EXHIBIT 10(ii)
PFIZER
RETIREMENT ANNUITY PLAN
(As Amended through 1/97)
SECTION 1
Definitions
Wherever used in this Plan:
"Anniversary Year" means 1) the twelve-month period following the date
on which an employee first begins his employment with an employer, as well as
successive twelve-month periods thereafter, and 2) the twelve-month period
following the date on which an employee returns to the employ of the Company or
an Associate Company after incurring a one-year break in service, as well as
successive twelve-month periods thereafter. No anniversary year shall be
credited for purposes of vesting unless in such anniversary year the employee
has completed 1,000 or more hours of service for an employer.
"Annuitant" means a person receiving annuity payments under this Plan.
"Annuity trust fund" means the trust fund created by the Company to
finance annuities under this Plan.
"Associate Company" means any corporation which adopts this Plan and
executes the Trust Agreement pursuant to the provisions of Section 11 hereof and
when action is required to be taken hereunder by an Associate Company such
action shall be authorized by its Executive Committee or its Board of Directors.
"Career Earnings" means the member's aggregate earnings, excluding any
severance payments, during his period of Creditable Service, except that
1) his earnings for each calendar year prior to 1995 shall be the
average of the member's earnings during the five consecutive
calendar years prior to 1995, during which he rendered
Creditable Service, which yield the highest average provided
his earnings are not reduced thereby; and
2) only his earnings during his last 35 calendar years of
Creditable Service shall be counted; provided that, such a
calculation shall not lessen said member's Career Earnings
below the result of a prior calculation; and provided,
further, that earnings attributable to severance payments
shall be counted towards years of Creditable Service, for the
purposes of this paragraph only, on the basis of one year, or
part thereof, for each year of earnings, or part thereof, paid
out as severance.
3) Notwithstanding the foregoing, effective January 1, 1989, the
amount of earnings taken into account for any calendar year in
determining an employee's career earnings shall not exceed
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$200,000, adjusted in accordance with Section 401(a)(17) of
the Internal Revenue Code and the regulations and other
guidance issued thereunder, and effective January 1, 1994, the
amount of earnings taken into account for any calendar year in
determining an employee's career earnings shall not exceed
$150,000, adjusted in accordance with Section 401(a)(17) of
the Internal Revenue Code and the regulations and other
guidance issued thereunder. Such dollar limitation shall be
prorated if, and only to the extent, required by applicable
regulations. The amount of any member's normal retirement
benefit shall be determined after December 31, 1988 and before
January 1, 1994 either by (i) applying the $200,000 limitation
to all applicable calendar years (including calendar years
beginning before January 1, 1989), provided that the member's
normal retirement benefit is not less than his normal
retirement benefit determined as of December 31, 1988, or (ii)
by applying the $200,000 limitation only to calendar years
commencing on and after January 1, 1989, and adding the
amounts accrued during such post-1988 calendar years to the
member's normal retirement benefit determined as of December
31, 1988, whichever method results in a higher normal
retirement benefit to the member; and the amount of any
member's normal retirement benefit shall be determined after
December 31, 1993 either by (i) applying the $150,000
limitation to all applicable calendar years (including
calendar years beginning before January 1, 1994), provided
that the member's normal retirement benefit is not less than
his normal retirement benefit determined as of December 31,
1993, or (ii) by applying the $150,000 limitation only to
calendar years commencing on and after January 1, 1994, and
adding the amounts accrued during such post-1993 calendar
years to the member's normal retirement benefit determined as
of December 31, 1993, whichever method results in a higher
normal retirement benefit to the member. For purposes of the
limitations under Section 401(a)(17) of the Internal Revenue
Code, the family aggregation rules of Section 414(q)(6) of the
Internal Revenue Code shall apply, except that in applying
such rules, the term "family" shall include only the spouse of
the employee and any lineal descendants of the employee that
have not attained age 19 before the close of the applicable
year.
"Company" means Pfizer Inc, a Delaware corporation, and any predecessor
or successor corporation and when action is required to be taken hereunder by
the Company, such action shall be authorized by the Executive Committee or the
Board of Directors of the Company.
"Earnings" means the actual salary, wages, bonus, or other remuneration
earned by an employee from an employer for his service with the employer, as
determined by such employer, provided that no part of the cost of any employee
benefit, including without limitation stock options, perquisites and group
insurance, shall constitute earnings hereunder; and further provided that any
remuneration received in the form of salary continuation by an employee while no
longer performing services for the Company as an employee shall not be credited
hereunder. No part of any bonus or other remuneration forming part of the
compensation of any employee shall be used as a basis for a retirement annuity
under this Plan, if such bonus should cause such annuity to become
discriminatory under the applicable provisions of the Internal Revenue Code.
"Employee" means a person who is employed by an employer.
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"Employer" means the Company or any Associate Company. For purposes of
sections 410 and 411 of the Internal Revenue Code, "Employer" also shall mean
any corporation or other trade or business that is treated under the first
sentence of section 414(b) or under section 414(c), 414(m) or 414(o) of the
Internal Revenue Code as constituting the same "employer" as the Company or an
Associate Company, with respect to any period of such affiliated status.
"Disability Leave Status" means the status of a member who has been
determined, pursuant to Section 4e. hereof, to be totally and permanently
disabled and who has fully utilized his benefits under the employer's short-term
disability program.
"Hours of Service" means all hours for which an employee is directly or
indirectly paid, or entitled to payment (including back pay for periods for
which such awards pertain), by the employer, or any company which is a member of
the same control group of corporations as the Company at the time of such
service within the meaning of section 1563(a) of the Internal Revenue Code for
the performance of duties, or for reasons other than the performance of duties,
such as vacation, accident, injury, sickness, short-term disability or
authorized leave of absence. In the case of a payment which is made or due on
account of a period during which an employee performs no duties, hours of
service will be determined in accordance with Department of Labor regulations
ss. 2530.200b-2(b) and (c).
"Leased Employee" means any person who is not an employee of the
employer and who provides services to the employer if such services are provided
pursuant to an agreement between the employer and another, such person has
performed such services for the employer on a substantially full-time basis for
a period of at least one year, and such services are of a type historically
performed in the business field of the employer, by employees.
"Member" means an employee or former employee to whom an annuity is
credited under the Plan.
"One-year break in service" shall be an anniversary year in which the
member does not perform more than five hundred hours of service.
"Primary Social Security Benefit" means the annual amount available to
the member at age 65 under the Old Age Insurance provisions of Title II of the
Social Security Act in effect at the time of his termination of employment,
without regard to any increases in the wage base or benefit levels that take
effect after the date of termination of employment, subject to the following. If
any employee terminates service prior to age 65, his Primary Social Security
Benefit shall be estimated by assuming continuation of his earnings until age 65
at the same rate in effect at termination of employment; provided however, that,
if the employee retires pursuant to Section 4d.(ii), his Primary Social Security
Benefit shall be estimated by assuming that he will not receive any income after
retirement which would be treated as wages for purposes of the Social Security
Act. The Retirement Committee may adopt rules governing the computation of such
amounts, and the fact that an employee does not actually receive such amount
because of failure to apply or continuance of work, or for any other reason,
shall be disregarded. Notwithstanding the foregoing, actual salary history will
be used to calculate the Primary Social Security Benefit if this will result in
a larger benefit under the Plan for the employee but only if documentation of
such history is provided by the employee within two years after the later of his
termination of employment or the date the employee receives notice of his
benefits under the Plan.
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"Retire" means to terminate service by a Member who is an Employee in
the service of an Employer after meeting the requirements of Sections 4a., b. or
d., respectively, for normal retirement, late retirement or early retirement
hereunder.
"Retirement Annuity" means the payments made pursuant to Section 4a.,
b. or d. of the Plan to retired members or their beneficiaries.
"Trustee" means the trustee appointed by the Company to hold and invest
the annuity trust fund.
"Vest" means to acquire, in accordance with the express provisions of
the Plan, an interest in an annuity under the Plan.
"Vested Annuity" means the payments made pursuant to Section 4c. of the
Plan.
The masculine pronoun shall include the feminine pronoun and the
feminine pronoun shall include the masculine.
SECTION 2
Eligibility for Membership
a. Employees of the Company: All persons who were in the regular
service of the Company on January 1, 1943 shall be included in the membership of
the Plan as of January 1, 1943. All persons who entered the regular service of
the Company after January 1, 1943 and prior to September 1, 1961, became members
of the Plan as of the date of employment. All employees who enter the service of
the Company on or after September 1, 1961 become members of the Plan as of the
date of their employment provided they are: (1) included in a group or class
designated by the Company as eligible for membership in the Plan and (2) in the
service of an employer within the United States of America or United States
citizens in the service of an employer outside of the continental limits of the
United States of America. An employee who is a United States citizen and who is
employed outside the continental limits of the United States of America in the
service of a foreign subsidiary (including foreign subsidiaries of such foreign
subsidiary) of the Company shall be included in the membership of the Plan,
provided that the Company has entered into an agreement under section 3121(1) of
the Internal Revenue Code which applies to the foreign subsidiary of which such
person is an employee and provided further, that contributions under a funded
plan of deferred compensation (whether or not a plan described in section
401(a), 403(a), or 405(a), of said Code) are not provided by any other person
with respect to the remuneration paid to such individual by the foreign
subsidiary. The groups and classes designated by the Company are set forth in
Schedule A.
b. Employees of Associate Companies: Wherever a corporation became an
Associate Company prior to September 1, 1961, all persons, who were in the
regular service of such corporation on the date it became an Associate Company,
became members of the Plan as of such date. Subject to Section 2a. hereof,
wherever a corporation becomes an Associate Company after September 1, 1961, all
employees who are in the service of such corporation on the date it becomes an
Associate Company become members of the Plan as of such date and all employees
who enter the service of a corporation after it has become an Associate Company
become members of the Plan as of the date of employment.
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c. Leased Employees: No leased employee shall be eligible to become a
member of the Plan. However, if a leased employee becomes an employee of the
Company, all years of service completed while a leased employee shall be
credited solely for purposes of vesting pursuant to Section 4c. of the Plan.
SECTION 3
Service Credited Under Plan
a. Prior Service: Service rendered by a person who is in the service of
an employer, before the date on which he becomes a member (in the case of an
employee becoming a member after December 12, 1951), who continues in service on
and after the date he becomes a member shall be known as "Prior Service" except
as provided in Section 4a. and Section 11.
b. Membership Service: Service rendered by an employee for an employer
after the date he becomes a member shall be known as "Membership Service."
c. Special Service: Service rendered outside the United States, by a
person employed by a corporation which is a subsidiary or affiliate of the
Company, but not an Associate Company, at the time of such service (1) before
the date on which he becomes a member, who continues in service on and after the
date he becomes a member, or (2) during a period of interrupted Membership
Service followed by a return to such Service, shall be known as "Special
Service."
d. Creditable Service: Membership Service plus Prior Service and
Special Service, if any, shall be known as "Creditable Service" under the Plan.
A member shall be credited with a full year of Creditable Service under the Plan
only if he completes at least 1,000 hours of service within an Anniversary Year
and no fractional years will be credited under the Plan; provided, however, that
for purposes only of 1) determining the Social Security calculation used in
Section 4a.2 and 2) determining a member's Career Earnings, and his eligibility
for early retirement under clauses (i) and (ii) of Section 4d. below, the
member's Creditable Service shall be determined on the basis of his number of
months of Membership Service plus Prior Service and Special Service without
regard to whether he completes at least 1,000 hours of service within an
Anniversary Year.
e. Military Service: For the purpose of this Plan, those employees who
were in the service of the Armed Forces of the United States, at the time they
would have become eligible for membership under the Plan except for such
service, or who subsequently enlisted in or were inducted into said Armed
Forces, shall be credited with all the benefits under this Plan for service
actually rendered to an employer prior to their entrance into said Armed Forces,
and shall be credited with time spent on active duty in said Armed Forces for
the purposes of computing length of service and benefits payable under the Plan;
provided that such employees return to active service with an employer within
the time limits provided by law after their separation or discharge from active
duty from said Armed Forces, having satisfactorily completed their period of
training and service.
f. Leave of Absence: Interruption of active service on account of leave
of absence authorized by the employer, leave of absence taken under the Family
and Medical Leave Act of 1993, as it may be amended from time to time, and any
regulations and other official guidance issued thereunder ("FMLA"), or transfer
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on Special Service shall not be considered termination of service. Time spent on
authorized leave of absence shall be credited for the purpose of computing
length of service and benefits payable under the Plan on the following basis:
members shall receive credit for each full year spent on authorized leave of
absence for each full year of Creditable Service that they render to an employer
following return to active service, except that time spent on authorized leave
of absence for medical reasons or under the FMLA shall be credited without
requirement of subsequent Creditable Service and time spent on Civic Leave shall
be credited after the member has returned to active service for three (3)
months. Notwithstanding the foregoing, in the case of Maternity/Paternity Leave,
as defined below, up to 501 hours of service shall be credited in the
anniversary year in which the Maternity/Paternity Leave begins, if the employee
would otherwise have incurred a one-year break in service in that anniversary
year, otherwise up to 501 hours of service shall be credited in the following
anniversary year to prevent a one-year break in service. Maternity/Paternity
Leave means an absence from work (1) by reason of the pregnancy of an employee,
(2) by reason of the birth of a child of an employee, (3) by reason of the
placement of a child with the employee in connection with the adoption of the
child, or (4) for the purposes of caring for the child during the period
immediately following the birth or placement for adoption.
g. Termination of Service: On termination of service, and after he has
subsequently incurred a one-year break in service, a person shall forfeit all
credit for service previously credited under the Plan unless
(1) He is reemployed before incurring five consecutive one-year
breaks in service; or
(2) He is reemployed after his termination of service and
thereafter completes at least 24 consecutive months of
Creditable Service; or
(3) He is eligible to receive a retirement benefit or a vested
annuity under Section 4c.
If a reemployed employee does not forfeit his service credit as
provided above, for purposes only of determining his "Career Earnings," the last
calendar year in which he rendered Creditable Service shall be treated as being
consecutive with the first calendar year in which he renders Creditable Service
after his reemployment.
h. General: For the purpose of this Plan, length of service shall be
computed in accordance with the employment records of the employer, or of a
subsidiary or affiliated corporation of the Company, as the case may be. No
employee may voluntarily terminate his status as an active participant in the
Plan during his period of employment. The period over which an employee receives
remuneration in the form of salary continuation while no longer performing
services for the Company as an employee shall not be credited hereunder.
SECTION 4
Benefits to Employees
a. Normal Retirement: Each member who attains his normal retirement
date, i.e., age 65, shall be eligible for normal retirement as of the first day
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of the month following, and if permitted under the provisions of the Age
Discrimination in Employment Act, as amended, and other applicable law, shall be
retired as of the first day of the month following.
Upon normal retirement, a member shall receive a retirement annuity,
subject to the provisions of and payable in the form described in Section 4f.
hereof, which shall accrue and be equal to the greatest of:
1. 1.4 per cent of his Career Earnings; or
2. 1.75 per cent of his Career Earnings, less 1.50 per cent of
his Primary Social Security Benefit multiplied by his years of
Creditable Service, but in no event more than 35 years; or
3. The accrued benefit as of December 31, 1977 payable to him
under the provisions of the Plan as of that date.
(1) In the case of any group or class which is designated as eligible
for membership in the Plan commencing as of a date after September 1,1961, the
employer may limit the Prior Service of persons included in such group or class
to service rendered on and after a date to be determined by the employer.
(2) Except in the case of a person in the service of a corporation
which becomes an Associate Company after September 1, 1961, the Prior Service
benefits of any employee who is a member of the Plan, but who was absent from
the employer during all or part of the calendar year next preceding the date he
becomes a member, because of sickness, disability, service in the Armed Forces
of the United States, or like reasons beyond his control, and who entered the
service of the employer prior to such calendar year, shall be computed by
crediting to him as earnings for such calendar year -
(i) All earnings actually received by such employee in such calendar
year before or after the period of absence from the employer, and
(ii) The earnings he would have received in such calendar year during
the period of absence based on a forty-hour week at his straight-time rate of
pay at the time of leaving the employer and any increased rate to which he would
have been entitled as a result of automatic length-of-service increases or a
general increase, and any bonuses or other payments made in such calendar year
during such period of absence to which he would normally have been entitled.
b. Late Retirement: In the event that a member remains in service after
attainment of his normal retirement date, he may retire on his own application
setting forth a date for retirement which shall be the first of the month not
less than 30 days following the filing of the application.
c. Vesting: Upon the completion of 5 Anniversary Years of Creditable
Service, a member shall acquire a vested interest in an annuity under the Plan.
Upon termination of service such a member shall be entitled to receive a vested
annuity at age 65, equal to the amount which his Creditable Service up to the
date of his termination would then provide; or, at any time prior to age 65,
such a member may elect to receive such an annuity on the first day of any month
following such election, which shall be computed by applying the percentages set
forth in Schedule B hereof to the amount of the annuity computed in accordance
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with Section 4a., provided he is at least 55 years of age. Notwithstanding
anything herein to the contrary, a member who is not otherwise vested, shall
become vested upon attaining his normal retirement date, i.e., age 65.
d. Early Retirement: Any member may retire before the attainment of age
65 provided he has reached age 55 and (i) has 10 years or more of Creditable
Service; or (ii) his attained age when added to his years of Creditable Service
equals or exceeds 90. On early retirement, a member shall receive a retirement
annuity commencing at age 65, equal to the annuity to which his Creditable
Service up to the date of his retirement would then produce, or, at his election
made at any time prior to age 65, a retirement annuity commencing on the first
day of any month following his earlier retirement and prior to age 65, which
shall be computed by applying the percentages set forth in Schedule C hereof to
the amount of the annuity computed in accordance with Section 4a.; provided
that, if a member's attained age when added to his years of Creditable Service
equals or exceeds 90, his retirement annuity shall be computed by so applying
the percentage set forth in Schedule D hereof.
e. Disability Leave Status: Upon total and permanent disability as
determined on or after January 1, 1974 by a physician appointed by the employer,
a member who has completed at least 5 years of Creditable Service will be
eligible for Disability Leave Status. Such status may be terminated or suspended
by the Retirement Committee if at any time before age 65 the member again
engages in regular full-time employment, fails or refuses to undergo any medical
examination ordered by the Retirement Committee, or the Retirement Committee
determines on the basis of medical examination that the member has sufficiently
recovered to engage in regular full-time employment. While on Disability Leave
Status, a member will be credited with Membership Service, and with earnings at
the same rate as he had earned in the calendar year prior to the calendar year
in which he became totally and permanently disabled, until the member retires,
or his Disability Leave Status is sooner terminated or suspended.
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f. Form of Benefit Payments:
(1) Normal Form: If a member is married on the date his benefits
commence, such member shall receive a benefit payable in the form of a joint and
survivor annuity which shall provide for an amount actuarially reduced from the
amount computed under Section 4a. to be paid to the member for his lifetime; and
for an annuity in an amount equal to one-half of such reduced amount to be paid
to the member's spouse to whom he was married on the date his benefits commence,
for her lifetime, if surviving at the time of the member's death. The form of
benefit shall also provide that if the member dies after retirement but prior to
the date on which his benefit becomes payable, his surviving spouse will
nevertheless be entitled to receive the lifetime annuity to which she would
otherwise be entitled beginning at the date that the member's annuity would have
become payable and under such circumstances, at her option, the surviving spouse
may elect to have benefits commence prior to the date on which the member's
annuity would have become payable on an appropriately reduced actuarial basis.
The benefit payable to the member and his spouse shall have the equivalent
actuarial value of the benefits determined under Section 4a. above. In lieu of
such a joint and survivor annuity, such a member may, in accordance with section
417 of the Internal Revenue Code, elect in writing, with the consent of his
spouse, at any time prior to the commencement of his benefits, to receive his
benefits in the form of a single annuity payable for his lifetime as computed
under Section 4a. above, or may revoke any such election previously made by him.
Notwithstanding the foregoing, if a member becomes divorced from his spouse
after his benefits commence, such member may elect in writing to cancel such
joint and survivor annuity and to receive his benefits thereafter in any form
permitted under the Plan; provided that, (1) the member obtains a valid written
release from his former spouse releasing the Plan from any claim the former
spouse may have against the Plan and (2) the member's benefit is adjusted
actuarially, including, but not limited to, adjustments for the value of
benefits previously paid and for the value of the protection provided by the
canceled joint and survivor annuity while in was in effect.
A member who is not married at the time that his benefits commence will
receive his benefits in the form of a single annuity payable for his lifetime as
computed under Section 4a. above.
(2) Optional Forms: At any time within 90 days prior to the
commencement of his retirement benefits, a member who is eligible for a
retirement annuity under Section 4a., b., or d. of the Plan may, in accordance
with section 417 of the Internal Revenue Code, elect, with the written and
witnessed consent of his spouse in the case of a married member, to convert the
benefits otherwise payable after retirement into a retirement benefit of
equivalent actuarial value in accordance with one of the options named below, or
may revoke any such election previously made by him; provided, however, that if
one of the options named below shall be so elected and the other named person or
persons shall die before the payment of any part of such benefit, then and in
that event the benefit shall be restored to the amount of the retirement annuity
as provided in Section 4a., b., or d. hereof, as if no such election had been
made; and provided further, that if one of the options named below shall be so
elected and the member shall die before the date of his retirement then the
election shall be of no effect and no payments shall be due under the option.
Option 1: A reduced retirement annuity commencing at or after the
member's retirement payable during his life, with the provision that after his
death it shall continue during the life of and shall be paid to the person
(including his spouse) nominated by him by written designation duly acknowledged
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and filed with the Retirement Committee at the time such election is made,
provided that if the member dies after retirement but prior to the date on which
his benefit becomes payable, his surviving beneficiary will nevertheless be
entitled to receive such a lifetime annuity beginning at the date that the
member's annuity would have become payable and also provided that under such
circumstances at his option, the surviving beneficiary may elect to have
benefits commence prior to the date on which the member's annuity would have
become payable on an appropriately reduced actuarial basis.
Option 2: A reduced retirement annuity commencing at or after the
member's retirement payable during his life, with the provision that after his
death an allowance of one-half the rate of his reduced allowance shall be
continued during the life of, and it shall be paid to, the person [other than
his spouse for whom this is the normal form of benefit provided in Section 4f.,
(1) above] nominated by him by written designation duly acknowledged and filed
with the Retirement Committee at the time such election is made, provided that
if the member dies after retirement but prior to the date his benefit becomes
payable, his surviving beneficiary will nevertheless be entitled to receive such
a lifetime annuity beginning at the date that the member's annuity would have
become payable and also provided that under such circumstances, at his option,
the surviving beneficiary may elect to have benefits commence prior to the date
on which the member's annuity would have become payable on an appropriately
reduced actuarial basis.
Option 3: A retirement benefit in a single lump sum that shall be the
actuarial equivalent of the benefit which would otherwise be payable to him,
provided that such benefit must be elected by the member prior to the date of
receipt of his first benefit payment.
(3) A member may, at the time he elects one of the options described
above, name a second person, who, in the event the first named person shall die
before the commencement of the annuity to the member, shall acquire all the
rights which the first named person would otherwise have had.
(4) Optional benefit payments shall commence at the end of the month
following the month in which the last payment to the deceased annuitant was
made.
(5) Notwithstanding any other provision of this Section 4f., an
optional form of retirement benefit which provides for payments to any person
other than the member may be elected by a member, and may be approved by the
Retirement Committee, only if the payments to such other person will be merely
incidental to the payment or payments made to the member.
(6) Where a member is entitled to or elects to receive a reduced
retirement annuity commencing after the member's retirement under which an
allowance would have been paid to such member's spouse or other beneficiary
after the member's death, and, prior to the date his benefit becomes payable,
the member elects any other form of benefit, then and in that event the benefit
so payable on his account shall be reduced actuarially to reflect any cost
attributable to the benefit earlier so provided to his spouse or other
beneficiary as the case may be.
(7) Notwithstanding anything to the contrary in the Plan, effective
January 1, 1989, in accordance with Section 401(a)(9) of the Internal Revenue
Code and the regulations and other official guidance issued thereunder, the
benefit of each member will be distributed or commence to be distributed to him
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not later than April 1 of the calendar year next following the calendar year in
which he attains age 70 1/2; provided, however, that if a member is not a 5%
owner and shall have attained age 70 1/2 before January 1, 1988, his benefit
shall be distributed or commence to be distributed not later than the April 1
following the later of the calendar year in which he retires. Payment shall be
made as follows: If a member is married on the date his benefits commence, such
member shall receive a benefit payable in the form of a joint and survivor
annuity which shall provide for an amount actuarially reduced from the amount
computed under Section 4a. to be paid to the member for his lifetime; and for an
annuity in an amount equal to one-half of such reduced amount to be paid to the
member's spouse to whom he was married on the date his benefits commence, for
her lifetime, if surviving at the time of the member's death. A member who is
not married at the time that his benefits commence will receive his benefits in
the form of a single annuity payable for his lifetime as computed under Section
4a. above. The member's beneficiary shall receive benefits, if any, only to the
extent provided under the applicable form of payment, and such beneficiary shall
not be entitled to receive death benefits under Section 4h. As of each following
January 1 the member's benefit shall be adjusted to reflect any additional
benefits accrued as of the immediately preceding December 31; and further
provided that any additional accruals for any twelve consecutive month period
shall be offset (but not below zero) by the actuarial value (determined in
accordance with applicable law) of benefits received by the member for such
period. All distributions under this Plan shall comply with the incidental death
benefit requirements of Section 401(a)(9)(G) of the Internal Revenue Code and
the regulations (including Treas. Reg. ss.1.401(a)(9)-2) and other official
guidance issued thereunder.
With respect to payments to a spouse of a member, the following
distribution limitations shall apply:
(A) Where distribution has commenced to the member prior to his death,
distribution to the surviving spouse shall be over a period that is no longer
than the period under which the member was receiving benefits;
(B) Where distribution has not commenced to the member at the time of
his death, distribution to the surviving spouse shall begin no later than the
date upon which the member would have attained age 70 1/2, and shall be payable
over the life of the surviving spouse or over a period not extending beyond the
life expectancy of the surviving spouse. (If the surviving spouse dies before
distribution of her benefit commences, the limitations applicable to the
distribution of any benefit remaining payable under the Plan shall be determined
hereunder as if the surviving spouse were the member.)
With respect to payments to a designated beneficiary of a member (other
than the spouse), the following distribution limitations shall apply:
(A) Where distribution has commenced to the member prior to his death,
distribution to the designated beneficiary shall be over a period that is no
longer than the period under which the member was receiving benefits;
(B) Where distribution has not commenced to the member at the time of
his death, distribution to the designated beneficiary shall begin no later than
one year after the date of the member's death, or such later date as may be
permitted by Treasury Regulations, and shall be payable over the life of the
11
designated beneficiary or over a period not extending beyond the life expectancy
of the designated beneficiary.
In all other cases where distribution has not commenced to the member
at the time of his death, no benefit remaining payable under the Plan shall be
distributed over a period that exceeds five years after the member's death.
Nothing in this Section 4f.(7) shall affect the ability of a member,
upon retirement, to select a form of benefit as provided otherwise by Section 4.
g. Adjustment For Federal Old Age Benefits: If a member who is eligible
for a retirement annuity under Section 4a., b., or d. of the Plan retires before
his Federal Old Age Benefit is payable, he may, at any time or from time to
time, elect to have the retirement benefit otherwise payable after retirement to
him for his lifetime under the normal form of benefit, or under an optional
benefit payment, whichever is applicable, actuarially adjusted to provide, so
far as practicable, a constant total retirement income inclusive of the
estimated Federal Old Age Benefit, both before and after the Federal benefit is
scheduled to begin.
h. Benefits To Surviving Spouse: In the event a member, who has
performed at least one hour of service on or after January 1, 1976, dies on or
after August 1, 1984, after having become vested under the Plan, leaving a
surviving spouse to whom the member was legally married for one year or more
prior to his death, an annuity at one-half the rate of the annuity which the
member would have been entitled to receive under Section 4f.(1) had he retired
and commenced receipt of benefits as of the first of the month following the
date of his death, if the member was eligible for retirement at the time of his
death, or an annuity at one-half the rate of the annuity which the member would
have been entitled to receive under Section 4f.(1) had he retired and commenced
receipt of benefits on the date he first would have been eligible to do so, if
the member was not eligible for retirement at the time of his death, shall be
paid to such spouse, commencing at the end of the month following the month in
which the member would have attained his normal retirement date or earlier if
the spouse so elects, but not earlier than the date the member first would have
reached age 55, as the case may be, for the life of such spouse.
i. (1) All annuities shall be payable in monthly installments.
[Effective August 1, 1994, the previous sentence shall read as follows: All
annuities shall be payable in monthly installments provided that any annuity
which has an actuarially computed present value at the time of termination of
service which is less than $3,500 shall be paid in a lump sum of equivalent
actuarial value.] In determining the amount of a lump sum payment payable under
this paragraph, (i) equivalent actuarial value shall mean a benefit, in the case
of a lump sum benefit payable prior to a member's normal retirement date, of
equivalent value to the benefit which would otherwise have been provided
commencing at the member's normal retirement date, and (ii) the interest rate to
be used shall be an interest rate no greater than that which would be used by
the Pension Benefit Guaranty Corporation ("PBGC") for valuing lump sums for
single employer plans that terminate three months preceding the date of
termination. For this lump sum equivalent actuarial value, the PBGC mortality
table shall be used. Monthly installment payments shall commence at the end of
the month in which retirement occurs and continue until death. Full payment will
be made for the month in which death occurs. In the event a member terminates
employment at a time when he is not entitled to any retirement benefit or vested
annuity, such member shall be deemed to have received a single sum payment of a
zero accrued benefit, and his entire accrued benefit shall immediately be
12
forfeited. In the event such a member is restored to service as an employee, he
shall be deemed to have immediately repaid to the Plan the amount which was
deemed to have been distributed upon his prior termination.
(2) If any person to whom a retirement annuity, vested annuity or other
benefit under this Plan is payable shall not have provided evidence satisfactory
to the Retirement Committee of his continued life and address for a period of
two years after or during which such annuity or other benefit is payable, the
Retirement Committee shall send by registered mail a notice addressed to such
person at his last address known to the Committee describing the annuity or
other benefit payable to him and stating that unless he communicates with the
Committee within 30 days from the date of such notice, the Retirement Committee
may suspend payments of the annuity or other benefit to such person while it
causes an investigation to be made as to the continued life and address of such
person.
(3) If any person to whom a benefit is payable hereunder is an infant,
or if the Retirement Committee determines that any person to whom a retirement
annuity or other benefit is payable is incompetent by reason of physical or
mental disability, the Committee shall have power to cause the payments becoming
due to such person to be made to another for his benefit without responsibility
of the Committee or the Trustee to see to the application of such payments.
Payments made pursuant to such power shall operate as a complete discharge of
the annuity trust fund, the Trustee and the Retirement Committee.
(4) Notwithstanding the other provisions of this Section, a member who
retires or becomes entitled to a vested annuity shall receive an annuity
computed as provided for under the provisions of the Plan in effect on the date
of his termination of service or retirement, except that: (a) effective for
payments made under Section 4a., b., or d. of the Plan on and after October 1,
1990, the Retirement Annuity of a member who retired or was eligible for normal
or late retirement under the Plan prior to January 1, 1990 shall be increased by
the greater of the increase attributable to paragraph (b) below or 10%, provided
that any increase attributable to this paragraph (a) shall be a minimum of $35
per month for any eligible member who at retirement had either (i) completed at
least 25 years of Creditable Service, or (ii) attained his normal retirement
date and completed at least 10 years of Creditable Service; and (b) effective on
and after January 1, 1981, except for those members who on and after January 2,
1994 elect a retirement benefit in a single lump sum as described in Option 3
under Section f.(2) hereof, any change in the years used in calculating Career
Earnings under Section l of the Plan that would improve the benefits payable to
a member who had retired prior to the effective date of such change or changes,
but on or after January 1, 1981 shall be applied to calculate the Career
Earnings of such member; and (c) effective for such payments made on and after
July 1, 1994, the retirement annuity of a member who retired or was eligible for
normal or late retirement under the Plan prior to January 1, 1994 shall be
increased by the greater of $500 or the amount of increase attributable to the
amendment to Section 1 adopted on May 26, 1994.
(5) The annual benefit for a calendar year shall be defined and
adjusted as provided in section 415(b)(2) of the Internal Revenue Code and no
annual annuity shall be payable in excess of the lesser of the maximum dollar
amount permitted by section 415(b)(1)(A) of the Internal Revenue Code, or 100%
of the average compensation of the member for the three consecutive calendar
years which yield the highest average during which the participant was an active
participant in the Plan, subject to the following conditions:
13
(a) For purposes of determining the percentage limitations in Section
4i.(5), the term "compensation" shall mean compensation as defined under Section
415(c)(3) of the Internal Revenue Code and the Treasury Regulations issued
thereunder.
(b) If benefits begin prior to or following the social security
retirement age (as defined in section 415(b)(8) of the Internal Revenue Code),
the maximum annual dollar amount will be adjusted in accordance with Regulations
issued by the Secretary of the Treasury.
(c) If the member has fewer than ten years of Creditable Service at
retirement, the maximum benefit payable as a result of the compensation
limitation hereunder shall be multiplied by a fraction, of which the numerator
is his Creditable Service and the denominator is 10. If the member has fewer
than ten years of participation in the Plan, the maximum benefit payable as a
result of the dollar limitation hereunder shall be multiplied by a fraction, of
which the numerator is his years of participation and the denominator is 10.
(d) Effective as of January 1 of each calendar year, the maximum annual
dollar amount referred to in Section 4i.(5) shall increase to the maximum annual
dollar amount as determined by the Commissioner of the Internal Revenue Service
for such calendar year pursuant to section 415(d)(1)(A) of the Internal Revenue
Code. Notwithstanding Section 4i.(4), such increased maximum dollar amount shall
also be applicable to participants who have retired under Section 4a., b., or d.
of the Plan regardless of whether they have actually begun to receive such
benefits.
(e) With respect to a member who was a participant in the Plan before
October 3, 1973, in lieu of the foregoing the maximum computed under this
subsection shall be the annuity payable under the Plan provision in effect as of
October 2, 1973 based upon (a) his aggregate creditable earnings on such date
plus (b) his rate of earnings under the Plan in effect as of such date times his
years of Creditable Service after such date.
(f) Notwithstanding the foregoing, in the case of an employee who
participates in this Plan and in the Company's Savings and Investment Plan or
any other defined contribution plan maintained by the employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction for any
year shall not exceed 1. In the event the sum of such fractions exceeds 1, the
Retirement Committee shall reduce the pension provided under this Plan in order
that none of the Plans shall be disqualified under the Internal Revenue Code.
For purposes of applying the limitations of this Section, the following rules
shall apply:
(I) The "defined benefit plan fraction" for any year shall mean the
projected annual pension payable under this Plan (determined as of the close of
the calendar year, and determined under the assumptions that his employment will
continue until his normal retirement age (i.e., age 65) (or his current age, if
greater), that his earnings will continue at the same rate as in effect in the
calendar year under consideration, and that all other relevant factors used to
determine benefits under the Plan will remain constant for all future years),
over the lesser of (i) 1.25 multiplied by the maximum dollar limitation in
effect under Section 415(b)(1)(A) of the Internal Revenue Code for such calendar
year, or (ii) 1.4 multiplied by the projected annual benefit that would be
payable to the member under the Plan (determined as of the close of the calendar
year) if the Plan provided the maximum benefit allowable under section
415(b)(1)(B) of the Internal Revenue Code as adjusted by section 235(g)(4) of
the Tax Equity and Fiscal Responsibility Act of 1982; provided, however, that
14
the defined benefit plan fraction with respect to a member whose pension is
described in subsection 5(d) hereof shall never be deemed to exceed 1.
(II) The "defined contribution plan fraction" for any calendar year
shall mean the actual aggregate annual additions, as hereinafter defined, to the
defined contribution plan determined as of the close of the year, over the sum
of the lesser of the following amounts determined for the calendar year under
consideration and each prior year of service: (i) 1.25 multiplied by the maximum
dollar limitation in effect under section 415(c)(1)(A) of the Internal Revenue
Code (without regard to section 415(c)(6) of the Internal Revenue Code), or (ii)
1.4 multiplied by the maximum amount of annual additions which could have been
credited to such member under section 415(c)(1)(B) of the Internal Revenue Code
for such year, taking into account the transition rules for years ending before
January 1, 1983 prescribed thereunder and under the Employee Retirement Income
Security Act of 1974 and the Tax Equity and Fiscal Responsibility Act of 1982,
including the rules of section 415(e)(3) of the Internal Revenue Code, as
amended by the Tax Equity and Fiscal Responsibility Act of 1982, and as adjusted
by section 235(g)(3) of the Tax Equity and Fiscal Responsibility Act of 1982,
unless the Committee elects to apply the rules of section 415(e)(6) of the
Internal Revenue Code, as added by the Tax Equity and Fiscal Responsibility Act
of 1982; provided, however, that the defined contribution plan fraction shall
never be deemed to exceed 1 with respect to years prior to January 1, 1976.
(III) The term "annual addition" shall mean for any calendar year the
sum of the Company contributions, Qualified Deferred Earnings Contributions
under the Company's Savings and Investment Plan, forfeitures, if any, and (a)
for years prior to January 1, 1987, the lesser of employee contributions in
excess of 6% of the member's compensation or one-half of the member's total
contribution allocated to a member's account in the defined contributions plan,
and (b) for years beginning after December 31, 1986, all employee contributions;
provided, however, that in computing such annual addition for any year prior to
January 1, 1976, the amount of a member's contributions taken into account for
such year shall be deemed to be an amount equal to the excess of the aggregate
of the member's contributions to the Plan prior to January 1, 1976 (without
regard to contributions made on or after October 2, 1973, which exceed the rate
of employee contributions prescribed under the terms of the Plan as of such
date) over 10% of his aggregate compensation for each year of his participation
in the defined contribution Plan prior to such date, multiplied by a fraction,
the numerator of which is 1 and the denominator of which is the number of the
member's years of participation prior to January 1, 1976.
(IV) The dollar limitation prescribed under Section 4i.(5) hereof shall
not apply [and shall not be used in computing the denominator of the defined
benefit plan fraction under Section 4i.(5)(e)(I)] in the case of any member who
was a member in the Plan on December 31, 1982 and whose annual benefit accrued
under the Plan as of such date determined in accordance with section 415(b)(2)
of the Internal Revenue Code, exceeds such limitation. In lieu thereof, the
member's annual accrued benefit as of December 31, 1982 shall be the applicable
dollar limitation.
(g) The limitations of subsection (f) shall not apply with respect to
any member who on September 2, 1974 participated in this Plan and a defined
contribution plan maintained by an employer, if the following conditions are
met:
(I) The defined benefit plan fraction with respect to the member is not
increased, by amendment or otherwise, after September 2, 1974, and
15
(II) No contributions are made under the defined contribution plan
after such date.
(h) The limitation of this Section with respect to any member who at
any time has participated in any other defined benefit plan, or in more than one
defined contribution plan, maintained by an employer or by a corporation which
is a member of a controlled group of corporations [within the meaning of section
1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C), and
section 415(h) of the Internal Revenue Code], of which the employer is a member,
shall apply as if the total benefits payable under all defined benefit plans in
which the member has been a participant were payable from one plan, and as if
the total annual additions made to all defined contribution plans in which the
member has been a participant were made to one plan.
(6) The benefits provided under this Plan shall be reduced in the case
of any member or beneficiary under uniform rules adopted by the Committee, by
the amount of any benefits payable to such member or beneficiary under any other
qualified non-government pension plan or program or any retirement or pension
benefits payable to him under the laws of any foreign government, to the extent
that the benefits payable under such other plan or program are based on service
which is included in Prior Service, Membership Service or Special Service,
hereunder, and are not attributable to contributions made to such other plan or
program by the member.
(7) The benefits provided under this Plan shall be reduced, under
uniform rules adopted by the Retirement Committee, in the case of any member
reemployed by an employer to avoid duplication of any benefits previously paid
by this Plan to such member after a prior termination of service and with
respect to annuity payments, only to the extent prior to the member's attainment
of age 65. Such reduction shall not apply to the extent that the member shall,
upon reemployment, repay to the Trustee any amount received from the Trust with
interest thereon compounded annually, at the rate to be determined by the
Retirement Committee from the date or dates of receipt of such benefits to the
date of repayment to the Trust.
(8) Whenever the amount of a benefit under this Plan is to be
determined by an actuarial procedure, effective January 1, 1984, the following
actuarial assumptions will be used: The interest rate assumption for annuity
forms of benefit payments shall be 7 1/2% per annum and for the lump sum form of
payment shall be the applicable Pension Benefit Guaranty Corporation discount
rate for the month three months preceding the date of retirement if the election
is made before retirement, or for the month following an election for the lump
sum form of payment made after retirement. The mortality assumption for all
forms of benefit payments except for the lump sum form of payment shall be based
upon the latest Unisex Mortality Table prepared by the Plan's actuary and
adopted by the Committee. For lump sum payments, the Pension Benefit Guaranty
Corporation Immediate Annuity Lump Sum Factor shall be used.
j. Qualified Domestic Relations Order: Notwithstanding anything in the
Plan to the contrary, the payment of any benefit to which a member may be
entitled under this Section 4 shall be subject to a qualified domestic relations
order within the meaning of section 414(p) of the Internal Revenue Code.
k. Special Rules For Certain Members Who Are Not Eligible To Retire
Under Sections 4.a. or 4.d.: Notwithstanding anything to the contrary in
Sections 4.c., 4.d., 4.f. or 4.h., this Section 4.k. provides special rules for
a member who (i) terminates service or dies on or after January 1, 1994, (ii)
16
has completed at least 5 Anniversary Years of Creditable Service upon his
termination from service or death, and (iii) has accrued a portion of his Plan
benefit prior to January 1, 1994 (the "Pre-1994 benefit"). The otherwise
applicable provisions of the Plan shall apply to such member except to the
extent specifically modified herein.
(1) Except as provided below, a terminated member (other than a deceased
member) described in this Section 4.k. may elect to receive his
pre-1994 benefit at any time after his attainment of age 50 and on or
before attainment of age 65, commencing on the first day of the month
following such election. The member shall receive such benefit in the
normal form provided under Section 4.f.(1). If the member elects
commencement of his pre-1994 benefit before age 65, such benefit shall
be reduced for early commencement by applying the percentages set forth
in Schedule C.
(2) If a member (other than a deceased member) described in this Section
4.k. terminates service (A) between the ages 50 and 55 with at least 10
years of Creditable Service, and his attained age when added to his
years of Creditable Service equals or exceeds 65, he may elect to
receive his pre-1994 benefit before age 65, reduced for early
commencement by applying the percentages set forth in Schedule C; or
(B) when his attained age when added to his years of Creditable Service
equals or exceeds 90, he may elect to receive his pre-1994 benefit
before age 65, reduced for early commencement by applying the
percentages set forth in Schedule D. Such a member shall receive his
pre-1994 benefit in the normal form provided under Section 4.f.(1);
provided, however, he may elect an optional form of payment in
accordance with the provisions of Section 4f.(2) or 4g.
(3) The surviving spouse of a deceased member described in this Section
4.k., who is entitled to benefits under Section 4.h., may elect to have
the amount attributable to the member's pre-1994 benefit commence prior
to the end of the month following the month in which the member would
have attained his normal retirement date, but not earlier than the date
the member first would have reached age 50.
(4) If a member's pre-1994 benefit is paid or commences to be paid pursuant
to (1), (2) or (3) above, the remaining portion of his benefit shall be
equal to his benefit, determined under the provisions of Section 4.a.
(taking into account all years of Creditable Service and all Career
Earnings), and expressed in the form of a single life annuity payable
at normal retirement date reduced by his pre-1994 benefit, expressed in
the form of a single life annuity payable at normal retirement date.
Such remaining benefit shall be payable under the otherwise applicable
provisions of this Plan.
(5) If receipt of the pre-1994 benefit of a member described in this
Section 4.k. commences after the member attains, or would have
attained, age 55, the remaining portion of his benefit shall commence
at the same time.
l. Suspension of Benefit Rules: If a member terminates employment or
retires and is reemployed by an employer before such member's normal retirement
date, the payment of any benefits he is then receiving shall be suspended. If a
member terminates employment or retires and is reemployed by an employer on or
after such member's normal retirement date, or if a member continues in
employment after the member's normal retirement date, payment of the member's
pension shall be suspended in accordance with the following provisions:
17
(1) If the member is reemployed or continues in Suspendible
Employment, the payment of any benefits he is then receiving
or entitled to receive shall be suspended until his subsequent
retirement. The Retirement Committee will notify the member of
the suspension of benefits in the manner, form and at such
time as is required by applicable law.
(2) If the member is reemployed, or continues in employment other
than Suspendible Employment, the payment of any benefits he is
then receiving shall be suspended, and the amount of his
resumed benefit payments upon subsequent retirement shall be
the amount in effect immediately before the suspension,
increased actuarially to reflect the delayed commencement of
payments, but only to the extent the value of such actuarial
increase exceeds the value of any additional pension earned
during the period employment after normal retirement date.
(3) For purposes of this Section 4.(l), "Suspendible Employment"
means the completion of 40 or more hours of service with the
employer during any calendar month (or four or five week
payroll period).
m. Direct Rollover Rules: Effective for distributions under the Plan on
or after January 1, 1993, at the written request of a distributee (which shall
mean a member, a surviving spouse of a member, or a spouse or former spouse of a
member that is an alternative payee under a Qualified Domestic Relations Order),
and upon receipt of the written consent of the Retirement Committee, the Trustee
shall effectuate a direct rollover distribution of the amount requested by the
distributee in accordance with Section 401(a)(31) of the Internal Revenue Code,
to an eligible retirement plan (as defined in Section 401(a)(31)(D) of the
Internal Revenue Code). Such amount shall constitute all or part of any
distribution otherwise to be made hereunder to the distributee, provided that
such distribution constitutes an "eligible rollover distribution," as defined in
Section 402(c) of the Internal Revenue Code and the regulations and other
guidance issued thereunder. All direct rollover distributions shall be made in
accordance with the following:
(1) The term "eligible rollover distribution" means any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or for a specified period of
ten years or more; or any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Internal Revenue Code; or any distribution to the extent such
distribution is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) The term "eligible retirement plan" means an individual
retirement account described in Section 408(a) of the Internal
Revenue Code, an individual retirement annuity described in
Section 408(b) of the Internal Revenue Code, or (to the extent
provided in Section 401(a)(31)(D) of the Internal Revenue
Code) a qualified trust described in Section 401(a) of the
Internal Revenue Code that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
18
rollover distribution to a surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(3) A direct rollover distribution shall be made to only one
eligible retirement plan; a distributee may not elect to have
a direct rollover distribution apportioned between more than
one eligible retirement plan.
(4) Direct rollover distributions shall be made in cash in the
form of a check made payable to the trustee or custodian of
the eligible retirement plan, in accordance with procedures
established by the Retirement Committee.
(5) No direct rollover distribution shall be made unless the
distributee furnishes the Retirement Committee with such
information as the Committee shall require, including but not
limited to: the name of the recipient eligible retirement
plan, and any account number or other identifying information.
(6) A distributee may have a portion of an eligible rollover
distribution distributed directly to him and a portion
directly rolled over to an eligible retirement plan as such
distributee may determine.
19
SECTION 5
Contributions
All of the retirement annuity payments provided under this Plan shall
be financed entirely by means of contributions made by the Company and Associate
Companies, subject to conditions set forth under Sections 9 and 12.
a. Service Contributions: Subject to the future financial needs and
condition of the business as determined by its Board of Directors, it is the
intention of the employer to continue the Plan and, within the time allowed by
law for filing of its federal income tax return for each fiscal year, to make
regular contributions each year in such amounts as are necessary to maintain the
Plan on a sound actuarial basis, and to meet minimum funding standards
prescribed by any applicable law. Upon transfer from Special Service to service
with an employer, appropriate contributions shall be made with respect to each
employee so transferred to provide the benefits for such Special Service.
b. Actuarial Calculations: The Company shall adopt from time to time,
service and mortality tables and the rates of interest to be used in actuarial
calculations required in connection with the Plan. As an aid to the Company in
adopting such tables the actuary designated by the Company shall from time to
time submit recommendations to the Company as to possible changes affecting such
tables. The actuary shall, in addition, make annual valuations of the contingent
assets and liabilities of the Plan and establish the rate of Company
contributions payable to the Plan.
c. Continuation of Plan: The continuation of this Plan and the payment
of contributions are not assumed as contractual obligations of the employer.
SECTION 6
Funding the Plan
a. Trust Fund: All contributions made by the employer to provide the
benefits under this Plan shall be paid into a trust fund. The trust fund will be
held and invested as described in the trust agreement, a brief description of
the provisions of which is given in Section 7 hereof. No part of the fund may be
used for, or diverted to, purposes other than for the exclusive benefit of
employees or their beneficiaries, nor may any part of the fund be remitted to
the Company, except as otherwise permitted under ERISA, provided, however, that
the reasonable expenses of the Trustee in the administration of this trust as
well as fees and other charges incurred for investment counseling and for
actuarial services and expenses of the Retirement Committee and the Plan Assets
Committee will be paid out of the trust fund.
b. Annuities: Notwithstanding anything herein to the contrary, if the
Retirement Committee shall find that any benefit prescribed in this Plan can be
provided with equal security to the members at the same or less cost, or at an
increased cost, provided the Company shall approve, through the purchase of
immediate or deferred annuities from any governmental agency or insurance
company or companies, approved by the Company, the Retirement Committee is
authorized and empowered to provide for the payment of such benefits by purchase
thereof from such agency or company or companies.
20
SECTION 7
Administration of the Trust Fund - The Trust Agreement
The Company has entered into a Trust Agreement with The Northern Trust
Company, providing for the administration of the annuity trust fund by that bank
as Trustee thereof, which includes provisions with respect to the powers and
authority of the Trustee (in its discretion and/or as directed by an Investment
Adviser appointed by the Plan Assets Committee) as to the investment and
reinvestment of the trust fund and the income therefrom provided, however, the
Company specifically reserves unto itself or its delegate the Plan Assets
Committee, through the Proxy Voting Committee, the right to vote any shares of
securities held in the Trust Fund or, alternatively, may permit the Investment
Adviser to exercise such responsibility and provisions with respect to the
administration of the trust fund, the limitations on the liability of the
Trustee, authority of the Company to settle the accounts of the Trustee and of
the Retirement Committee on behalf of all persons having any interest in the
trust fund, and from time to time, to appoint a new Trustee in place of any then
acting Trustee to the trust fund, and that, with respect to any payments to or
for the benefit of any employee or beneficiary under this Plan, the Trustee
shall follow the directions of the Retirement Committee. The Trust Agreement
further provides that the Company shall have the right, from time to time, to
modify or amend the Trust Agreement in whole or in part, provided that no such
amendment shall divert any part of the annuity trust fund to purposes other than
the exclusive benefit of employees or their beneficiaries; provided, however,
that the reasonable expenses of the Trustee in the administration of this trust
as well as fees and other charges incurred for investment counseling (including
any Investment Adviser) and for actuarial services and expenses of the
Retirement Committee and of the Plan Assets Committee will be paid out of the
trust fund. The Trust Agreement shall be deemed to form a part of this Plan, and
any and all rights or benefits which may accrue to any person under this Plan
shall be subject to all the terms and provisions of said Trust Agreement.
SECTION 8
Committees
a. (1) Retirement Committee: This Plan is administered by a Retirement
Committee consisting of at least three persons appointed by the Board of
Directors of the Company. Members of the Retirement Committee may resign at any
time upon due notice in writing. The Board of Directors of the Company may
remove any Retirement Committee members and appoint others in their places. The
Retirement Committee may act by a majority of its members.
(2) The Retirement Committee shall be the Plan Administrator and shall
have fiduciary responsibility under the Employee Retirement Income Security Act
of 1974 for the general operation of the Plan, except that the Retirement
Committee shall have no responsibility for or control over the investment of the
Plan assets, other than the authority to provide for the purchase of annuities
pursuant to Section 6b. of the Plan and to give written directions to the
Trustee to retain cash as provided in Article II Section 2.1(a)i of the Trust
Agreement to meet contemplated payments under the Plan. The Retirement Committee
may appoint or employ such persons as it deems necessary to render advice with
respect to any responsibility of the Retirement Committee under the Plan. The
Retirement Committee may allocate to any one or more of its members any
21
responsibility it may have under the Plan and may designate any other person or
persons to carry out any responsibility of the Retirement Committee under the
Plan, other than its authority described above with respect to the retention of
cash and the purchase of annuities. Any person may serve in more than one
fiduciary capacity with respect to the Plan.
(3) Duties:
(a) The Retirement Committee will determine the names of annuitants and
joint annuitants and the amounts that are payable to them from the trust fund in
accordance with the provisions of this Plan.
(b) The Retirement Committee shall keep in convenient form such data as
shall be necessary for actuarial valuations of the contingent assets and
liabilities of the Plan and for checking the experience thereof.
(c) The Retirement Committee shall determine the manner in which the
funds of the Plan shall be dispensed including the form of voucher or waiver to
be used in making disbursements and the due notification of persons authorized
to approve and sign the same.
(d) The Retirement Committee shall determine whether a judgment, decree
or order, including approval of a property settlement agreement, made pursuant
to a state domestic relations law, including a community property law, that
relates to the provision of child support, alimony payments, or marital property
rights of a spouse, former spouse, child, or other dependent of the member is a
qualified domestic relations order within the meaning of section 414(p) of the
Internal Revenue Code, and shall give the required notices and segregate any
amounts that may be subject to such order if it is a qualified domestic
relations order, and shall administer the distributions required by any such
qualified domestic relations order.
(4) Administration of Plan: The Retirement Committee is authorized to
make such rules and regulations as may be necessary to carry out the provisions
of the Plan and will determine any questions arising in the administration,
interpretation and application of the Plan, which determination shall be
conclusive and binding on all parties. The Retirement Committee is also
authorized to adopt such rules and regulations as in its opinion may be
necessary to prevent inequities with respect to any employees whose total annual
compensation did not exceed $7,500 in any year during which such inequity
occurred and the determination of the Committee on such inequity and the
correction thereof shall be conclusive and binding on all parties. The
Retirement Committee is also authorized to provide for accelerated vesting and
to purchase or arrange for payment of an appropriate annuity or any other form
of payment or to permit the immediate distribution of Plan benefits in those
cases involving groups of employees involuntarily terminated, including, but not
limited to, cases involving groups of employees who involuntarily cease to
render Creditable Service due to a liquidation, sale, or other means of
terminating the parent-subsidiary or controlled group relationship with the
Employer or the sale or other transfer to a third party of all or substantially
all of the assets used by the Employer in a trade or business conducted by the
Employer, when the Retirement Committee determines that such action is
appropriate to prevent inequities with respect to such employees, and the
determination of the Committee in such matters shall be conclusive and binding
on all parties. For the purpose of the preceding sentence, Employer includes the
definition of controlled group contained in Section 1c. hereof. Further, the
Retirement Committee, upon the written request of the Company's Vice
22
President-Personnel, is authorized, with respect to a member of the Plan who has
five or more years of Credited Service and who is transferred to the purchaser
of a portion of the Company's operations, effective the day after the Closing
Date of the Sale, to grant additional Creditable Service and additional credit
for age under the Plan, in each case up to one percent for each year of
Creditable Service, and to advance the date through which a member's earnings
are calculated pursuant to Section 1q. hereof, so as to prevent hardship with
respect to his participation in said purchaser's pension plan. The Retirement
Committee, upon written request of the Company's Vice-President-Personnel, is
also authorized to waive, either in whole or in part, the percentage reductions
for early commencement of retirement benefits set forth in Section 4d. and/or to
grant additional years of Creditable Service and additional credit for age under
the Plan, or a combination thereof, up to a total of five (5), in those cases
where groups of employees have terminated employment either as a result of a
reduction in the work force or early retirement incentive programs or for
similar economic reasons, and the determination of the Retirement Committee
shall be conclusive and binding on all parties. The Retirement Committee is also
authorized to adopt such rules and regulations as it may consider necessary or
desirable for the conduct of its affairs and the transaction of its business,
including, but not limited to, the power on the part of the Retirement Committee
to act without formally convening and to provide that action of the Retirement
Committee may be expressed by written instrument signed by a majority of its
members. It shall elect a Secretary, who need not of necessity be a member of
the Retirement Committee, who shall record the Minutes of its proceedings and
shall perform such other duties as may from time to time be assigned to him. The
Retirement Committee may retain legal counsel (who may be counsel for the
Company) when and if it be found necessary to do so and may also employ such
other assistants, clerical or otherwise, as may be requisite, and expend such
monies as may be requisite in their work. All of these expenses of the
Retirement Committee and the reasonable expenses of the Trustee in the
administration of this trust as well as for actuarial services will be paid out
of the trust fund.
b. (1) Plan Assets Committee: A Plan Assets Committee consisting of at
least three persons appointed by the Board of Directors of the Company shall
have exclusive authority and fiduciary responsibility under the Employee
Retirement Income Security Act of 1974 (i) to appoint and remove Investment
Advisers, if any, under the Plan and the Trust Agreement, (ii) to direct the
segregation of assets of the Retirement Annuity Trust Fund into an Investment
Adviser account or accounts at any time, and from time to time to add to or
withdraw assets from such Investment Adviser account or accounts as it deems
desirable or appropriate and also to direct the Company's contribution or any
portion thereof into any of the accounts maintained under the trust, (iii) to
direct the Trustee to enter into an agreement or agreements with an insurance
company or companies designated by the Plan Assets Committee as provided in
Article II Section 2.6 of the Trust Agreement, (iv) to establish investment
guidelines for areas other than those set forth above and, within such
guidelines, to direct the Trustee to purchase and sell securities or to enter
into one or more agreements with one or more companies, partnerships or joint
ventures and to transfer assets of the Retirement Annuity Trust Fund to such
entities for purposes of investment therein; provided however, that, except as
expressly set forth herein, the Plan Assets Committee shall have no
responsibility for or control over the investment of the Plan assets held in the
fund established hereunder. Notwithstanding the foregoing, the Company
specifically reserves unto itself or its delegate, the Plan Assets Committee,
through the Proxy Voting Committee, the right to vote any shares of securities
held in the Trust Fund or, alternatively, may permit the Investment Adviser to
exercise such responsibility. In addition, the Plan Assets Committee shall
receive the reports and recommendations of the actuary designated by the Company
under Section 5b. hereof concerning actuarial assumptions to be adopted on
subjects including, but not limited to, employee turnover, rate of mortality,
23
disability rate, ages at actual retirement, rate of pay increases, investment
income and size of participant group, and make such recommendations and
determinations based upon such reports and recommendations as it may deem
necessary or appropriate. The Plan Assets Committee may appoint or employ such
persons as it deems necessary to render advice with respect to any
responsibility of the Plan Assets Committee under the Plan. The Plan Assets
Committee may allocate to any one or more of its members any responsibility that
it may have under the Plan and may designate any other person or persons to
carry out any responsibility of the Plan Assets Committee under the Plan. Any
person may serve in more than one fiduciary capacity with respect to the Plan.
Members of the Plan Assets Committee may resign at any time upon due notice in
writing. The Board of Directors of the Company may remove any Plan Assets
Committee members and appoint others in their places. The Plan Assets Committee
may act by a majority of its members.
(2) The Plan Assets Committee is authorized to make such rules and
regulations as may be necessary to carry out its duties under the Plan. The Plan
Assets Committee is also authorized to adopt such rules and regulations as it
may consider necessary or desirable for the conduct of its affairs and the
transaction of its business, including, but not limited to, the power on the
part of the Plan Assets Committee to act without formally convening and to
provide that action of the Plan Assets Committee may be expressed by written
instrument signed by a majority of its members. It shall elect a Secretary, who
need not of necessity be a member of the Plan Assets Committee, who shall record
the Minutes of its proceedings and shall perform such other duties as may from
time to time be assigned to him. The Plan Assets Committee may retain legal
counsel (who may be counsel for the Company) when and if it be found necessary
to do so and may also employ such other assistants, clerical or otherwise, as
may be requisite, and expend such monies as may be requisite in their work. All
of these expenses of the Plan Assets Committee as well as expenses for
investment counseling will be paid out of the trust fund.
c. To the extent permitted by law, the Retirement Committee, the Plan
Assets Committee, the Trustee, the Boards of Directors of the employers, and the
employers and their respective officers shall not be liable for the directions,
actions or omissions of any agent, legal or other counsel, accountant or any
other expert who has agreed to the performance of administrative duties in
connection with the Plan or Trust. The Committees, the Trustee, the Boards of
Directors of the employers, and the employers and their respective officers
shall be entitled to rely upon all certificates, reports, data, statistics,
analyses and opinions which may be made by such experts and shall be fully
protected in respect to any action taken or suffered by them in good faith
reliance upon any such certificates, reports, data, statistics, analyses or
opinions; all action so taken or suffered shall be conclusive upon each of them
and upon all persons having or claiming to have any interest in or under the
Plan.
d. Indemnification: Each member of the Retirement Committee and each
member of the Plan Assets Committee shall be indemnified by the Company against
all costs and expenses (including counsel fees but excluding any amount
representing a settlement unless such settlement be approved by the Board of
Directors of the Company) reasonably incurred by or imposed upon him, in
connection with or resulting from any action, suit or proceeding, to which he
may be made a party by reason of his being or having been a member of the
Retirement Committee or the Plan Assets Committee, as applicable (whether or not
he continues to be a member of such Committee at the time when such cost or
expense is incurred or imposed), to the full extent permitted by law. The
foregoing rights of indemnification shall not be exclusive of other rights to
which any member of the Retirement Committee or the Plan Assets Committee may be
entitled as a matter of law.
24
SECTION 9
Amendments and Changes in Plan and Coverage
Because of the uncertainty as to future conditions, including the
possibility that Federal Social Security Benefits may be extended and
liberalized, the Company necessarily reserves the right, through its Board of
Directors, at any time to modify, suspend or discontinue this Plan or the
annuity trust fund and to change the Trustee. Any such amendment may effect a
substantial change in the Plan, and may include (but shall not be limited to)
provisions for disability pensions, provisions permitting or requiring employees
to make contributions to the trust, provisions for the participation in the Plan
of any corporation or any change deemed by the Company to be necessary or
desirable to make the Plan conform to, or to obtain tax benefits under, any
existing or future laws or rules or regulations thereunder, and a change in the
class or classes of persons to whom any retirement annuity may be or become
payable or in the amount of any such annuity. An employer may at any time, or
from time to time, change the designation of a group or class of employees with
respect to the eligibility or non-eligibility of such group or class for
membership in the Plan, as well as change, modify, consolidate or redefine any
and all groups or classes of employees for purposes of such designation. Any
such amendment or change shall not reduce any retirement annuities which shall
have already been granted and which are then in force and shall not so operate
as to divert substantial amounts of trust funds from one group of employees to
any other group of employees. No such amendment or change shall discriminate in
favor of employees who are officers, stockholders, persons whose principal
duties consist of supervising the work of other employees, or highly compensated
employees or their beneficiaries, provided, however, that changes shall not be
considered discriminatory, because of readjustment of the Plan to integrate
benefits in accordance with present or future Social Security Laws of the United
States or any State or States.
The Committee may make non-substantive administrative changes to the
Plan so as to conform with or take advantage of governmental requirements,
statutes or regulations.
SECTION 10
Non-Alienation of Benefits
No benefit payable under the provisions of the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void; nor shall
any such benefits be in any manner liable for or subject to the debts,
contracts, liabilities, engagements or torts of any member or beneficiary except
as specifically provided in the Plan, or by a qualified domestic relations order
within the meaning of section 414(p) of the Internal Revenue Code, or by any
other applicable law.
SECTION 11
Associate Companies
25
a. Adoption of Plan: Any corporation, with the consent of the Company,
by taking appropriate corporate action may become an Associate Company and
secure the benefits of this Plan for its employees by adopting this Plan as its
Retirement Annuity Plan and by executing the Trust Agreement. As a condition to
such corporation becoming an Associate Company, the Company may require such
corporation to modify or amend any pension plan which such corporation may then
have so as to conform to the provisions of this Plan, or to limit Prior Service,
as defined in Section 3, to service rendered for such corporation on and after a
date to be determined by the Company. The Associate Company shall thereafter
promptly deliver to the Trustee a certified copy of the resolutions or other
documents evidencing its adoption of this Plan and also a written instrument
showing the consent by the Company to such adoption.
b. Employee Transfers: Any employee who is transferred from one
employer under this Plan to another employer under this Plan shall receive upon
retirement a retirement annuity based on his Creditable Service with all such
employers.
c. Withdrawal: The Company may upon thirty (30) days written notice
request an Associate Company to withdraw from the Plan and upon the expiration
of such thirty (30) day period, unless such Associate Company has taken the
appropriate corporate action to accomplish such withdrawal, such Associate
Company shall be deemed to have withdrawn from the Plan and the provisions of
Section 12 shall apply. The Retirement Committee shall give written notice to
the Trustee of any such withdrawal.
SECTION 12
Withdrawal from Plan
Any employer may withdraw from the Plan by giving the Retirement
Committee thirty (30) days written notice of its intention to withdraw. In the
event any employer withdraws from the Plan, the Retirement Committee shall
thereupon determine, on the basis of actuarial valuation, that portion of the
annuity trust fund held on account of the employees of such employer not yet
retired. The Retirement Committee shall thereupon instruct the Trustee to set
aside such assets in the annuity trust fund, as the Retirement Committee shall
specify, which equal in value that portion of the annuity trust fund so
determined by the Retirement Committee. The Retirement Committee in its
discretion shall direct the Trustee either (1) to hold such assets so set aside
for the exclusive benefit of the employees of such withdrawing employer, who
were members under this Plan on the date of such withdrawals; or (2) to deliver
such assets to such trustee or trustees as shall be selected by such withdrawing
employer; or (3) to use such assets to purchase an appropriate retirement
annuity for each employee of such withdrawing employer who was a member on the
date of such withdrawal.
SECTION 13
Termination of Plan
a. Application of Funds: Upon complete or partial termination of the
Plan, the rights of all affected members to affected benefits accrued to the
date of such termination, to the extent then funded, shall be non-forfeitable.
If the Plan is terminated by an employer for any reason, the funds in the trust
shall be used and applied by the Retirement Committee, after expenses,
exclusively for the benefit of members and annuitants at the time of termination
26
in accordance with the formula set forth below by either purchasing or arranging
for payment of an appropriate annuity or any other form of payment approved by
the Retirement Committee, and for no other purpose, and when so used and applied
the trust shall finally cease and be at an end. The funds shall be allocated for
distribution in the following order:
(1) In the case of a benefit, payable as an annuity to a member or
beneficiary, which was in pay status as of the beginning of the three-year
period ending on the termination date of the Plan, to each such benefit, based
on the provisions of the Plan (as in effect under the five-year period ending on
such date) under which such benefit would be the least.
(2) In the case of a benefit, payable as an annuity to a participant or
beneficiary, which would have been in pay status as of the beginning of such
three-year period if the participant had retired prior to the beginning of the
three-year period and if his benefits had commenced (in the normal form of
annuity under the Plan) as of the beginning of such period, to each such benefit
based on the provisions of the Plan (as in effect during the five-year period
ending on such date) under which such benefit would be the least.
(3) To all other benefits, if any, of individuals under the Plan
subject to the Pension Benefit Guaranty Corporation insurance guarantee and to
any additional benefits to a substantial owner, as that term is defined in
Section 4022(b)(6)(A) of the Employee Retirement Income Security Act of 1974,
which would be subject to the guarantee but for their "substantial owner"
status.
(4) To all other non-forfeitable benefits under the Plan and, if the
assets are not sufficient to cover all such remaining non-forfeitable benefits,
then to the benefits resulting from the Plan as in effect five years prior to
the date of termination, and if assets remain after satisfaction of such
benefits, then to each increase in benefits resulting from amendments during the
last five years in the order in which those amendments occurred.
(5) To all other benefits under the Plan.
(6) In the event that there remain additional funds available for
distribution after the funds have been distributed as provided in said
paragraphs (1), (2), (3), (4) and (5) above, any other provisions of this
Section 13 notwithstanding, any funds, remaining as a result of actuarial error
may be reclaimed by the employer. Any of such funds remaining, but not as a
result of actuarial error, and/or any of such funds remaining as a result of
actuarial error, but not reclaimed by the employer, shall be distributed in such
a manner that all the annuitants and members included in paragraphs (1), (2),
(3), (4) and (5) above shall receive an additional amount determined by
multiplying the total value of these remaining assets in the trust fund by a
percentage computed by dividing the value as of the date of termination of such
annuitant's remaining benefits or such member's benefits, as the case may be, by
the total value as of the date of termination of the remaining benefits, or the
benefits of all such annuitants or members under the Plan, as the case may be.
b. In the event of the termination of the Plan, the benefit of any one
of the twenty-five (25) most highly compensated employees (whether a current or
former employee) is limited to a benefit that is nondiscriminatory under Section
401(a)(4) of the Internal Revenue Code.
27
c. Unless an escrow or similar agreement is permitted and established
in accordance with IRS procedures, annual payments to any one of the twenty-five
(25) most highly compensated employees is restricted to the sum of:
(1) the amount that would be paid under a straight life annuity
that is the actuarial equivalent of the employee's accrued
benefit and other benefits to which the employee is entitled
under the Plan; and
(2) the amount the employee is entitled to receive under a social
security supplement.
However, none of the restrictions in this subsection (c) shall apply to
any one of the twenty-five (25) most highly compensated employees if any of the
conditions set forth in IRS Regulations Section 1.401(a)(4)-5(b)(3)(iv) are
satisfied with respect to such employee.
d. Excess Reserves: Any excess reserves resulting from the application
of the foregoing provisions of this Section shall be used and applied for the
benefit of other members who are employees of such employer, in accordance with
the provisions of the Plan.
e. Change in Law: In the event that it should subsequently be
determined by statute, court decision administrative ruling, or otherwise, that
the provisions of this Section applicable to the twenty-five (25) most highly
compensated employees are no longer necessary to qualify the Plan under the
Internal Revenue Code, such provisions shall be ineffective without the
necessity of further amendment of the Plan.
28
SECTION 14
Plan Mergers and Consolidations
In the event of any merger or consolidation of the Plan with, or
transfer in whole or in part of the assets and liabilities of the trust fund to
another trust fund held under, any other plan of deferred compensation
maintained or to be established for the benefit of all or some of the members of
this Plan, the assets of the trust fund applicable to such members shall be
transferred to the other trust fund only if:
a. Each member would, if either this Plan or the other plan were to
terminate at such time, receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger, consolidation or
transfer if this Plan had then terminated;
b. The employer and any new or successor employer of the affected
members shall authorize such transfer of assets; and
c. Such new or successor employer shall assume all liabilities with
respect to such members' inclusion in the new employer's plan.
SECTION 15
Claims Procedure
Any request by a member or any other person for any benefit alleged to
be due under the Plan shall be known as a "Claim" and the member or such other
person making a Claim shall be known as a "Claimant."
A Claim shall be filed when a written statement has been made by the
Claimant or his authorized representative and delivered to the Vice
President-Personnel, Pfizer Inc, 235 East 42nd Street, New York, New York 10017.
This statement shall include a general description of the benefit which the
Claimant believes is due and the reasons that the Claimant believes such benefit
to be due, to the extent this is within the knowledge of the Claimant. It shall
not be necessary for the Claimant to cite any particular Section or Sections of
the Plan, but only to set out the facts known to him which he believes
constitute a basis for a Claim.
Within 90 days of the receipt of the Claim by the Plan, the Vice
President-Personnel shall (i) notify the Claimant that the Claim has been
approved, (ii) notify the Claimant that the Claim has been partially approved
and partially denied, or (iii) notify the Claimant that the Claim has been
denied. Notice of the decision shall be in writing and shall be delivered to the
Claimant either personally or by first-class mail. Special circumstances may
require an extension of time for processing the claim. In such event, written
notice of the extension shall be furnished to the Claimant prior to the
termination of the initial 90 day period but in no event shall the extension
exceed a period of 90 days from the end of such initial period. The notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Plan expects to render the final decision.
29
In the event a Claim is denied in whole or in part, the notice of
denial shall set forth (i) the specific reason or reasons for the denial, (ii)
specific reference to the pertinent Plan provisions on which the denial is
based, (iii) a description of any additional material or information necessary
for the Claimant to perfect the Claim and an explanation of why such material or
information is necessary, and (iv) an explanation of the Plan's claims review
procedure.
Within 60 days of the receipt of a notice of denial of a Claim in whole
or in part, a Claimant or his duly authorized representative (i) may request a
review upon written application to the Retirement Committee, (ii) may review
documents pertinent to the Claim, and (iii) may submit issues and comments in
writing to the Retirement Committee.
It shall be the duty of the Retirement Committee to review a Claim for
which a request for review has been made and to render a decision not later than
60 days after receipt of a request for review; provided, however, that if
special circumstances require an extension of time for processing, a decision
shall be rendered no later than 120 days after receipt of a request for review.
Written notice of any such extension shall be furnished to the Claimant within
60 days after receipt of request for review. The decision shall be in writing
and shall include the specific reasons for the decision and specific references
to the pertinent Plan provisions on which the decision is based. The decision
shall be delivered to the Claimant either personally or by first-class mail. If
the decision on review is not furnished within such time, the Claim shall be
deemed denied on review.
SECTION 16
Top-Heavy Rule
a. Notwithstanding any provision in the Plan to the contrary, if the
Plan is determined by the Retirement Committee to be top-heavy, as that term is
defined in section 416 of the Internal Revenue Code, in any calendar year,
commencing on or after January 1, 1984, then for that calendar year the vesting
schedule and minimum benefit rules, as set forth below, shall be applicable.
Determination of whether the Plan is top-heavy shall be made in accordance with
section 416(g)(2)(B) of the Internal Revenue Code.
b. Definitions solely applicable to this Section 16.
(1) "Compensation" shall mean the amount reportable by the
employer for federal income tax purposes as wages paid to the
member for such period.
(2) "Determination Date," the date for determining whether the
Plan is top-heavy, shall be the December 31 of the preceding
year.
(3) "Key Employee" shall have the same meaning as in section
416(i)(1) of the Internal Revenue Code.
(4) "Non-Key Employee" shall mean an employee other than a Key
Employee as defined in subsection b.(3) above.
30
(5) "Testing Period" shall mean the period of consecutive years,
not exceeding five (5), during which a member had the greatest
aggregate compensation from the employer, but not including
years beginning before January 1, 1984 or years in which this
Plan was determined not to be top-heavy.
(6) "Valuation Date," for minimum funding purposes, shall be a
date within the twelve-month period ending on the
Determination Date, regardless of whether a valuation for
minimum funding purposes is performed in that year.
c. For the purpose of determining whether this Plan is top-heavy, this
Plan, the Company's Savings and Investment Plan, and the Company's Employee
Stock Ownership Plan shall be aggregated, as provided in section 416(g)(2)(A) of
the Internal Revenue Code.
d. Vesting Schedule: Employees shall acquire a vested interest in an
annuity under the Plan in accordance with the following schedule:
20% of the accrued benefit under Section 4a. after two (2)
Anniversary Years of Creditable Service; 40% of the accrued
benefit under Section 4a. after three (3) Anniversary Years of
Creditable Service; 60% of the accrued benefit under Section
4a. after four (4) Anniversary Years of Creditable Service;
80% of the accrued benefit under Section 4a. after five (5)
Anniversary Years of Creditable Service; and 100% of the
accrued benefit under Section 4a. after six (6) Anniversary
Years of Creditable Service.
e. Minimum Benefit Rule: A Non-Key Employee's benefit shall not be less
than the lesser of: 2% of his average compensation during the testing period,
not exceeding the compensation limitation under section 416(d) of the Internal
Revenue Code and applicable regulations, multiplied by those years of service
with the employer on or after January 1, 1984 in which this Plan is determined
to be top-heavy or 20% of his average compensation during the testing period;
provided, however, that any minimum benefit provided under this Section 16 shall
be offset by the actuarial equivalent of the value of the employer's
contributions to the Company's Savings and Investment Plan and the Company's
Employee Stock Ownership Plan on the Non-Key Employee's behalf. Such actuarial
equivalent shall be calculated using the Pension Benefit Guaranty Corporation
immediate annuity lump sum factor, with male and female factors equally
weighted, in effect three (3) months prior to termination of employment. All
accruals derived from employer contributions, whether or not attributable to
years in which the Plan is top-heavy, may be used in determining whether the
minimum accrued benefit requirements for a Non-Key Employee has been satisfied.
f. If the Plan becomes subject to the adjustments pursuant to section
416(h) of the Internal Revenue Code, the defined benefit plan fraction described
in section 415(e)(2)(B) and the defined contribution fraction described in
section 415(e)(3)(B) shall be applied by substituting 1.0 for 1.25 in the
denominator of each fraction.
g. If the Plan becomes top-heavy and in a subsequent year ceases to be
top-heavy, the vesting schedule under Section 16d. shall revert to the vesting
schedule under Section 4c. of the Plan provided, however, that any employee who
has completed at least five (5) or more years of Creditable Service at the time
31
the Plan ceases to be top-heavy and who had at least one (1) hour of service
while the Plan was a top-heavy plan, shall be entitled to elect, within a
reasonable period (such period to be determined by the Retirement Committee when
relevant but in no event no earlier than 60 days following the latest of (i) the
date upon which the reversion to the prior vesting schedule became effective, or
(ii) the day the employee is issued written notice by the Retirement Committee
that the prior schedule is applicable), whether the vesting schedule in Section
16d. or in Section 4c. is applicable to his benefit.
32
SCHEDULE A
List of Eligible Groups or Classes
Groups or Classes eligible for participation in the Retirement Annuity
Plan (except in each case employees covered by a collective bargaining agreement
that does not provide for coverage of such employees under the Plan):
1. All employees in the service of Pfizer Inc at the following locations:
New York Headquarters, New York, New York
Brooklyn Plant, Brooklyn, New York
Groton Plant and Research Laboratories, Groton, Connecticut
Vigo Plant and Research Laboratories, Terre Haute, Indiana
Washington Office, Washington, D.C.
Atlanta Branch, Doraville, Georgia
Chicago Branch, Hoffman Estates, Illinois
Clifton Branch, Clifton, New Jersey
Dallas Branch, Dallas, Texas
Parsippany Plant, Parsippany, New Jersey
Irvine Branch, Irvine, California
Lee's Summit Plant, Lee's Summit, Missouri
Aviation Department, West Trenton, New Jersey
Lincoln, Nebraska
West Chester, Pennsylvania
Exton, Pennsylvania
Miami, Florida
Omaha, Nebraska
White Hall, Illinois
Albany, New York
Arlington, Texas
Ashland, Virginia
Englewood, Colorado
Marietta, Georgia
Olive Branch, Mississippi
Orlando, Florida
Sacramento, California
South Bend, Indiana
Memphis, Tennessee
2. Headquarters Foreign Residents in the service of a foreign subsidiary (as
defined in section 3121(1)(8) of the Internal Revenue Code) of Pfizer Inc who
are United States citizens employed outside the continental limits of the United
States.
3. All Field Sales Personnel in the service of the following groups or divisions
of Pfizer Inc:
33
Pfizer Laboratories
Animal Health Group
Roerig
Consumer Health Care Group
Pratt
National Health Care Operations
Specialty
Powers Rx
Pfizer Corporation Carolina
4. All employees in the service of the following Associate Companies:
Pfizer International Inc.
Howmedica, Inc.
Howmedica Management and Technical Services, Ltd.
Pfizer Pharmaceuticals, Inc.
Shiley Heart Valve Research Center
Valleylab, Inc.
Strato/Infusaid, Inc.
Schneider (USA) Inc., a Pfizer Company
American Medical Systems, Inc.
NAMIC USA Corporation
Corvita Corporation
Howmedica Leibinger Inc.
5. All employees employed in Puerto Rico by Pfizer Corporation, an
Associate Company.
34
SCHEDULE B
Vested Benefit Table
The following table sets forth the percentages which will apply at the
ages indicated in the computation of vested benefits:
Age Percentage
----------------------------------------------
65 100
64 94
63 88
62 82
61 76
60 70
59 64
58 58
57 52
56 46
55 40
35
SCHEDULE C
Early Retirement Table
The following table sets forth the percentages which will apply at the
ages indicated in the computation of early retirement benefits:
Age Percentage
------------------------------------------------
65 100
64 96
63 92
62 88
61 84
60 80
59 76
58 72
57 68
56 64
55 60
36
SCHEDULE D
Alternate Early Retirement Table
The following table sets forth the percentages which will apply at the
ages indicated in the computation of early retirement benefits:
Age Service Percentage
----------------------------------------------
64 26 100
63 27 100
62 28 100
61 29 100
60 30 100
59 31 96
58 32 92
57 33 88
56 34 84
55 35 80