EXHIBIT 4.1
PEAPACK-GLADSTONE BANK EMPLOYEES' RETIREMENT PLAN
PEAPACK-GLADSTONE BANK EMPLOYEES' RETIREMENT PLAN
This Pension Plan, executed on 2/22, 1995, by Peapack-Gladstone Bank, a
Corporation (the "Company"),
W I T N E S S E T H T H A T:
WHEREAS, effective July 1, 1956, the Company adopted the Peapack-Gladstone
Bank Employees' Retirement Plan (hereinafter the "Prior Plan"); and
WHEREAS, the Company reserved the right to amend the Prior Plan at any time
and for any reason by resolution of its Directors, provided the amendment does
not adversely affect any accrued right of a Participant or Beneficiary, and the
Company has resolved to amend the Prior Plan by restating it in its entirety in
order to comply with the most recent laws and regulations applicable to employee
retirement plans;
NOW, THEREFORE, the Peapack-Gladstone Bank Employees' Retirement Plan is
hereby amended by restating it in its entirety as the Peapack-Gladstone Bank
Employees' Retirement Plan, effective January 1, 1989.
IN WITNESS WHEREOF, the Company has adopted this Plan and caused this
instrument to be executed by its duly authorized representative as of the above
date.
WITNESS: PEAPACK-GLADSTONE BANK
CRAIG SPENGEMEN By: FRANK KISSEL, PRESIDENT
- ------------------------- ------------------------------
Craig Spengemen Frank Kissel, President
TABLE OF CONTENTS
SECTION 1. PLAN IDENTITY.......................................................
1.1 NAME.......................................................................
1.2 PURPOSE....................................................................
1.3 EFFECTIVE DATE.............................................................
1.4 FISCAL PERIOD..............................................................
1.5 TREATMENT OF PLAN FOR PARTICIPATING EMPLOYERS..............................
1.6 INTERPRETATION OF PROVISIONS...............................................
SECTION 2. DEFINITIONS.........................................................
SECTION 3. ELIGIBILITY FOR PARTICIPATION.......................................
3.1 INITIAL ELIGIBILITY........................................................
3.2 ELIGIBILITY DEFINITIONS....................................................
3.3 PRIOR PLAN PARTICIPANTS, AND TERMINATED OR PART-TIME EMPLOYEES.............
3.4 INELIGIBLE EMPLOYEES.......................................................
3.5 WAIVER OF PARTICIPATION....................................................
3.6 PARTICIPATION AND REPARTICIPATION..........................................
SECTION 4. RETIREMENT BENEFITS.................................................
4.1 NORMAL RETIREMENT..........................................................
4.2 LATER RETIREMENT...........................................................
4.3 TERMINATION BEFORE NORMAL RETIREMENT.......................................
4.4 ACCRUED BENEFIT............................................................
4.5 DEFINITIONS FOR BENEFIT COMPUTATIONS.......................................
4.6 TOP-HEAVY MINIMUM BENEFIT..................................................
4.7 SUSPENSION, DEFERRAL, AND NONDUPLICATION OF BENEFITS.......................
4.8 ADMINISTRATOR DISCRETION AS TO PAYMENTS....................................
4.9 TERM OF BENEFIT PAYMENTS...................................................
SECTION 5. VESTING AND FORFEITURE..............................................
5.1 VESTING SCHEDULE...........................................................
5.2 COMPUTATION OF VESTING YEARS...............................................
5.3 FULL VESTING UPON CERTAIN EVENTS...........................................
5.4 FULL VESTING UPON PLAN TERMINATION.........................................
5.5 FORFEITURE OF NONVESTED INTEREST...........................................
5.6 VESTING AND NONFORFEITABILITY..............................................
SECTION 6. PENSION BENEFIT CLAIMS AND FORMS....................................
6.1 CLAIM FOR BENEFITS.........................................................
6.2 NOTIFICATION BY ADMINISTRATOR..............................................
6.3 CLAIMS REVIEW PROCEDURE....................................................
6.4 STANDARD AND ALTERNATIVE BENEFIT FORMS.....................................
6.5 ELECTION OF PENSION BENEFIT FORM...........................................
6.6 ADMINISTRATOR ACTION AS TO BENEFIT PAYMENTS................................
6.7 ELECTION FORMALITIES.......................................................
6.8 MARITAL STATUS.............................................................
6.9 PROOF OF AGES..............................................................
6.10 IRREVOCABILITY OF ELECTIONS................................................
6.11 PRESUMPTION IN ABSENCE OF ELECTION.........................................
6.12 EFFECT OF CONTINGENT ANNUITANT'S DEATH.....................................
6.13 EFFECT OF PARTICIPANT'S DEATH..............................................
6.14 PAYMENT IN CASH; DIRECT TRANSFER...........................................
SECTION 7. DEATH BENEFITS......................................................
7.1 DEATH BEFORE COMMENCEMENT OF BENEFITS......................................
7.2 DEATH AFTER COMMENCEMENT OF BENEFITS.......................................
SECTION 8. BENEFIT LIMITATIONS.................................................
8.1 MAXIMUM ANNUAL BENEFITS....................................................
8.2 COORDINATED LIMITATION WITH OTHER PLANS....................................
8.3 LIMITATIONS AS TO CERTAIN EMPLOYEES........................................
SECTION 9. CONTRIBUTIONS AND TRUST FUND........................................
9.1 FUNDING OF COSTS...........................................................
9.2 CREATION OF TRUST FUND.....................................................
9.3 RESPONSIBILITY FOR INVESTMENT..............................................
9.4 FUNDING METHOD AND DETERMINATION OF COST...................................
9.5 PAYMENT OF EXPENSES........................................................
9.6 RETURN OF CONTRIBUTIONS....................................................
9.7 LOANS TO PARTICIPANTS......................................................
9.8 VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS....................................
9.9 ROLLOVERS BY PARTICIPANTS..................................................
9.10 RIGHT TO IMPLEMENT OR SUSPEND PROVISIONS...................................
SECTION 10. THE ADMINISTRATOR AND ITS FUNCTIONS................................
10.1 AUTHORITY OF ADMINISTRATOR................................................
10.2 IDENTITY OF ADMINISTRATOR.................................................
10.3 DUTIES OF ADMINISTRATOR...................................................
10.4 COMPLIANCE WITH ERISA.....................................................
10.5 ACTION BY ADMINISTRATOR...................................................
10.6 EXECUTION OF DOCUMENTS....................................................
10.7 ADOPTION OF RULES.........................................................
10.8 RESPONSIBILITIES TO PARTICIPANTS..........................................
10.9 ALTERNATIVE PAYEES IN EVENT OF INCAPACITY.................................
10.10 INDEMNIFICATION BY COMPANY...............................................
10.11 NONPARTICIPATION BY INTERESTED MEMBER....................................
SECTION 11. ADOPTION, AMENDMENT, OR TERMINATION OF THE PLAN....................
11.1 ADOPTION OF PLAN BY OTHER EMPLOYERS.......................................
11.2 ADOPTION OF PLAN BY SUCCESSOR.............................................
11.3 PLAN RESTATEMENT SUBJECT TO QUALIFICATION.................................
11.4 RIGHT TO AMEND OR TERMINATE...............................................
11.5 DISPOSITION OF EMPLOYER'S SHARE OF TRUST FUND.............................
11.6 ALLOCATION AMONG PARTICIPANTS AND BENEFICIARIES...........................
SECTION 12. MISCELLANEOUS PROVISIONS...........................................
12.1 PLAN CREATES NO EMPLOYMENT RIGHTS.........................................
12.2 NONASSIGNABILITY OF BENEFITS..............................................
12.3 LIMIT OF EMPLOYER LIABILITY...............................................
12.4 NUMBER AND GENDER.........................................................
12.5 NONDIVERSION OF ASSETS....................................................
12.6 SEPARABILITY OF PROVISIONS................................................
12.7 SERVICE OF PROCESS........................................................
12.8 GOVERNING STATE LAW.......................................................
Section 1. Plan Identity.
1.1 Name.
The name of this Plan is the Peapack-Gladstone Bank Employees' Retirement
Plan.
1.2 Purpose.
The purpose of this Plan is to describe the terms and conditions under
which pension and death benefits will be funded by Employers and paid to the
eligible Participants and their Beneficiaries.
1.3 Effective Date.
The Effective Date of this Plan is July 1, 1956. However the provisions of
this restated plan shall generally become effective January 1, 1989, and shall
apply only to individuals who have Service with an Employer on or after that
date.
1.4 Fiscal Period.
This Plan shall be operated on the basis of a fiscal year beginning each
January 1 for the purpose of determining actuarial costs, keeping the Plan's
books and records, and distributing or filing any reports or returns required by
law. Notwithstanding the foregoing, the fiscal year
which began July 1, 1987 shall end on December 31, 1987. Subsequent to December
31, 1987, the Plan shall be operated on the basis of a fiscal year beginning
each January 1 thereafter.
1.5 Treatment of Plan for Participating Employers.
This Plan shall be treated as a single Plan with respect to all
participating Employers for the purpose of making contributions and paying
pension benefits, determining whether there has been any termination of Service,
and applying the limitations set forth in section 8.
1.6 Interpretation of Provisions.
The Employers intend this Plan and the Trust to be a qualified defined
benefit plan under section 401(a) of the Code and to satisfy any applicable
requirement under ERISA. Accordingly, the Plan and Trust Agreement shall be
interpreted and applied in a manner consistent with this intent and shall be
administered at all times and in all respects in a nondiscriminatory manner.
Section 2. Definitions.
The following capitalized words and phrases shall have the meanings specified
when used in this Plan and in the Trust Agreement, unless the context clearly
indicates otherwise:
"Accrued Benefit" means the monthly annuity benefit payable at a
Participant's Normal Retirement Date which he has earned on the basis of his
participation in the Plan to date, as defined in section 4.4.
"Actuarial Equivalent" means a benefit of value equivalent to the value of
the benefit replaced, based on the following actuarial assumptions:
Mortality, pre-retirement - none
Mortality, post-retirement - UP-1984 Unisex Mortality Table
Interest, pre-retirement - 6.0%
Interest, post-retirement - 6.0%
However, a single lump sum Actuarial Equivalent of an annuity benefit shall be
calculated with interest at the rates specified above or at the applicable PBGC
rate if lower. For this purpose, the "applicable PBGC rate" shall mean the
applicable rate or rates for the immediate or deferred annuity benefit in
question as adopted by the Pension Benefit Guaranty Corporation to determine the
sufficiency of plans terminating on the first day of the Plan Year in which the
lump sum is paid; provided, however, that if the present value of a lump sum
benefit using such rate or rates exceeds $25,000, the "applicable PBGC rate"
shall instead mean 120 percent of such rate or rates, but only to the extent
that the lump sum value is not thereby reduced below $25,000.
"Administrator" means the person or persons responsible for the
administration of this Plan in accordance with section 10.
"Beneficiary" means the person or persons who are designated by a
Participant (within the meaning of section 401(a)(9) of the Code) to receive
benefits payable under the Plan on the Participant's death. In the absence of
any designation, or if all the designated Beneficiaries shall die before the
Participant dies or shall die before all benefits have been paid, the
Participant's Beneficiary shall be his surviving Spouse, if any, or his estate
if he is not survived by a Spouse. The Administrator may rely upon the advice of
the Participant's executor or estate administrator as to the identity and
relationship of the Participant's Spouse.
"Benefit Year" means a unit of service credited to a Participant pursuant
to section 4.5-1 for purposes of determining his Pension Benefit.
"Break in Service" means any five or more consecutive 12-month periods
beginning January 1 in which an Employee has 500 or fewer Hours of Service per
period. Solely for this purpose, an Employee shall be considered employed for
his normal hours of paid employment during a Recognized Absence, unless he does
not resume his Service at the end of the Recognized Absence. Further, any
Employee who has a Parental Absence, shall be credited with the Hours of Service
which would normally have been credited but for such absence, up to a maximum of
501 Hours of Service, in the first 12-month period which would otherwise be
counted toward a Break in Service.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Peapack-Gladstone Bank, and any entity which succeeds to
the business of Peapack-Gladstone Bank and adopts this Plan as its own pursuant
to section 11.2.
"Disability" means only a disability which renders the Participant totally
unable, as a result of bodily or mental disease or injury, to perform any duties
for an Employer for which he is reasonably fitted, of which such disability is
expected to be permanent or of long and indefinite duration. However, this term
shall not include any disability directly or indirectly resulting from or
related to habitual drunkenness or addiction to narcotics, a criminal act or
attempt, service in the armed forces of any country, an act of war, declared or
undeclared, any injury or disease occurring while compensation to the
Participant is suspended, or any injury which was intentionally self-inflicted.
Further, this term shall only apply if the Participant is sufficiently disabled
to qualify for the payment of disability benefits under the federal Social
Security Act or Veterans Disability Act.
"Early Retirement Date" means the date on which a Participant has completed
at least 15 Benefit Years and is at least 50 years old (whether he reached that
age before or after his Service was terminated).
"Earned Income" means the net earnings from any Employer within the meaning
of section 401(c)(2) of the Code, excluding income from an Employer for which
the Participant's personal services are not a material income-producing factor.
Earned Income shall exclude any qualified plan contributions on his behalf which
are deductible under section 404 of the Code,
and, for taxable years beginning after 1989, shall take into account the
Employer's deduction under section 164(f) of the Code.
"Effective Date" means July 1, 1956.
"Employee" means any individual who is or has been employed or
Self-Employed by an Employer. "Employee" also means an individual who has been
employed by a leasing organization and who, pursuant to an agreement between an
Employer and the leasing organization, has performed services for the Employer
on a substantially full-time basis for at least one year, if such services are
of a type historically performed by employees in the Employer's business field.
Solely for this purpose, the "Employer" shall include any related persons within
the meaning of section 414(n)(6) of the Code. However, such a "leased employee"
shall not be considered an Employee if (i) he participates in a money purchase
pension plan sponsored by the leasing organization which provides for immediate
participation, immediate full vesting, and an annual contribution of at least 10
percent of the employee's Total Compensation, and (ii) leased employees do not
constitute more than 20 percent of the Employer's total workforce (including
leased employees, but excluding Highly Paid Employees and any other employees
who have not performed services for the Employer on a substantially full-time
basis for at least one year). Solely for this purpose, an employee's Total
Compensation shall include any salary reduction amounts excluded from the
employee's gross taxable income pursuant to any of sections 125, 402(e)(3),
402(h)(l)(B), and 403(b) of the Code.
"Employer" means the Company, any other corporation, partnership, or
proprietorship which adopts this Plan with the Company's consent pursuant to
section 11.1, and any entity which succeeds to the business of any Employer and
adopts the Plan pursuant to section 11.2.
"ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
93-406, as amended).
"Five-Percent Owner" means an Employee who owns more than five percent of
the outstanding equity interest or the outstanding voting interest in any
Employer.
"Highly Paid Employee" for any Plan Year means an Employee who performs
service during the current Plan Year and who, during the immediately preceding
12 months, (i) was at any time a Five-Percent Owner, (ii) had Total Compensation
exceeding five-sixths of the Current Limit (i.e., $81,720 for 1989), (iii) had
Total Compensation exceeding five-ninths of the Current
Limit (i.e., $54,480 for 1989) and was among the most highly compensated
one-fifth of all Employees, or (iv) was at any time an officer, partner, or sole
proprietor of an Employer and had Total Compensation exceeding one-half of the
Current Limit (i.e., $49,032 for 1989). An Employee shall also be a "Highly Paid
Employee" if, substituting the current Plan Year for the Preceding Plan Year in
the preceding sentence, either (1) he would be described in clause (i), or (2)
he would be described in any of clauses (ii), (iii), and (iv) and he is among
the 100 highest-paid Employees of the Employer for the current Plan Year. For
this purpose:
(a) "Total Compensation" shall include any amount which is excludable
from the Employee's gross income for tax purposes pursuant to section 125,
402(e)(3), 402(h)(1)(B), or 403(b) of the Code.
(b) "Current Limit" means the currently applicable dollar limit under
section 415(b)(1)(A) of the Code.
(c) The number of Employees in "the most highly compensated one-fifth
of all Employees" shall be determined by taking into account all
individuals working for all related employer entities described in the
definition of "Service", but excluding any individual who has not completed
six months of Service, who normally works fewer than 17-1/2 hours per week
or in fewer than six months per year, who has not reached age 21, whose
employment is covered by a collective bargaining agreement, or who is a
nonresident alien who receives no earned income from United States sources.
(d) The number of individuals counted as "officers" shall not be more
than the lesser of (i) 50 individuals and (ii) the greater of 3 individuals
or 10 percent of the total number of Employees. If no officer earns more
than one-half of the Current Limit, then the highest paid officer shall be
a Highly Paid Employee.
(e) A former Employee shall be counted as a Highly Paid Employee if he
separated from Service (or is deemed to have separated) prior to the
current Plan Year and he was a Highly Paid Employee during either the Plan
Year in which his Service ended or any Plan Year ending after his 55th
birthday.
(f) If an Employee, during either of the current and preceding Plan
Years, is a family member of either (i) a Five-Percent Owner or (ii) a
Highly Paid Employee who is among the Employer's 10 most highly compensated
Employees, then the Employee and such family member shall be aggregated,
and the compensation paid to and plan benefits provided for such
individuals shall be treated as paid to and provided for a single Employee.
A "family member" shall include an Employee's spouse, the Employee's lineal
ancestors and descendants, and the ancestors' and descendants' spouses.
(g) In all respects, the determination of who are Highly Paid
Employees shall be made in accordance with section 414(q) of the Code and
the Treasury Regulations thereunder.
"Hours of Service" means hours to be credited to an Employee's Service
under the following rules:
(a) Each hour for which an Employee is paid or is entitled to be paid
for services to an Employer is an Hour of Service.
(b) Each hour for which an Employee is directly or indirectly paid or
is entitled to be paid by an Employer due to vacation, holidays,
illness, incapacity (including disability), lay-off, jury duty,
temporary military duty, or leave of absence is an Hour of
Service. However, except as otherwise specifically provided, no
more than 501 Hours of Service shall be credited for any single
continuous period during which the Employee performs no duties.
Further, no Hours of Service shall be credited on account of
payments made solely under a plan maintained to comply with
worker's compensation, unemployment compensation, or disability
insurance laws, or to reimburse an Employee for medical expenses.
(c) Each hour for which back pay (ignoring any mitigation of damages)
is either awarded or agreed to by an Employer is an Hour of
Service. However, no more than 501 Hours of Service shall be
credited for any single continuous period during which the
Employee would not have performed any duties.
(d) Hours of Service shall be credited in any one period only under
one of paragraphs (a), (b), and (c); an Employee may not receive
double credit for the same period.
(e) If an Employer finds it impractical to count the actual Hours of
Service for any class or group of Employees, each Employee in
that class or group shall be credited with the Hours of Service
shown in the following table for each pay period in which he has
at least one Hour of Service:
PAY PERIOD HOURS OF SERVICE CREDIT
---------- -----------------------
daily 10
weekly 45
bi-weekly 90
semi-monthly 95
monthly 190
However, an Employee shall only be credited for his scheduled working hours
during a paid absence.
(f) Hours of Service to be credited on account of a payment to an
Employee, including an award of back pay shall be credited in the
computation period in which the Service was rendered or to which
the award relates. If the period overlaps two or more Plan Years,
the Hours of Service credit shall be allocated in proportion to
the respective portions of the periods included in the several
Plan Years. However, in the case of periods of 31 days or less,
the Administrator may apply a uniform policy of crediting the
Hours of Service to either the first Plan Year or the second.
(g) In all respects an Employee's Hours of Service shall be counted
as required by section 2530.200b-2 of the Department of Labor's
regulations under Title I of ERISA.
"Key Employee" means an Employee who at any time during the five years
ending on the top-heavy determination date for the Plan Year has performed any
Service and has been (i) an officer of the Employer having Total Compensation
greater than one-half of the limit then in effect under section 415(b)(1)(A) of
the Code, (ii) one of the 10 Employees owning (or considered as owning under
section 318 of the Code) the largest interests in the Employer (ignoring any
Employee who does not own more than 1/2 percent interest) and having Total
Compensation greater than the limit then in effect under section 415(c)(1)(A),
(iii) a Five-Percent Owner, or (iv) an owner of more than one percent of the
outstanding equity interest or the outstanding voting interest in any Employer
whose Total Compensation exceeds $150,000. For this purpose, an Employees'
"Total Compensation" shall include any amount which is excludable from the
Employee's gross income for tax purposes pursuant to section 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code. In determining which individuals are Key
Employees, the rules of section 416(i) of the Code and Treasury Regulations
promulgated thereunder shall apply. The Beneficiary of a Key Employee shall also
be considered a Key Employee.
"Nonkey Employee" means an Employee who at any time during the five years
ending on the top-heavy determination date for the Plan Year has performed any
Service and who has never been a Key Employee, and the Beneficiary of any such
Employee.
"Normal Retirement Date" means the later of (a) a Participant's attainment
of 65 and (b) the earlier of (i) the fifth anniversary of the Participant's
initial participation in the Plan, assuming that any Participant who entered the
Plan prior to the January 1, 1988, instead entered
the Plan on that date, and (ii) the 10th anniversary of such initial
participation. However, a Participant's Normal Retirement Date in no event shall
be later than the Participant's attainment of age 70.
"Owner-Employee" means an individual who is a sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits interest of
the partnership. If this Plan provides benefits for one or more Owner-Employees
who control both the business for which this Plan is established and one or more
other trades or businesses, this Plan and the plan established for other trades
or businesses must, when looked at as a single plan, satisfy section 401(a) and
(d) for the Employees of this and all other trades or businesses and the
Employees of the other trades or businesses must be included in a Plan which
satisfies section 401(a) and (d) and which provides contributions and benefits
not less favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trade or business which are controlled must be as favorable as those
provided for his under the most favorable plan of the trade or business which is
not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated trade or business, or
(2) in the case of a partnership, own more than 50 percent or either
the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
"Parental Absence" means an Employee's absence (i) by reason of the
Employee's pregnancy, (ii) by reason of the birth of the Employee's child, (iii)
by reason of the placement of a child with the Employee in connection with the
Employee's adoption of the child, or (iv) for purposes of caring for such child
for a period beginning immediately after such birth or placement.
"Participant" means any Employee who is participating in the Plan or has
previously participated in the Plan and whose rights to benefits payable under
this Plan have not yet been paid in full (either directly or by distribution of
an appropriate annuity contract) or forfeited to the extent not so paid. Subject
to the provisions of section 3.3, "Participant" shall also include an individual
who previously participated in the Prior Plan unless the liability for his
unpaid accrued benefit under the Prior Plan has been separately provided for
under a funding arrangement other than the Trust Fund under this Plan. Any
reference in this Plan to an Employee's period of participation in the Plan
shall be treated as including the Employees' years of participation, if any, in
the Prior Plan.
"Pension Benefit" means the greatest of the following retirement benefits
for which a Participant is eligible following the termination of his employment,
each such benefit being an annuity for the Participant's life, with payments
guaranteed for 120 months certain, providing monthly payments of the benefit
amount prescribed in the appropriate section:
(a) "Normal Pension Benefit" means the benefit described in section
4.1.
(b) "Later Pension Benefit" means the benefit described in section
4.2.
(c) "Vested Deferred Pension Benefit", "Early Pension Benefit", and
"Disability Pension Benefit" means the benefits described in section 4.3.
"Plan Year" means each period of 12 consecutive months beginning on July 1.
The Plan Year which commenced July 1, 1987 shall end the last day of that
calendar year. Thereafter the Plan Year shall be the calendar year.
"Prior Plan" means the Peapack-Gladstone Bank Employees' Retirement Plan,
as in effect immediately prior to January 1, 1989.
"Recognized Absence" means a period for which--
(a) an Employer grants the Employee a leave of absence for a limited
period, but only if the Employer grants such leaves on a
nondiscriminatory basis; or
(b) the Employee is temporarily laid off by an Employer because of a
change in business conditions; or
(c) the Employee is on active military duty, but only to the extent
his employment rights are protected by the Military Selective Service
Act of 1967 (38 U.S.C. sec. 2021).
"Self-Employed" individual means an individual who has Earned Income for
the taxable year from the trade or business for which the plan is established;
also an individual who would have Earned Income but for the fact that the trade
or business had no net profits for the taxable year.
"Service" means an Employee's period(s) of employment or self-employment
with an Employer, excluding for initial eligibility purposes any period in which
the individual was a non-resident alien and did not receive from an Employer any
earned income which constituted income from sources within the United States. An
Employee's Service shall include any service which constitutes service with a
predecessor employer within the meaning of section 414(a) of the Code, including
service with any employer which previously maintained this Plan. An Employee's
Service shall also include any service with an entity which is not an Employer,
but only (i) for a period after 1975 in which the other entity is a member of a
controlled group of corporations or is under common control with other trades
and businesses within the meaning of section 414(b) or 414(c) of the Code, and a
member of the controlled group or one of the trades and businesses is an
Employer, (ii) for a period after 1979 in which the other entity is a member of
an affiliated service group within the meaning of section 414(m) of the Code,
and a member of the affiliated service group is an Employer, or (iii) for a
period after 1983 in which the other entity is a member of a group of
businesses, or is part of any arrangement, such that the entity is to be treated
as an Employer under Treasury Regulations promulgated pursuant to section 414(o)
of the Code.
"Social Security Retirement Age" means the age used as a Participant's
retirement age under section 216(l) of the Social Security Act, which shall mean
age 65 for a Participant born before 1938, age 66 for a Participant born after
1937 but before 1955, and age 67 for a Participant born after 1954.
"Spouse" means the individual, if any, to whom a Participant is lawfully
married on the date benefit payments to the Participant are to begin, or on the
date of the Participant's death, if earlier. However, a Participant's former
spouse shall be treated as his Spouse in lieu of his current spouse to the
extent required under any judgement, decree, or order which is determined by the
Administrator in accordance with its policies and procedures to be a qualified
domestic relations order within the meaning of section 414(p) of the Code.
"Standard Annuity" means the standard benefit form in which a Participant's
Pension Benefit shall be payable pursuant to section 6.4 unless the Participant
elects a different form.
"Top-Heavy Year" means a Plan Year in which the Plan is top-heavy within
the meaning of section 416 of the Code. In this connection, the Administrator
shall determine on a regular basis whether each Plan Year is or is not a
Top-Heavy Year for purposes of implementing the various provisions of the Plan
which apply only to the extent that the plan is top-heavy or super top-heavy
within the meaning of section 416 and the Treasury Regulations thereunder. In
making this determination, the Administrator shall use the following definitions
and principles:
(a) The "Employer" includes all business entities which are considered
commonly controlled or affiliated within the meaning of sections 414(b),
414(c), 414(m) and 414(o) of the Code.
(b) The "plan aggregation group" includes each qualified retirement
plan or simplified employee pension (as defined in section 408(k) of the
Code) which is or has been maintained by the Employer (whether or not
terminated) (i) in which a Key Employee is or has been a Participant during
any of the five years ending on a determination date, or (ii) which enables
or has enabled any plan described in clause (i) to satisfy the requirements
of section 401(a)(4) or 410 of the Code during those five years, or (iii)
which provides contributions or benefits comparable to those of the plans
described in clauses (i) and (ii) and which is designated by the
Administrator as part of the plan aggregation group.
(c) The "determination date", with respect to the first plan year of
any plan, means the last day of that plan year, and with respect to each
subsequent plan year, means the last day of the preceding plan year. If any
other plan has a determination date which differs from this Plan's
determination date, the top-heaviness of this Plan shall be determined on
the basis of the other plan's determination date which falls within the
same calendar year as this Plan's determination date.
(d) The "aggregated benefits" for any Plan Year means (i) the adjusted
account balances in defined contribution plans and simplified employee
pensions on the determination date, plus (ii) the adjusted value of accrued
benefits in defined benefit plans (calculated as of the annual valuation
date coinciding with or next preceding the determination date), with
respect to Key Employees and Nonkey Employees under all plans within the
plan aggregation group which includes this Plan. For this purpose, the
accrued benefit of any Nonkey Employee shall be determined (i) under the
accrual method, if any, which is uniformly applicable under all defined
benefit plans within the plan aggregation group, or (ii) if there is no
such uniform method, as if such benefit accrued under the slowest accrual
rate
permitted under the fractional rule of section 411(b)(1)(c) of the Code.
Further, the "adjusted account balance" and the "adjusted value of accrued
benefit" for any Employee shall be increased by all plan distributions made
with respect to the Employee during the five years ending on the
determination date from any plan within the plan aggregation group and from
any terminated plan which during those five years was within the plan
aggregation group. In addition, the adjusted account balance under a plan
shall not include any amount attributable to a rollover contribution or
similar transfer to the plan initiated by an Employee and made after 1983,
unless both plans involved are maintained by the Employer, in which event
the transferred amount shall be counted in the transferee plan and ignored
for all purposes in the transferor plan. Finally, the adjusted value of
accrued benefits under any defined benefit plan shall be determined by
assuming whichever actuarial assumptions are prescribed in that plan.
(e) This Plan shall be "top-heavy" for any Plan Year in which the
aggregated benefits of the Key Employees exceed 60 percent of the total
aggregated benefits for both Key Employees and Nonkey Employees.
(f) This Plan shall be "super top-heavy" for any Plan Year in which
the aggregated benefits of the Key Employees exceed 90 percent of the total
aggregated benefits for both Key Employees and Nonkey Employees.
"Total Compensation" means a Participant's wages, salary, overtime,
bonuses, commissions, and any other amounts received for personal services
rendered while in Service from any Employer or an affiliate (within the purview
of sections 414(b),(c),(m) and (o) of the Code), plus his Earned Income.
A Participant's Total Compensation shall include (i) amounts excludable
from gross income under section 911 of the Code, (ii) amounts described in
sections 104(a)(3), 105(a), and 105(h) of the Code to the extent includable in
gross income, (iii) amounts received from an Employer for moving expenses which
are not deductible under section 217 of the Code, and (iv) amounts includable in
gross income in the year of, and on account of, the grant of a nonqualified
stock option, or under an unfunded nonqualified plan of deferred compensation,
or otherwise includable pursuant to section 83(b) of the Code.
A Participant's Total Compensation shall exclude (i) Employer contributions
to or amounts received from a funded or qualified plan of deferred compensation,
(ii) Employer contributions to a simplified employee pension account to the
extent deductible under section 219 of the Code, (iii) Employer contributions to
a section 403(b) annuity contract (whether or not excludable from gross income),
(iv) amounts includable in gross income pursuant to section
83(a) of the Code, (v) amounts includable in gross income upon the exercise of a
nonqualified stock option or upon the disposition of stock acquired under any
stock option, and (vi) any other amounts expended by the Employer on the
Participant's behalf which are excludable from his income or which receive
special tax benefits.
"Trust" or "Trust Fund" means the trust fund created under this Plan,
including the fund carried over from the Prior Plan.
"Trust Agreement" means the agreement between the Company and the Trustee
concerning the Trust Fund. If any assets of the Trust Fund are held in a
commingled trust fund with assets of other qualified retirement plans, "Trust
Agreement" shall be deemed to include the trust agreement governing that
commingled trust fund. With respect to the allocation of investment
responsibility for the assets of the Trust Fund, the provisions of section 2.2
of the Trust Agreement are incorporated herein by reference.
"Trustee" means one or more corporate persons and individuals selected from
time to time to serve as trustee or co-trustees of the Trust Fund.
"Vesting Year" means a unit of service credited to a Participant pursuant
to section 5.2 for purposes of determining his vested interest in his Accrued
Benefit.
Section 3. Eligibility for Participation
3.1 Initial Eligibility.
An Employee shall enter the Plan as of the Entry Date nearest the later of
the following dates:
(a) the last day of the Employee's 1st Eligibility Year, and
(b) the Employee's attainment of age 21.
However, if an Employee is not in active Service with an Employer on the date he
would otherwise first enter the Plan, his entry shall be deferred until the next
day he is in active Service.
3.2 Eligibility Definitions.
An "Eligibility Year" means an applicable eligibility period (as defined below)
in which the Employee has at least 1,000 Hours of Service.
For this purpose,
(a) an Employee's first "eligibility period" is the 12 consecutive
month period beginning on the first day on which he has an Hour
of Service and if applicable, the first such day following his
most recent Break in Service, and
(b) his subsequent eligibility periods will be 12 consecutive month
periods beginning on each January 1 after that first day of
Service.
"Entry Date" means each January 1.
3.3 Prior Plan Participants, and Terminated or Part-Time Employees.
Each Employee who was in active Service and participating in the Prior Plan
immediately prior to January 1, 1989 shall enter the Plan on that date. However,
no Employee shall have any interest or rights under this Plan if (i) he is never
in active Service with an Employer on or after January 1, 1989, or (ii) he had a
one year period in which Service was interrupted as described in the definition
of Break in Service in any eligibility period beginning before January 1, 1989,
and he never has an Eligibility Year after that date. Any excluded Employee who
was a participant in the Prior Plan, and the Beneficiary of any such Employee
who has died, shall only be entitled to his benefits under the Prior Plan as of
the earlier of the termination of his Service or January 1, 1989.
3.4 Ineligible Employees.
No Employee shall participate in the Plan while he is actually employed by
a leasing organization rather than an Employer, except as otherwise provided in
the definition of Employee.
3.5 Waiver of Participation.
Any eligible Employee who does not wish to participate in the Plan shall
file with the Administrator a waiver of participation on a form provided for
this purpose. A waiver shall be effective until the first day of the Plan Year
following the Employee's revocation of the waiver. An Employee's waiver shall
automatically cease to be effective if his failure to participate in the Plan
would adversely affect the Plan's qualification pursuant to section 401(a)(26)
or 410(b) of the Code.
3.6 Participation and Reparticipation.
An Employee shall participate in the Plan during each period of Service in
which he satisfies the foregoing requirements. An Employee who leaves and
returns to Service and who previously satisfied the initial eligibility
requirements shall re-enter the Plan as of the date of his return. Furthermore,
an Employee who changes status from an ineligible class of Employees to an
eligible class of Employees shall participate in the Plan on the date of such
change in status, subject to the foregoing eligibility requirements of this
section 3.
Section 4. Retirement Benefits.
4.1 Normal Retirement.
A Participant who retires on his Normal Retirement Date shall be
immediately eligible to receive a Normal Pension Benefit. Subject to the other
provisions of this Plan, a Participant's Normal Pension Benefit shall provide a
monthly payment equal to the sum of the following:
(a) his Accrued Benefit as of January 1, 1989,
(b) 2.2 percent of his Average Compensation multiplied by his Benefit
Years on or after January 1, 1989, but not to exceed 25 Benefit Years.
(c) 0.75 percent (0.6875 percent effective January 1, 1994) of his
Average Excess Compensation multiplied by his Benefit Years on or after
January 1, 1989, but not to exceed 25 Benefit Years.
If the Participant's Pension Benefit after the latest fresh-start date is
determined under the fractional accrual rule in section 4.4 of the Plan, the
maximum number of Benefit Years during which permitted disparity is taken into
account under this formula may not be less than 25. The number of Benefit Years
taken into account under this paragraph for any Participant will not exceed the
Participant's cumulative disparity limit. The participant's cumulative disparity
limit is equal to 35 minus the number of years during which the Participant
earned a Benefit Year under one or more qualified plans or simplified employee
pensions ever maintained by the Employer, other than years for which a
Participant earned a Benefit Year under this Plan. If the Participant's
cumulative disparity limit is less than 25 years, then for years after the
participant reaches the cumulative disparity limit until the Participant has
accumulated 25 Benefit Years, the Participant's Pension Benefit will be equal to
the excess benefit percentage, or, if lesser, the highest percentage permitted
under the 133 1/3 percent accrued rule of section 411(b)(1)(B) of the Code (if
applicable) times Average Compensation. In no event may the percentage applied
to Average Excess Compensation exceed the Annual Factor as provided in Table I,
II, or III below.
TABLE I
SOCIAL SECURITY RETIREMENT AGE 67
- --------------------------------------------------------------------------------
ANNUAL FACTOR IN MAXIMUM
EXCESS ALLOWANCE AND
AGE AT WHICH MAXIMUM OFFSET ALLOWANCE
BENEFITS COMMENCE (PERCENT)
- --------------------------------------------------------------------------------
70 1.002
69 0.908
68 0.825
67 0.750
66 0.700
65 0.650
64 0.600
63 0.550
62 0.500
61 0.475
60 0.450
59 0.425
58 0.400
57 0.375
56 0.344
55 0.316
TABLE II
SOCIAL SECURITY RETIREMENT AGE 66
- --------------------------------------------------------------------------------
ANNUAL FACTOR IN MAXIMUM
EXCESS ALLOWANCE AND
AGE AT WHICH MAXIMUM OFFSET ALLOWANCE
BENEFITS COMMENCE (PERCENT)
- --------------------------------------------------------------------------------
70 1.101
69 0.998
68 0.907
67 0.824
66 0.770
65 0.700
64 0.650
63 0.600
62 0.550
61 0.500
60 0.475
59 0.450
58 0.425
57 0.400
56 0.375
55 0.344
TABLE II
SOCIAL SECURITY RETIREMENT AGE 65
- --------------------------------------------------------------------------------
ANNUAL FACTOR IN MAXIMUM
EXCESS ALLOWANCE AND
AGE AT WHICH MAXIMUM OFFSET ALLOWANCE
BENEFITS COMMENCE (PERCENT)
- --------------------------------------------------------------------------------
70 1.209
69 1.096
68 0.996
67 0.905
66 0.824
65 0.750
64 0.700
63 0.650
62 0.600
61 0.550
60 0.500
59 0.475
58 0.450
57 0.425
56 0.400
55 0.375
The Annual Factor shall be reduced actuarially to the extent Normal Retirement
Date precedes Social Security Retirement Age by more than 10 years.
Notwithstanding any other provision in the Plan, the Accrued Benefit of each
Employee whose Accrued Benefit on or after January 1, 1994, is based on
Compensation that exceeded $150,000 for a year beginning prior to January 1,
1994, will be the greater of (a) or (b) below:
(a) the Accrued Benefit determined with respect to the benefit formula
applicable for the Plan Year beginning on or after January 1, 1994, as
applied to the employee's total Benefit Years, or
(b) the sum of:
(i) the Accrued Benefit as of the last day of the last Plan Year
beginning before January 1, 1994, frozen in accordance with section
1.401(a)(4)-13 of the regulations, and
(ii) the Accrued Benefit determined under the benefit formulas
applicable for the Plan Year beginning on or after January 1, 1994, as
applied to the Benefit Years beginning on or after January 1, 1994.
A Participant's frozen Accrued Benefit is the amount of the Participant's
Accrued Benefit determined in accordance with the provisions of the Plan
applicable in the year containing the latest fresh-start date, determined as if
the Participant terminated service as of the latest fresh-start date, without
regard to any amendment made to the Plan after that date. If this Plan has not
had a fresh-start date, the participant's frozen Accrued Benefit will be zero.
If, as of the latest fresh-start date, the amount of a Participant's frozen
Accrued Benefit was limited by the application of section 415 of the Code, the
Participant's frozen Accrued Benefit will be increased for years after the
latest fresh-start date to the extent permitted under section 415(d)(1) of the
Code. In addition, the frozen Accrued Benefit of a participant whose frozen
Accrued Benefit includes the top-heavy minimum benefits provided in section 4.6
of the Plan, will be increased to the extent necessary to comply with the
average compensation requirement of section 416(c)(1)(D)(i).
If: (1) the plan's normal form of benefit in effect on the latest
fresh-start date is not the same as the normal form under the Plan after the
latest fresh-start date and/or (2) the normal retirement age for any Participant
on that date was greater than the normal retirement age for that Participant
under the Plan after the latest fresh-start date, the frozen Accrued Benefit
will be expressed as an actuarially equivalent benefit in the normal form under
the Plan after the latest fresh-start date, commencing at the Participant's
normal retirement age under the Plan in effect after the latest fresh-start
date.
Fresh-start date means the last day of a Plan Year preceding a Plan Year
for which any amendment of the Plan that directly or indirectly affects the
amount of a Participant's benefit determined under the current benefit formula
(such as an amendment to the definition of compensation used in the current
benefit formula or a change in the normal retirement age of the plan) is made
effective.
4.2 Later Retirement.
A Participant who retires on or after his Normal Retirement Date shall be
immediately eligible to receive a Later Pension Benefit. A Participant's Later
Pension Benefit shall provide monthly payments of an amount such that the Later
Pension Benefit is equal to the greater of (i) the Actuarial Equivalent of a
Normal Pension Benefit computed on the basis of his Benefit Years and
compensation up to the later of his Normal Retirement Date and his completion of
25 Benefit Years, such Actuarial Equivalent to be recomputed at the end of each
Plan Year falling more than 12 months after his completion of 25 Benefit Years,
plus interest thereon at the rate of 6 percent per annum, and (ii) the Accrued
Normal Pension Benefit determined as of his actual termination date, counting
his compensation through that date. If the Participant has fewer than 25 Benefit
Years when his employment terminates, his Later Pension Benefit shall provide
monthly payments computed on the basis of his total Benefit Years and
compensation without any actuarial increase on account of the commencement of
his benefits after Normal Retirement Date. In all events, a Participant's
benefits shall commence by the latest of (i) April 1, 1990, or (ii) the April
1st of the calendar year following the calendar year in which he reaches age
70 1/2, unless the Participant was never a Five-Percent Owner and had attained
age 70 1/2 prior to January 1, 1988, and he has never been a Five Percent Owner,
or (iii) a Participant's actual termination date if he had accrued a benefit
under this Plan as of December 31, 1983 and had elected a later commencement
date and benefit payment form in a written election signed by the Participants
or his Beneficiary and filed with the Administrator before 1984 which complied
with then applicable law and which has not since been changed in any respect
other than to comply with section 417 of the Code. The method of distribution
designated by the Participant or the Beneficiary must specify the time at which
distribution will commence, the period over which distributions will be made,
and in the case of any distribution upon the Participant's death, the
Beneficiaries of the Participant listed in order of priority. A distributions
upon death will not be covered by this transitional rule unless the information
in the designation contains the required information described above with
respect to the distributions to be made upon the death of the Participant.
If such an election is changed in any other respect (ignoring any change in
beneficiaries which does not affect the total period of benefit payments) after
the date on which, in the absence of such election, the Participant's benefits
would have begun, the election shall be deemed revoked. The Participant must
then commence receiving benefits in a form consistent with section 6.4, with
sufficient regular or special payments made by the second December 31st on or
after that revocation such that the total benefits received by that date are not
less than would have been received under a benefit payment form authorized by
section 6.4 and commencing by the April 1st of the calendar year following the
year in which the Participant reached age 70 1/2.
4.3 Termination Before Normal Retirement.
Vested Termination: A Participant whose Service terminates other than by
death before his Normal Retirement Date but after his interest in his Accrued
Benefit has become vested to some extent shall be eligible to receive on his
Normal Retirement Date a Vested Deferred Pension Benefit, provided he is living
at that date. A Participant's Vested Deferred Pension Benefit shall be equal to
the vested portion of his Accrued Benefit, but reduced to be the Actuarial
Equivalent of such benefit if his benefits begin before his Normal Retirement
Date.
Early Retirement: A Participant whose Service terminates and who reaches
his Early Retirement Date shall be eligible to receive an Early Pension Benefit
commencing on that
date in lieu of a Vested Deferred Pension Benefit. An Early Pension Benefit
shall provide monthly payments of an amount such that the benefit is the
Actuarial Equivalent of the Participant's vested Accrued Benefit at his
termination. Such Participant may elect to postpone the commencement of an Early
Pension Benefit to a date no later than his Normal Retirement Date, provided the
election is made within 30 days after he has received appropriate information
regarding the effect of a postponement on the amount of monthly payments. Such
an election may be changed at any time to specify a new benefit commencement
date at least 120 days after the new election date.
Disability Retirement: If a Participant's Service is terminated by
Disability, he shall be eligible to receive a Disability Pension Benefit. A
Disability Pension Benefit shall provide monthly payments of an amount such that
the benefit is the Actuarial Equivalent of the Participant's Accrued Benefit at
his termination. A disabled Participant may elect to receive an alternative form
of benefit described in section 6.4 other than a Standard Annuity. Subject to
section 4.7, a Disability Pension Benefit shall begin on the first day of the
month following the fifth full calendar month of the Participant's Disability,
and shall end only if the Participant's Disability ends before his Normal
Retirement Date.
4.4 Accrued Benefit.
A Participant's Accrued Benefit means that part of his Normal Pension
Benefit which he has earned on the basis of his Benefit Years to date calculated
under section 4.1. That benefit shall be increased, if necessary, to be not less
than the top-heavy minimum benefit prescribed in section 4.6, based on the
Participant's Top-Heavy Benefit Years to date. If a Participant works beyond his
Normal Retirement Date, his Accrued Benefit means the Later Pension Benefit he
would receive if he retired.
However, if this Plan has had a fresh-start, and after the latest
fresh-start date, the fresh-start rule used under the Plan is formula with
wear-away, the Accrued Benefit will not be less than the Participant's frozen
Accrued Benefit. If this Plan has had a fresh-start, and after the latest
fresh-start date, the fresh-start rule used under the Plan is the formula with
extended wear-away, in determining the Participant's Accrued Benefit with
respect to Benefit Years after the latest fresh-start date under the formula
without wear-away, the numerator in the fraction above will be limited to the
Participant's Benefit Years after the latest fresh-start date.
For Plan Years beginning before section 411 of the Code is applicable
hereto, the Participant's Accrued Benefit shall be the greater of that provided
by the Plan, or 1/2 of the Pension Benefit which would have accrued had the
provisions of section 4.4 been in effect. In
the event the Accrued Benefit as of the effective date of section 411 of the
Code is less than that provided by section 4.4 such difference shall be accrued
in accordance with section 4.4.
4.5 Definitions for Benefit Computations.
In computing a Participant's Pension Benefit or Accrued Benefit, the
following terms shall have the meanings specified:
4.5-1 "Benefit Year" means any 12-month period beginning July 1 in
which a Participant has 1,000 Hours of Service, beginning with his initial
Service with any Employer. Notwithstanding the foregoing, a Participant who
has at least one Hour of Service during the short Plan Year ending December
31, 1987 and at least 1,000 Hours of Service during the 12-month period
ending December 31, 1987 shall be credited with a full Benefit Year for the
Plan Year beginning July 1, 1987 and ending the last day of that calendar
year. Subsequent to the last day of that calendar year, a "Benefit Year"
shall be measured based on the 12-month period commencing each January 1.
However, a Participant's Benefit Years shall be computed subject to the
following conditions and qualifications:
- A Participant's Benefit Years shall include all Benefit Years credited
under the Prior Plan.
- A Participant's Benefit Years shall include any period of active
military duty to the extent required by the Military Selective Service
Act of 1967 (38 U.S.C. 2021).
- A Participant's Benefit Years shall not include any Service before the
date the Participant commences participation in the Plan.
- A Participant's Benefit Years shall not include any Service before
January 1, 1989 which would not have been included in computing his
normal retirement benefit under the Prior Plan as of that date.
- If a Participant has a Break in Service before his interest in his
Accrued Benefit has become vested to some extent, he shall lose credit
for his Benefit Years before the Break in Service unless the number of
his Vesting Years before the Break (excluding any years which would be
excluded pursuant to section 5.2 on account of a previous Break)
exceeds the number of consecutive years of the Break in Service, and
the Participant completes an Eligibility Year after the Break.
4.5-2 Compensation definitions:
"Average Compensation" means a Participant's average monthly cash
compensation from one or more Employers with respect to his highest paid 5
consecutive
Plan Years of Service or such average compensation during his entire period
of Service if that is less than 5 Plan Years of Service. Compensation for
purposes of this section 4.5 shall mean a Participant's Total Compensation.
Compensation shall include the remuneration paid to a Participant during
the applicable computation period, except that any compensation reduction
amount which is excludable from the Employee's gross income for tax
purposes pursuant to section 125, 402(e)(3), or 402(h)(1)(B), or 403(b) of
the Code shall be included. Any period of Recognized Absence and any period
after the Participant's final termination shall be excluded from the
determination of Compensation. For purposes of determining a Participant's
benefit accrual, a Participant's compensation shall exclude any
compensation in any Plan Year beginning after 1988 or in any early
Top-Heavy Year, in excess of the limit currently in effect under section
401(a)(17) or 416(d) of the Code (i.e., $200,000 for 1989). For Plan Years
beginning on or after January 1, 1994, the Compensation shall not exceed
the Omnibus Budget Reconciliation Act of 1993 annual compensation limit of
$150,000 as adjusted for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Code. The cost of living adjustment in effect
for a calendar year applies to any period, not exceeding twelve (12)
months, over which Compensation is determined, (determination period)
beginning in such calendar year. If Compensation for any prior
determination period is taken into account in determining an Employee's
benefits accruing in the current Plan Year, the Compensation for that prior
determination period is subject to the Omnibus Budget Reconciliation Act of
1993 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before
January 1, 1994, the Omnibus Budget Reconciliation Act of 1993 annual
compensation limit is $150,000, provided, however, that such limit shall be
proportionately reduced in the case of any Plan Year containing fewer than
12 months.
If, during any Plan Year beginning after 1986, any of the Participant,
the Participant's spouse, or a lineal descendant of the Participant who has
not reached age 19 by the end of the year, is either (i) a Five-Percent
Owner or (ii) a Highly Paid Employee who is among the Employer's 10 most
highly compensated Employees, then the foregoing limitation shall be
allocated among such individuals in proportion to their actual compensation
in accordance with section 414(q)(6) of the Code and applicable Treasury
Regulations. A Participant's compensation in any earlier Plan Year which is
taken into account in determining his Pension Benefit in a later Plan Year
shall not exceed the limitation applicable in the earlier Plan Year. The
foregoing limitation shall also apply in determining a Participant's "Total
Compensation" solely for purposes of the definition of "Employee" in
section 2, the top-heavy minimum benefits under section 4.6 and the
restrictions on certain distributions under section 8.3. Notwithstanding
the foregoing, for the Plan Year beginning July 1, 1987 and ending on the
last day of that calendar year Compensation shall be annualized in the
determination of "Average Compensation". Furthermore, Compensation shall be
the Compensation as defined herein during the calendar year for Plan Years
subsequent to December 31, 1987.
"Average Excess Compensation" means the excess of a Participant's Average
Compensation over the transitional covered compensation amount specified in
Table 1 of IRS Notice 89-70, as follows:
================================================================================
COVERED COVERED
YEAR OF BIRTH COMPENSATION YEAR OF BIRTH COMPENSATION
- --------------------------------------------------------------------------------
1908 $ 4,200 1933 $ 27,000
1909 4,800 1934 28,200
1910 4,800 1935 29,400
1911 5,400 1936 30,600
1912 5,400 1937 31,800
1913 6,000 1938 34,200
1914 6,600 1939 35,400
1915 7,200 1940 36,600
1916 7,800 1941 37,800
1917 8,400 1942 38,400
1918 9,600 1943 39,600
1919 10,200 1944 40,800
1920 11,400 1945 42,000
1921 12,000 1946 42,600
1922 13,200 1947 43,800
1923 14,400 1948 44,400
1924 15,600 1949 45,000
1925 16,800 1950 45,600
1926 18,000 1951 46,200
1927 19,200 1952 46,800
1928 21,000 1953 46,800
1929 22,200 1954 47,400
1930 23,400 1955 48,000
1931 24,600 1956 48,000
1932 25,800 1957 or later 48,000
===============================================================================
In the case of any other Participant who has not reached his Social
Security Retirement Age, the wage bases applicable for the current and
subsequent Plan Years shall be assumed to be equal to the wage base in effect at
the beginning of the current Plan Year. After a Participant reaches his Social
Security Retirement Age, the wage bases for subsequent years shall be assumed to
remain equal to the wage base in effect at the beginning of the Plan Year in
which he reaches such age.
Moreover, for the Plan Year beginning on January 1, 1994, the covered
compensation shall be based on the following table (adjusted, for Plan Years
beginning after 1994, in accordance with Internal Revenue Service regulations):
================================================================================
COVERED COVERED
YEAR OF BIRTH COMPENSATION YEAR OF BIRTH COMPENSATION
- --------------------------------------------------------------------------------
1928 $ 24,000 1946 $ 51,000
1929 24,000 1947 51,000
1930 27,000 1948 54,000
1931 27,000 1949 54,000
1932 30,000 1950 54,000
1933 30,000 1951 57,000
1934 33,000 1952 57,000
1935 33,000 1953 57,000
1936 36,000 1954 57,000
1937 36,000 1955 60,000
1938 39,000 1956 60,000
1939 42,000 1957 60,000
1940 42,000 1958 60,000
1941 45,000 1959 60,000
1942 45,000 1960 60,000
1943 48,000 1961 60,600
1944 48,000 1962 60,600
1945 51,000 1963 or later 60,600
================================================================================
4.6 Top-Heavy Minimum Benefit.
Notwithstanding the foregoing, if this Plan is ever Top-Heavy, a
Participant's Normal Pension Benefit or Accrued Benefit shall in no event
provide a monthly payment less than the product of 1.8 percent of his average
compensation multiplied by the number of his Top-Heavy Benefit Years up to but
not exceeding 10 Top-Heavy Benefit Years. For this purpose a Participant's
"average compensation" means the average of his Total Compensation which is paid
to him by an Employer during his highest paid five consecutive Plan Years out of
his entire period of Service, excluding any Service before the Plan's first
Top-Heavy Year or after its last Top-Heavy Year. If such period of Service is
shorter than five years, the Participant's average compensation for this purpose
shall be determined on the basis of the shorter period. Such minimum Normal
Pension Benefit or Accrued Benefit shall apply for purposes of calculating a
Participant's Later Pension Benefit, Early Pension Benefit, Disability Pension
Benefit, or Vested
Deferred Pension Benefit, as the case may be, but shall not apply for purposes
of any pre-retirement death benefit, other than the pre-retirement spousal
annuity described in section 7.1. In calculating this minimum benefit, a
Participant's "Top-Heavy Benefit Years" are Benefit Years credited to a
Participant after 1983 which are also Top-Heavy Years, up to a maximum of 10
years. However, a Top-Heavy Year shall not be counted as a Top-Heavy Benefit
Year if the Participant participated in a qualified defined contribution plan
within the plan aggregation group for that year and his accounts were credited
with employer contributions and forfeitures (excluding any salary reduction or
matching contributions) of at least 5 percent of his Total Compensation.
4.7 Suspension, Deferral, and Nonduplication of Benefits.
Payments under a Participant's Early Pension Benefit shall be suspended if
he resumes Service with an Employer before his Normal Retirement Date, and shall
resume upon the termination of his Service. However, no benefits shall be
suspended for any month after a Participant's Normal Retirement Date in which he
has fewer than 40 Hours of Service. If benefits are suspended for any period,
regular payments shall resume either (i) if the Participant has not reached his
Normal Retirement Date, as of the first day of the month following his
termination of Service, or (ii) if he has reached his Normal Retirement Date,
the first day of the month following his termination of Service, or (iii) if he
has reached his Normal Retirement Date, the first day of the month following a
reduction of his monthly Hours of Service below 40, with an immediate makeup of
all payments missed since his Normal Retirement Date. Notwithstanding the
foregoing, no portion of a Participant's Pension Benefit representing a
Top-Heavy minimum benefit payable pursuant to section 4.6 shall be suspended for
any month after the Participant's Normal Retirement Date. The Administrator
shall give Participants written notice by personal delivery or first class mail
of the rules governing such benefit suspensions and shall take whatever further
action may be necessary to comply with section 2530.203-3 of the Department of
Labor's regulations under Title I of ERISA.
Payments under a Participant's Disability Pension Benefit, if applicable,
shall cease if his Disability ceases before his Normal Retirement Date. Further,
payments under a Disability Pension Benefit shall be deferred during any period
prior to his Normal Retirement Date in which the Participant is entitled to
receive disability benefits under any insured plan maintained by an Employer,
unless such insured benefit would not be affected by the Participant's receipt
of Disability Pension Benefits.
Any Plan benefits to which a Participant or his Beneficiary may become
entitled shall be actuarially reduced to reflect any benefits other than
disability benefits previously paid or separately payable under this Plan or any
Prior Plan. In addition, a Participant's Pension Benefit
under this Plan shall be reduced to the extent of the Actuarial Equivalent of
any benefits he receives upon the termination of his employment under any public
worker's compensation or disability insurance program.
4.8 Administrator Discretion as to Payments.
The Administrator may, within a reasonable time after a Participant's
termination, distribute his vested Pension Benefit in the form of a single lump
sum which is the Actuarial Equivalent of that benefit, provided the Actuarial
Equivalent of his Accrued Benefit does not exceed and has never exceeded $3,500.
If any annuity benefit provides monthly payments of less the $100, the
Administration may provide for the payment of benefits which are the Actuarial
Equivalent on a less frequent basis such that each periodic payment is as close
as possible to $100.
4.9 Term of Benefit Payments.
The payment of any Pension Benefit shall begin on the first day of the
calendar month coinciding with or next following the date on which the
Participant becomes eligible for the benefit under sections 4.1, 4.2, or 4.3,
(his "benefit commencement date", provided his benefit form election has become
irrevocable pursuant to section 6.10, and shall end with the payment on the
first day of the calendar month in which the Participant or Beneficiary dies, or
in which the guaranteed payment period is completed, as the case may be. If the
Administrator is unable to determine the benefits payable to a Participant (or
Beneficiary) by the benefit commencement date, or is the Participant's benefit
form election has not become irrevocable by that date, the benefits shall in any
event begin within 60 days after they can first be determined or after the
election has become irrevocable, with whatever makeup payments may be
appropriate in view of the delay beyond the benefit commencement date.
Section 5. Vesting and Forfeiture.
5.1 Vesting Schedule.
A Participant shall have no interest in his Accrued Benefit until he has
completed 5 Vesting Years, at which time his interest in his Accrued Benefit
shall become 100 percent vested.
If the Plan's vesting schedule is amended or the Plan is amended in any way
that directly or indirectly affects the computation of a Participant's
nonforfeitable percentage, or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, each Participant with at least 3
years of Service with the Employer may elect within a reasonable period after
the adoption of the amendment or change, to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the latest
of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or the Administrator.
However, in the case of a Participant whose vested interest is to be
determined in a Top-Heavy Year, it shall instead be based on the following
table:
PERCENTAGE OF
VESTING YEARS INTEREST VESTED
------------------ -----------------
fewer than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
However, this top-heavy vesting schedule does not apply to the Accrued
Benefit of any Employee who does not have an Hour of Service after the Plan has
initially become top-heavy and such Employee's Accrued Benefit will be
determined without regard to this top-heavy vesting schedule.
5.2 Computation of Vesting Years.
For purposes of this Plan, a "Vesting Year" means each 12 month period
beginning July 1 in which an Employee has at least 1,000 Hours of Service,
beginning with his initial Service with any Employer, and including certain
Service with other employers as provided in the definition of "Service."
However, a Participant's Vesting Years shall be computed subject to the
following conditions and qualifications:
- Unless otherwise specifically excluded, a Participant's Vesting Years
shall include any period of active military duty to the extent
required by the Military Selective Service Act of 1967 (38 U.S.C.
section 2021).
- If a Participant has a Break in Service before his interest in his
Accrued Benefit has become vested to some extent, he shall lose credit
for any Vesting Year before the Break.
- A Participant's Vesting Years shall not include any Service before
January 1, 1971, unless he has accrued three Vesting Years since that
date.
- Notwithstanding the foregoing, a Participant shall be credited with a
Vesting Year for the Plan Year ending December 31, 1987 provided that
such Participant completes at least one Hour of Service during the
short Plan Year ending December 31, 1987 and at least 1,000 Hours of
Service during the 12-month period ending December 31, 1987.
Subsequent to the last day of that calendar year a `Vesting Year'
shall be measured based on the 12-month period commencing each January
1.
5.3 Full Vesting Upon Certain Events.
Notwithstanding section 5.1, a Participant's interest in his Accrued
Benefit shall fully vest on the Participant's Normal Retirement Date.
The Participant's interest shall also fully vest on the date he reaches his
Early Retirement Date, provided he is in Service on or after that date, or in
the event that his Service is terminated by Disability or death. These special
full vesting rules, other than as provided in the first sentence in this section
5.3, shall not apply to Top-Heavy minimum benefits accrued by a Participant
pursuant to section 4.6.
5.4 Full Vesting Upon Plan Termination.
Notwithstanding section 5.1, an affected Participant's interest in his
Accrued Benefit shall fully vest upon the complete termination of this Plan,
subject to sections 8.3 and 11.6. If there is a partial termination, each active
Participant's interest in his Accrued Benefit, with respect to that part of the
Plan which is terminated, shall fully vest to the extent such interest is
funded, as
determined on a basis consistent with the priorities set forth in section 11.6
and the restrictions in section 8.3.
5.5 Forfeiture of Nonvested Interest.
If a Participant's Service terminates before his interest in his Accrued
Benefit is fully vested, that portion which has not vested shall be forfeited as
soon as he either (a) receives a distribution of his entire vested interest
pursuant to section 6, or (b) has a Break in Service. For this purpose, a
Participant who has terminated with no vested interest in his Accrued Benefit
shall be deemed to have received a distribution of his entire vested interest on
the date of his termination. However, if the nonvested portion of a
Participant's Accrued Benefit has been forfeited before he has a Break in
Service, and the Participant returns to an Employer's Service before he has a
Break, the forfeited portion shall immediately be restored to the Participant.
No forfeiture shall be used to increase the benefits any Participant or
Beneficiary would otherwise receive under the Plan.
5.6 Vesting and Nonforfeitability.
A Participant's interest in his Accrued Benefit which has become vested
shall be nonforfeitable for any reason. However, the Participant's
nonforfeitable interest shall be limited to those pension and death benefits
specifically described in sections 4 and 7, subject to all applicable conditions
and limitations under this Plan. If a benefit is forfeited because the
Participant or Beneficiary cannot be found, such benefit will be reinstated if a
claim is made by the Participant of Beneficiary. The minimum Accrued Benefit
required (to the extent required to be nonforfeitable under section 416(b)) of
the Code may not be forfeited under section 411(a)(3)(B) or 411(a)(3)(D) of the
Code.
Section 6. Pension Benefit Claims and Forms.
6.1 Claim for Benefits.
Any Participant or Beneficiary who qualifies for the payment of benefits
shall file a claim for his benefits with the Administrator on a form provided by
the Administrator. The claim shall be filed at least 30 days before the date on
which the benefits are to begin. If a Participant fails to file a claim by the
30th day before the date on which his benefits are to begin, the Administrator
shall proceed as if he had filed a claim for whatever Pension Benefit the
Administrator believes he has earned.
6.2 Notification by Administrator.
Within 90 days after receiving a claim for benefits (or within 180 days, if
special circumstances require an extension of time and written notice of the
extension is given to the Participant or Beneficiary within 90 days after
receiving the claim for benefits), the Administrator shall notify the
Participant or Beneficiary whether the claim has been approved or denied. If the
Administrator denies a claim in any respect, the Administrator shall set forth
in a written notice to the Participant or Beneficiary:
(i) each specific reason for the denial;
(ii) specific references to the pertinent Plan provisions on which the
denial is based;
(iii) a description of any additional material or information which
could be submitted by the Participant or Beneficiary to support his claim,
with an explanation of the relevance of such information; and
(iv) an explanation of the claims review procedure set forth in
section 6.3.
6.3 Claims Review Procedure.
Within 60 days after a Participant or Beneficiary receives notice from the
Administrator that his claim for benefits has been denied in any respect, he may
file with the Administrator a written notice of appeal setting forth his reasons
for disputing the Administrator's determination. In connection with his appeal
the Participant or Beneficiary or his representative may inspect or purchase
copies of pertinent documents and records to the extent not inconsistent with
other Participants' and Beneficiaries' rights of privacy. Within 60 days after
receiving a notice of appeal from a prior determination (or within 120 days, if
special circumstances require an extension of time and written notice of the
extension is given to the Participant or Beneficiary and his representative
within 60 days after receiving the notice of appeal), the Administrator shall
furnish to the Participant or Beneficiary and his representative, if any, a
written statement of the
Administrator's final decision with respect to his claim, including the reasons
for such decision and the particular Plan provisions upon which it is based.
6.4 Standard and Alternative Benefit Forms.
If a Participant has no Spouse, his Pension Benefit described in any of
sections 4.1, 4.2 or 4.3 shall be the "Standard Annuity" form for the
Participant. If a Participant has a Spouse, the "Standard Annuity" form in which
his Pension Benefit shall be payable shall be a joint and survivor annuity,
payable monthly for his life and, after his death, payable monthly at one-half
of the initial rate for the life of his Spouse, which is the Actuarial
Equivalent of his Pension Benefit. Any alternative form of benefit selected by a
Participant shall be the Actuarial Equivalent of his Pension Benefit payable in
the Standard Annuity form. Each Participant shall receive his benefits in the
Standard Annuity form unless he elects in accordance with section 6.5 to receive
one of the following alternative forms of benefits:
- a monthly benefit for the Participant's life, with or without payments
guaranteed at the initial rate for 60 months, 180 months, or 240
months, or, if less, a period not exceeding his life expectancy; or
- a monthly benefit for the Participant's life and, after his death, a
monthly benefit for the life of his Beneficiary which shall either be
equal to the Participant's monthly benefit or be equal to two-thirds
or one-half of his benefit; or
- a term certain annuity providing equal periodic installments over a
period of not less than 5 years, but in any event not exceeding the
joint and survivor's life expectancy of the Participant and his
Beneficiary, if any; or
- any other annuity benefit; or
- a lump sum benefit. A lump sum distribution benefit will not be
permitted if the amount of such lump sum exceeds $20,000 (effective
January 1, 1994, $25,000).
Where a Participant elects to receive an annuity with a period certain, the
period selected may not extend past the Participant's 96th birthday. Where a
Participant elects to receive a joint and survivor annuity with a contingent
annuitant other than his Spouse, the ratio of the monthly payment under the
survivor annuity to the payment to the Participant shall not exceed the
applicable percentage in the following table:
================================================================================
PARTICIPANT'S AGE PARTICIPANT'S AGE
MINUS CONTINGENT APPLICABLE MINUS CONTINGENT APPLICABLE
ANNUITANTS'S AGE PERCENTAGE ANNUITANT'S AGE PERCENTAGE
- --------------------------------------------------------------------------------
10 or less 100% 28 62%
11 96% 29 61%
12 93% 30 60%
13 90% 31 59%
14 87% 32 59%
15 84% 33 58%
16 82% 34 57%
17 79% 35 56%
18 77% 36 56%
19 75% 37 55%
20 73% 38 55%
21 72% 39 54%
22 70% 40 54%
23 68% 41 53%
24 67% 42 53%
25 66% 43 53%
26 64% 44 or more 52%
27 63%
================================================================================
Further, any form elected must provide for benefit payments such that the
present value of the benefits to be paid to the Participant exceeds 50 percent
of the present value of the total benefits to be paid, and either (i) all
benefits will be paid by the Participant's death, or by the death of the
survivor of the Participant and a designated contingent annuitant, or (ii) all
benefits will be paid over a period not exceeding the Participant's life
expectancy, or the joint and survivor life expectancy of the Participant and a
designated contingent annuitant, as determined at the time benefits begin.
However, this shall not prevent the payment of benefits over a longer period
pursuant to an election made by a Participant before 1984 which complied with
then applicable law and which has not since been changed in any respect other
than to comply with section 417 of the Code (ignoring any change in
beneficiaries which does not affect the total period of benefit payments).
6.5 Election of Pension Benefit Form.
Any Participant who qualifies for a Pension Benefit may, in lieu of the
Standard Annuity, elect to receive a form of benefits described in section 6.4.
Any election of a benefit form, or revocation of an election, shall be made on a
form provided by the Administrator and shall be signed by the Participant.
If a Participant is married, his election of any benefit form other than
the Standard Annuity shall be valid only if accompanied by the Spouse's written
consent to the election, which (i) must acknowledge the effect of the election,
(ii) must explicitly provide either that the designated Beneficiary, if any, and
payment form may not subsequently be changed by the Participant without the
Spouse's further consent, or that they may be changed without such consent, and
(iii) must be witnessed by the Administrator, its representative, or a notary
public. (The Administrator may waive this requirement if the Participant
established to the Administrator's satisfaction that the Spouse may not be
located.)
A Participant's election, and his Spouse's consent if applicable, shall be
filed with the Administrator during an election period beginning 90 days before
the day on which benefit payments are to begin. The Administrator shall furnish
to the Participant, at least 30 days and not more than 90 days before the
benefit commencement date, a written explanation in nontechnical language of the
Standard Annuity and other benefit forms provided under section 6.4, the
Participant's right to elect a form and revoke an election, and the relative
effect of the different forms on the amounts to be received by the Participant
and any Beneficiary. If the Participant is married, the Administrator's written
explanation shall describe the need for the Spouse to consent to the election of
any form other than a Standard Annuity.
If a Participant requests any additional information regarding the election
of a benefit form within 60 days after receiving the Administrator's initial
written explanation, the Participant's benefit commencement date shall be
changed, if necessary, to be at least 60 days after he receives the additional
information. If a Participant is to receive a form of benefits involving a fixed
or minimum number of payments, he may at any time, whether before or after the
end of the election period, change the designated Beneficiary of any benefits
which may remain payable upon the death of the Participant and any contingent
annuitant, subject his Spouse's consent if applicable.
6.6 Administrator Action as to Benefit Payments.
Where a Participant or Beneficiary does not or may not elect to receive a
lump sum payment of the Participant's Pension Benefit or death benefit, the
Administrator in accordance with uniform, nondiscriminatory policies shall
determine whether the benefits shall be paid directly from the Trust Fund as the
payments become due, or shall be provided through insured individuals or group
annuity contracts, which policies may take into account the interest rates being
assumed under such contracts relative to the expected investment returns of the
Trust Fund. Where a Participant's Service has ended prior to his Normal
Retirement Date and the Participant has declined or is not permitted to accept a
lump sum payment of his Accrued Benefit, the Administrator may at any time, in
accordance with such policies, distribute a terminated Participant's Pension
Benefit to him in the form of an individual, nontransferable annuity contract
from a reputable insurer, provided such contract complies with the provisions of
this Plan and preserves all of the elections provided under sections 6.4 and
6.5.
If the lump sum distributions in excess of $3,500 are permitted by the
Plan, the Administrator shall, within a reasonable time after a Participant's
termination, distribute his Pension Benefit in the form of a single lump sum
which is the Actuarial Equivalent of that benefit, provided (i) the Actuarial
Equivalent of his Accrued Benefit does not exceed and has never exceeded $3,500,
or (ii) the Participant has reached his earliest retirement date and has elected
to receive the proposed lump sum payment in lieu of a periodic benefit as a
Standard Annuity within 30 days after the Administrator notifies him of his
right to elect the lump sum. The Administrator's notice shall be given between
30 and 90 days prior to the lump sum payment date, and shall explain the
Participant's right to receive or defer his benefit and his right to elect among
various forms of annuities if benefit payments are deferred until the
Participant's Early or Normal Retirement Date.
6.7 Election Formalities.
Any election or revocation of a benefit form shall be in writing, signed by
the Participant or, if applicable, by the Beneficiary, and delivered personally
or by mail to the Administrator. The Administrator shall provide appropriate
forms for benefits elections, but an election shall be valid whether or not it
is made on the official form.
6.8 Marital Status.
The Administrator shall from time to time take whatever steps it deems
appropriate to keep informed of each Participant's marital status. Each Employer
shall provide the Administrator with the most reliable information in the
Employer's possession regarding its Participants' marital status, and the
Administrator may, in its discretion, require a notarized affidavit from any
Participant as to his marital status. The Administrator, the Plan, the Trustee
and the Employers shall be fully protected and discharged from any liability to
the extent of any benefit payment made as a result of the Administrator's good
faith and reasonable reliance upon information obtained from a Participant and
his Employer as to his marital status.
6.9 Proof of Ages.
Each Participant shall furnish satisfactory proof of his age to the
Administrator at least 30 days before the end of the election period described
in section 6.5. Further, any Participant who is to receive his benefits in a
form related to the lifespan of another individual shall furnish satisfactory
proof of the individual's age to the Administrator by the same date.
6.10 Irrevocability of Elections.
Any election by a Participant as to his benefit form shall be irrevocable
after the end of the election period described in section 6.5.
6.11 Presumption in Absence of Election.
Any Participant who fails to make a timely election in accordance with
section 6.5, or whose election is revoked or becomes void, shall be presumed
conclusively to have accepted his Pension Benefit in the form of the Standard
Annuity.
Notwithstanding the foregoing, the failure of a Participant and Spouse, if
applicable, to consent to a distribution while a benefit is immediately
distributable, within the meaning of section 4.1, 4.2 or 4.3 of the Plan, shall
be deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
6.12 Effect of Contingent Annuitant's Death.
Any election of a form of Pension Benefit related to the lifespan of
another individual shall become void automatically if such individual dies
before the date on which benefit payments are to begin. However, if the
individual dies before the Participant but after the date on which benefit
payments begin (or were to begin), the Participant shall receive only the
benefits described in the form so elected.
6.13 Effect of Participant's Death.
Any election of an alternative form of Pension Benefit described in section
6.4 shall become void automatically if the Participant dies before the date on
which benefit payments are to begin. The amount and form of the benefits, if
any, to be paid to such Participant's Spouse or other designated Beneficiary
shall be determined in accordance with section 7.
6.14 Payment in Cash; Direct Transfer.
All benefits shall be paid in cash except as otherwise agreed upon by the
Administrator and the person entitled to the benefits. To the extent that the
recipient could roll over some or all of a benefit payment into another
qualified retirement plan or an individual retirement arrangement pursuant to
section 402(c) of the Code, and the amount eligible for rollover exceeds $200,
the recipient may elect to have that amount paid directly to such plan or
arrangement.
Section 7. Death Benefits.
7.1 Death Before Commencement of Benefits.
If a Participant dies before his benefit commencement date while he is in
active Service, or after his interest in his Accrued Benefit has become vested
to some extent and after his Service has terminated, his Beneficiary shall
receive a death benefit which is the Actuarial Equivalent of his Accrued
Benefit, computed as of the date of his death. The death benefit shall be paid
in a lump sum, annuity, or installment form, and to one or more Beneficiaries,
as the Participant may have elected.
However, if the Participant has a Spouse at the time of his death and has
not specifically elected otherwise, the death benefit shall automatically be
paid to the Spouse in the form of a monthly annuity for the Spouse's remaining
life. The Plan Administrator shall provide each Participant within the period
beginning on the first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year in which the Participant attains
age 35, a written explanation of: (i) the terms and conditions of a qualified
pre-retirement survivor annuity; (ii) the Participant's right to make and the
effect of an election to waive the qualified pre-retirement survivor annuity
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 pre-retirement survivor annuity. If a Participant enters the Plan
after the first day of the Plan Year in which the Participant attained age 32,
the Plan Administrator shall provide notice no later than the close of the
second Plan Year succeeding the entry of the Participant into the Plan. Any
qualified pre-retirement survivor annuity election will be in writing and may be
changed by the Participant at any time. No election of a different Beneficiary
or a different payment form shall be valid unless the election is accompanied by
the Spouse's written consent, which (i) must acknowledge the effect of the
election (ii) must explicitly provide either that the designated Beneficiary and
payment form may not subsequently be changed by the Participant without the
Spouse's further consent, or that it may be changed without such consent, and
(iii) must be witnessed by the Administrator, its representative, or a notary
public. (The Administrator may waive this requirement if the Participant
establishes to the Administrator's satisfaction that the Spouse can not be
located.)
Unless the Participant has otherwise provided, his Beneficiary may change
or elect an alternative benefit form within 60 days after a death benefit
becomes payable. The Administrator may cause the death benefit to be paid in a
single lump sum which is the Actuarial Equivalent where (i) if the Beneficiary
is the Spouse, the lump sum is less than
$3,500 or the Spouse consents to receive it, or (ii) if the Beneficiary is not
the Spouse, the lump sum is less than $3,500 or there is no valid election of a
different benefit form by the Participant or the Beneficiary.
In all events, whether pursuant to an election by the Participant or by the
Beneficiary, all of the Participant's interest under this Plan shall be
completely distributed by the sixth December 31st falling on or after the date
of his death, except in the case of death benefits payable to an individual
Beneficiary, which may be payable over the Beneficiary's remaining lifetime or
over a period certain not exceeding the Beneficiary's life expectancy at the
Participant's death. However, this shall not prevent the payment of death
benefits over a longer period pursuant to an election made by a Participant
before 1984 which complied with then applicable law and which has not since been
changed in any respect other than to comply with section 417 of the Code
(ignoring any change in beneficiaries which does not affect the total period of
benefit payments).
If a Participant dies before his benefit commencement date while in active
Service, but after his Normal Retirement Date, his Beneficiary shall receive a
death benefit which is the Actuarial Equivalent of his Accrued Benefit, subject
to the terms and conditions of the preceding paragraph.
7.2 Death After Commencement of Benefits.
If a Participant dies after his benefit commencement date, any remaining
benefits under the Standard Annuity or the alternative benefit form, if any,
elected pursuant to section 6.5 shall be paid to the Participant's Spouse or
other Beneficiary, as the case may be.
Section 8. Benefit Limitations.
8.1 Maximum Annual Benefits.
Regardless of any other provision in this Plan, no Participant's
Pension Benefit shall provide annual payments exceeding the lesser of: (i)
$90,000, or the dollar limitation currently in effect (hereinafter the "Dollar
Limitation"), and (ii) the Participant's average annual Total Compensation
during his highest-paid three consecutive limitation years out of his total
period of Service with the Employers (hereinafter the "Percentage Limitation").
However, in a case of a Participant who has never participated in a defined
contribution plan maintained by an Employer, the limitation under this section
8.1 (hereinafter the "Benefit Limit") shall not be less than $1,000 multiplied
by his years of Service up to a maximum of 10 years. A "limitation year" shall
mean each 12-month period beginning on January 1. In all events, the Benefit
Limit shall be determined subject to the following:
8.1-1 The Dollar Limitation shall be reduced by one-tenth for each
whole year by which the sum of the Participant's total years of
participation in the Plan and the Prior Plan is less than 10. The
Percentage Limitation shall be reduced by one-tenth for each whole year by
which the sum of the Participant's total years of Service with the Employer
is less than 10.
8.1-2 The Benefit Limit shall be reduced to the extent of the
Participant's benefits under any other defined benefit retirement plan
which must be aggregated with this plan pursuant to sections 415(f) and (h)
of the Code, taking into account the rules prescribed under sections
414(b), (c), (m), and (o).
8.1-3 If a Participant's benefits are payable in a form other than a
straight life annuity or a qualified joint and survivor annuity, such
benefits shall be converted to an actuarially equivalent straight life
annuity for purposes of determining compliance with the Benefit Limit. A
Participant's benefits for this purpose shall not include any benefits
attributable to his rollover or voluntary contributions, any benefits
transferred from another plan not maintained by an Employer, or any
pre-retirement death benefits, post-retirement medical benefits, or
post-retirement cost-of-livings adjustments.
8.1-4 If a Participant's benefits commence before his Social Security
Retirement Age, the Dollar Limitation shall first be reduced to be
actuarially equivalent to a single life annuity beginning at that age as
follows: for benefits commencing on or after the Participant reaches age
62, the Dollar Limitation shall be reduced by 5/9 of one percent for each
of the first 36 months and by 5/12 of one percent for each of the next 24
months (if any) prior to the Social Security Retirement Age; for benefits
commencing before the
Participant reached age 62, the Dollar Limitation shall be actuarially
equivalent to the limitation applicable at age 62.
8.1-5 If a Participant's benefits commence after his Social Security
Retirement Age, the Dollar Limitation shall first be increased to be
actuarially equivalent to a single life annuity of the Dollar Limitation
beginning at the Participant's Social Security Retirement Age.
8.1-6 For purposes of this section 8.1, actuarial equivalence shall be
determined using the factors specified for determining an Actuarial
Equivalent under other provisions of the Plan, except that the interest
rate for purposes of sections 8.1-3 and 8.1-4 shall be greater of five
percent and the rate used to determine an Actuarial Equivalent, while the
interest rate for purposes of section 8.1-5 shall be the lesser of five
percent and the rate used to determine an Actuarial Equivalent. Further,
there shall not be any discount for pre-retirement mortality to the extent
the Participant's Beneficiary, in the event of his death prior to his
Normal Retirement Date, would receive a death benefit under section 7.1
equivalent to his Accrued Benefit.
8.1-7 For purposes of this section 8.1 and section 8.2, the $90,000
and $30,000 Dollar Limitations referred to shall, for each limitation year
ending after 1987, be automatically adjusted to the new Dollar Limitations
determined by the Commissioner of Internal Revenue for the calendar year in
which the limitation year ends.
8.1-8 In computing a Participant's Pension Benefit, all other
reductions (e.g., those applicable in determining his Accrued Benefit, or
in computing a benefit payable before Normal Retirement Date, or in
determining an offset on account of a benefit under another plan) shall be
applied before the benefit is reduced to comply with the Benefit Limit
under this section.
8.1-9 The dollar Limitation shall in no event be less than a
Participant's Accrued Benefit in the form of a single life annuity
determined as of the last day of the last limitation year beginning before
1987, but without regard to any changes in the Plan made after May 5, 1986.
8.2 Coordinated Limitation With Other Plans.
If a Participant has ever participated in one or more defined contribution
plans maintained by the Employer or a related entity (within the purview of
sections 414(b), (c), (m) and (o) and 415(h) of the Code, which affiliate shall
be deemed an Employer for this purpose), and if the Participant's defined
contribution plan fraction has not been sufficiently limited pursuant to those
plans' provisions regarding the limitations under section 415(e) of the Code,
then the Participant's
Pension Benefit shall be limited so that the sum of his defined benefit plan
fraction and his defined contribution plan fraction does not exceed one in any
limitation year. For this purpose:
8.2-1 A Participant's defined benefit plan fraction shall be a
fraction, (i) the numerator of which is the sum of 12 monthly payments of
the Participant's projected annual benefit, and (ii) the denominator of
which is the least of (a) 1.25 times the Dollar Limitation, or 1.25 times
the currently applicable Dollar Limitation, or (b) 1.0 times the Dollar
Limitation if either the Plan is super top-heavy, or the Plan is top-heavy
and the minimum benefits required pursuant to section 416(h)(2) of the Code
have not been provided, or (c) 1.4 times the Percentage Limitation.
For this purpose, a Participant "projected annual benefit" under each
defined benefit plan means the annual normal retirement benefit (adjusted
to an actuarially equivalent single life annuity in the case of any plan
under which the normal form is other than a single life annuity or
qualified joint and survivor annuity) which the Participant will receive
assuming his Service with the Employer will continue until his normal
retirement date under the plan (or until the present, if later), and
assuming that his compensation and all other factors used to determine his
benefits will remain constant through such date.
In the case of any Participant covered on or before the last day of
the Plan Year that began in 1986, by one or more defined benefit plans
established by May 6, 1986, which satisfied the requirements of section 415
for all years beginning before 1987, the denominator of his benefit plan
fraction shall in no event be less than 125 percent of the sum of the
annual benefits which he had accrued as of the last day of the Plan Year
that began in 1986, disregarding any changes in the terms of any plan after
May 5, 1986.
8.2-2 A Participant's defined contribution plan fraction shall be a
fraction, (i) the numerator of which is the sum of the annual additions to
his accounts under all qualified retirement plans and simplified employee
pensions ever maintained by an Employer (whether or not terminated), and
(ii) the denominator of which is the sum of the least of the following
amounts determined for the current year and each prior year of service with
an Employer: (a) 1.25 times $30,000, or 1.25 times the Dollar Limitation in
effect under section 415(c)(1)(A) of the Code for such year (ignoring
section 415(c)(6)), or (b) 1.0 times such Dollar Limitation if either the
Plan is super top-heavy, or the Plan is top-heavy and the minimum benefits
required pursuant to section 416(h)(2) of the Code have not been provided,
or (c) 35 percent of the Participant's Total Compensation for such year.
However, the denominator of the defined contribution plan fraction shall be
determined instead pursuant to the special transition rule set forth in
section 415(e)(6) of the Code if the Administrator so elects.
If the Participant participated in a defined contribution plan in any years
beginning before 1976, any excess of the sum of the actual annual additions
to the Participant's accounts for those years over the maximum annual
additions which could have been made in accordance with section 415(c) of
the Code shall be ignored, and voluntary contributions by the Participant
during those years shall be taken into account as to each such year only to
the extent that his average annual voluntary contribution in those years
exceeded 10 percent of his average Total Compensation in those years. In
the case of any Participant covered by one or more defined contribution
plans established by May 6, 1986, for whom the sum of his defined
contribution plan fraction and defined benefit plan fraction on the last
day of the Plan Year that began in 1986 did not exceed one under the rules
of section 415(e) of the Code in effect on that date, but did exceed one
under the rules becoming effective on the first day of the Plan Year that
began in 1987, his defined contribution plan fraction shall be permanently
reduced by subtracting from the numerator an amount equal to the product of
(a) the excess of the sum of such fractions on the first day of the Plan
Year that began in 1987, over one, multiplied by (b) the denominator of the
defined contribution plan fraction on that date. No changes in the terms of
any plan after May 5, 1986, shall be taken into account in making such an
adjustment.
For this purpose, the annual additions to a Participant's accounts shall
mean the sum of (i) the Employer contributions and Employee forfeitures
allocated to his accounts (including contributions to any individual
medical benefits account as described in section 415(l)(2) or 419(d)(2) of
the Code), plus (ii) for limitation years beginning before 1987 the lesser
of one-half of his voluntary contributions or the excess of his voluntary
contributions over six percent of his Total Compensation, plus (iii)
amounts allocated after March 31, 1984 to an individual medical account as
defined in Section 415(l)(1) of the Code which is part of a defined benefit
plan maintained by the Employer, plus (iv) amounts derived from
contributions paid or accrued after December 31, 1985 to post-retirement
medical benefits allocated to the separate account of a Key Employee under
a welfare benefit fund, as defined in Code Section 419(e), maintained by
the Employer, (v) for limitation years beginning after 1986, his total
voluntary contributions. Further, any voluntary contributions by a
Participant pursuant to section 9.8 shall be treated as participation in a
defined contribution plan maintained by the Employer. Where the sum of the
fractions would exceed one for a Participant, the Administrator shall be
authorized to take whatever action (i) will reduce the Participant's
benefit accruals and annual additions to the extent required for the sum of
the fractions not to exceed one, and (ii) will result in
the least reduction of retirement income to the Participant using the
actuarial assumptions applied to determine an Actuarial Equivalent.
8.3 Limitations as to Certain Employees.
Regardless of any other provision of the Plan, during any Plan Year
beginning on or after January 1 , 1994, the benefits paid to any of the 25 most
highly compensated Highly Paid Employees or their Beneficiaries shall not exceed
the payments which would be made in a single life annuity form. (For this
purpose, any loans to an Employee in excess of the limit prescribed under
section 72(p)(2)(A) of the Code, and any death benefits paid to a deceased
Participant's Beneficiary which are not provided by life insurance, shall be
deemed additional benefits.) However, the foregoing restriction shall not apply
to any Participant's benefits if (a) the Plan would have assets, after
distributing the Participant's entire remaining benefits in a lump sum,
exceeding 110 percent of the Plan's "current liabilities" within the meaning of
section 412(l)(7) of the Code, or (b) the present value of the Participant's
remaining benefits is less than one percent of such current liabilities or less
than $3,500.
During any Plan Year beginning before January 1, 1989 the Pension Benefit
payable to any active or terminated Participant who was among the 25
highest-paid Employees of all participating Employers as of the latest of (i)
July 1, 1956 (ii) the effective date of his Employer's adoption of the Plan, and
(iii) the effective date of an amendment to the Plan which generally increases
retirement benefits (that latest date to be called the "Limitation Date") shall
be subject to certain restrictions as follows:
8.3-1 The restrictions described in section 8.3-2 shall become
applicable if (i) the Plan is terminated within ten years after the
Limitation Date and the Plan's assets are not sufficient to cover the full
actuarial value of all Participants' and Beneficiaries' interests, or (ii)
the Participant's benefits become payable within ten years after the
Limitation Date.
8.3-2 The Employer's contributions which may be used for the
Participant's benefits shall not exceed the greatest of: (i) $20,000; (ii)
the sum of 20 percent of the first $50,000 of his annual compensation
multiplied by the number of years between the Limitation Date and the
earlier of the date of termination of the Plan or the date on which the
Participant's benefits commence, whichever is applicable, plus, if benefits
have been increased by an amendment, the amount which would have been used
for his benefit if the Plan had been terminated on the Limitation Date;
(iii) the amount which would have been used for his benefit if the benefit
level under the Plan as in effect prior to the Limitation Date had not been
changed; (iv) in the case of a "substantial owner" as defined in section
4022(b)(5) of ERISA, the present value of his benefits which are guaranteed
under section 4022 if the Plan is terminating, or which would be guaranteed
if the Plan were terminating; or (v) in the case of a Participant who is
not a "substantial owner", the present value of the maximum benefit
described in section 4022(b)(3)(B), substituting the phrase "at the earlier
of the time the Plan terminates or the time benefits commence" in place of
"at the time the plan terminates" in that section. The foregoing
restrictions shall be applied separately with respect to each Limitation
Date arising from an amendment which increases benefits.
8.3-3 For purposes of this section 8.3, the term "benefits" shall mean
the Pension Benefits described in section 4, and the term "annual
compensation" shall mean the Participant's average Total Compensation
during the most recent five years.
8.3-4 Any terminated Participant subject to the foregoing restrictions
shall receive the unrestricted portion of his Pension Benefit in accordance
with section 4, and the Trustee shall continue to hold in trust the balance
of his benefits until the restrictions permit the remaining benefits to be
paid.
8.3-5 The restrictions shall not apply to any death benefits payable
pursuant to section 7 or to any Pension Benefit which, in the form of a
Standard Annuity, provides monthly payments to the Participant not
exceeding $125. Further, the restrictions shall not prevent the payment of
annuity benefits to the Participant so long as any excess of the benefits
paid during the current Plan Year to all Participants over the benefits
which could otherwise be paid to them under the restrictions does not
exceed the Employer's contributions already paid to the Trustee in the
year.
The foregoing restrictions shall not, in the event of a termination of
the Plan, prevent the payment of benefits in a manner which does not
discriminate in favor of Participants who are officers or shareholders of
the Employer, or are highly compensated.
8.3-6 Further, the foregoing restrictions shall not apply to a
Participant who agrees to repay, before the restrictions would otherwise
lapse, any part of the benefits which, except for this paragraph, would not
have been paid, plus interest at the rate used from time to time to
calculate the lump sum equivalent of a Pension Benefit (hereinafter the
"repayable amount"). The agreement shall be in writing, signed by the
Participant and the Administrator, and shall be secured by the deposit,
with a depository acceptable to the Administrator, of property having a
fair market value equal to 125 percent of the repayable amount.
The Participant shall agree to deposit additional property to bring
the value of the total property deposited up to 125 percent of the
repayable amount if the fair market value of the property originally
deposited falls below 110 percent of that amount. The deposited property
shall be released as security and returned to the Participant if and to
the extent that the restrictions shall no longer apply to his benefits, as
long as the remaining property always equals 125 percent of the
Participant's remaining obligation under this paragraph.
To the extent that the Participant deposits U.S. Treasury bonds, cash,
or cash equivalent securities, "100 percent" shall be substituted for "125
percent" or "110 percent" in the preceding paragraphs.
Section 9. Contributions and Trust Fund.
9.1 Funding of Costs.
The Employers intend to make the contributions necessary to provide the benefits
described in this Plan in accordance with a funding policy adopted by the
Company. No contribution shall be made by any Participant to provide the
prescribed benefits, although a Participant may make voluntary or rollover
contributions pursuant to sections 9.8 and 9.9. All Employer's contributions
shall be voluntary and an Employer may not be compelled by the Trustee, the
Administrator, any Participant, any Beneficiary, or any other person to make
contributions under this Plan.
9.2 Creation of Trust Fund.
The Company shall select the Trustee to whom the Employers may from time to
time make contributions for the purpose of funding the benefits described in
this Plan. The Trustee shall hold the Employers' contributions, together with
all amounts received from other qualified plans and investments, as the Trust
Fund under the terms of this Plan and the Trust Agreement. in all events, the
benefits described in this Plan shall be payable only from assets of the Trust
Fund and none of the Company, any other Employer, its board of directors or
trustees, its stockholders or members, its officers, its partners, its
proprietor, its employees, the Administrator, and the Trustee shall be liable
for the payment of any benefit under this Plan except from the Trust Fund.
9.3 Responsibility for Investment.
The Trustee shall have full responsibility for the investment of the Trust
Fund, except to the extent investment responsibility may be assigned in writing
by the Company to another fiduciary or delegated from time to time to one or
more investment managers pursuant to section 2.2 of the Trust Agreement.
9.4 Funding Method and Determination of Cost.
Subject to the approval of the Company, the Administrator shall determine
an appropriate method for funding the benefits under this Plan in a manner which
complies with ERISA. The Administrator shall engage a competent actuary,
enrolled by the federal Joint Board for the Enrollment of Actuaries, who shall
assist the Administrator in choosing the funding method to be used. Using such
factual information as he may require from the Administrator, the actuary shall
have the exclusive authority to determine appropriate actuarial assumptions for
calculating the costs of providing the Plan's benefits and for determining the
minimum amount which must be
contributed in order to avoid an accumulated funding deficiency within the
meaning of section 412(a) of the Code.
9.5 Payment of Expenses.
All expenses incurred by the Administrator and the Trustee in connection
with administering this Plan and the Trust Fund shall be paid by the Trustee
from the Trust Fund to the extent the expenses have not been assumed by the
Employers or by the Trustee in accordance with the Trust Agreement.
9.6 Return of Contributions.
Any amount contributed by an Employer due to a good faith mistake of fact,
or based upon a good faith but erroneous belief that it is deductible under
section 404 of the Code, shall be returned to the Employer within one year after
the contribution was originally made. No Employer shall make any contribution to
the Trust Fund which is not currently deductible under section 404 of the Code
(taking into account the aggregate limitation under section 404(a)(7), and any
nondeductible contribution shall be returned to the Employer within one year
after its nondeductibility has been finally determined. However, the amount to
be returned shall not include any investment earnings, an d shall be reduced to
take account of any adverse investment experience within the Trust Fund in order
that the Plan's assets are not less than they would have been if the
contribution had never been made.
9.7 Loans to Participants.
Participants may not borrow from the Trust Fund under any conditions.
9.8 Voluntary Contributions by Participants.
Voluntary contributions by Participants are not permitted under this Plan.
9.9 Rollovers by Participants.
Rollovers by participants are not permitted under this Plan.
9.10 Right to Implement or Suspend Provisions.
Notwithstanding sections 9.7, 9.8, and 9.9, the Company and, in the absence
of Company action, the Administrator, shall have the right to implement or
suspend entirely the provisions of any such section, taking into account the
best interests of the Participants and the administrative burdens involved. The
Administrator may, upon reasonable notice to the Participants, establish or
modify rules and procedures applicable to any such provisions to avoid
administrative burdens and to assure compliance with the purposes of the Plan
and requirements under ERISA and the Code.
Section 10. The Administrator and Its Functions.
10.1 Authority of Administrator.
The Administrator shall be the "plan administrator" within the meaning of
ERISA and shall have exclusive responsibility and authority to control and
manage the operation and administration of the Plan, including full discretion
to interpret and apply its provisions, except to the extent such responsibility
and authority are otherwise specifically (i) allocated to the Company, the
Employers, or the Trustee under the Plan and Trust Agreement, (ii) delegated in
writing to other persons by the Company, the Employers, the Administrator, or
the Trustee, or (iii) allocated to other parties by operation of law. The
Administrator shall have no investment responsibilities however, except to the
extent, if any, specifically provided in the Trust Agreement. In the discharge
of its duties, the Administrator may employ accountants, actuaries, legal
counsel, and other agents (who also may be employed by an Employer in the same
or some other capacity) and may pay their reasonable expenses and compensation.
10.2 Identity of Administrator.
The Administrator shall be one or more individuals, partnerships, and
corporations (including an Employer) who shall be selected by the Company. Any
individual, including but not limited to a director, shareholder, officer,
partner, proprietor, or employee of an Employer, shall be eligible to serve as
the Administrator or part of the Administrator. The Company shall have the power
to remove any person serving as the Administrator at any time without cause upon
10 days written notice, and any person may resign as Administrator at any time
upon 10 days written notice to the Company. The Company shall notify the Trustee
of any change in the identity of the Administrator.
10.3 Duties of Administrator.
The Administrator shall keep whatever records may be necessary to implement
the Plan and shall furnish whatever reports may be required from time to time by
the Company. The Administrator shall furnish to the Trustee whatever information
may be necessary to properly administer the Trust. The Administrator shall see
to the filing with the appropriate government agencies of all reports and
returns required of the plan administrator under ERISA and other laws.
10.4 Compliance with ERISA.
The Administrator shall perform all acts necessary to comply with ERISA.
Each individual member or employee of the Administrator shall discharge his
duties in good faith and in accordance with the applicable requirements of
ERISA.
10.5 Action by Administrator.
If the Administrator consists at any time of a committee of three or more
individuals, all actions of the Administrator shall be governed by the
affirmative vote of a number of members which is a majority of the total number
of members currently appointed, including vacancies. The members of the
committee may meet informally and may take any action without meeting as a
group.
10.6 Execution of Documents.
Any instrument executed by the Administrator shall be signed by any member
or employee of the Administrator.
10.7 Adoption of Rules.
The Administrator shall adopt such rules and regulations of uniform
applicability as it deems necessary or appropriate for the proper administration
and interpretation of the Plan.
10.8 Responsibilities to Participants.
The Administrator shall determine which Employees are to enter the Plan in
accordance with section 3. The Administrator shall furnish to each eligible
Employee whatever summary plan descriptions, summary annual reports, and other
notices and information may be required under ERISA. The Administrator also
shall determine when a Participant or his Beneficiary qualifies for the payment
of benefits under the Plan, and shall have complete discretion to interpret and
apply whatever Plan provisions may be relevant to a Participant's claim for
benefits. The Administrator shall furnish to each such Participant or
Beneficiary whatever information is required under ERISA or is otherwise
appropriate to enable the Participant or Beneficiary to make whatever elections
may be available pursuant to sections 4, 6, and 7, and the Administrator shall
provide for the payment of benefits in the proper form and amount from the
assets of the Trust Fund.
10.9 Alternative Payees in Event of Incapacity.
If the Administrator finds at any time that an individual qualifying for
benefits under this Plan is a minor or is incompetent, the Administrator may
direct the benefits to be paid, in the case of a minor, to his parents, his
legal guardian, a custodian for him under the Uniform Gifts to Minors Act, or
the person having actual custody of him, or, in the case of an incompetent, to
his spouse, his legal guardian, or the person having actual custody of him, the
payments to be used for the individual's benefit. To the extent that the Plan's
obligation to the individual has been discharged by the purchase and
distribution of an annuity contract from an insurer, the insurer
shall assume the Administrator's authority and responsibility with respect to
the benefits. The Administrator, the Trustee, and any insurer shall not be
obligated to inquire as to the actual use of the funds by the person receiving
them under this section 10.9, and any such payment shall completely discharge
the obligations of the Plan, the Trustee, the Administrator, the Company, the
Employers, and the insurer to the extent of the payment.
10.10 Indemnification by Company.
Except as separately agreed in writing, the Administrator, and any member
or employee of the Administrator, shall be indemnified and held harmless by the
Employers, jointly and severally, to the fullest extent permitted by law against
any and all costs, damages, expenses, and liabilities reasonably incurred by or
imposed upon it or him in connection with any claim made against it or him or in
which it or he may be involved by reason of its or his being, or having been,
the Administrator, or a member or employee of the Administrator, to the extent
such amounts are not paid by insurance.
10.11 Nonparticipation by Interested Member.
Any member of the Administrator who also is a Participant in the Plan shall
take no part in any determination specifically relating to his own participation
or benefits, unless his abstention would leave the Administrator incapable of
acting on the matter.
Section 11. Adoption, Amendment, or Termination of the Plan.
11.1 Adoption of Plan by Other Employers.
With the consent of the Company, any entity may become a participating
Employer under the Plan by (i) taking such action as shall be necessary to adopt
the Plan, (ii) becoming a party to the Trust Agreement establishing the Trust
Fund, and (iii) executing and delivering such instruments and taking such other
action as may be necessary or desirable to put the Plan into effect with respect
to the entity's Employees.
11.2 Adoption of Plan by Successor.
In the event that any Employer shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that an entity other than an
Employer shall succeed to all or substantially all of the Employer's business,
the successor entity may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the Trust Agreement. Contributions by
the Employer shall be automatically suspended from the effective date of any
such reorganization until the date upon which the substitution of the successor
entity for the Employer under the Plan becomes effective. If, within 90 days
following the effective date of any such reorganization, the successor entity
shall not have elected to become a party to the Plan, or if the Employer shall
adopt a plan of complete liquidation other than in connection with a
reorganization, the Plan shall be automatically terminated with respect to
Employees of the Employer as of the close of business on the 90th day following
the effective date of the reorganization, or as of the close of business on the
date of adoption of a plan of complete liquidation, as the case may be.
11.3 Plan Restatement Subject to Qualification.
In the event that this restated Plan is held by the Internal Revenue
Service not to qualify under section 401(a) of the Code, the Plan may be amended
retroactively to the earliest date permitted by U.S. Treasury regulations in
order to secure qualification under section 401(a). In the event that this
restated Plan is amended after its initial qualification and the Plan as amended
is held by the Internal Revenue Service not to qualify under section 401(a), the
amendment may be modified retroactively to the earliest date permitted by U.S.
Treasury regulations in order to secure approval of the amendment under section
401(a).
11.4 Right to Amend or Terminate.
The Company intends to continue this Plan as a permanent program. However,
each participating Employer separately reserves the right to suspend, supersede,
or terminate the Plan at any time and for any reason, as it applies to that
Employer's Employees, and the Company by
written action of its board of directors or board of trustees if a corporation
or a non profit organization, its partners if a partnership, the proprietor if a
proprietorship, or such other individuals or committees as may have been
authorized to represent the Company, preserves the right to amend, suspend,
supersede, merge, consolidate, or terminate the Plan at any time and for any
reason, as it applies to the Employees of all Employers.
No amendment, suspension, supersession, merger, consolidation, or
termination of the Plan shall reduce the current Pension Benefit or Accrued
Benefit of any Participant or his Beneficiary, or reduce a Participant's vested
interest in his Accrued Benefit, although such action may result in a
Participant's or Beneficiary's Pension Benefit or Accrued Benefit not being
fully or even partially funded in accordance with section 11.6. Further, no such
action shall divert any portion of the Trust Fund to purposes other than the
exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan. Any amendment which (a) reduces
the value of any form of Pension Benefit by changing the assumptions used to
determine an Actuarial Equivalent, (b) reduces or eliminates an early retirement
benefit or a retirement-type subsidiary, or (c) eliminates an optional form of
benefits, shall not be effective as to any Participant's Accrued Benefits as of
the later of the date of adoption or the effective date of the amendment.
11.5 Disposition of Employer's Share of Trust Fund.
Following the suspension, supersession, merger, consolidation, or
termination of the Plan as it applies to the Employees of an Employer, the
Trustee shall, subject to further instructions from the Administrator, deal with
that Employer's share of the Trust Fund as follows:
11.5-1 If the Plan is suspended or terminated, the Trustee shall
administer and distribute the share in accordance with section 11.6.
11.5-2 If the Plan is superseded by another pension plan which is
qualified under section 401(a) of the Code and which provides benefits
comparable to those provided under this Plan, the Trustee shall transfer
the Employer's share to the Trustee of the successor plan; however, the
Administrator may in any case instruct the Trustee to allocate and dispose
of the share in accordance with section 11.6.
11.5-3 If the assets and liabilities of another qualified plan are
merged or consolidated with this Plan, the Trustee shall adjust the share
by the amount of the assets and by the amount of any other assets
contributed with respect to the merged or consolidated plan, and shall
continue to administer the share in accordance with this Plan and the Trust
Agreement.
However, despite sections 11.5-2 and 11.5-3, there shall not be any
transfer to a successor plan or merger or consolidation with another plan
unless, if the successor plan or the
surviving plan were to terminate immediately following the transfer, merger, or
consolidation, each participant or beneficiary would receive a benefit equal to
or greater than the benefit he would have received if the plan in which he was
previously a participant or beneficiary had terminated immediately prior to the
transfer, merger, or consolidation.
11.6 Allocation Among Participants and Beneficiaries.
An Employer's share of the Trust Fund to be disposed of under this section
11.6 shall first be charged with its appropriate share of any fees and expenses
(including termination and distribution expenses) owed by the Trust which are
not to be paid by the Employer. The remaining balance of the share shall be
allocated and credited to the active and terminated Participants and to the
Beneficiaries currently entitled to any death benefit described in section 7 in
proportion to the actuarial value of the unpaid balances of their respective
Accrued Benefits (in the case of active Participants) or Pension Benefits (in
the case of terminated Participants and Beneficiaries of deceased Participants),
based on service rendered to the date of suspension, termination, or
supersession of the Plan.
If the assets of the Employer's share are sufficient to cover the full
actuarial value of all Participants' and Beneficiaries' unpaid Accrued Benefits
and Pension Benefits, (using actuarial assumptions which satisfy section 4044 of
Title IV of ERISA), the remaining balance attributable to actuarial error shall
be refunded to the Employer. If the assets of the Employer's share are
insufficient to cover the full actuarial value of each Participant's or
Beneficiary's unpaid Accrued Benefit or Pension Benefit, the share shall be
applied and distributed pursuant to the priority categories set forth in such
section 4044 of Title IV of ERISA and the Pension Benefit Guaranty Corporation's
regulations thereunder, subject to the restrictions in section 8.3 to the extent
provided in section 4044(b)(4) of ERISA.
Section 12. Miscellaneous Provisions.
12.1 Plan Creates No Employment Rights.
Nothing in this Plan shall be interpreted as giving any Employee the right
to be retained as an Employee by an Employer, or as limiting or affecting the
rights of an Employer to control its Employees or to terminate the employment of
any Employee at any time and for any reason, subject to any applicable
employment or collective bargaining agreements.
12.2 Nonassignability of Benefits.
Except as provided in section 9.7 with respect to certain loans to
Participants, no assignment, pledge, or other anticipation of benefits from the
Plan will be permitted or recognized by the Employers, the Administrator, or the
Trustee. Moreover, benefits from the Plan shall not be subject to attachment,
garnishment, or other legal process for debts or liabilities of any Participant
or Beneficiary, to the extent permitted by law.
This prohibition on assignment or alienation shall apply to any judgment,
decree, or order (including approval of a property settlement agreement) which
relates to the provision of child support, alimony, or property rights to a
present or former spouse, child or other dependent of a Participant pursuant to
a State domestic relations or community property law, unless the judgment,
decree, or order is determined by the Administrator to be a qualified domestic
relations order within the meaning of section 414(p) of the Code.
12.3 Limit of Employer Liability.
The liability of the Employers with respect to Participants under this Plan
shall be limited to making contributions to the Trust from time to time, in
accordance with section 9.
12.4 Number and Gender.
Any use of the singular shall be interpreted to include the plural, and the
plural the singular. Any use of the masculine, feminine, or neuter shall be
interpreted to include the masculine, feminine, or neuter, as the context shall
require.
12.5 Nondiversion of Assets.
Except as provided in sections 9.6 and 11.6, under no circumstances shall
any portion of the Trust Fund be diverted to or used for any purpose other than
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan.
12.6 Separability of Provisions.
If any provision of this Plan is held to be invalid or unenforceable, the
other provisions of the Plan shall not be affected but shall be applied as if
the invalid or unenforceable provision had not been included in the Plan.
12.7 Service of Process.
The agent for the service of process upon the Plan shall be the president,
managing partner, proprietor of the Company, or such other person as may be
designated from time to time by the Company.
12.8 Governing State Law.
This Plan shall be interpreted in accordance with the laws of the State of
New Jersey to the extent those laws are applicable under the provisions of
ERISA.