ADVANCED TECHNOLOGY LABORATORIES, INC.
RETIREMENT PLAN
AMENDED AND RESTATED
EFFECTIVE
MAY 17, 1994
TABLE OF CONTENTS
Page
PREAMBLE 1
SECTION 1 - DEFINITIONS 3
1.1 Accrued Benefit 3
1.2 Actuarially Equivalent/Actuarially 3
1.3 Affiliated Companies 4
1.4 Annuity Starting Date 4
1.5 Beneficiary 4
1.6 Code 4
1.7 Committee 5
1.8 Compensation 5
1.9 Credited Service 6
1.10 Disabled 6
1.11 Earnings 6
1.12 Effective Date 8
1.13 Eligible Employee 9
1.14 Employee 9
1.15 Employer 9
1.16 Employment Commencement Date 9
1.17 ERISA 10
1.18 Final Average Monthly Earnings 10
1.19 Foreign Employee 10
1.20 Hour of Service 10
1.21 Participant 11
1.22 Period of Service 11
1.23 Period of Severance 11
1.24 Plan 12
1.25 Plan Administrator 12
1.26 Plan Year 12
1.27 Service 12
1.28 Severance From Service Date 12
1.29 Social Security Retirement Age 12
1.30 Temporarily Terminated 12
1.31 Terminated 13
1.32 Trust or Trust Fund 13
1.33 Trustee 13
1.34 Additional Definitions in Plan 13
SECTION 2 - PARTICIPATION 15
2.1 Eligibility for Participation 15
2.2 Reemployment After a Termination 15
2.3 Employees in a Bargaining Unit 15
SECTION 3 - RETIREMENT DATES 16
3.1 Normal Retirement Date 16
3.2 Early Retirement Date 16
3.3 Deferred Retirement Date 16
3.4 Retirement Date 16
3.5 Vested Termination Date 16
SECTION 4 - RETIREMENT BENEFITS 17
4.1 Accrued Benefit 17
4.2 Normal Retirement Benefit 18
4.3 Early Retirement Benefit 19
4.4 Deferred Retirement Benefit 19
4.5 Vested Termination Benefit 19
4.6 Reemployment After Retirement 19
4.7 Benefits For Terminated Participants 19
4.8 Benefits Payable From SpaceLabs Medical, Inc.
Retirement Plan 20
SECTION 5 - FORMS OF PAYMENT 21
5.1 Forms of Payment 21
5.2 Automatic Form of Benefit 22
5.3 Limitation on Forms of Payment 22
5.4 Explanation of Benefit Election and Waiting Period 23
5.5 Directed Rollovers 23
SECTION 6 - DEATH AND DISABILITY BENEFITS 25
6.1 Spouse's Death Benefit 25
6.2 Disability Benefits 26
SECTION 7 - VESTING 27
7.1 Vesting 27
7.2 Termination Prior to Vesting 27
7.3 Forfeitures 28
SECTION 8 - LIMITATIONS ON BENEFITS 29
8.1 Limitation on Benefits 29
8.2 Maximum Annual Benefit Payable Under the Plan 30
8.3 Additional Limitation Relating to Defined Contribution
Plans 33
SECTION 9 - TOP HEAVY PROVISIONS 35
9.1 Scope 35
9.2 Top Heavy Status 35
9.3 Minimum Benefit 37
9.4 Benefit Limitation 38
9.5 Vesting 39
SECTION 10 - ADMINISTRATION OF THE PLAN 40
10.1 Plan Administrator 40
10.2 Organization and Procedures 40
10.3 Duties and Authority of the Committee 40
10.4 Expenses 42
10.5 Bonding and Insurance 42
10.6 Commencement of Benefits 42
10.7 Appeal Procedure 43
10.8 Plan Administration - Miscellaneous 44
10.9 Domestic Relations Orders 46
10.10 Plan Qualification 47
10.11 Deductible Contribution 47
10.12 Payment of Benefits Through Purchase of Annuity
Contract 47
SECTION 11 - AMENDMENT AND TERMINATION 49
11.1 Amendment General 49
11.2 Amendment - Consolidation or Merger 49
11.3 Termination of the Plan 49
11.4 Allocation of the Trust Fund on Termination of Plan 49
SECTION 12 - FUNDING 51
12.1 Contributions to the Trust 51
12.2 Trust Fund for Exclusive Benefit of Participants 51
12.3 Disposition of Credits and Forfeitures 51
12.4 Trustee 51
12.5 Investment Manager 51
SECTION 13 - FIDUCIARIES 53
13.1 Limitation of Liability of the Employer and Others 53
13.2 Indemnification of Fiduciaries 53
13.3 Scope of Indemnification 53
SIGNATURE PAGE 54
APPENDIX 1 55
PREAMBLE
THIS RETIREMENT PLAN (hereinafter referred to as the "Plan,"
formerly known as the Westmark International Incorporated
Retirement Plan and now known as the Advanced Technology
Laboratories, Inc. Retirement Plan) is amended and restated
effective May 17, 1994, by Advanced Technology Laboratories,
Inc., a Delaware corporation (hereinafter "Employer").
WHEREAS, the purpose of the Plan is to provide retirement
benefits to Employees who become covered under the Plan; and
WHEREAS, the Plan was originally known as the Advanced
Technology Laboratories Floor Retirement Plan, and was adopted
effective January 1, 1981 by Advanced Technology Laboratories,
Inc.; and
WHEREAS, the Plan was amended and restated effective January
1, 1987, the name was changed to the Westmark International
Incorporated Floor Retirement Plan, and Westmark International
Incorporated became the plan sponsor, in connection with the
distribution of shares of Westmark International Incorporated to
the shareholders of Squibb Corporation; and
WHEREAS, the Plan was amended and restated effective January
1, 1990 and the name was changed to the Westmark International
Incorporated Retirement Plan; and
WHEREAS, effective June 26, 1992, the corporate name of
Westmark International Incorporated was changed to Advanced
Technology Laboratories, Inc., and assets and liabilities of the
Plan attributable to SpaceLabs, Inc. as a participating employer
in this Plan were spun off to form the SpaceLabs Medical, Inc.
Retirement Plan; and
WHEREAS, effective June 26, 1992 the Plan was amended and
restated to change the name to the Advanced Technology
Laboratories, Inc. Retirement Plan and to effect certain other
changes; and
WHEREAS, the Plan was amended and restated effective January
1, 1994;
WHEREAS, the Employer acquired Interspec, Inc., including
Echo Ultrasound, a division of Interspec, Inc., as of May 17,
1994 (the "Acquisition"); and
WHEREAS, the Employer desires to amend and restate the Plan
to reflect the Acquisition and to effect certain changes; and
WHEREAS, the Plan shall be maintained for the exclusive
benefit of covered Employees, and is intended to comply with the
Internal Revenue Code of 1986, as amended, the Employee
Retirement Income Security Act of 1974, as amended, and other
applicable law;
NOW, THEREFORE, except as otherwise specified herein, the
Employer does hereby amend and restate the Plan as set forth in
the following pages effective May 17, 1994, except that any
change required by federal law, including without limitation
amendments to the Internal Revenue
1
Code, the Employee Retirement Income Security Act, the Age
Discrimination in Employment Act and regulations or rulings
issued pursuant thereto shall be effective on the latest date
on which such change may become effective and comply with
such laws.
2
SECTION 1
DEFINITIONS
The following terms when used herein shall have the following
meaning, unless a different meaning is plainly required by the
context. Capitalized terms are used throughout the Plan text for
terms defined by this and other sections.
1.1 Accrued Benefit
---------------
"Accrued Benefit" means, on any date, the benefit determined
under the formula specified in Section 4.1 as of such date.
1.2 Actuarially Equivalent/Actuarially
----------------------------------
(a) General
-------
"Actuarially Equivalent" and similar terms (for
purposes other than determining contributions to the
Trust Fund) means that the present value of two (2)
payments or series of payments shall be of equal value
when computed at an eight percent (8%) rate of interest
and on the basis of the 1984 Unisex Pension Mortality
Table; provided, however, that the interest rates and
mortality table below shall apply for the purposes
stated.
(b) Before January 1, 1996
----------------------
With respect to Participants who terminate employment
before January 1, 1996, the interest rate for immediate
or deferred annuities that would be used by the Pension
Benefit Guaranty Corporation to determine the present
value of the Participant's benefit upon termination of
an insufficient trusteed single employer plan, as of
the first day of the Plan Year that contains the
Annuity Starting Date shall be used for calculating the
Actuarial Equivalent value of any lump sum
distribution.
(c) On or After January 1, 1996
---------------------------
Notwithstanding the foregoing, with respect to
Participants who terminate employment on or after
January 1, 1996, the Actuarial Equivalent value of any
lump sum distribution shall be determined using the
following interest rate and mortality table:
Interest: the annual interest rate on 30-year Treasury
securities as determined under Code Section
417 (which, as of January 1, 1996, is the
average annual yield on 30-year Treasury
Constant Maturities) for the November
before the Plan Year which contains the Annuity
Starting Date; and
3
Mortality: the prevailing Commissioner's standard
table (described in Code Section
807(d)(5)(A)), without regard to any other
subparagraphs of Code Section 807(d)(5)) used
to determine reserves for group annuity
contracts issued on the date as of which the
present value is being determined (which as
of the date of this amendment is the 1983
Group Annuity Mortality Table, 50% male and
50% female).
1.3 Affiliated Companies
--------------------
"Affiliated Companies" means:
(a) the Employer,
(b) any other corporation which is a member of a controlled
group of corporations which includes the Employer (as defined in
Section 414(b) of the Code),
(c) any other trade or business under common control with the
Employer (as defined in Section 414(c) of the Code), or
(d) any other member of an affiliated service group which
includes the Employer (as defined in Section 414(m) of
the Code).
For purposes of the limitation on benefits in Sections
8.2 and 8.3, the determination of whether an entity is
an Affiliated Company will be made by modifying
Sections 414(b) and (c) of the Code as specified in
Section 415(h) of the Code.
1.4 Annuity Starting Date
---------------------
"Annuity Starting Date" means the first day of the first
period for which a Plan benefit is payable as an annuity, or
any other form.
1.5 Beneficiary
-----------
"Beneficiary" means the person or persons designated to be
the Beneficiary by the Participant in writing to the
Benefits Committee. In the event a married Participant
designates someone other than his or her spouse as
Beneficiary, such initial designation or subsequent change
shall be invalid unless the spouse signs a written consent
that acknowledges the effect of the designation and names
the designated Beneficiary, and the spouse's signature is
notarized or witnessed by a Plan representative.
1.6 Code
----
"Code" means the Internal Revenue Code of 1986, as amended
and including all regulations promulgated pursuant thereto.
4
1.7 Committee
---------
"Committee" means the Advanced Technology Laboratories, Inc.
Benefits Committee as from time to time constituted and
appointed by the Compensation Committee of the Board of
Directors of the Employer to administer the Plan.
1.8 Compensation
------------
"Compensation" means all of the following listed in (a)
through (f) below excluding the items listed in (g) through
(j) below.
(a) wages, salaries, fees for professional services and other
amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the
course of employment with the Employer to the extent that the
amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements, or
other expense allowances under a nonaccountable plan (as
described in Treas. Reg. Section 1.62-2(c));
(b) in case of an Employee who is an employee within the meaning
of Code Section 401(c)(1) and the regulations thereunder, the
Employee's earned income (as described in Code Section 401(c)(2)
and the regulations thereunder);
(c) amounts described in Code Sections 104(a)(3), 105(a), and
105(h), but only to the extent that these amounts are includible
in the gross income of the Employee;
(d) amounts paid or reimbursed by the Employer for moving
expenses incurred by an Employee, but only to the extent that at
the time of the payment it is reasonable to believe that these
amounts are not deductible by the Employee under Code Section
217;
(e) the value of a non-qualified stock option granted to an
Employee by the Employer, but only to the extent that the value
of the option is includible in the gross income of the Employee
for the taxable year in which granted; and
(f) the amount includible in the gross income of an Employee
upon making the election described in Code Section 83(b).
Paragraphs (a) and (b) of this Section 1.8 include
foreign earned income (as defined in Code Section
911(b)), whether or not excludible from gross income
under Code Section 911. Compensation described in
paragraph (a) of this Section is to be determined
without regard to the exclusions from gross income in
Code Sections 931 and 933. Similar principle are to be
applied with respect to income subject to Code
5
Sections 931 and 933 in determining Compensation described
in paragraph (b) of this Section:
(g) Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the
taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(h) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(i) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(j) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are actually excludible from the gross income of
the Employee).
For purposes of applying the limitations of Section 8.2,
Compensation for a limitation year is the compensation
actually paid or made available during such limitation year.
1.9 Credited Service
----------------
"Credited Service" means all completed years and fractions
of years of Service for the Employer during a Period of
Service, excluding Periods of Service forfeited due to a
Period of Severance.
Notwithstanding the foregoing, Service while a Foreign
Employee which is completed before January 1, 1987 shall be
disregarded for purposes of determining a Participant's
Credited Service.
1.10 Disabled
--------
"Disabled" means a Participant is entitled to benefits under
an Employer-sponsored long term disability plan, or a long
term disability plan to which the Employer contributes on
behalf of the Participant.
1.11 Earnings
--------
"Earnings" for each Plan Year means:
(a) for all Participants who are not Foreign Employees, for
Credited Service prior to January 1, 1989: the straight-time
pay earned by an Employee from the
6
Employer prior to reduction for any contributions determined
on a salary reduction basis under a flexible benefit plan
established pursuant to Section 125 of the Code or under the
Westmark International Incorporated Incentive Savings and Stock
Ownership Plan, including shift differentials, special
geographical location allowances, holiday pay, sick leave
pay (exempt and non-exempt), short-term disability (exempt and
non-exempt), retroactive pay as it applies to any of the above,
and pay for vacation hours taken. Earnings will not include non-
refundable draw, bonuses, commissions, employee referral bonuses,
stock option payments, special bonuses, lump-sum payments or cash
payoffs for unused vacation, severance pay, hiring bonus, long-
term disability payments (exempt and non-exempt), finder's fees,
any relocation payments in the form of reimbursement or
relocation bonus and overtime.
(b) for all Participants who are not Foreign Employees, for
Credited Service after December 31, 1988: the straight-time pay
earned by an Employee from:
(i) the Employer; and
(ii) from Interspec, Inc. from January 1, 1994 to May 17, 1994
when Interspec, Inc. became an Employer,
prior to reduction for any contributions
determined on a salary reduction basis under a
flexible benefit plan established pursuant to
Section 125 of the Code or under the Westmark
International Incorporated Incentive Savings and
Stock Ownership Plan or Advanced Technology
Laboratories, Inc. Incentive Savings and Stock
Ownership Plan, including:
(1) special geographical location allowances, holiday pay,
sick leave pay (exempt and non-exempt), short-term
disability (exempt and non-exempt), retroactive pay as
it applies to any of the above, and pay for vacation
hours taken;
(2) overtime pay, shift differentials, and bonuses (including
MICP and bullet bonuses) not in excess of fifty percent
(50)% of annualized straight-time pay prior to reduction
as described above;
(3) for Credited Service after December 31, 1988 and before
January 1, 1993: salesperson commissions and service
commissions/incentives to the extent such amounts when
added to the amount determined under (ii) above do not
exceed one hundred twenty-five percent (125%) of
annualized straight-time pay prior to reduction as
described above; and
(4) for Credited Service after December 31, 1992, salesperson
commissions and service commissions/incentives.
7
Earnings will not include non-refundable draw,
employee referral bonuses, Performance Unit Plan
awards, car allowances, stock option payments,
restricted stock awards, lump-sum payments or cash
payoffs for unused vacation, severance pay,
retention bonus, hiring bonus, long-term
disability payments (exempt and non-exempt), and
any relocation payments in the form of
reimbursement or relocation bonus.
(c) For all Foreign Employees, the annual notional salary and
the actual bonus, if any, stated in U.S. dollars established in a
uniform and nondiscriminatory manner for each Foreign Employee,
on or after January 1, 1987. Notional salary shall not include
any special relocation or foreign assignment allowances.
Notional salary shall include an equitable adjustment
to reflect any retirement benefit which is expected to
be earned under a foreign retirement plan to the extent
attributable to contributions by an Employer or any
foreign subsidiary of an Employer.
Notional salary for each Foreign Employee shall be
approved by the President of the applicable business
unit.
Notwithstanding the foregoing, annual Earnings in
excess of the limit indicated below shall be
disregarded; provided, however, that the $150,000 limit
for 1994 shall be automatically adjusted for future
years in accordance with Code Section 401(a)(17)(B) to
the maximum permissible dollar limitation permitted by
the Commissioner of the Internal Revenue Service.
Plan Year Dollar Limitation
------------- -----------------
1989 - 1993 $235,840
1994 and later $150,000 (indexed)
In determining Earnings of a Participant for purposes
of this limitation, the family aggregation rules of
Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include
only the spouse of the Participant and any lineal
descendants of the Participant who have not attained
age nineteen (19) before the close of the year. If as
a result of the application of such rules the
limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion
to each such individual's Earnings as determined under
this Section 1.11 prior to the applications of this
limitation.
1.12 Effective Date
--------------
"Effective Date" means January 1, 1981, or with respect to
any Employer specified in appendices to this Plan, the date
such Employer adopted the Plan.
8
1.13 Eligible Employee
-----------------
"Eligible Employee" means any Employee who is on the active,
regular payroll of the Employer, provided, however, the term
"Eligible Employee" does not include any temporary,
cooperative or leased employee. A temporary employee within
the meaning of the previous sentence is an Employee who is
hired to complete a specific project or to accommodate
business cycle fluctuations without exceeding the maximum
number of Employees permitted under the Employer's corporate
budget.
1.14 Employee
--------
"Employee" means any person (including any officer or
director) who is employed by, and as such is enrolled on the
active payroll of the Employer and is performing services in
the United States, and any person who is a Foreign Employee.
"Employee" shall include any leased employee within the
meaning of Code Section 414(n)(2); provided, however, if
leased employees constitute twenty percent (20%) or less of
the Employer's non-highly compensated work force, the term
"Employee" shall not include a leased employee who is
covered by a plan maintained by the leasing organization
which meets the requirements of Code Section 414(n)(5).
1.15 Employer
--------
"Employer" means Advanced Technology Laboratories, Inc., a
Delaware corporation. For purposes other than Sections 10,
11 and 12, the term "Employer" shall also include other
Affiliated Companies that adopt the Plan with the approval
of the Board of Directors of Advanced Technology
Laboratories, Inc. (Delaware), as provided from time to time
in Appendix I to this Plan.
1.16 Employment Commencement Date
----------------------------
"Employment Commencement Date" means the later of:
(a) the Effective Date;
(b) the date on which an Employee first completes an Hour of
Service for the Employer or an Affiliated Company during the
current period of employment; and
(c) the date the individual's employer became an Employer or an
Affiliated Company. "Hour of Service" for purposes of this
definition means each hour for which an Employee is paid or
entitled to payment for the performance of duties for the
Employer or any Affiliated Companies.
9
1.17 ERISA
-----
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, including all regulations thereunder.
1.18 Final Average Monthly Earnings
------------------------------
"Final Average Monthly Earnings" means one twelfth of the
highest average annual Earnings received by the Participant
during any sixty (60) consecutive month period. In the
event the Participant has less than 60 consecutive months of
employment, the computation period shall be based upon (1)
the most recent sixty (60) months of employment (whether or
not consecutive), or (2) the total Period of Service with
the Employer, whichever is less. Earnings for partial years
are pro-rated.
1.19 Foreign Employee
----------------
"Foreign Employee" means any person (including an officer or
director) who is employed by, and as such is on the active
payroll of the Employer or a foreign subsidiary or branch of
an Employer, who relocates to a country outside the United
States and outside such individual's country of citizenship
to complete a temporary assignment for an Employer or a
foreign subsidiary or branch of an Employer which is
expected to be completed within five (5) years from the
initial date of the assignment.
1.20 Hour of Service
---------------
"Hour of Service" means each hour for which an Employee is
paid or entitled to payment by the Company or any Affiliated
Companies on account of:
(a) Performance of duties;
(b) A period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
leave of absence. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to 29 CFR 2530.200b-2(b) and (c), which are
incorporated herein by this reference; and
(c) An award of back pay, irrespective of mitigation of damages,
agreed to by the Participating Company or any Affiliated Company.
However, hours credited under (a) or (b) above shall not also be
credited under this subsection (c).
10
1.21 Participant
-----------
"Participant" means any Eligible Employee who qualifies for
participation pursuant to Section 2.1 or 2.2. A nonvested
Participant shall cease to be a Participant on the date he
or she incurs a one-year (1) Period of Severance. A vested
Participant shall cease to be a Participant when his or her
benefit payments from the Plan are completed.
1.22 Period of Service
-----------------
"Period of Service" means the period of time commencing with
the Employment Commencement Date and ending on the Severance
From Service Date, provided that Periods of Service with
Advanced Technology Laboratories, Inc. beginning before the
Effective Date shall be included. Non-successive periods
are aggregated to determine the Employee's total Period of
Service.
For vesting and participation purposes, an Employee's Period
of Service shall also include the following:
(a) Periods not in Service due to Temporary Terminations;
(b) Periods of Service with an Affiliated Company; and
(c) Periods of Service prior to May 17, 1994 with Interspec,
Inc. and Periods of Service with Echo Ultrasound, currently a
division of Interspec, Inc. and formerly a division of General
Electric Company, determined as if such companies were Employers
prior to that date.
Notwithstanding the above, for an individual with respect to
whom assets and liabilities are transferred to the SpaceLabs
Medical, Inc. Retirement Plan between June 26 and December
31, 1992, the individual's Period of Service for all
purposes under the Plan shall begin on the individual's
first Employment Commencement Date following the date of
such transfer.
1.23 Period of Severance
-------------------
"Period of Severance" means the period of time commencing on
the Severance From Service Date and ending on the date the
Employee again performs an Hour of Service for the Employer;
provided however, such period shall commence one (1) year
later if a male or female Employee is absent due to
pregnancy, birth or adoption of a child, or caring for a
child immediately following birth or adoption.
Notwithstanding any Plan provision to the contrary, a Period
of Severance for an employee of Interspec, Inc. on May 16,
1994 shall be determined for vesting and participation
purposes only as if Interspec, Inc. and Echo Ultrasound,
which is currently a division of Interspec, Inc. and
formerly was a division of General Electric Company, were
Employers prior to May 17, 1994.
11
1.24 Plan
----
"Plan" means the Advanced Technology Laboratories, Inc.
Retirement Plan either in its previous or present form or as
amended from time to time.
1.25 Plan Administrator
------------------
"Plan Administrator" means the person or entity designated
in Section 10 to administer the Plan.
1.26 Plan Year
---------
"Plan Year" means the twelve (12) month period commencing
each January 1 and ending each December 31.
1.27 Service
-------
"Service" means periods for which an Employee is paid or
entitled to payment for the performance of duties for the
Employer or an Affiliated Company.
For purposes of Section 2 (Participation) and Section 7
(Vesting) only, Service for an Employee who transfers
employment from an employing company under the Squibb
Corporation Pension Plan to the Employer on or before August
31, 1987, without intervening employment with another
employer, shall also include any prior period of employment
with an employing company under the Squibb Corporation
Pension Plan to the extent such employment was credited as
"service" for vesting purposes under the Squibb Corporation
Pension Plan.
1.28 Severance From Service Date
---------------------------
"Severance From Service Date" means the earlier of the date
on which an Employee quits, retires, is discharged or dies,
or the first anniversary of absence from work for any other
reason. An individual employed by an Affiliated Company
other than the Employer shall incur a Severance from Service
Date if the individual's employer ceases to be an Affiliated
Company of the Employer.
1.29 Social Security Retirement Age
------------------------------
"Social Security Retirement Age" means the following ages
depending on the Participant's year of birth: age (65)
sixty-five for Participants born prior to 1938, age sixty-
six (66) for Participants born after 1937 but prior to 1955,
and age sixty-seven (67) for Participants born after 1954.
1.30 Temporarily Terminated
----------------------
Termination is deemed "Temporary" if the Employee is rehired
and in Service within one (1) year of the initial date of
absence from work.
12
1.31 Terminated
----------
"Terminated" means no longer in Service or employed as an
Employee with the Employer for reasons of quit, retirement,
discharge or death. An Employee shall also be deemed
Terminated on the first anniversary of the initial date of
absence for any other reason, provided such absence lasts at
least twelve (12) months.
1.32 Trust or Trust Fund
-------------------
"Trust" or "Trust Fund" means the trust fund into which
shall be paid all contributions and from which all benefits
shall be paid under this Plan.
1.33 Trustee
-------
"Trustee" means the trustee or trustees who receive, hold,
invest and disburse the assets of the Trust in accordance
with the terms and provisions set forth in a trust
agreement.
1.34 Additional Definitions in Plan
------------------------------
The following terms are defined in the following sections of
the Plan:
Section
Aggregate Account 9.2
Aggregation Group 9.2
Benefit 8.1(c)
Deferred Retirement Benefit 4.5
Deferred Retirement Date 3.3
Determination Date 9.2
Early Retirement Benefit 4.4
Early Retirement Date 3.2
Highly Compensated Employee 8.1(c)(3)
Investment Manager 12.5
Joint and Survivor Annuity 5.1(b)
Key Employee 9.2
Lump Sum 5.1(d)
Normal Retirement Benefit 4.3
Normal Retirement Date 3.1
Present Value of Accrued Benefits 9.2
Qualified Domestic Relations Order 10.9
Restricted Group 8.1(c)
Retirement Date 3.4
Statutory 50% Joint and Survivor Annuity Option 5.2(a)
Super Top Heavy 9.2
Top Heavy 9.2
Valuation Date (for Top Heavy) 9.2
13
Vested Termination Date 3.5
Vested Termination Benefit 4.6
Whole Life Annuity 5.1(a)
14
SECTION 2
PARTICIPATION
2.1 Eligibility for Participation
-----------------------------
(a) Full-Time Employees
-------------------
Each Eligible Employee (other than a Part-time Employee
as described below) who is not already a Participant
shall become a Participant under this Plan on the later
of the first day of the first month coinciding with or
next following completion of a one-year (1) Period of
Service and the date his or her employer becomes an
Employer for Plan purposes.
(b) Part-Time Employees
-------------------
An Eligible Employee who is a Part-Time Employee shall
become a Participant on the later of the first day of
the first month coinciding with or next following a
twelve-month (12) period during which he or she is
credited with at least 1,000 Hours of Service and the
date his or her employer becomes an Employer for plan
purposes. Such twelve-month (12) period shall commence
on the Employee's Employment Commencement Date and each
January 1 thereafter.
"Part-Time Employee" means an Employee who is employed
for less than a full-time basis based on uniform rules
established by the Committee and consistently applied
to all persons similarly situated.
2.2 Reemployment After a Termination
--------------------------------
Upon the reemployment of a Terminated former Participant as
an Eligible Employee, he or she shall immediately become a
Participant.
An Employee who Terminates prior to becoming a Participant
and is later reemployed shall become a Participant upon
satisfying the requirements of Section 2.1. If the
Employee's Period of Severance equals or exceeds five (5)
years, the Period of Service preceding the Period of
Severance shall be disregarded. If the Employee's Period of
Severance is less than five (5) years, the Period of Service
before the Period of Severance shall be aggregated with the
subsequent Period of Service.
2.3 Employees in a Bargaining Unit
------------------------------
An Employee belonging to a collective bargaining unit, which
has entered an agreement with the Employer which does not
provide for retirement benefits under this Plan, shall not
qualify for participation and the period of employment shall
not be included in determining his or her Credited Service.
If such an Employee is a Participant when such an agreement
is entered, the Employee shall cease to accrue Credited
Service on the effective date of the bargaining agreement.
If such an agreement provides for Plan participation, a
covered Employee may continue or resume participation and
accrual of Credited Service.
15
SECTION 3
RETIREMENT DATES
3.1 Normal Retirement Date
----------------------
The Normal Retirement Date for a Participant shall be the
first day of the month coinciding with or next following the
attainment of age sixty-five (65).
3.2 Early Retirement Date
---------------------
Each Participant who attains age fifty-five (55) either
before or after Termination and who completes a five (5)
year Period of Service may elect, in writing, an Early
Retirement Date. Such Early Retirement Date shall be before
the Normal Retirement Date and after Termination on the
first day of any month coinciding with or following the date
the early retirement requirements are met.
3.3 Deferred Retirement Date
------------------------
The Deferred Retirement Date for a Participant who continues
working after the Normal Retirement Date shall be the first
day of the month coinciding with or next following his or
her Termination date; provided, however, the Deferred
Retirement Date shall not be later than April 1 following
the calendar year in which the Participant attains age
seventy and a half (70 1/2).
3.4 Retirement Date
---------------
The Retirement Date for a Participant shall be one of the
dates specified in Sections 3.1, 3.2 or 3.3 above, on which
benefits are to commence. The Retirement Date for a
Participant who Terminates prior to retirement with a vested
Accrued Benefit shall be Normal Retirement Date, unless such
Participant qualifies for and elects to receive benefits at
an Early Retirement Date.
3.5 Vested Termination Date
-----------------------
A vested Participant, whose Accrued Benefit has an
Actuarially Equivalent present value not in excess of
$10,000, who Terminates employment with the Employer and any
Affiliated Companies prior to Early Retirement Date may
elect in writing to receive the Vested Termination Benefit
either as a Lump Sum or an annuity on a Vested Termination
Date, which is the first day of any month following the date
of Termination and prior to his or her earliest Retirement
Date. In the event a married Participant elects to receive
benefits on a Vested Termination Date and his or her Vested
Termination Benefit exceeds $3,500, such election shall be
void unless the election is signed by the Participant's
spouse, acknowledges the effect of the election, and the
spouse's signature is notarized or witnessed by a Plan
representative.
16
SECTION 4
RETIREMENT BENEFITS
4.1 Accrued Benefit
---------------
The Accrued Benefit for any Participant shall be the excess,
if any, of the monthly benefit (as described in (a) below)
over the frozen monthly amount determined by reference to
the former Westmark Discretionary Contribution Retirement
Plan offset (as described in (b) below), and then adjusted
for any prior distribution (Section 4.6) and/or form of
payment (Section 5.1).
(a) Monthly Benefit
---------------
The monthly benefit payable to a Participant at the
Normal Retirement Date shall equal the greater of (i)
or (ii) below:
(i) One percent (1.0%) of Final Average Monthly Earnings as of
December 31, 1993, multiplied by Credited Service as of
December 31, 1993, plus One percent (1.0%) of Final Average
Monthly Earnings taking into account all periods, but
disregarding Earnings in excess of $150,000 for Plan Years
prior to January 1, 1994, multiplied by Credited Service
earned after December 31, 1993, or
(ii) One percent (1.0%) of Final Average Monthly Earnings, but
disregarding Earnings in excess of $150,000 for Plan Years
prior to January 1, 1994, multiplied by the Participant's
Credited Service.
(b) Frozen Discretionary Contribution Plan Offset
---------------------------------------------
The monthly frozen discretionary contribution plan
offset shall equal the amount determined under
subparagraph (i) less the amount determined under
subparagraph (ii) below, accumulated with eight percent
(8%) interest compounded annually to the later of
January 1, 1989 and the Normal Retirement Date and then
divided by 100:
(i) The Participant's account balance in the Westmark
International Incorporated Discretionary Contribution Plan on
December 31, 1988.
(ii) The greater of (A) or (B) below:
(A) the amount determined under subparagraph (1) less the
amount determined under subparagraph (2) below,
accumulated with eight percent (8%) interest compounded
annually from December 31, 1982 through December 31, 1988.
17
(1) the Participant's account balance in the Westmark
International Incorporated Discretionary Contribution
Plan as of December 31, 1982.
(2) the maximum amount of the Participant's account
balance in the Westmark International Incorporated
Discretionary Contribution Plan (exceeding any
rollover or transfer amount), as of December 31,
1982, which, when accumulated with eight percent
(8%) interest compounded annually to the later of
January 1, 1989 and the Normal Retirement Date and
then divided by one hundred (100), does not exceed
the Participant's floor benefit under the
Predecessor Plan as of December 31, 1982.
(B) The amount determined under subparagraph (1) less the
amount determined under subparagraph (2) below:
(1) the Participant's account balance in the Westmark
International Incorporated Discretionary
Contribution Plan as of December 31, 1988.
(2) the maximum amount of the Participant's account
balance in the Westmark International Incorporated
Discretionary Contribution Plan (excluding any
rollover or transfer amount), as of December 31,
1988, which, when accumulated with eight percent
(8%) interest compounded annually to the later of
January 1, 1989 and the Normal Retirement Date and
then divided by one hundred (100), does not exceed
the Participant's monthly benefit under this Plan
as of December 31, 1988.
Notwithstanding the foregoing, a Participant's Accrued
Benefit shall not be less than his or her Accrued Benefit on
the date immediately preceding the date on which any Plan
term that affects the Accrued Benefit is amended.
The Accrued Benefit is payable in the form of a Whole Life
Annuity commencing at Normal Retirement Date.
4.2 Normal Retirement Benefit
-------------------------
A Participant's monthly Normal Retirement Benefit shall
equal his or her vested Accrued Benefit as of the date of
Termination, and then Actuarially adjusted for form of
payment.
18
4.3 Early Retirement Benefit
------------------------
A Participant's monthly Early Retirement Benefit shall equal
his or her vested Accrued Benefit as of the date of
Termination, reduced by half (1/2) of one percent (1%) for
each month that the Early Retirement Date precedes the
Normal Retirement Date, and then Actuarially adjusted for
form of payment.
4.4 Deferred Retirement Benefit
---------------------------
A Participant's monthly Deferred Retirement Benefit shall
equal his or her vested Accrued Benefit as of the date of
Termination, and then Actuarially adjusted for form of
payment. Service and Earnings beyond the Normal Retirement
Date shall be taken into consideration. In no event shall
the benefit provided under this paragraph be less than the
retirement benefit to which the Participant would have been
entitled if he or she had actually retired on the Normal
Retirement Date, Actuarially increased to reflect the
deferred commencement of payments.
In the event a Participant continues working after the date
benefits are required to commence following age seventy and
a half (70 1/2) pursuant to Section 10.6, the Deferred
Retirement Benefit shall be recalculated and adjusted
annually.
4.5 Vested Termination Benefit
--------------------------
A Participant's Vested Termination Benefit shall equal his
or her Accrued Benefit as of the date of Termination,
Actuarially reduced to reflect the early commencement of
payment of benefits, and then Actuarially adjusted for form
of payment.
4.6 Reemployment After Retirement
-----------------------------
Upon reemployment, a retired Participant shall cease
receiving retirement benefits under the Plan, until the
earlier of subsequent Termination or the date benefits are
required to commence following age seventy and a half (70 1/2)
pursuant to Section 10.6. At the Participant's subsequent
retirement, benefits payable shall be based on his or her
total Credited Service and Earnings at the time of
subsequent retirement, and shall be reduced by the
Actuarially Equivalent value of benefits previously received
by the Participant. In no event shall the benefit upon
subsequent retirement, after any reduction for previously
received benefits, be less than the initial retirement
benefit.
4.7 Benefits For Terminated Participants
------------------------------------
Benefits under the Plan shall be determined and paid in
accordance with the provisions of the Plan as in effect on
the most recent date of a Termination of employment.
19
4.8 Benefits Payable From SpaceLabs Medical, Inc. Retirement Plan
-------------------------------------------------------------
Notwithstanding anything herein to the contrary, if an
individual was a Participant in this Plan and assets and
liabilities attributable to the individual's Accrued Benefit
under this Plan were transferred from this Plan to the
SpaceLabs Medical, Inc. Retirement Plan between June 26 and
December 31, 1992, the Accrued Benefit of such individual
with respect to Credited Service earned prior to such
transfer shall be payable from the SpaceLabs Medical, Inc.
Retirement Plan and shall not be payable from this Plan.
20
SECTION 5
FORMS OF PAYMENT
5.1 Forms of Payment
----------------
The following forms of benefit payments are available under
this Plan:
(a) Whole Life Annuity
------------------
A Whole Life Annuity shall be payable monthly from the
Retirement Date to the first of the month preceding
death. The amount of the monthly benefit shall equal
the monthly Normal, Early or Deferred Retirement
Benefit, whichever applies.
(b) Joint and Survivor Annuity
--------------------------
A reduced Joint and Survivor Annuity shall be payable
monthly to a retired Participant from the Retirement
Date or Vested Termination Date to the first of the
month preceding death. Following the Participant's
death, a retirement benefit equal to fifty percent
(50%) or one hundred percent (100%) of the reduced
amount payable to the retired Participant shall be
payable for life to the joint annuitant, if living at
the time of the Participant's death. A Participant may
elect, before benefits commence, which percentage shall
be payable to the joint annuitant.
If the joint annuitant dies after the Participant's
retirement income begins, the Participant's payments
will be in the same reduced amount as is otherwise
payable under the Joint and Survivor Annuity. If the
joint annuitant dies prior to the date as of which the
Participant's retirement income begins, any election of
a form of benefit under this Section 5.1(b) shall be
automatically canceled. If the Participant dies prior
to the date as of which his or her retirement income is
to begin, the joint annuitant shall not be entitled to
receive any payments under this Section 5.1(b).
However, a spouse joint annuitant may be entitled to a
benefit under Section 6.1.
The Joint and Survivor Annuity shall be Actuarially
Equivalent to the Participant's retirement benefit
payable in the form of a Whole Life Annuity.
(c) Lump Sum
--------
A Lump Sum distribution shall be a single sum payment.
The Lump Sum distribution shall be Actuarially
Equivalent to the Participant's retirement benefit
payable in the form of a Whole Life Annuity, and shall
represent the Participant's entire interest in the
Plan. Lump Sum distributions may not exceed $10,000.
21
5.2 Automatic Form of Benefit
-------------------------
Unless a Participant elects otherwise, benefits shall be
paid as provided below:
(a) Married Participants
--------------------
Any Participant who is married on his or her Annuity
Starting Date or Vested Termination Date shall
automatically be deemed to have elected the fifty
percent (50%) Joint and Survivor Annuity option,
effective as of such date, with his or her spouse on
the Annuity Starting Date as the joint annuitant (the
"Statutory fifty percent (50%) Joint and Survivor
Annuity Option").
A married Participant may reject the Statutory fifty
percent (50%) Joint and Survivor Annuity Option, or
elect a nonspouse joint annuitant pursuant to Section
5.3, by filing a written notice with the Committee
within ninety (90) days prior to his or her Annuity
Starting Date. Such notice must specify the form of
payment elected, name the non-spouse joint annuitant if
any, acknowledge the effect of the election, and must
be signed by the Participant's spouse. The spouse's
signature must be notarized or witnessed by a Plan
representative.
A married Participant may file a rejection or joint
annuitant election notice or revoke any such notice at
any time during the ninety-day (90) election period
immediately preceding the Annuity Starting Date.
(b) Other Participants
------------------
An unmarried Participant shall receive his or her
retirement benefits in the form of a Whole Life
Annuity.
An unmarried Participant may reject the Whole Life
Annuity option and elect either a Joint and Survivor
Annuity or a Lump Sum option by filing a written notice
with the Committee within ninety (90) days prior to his
or her Annuity Starting Date. An unmarried Participant
may file or revoke such a notice at any time during the
ninety-day (90) period immediately preceding the
Annuity Starting Date.
5.3 Limitation on Forms of Payment
------------------------------
Notwithstanding any Plan provision to the contrary, all
distributions will be made in accordance with Code Section
401(a)(9) and the regulations under Code Section 401(a)(9),
including Section 1.401(a)(9)-2 of the proposed Income Tax
Regulations. A Participant may elect a joint annuitant
other than his or her spouse. A Participant must elect a
form of payment under which payments will be completed
within the Participant's and joint annuitant's life times or
within their life expectancies. If a
22
Participant elects a joint annuitant other than his or her
spouse, the percentage selected by the Participant to be
payable to the joint annuitant cannot exceed the
percentage in the table set forth in Q&A A-6 of Section
1.401(a)(9)-2 of the proposed Income Tax Regulations,
determined according to the age difference between the
Participant and the joint annuitant.
5.4 Explanation of Benefit Election and Waiting Period
--------------------------------------------------
(a) Explanation
-----------
The Committee shall furnish each Participant with a
written explanation of benefit commencement dates and
the terms and conditions of the forms of payment before
the Annuity Starting Date andat least thirty (30) but
not more than ninety (90) days prior to either the
Participant's Annuity Starting Date or the date benefit
distribution commences. The explanation shall clearly
indicate that the Participant has a right to consider
his or her benefit election for at least thirty (30)
days. Any election made by a Participant or consent by
the Participant's spouse more than ninety (90) days
before the Annuity Starting Date is void.
(b) Waiting Period Waiver
---------------------
A Participant may elect to commence benefits sooner
than thirty (30) days after receiving the explanation
described above. A Participant or the Participant's
spouse may revoke a benefit election at any time during
the seven (7) day period that begins immediately after
the date the written explanation is provided or at any
time before the Annuity Starting Date, if later. Also,
a Participant may elect a retroactive benefit
commencement date as long as the date is not before the
explanation is provided, and the first payment is not
made until the ninth day (9th) after the date the
explanation was provided.
5.5 Directed Rollovers
------------------
(a) General Rule
------------
Effective for distributions made after December 31,
1992, a Participant or spouse Beneficiary who is
entitled to a Lump Sum benefit pursuant to Section
10.8(c), or who elects a Lump Sum distribution pursuant
to Section 5.1(c) may direct the Committee to pay part
or all of the benefit to a trustee or custodian of
another employer's qualified plan which accepts such
directed rollovers or an individual retirement account
(IRA), subject to the following provisions:
(i) Participant or Beneficiary may only direct such a rollover
if the expected benefit payment during the Plan Year is
$200 or more.
(ii) A Participant or Beneficiary may not request a directed
rollover of an amount distributed due to the minimum required
distribution provision under Section 10.6(b).
23
(iii) The rollover of a distribution may only be directed to
one qualified plan or IRA.
(iv) A Participant or Beneficiary may direct the rollover of a
portion of the distribution and elect to receive the remaining
portion of a distribution only if the rollover amount is at
least $200.
(v) A surviving spouse Beneficiary or a former spouse who is an
alternate payee pursuant to Section 10.9 may direct a rollover
under the same terms and conditions as a Participant, except
that a surviving spouse Beneficiary may only direct a rollover
to an IRA.
(vi) A non-spouse Beneficiary may not direct a rollover pursuant
to this section.
(vii) A Participant or Beneficiary provides the information
or documentation reasonably requested by the Committee.
(b) Notice to Participants
----------------------
The Committee shall furnish each Participant and
Beneficiary eligible for a directed rollover under this
Section 5.5 with a written explanation of the directed
rollover opportunity and related withholding
consequences of not choosing a directed rollover within
a reasonable period (at least thirty (30) but not more
than ninety (90) days) prior to the Participant's or
Beneficiary's Annuity Starting Date. The explanation
shall clearly indicate that the Participant or
Beneficiary has a right to a thirty-day (30) waiting
period to consider the election. A Participant or
Beneficiary may waive the thirty-day (30) waiting
period by an affirmative election to make or not make a
directed rollover in writing on form(s) provided by the
Committee.
24
SECTION 6
DEATH AND DISABILITY BENEFITS
6.1 Spouse's Death Benefit
----------------------
In the event a vested Participant dies before commencing to
receive retirement benefits or Vested Termination Benefits
under the Plan, his or her spouse shall receive a
pre-retirement death benefit provided they were married
throughout the one (1) year period ending on the date of
death. The amount of the spouse's benefit and time of
commencement is described below. The spouse of a nonvested
Participant, or a Participant who has started to receive
benefits, or a spouse who was married to the Participant
less than one (1) year, is not entitled to this death
benefit.
(a) Death Following Early Retirement Date
-------------------------------------
If the Participant dies after he or she becomes
eligible to elect an Early Retirement Date, the
spouse's benefit shall be paid monthly from the first
of the month coinciding with or following the
Participant's death through the first of the month
preceding the spouse's death. The benefit shall equal
the amount payable to the surviving spouse under a
fifty percent (50%) Joint and Survivor Annuity form of
payment if the Participant had commenced receiving
retirement benefit payments as of the date spouse
benefits commence, based upon the Participant's vested
Accrued Benefit at the date of death.
(b) Death Prior to Early Retirement Date
------------------------------------
If the Participant dies prior to becoming eligible to
elect an Early Retirement Date, the spouse's benefit
shall be paid monthly from the Participant's earliest
Retirement Date (determined as if he or she had
survived) through the first of the month preceding the
spouse's death. The benefit shall equal the amount
payable to the surviving spouse under a fifty percent
(50%) Joint and Survivor Annuity form of payment if the
Participant had Terminated on the date of death,
survived to the date spouse benefits commence and
commenced receiving retirement benefit payments on such
date.
(c) Small Benefits
--------------
Notwithstanding Section 6.1(a) and 6.1(b) above, a
spouse's death benefit shall be paid in a Lump Sum
distribution if it is a small benefit under Section
10.8(c).
Notwithstanding the foregoing, in the event a Participant
dies prior to Normal Retirement Date, a spouse entitled to
benefits under (a) or (b) above, may elect prior to the date
benefits commence thereunder, to postpone commencement of
benefits to the first day of any month on or before the
Participant's Normal Retirement Date
25
determined as if he or she had survived. The benefit
payable at such delayed commencement date shall be the
Actuarial Equivalent of the spouse's death benefit payable
at the terms specified under (a) or (b) above.
6.2 Disability Benefits
-------------------
A Participant who becomes Disabled shall be deemed to be in
Service for purposes of vesting and benefit accrual until
the earlier of (i) the date of recovery from Disability,
(ii) an Early Retirement Date elected by the Participant, or
(iii) Normal Retirement Date. For purposes of determining a
Participant's Accrued Benefit, average Earnings for the
twelve (12) months preceding commencement of short-term
disability benefits are deemed to be in effect during
Disability.
26
SECTION 7
VESTING
7.1 Vesting
-------
Each Participant shall have a vested, nonforfeitable right
to his or her Accrued Benefit multiplied by the appropriate
vesting percentage in accordance with the following table:
Periods of Service Percent Vested
------------------ --------------
Less than 5 years 0%
5 years or more 100%
In addition, each Participant shall have a one hundred
percent (100%) nonforfeitable right to his or her Accrued
Benefit on the first day of the month preceding his or her
Normal Retirement Date, provided he or she is an Employee on
such date. An Employee who Terminates with zero percent
(0%) vested shall be deemed "nonvested."
7.2 Termination Prior to Vesting
----------------------------
(a) Forfeiture of Service
In the event a nonvested Participant incurs a Period of
Severance, and the number of years in such Period of
Severance equals or exceeds five (5) consecutive years,
his or her Period of Service and Credited Service
preceding the Severance from Service Date shall be
disregarded, and any Accrued Benefit earned prior to
the Severance from Service Date shall be forfeited.
If a vested Participant incurs a Period of Severance,
all Periods of Service and Credited Service before and
after the Period of Severance shall be aggregated.
(b) Deemed Cash-Out of Accrued Benefit
----------------------------------
If aParticipant Terminates at a time when the present
value of the Participant's vested Accrued Benefit is
zero, the Participant shall be deemed to have received
a distribution of such vested Accrued Benefit, and
shall no longer be a Participant. If the individual
resumes employment with the Employer before incurring a
five-consecutive-year (5) Period of Severance, his or
her Period of Service and Credited Service preceding
the Period of Severance and any Accrued Benefit earned
prior to the Period of Severance shall be reinstated
upon reemployment.
27
7.3 Forfeitures
-----------
Any forfeitures arising under this Plan shall be used only
to offset future Employer contributions and shall not affect
any Participant's Accrued Benefit.
28
SECTION 8
LIMITATIONS ON BENEFITS
8.1 Limitation on Benefits
----------------------
(a) General Rule
In the event the Plan terminates, the benefit of any
Highly Compensated Employee (and any former Highly
Compensated Employee) shall be limited to a benefit
that is nondiscriminatory under Code Section 401(a)(4).
(b) Limit on Annual Payments
------------------------
Annual payments to an Employee in the "Restricted
Group" (as defined below) are restricted to an amount
equal to the payments that would be made on behalf of
the Employee:
(i) under a single life annuity that is Actuarially Equivalent
to the sum of the Employee's Accrued Benefit and the
Employee's other benefits under the Plan (other than a Social
Security supplement); plus
(ii) the amount of any Social Security supplements the Employee
is entitled to receive. This restriction will not apply if:
(1) after payment to an Employee in the Restricted Group of
all "Benefits" (as defined below), the value of Plan
assets equals or exceeds one hundred ten percent (110%)
of the value of current liabilities, as defined in Code
Section 412(l)(7)
(2) the value of the Benefits for an Employee in the
Restricted Group is less than one percent (1%) of the
value of current liabilities before distribution of such
Benefits; or
(3) the value of the Benefits for an Employee in the
Restricted Group does not exceed the small benefit amount
described in Section 10.8(c).
(c) Definitions
-----------
(i) The "Restricted Group" consists of the twenty-five highest-
paid current and former Highly Compensated Employees (as
defined in Code Section 414(q)), or all current and former
Highly Compensated Employees if less than twenty-five.
29
(ii) "Benefit" means loans in excess of the amounts set forth in
Code Section 72(p)(2)(A), any periodic income, any withdrawal
values payable to a living employee or former Employee, and
any non-insured death benefits.
(d) Limitations Not Effective
-------------------------
The limitations contained in this Section 8.1 shall not
restrict the annual amount paid to a Participant in the
Restricted Group provided the Participant agrees to
repay an amount necessary for the distribution of
assets upon Plan termination to satisfy Code Section
401(a)(4). Such Participant must agree to repay
amounts paid to him or her to the extent they exceed
the amount he or she would have received if the
restrictions under this Section 8.1 had been applied.
The agreement to repay must be secured by deposit in
escrow of property having a market value of one hundred
twenty-five percent (125%) of the amount subject to
repayment. If the value of the property falls below
one hundred ten percent (100%) of the repayment amount,
the Participant must deposit additional property to
again satisfy the one hundred twenty-five percent
(125%) requirement. Alternatively, the agreement to
repay may be secured or collateralized by posting a
bond or letter of credit equal to at least one hundred
percent (100%) of the repayment amount. Such bond must
be furnished by an insurance company or bonding company
or other surety approved by the U.S. Department of
Treasury as an acceptable surety for federal bonds.
Any such repayment agreement shall be terminated and
any property in escrow shall be returned and any bond
or letter of credit may be canceled in the event one of
the three conditions set forth in Section 8.1(b) is
satisfied or the Plan terminates and benefits received
by the Participant are nondiscriminatory in accordance
with Section 401(a)(4).
(e) Regulatory Authority
--------------------
This Section 8.1 is intended to comply with Treasury
Regulation 1.401(a)(4)-5(b), and shall be superseded
to the extent any provision of such regulation
conflicts with the limitations stated herein.
8.2 Maximum Annual Benefit Payable Under the Plan
---------------------------------------------
For purposes of this Section 8.2, the Employer and any
Affiliated Companies shall be considered a single employer,
to the extent required by the Code.
(a) Primary Rule
------------
Notwithstanding any other Plan provision to the
contrary, the annual Employer provided benefit payable
to or on behalf of a Participant under the Plan (after
any adjustments required under the Plan to reflect
commencement of benefits
30
other than at Normal Retirement Date, an optional form of
payment or death benefit coverage) after 1982 shall not
exceed the lesser of:
(1) $90,000 (adjusted in accordance with this Section 8.2) or,
if greater, the Participant's current Accrued Benefit on
December 31, 1982, or
(2) the Participant's average annual Compensation from the
Employer for the consecutive calendar years (not in excess of
three such years) during which he or she was an active
Participant in the Plan and for which such average is highest.
(b) Cost-of-Living Adjustment
-------------------------
The $90,000 limit prescribed above shall be
automatically adjusted for cost-of-living increases, to
the maximum permissible dollar limitation determined by
the Commissioner of Internal Revenue. The dollar
amount applicable in computing the benefit payable to
any Participant shall be the dollar amount in effect
for the calendar year in which the benefit commences.
For 1994, the limit is $118,800.
(c) Adjustment for Early or Late Retirement
---------------------------------------
(i) Early Retirement
----------------
For purposes of 8.2 and 8.3, if the Participant's
benefit commences before Social Security
Retirement Age, the limit prescribed in Section
8.2(a)(1) shall be reduced to reflect such early
commencement.
If benefits commence on or after the date the
Participant attains age sixty-two (62) but before
the Participant attains Social Security Retirement
Age, such limit shall be reduced:
(1) five ninths (5/9) of one percent (1%) for each of the first
thirty-six (36) months prior to Social Security Retirement
Age that benefits commence; and
(2) five twelfth (5/12) of one percent (1%) for each
additional month (up to a maximum of twenty-four (24)
months) that benefits commence prior to Social Security
Retirement Age. If benefits commence prior to the
Participant attaining age sixty-two (62), the limitation
for benefits commencing at age sixty-two (62) (determined
under the preceding sentence) is further reduced to
reflect earlier commencement using the reduction factors
used to calculate early retirement benefits pursuant to
Section 4.3, provided that the interest rate used shall
not be less than five percent (5%). Any reduction shall
not reflect the
31
mortality decrement to the extent that benefits will
not be forfeited upon the death of the participant.
(ii) Late Retirement
---------------
If the Participant's benefit commences after
Social Security Retirement Age, the limit
prescribed in Section 8.2(a)(1) shall be
Actuarially increased for purposes of Section 8.2
and Section 8.3 to reflect such late commencement.
(d) Annual Benefit
--------------
Notwithstanding the foregoing, if the benefit to be
paid to a Participant under the Plan is not in the form
of an Annual Benefit as described below, the benefit
considered to be payable to a Participant under the
Plan for purposes of Sections 8.2 and 8.3 shall be
Actuarially adjusted to the extent required under
Section 415(b)(2) of the Code. For purposes of the
foregoing, Annual Benefit means the benefit payable
annually in the form of a straight life annuity without
ancillary benefits or in the Statutory fifty percent
(50%) Joint and Survivor Annuity Option.
(e) Interest Rate
-------------
Any Actuarial adjustments under this Section 8.2 shall
be based on the Actuarial factors applicable for
comparable purposes under the Plan on the applicable
date, except that;
(1) the interest rate assumption for purposes of adjusting the
term of payment pursuant to Section 8.2(d) and adjusting the
$90,000 limitation for benefits commencing before Social
Security Retirement Age shall be the greater of five percent
(5%) or the Plan rate; and
(2) the interest rate assumption for purposes of adjusting the
$90,000 limitation for benefits commencing after Social
Security Retirement Age shall be the lesser of five (5%) or
the Plan rate.
(f) Special Provisions Regarding Participants With Fewer Than
---------------------------------------------------------
Ten Years of Participation or Service
-------------------------------------
In the case of any Participant who participated in the
Plan for fewer than ten (10) years, the maximum dollar
benefit otherwise applicable under Section 8.2(a)(i)
shall be multiplied by a fraction whose numerator is
the Participant's years of participation in the Plan
(including fractions thereof, but not less than one)
and whose denominator is ten.
32
In the case of any Participant who was employed by the
Employer for fewer than ten (10) years, the maximum
benefit otherwise applicable under Sections 8.2(a)(ii)
and 8.3 shall be multiplied by a fraction whose
numerator is the Participant's years of employment with
the Employer (including fractions thereof, but not less
than one) and whose denominator is ten.
(g) Transition Rule
---------------
The limitations of this Section 8.2 shall not reduce a
Participant's annual benefit to less than his or her
Accrued Benefit as of December 31, 1986, disregarding
any change in the terms of the Plan and any cost-of-
living adjustments after May 5, 1986.
(h) Aggregation With Other Defined Benefit Plans
--------------------------------------------
If a Participant also participates in any other defined
benefit pension plan qualified under Code Section
401(a) that is maintained by the Employer, the
provisions of Section 8.2 and 8.3 shall be applied on
an aggregate basis to the benefits payable under this
Plan and each such other plan. Any reduction in the
aggregate benefits payable under this Plan and any such
other plan due to the application of this Section shall
be made on a pro-rata basis.
8.3 Additional Limitation Relating to Defined Contribution Plans
------------------------------------------------------------
(a) Primary Rule
------------
For Participants who participate in this Plan and a
defined contribution plan maintained by the Employer,
the sum of (1) and (2) below for any calendar year may
not exceed 1.0.
(1) The defined benefit plan fraction for any year is equal to
the quotient of (i) divided by (ii) below expressed as a
fraction:
(i) The projected annual benefit (determined by projecting
service, but not Earnings, to normal retirement age) of
the Participant under the Plan determined as of the close
of the year.
(ii) The lesser of: (a) 1.25 multiplied by the limitation
determined under Section 8.2(a)(1) in effect for such
year, or (b) 1.4 multiplied by the limitation determined
under Section 8.2(a)(2) (generally one hundred percent
(100%) of the Participant's average annual Compensation).
(2) The defined contribution plan fraction for any year is equal
to the quotient of (i) divided by (ii) below expressed as a
fraction:
33
(i) The sum of the annual additions to the Participant's
accounts for the current year, as of the close of the
year, and for all prior years.
(ii) The sum of the lesser of the following amounts for such
year and for each prior year of service with the Employer
(regardless of whether a plan was in existence during
those years): (a) 1.25 multiplied by the dollar
limitation in effect for defined contribution plans under
Section 415 of the Code for such year, or (b) 1.4
multiplied by twenty-five (25%) of a Participant's
Compensation for such year.
(b) Remedy
------
If such sum exceeds 1.0, the benefit under this defined
benefit Plan shall be reduced to the extent necessary
to satisfy the limitations of this section.
34
SECTION 9
TOP HEAVY PROVISIONS
9.1 Scope
-----
Notwithstanding any Plan provision to the contrary, for any
Plan Year in which the Plan is Top Heavy within the meaning
of Section 416(g) of the Code, the provisions of this
Section 9 shall govern to the extent they conflict with or
specify additional requirements to the Plan provisions
governing Plan Years which are not Top Heavy.
9.2 Top Heavy Status
----------------
(a) Top Heavy
---------
This Plan shall be "Top Heavy" if, as of the
Determination Date, (1) the sum of the Aggregate
Accounts of Key Employees, or (2) the Present Value of
Accrued Benefits of Key Employees under this Plan and
any plan of an Aggregation Group, exceeds sixty percent
(60%) of the Aggregate Accounts or the Present Value of
Accrued Benefits of all Participants under this Plan
and any plan of an Aggregation Group.
The Present Value of Accrued Benefits and/or Aggregate
Account balance of a Participant who was previously a
Key Employee but is no longer a Key Employee (or his or
her Beneficiary), shall not be taken into account for
purposes of determining Top Heavy status. Further, a
Participant's Present Value of Accrued Benefits and/or
Aggregate Account balance shall not be taken into
account if he or she has not performed services for the
Affiliated Companies during the five (5) year period
ending on the Determination Date.
(b) Super Top Heavy
---------------
This Plan shall be "Super Top Heavy" if, as of the
Determination Date, (1) the sum of the Aggregate
Accounts of Key Employees, or (2) the Present Value of
Accrued Benefits of Key Employees under this Plan and
any plan of an Aggregation Group, exceeds ninety
percent (90%) of the Aggregate Accounts or the Present
Value of Accrued Benefits of all Participants under
this Plan and any plan of an Aggregation Group.
(c) Determination Date
------------------
Whether the Plan is Top Heavy for any Plan Year shall
be determined as of the Determination Date.
"Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first
Plan Year, the last day of such Plan Year.
35
(d) Valuation Date
--------------
"Valuation Date" means, for purposes of determining Top
Heaviness, the Determination Date.
(e) Aggregate Account
-----------------
"Aggregate Account" means, with respect to a
Participant, his or her adjusted account balance in a
defined contribution plan, as determined under the top
heavy provisions of such plan.
(f) Present Value of Accrued Benefits
---------------------------------
"Present Value of Accrued Benefits" means the sum of:
(i) the Actuarial Equivalent present value of the accrued normal
retirement benefit under the Plan as of the Valuation Date,
and
(ii) distributions prior to the Valuation Date, made during the
Plan Year that contains the Determination Date and the four
preceding Plan Years. Unrelated rollovers or transfers from
this plan shall be considered distributions. A related
rollover or transfer from this Plan shall not be considered a
distribution.
An unrelated rollover or transfer is one which is both
initiated by the Employee and made between plans of
different employers. A related rollover or transfer is
one which is either not initiated by the Employee or
made between plans of the same employer.
(g) Key Employee
------------
"Key Employee" means an Employee or former Employee
(and his or her Beneficiaries) who, at any time during
the Plan Year containing the Determination Date or any
of the four preceding Plan Years, is included in one of
the following categories as within the meaning of
Section 416(i) of the Code and regulations thereunder.
(i) an officer of the Employer whose annual aggregate
Compensation from the Affiliated Companies exceeds fifty
percent (50%) of the dollar limitation under Section
415(b)(1)(A) of the Code ($59,400 for the Plan Year ending
in 1994), provided that no more than 50 Employees shall be
considered officers, or if less, the greater of ten percent
(10%) of the Employees or 3,
(ii) one of the ten Employees owning the largest interest in the
Employer who owns more than a half percent (0.5%) interest of
the Employer, and whose annual aggregate Compensation from the
Affiliated
36
Companies exceeds the dollar limitation under Section
415(c)(1)(A) of the Code ($30,000 for the Plan Year ending
in 1994),
(iii) an Employee who owns more than five percent (5%) of the
Employer, or
(iv) an Employee who owns more than one percent (1%) of the
Employer with annual aggregate Compensation from the
Affiliated Companies that exceeds $150,000.
(h) Aggregation Group
-----------------
"Aggregation Group" means the group of plans that must
be considered as a single plan for purposes of
determining whether the plans within the group are Top
Heavy (Required Aggregation Group), or the group of
plans that may be aggregated for purposes of Top Heavy
testing (Permissive Aggregation Group). The
Determination Date for each plan must fall within the
same calendar year in order to aggregate the plans.
(i) The Required Aggregation Group includes each plan of the
Affiliated Companies in which a Key Employee is a participant
in the Plan Year containing the Determination Date or any of
the four preceding Plan Years, and each other plan of the
Affiliated Companies which, during this period, enables any
plan in which a Key Employee participates to meet the minimum
participation standards or nondiscriminatory contribution
requirements of Code Sections 401(a)(4) and 410.
(ii) A Permissive Aggregation Group may include any plan
sponsored by an Affiliated Company, provided the group as a
whole continues to satisfy the minimum participation standards
and nondiscriminatory contribution requirements of Code
Sections 401(a)(4) and 410.
Each plan belonging to a Required Aggregation Group
shall be deemed Top Heavy or non-Top Heavy in
accordance with the group's status. In a Permissive
Aggregation Group that is determined Top Heavy only
those plans that are required to be aggregated shall be
Top Heavy. In a Permissive Aggregation Group that is
not Top Heavy, no plan in the group shall be Top Heavy.
9.3 Minimum Benefit
---------------
(a) General Rule
------------
For any Top Heavy Plan Year, a non-Key Employee who
completes a one-year (1) Period of Service shall have
an Accrued Benefit at least equal to the minimum
benefit described herein. The minimum Accrued Benefit
at any point in time equals the lesser of:
37
(i) two percent (2%) multiplied by Top Heavy years of Service,
or
(ii) twenty percent (20%),
multiplied by such Participant's "average
Compensation." "Average Compensation" means a
Participant's average Compensation for the five (5)
consecutive years when such Participant had the highest
aggregate Compensation from the Employer. However,
Compensation received for non-Top Heavy Plan Years
shall be disregarded. The benefit described herein is
expressed as an annual benefit in the form of a single
life annuity (with no ancillary benefits), commencing
at normal retirement age.
A non-Key Employee shall not be denied this minimum
benefit because he or she was not employed on a
specified date, failed to make any mandatory Employee
contribution, or failed to earn a specified amount of
Compensation.
(b) Special Two Plan Rule
---------------------
Where this Plan and a defined contribution plan belong
to an Aggregation Group that is determined Top Heavy,
the Employer shall not be required to provide the
minimum benefit under (a) above on behalf of any
non-Key Participant who also participates in the
defined contribution plan if the Employer contributions
and forfeitures under the defined contribution plan
equal five percent (5%) of each non-Key Participant's
Compensation.
9.4 Benefit Limitation
------------------
For any Top Heavy Plan Year in which the Employer does not
make the extra minimum allocation provided below, 1.0 shall
replace the 1.25 factor found in the denominators of the
defined benefit and defined contribution plan fractions for
purposes of calculating the combined limitation on benefits
under a defined benefit and defined contribution plan
pursuant to Section 415(e) of the Code (see Section 8.3).
If this Plan is Top Heavy, but is not Super Top Heavy, the
above referenced fractions shall remain unchanged provided
the Employer provides an extra minimum Accrued Benefit for
each non-Key Employee. The extra benefit (in addition to
the minimum benefit set forth in Section 9.3) shall equal
the lesser of:
(a) one percent (1%) multiplied by Top Heavy years of Service,
or
(b) ten percent (10%),
multiplied by such Participant's "average Compensation", as
defined in Section 9.3.
38
9.5 Vesting
-------
(a) Top Heavy Schedule
------------------
For any Top Heavy Plan Year, each Participant who
completes an Hour of Service in such Year shall become
vested and have a nonforfeitable right to retirement
benefits he or she has earned under the Plan in
accordance with the following table:
Periods of Service Vesting Percentage
------------------ ------------------
Less than 2 Years 0%
2 Years 20%
3 Years 40%
4 Years 60%
5 Years 100%
Provided, however, that a Participant's vesting
percentage shall not be less than the percentage
determined under the table in Section 7.1.
(b) Return to Non-Top Heavy Status
------------------------------
If the Plan becomes Top Heavy and ceases to be Top
Heavy in any subsequent Plan Year, the vesting schedule
shall automatically revert to the vesting schedule in
effect before the Plan became Top Heavy. Such
reversion shall be treated as a Plan amendment pursuant
to the terms of the Plan, and shall not cause a
reduction of any Participant's nonforfeitable interest
in the Plan on the date of such amendment.
A Participant with three or more one-year (1) Periods
of Service with the Employer as of the end of the
election period, may elect to remain covered by the Top
Heavy vesting schedule. The Participant's election
period shall commence on the adoption date of the
amendment and shall end sixty (60) days after the
latest of:
(i) the adoption date of the amendment,
(ii) the effective date of the amendment, or
(iii) the date the Participant receives written notice of the
amendment from the Committee.
39
SECTION 10
ADMINISTRATION OF THE PLAN
10.1 Plan Administrator
------------------
The Plan Administrator and named fiduciary shall be the
Employer. The Compensation Committee of the Board of
Directors of the Employer shall appoint a Committee composed
of one or more persons which shall carry out the general
administration of the Plan. Every member of the Committee
shall be deemed a fiduciary. No Committee member who is an
Employee shall receive compensation with respect to his or
her service on the Committee. Any member of the Committee
may resign by delivering written resignation to the
Compensation Committee of the Board of Directors of the
Employer and to the Committee. The Compensation Committee
of the Board of Directors of the Employer may remove or
replace any member of the Committee at any time.
10.2 Organization and Procedures
---------------------------
The Compensation Committee of the Board of Directors of the
Employer shall designate a chairman from the members of the
Committee. The Committee shall appoint a secretary, who may
or may not be a member of the Committee. The secretary
shall have the primary responsibility for keeping a record
of all meetings and acts of the Committee and shall have
custody of all documents, the preservation of which shall be
necessary or convenient to the efficient functioning of the
Committee. The chairman of the Committee shall be the agent
of the Plan for service of legal process. All reports
required by law may be signed by the chairman on behalf of
all members of the Committee.
The Committee shall act by a majority of its members in
office and such action may be taken by a vote at a meeting
or in writing without a meeting. The Administration
Committee may adopt such by-laws and regulations as it deems
desirable for the conduct of its affairs.
10.3 Duties and Authority of the Committee
-------------------------------------
(a) Administrative Duties
--------------------
The Committee shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of
Participants and their Beneficiaries. The Committee
shall perform all such duties as are necessary to
supervise the administration of the Plan and to control
its operation in accordance with the terms thereof,
including, but not limited to, the following:
(i) Make and enforce such rules and regulations as it shall deem
necessary or proper for the efficient administration of the
Plan;
40
(ii) Interpret the provisions of the Plan and determine any
question arising under the Plan, or in connection with the
administration or operation thereof;
(iii) Determine all considerations affecting the eligibility
of any Employee to be or become a Participant;
(iv) Determine eligibility for and amount of benefits for any
Participant, Beneficiary, or alternate payee pursuant to a
domestic relations order (including determining the qualified
status of a domestic relations order);
(v) Authorize and direct the Trustee with respect to all
disbursements of benefits under the Plan;
(vi) Employ and engage such persons, counsel and agents and
obtain such administrative, clerical, medical, legal, audit
and actuarial services as it may deem necessary in carrying
out the provision of the Plan;
(vii) Delegate and allocate specific responsibilities and
duties imposed by the Plan to one or more Employees, officers
or such other persons as the Committee deems appropriate.
(b) Investment Authority
--------------------
The Trustee and/or designated Investment Manager shall
have responsibility or authority with respect to the
management, acquisition, disposition or investment of
Plan assets.
(c) General Authority
-----------------
The Committee shall have all powers necessary or
appropriate to carry out its duties, including the
discretionary authority to interpret the provisions of
the Plan and the facts and circumstances of claims for
benefits. Any interpretation or construction of or
action by the Committee with respect to the Plan and
its administration shall be conclusive and binding upon
any and all parties and persons affected hereby,
subject to the exclusive appeal procedure set forth in
Section 10.7.
(d) Amendment Authority
-------------------
The Committee shall have responsibility and authority
to approve documents for the Plan and to approve
amendments that may be required to the Plan from time
to time to keep the Plan in compliance with relevant
law or to facilitate the administration of the Plan.
The Chairman of the Committee is authorized to execute
any such documents or amendments on behalf of the
Company.
41
10.4 Expenses
--------
All reasonable expenses which are necessary to operate and
administer the Plan may be deducted from the Trust Fund or,
at the election of the Employer, paid directly by the
Employer.
10.5 Bonding and Insurance
---------------------
To the extent required by law, every Committee member, every
fiduciary of the Plan and every person handling Plan funds
shall be bonded. The Committee shall take such steps as are
necessary to assure compliance with applicable bonding
requirements. The Committee may apply for and obtain
fiduciary liability insurance insuring the Plan against
damages by reason of breach of fiduciary responsibility at
the Plan's expense and insuring each fiduciary against
liability to the extent permissible by law at the Employer's
expense.
10.6 Commencement of Benefits
------------------------
(a) Conditions of Payment
---------------------
Benefit payments under the Plan shall not be payable
prior to the fulfillment of the following conditions:
(i) the Committee has been furnished with such applications,
proofs of birth or death, address, form of benefit election,
spouse consent if required, and other information the
Committee deems necessary;
(ii) the Participant has Terminated employment with the Employer,
reached age seventy and a half (70 1/2) or died; and
(iii) the Participant or Beneficiary is eligible to receive
benefits under the Plan as determined by the Committee.
(b) Commencement of Payment
-----------------------
Unless a Participant elects otherwise, the payment of
benefits shall commence no later than sixty (60) days
after the end of the Plan Year in which the latest of
the following occurs:
(i) the Participant reaches Normal Retirement Date;
(ii) the tenth anniversary of the year in which the Participant
commences participation in the Plan; or
(iii) the Participant Terminates employment with the
Employer; provided that notwithstanding any other Plan
provision, payments shall not commence later than the April 1
following the calendar year in which
42
the Participant reaches age seventy and a half (70 1/2).
The amount of any payments required following age seventy
and a half (70 1/2) or Termination shall at least satisfy
the minimum required distribution amount under Code
Section 401(a)(9)(A)(ii) and related regulations.
In no event shall payments commence in a form other
than the automatic form described in Section 5.2 prior
to the Participant's Normal Retirement Age if the
Actuarially Equivalent present value of the
Participant's Accrued Benefit at the time benefits
commence exceeds $3,500 without the written consent of
the Participant and the spouse, if any. Spouse consent
must acknowledge the effect of such election and must
be notarized or witnessed by a Plan representative.
If the information required in subsection 10.6(a) above
is not available prior to such date, the amount of
payment will not be ascertainable. In such event, the
commencement of payment shall be delayed until no more
than sixty (60) days after the date the amount of such
payment is ascertainable.
10.7 Appeal Procedure
----------------
(a) Submission of Claim
-------------------
A claim for benefit payment shall be considered filed
when an application form is submitted to the Committee.
(b) Notice of Denial
----------------
Any time a claim for benefits is wholly or partially
denied, the Participant or Beneficiary (hereinafter
"Claimant") shall be given written notice of such
action within ninety (90) days after the claim is
filed, unless special circumstances require an
extension of time for processing. (If there is an
extension, the Claimant shall be notified of the
extension and the reason for the extension within the
initial ninety (90) day period. The extension shall
not exceed one hundred eighty (180) days after the
claim is filed.) Such notice will indicate the reason
for denial, the pertinent provisions of the Plan on
which the denial is based, an explanation of the claims
appeal procedure set forth herein, and a description of
any additional material or information necessary to
perfect the claim and an explanation of why such
material or information is necessary.
(c) Right to Request Review
-----------------------
Any person who has had a claim for benefits denied by
the Committee, who disputes the amount of benefit
payment determined by the Committee, or who is
otherwise adversely affected by action of the
Committee, shall have the right to request review by
the Committee. Such request must be in writing, and
must be made within sixty (60) days after such person
is advised of the
43
Committee's action. If written request for review is
not made within such sixty-day (60) period, the
Claimant shall forfeit his or her right to review.
The Claimant or a duly authorized representative of the
Claimant may review all pertinent documents and submit
issues and comments in writing.
(d) Review of Claim
---------------
The Committee shall then review the claim. It may hold
a hearing if it deems it necessary and shall issue a
written decision reaffirming, modifying or setting
aside its former action within sixty (60) days after
receipt of the written request for review, or one
hundred twenty (120) days if special circumstances,
such as a hearing, require an extension. The Claimant
shall be notified in writing of any such extension
within sixty (60) days following the request for
review. A copy of the decision shall be furnished to
the Claimant. The decision shall set forth its reasons
and pertinent Plan provisions on which it is based.
The decision shall be final and binding upon the
Claimant and the Committee and all other persons
involved.
10.8 Plan Administration - Miscellaneous
-----------------------------------
(a) Limitations on Assignments
--------------------------
Benefits under the Plan may not be assigned, sold,
transferred, or encumbered, and any attempt to do so
shall be void. The interest of a Participant in
benefits under the Plan shall not be subject to debts
or liabilities of any kind and shall not be subject to
attachment, garnishment or other legal process, except
as provided in Section 10.8 relating to Domestic
Relations Orders, or otherwise permitted by law.
(b) Masculine and Feminine, Singular and Plural
-------------------------------------------
Whenever used herein, pronouns shall include the
opposite gender, and the singular shall include the
plural and the plural shall include the singular
whenever the context shall plainly so require.
(c) Small Benefits
--------------
Notwithstanding any other provisions of this Plan, in
cases where the Actuarially Equivalent present value of
a vested or payable benefit is less than or equal to
the maximum permissible amount under the Code which may
be distributed without the consent of a Participant or
his or her spouse (in 1994, this amount was $3,500),
the Committee shall direct such present value be paid
in a Lump Sum distribution as soon as practical
following termination and prior to the Annuity Starting
Date.
44
(d) No Additional Rights
--------------------
No person shall have any rights in or to the Trust
Fund, or any part thereof, or under the Plan, except
as, and only to the extent, expressly provided for in
the Plan. Neither the establishment of the Plan, the
accrual of benefits under the Plan nor any action of
the Employer or the Committee shall be held or
construed to confer upon any person any right to be
continued as an Employee, or, upon dismissal, any right
or interest in the Trust Fund other than as herein
provided. The Employer expressly reserves the right to
discharge any Employee at any time.
(e) Governing Law
-------------
This Plan shall be construed in accordance with
applicable federal law and the laws of the State of
Washington, wherein venue shall lie for any dispute
arising hereunder.
(f) Disclosure to Participants
--------------------------
Each Participant shall be advised of the general
provisions of the Plan and, upon written request
addressed to the Committee, shall be furnished any
information requested regarding the Participant's
status, rights and privileges under the Plan as may be
required by law.
(g) Income Tax Withholding Requirements
-----------------------------------
Any retirement benefit payment made under the Plan
shall be subject to any applicable income tax
withholding requirements. For this purpose, the
Committee shall provide the Trustee with any
information the Trustee needs to satisfy such
withholding obligations and with any other information
that may be required by regulations promulgated under
the Code.
(h) Severability
------------
If any provision of this Plan shall be held illegal or
invalid for any reason, such determination shall not
affect the remaining provisions of this Plan which
shall be construed as if said illegal or invalid
provision had never been included.
(i) Facility of Payment
-------------------
In the event any benefit under this Plan shall be
payable to a person who is under legal disability or is
in any way incapacitated so as to be unable to manage
his or her financial affairs, the Committee may direct
payment of such benefit to a duly appointed guardian,
committee or other legal representative of such person,
or in the absence of a guardian or legal
representative, to a custodian for such person under a
Uniform Gifts to Minors Act or to any
45
relative of such person by blood or marriage, for such
person's benefit. Any payment made in good faith
pursuant to this provision shall fully discharge the
Employer and the Plan of any liability to the extent
of such payment.
(j) Correction of Errors
--------------------
Any Employer contribution to the Trust Fund made under
a mistake of fact (or investment proceeds of such
contribution if a lesser amount) shall be returned to
the Employer within one (1) year after payment of the
contribution. In the event an incorrect amount is paid
to a Participant or Beneficiary, any remaining payments
may be adjusted to correct the error. The Committee
may take such other action it deems necessary and
equitable to correct any such error.
10.9 Domestic Relations Orders
-------------------------
Notwithstanding any Plan provisions to the contrary,
benefits under the Plan may be paid to someone other than
the Participant, Beneficiary or joint annuitant, pursuant to
a Qualified Domestic Relations Order, in accordance with
Section 414(p) of the Code. A Qualified Domestic Relations
Order is a judgement, decree, or order ("Order") (including
approval of a property settlement agreement) that:
(a) relates to the provision of child support, alimony payments
or marital property rights to a spouse, former spouse, child or
other dependent of a Participant;
(b) is made pursuant to a state domestic relations law
(including a community property law);
(c) creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive
all or a portion of the benefits payable to a Participant under
the Plan;
(d) specifies the name and last known address of the Participant
and each alternate payee;
(e) specifies the amount or method of determining the amount of
benefit payable to an alternate payee;
(f) specifies the number of payments or period during which
payments are to be made;
(g) names each plan to which the order applies;
(h) does not require any form, type or amount of benefit not
otherwise provided under the Plan; and
46
(i) does not conflict with a prior Domestic Relations Order that
meets the requirements of this section.
Payments to an alternate payee pursuant to a Qualified
Domestic Relations Order may commence after the Participant
becomes vested and on or after the earlier of (a) the date
the Participant attains age fifty-five (55), or (b) the date
the Participant is eligible to elect to receive a Vested
Termination Benefit. The Alternate Payee may elect any form
of payment available under the Plan at the time benefit
payments commence other than a joint and survivor annuity,
provided that a Lump Sum form of payment is available only
if the Alternate Payee's benefit does not exceed $10,000.
The Committee shall determine whether an order meets the
requirements of this section within a reasonable period
after receiving an order. The Committee shall notify the
Participant and any alternate payee that an order has been
received and with respect to benefits which are in pay
status shall establish a separate account under the Plan for
any alternate payee pending determination that an order
meets the requirements of this section. If within eighteen
(18) months after such separate account is established the
order has not been determined to be a qualified Order, the
amount in the separate account shall be distributed to the
individual who would have been entitled to such amount if
there had been no order.
10.10 Plan Qualification
------------------
Any modification or amendment of the Plan may be made
retroactive, as necessary or appropriate, to establish and
maintain a "qualified plan" pursuant to Section 401 of the
Code, and ERISA and regulations thereunder and the exempt
status of the Trust Fund under Section 501 of the Code.
10.11 Deductible Contribution
-----------------------
Notwithstanding anything herein to the contrary, any
contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by
the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1)
year following a final determination of the disallowance,
demand repayment of such disallowed contribution and the
Trustee shall return such contribution less any losses
attributable thereto to the Employer within one (1) year
following the disallowance.
10.12 Payment of Benefits Through Purchase of Annuity Contract
--------------------------------------------------------
In lieu of paying benefits directly from the Trust Fund to a
Participant or his Beneficiary, the Trustee may purchase,
with Trust Fund assets, an individual annuity contract from
an insurance company rated A+ by A.M. Best Company, Inc.
which, as far as possible, provides benefits equal to (or
Actuarially Equivalent to) those provided in the Plan for
such Participant or Beneficiary, but provides no optional
form of retirement income or benefit which would not be
permitted under the Plan, whereupon the liability of the
Trust Fund and of the Plan will cease and terminate
47
with respect to such benefits that are so purchased and for
which the premiums are duly paid. Such an individual annuity
contract may be purchased by the Trustee on a single-premium
basis or on the basis of annual premiums payable over a
period of years and may be purchased at any time on or after
the Participant's Vested Termination Date, Retirement Date
or death to provide the benefits due under the Plan to the
Participant or Beneficiary on or after the date of such
purchase.
Any annuity contract distributed by the Trustee to a
Participant or Beneficiary under the provisions of the Plan
shall bear on the face thereof the designation "NOT
TRANSFERABLE", and such contract shall contain a provision
to the effect that the contract may not be sold, assigned,
discounted or pledged as collateral for a loan or as
security for the performance of an obligation or for any
other purpose to any person other than the issuer thereof.
48
SECTION 11
AMENDMENT AND TERMINATION
11.1 Amendment General
-----------------
The Employer shall have the right to amend, terminate, or
partially terminate this Plan by action of its Board of
Directors or by the Committee pursuant to Section 10.3(d) at
any time subject to any advance notice or other requirements
of ERISA.
11.2 Amendment - Consolidation or Merger
-----------------------------------
In the event the Plan's assets and liabilities are merged
into, transferred to or otherwise consolidated with any
other retirement plan, then such must be accomplished so as
to ensure that each Participant would (if the other
retirement plan then terminated) receive a benefit
immediately after the merger, transfer or consolidation,
which is equal to or greater than the benefit the Partici-
pant would have been entitled to receive immediately before
the merger, transfer or consolidation (as if the Plan had
then terminated). This provision shall not be construed as
limiting the powers of the Employer to appoint a successor
Trustee.
11.3 Termination of the Plan
-----------------------
The termination of the Plan shall not cause or permit any
part of the Trust Fund to be diverted to purposes other than
for the exclusive benefit of the Participants, or cause or
permit any portion of the Trust Fund to revert to or become
the property of the Employer at any time prior to the
satisfaction of all liabilities with respect to the
Participants.
Upon termination of this Plan, the Committee shall continue
to act for the purpose of complying with the preceding para-
graph and shall have all power necessary or convenient to
the winding up and dissolution of the Plan as herein
provided. While so acting, the Committee shall be in the
same status and position with respect to other persons as if
the Plan remained in existence.
11.4 Allocation of the Trust Fund on Termination of Plan
---------------------------------------------------
(a) Complete Termination
--------------------
In the event of a complete Plan termination, the right
of each Participant to benefits accrued to the date of
such termination that would be vested under the
provisions of the Plan in the absence of such
termination shall continue to be vested and
nonforfeitable; and the right of each Participant to
any other benefits accrued to the date of termination
shall be fully vested and nonforfeitable to the extent
then funded under the priority rules set forth in
Section 4044 of ERISA.
49
In any event, a Participant or a Beneficiary shall have
recourse only against Plan assets for the payment of
benefits thereunder, subject to any applicable
guarantee provisions of Title IV of ERISA. The
Committee shall direct the Trustee to allocate Trust
assets to those affected Participants to the extent and
in the order of preference set forth in Section 4044 of
ERISA. The assets so allocated shall be distributed,
as determined by the Committee, either wholly or in
part by purchase of nontransferable annuity contracts
or lump-sum payments. If Trust Fund assets as of the
date of Plan termination exceed the amounts required
under the priority rules set forth in Section 4044 of
ERISA, such excess shall, after all liabilities of the
Plan have been satisfied, revert to the Employer to the
extent permitted by applicable law.
(b) Partial Termination
-------------------
If at any time the Plan is terminated with respect to
any group of Participants under such circumstances as
to constitute a partial Plan termination within the
meaning of Section 411(d)(3) of the Code, each affected
Participant's right to benefits that have accrued to
the date of partial termination that would be vested
under the provisions of the Plan in the absence of such
termination shall continue to be so vested; and the
right of each affected Participant to any other
benefits accrued to the date of such termination shall
be vested to the extent assets would be allocable to
such benefits under the priority rules set forth in
Section 4044 of ERISA in the event of a complete Plan
termination. In any event, affected Participants shall
have recourse only against Plan assets for payment of
benefits thereunder, subject to any applicable
guarantee provisions of Title IV of ERISA. Subject to
the foregoing, the vested benefits of such Participants
shall be payable as though such termination had not
occurred; provided, however, that the Committee, in its
discretion, subject to any necessary governmental
approval, may direct that the amounts held in the Trust
Fund that are allocable to the Participants as to whom
such termination occurred be segregated by the Trustee
as a separate plan. The assets thus allocated to such
separate plan shall be applied for the benefit of such
Participants in the manner described in the preceding
paragraph.
(c) Merged Plan Assets
------------------
For a period of five (5) years after the date the Plan
is combined in a merger with one or more other defined
benefit plans, assets shall be allocated upon Plan
termination according to a special schedule in
accordance with Treas. Reg. 1.414(l)-1(e) through (k)
to prevent any Participant from receiving smaller
benefits on a termination basis as a result of the
merger.
50
SECTION 12
FUNDING
12.1 Contributions to the Trust
--------------------------
As a part of this Plan the Employer shall maintain a Trust.
From time to time, the Employer shall make such
contributions to the Trust as the Committee determines, with
the advice of its actuary, are required to maintain the Plan
on a sound actuarial basis.
12.2 Trust Fund for Exclusive Benefit of Participants
------------------------------------------------
The Trust is for the exclusive benefit of Participants.
Except as provided in Sections 10.7(j) (Correction of
Errors), 10.9 (Domestic Relations Orders) and 10.11
(Deductible Contributions), no portion of the Trust shall be
diverted to purposes other than this or revert to or become
the property of the Employer at any time prior to the
satisfaction of all liabilities with respect to the
Participants.
12.3 Disposition of Credits and Forfeitures
--------------------------------------
In no event shall any credits or forfeitures which may arise
under the Plan be used to increase benefits under the Plan.
12.4 Trustee
-------
As a part of this Plan, the Employer has entered into a
trust agreement with a Trustee. The Employer has the power
and duty to appoint the Trustee and it shall have the power
to remove the Trustee and appoint successors at any time.
As a condition to exercising its power to remove any Trustee
hereunder, the Employer must first enter into an agreement
with a successor Trustee.
12.5 Investment Manager
------------------
The Employer has the power to appoint, remove or change from
time to time an Investment Manager to direct the investment
of all or a portion of the Trust Fund held by the Trustee.
For purposes of this section "Investment Manager" shall mean
any fiduciary (other than the Trustee) who:
(a) has the power to manage, acquire, or dispose of any asset of
the Plan;
(b) is either
(i) registered as an investment adviser under the Investment
Advisers Act of 1940, or
51
(ii) is a bank, or
(iii) is an insurance company qualified under the laws of
more than one state to perform the services described in
subparagraph (a); and
(c) has acknowledged in writing that he, she or it is a
fiduciary with respect to the plan.
52
SECTION 13
FIDUCIARIES
13.1 Limitation of Liability of the Employer and Others
--------------------------------------------------
No Participant shall have any claim against the Employer, or
the Committee, or against their directors, officers,
members, agents or representatives, for any benefits under
the Plan, and such benefits shall be payable solely from the
Trust; nor, to the extent permitted by law, shall the
Employer, the Committee or their directors, officers,
members, agents or representatives incur any liability to
any person for any action taken or suffered or omitted to be
taken by them under the Plan in good faith.
13.2 Indemnification of Fiduciaries
------------------------------
In order to facilitate the recruitment of competent
fiduciaries, the Employer adopting this Plan agrees to
provide the indemnification as described herein. This
provision shall apply to Employees who are considered Plan
fiduciaries including without limitation, Committee members,
any agent of the Committee, or any other officers, directors
or Employees. Notwithstanding the preceding, this provision
shall not apply and indemnification will not be provided for
any Trustee or Investment Manager appointed as provided in
this Plan.
13.3 Scope of Indemnification
------------------------
The Employer agrees to indemnify an Employee fiduciary as
described above for all acts taken in good faith in carrying
out his or her responsibilities under the terms of this Plan
or other responsibilities imposed upon such fiduciary by
ERISA. This indemnification for all acts is intentionally
broad but shall not provide indemnification for embezzlement
or diversion of Plan assets for the benefit of the Employee
fiduciary. The Employer agrees to indemnify Employee
fiduciaries described herein for all expenses of defending
an action by a Participant, Beneficiary or government
entity, including all legal fees for counsel selected with
the consent of the Employer and other costs of such defense.
The Employer will also reimburse an Employee fiduciary for
any monetary recovery in any court or arbitration
proceeding. In addition, if the claim is settled out of
court with the concurrence of the Employer, the Employer
will indemnify an Employee fiduciary for any monetary
liability under said settlement. The Employer shall have
the right, but not the obligation, to conduct the defense of
such persons in any proceeding to which this Section 13.3
applies. The Employer may satisfy its obligations under
this Section 13.3 in whole or in part through the purchase
of a policy or policies of insurance providing equivalent
protection.
53
The Advanced Technology Laboratories, Inc. Retirement Plan
is adopted by Advanced Technology Laboratories, Inc.
IN WITNESS WHEREOF, the Employer has caused this Plan to be
duly executed on this 15th day of March, 1996.
FOR ADVANCED TECHNOLOGY
LABORATORIES, INC.
/s/ Annette King /s/ Harvey N. Gillis
- ---------------------- -----------------------------
Witness Authorized Officer
Senior Vice President & CFO
------------------------------
Title
54
APPENDIX I
TO THE
ADVANCED TECHNOLOGY LABORATORIES, INC.
RETIREMENT PLAN
"Employer" as defined in Section 1.15 of the Advanced Technology
Laboratories, Inc. Retirement Plan shall also include the
following companies during the specified period of time.
Company Beginning Ending
------- --------- ------
1. Advanced Technology Laboratories, 1/1/81
Inc. (Washington)
2. Interspec, Inc., including Echo Ultrasound,
a division of Interspec, Inc. 5/17/94
ACKNOWLEDGED AND ACCEPTED:
By: /s/ Harvey N. Gillis
-------------------------
Title: Senior V.P. & CFO
-----------------------
Date: 3/15/96
-----------------------
55