Date is the
greater of:
(i) Twenty Thousand Dollars ($20,000.00); or
(ii) The sum of:
(A) The Company contributions (or the funds attributable
thereto) that could have been used to provide retirement benefits to
the Participant had the Plan been discontinued on the day
immediately preceding the Second Commencement Date; and
(B) Twenty percent (20%) of the first Fifty Thousand Dollars
($50,000.00) of the Participant's annual compensation multiplied by
the number of years following the Second Commencement Date.
(g) For the purpose of this Article XI, the term "annual
compensation" shall mean the Participant's average compensation during
his/her last five (5) years of employment.
(h) The restrictions contained in this Article XI may be
exceeded: (i) for the purpose of providing current retirement income
payments (as opposed to lump sum distributions) to retired individuals
who would otherwise be subject to the restrictions, provided the full
current costs of the plan are satisfied at the time the payments are
made; (ii) in the event of the termination of the Plan, to the extent
permitted under Revenue Ruling 80-229, 1980-2 C.B. 133, as such Ruling
may be amended from time to time; and (iii) as may otherwise be permitted
pursuant to applicable regulations.
(i) If the benefits of any person shall have been suspended in
part in accordance with the restrictions contained in this Article XI and
such restrictions shall later become inapplicable, the full amount of
such benefits shall be resumed and the part of any such benefits which
shall have been suspended shall then be paid in full with such payment
actuarially increased to reflect the later commencement of benefits. The
timing of the payments shall be determined by the Committee in accordance
with any applicable Treasury Regulations.
(j) Any amounts that cannot be paid to a Participant because of
the restrictions imposed by this Article XI shall be used (to the extent
necessary) to pay the benefits due to other Participants.
(k) The provisions of this Subsection (k) shall apply if it is
determined that the Plan is covered by Section 4021(a) of ERISA.
(i) The maximum Company contributions that may be used for
the benefit of a Participant described in Subsection (a) above who
is a Substantial Owner (as defined in Section 4022(b)(5) of ERISA)
shall not exceed the greatest of:
22
(A) The dollar amount described in Subsection (e) above;
(B) A dollar amount which equals the present value of the
benefit guaranteed for the Participant under Section 4022 of ERISA;
or
(C) If the Plan has not terminated, the present value of the
benefit that would be guaranteed (if the Plan terminated on the date
the benefit commences) determined in accordance with regulations of
the Pension Benefit Guaranty Corporation ("PBGC").
(ii) In the case of a Participant other than those described in
Paragraph (i) above, the maximum Company contributions that may be used
for the benefit of the Participant shall not exceed the greater of:
(A) The dollar amount described in Subsection (e) above,
or
(B) A dollar amount which equals the present value of the
maximum benefit described in Section 4022(b)(3)(B) of ERISA
(determined on the date the Plan terminates or the date benefits
commence, whichever is earlier), determined in accordance with
regulations of PBGC, but without regard to any other limitations in
Section 4022 of ERISA.
(l) In the event that it should subsequently be determined by
statute, court decision, ruling by the Internal Revenue Service, or
otherwise, that the provisions of this Article XI, or any part thereof,
are no longer necessary to qualify the Plan under the Internal Revenue
Code, then this Article XI, or such part, shall be ineffective without
the necessity of amending the Plan.
(m) In the event the limitations of this Article XI should no
longer be needed to prevent discrimination in favor of Employees who are
officers, shareholders, or highly compensated, these limitations shall no
longer apply.
(n) In the event that the limits on the maximum benefit payable
to a Participant subject to the restrictions of this Article XI become
capable of being raised, by reason of an amendment to the Income Tax
Regulations or otherwise, the limits of this Section shall be automatically
raised to the maximum amount permissible, without the necessity of an
amendment to the Plan.
11.2 RESTRICTIONS ON BENEFITS AT PLAN TERMINATION FOR PLAN YEARS
BEGINNING ON OR AFTER JANUARY 1, 1994. In the event the Plan is terminated in
any Plan Year beginning on or after January 1, 1994, the benefit of any
Highly Compensated Employee (and any Highly Compensated former Employee)
shall be limited to a benefit that is nondiscriminatory under Section
401(a)(4) of the Code and shall be determined in accordance with this Section
11.2.
(a) In the event of a Plan termination, the annual payments to a
Participant described in Section 11.2(b) below shall be restricted to an
amount equal to the payments that would be made on behalf of the Participant
under a single life annuity that is the Actuarial Equivalent of the sum of
the Participant's accrued benefit and any other benefits available to
23
the Participant under the Plan. The restrictions in this Subsection (a) shall
not apply, however, if:
(i) After payment to a Participant described in Section
11.2(c) below of all benefits described in Subsection 11.2(b)
below, the value of Plan assets equals or exceeds one hundred
ten percent (110%) of the value of current Plan liabilities, as
defined in Section 412(1)(7) of the Code, or
(ii) The value of the benefits described in Subsection
11.2(b) below for a Participant described in Subsection 11.2(c)
below is less than one percent (1%) of the value of current
Plan liabilities.
For purposes of applying the limitations of this Section 11.2, Participants
whose benefits are restricted on distribution include all Highly Compensated
Employees and Highly Compensated former Employees; provided, however, in any
Plan Year, the total number of Participants whose benefits are subject to
restriction under this Article XI shall be limited by the Plan to the group
of twenty-five (25) Highly Compensated Employees and Highly Compensated
former Employees consisting of those Highly Compensated Employees and Highly
Compensated former Employees with the greatest Compensation.
(b) For purposes of applying the limitations of this Section 11.2,
the term "benefit" includes loans in excess of the amounts set forth in
Section 72(p)(2)(A), any periodic income, any withdrawal values payable to a
living employee, and any death benefits not provided for by insurance on the
Participant's life.
ARTICLE XII
OPERATION AND ADMINISTRATION OF THE PLAN
12.1 PLAN ADMINISTRATION.
(a) Authority to control and manage the operation and
administration of the Plan shall be vested in the Committee as provided
in this Article XII.
(b) The members of the Committee (the number of which shall
be determined by the Board of Directors) shall be appointed by the Board
of Directors and shall hold office until resignation, death or removal by
the Board of Directors. Members of the Committee may, but need not, be
appointed by appropriate designation of a Committee heretofore
constituted pursuant to the provisions of another employee benefit plan
maintained by the Company.
(c) For purposes of ERISA Section 402(a), the members of
the Committee shall be the Named Fiduciaries of this Plan.
(d) Notwithstanding the foregoing, a Trustee with whom Plan
assets have been placed in trust or an Investment Manager appointed
pursuant to Section 12.3 may be granted exclusive authority and
discretion to manage and control all or any portion of the assets of the
Plan.
12.2 COMMITTEE POWERS. The Committee shall have all powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any powers and authority conferred on the
Committee elsewhere in the Plan or by law, the Committee
24
shall have, by way of illustration but not by way of limitation, the
following powers and authority:
(a) To allocate fiduciary responsibilities (other than trustee
responsibilities) among the Named Fiduciaries and to designate one or
more other persons to carry out fiduciary responsibilities (other than
trustee responsibilities). However, no allocation or delegation under
this Section 12.2(a) shall be effective until the person or persons to
whom the responsibilities have been allocated or delegated agree to
assume the responsibilities. The term "trustee responsibilities" as used
herein shall have the meaning set forth in Section 405(c) of ERISA. The
preceding provisions of this Section 12.2(a) shall not limit the
authority of the Committee to appoint one or more Investment Managers in
accordance with Section 12.3.
(b) To designate agents to carry out responsibilities relating
to the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical, accounting,
clerical and other assistance as it may deem appropriate in carrying out
the provisions of this Plan, including one or more persons to render
advice with regard to any responsibility any Named Fiduciary or any other
fiduciary may have under the Plan.
(d) To establish rules and regulations from time to time for the
conduct of the Committee's business and the administration and
effectuation of this Plan.
(e) To administer, interpret, construe and apply this Plan and
to decide all questions which may arise or which may be raised under this
Plan, by any Employee, Participant, former Participant, Beneficiary or
other person whatsoever, including but not limited to all questions
relating to eligibility to participate in the Plan, the amount of service
of any Participant, and the amount of benefits to which any Participant
or his/her Beneficiary may be entitled.
(f) To determine the manner in which the assets of this Plan, or
any part thereof, shall be disbursed.
(g) To direct the Trustee, in writing, from time to time, to
invest and reinvest the Trust Fund, or any part thereof, or to purchase,
exchange, or lease any property, real or personal, which the Committee
may designate. This shall include the right to direct the investment of
all or any part of the Trust in any one security or any one type of
securities permitted hereunder. Among the securities which the Committee
may direct the Trustee to purchase are "employer securities" as defined
in Code Section 409A(l) or any successor statute thereto.
(h) To perform or cause to be performed such further acts as it
may deem to be necessary, appropriate or convenient in the efficient
administration of the Plan.
Any action taken in good faith by the Committee in the exercise of
authority conferred upon it by this Plan shall be conclusive and binding upon
the Participants and their Beneficiaries. All discretionary powers conferred
upon the Committee shall be absolute. However, all discretionary powers shall
be exercised in a uniform and nondiscriminatory manner.
25
12.3 INVESTMENT MANAGER.
(a) The Committee, by action reflected in the minutes thereof, may
appoint one or more Investment Managers, as defined in Section 3(38) of
ERISA, to manage all or a portion of the assets of the Plan.
(b) An Investment Manager shall discharge its duties in accordance
with applicable law and in particular in accordance with Section 404(a)(1) of
ERISA.
(c) An Investment Manager, when appointed, shall have full power to
manage the assets of the Plan for which it has responsibility, and neither
the Company nor the Committee shall thereafter have any responsibility for
the management of those assets.
12.4 PERIODIC REVIEW.
(a) At periodic intervals, not less frequently than annually, the
Committee shall review the long-run and short-run financial needs of the Plan
and shall determine a funding policy for the Plan consistent with the
objectives of the Plan and the minimum funding standards of ERISA, if
applicable. In determining the funding policy the Committee shall take into
account, at a minimum, not only the long-term investment objectives of the
Trust Fund consistent with the prudent management of the assets thereof, but
also the short-run needs of the Plan to pay benefits.
(b) All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefor, shall be fully reflected
in the minutes of the Committee.
12.5 COMMITTEE PROCEDURE.
(a) A majority of the members of the Committee as constituted 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 Committee.
(b) The Committee may designate certain of its members as
authorized to execute any document or documents on behalf of the Committee,
in which event the Committee shall notify the Trustee of this action and the
name or names of the designated members. The Trustee, Company, Participants,
Beneficiaries, and any other party dealing with the Committee may accept and
rely upon any document executed by the designated members as representing
action by the Committee until the Committee shall file with the Trustee a
written revocation of the authorization of the designated members.
12.6 COMPENSATION OF COMMITTEE.
(a) Members of the Committee shall serve without compensation
unless the Board of Directors shall otherwise determine. However, in no event
shall any member of the Committee who is an Employee receive compensation
from the Plan for his/her services as a member of the Committee.
(b) All members shall be reimbursed for any necessary or
appropriate expenditures incurred in the discharge of duties as members of
the Committee.
26
(c) The compensation or fees, as the case may be, of all officers,
agents, counsel, the Trustee, or other persons retained or employed by the
Committee shall be fixed by the Committee.
12.7 RESIGNATION AND REMOVAL OF MEMBERS. Any member of the 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 Committee
may, at any time, be removed by the Board of Directors.
12.8 APPOINTMENT OF SUCCESSORS.
(a) Upon the death, resignation, or removal of any Committee
member, the Board of Directors may appoint a successor.
(b) Notice of appointment of a successor member shall be given by
the Secretary of the Company in writing to the Trustee and to the members of
the Committee.
(c) Upon termination, for any reason, of a Committee member's
status as a member of the Committee, the member's status as a Named Fiduciary
shall concurrently be terminated, and upon the appointment of a successor
Committee member the successor shall assume the status of a Named Fiduciary
as provided in Section 12.1.
12.9 RECORDS.
(a) The 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 for the administration
of the Plan and to properly reflect the affairs thereof.
(b) However, nothing in this Section 12.9 shall require the
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 relieve the Plan Administrator from such
responsibility.
12.10 RELIANCE UPON DOCUMENTS AND OPINIONS.
(a) The members of the Committee, the Board of Directors, the
Company and any person delegated under the provisions hereof to carry out any
fiduciary responsibilities under the Plan ("delegated fiduciary") shall be
entitled to rely upon any tables, valuations, computations, estimates,
certificates and reports furnished by any consultant, or firm or corporation
which employs one or more consultants, upon any opinions furnished by legal
counsel, and upon any reports furnished by the Trustee. The members of the
Committee, the Board of Directors, the Company and any delegated fiduciary
shall be fully protected and shall not be liable in any manner whatsoever for
anything done or action taken or suffered in reliance upon any such
consultant or firm or corporation which employs one or more consultants,
Trustee, or counsel.
(b) Any and all such things done or actions taken or suffered by
the Committee, the Board of Directors, the Company and any delegated
fiduciary shall be conclusive and binding on all Employees, Participants,
Beneficiaries, and any other persons whomsoever, except as otherwise provided
by law.
27
(c) The Committee and any delegated fiduciary may, but are not
required to, rely upon all records of the Company with respect to any matter
or thing whatsoever, and may likewise treat those records as conclusive with
respect to all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law.
12.11 REQUIREMENT OF PROOF. The Committee or the Company may require
satisfactory proof of any matter under this Plan from or with respect to any
Employee, Participant, or Beneficiary, and no person shall acquire any rights
or be entitled to receive any benefits under this Plan until the required
proof shall be furnished.
12.12 RELIANCE ON COMMITTEE MEMORANDUM. Any person dealing with the
Committee may rely on and shall be fully protected in relying on a
certificate or memorandum in writing signed by any Committee member or other
person so authorized, or by the majority of the members of the Committee, as
constituted as of the date of the certificate or memorandum, as evidence of
any action taken or resolution adopted by the Committee.
12.13 MULTIPLE FIDUCIARY CAPACITY. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
12.14 LIMITATION ON LIABILITY.
(a) Except as provided in Part 4 of Title I of ERISA, no person
shall be subject to any liability with respect to his/her duties under the
Plan unless he/she acts fraudulently or in bad faith.
(b) No person shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any other fiduciary or
any person to whom fiduciary responsibilities have been allocated or
delegated, except as provided in Part 4 of Title I of ERISA.
(c) No action or responsibility shall be deemed to be a fiduciary
action or responsibility except to the extent required by ERISA.
12.15 INDEMNIFICATION.
(a) To the extent permitted by law, the Company shall indemnify
each member of the Board of Directors and the Committee, and any other
Employee of the Company with duties under the Plan, against expenses
(including any amount paid in settlement) reasonably incurred by him/her in
connection with any claims against him/her by reason of his/her conduct in
the performance of his/her duties under the Plan, except in relation to
matters as to which he/she acted fraudulently or in bad faith in the
performance of such duties. The preceding right of indemnification shall pass
to the estate of such a person.
(b) The preceding right of indemnification shall be in addition to
any other right to which the Board member or Committee member or other person
may be entitled as a matter of law or otherwise.
12.16 BONDING.
(a) Except as is prescribed by the Board of Directors, as provided
in Section 412 of ERISA, or as may be required under any other applicable
law, no bond
28
or other security shall be required by any member of the Committee, or any
other fiduciary under this Plan.
(b) Notwithstanding the foregoing, for purposes of satisfying its
indemnity obligations under Section 12.15, the Company may (but need not)
purchase and pay premiums for one or more policies of insurance. However,
this insurance shall not release the Company of its liability under the
indemnification provisions.
12.17 PROHIBITION AGAINST CERTAIN ACTIONS.
(a) To the extent prohibited by law, in administering this Plan the
Committee shall not discriminate in favor of any class of Employees and
particularly it shall not discriminate in favor of highly compensated
Employees (within the meaning of Code Section 414(q)).
(b) The Committee shall not cause the Plan to engage in any
transaction that constitutes a nonexempt prohibited transaction under Section
4975(c) of the Code or Section 406(a) of ERISA.
(c) All individuals who are fiduciaries with respect to the Plan
(as defined in Section 3(21) of ERISA) shall discharge their fiduciary duties
in accordance with applicable law, and in particular, in accordance with the
standards of conduct contained in Section 404 of ERISA.
12.18 PLAN EXPENSES. All expenses incurred in the establishment,
administration and operation of the Plan, including but not limited to the
expenses incurred by the members of the Committee in exercising their duties,
shall be charged to the Trust Fund, but shall be paid by the Company if not
paid by the Trust Fund.
ARTICLE XIII
PLAN AMENDMENTS
13.1 AMENDMENTS. The Board of Directors may at any time, and from time
to time, amend the Plan and any Funding Agreement by an instrument in writing
executed in the name of 20th Century Industries by an officer(s) duly
authorized to execute the instrument and filed with the Trustee. No such
amendment, however, shall be made at any time, the effect of which would be:
(a) To cause any assets of the Plan, at any time prior to the
satisfaction of all liabilities with respect to Participants and their
Beneficiaries, to be used for or diverted to purposes other than providing
benefits to Participants and their Beneficiaries, and defraying reasonable
expenses of administering the Plan, except as otherwise permitted by law;
(b) To increase the responsibilities or liabilities of the Trustees
without their written consent; or
(c) To decrease a Participant's accrued benefit (within the meaning
of Section 411(d)(6) of the Code) with respect to service performed prior to
the effective date of the amendment.
For purposes of this provision, an amendment shall be treated as
reducing accrued benefits if it (1) unfavorably changes the actuarial basis
for determining
29
benefits, (2) reduces or eliminates an early retirement benefit or
retirement-type subsidy, or (3) eliminates an optional form of benefit with
respect to benefits attributable to service performed before the amendment
became effective. However, the restriction on affecting retirement-type
subsidies applies only with respect to Participants who satisfy (either
before or after the amendment) the preamendment conditions for entitlement to
the subsidy. For purposes of this provision, a "retirement-type subsidy"
shall have the meaning ascribed to such terms by Section 411(d)(6) of the
Code.
(d) No amendment shall adversely change the vesting schedule with
respect to the future accrual of benefits for any Participant unless each
Participant with five (5) or more one-year Periods of Service is permitted to
elect to have the vesting schedule which was in effect before the amendment
used to determine his/her vested benefit.
13.2 RETROACTIVE AMENDMENTS. Notwithstanding any provisions of this
Article XIII to the contrary, to the extent allowable under applicable law
the Plan may be amended prospectively or retroactively (as provided in
Section 401(b) of the Code as amended by Section 1023 of ERISA) to make the
Plan conform to any provision of ERISA, the Code provisions dealing with
employees' trusts, or any regulation under either of such statutes.
ARTICLE XIV
MERGER OF COMPANY; MERGER OF PLAN
14.1 EFFECT OF REORGANIZATION OR TRANSFER OF ASSETS. In the event of a
consolidation, merger, sale, liquidation, or other transfer of the operating
assets of the Company to any other company, the ultimate successor or
successors to the business of the Company shall automatically be deemed to
have elected to continue this Plan in full force and effect in the same
manner as if the Plan had been adopted by resolution of its board of
directors unless the successor(s), by resolution of its board of directors,
shall elect not to so continue this Plan in effect, in which case the Plan
shall automatically be deemed terminated as of the applicable effective date
set forth in the board resolution.
14.2 MERGER RESTRICTION. Notwithstanding any other provision in this
Article, this Plan shall not in whole or in part merge or consolidate with,
or transfer its assets or liabilities to, any other plan unless each affected
Participant in this Plan would receive a benefit immediately after the
merger, consolidation, or transfer (if the Plan then terminated) which is
equal to or greater than the benefit he/she would have been entitled to
receive immediately before the merger, consolidation, or transfer (if the
Plan had then terminated).
ARTICLE XV
PLAN TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS
15.1 PLAN TERMINATION.
(a) (i) Subject to the following provisions of this Section 15.1,
20th Century Industries may terminate the Plan and the Trust Agreement at any
time by an instrument in writing executed in the name of 20th Century
Industries by an officer or officers duly authorized to execute such an
instrument, and delivered to the Trustee.
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(ii) The Plan and Trust Agreement may terminate if 20th
Century Industries merges into any other corporation, if as the result of the
merger the entity of 20th Century Industries ceases, and the Plan is
terminated pursuant to the rules of Section 14.1.
(b) Upon and after the effective date of the termination, the
Company shall not make any further contributions under the Plan and no
contributions need be made by the Company applicable to the Plan Year in
which the termination occurs, except as may otherwise be required by law.
(c) The rights of all affected Participants to benefits accrued to
the date of termination of the Plan, to the extent funded as of the date of
termination, shall automatically become fully vested as of that date.
15.2 DISCONTINUANCE OF CONTRIBUTIONS.
(a) In the event the Company decides it is impossible or
inadvisable for business reasons to continue to make Company contributions
under the Plan, the Board of Directors may discontinue contributions to the
Plan. Upon and after the effective date of this discontinuance, the Company
shall not make any further Company contributions under the Plan and no
Company contributions need be made by the Company with respect to the Plan
Year in which the discontinuance occurs, except as may otherwise be required
by law.
(b) The discontinuance of Company contributions on the part of the
Company shall not terminate the Plan as to the funds and assets then held by
the Trustee, or operate to accelerate any payments of distributions to or for
the benefit of Participants or Beneficiaries, and the Trustee shall continue
to administer the Trust Fund in accordance with the provisions of the Plan
until all of the obligations under the Plan shall have been discharged and
satisfied.
(c) However, if this discontinuance of Company contributions shall
cause the Plan to lose its status as a qualified plan under Code Section
401(a), the Plan shall be terminated in accordance with the provisions of
this Article XV.
(d) On and after the effective date of a discontinuance of Company
contributions, the rights of all affected Participants to benefits accrued to
that date, to the extent funded as of that date, shall automatically become
fully vested as of that date.
15.3 RIGHTS OF PARTICIPANTS. In the event of the termination of the
Plan, for any cause whatsoever, all assets of the Plan, after payment of
expenses, shall be used for the exclusive benefit of Participants and their
Beneficiaries and no part thereof shall be returned to the Company, except as
provided in Section 4.3 of this Plan.
15.4 ALLOCATION AND PAYMENT PRIORITY. Upon termination of the Plan, the
assets of the Plan, to the extent that they are sufficient after the payment
of liabilities and expenses and reasonable reserves for expenses and
liabilities (absolute or contingent) of the funding agents, shall be
allocated for the purpose of paying benefits to Participants in the following
order of precedence:
(a) First, in payment of all benefits of Participants or their
Beneficiaries provided for under this Plan which (i) were in pay status as of
the beginning of the three (3) year period ending on the Plan Termination
Date or (ii) would have been in pay status as of the beginning of such three
(3) year period if the
31
Participant had retired prior to the beginning of the three (3) year period
and if his/her benefits had commenced as of the beginning of such period;
provided, however, that the amount of benefits entitled to priority under
this Section 15.4(a) shall be the lowest amount payable under the provisions
of the Plan in effect at any time during the five (5) year period ending on
the Plan Termination Date; and provided further, that for the purposes of (i)
above, the lowest benefit in pay status during said three (3) year period
prior to the Plan Termination Date shall be considered the benefit in pay
status for such period.
(b) Second, in payment of all benefits provided for under the Plan
which (i) are guaranteed under Title IV of ERISA, or (ii) would be so
guaranteed if the provisions of Sections 4022(b)(5) and 4022(b)(6) of ERISA
were not applicable.
(c) Third, in payment of all benefits provided for under the Plan
which were vested and nonforfeitable on the Plan Termination Date, but
excluding those benefits which became vested and nonforfeitable solely by
reason of the termination of the Plan.
(d) Fourth, to all other benefits under the Plan.
(e) Fifth, to return to the Company any assets remaining after the
satisfaction of all liabilities for benefits under the Plan to Participants
and their Beneficiaries.
The assets of the Plan shall be used to provide benefits under the above
subsections in the order in which they appear before any benefits are
provided under the following subsection. Should the assets be insufficient to
provide full benefits under any subsection in the order of precedence, the
benefit for each Participant in the group for which the assets are
insufficient shall be reduced in the proportion that the available assets
bear to the present value of the full benefits for all Participants in the
group; provided, however, that with respect to Section 15.4(c) above, if any
such proration is necessary the assets available shall first be used to
provide benefits based upon the Plan as in effect five (5) years prior to the
Plan Termination Date, and if the assets available are insufficient to
provide in full for such benefits, then the benefits based upon the most
recent Plan amendment under which the assets available are sufficient to
satisfy in full the benefits provided thereby shall be used, with the
remaining assets prorated on the basis of the benefits provided under the
terms of the next most recent Plan amendment. The interpretation and
application of this Section 15.4 shall be in conformity with any regulations
issued under Section 4044 of ERISA by the Secretary of Labor.
15.5 CONTINUATION OF THE FUNDING AGREEMENTS, ETC. The allocation and
provision for the benefits described in Sections 15.4(a) through (d),
inclusive, shall be accomplished through either continuance of the Funding
Agreements, the creation of new Funding Agreements, or the purchase of
annuity contracts; provided, however, that the Committee, upon finding that
it is not practicable or desirable under the circumstances to do any of the
foregoing with respect to one or more of the groups listed in Section 15.4,
may, with the consent of the Board of Directors, provide some other means,
including cash payments, but no change shall be effected in the order of
precedence and the basis of allocation established therein.
15.6 PLAN TERMINATION DATE. The Plan Termination Date, as used in this
Article XV, shall be:
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(a) The date established by the Committee and agreed to by the
Pension Benefit Guaranty Corporation, if the Plan is terminated in accordance
with Section 4041 of ERISA;
(b) The date established by the Pension Benefit Guaranty
Corporation and agreed to by the Committee, if the Plan is terminated by the
Pension Benefit Guaranty Corporation in accordance with Section 4042 of
ERISA; or
(c) The date established by a court of competent jurisdiction if
the Plan is terminated in accordance with either of the foregoing sections of
ERISA but no agreement is reached between the Committee and the Pension
Benefit Guaranty Corporation or a judicially appointed trustee.
15.7 PARTIAL TERMINATION.
(a) In the event of a partial termination of the Plan within the
meaning of Code Section 411(d)(3), the interests of affected Participants in
the Trust Fund, as of the date of the partial termination, shall become
nonforfeitable as of that date.
(b) That portion of the assets of the Plan affected by the partial
termination shall be used exclusively for the benefit of the affected
Participants and their Beneficiaries, and no part thereof shall otherwise be
applied.
(c) With respect to Plan assets and Participants affected by a
partial termination, the Committee and the Trustee shall follow the same
procedures and take the same actions prescribed in this Article XV in the
case of a total termination of the Plan.
15.8 FAILURE TO CONTRIBUTE. The failure of the Company to contribute to
the Trust in any year, if contributions are not required under the Plan for
that year, shall not constitute a complete discontinuance of contributions to
the Plan.
ARTICLE XVI
APPLICATION FOR BENEFITS
16.1 APPLICATION FOR BENEFITS. The Committee may require any person
claiming benefits under the Plan to submit an application therefor, together
with such documents and information as the Committee may require. In the case
of any person suffering from a disability which prevents the claimant from
making personal application for benefits, the Committee may, in its
discretion, permit another person acting on his/her behalf to submit the
application.
16.2 ACTION ON APPLICATION.
(a) Within ninety (90) days following receipt of an application and
all necessary documents and information, the Committee's authorized delegate
reviewing the claim shall furnish the claimant with written notice of the
decision rendered with respect to the application.
(b) In the case of a denial of the claimant's application, the
written notice shall set forth:
33
(i) The specific reasons for the denial, with reference to the
Plan provisions upon which the denial is based;
(ii) A description of any additional information or material
necessary for perfection of the application (together with an explanation why
the material or information is necessary); and
(iii) An explanation of the Plan's claim review procedure.
(c) A claimant who wishes to contest the denial of his/her
application for benefits or to contest the amount of benefits payable to
him/her shall follow the procedures for an appeal of benefits as set forth in
Section 16.3 below, and shall exhaust such administrative procedures prior to
seeking any other form of relief.
16.3 APPEALS.
(a) (i) A claimant who does not agree with the decision rendered
with respect to his/her application may appeal the decision to the Committee.
(ii) The appeal shall be made, in writing, within sixty-five
(65) days after the date of notice of the decision with respect to the
application.
(iii) If the application has neither been approved nor denied
within the ninety (90) day period provided in Section 16.2 above, then the
appeal shall be made within sixty-five (65) days after the expiration of the
ninety (90) day period.
(b) The claimant may request that his/her application be given full
and fair review by the Committee. The claimant may review all pertinent
documents and submit issues and comments in writing in connection with the
appeal.
(c) The decision of the Committee shall be made promptly, and not
later than sixty (60) days after the Committee's receipt of a request for
review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible,
but not later than one hundred twenty (120) days after receipt of a request
for review.
(d) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant with specific reference to the pertinent Plan
provisions upon which the decision is based.
ARTICLE XVII
LIMITATION ON BENEFITS
17.1 BASIC LIMITATION.
(a) Notwithstanding anything to the contrary contained in this
Plan, and subject to the adjustments set forth below in this Article, the
maximum annual amount of retirement income payable to a Participant under
this Plan (the "Defined Benefit Dollar Limitation") shall not exceed the
lesser of:
34
(i) The Specific Dollar Limitation (as defined hereinbelow); or
(ii) 100% of the Participant's average compensation for the
three consecutive calendar years during which he had the greatest aggregate
compensation.
As used herein the term "Specific Dollar Limitation" shall mean
$90,000.
(b) In determining a Participant's Compensation (as defined in
Section 2.9(b)) for any Limitation Year, there shall be taken into account
only the compensation that is actually paid to or includable in the gross
income of the Participant during such Limitation Year. In all cases this
Subsection (b) shall be interpreted and applied in compliance with the
provisions of Treasury Regulations Section 1.415-2(d) or any successor
thereto.
(c) For purposes of applying the limitations of this Article, a
Limitation Year corresponding to the Plan Year has been adopted. The Specific
Dollar Limitation referred to in Subsection (a)(i) shall be adjusted annually
for increases in the cost of living which are authorized under Code Section
415, effective as of January 1 of the year for which the adjustment is made,
with such adjustment to apply to the Limitation Year ending with or within
the calendar year of adjustment.
17.2 ANNUAL ADDITIONS. The term "Annual Additions" means, for any
Limitation Year, the sum of the following amounts credited to a Participant:
(a) The amount credited to the Participant's accounts under all
defined contribution plans from contributions by the Company or an Affiliated
Company (including amounts deferred under a cash or deferred arrangement
under Section 401(k) of the Code);
(b) The Participant's contributions to such plans;
(c) Forfeitures; and
(d) Amounts described in Sections 415(l)(1) and 419A(d)(2) of the
Code.
17.3 MEMBERSHIP IN OTHER DEFINED BENEFIT PLANS. The limitations of this
Article with respect to any Participant who at any time is or has been a
participant in any other defined benefit plan, as defined in Section 414(j)
of the Code (whether or not the plan has been terminated), maintained by the
Company or an Affiliated Company shall be applied as if the total benefits
payable under all such defined benefit plans in which the Participant has
been a participant were payable from one plan.
17.4 MEMBERSHIP IN DEFINED CONTRIBUTION PLANS. If a Participant in this
Plan is or was also a participant in a defined contribution plan, as defined
in Section 414(i) of the Code (whether or not the plan has been terminated),
to which contributions are made by the Company or an Affiliated Company
(whether or not the plan has been terminated), then in addition to the
Defined Benefit Dollar Limitation contained in Section 17.1 of this Plan, the
"Combined Plan Fraction" shall not exceed 1.0.
(a) The provisions of this Section 17.4 shall apply to any
Participant (herein a "Combined Plan Participant") in this Plan who is or was
also a participant in a
35
defined contribution plan, as defined in Section 414(i) of the Code, to which
contributions are or were made by the Company or an Affiliated Company
(whether or not the plan has been terminated). In addition to the limitation
contained in Section 17.1 of this Plan, for any Limitation Year the Combined
Plan Fraction for any Combined Plan Participant shall not exceed 1.0. As used
herein the term Combined Plan Fraction means, with respect to any Combined
Plan Participant, a fraction equal to the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction for such Participant. In
all cases the calculation of such Combined Plan Fraction shall be made in
accordance with the provisions of Code Section 415(e) and the following rules
of this Section.
(b) "Defined Contribution Plan Fraction" means a fraction
determined in accordance with the provisions of Code Section 415(e) and the
following rules with respect to the combined participation by a Participant
in all defined contribution plans of the Company and all Affiliated Companies:
(i) The numerator of such fraction is the sum (as determined
as of the end of the applicable Limitation Year) of all "Annual Additions" to
the Participant's accounts under all such plans for all of his years of
participation in such plans.
(ii) The denominator of the fraction is the sum of the lesser
of the following amounts determined separately with respect to each
Limitation Year and each year of service:
(A) The product of 1.25 multiplied by the dollar
limitation under Code Section 415(c)(1)(A) (determined without regard to
Subsection (c)(6) thereof) in effect for the applicable Limitation Year; or
(B) The product of 1.4 multiplied by an amount equal to
the percentage of compensation limitation under Code Section 415(c)(l)(B) (or
Subsection (c)(7) thereof, if applicable) that applies with respect to the
Participant for the applicable Limitation Year.
(iii) Solely in the case of a defined contribution plan in
existence on July 1, 1982, at the election of the Plan Administrator, in
applying the above rules with respect to any year ending after December 31,
1982, the denominator with respect to each Participant for all years ending
before January 1, 1983, shall be an amount equal to the product of the
denominator for the year ending in 1982 (determined using the rules in effect
under Code Section 415(e)(3)(B) at that time) multiplied by the "Transition
Fraction." The "Transition Fraction" is a fraction the numerator of which is
the lesser of $51,875, or 1.4 multiplied by 25% of the compensation of the
Participant for the year ending in 1981, and the denominator of which is the
lesser of $41,500, or 25% of the compensation of the Participant for the year
ending in 1981.
(c) "Defined Benefit Plan Fraction" means a fraction determined in
accordance with the provisions of Code Section 415(e) and the following rules
with respect to the combined participation by a Participant in all defined
benefit plans of the Company and all Affiliated Companies:
36
(i) The numerator of such fraction is the projected annual
benefit of the Participant under all such plans (determined as of the
close of the applicable Limitation Year). For purposes of this
Paragraph, a Participant's projected annual benefit shall be
determined in accordance with Treasury Regulations Section
1.415-7(b)(3).
(ii) The denominator of such fraction is the lesser of (A) the
product of 1.25 multiplied by the dollar limitation under Code
Section 415(b)(l)(A) for the applicable Limitation Year; or (B) the
product of 1.4 multiplied by the percentage of compensation
limitation under Code Section 415(b)(1)(3) with respect to the
Participant for the applicable Limitation Year.
(d) In the case of any Combined Plan Participant with respect to whom
the Combined Plan Fraction for any Limitation Year would exceed 1.0, the
following corrective action shall be taken:
(i) First, the Committee or Plan Administrator shall make such
elections under Code Section 415 as may be available (if any) which
would allow the Plan to satisfy the Combined Plan Fraction
requirements of Code Section 415(e) without causing any reduction in
the benefits of participants under this Plan or any defined
contribution plan included in the calculation of the Combined Plan
Fraction (herein an "Included Defined Contribution Plan").
(ii) Second, to the maximum extent permissible under the
applicable provisions of Code Sections 401 through 415, the benefits
payable with respect to such Combined Plan Participant under the
Included Defined Benefit Plans shall be reduced or otherwise adjusted
so as to allow the Combined Plan Participant to satisfy the Combined
Plan Fraction requirements of Code Section 415(e) for the applicable
Limitation Year.
(iii) After reducing or otherwise adjusting the benefits under
Included Defined Contribution Plans to the maximum permissible extent
as provided under Paragraph (ii) above, to the extent necessary to
achieve compliance with the Combined Plan Fraction requirements of
Code Section 415(e) the Committee shall then implement reductions in
the Accrued Benefits otherwise payable under this Plan to such
Combined Plan Participant.
17.5 ADJUSTMENTS IN THE LIMITATION. In applying the Defined Benefit
Dollar Limitation on the maximum amount of annual retirement income permitted
under Section 17.1 above, the following special rules and adjustments shall be
applied:
(a) The Defined Benefit Dollar Limitation shall only apply to
benefits attributable to Company contributions, and any benefits payable
at any time under this Plan attributable to Participant contributions
shall be paid in addition to the maximum permitted benefit attributable to
Company contributions (subject, however, to applicable limitations under
Code Section 415 upon the payment of benefits attributable to employee
contributions under a defined benefit plan).
(b) If the retirement benefit of a Participant commences before the
Participant's Social Security Retirement Age, the Defined Benefit Dollar
Limitation shall be adjusted so that it is the actuarial equivalent of an
annual benefit of $90,000, multiplied by the Adjustment Factor, as
prescribed by the Secretary of the Treasury,
37
beginning at the Social Security Retirement Age. The adjustment provided
for in the preceding sentence shall be made as follows:
(i) in the case of a Participant whose Social Security
Retirement Age is age sixty-five (65), the Specific Dollar Limitation
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),
(ii) in the case of a Participant whose Social Security
Retirement Age is greater than age sixty-five (65), the Specific
Dollar Limitation shall be reduced 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)) by which benefits commence before the
month in which the Participant attains Social Security Retirement
Age, and
(iii) if the benefit begins before age sixty-two (62), the
benefit must be limited to the Actuarial Equivalent of the
Participant's Specific Dollar Limitation for benefits commencing at
age sixty-two (62), with the reduced dollar limitation for such
benefits further reduced for each month by which benefits commence
before the month in which the Participant attains age sixty-two (62).
(c) If the retirement benefit of a Participant commences after the
Participant's Social Security Retirement Age, the Defined Benefit Dollar
Limitation shall be adjusted so that it is the actuarial equivalent of a
benefit of $90,000 beginning at the Social Security Retirement Age,
multiplied by the Adjustment Factor as provided by the Secretary of the
Treasury, based on the lesser of the interest rate assumption under the
Plan or on an assumption of five percent (5%) per year.
(d) In the event that all or any portion of a Participant's
retirement income is payable in a form other than a single life annuity
for the life of the Participant or a Qualified Joint and Survivor Annuity
under Article VI, for purposes of applying the Defined Benefit Dollar
Limitation such other plan benefit shall be adjusted to a straight life
annuity (commencing at the same age) which is the Actuarial Equivalent
Value of such other plan benefit.
(e) For purposes of making the actuarial adjustments to the Defined
Benefit Dollar Limitation or to Plan benefits as provided under Subsection
(d), the interest rate assumption used shall be the greater of (i) 5%, or
(ii) the rate used under this Plan for determining Actuarial Equivalent
Values.
(f) In all cases the adjustments described hereinabove shall be made
in accordance with and to the extent required by the Regulations and
applicable Internal Revenue Service rules issued under Code Section
415(b)(2) and other applicable provisions of Code Section 415.
(g) "Social Security Retirement Age" means the age used as the
retirement age for the Participant under Section 216(1) of the Social
Security Act, except that such section shall be applied without regard to
the age increase factor, and as if the early retirement age under Section
216(1)(2) of such Act were 62. "Social Security Retirement Age" shall mean
age sixty-five (65) if the Participant was born before January 1, 1938,
age sixty-six (66) if the Participant was born before January 1, 1955, and
age sixty-seven (67) if the Participant was born after December 31, 1954.
38
17.6 BENEFITS NOT IN EXCESS OF $10,000. The foregoing provisions of this
Article shall not apply to any Participant who has not at any time participated
in any defined contribution plan maintained by the Company if his total annual
benefit in any year under this Plan and any other defined benefit plans
maintained by the Company is not in excess of $10,000 in the aggregate.
17.7 ADJUSTMENT OF LIMITATION FOR YEARS OF SERVICE OR PARTICIPATION.
(a) If a Participant has completed less than ten years of
participation, the Participant's Accrued Benefit shall not exceed the
Defined Benefit Dollar Limitation as adjusted by multiplying such amount
by a fraction, the numerator of which is the Participant's number of years
(or part thereof) of participation in the Plan, and the denominator of
which is ten.
(b) If a Participant has completed less than ten years of service
with the Affiliated Companies, the limitations described in Sections
415(b)(1)(B) and 415(b)(4) of the Code shall be adjusted by multiplying
such amounts by a fraction, the numerator of which is the Participant's
number of years of service (or part thereof), and the denominator of which
is ten.
(c) In no event shall Sections 17.7(a) and (b) reduce the limitations
provided under Sections 415(b)(1) and (4) of the Code to an amount less
than one-tenth of the applicable limitation (as determined without regard
to this Section 17.7).
(d) To the extent provided by the Secretary of the Treasury, this
Section 17.7 shall be applied separately with respect to each change in
the benefit structure of the plan.
17.8 AFFILIATED COMPANY. For purposes of this Article, the determination
of whether a company is an Affiliated Company shall be made after applying the
modifications required by Code Section 415(h) to the percentage tests of Code
Section 414(b) and (c).
ARTICLE XVIII
RESTRICTION ON ALIENATION
18.1 GENERAL RESTRICTIONS AGAINST ALIENATION.
(a) The interest of any Participant or Beneficiary in the income,
benefits, payments, claims or rights hereunder, or in the Trust Fund shall
not in any event be subject to sale, assignment, hypothecation, or
transfer. Each Participant and Beneficiary is prohibited from
anticipating, encumbering, assigning, or in any manner alienating his/her
interest under the Trust Fund, and is without power to do so, except as
may otherwise be provided for in the Trust Agreement. The interest of any
Participant or Beneficiary shall not be liable or subject to his/her
debts, liabilities, or obligations, now contracted, or which may be
subsequently contracted. The interest of any Participant or Beneficiary
shall be free from all claims, liabilities, bankruptcy proceedings, or
other legal process now or hereafter incurred or arising; and the
interest, or any part thereof, shall not be subject to any judgment
rendered against the Participant or Beneficiary.
(b) In the event any person attempts to take any action contrary to
this Article XVIII, that action shall be void and the Company, the
Committee, the Trustees and all Participants and their Beneficiaries may
disregard that action and are not
39
in any manner bound thereby, and they, and each of them separately, shall
suffer no liability for any disregard of that action, and shall be
reimbursed on demand out of the Trust Fund for the amount of any loss,
cost or expense incurred as a result of disregarding or of acting in
disregard of that action.
(c) The preceding provisions of this Section 18.1 shall be
interpreted and applied by the Committee in accordance with the
requirements of Code Section 401(a)(13) as construed and interpreted by
authoritative judicial and administrative rulings and regulations.
18.2 NONCONFORMING DISTRIBUTIONS UNDER COURT ORDER.
(a) In the event that a court with jurisdiction over the Plan shall
issue an order or render a judgment requiring that all or part of a
Participant's interest under the Plan be paid to a Spouse, former Spouse
and/or children of the Participant by reason of or in connection with the
marital dissolution and/or marital separation of the Participant and the
Spouse, and/or some other similar proceeding involving marital rights and
property interests, then the Committee may, in its absolute discretion,
direct the applicable Trustees to comply with that court order or judgment
and distribute assets of the Plan in accordance therewith.
(b) The Committee's decision with respect to compliance with any such
court order or judgment shall be made in its absolute discretion and shall
be binding upon the Trustees and all Participants and their Beneficiaries,
provided, however, that the Committee in the exercise of its discretion
shall not make payments in accordance with the terms of an order which is
not a qualified domestic relations order or which the Committee determines
would jeopardize the continued qualification of the Plan under Section 401
of the Code.
(c) Neither the Plan, the Company, the Committee nor the Trustees
shall be liable in any manner to any person, including any Participant or
Beneficiary, for complying with any such court order or judgment.
(d) Nothing in this Section 18.2 shall be interpreted as placing upon
the Company, the Committee or any Trustees any duty or obligation to
comply with any such court order or judgment. The Committee may, if in its
absolute discretion it deems it to be in the best interests of the Plan
and the Participants, determine that any such court order or judgment
shall be resisted by means of judicial appeal or other available judicial
remedy, and in that event the Trustees shall act in accordance with the
Committee's directions.
ARTICLE XIX
TOP-HEAVY PLAN RULES
19.1 PURPOSE. The purpose of this Article is to ensure that the Plan
conforms to the requirements of Code Section 401(a)(10)(B), through the
adjustments required herein, should the Plan become a Top-Heavy Plan within the
meaning of Code Section 416 or become subject to the application of the
provisions of Code Section 416 by reason of its inclusion in an Aggregation
Group within the meaning of Code Section 416(g). The provisions of this Article
shall be administered and interpreted strictly for the purposes of satisfying
the applicable minimum requirements of the Code.
40
19.2 APPLICABILITY. Notwithstanding any provision in this Plan to the
contrary, and subject to the limitations set forth in Section 19.9, the
requirements of Sections 19.5, 19.6, 19.7 and 19.8 shall apply under this Plan
in the case of any Plan Year in which the Plan is determined to be a Top-Heavy
Plan under the rules of Section 19.4. Except as is expressly provided to the
contrary, the rules of this Article shall be applied after the application of
the Affiliated Company rules of Section 2.2.
19.3 DEFINITIONS. For purposes of this Article, the following special
definitions and definitional rules shall apply:
(a) The term "Key Employee" means any Employee or former Employee
who, at any time during the Plan Year or any of the four preceding Plan
Years, is or was:
(i) An officer of the Company having an annual compensation
greater than 50% of the amount in effect under Code Section
415(b)(1)(A) for the Plan Year; provided, however, for such purposes
no more than 50 Employees (or, if lesser, the greater of three or 10%
of the Employees) shall be treated as officers;
(ii) One of the ten Employees having annual compensation from
the Company of more than the limitation in effect under Code Section
415(c)(1)(A) and owning (or considered as owning within the meaning
of Code Section 318) both more than a one-half percent (1/2%)
interest in the Company and the largest interests in the Company. For
this purpose, if two Employees have the same interest in the Company,
the Employee having greater annual compensation from the Company
shall be treated as having a larger interest;
(iii) A Five Percent Owner of the Company; or
(iv) A One Percent Owner of the Company having an annual
compensation from the Company of more than $150,000.
(b) The term "Five Percent Owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318) more than 5%
of the outstanding stock of the Company or stock possessing more than 5%
of the total combined voting power of all stock of the Company.
(c) The term "One Percent Owner" means any person who would be
described in Subsection (b) if "1%" were substituted for "5%" each place
where it appears therein.
(d) The term "Non-Key Employee" means any Employee who is not a Key
Employee.
(e) The term "Determination Date" means, with respect to any plan
year, the last day of the preceding plan year. In the case of the first
plan year of any plan, the term "Determination Date" shall mean the last
day of that plan year.
(f) The term "Aggregation Group" means (i) each plan of the Company
in which a Key Employee is a Participant, and (ii) each other plan of the
Company which enables any plan described in clause (i) to meet the
requirements of Code Sections 401(a)(4) or 410. Any plan not required to
be included in an Aggregation Group under the preceding rules may be
treated as being part of such group if the group
41
would continue to meet the requirements of Code Sections 401(a)(4) and 410
with the plan being taken into account.
(g) For purposes of determining ownership under Subsections (a), (b)
and (c) above, the following special rules shall apply: (i) Code Section
318(a)(2)(C) shall be applied by substituting "5%" for "50%," and (ii) the
aggregation rules of Subsections (b), (c) and (m) of Code Section 414
shall not apply, with the result that the ownership tests of this Section
shall apply separately with respect to each Affiliated Company.
(h) For purposes of this Article XIX, the terms "Key Employee" and
"Non-Key Employee" shall apply to a Beneficiary of such Key Employee or
Non-Key Employee and such Beneficiary will acquire the character of the
Participant. Any inherited benefits payable to a deceased Participant's
Beneficiary shall retain the character of the benefits payable to the
Participant.
(i) For purposes of this Article, an Employee's compensation shall be
determined in accordance with the rules of Code Section 415.
19.4 TOP-HEAVY STATUS.
(a) The term "Top-Heavy Plan" means, with respect to any Plan Year:
(i) Any defined benefit plan if, as of the Determination Date,
the Actuarial Equivalent Value of the cumulative accrued benefits
under the plan for Key Employees exceeds 60% of the Actuarial
Equivalent Value of the cumulative accrued benefits under the plan
for all Employees; and
(ii) Any defined contribution plan if, as of the Determination
Date, the aggregate of the account balances of Key Employees under
the plan exceeds 60% of the Actuarial Equivalent Value of the
aggregate of the account balances of all Employees under the plan.
In applying the foregoing provisions of this Subsection (a), the
valuation date to be used in valuing Plan assets shall be (A) in the case
of a defined benefit plan, the same date which is used for computing costs
for minimum funding purposes, and (B) in the case of a defined
contribution plan, the most recent valuation date within a 12-month period
ending on the applicable Determination Date.
(b) Each plan maintained by the Company required to be included in an
Aggregation Group shall be treated as a Top-Heavy Plan if the Aggregation
Group is a Top-Heavy Group.
(c) The term "Top-Heavy Group" means any Aggregation Group if the sum
(as of the Determination Date) of (i) the Actuarial Equivalent Value of
the cumulative accrued benefits for Key Employees under all defined
benefit plans included in the group, and (ii) the aggregate of the account
balances of Key Employees under all defined contribution plans included in
the group exceeds 60% of a similar sum determined for all Employees. For
purposes of determining the Actuarial Equivalent Value of the cumulative
accrued benefit of any Employee, or the amount of the account balance of
any Employee, such Actuarial Equivalent Value or amount shall be increased
by the aggregate distributions made with respect to the Employee under the
plan during the five year period ending on the Determination Date. The
preceding prior distribution
42
rule shall also apply to distributions under a terminated plan that, if it
had not been terminated, would have been required to be included in an
Aggregation Group; provided, however, any rollover contribution or similar
transfer initiated by the Employee and made after December 31, 1983, to a
plan shall not be taken into account with respect to the transferee plan
for purposes of determining whether such plan is a Top-Heavy Plan (or
whether any Aggregation Group which includes such plan is a Top-Heavy
Group).
(d) If any individual is a Non-Key Employee with respect to any plan
for any plan year, but the individual was a Key Employee with respect to
the plan for any prior plan year, any accrued benefit for the individual
(and the account balance of the individual) shall not be taken into
account for purposes of this Section.
(e) If any individual has not performed any services for the Company
or received any compensation from the Company (other than benefits under
the Plan) at any time during the five year period ending on the
Determination Date, any accrued benefit for such individual (and the
account balance of the individual) shall not be taken into account for
purposes of this Section. If any individual returns after the five (5)
year period, such individuals total accrued benefit shall be included in
determining the top heavy ratio.
(f) In applying the foregoing provisions of this Section, for
purposes of determining the Actuarial Equivalent Value of accrued benefits
under a defined benefit plan the following rules shall apply: (i) the
actuarial factors to be used shall be those as specified in Section 2.1 of
this Plan; and (ii) proportional subsidies shall be ignored and
nonproportional subsidies shall be considered in accordance with the
requirements of applicable regulations under Code Section 416.
(g) For all purposes of this Article, the provisions of this Section
shall be applied and interpreted in a manner consistent with the
provisions of Code Section 416(g) and the regulations thereunder.
(h) Solely for the purpose of determining if the Plan, or any other
plan included in a required aggregation group of which this plan is a
part, is top-heavy (within the meaning of Section 416(g) of the Code) the
accrued benefit of an Employee other than a key employee (within the
meaning of Section 416(i)(1) of the Code) shall be determined under (a)
the method, if any, that uniformly applies for accrued purposes under all
plans maintained by the Affiliated Employers, 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.
19.5 MINIMUM BENEFITS.
(a) For any Plan Year in which the Plan is determined to be a
Top-Heavy Plan, the Plan shall provide a minimum benefit (provided solely
by Company contributions) for each Participant who is Non-Key Employee and
who is credited with a Year of Service for the Plan Year, regardless of
such Participant's level of compensation or whether the Participant is
employed by the Company as of the last day of the Plan Year. This minimum
benefit, when expressed as an annual retirement benefit payable in the
form of a single life annuity beginning at the Participant's Normal
Retirement Age, shall be the greater of (i) the normal benefit accrued by
such a Participant for such a Plan Year under the benefit accrual
provisions of this Plan, or (ii) the lesser of (A) or (B) where: (A) is
the product derived by multiplying the Participant's average annual
compensation during the "testing period" by 20% minus the benefit
(expressed as a
43
percentage of such average annual compensation) accrued by the Participant
under this Plan prior to such Top-Heavy Plan Year, and (B) is the product
derived by multiplying such average annual compensation by the product of
2% multiplied by the Participant's years of service determined under the
rules of Subsection (b) below. As used herein the term "testing period"
shall mean the period of consecutive years (not exceeding 5) during which
the Participant had the greatest aggregate Compensation from the Company.
(b) For purposes of clause (ii)(B) of Subsection (a) above, years of
service shall be determined under the rules of paragraphs (4), (5) and (6)
of Code Section 411(a), subject, however, to the following special rules:
(i) a year of service shall not be taken into account if either (A) the
Plan was not a Top-Heavy Plan for the Plan Year ending with or within such
year of service, or (B) the year of service was completed in a Plan Year
beginning prior to January 1, 1984; and (ii) if service for vesting
purposes under the Plan is determined under the elapsed time method, then
such method shall be used (in lieu of the hours of service method
referenced in Section 411(a)(5) of the Code) in determining years of
service for purposes of clause (ii)(B) of Subsection (a).
(c) The Participant's minimum benefit determined under this Section
shall be calculated without regard to any Social Security benefits payable
to the Participant.
(d) In the event a Participant is covered by both a defined
contribution and a defined benefit plan maintained by the participating
Company, both of which are determined to be Top-Heavy Plans, the defined
benefit minimum shall be provided under the defined benefit plan, but
shall be offset by the benefits provided under the defined contribution
plan.
19.6 COMPENSATION LIMITATION. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the Plan shall not take into account an
Employee's Compensation in excess of the first $200,000 (or such other amount
as may be permitted pursuant to Code Sections 416(d)(2) or 401(a)(17), as
applicable). For Plan Years beginning on and after January 1, 1994, an
Employee's Compensation in excess of the "OBRA '93 annual compensation limit"
as defined in Section 2.9(d) shall not be taken into account.
19.7 MAXIMUM BENEFIT LIMITATIONS.
(a) Except as set forth below, for any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the rules of Code Sections 415(e)(2)(B)
and 415(e)(3)(B) shall be applied by substituting "1.0" for "1.25."
(b) The rule set forth in Subsection (a) above shall not apply if the
requirements of both Paragraphs (i) and (ii), below, are satisfied.
(i) The requirements of this Paragraph (i) are satisfied if the
rules of Section 19.5(a) above would be satisfied after substituting
"3%" for "2%" where it appears therein.
(ii) The requirements of this Paragraph (ii) are satisfied if
the Plan would not be a Top-Heavy Plan if "90%" were substituted for
"60%" each place it appears in Section 19.4(a)(ii).
(c) The rules of Subsection (a) shall not apply with respect to any
Employee as long as there are no (i) Company Contributions (including
amounts
44
deferred under a cash or deferred arrangement under Section 401(k) of the
Code), forfeitures, or voluntary nondeductible contributions allocated to
the Employee under a defined contribution plan maintained by the Company,
or (ii) accruals by the Employee under a defined benefit plan maintained
by the Company.
(d) In the case where the Plan is subject to the rules of Subsection
(a) above, the rules of Code Section 415(e)(6)(B)(i) shall be applied by
substituting "$41,500" for "$51,875."
19.8 VESTING RULES.
(a) In the event that the Plan is determined to be Top-Heavy in
accordance with the rules of Section 19.4, then a Participant who has
completed at least three (3) one-year Periods of Service with the Company
or an Affiliated Company shall be one hundred percent (100%) vested in the
Plan.
(b) If the Plan ceases to be a Top-Heavy Plan, the vesting schedule
of the Plan shall (for such Plan Years as the Plan is not a Top-Heavy
Plan) revert to that provided in Section 8.2(a) (the "Regular Vesting
Schedule"). If such reversion to the Regular Vesting Schedule is deemed to
constitute a vesting schedule change that is attributable to a Plan
amendment (within the meaning of Code Section 411(a)(10)), then such
reversion to said Regular Vesting Schedule shall be subject to the
requirements of Section 8.2(b) of this Plan. For such purposes, the date
of the adoption of such deemed amendment shall be the Determination Date
as of which it is determined that the Plan has ceased to be a Top-Heavy
Plan.
19.9 NON-ELIGIBLE EMPLOYEES. The rules of this Article shall not apply to
any Employee included in a unit of employees covered by a collective bargaining
agreement between employee representatives and one or more employers if
retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.
ARTICLE XX
MISCELLANEOUS
20.1 NO ENLARGEMENT OF EMPLOYEE RIGHTS.
(a) This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the
Company and any Employee, or to be consideration for, or an inducement to,
or a condition of, the employment of any Employee.
(b) Nothing contained in this Plan or the Trust shall be deemed to
give any Employee the right to be retained in the employ of the Company or
to interfere with the right of the Company to discharge or retire any
Employee at any time.
(c) No Employee, nor any other person, shall have any right to or
interest in any portion of the Trust Fund other than as specifically
provided in this Plan.
20.2 ADDRESSES. Each Participant shall be responsible for furnishing the
Committee with his/her correct current address and the correct current name and
address of his/her Beneficiary or Beneficiaries.
45
20.3 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections, and other
communications from Participants shall be in writing, on forms prescribed
by the Committee and shall be mailed or delivered to the office designated
by the Committee, and shall be deemed to have been given when received by
that office.
(b) Each notice, report, remittance, statement and other
communication directed to a Participant or Beneficiary shall be in writing
and may be delivered in person or by mail. An item shall be deemed to have
been delivered and received by the Participant when it is deposited in the
United States mail with postage prepaid, addressed to the Participant or
Beneficiary at his/her last address of record with the Committee.
20.4 REPORTING AND DISCLOSURE. The Plan Administrator shall be responsible
for the reporting and disclosure of information required to be reported or
disclosed by the Plan Administrator pursuant to ERISA or any other applicable
law.
20.5 GOVERNING LAW. All legal questions pertaining to the Plan shall be
determined in accordance with the provisions of ERISA and the laws of the State
of California. All contributions made hereunder shall be deemed to have been
made in California.
20.6 INTERPRETATION. Article and Section headings are for convenient
reference only and shall not be deemed to be part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article or
Section. Unless the context clearly indicates otherwise, masculine gender shall
include the feminine, and the singular shall include the plural and the plural
the singular.
20.7 WITHHOLDING FOR TAXES. Any payments out of the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal
or state law.
20.8 LIMITATION ON COMPANY. COMMITTEE AND TRUSTEE LIABILITY. Any benefits
payable under this Plan shall be paid or provided for solely from the Trust
Fund and neither the Company, the Committee nor the Trustee assume any
responsibility for the sufficiency of the assets of the Trust to provide the
benefits payable hereunder.
20.9 SUCCESSORS AND ASSIGNS. This Plan and the Trust established hereunder
shall inure to the benefit of, and be binding upon, the parties hereto and
their successors and assigns.
20.10 COUNTERPARTS. This Plan document may be executed in any number of
identical counterparts, each of which shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purpose without
the production of any other counterparts.
20.11 APPLICATION OF FORFEITURES. Any forfeiture of benefits arising from
a Participant's termination of employment, whether by reason of his/her death
or otherwise, prior to the termination of the Plan or the complete
discontinuance of contributions, will be used as soon as possible to reduce the
Company contributions otherwise payable under the Plan, and will not be used to
increase the benefits of Participants.
20.12 MAILING OF PAYMENTS: LAPSED BENEFITS. All payments under the Plan
shall be delivered in person or mailed to the last address of the Participant
(or, in the case of the death of the Participant, to that of any other person
entitled to such payments under the
46
terms of the Plan) furnished pursuant to Section 20.2 above. In the event that
a retirement benefit is payable under this Plan to a Participant or his/her
Beneficiary (including any person or entity entitled under Section 6.6 to
receive the interest of a deceased Participant or deceased designated
Beneficiary), and such Participant or eligible Beneficiary cannot be located
for the purpose of effecting payment of such benefit during a period of two
consecutive years, such benefit shall, upon the termination of such two year
period, be forfeited and applied in accordance with the provisions of Section
20.11. Notwithstanding the foregoing, if after such a forfeiture the
Participant or an eligible Beneficiary shall claim such forfeited benefit, said
forfeited benefit shall be reinstated and paid to such claimant in accordance
with all applicable provisions of this Plan.
IN WITNESS WHEREOF, 20th Century Industries, a California corporation, has
caused this instrument to be executed by its duly authorized officer this ___
day of __________, 19___, effective, however, as of January 1, 1989 except as
otherwise expressly provided herein.
20TH CENTURY INDUSTRIES
By:__________________________________
By:__________________________________
47
20TH CENTURY INSURANCE
EARLY RETIREMENT FACTORS
Percentage of Benefit Payable
-----------------------------
Age at Section 5.3 Section 7.2
Retirement (Note 2) (Note 3)
---------- -------- --------
55 50% 37.4%
56 55 41.0
57 60 45.0
58 65 49.5
59 70 54.4
60 75 60.0
61 80 66.2
62 85 73.2
63 90 81.1
64 95 89.9
65 100 100.0
Note 1: Percentages should be prorated to reflect age at retirement in
years and months.
Note 2: Factors to be used for immediate early retirements (Section 5.3).
Reduction equal 5% for each year (5/12% for each month) that retirement
precedes age 65.
Note 3: Factors to be used for early retirement for terminated vested
participants (Section 7.2). True actuarial equivalent factors based on 8%
interest, 1983 Group Annuity Mortality Table (35% males, 65% females).
i
APPENDIX I
MORTALITY RATES FOR ACTUARIAL EQUIVALENCE
Mortality Mortality
Age Rate Age Rate
--- ---- --- ----
5 0.000231 60 0.005962
6 0.000202 61 0.006579
7 0.000182 62 0.007283
8 0.000170 63 0.008087
9 0.000165 64 0.009004
10 0.000165 65 0.010049
11 0.000172 66 0.011234
12 0.000180 67 0.012574
13 0.000187 68 0.014086
14 0.000196 69 0.015785
15 0.000205 70 0.017686
16 0.000213 71 0.019807
17 0.000223 72 0.022183
18 0.000233 73 0.024851
19 0.000244 74 0.027845
20 0.000255 75 0.031204
21 0.000268 76 0.034955
22 0.000281 77 0.039102
23 0.000295 78 0.043636
24 0.000310 79 0.048551
25 0.000327 80 0.053839
26 0.000345 81 0.059495
27 0.000363 82 0.065511
28 0.000385 83 0.071880
29 0.000408 84 0.078591
30 0.000435 85 0.085639
31 0.000462 86 0.093230
32 0.000493 87 0.101753
33 0.000526 88 0.110183
34 0.000563 89 0.120081
35 0.000610 90 0.130845
36 0.000644 91 0.142374
37 0.000686 92 0.154821
38 0.000736 93 0.168277
39 0.000796 94 0.183583
40 0.000866 95 0.200502
ii
APPENDIX I
MORTALITY RATES FOR ACTUARIAL EQUIVALENCE
Mortality Mortality
Age Rate Age Rate
--- ---- --- ----
41 0.000945 96 0.218095
42 0.001038 97 0.236712
43 0.001147 98 0.256815
44 0.001274 99 0.279024
45 0.001421 100 0.303586
46 0.001591 101 0.330776
47 0.001781 102 0.361051
48 0.001986 103 0.394883
49 0.002208 104 0.434473
50 0.002439 105 0.481416
51 0.002679 106 0.537507
52 0.002930 107 0.604582
53 0.003197 108 0.684518
54 0.003486 109 0.779233
55 0.003798 110 1.000000
56 0.004138
57 0.004516
58 0.004939
59 0.005418
1983 Group Annuity Mortality Table (35% males, 65% females)
iii