EXHIBIT 10-36
AMENDMENT AND RESTATEMENT
OF
USG CORPORATION RETIREMENT PLAN
WHEREAS, USG CORPORATION RETIREMENT PLAN (the "Plan") was established effective
July 1, 1958 (and then was named "United States Gypsum Company Retirement
Plan"); and
WHEREAS, the Plan, as amended and restated effective as of January 1, 1984, has
subsequently been amended from time to time and it now is considered desirable
to further amend and restate the Plan in its entirety;
NOW, THEREFORE, pursuant to the amending power reserved to USG Corporation as
the "company" under subsection 14.1 of the Plan, as amended, the Plan be and
hereby is further amended and restated in its entirety effective as of January
1, 1999 in the form attached hereto.
* * *
IN WITNESS WHEREOF, the Company has caused these presents to be signed on its
behalf by an officer thereunto duly authorized this 29th day of December, 1999.
USG CORPORATION
By:
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USG CORPORATION RETIREMENT PLAN
As Amended and Restated Effective January 1, 1999
McDermott, Will & Emery
Chicago
TABLE OF CONTENTS
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SECTION 1 ...................................................................... 1
Introduction ................................................................ 1
1.1 Plan, Company .................................................... 1
1.2 Purpose .......................................................... 1
1.3 Restatement Effective Date, Plan Year ............................ 1
1.4 Subsidiaries, Employers, USG Companies ........................... 2
1.5 Plan Administration, the Committee ............................... 2
1.6 Trustees, Trust Agreements, Trust Funds .......................... 2
1.7 Preservation of Benefits ......................................... 2
1.8 Predecessor Plans ................................................ 3
1.9 Supplements ...................................................... 3
1.10 Examination of Plan Documents .................................... 4
1.11 Gender and Number ................................................ 4
1.12 Notices .......................................................... 4
1.13 Combination Defined Benefit and Defined Contribution Plan ........ 4
SECTION 2 ...................................................................... 6
Eligibility for Participation and ........................................... 6
Participant Contributions ................................................... 6
2.1 Covered Employee, Participant, Eligibility Date .................. 6
2.2 Eligibility ...................................................... 7
2.3 Notice of Eligibility, Enrollment ................................ 7
2.4 Leave of Absence ................................................. 7
2.5 Participant Contributions ........................................ 8
2.6 Separate Accounts ................................................ 8
2.7 U.S. Foreign Service Employee .................................... 11
2.8 Leased Employees ................................................. 11
SECTION 3 ...................................................................... 13
Retirement Dates, Employment Termination Date ............................... 13
3.1 Normal Retirement Date ........................................... 13
3.2 Deferred Retirement Date ......................................... 13
3.3 Early Retirement Date ............................................ 13
3.4 Disability Retirement Date ....................................... 13
3.5 Retirement Date .................................................. 14
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3.6 Employment Termination Date ...................................... 14
3.7 Retirement or Termination While on Leave of Absence .............. 14
SECTION 4 ...................................................................... 15
Bases of Retirement Income and Other Benefits ............................... 15
4.l General .......................................................... 15
4.2 Credited Service ................................................. 15
4.3 Benefit Service .................................................. 18
4.4 Special Rules as to Credited Service and Benefit Service ......... 19
4.5 Earnings ......................................................... 21
4.6 Final Average Earnings ........................................... 22
4.7 Primary Social Security Benefit .................................. 23
4.8 Monthly Separate Account Benefit ................................. 24
4.9 Determination of Bases of Benefits ............................... 25
SECTION 5 ...................................................................... 26
Amount of Retirement Income ................................................. 26
5.1 Normal Retirement ................................................ 26
5.2 Deferred Retirement .............................................. 26
5.3 Early Retirement Benefits ........................................ 27
5.4 Election of Early Commencement of Early Retirement Benefits ...... 28
5.5 Lump Sum Payment of Early Retirement Benefits Derived from
Participants' Contributions .................................. 29
5.6 Disability Retirement ............................................ 30
5.7 Total and Permanent Disability ................................... 31
5.8 Conditions as to Payment of Disability Benefits .................. 31
5.9 Accrued Monthly Benefit .......................................... 32
5.10 Increased Benefits for Certain Retired Participants .............. 32
5.11 Benefit Commencement Consent Requirements ........................ 33
SECTION 6 ...................................................................... 34
Termination Before Retirement, Death During Employment ...................... 34
6.1 Monthly Deferred Vested Benefit .................................. 34
6.2 Election of Early Commencement of Deferred Vested Benefits ....... 34
6.3 Lump Sum Payment of Deferred Vested Benefits
Derived from Participants' Contributions ...................... 34
6.4 Termination Prior to Five Years of Credited Service .............. 35
6.5 Death During Employment .......................................... 36
6.6 Pre-Retirement Spouse's Benefit .................................. 38
6.7 Benefit Commencement Consent Requirements ........................ 38
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SECTION 7 ...................................................................... 39
Payment of Retirement Income and Other Benefits ............................. 39
7.1 Benefit Commencement Date, Combined Benefit Reference ............ 39
7.2 Eligible Spouse .................................................. 39
7.3 Normal Form of Payment of Benefits ............................... 39
7.4 Benefit Options .................................................. 41
7.5 Rules as to Election and Discontinuance of
Benefit Options ............................................... 42
7.6 Applicable Election Period ....................................... 45
7.7 Relating to Qualified Joint and Survivor Annuity ................. 45
7.8 Benefit Commencement Requirements ................................ 46
7.9 Payment of Small Amounts ......................................... 49
7.10 Benefits Derived from Employer and Participant
Contributions ................................................. 49
7.11 Designation of Beneficiaries ..................................... 50
7.12 Missing Participants or Beneficiaries ............................ 51
7.13 Direct Transfer of Eligible Rollover Distributions ............... 52
SECTION 8 ...................................................................... 53
Maximum and Minimum Benefit Limitations, Offset for Other Plan Benefits ..... 53
8.1 Maximum Retirement Income and Deferred Vested Benefits ........... 53
8.2 Limitation Year and Total Compensation ........................... 53
8.3 Defined Benefit Plan and Defined Contribution Plan Limitations ... 53
8.4 Combining of Plans ............................................... 54
8.5 Maximum Benefits as a Result of the Annual Compensation Limit .... 54
8.7 Maximum Retirement Income and Deferred Vested Benefit ............ 57
8.8 Minimum Retirement Income and Deferred Vested Benefit ............ 57
8.9 Minimum Death Benefits ........................................... 57
8.10 Offset for Other Plan Benefits ................................... 58
8.11 Special Rules for Benefit Transfers .............................. 58
8.12 Section 401(m) Limitations as to Participant Separate
Account Contributions ......................................... 59
8.13 Special Provisions Applicable to Section 401(m) Limitations ...... 60
8.14 Highly Compensated Participant ................................... 61
SECTION 9 ...................................................................... 62
Reemployment ................................................................ 62
9.1 Rehired Employee ................................................. 62
9.2 Rehired Participant .............................................. 62
9.3 One-Year Break in Service, Extended Break in Service ............. 63
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9.4 Credited and Benefit Service ..................................... 63
9.5 Prior Accrued Benefit ............................................ 66
9.6 Benefits After Reemployment Ends ................................. 68
SECTION 10 ..................................................................... 70
General Provisions .......................................................... 70
10.1 Interests Not Transferable ....................................... 70
10.2 Facility of Payment .............................................. 71
10.3 Absence of Guaranty .............................................. 71
10.4 Employment Rights ................................................ 71
10.5 Litigation by Participants or Other Persons ...................... 71
10.6 Actuarially Equivalent Benefits .................................. 72
10.7 Evidence ......................................................... 72
10.8 Waiver of Notice ................................................. 72
10.9 Controlling Law .................................................. 72
10.10 Severability ..................................................... 72
10.11 Fiduciary Responsibilities ....................................... 73
SECTION 11 ..................................................................... 74
The Committee ............................................................... 74
11.1 Membership ....................................................... 74
11.2 General Powers, Rights and Duties ................................ 74
11.3 Manner of Action ................................................. 75
11.4 Information Required by Committee ................................ 76
11.5 Committee Decision Final ......................................... 76
11.6 Review of Benefit Determinations ................................. 76
11.7 Uniform Rules .................................................... 76
11.8 Committee Member Who is a Participant ............................ 76
SECTION 12 ..................................................................... 77
Funding of Plan Benefits .................................................... 77
12.1 Employer and Participant Contributions ........................... 77
12.2 Minimum Funding Standards ........................................ 77
12.3 Application of Forfeited Benefits ................................ 77
SECTION 13 ..................................................................... 78
Relating to the Employers ................................................... 78
13.1 Action by Employers .............................................. 78
13.2 Additional Employers ............................................. 78
13.3 Successor Employers .............................................. 78
13.4 Restrictions as to Reversion of Trust Assets to Employers ........ 78
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SECTION 14 ..................................................................... 80
Amendment, Termination or Plan Merger ....................................... 80
14.1 Amendment ........................................................ 80
14.2 Termination ...................................................... 80
14.3 Plan Merger or Consolidation ..................................... 80
14.4 Notice of Amendment, Termination or Plan Merger .................. 80
14.5 Nonforfeitability on Termination ................................. 81
14.6 Limitations on Termination ....................................... 81
SECTION 15 ..................................................................... 82
Allocation and Distribution of Assets on Termination ........................ 82
SECTION 16 ..................................................................... 83
Annual Benefit Payment Restrictions ......................................... 83
16.1 Restrictions on Annual Payments .................................. 83
16.2 Responsibility of Committee ...................................... 83
SECTION 17 ..................................................................... 84
Special Rules for Top-heavy Plans ........................................... 84
17.1 Purpose .......................................................... 84
17.2 Top-heavy Plan ................................................... 84
17.3 Key Employee ..................................................... 85
17.4 Minimum Vesting .................................................. 86
17.5 Minimum Benefit .................................................. 86
17.6 Aggregation of Plans ............................................. 87
17.7 No Duplication of Benefits ....................................... 87
17.8 Adjustment of Combined Benefit Limitations ....................... 87
17.9 Use of Terms ..................................................... 88
SECTION 18 ..................................................................... 89
Special Restrictions and Overriding Provisions Applicable During a
Restricted Period ........................................................ 89
18.1 Overriding Provisions Effective During Restricted Period ......... 89
18.2 Definitions ...................................................... 89
18.3 Restrictions on Eligibility to Participate ....................... 92
18.4 Prohibition Against Mergers and Transfers of Assets
and Liabilities ............................................... 92
18.5 Timing and Method of Distribution ................................ 92
18.6 Prohibition Against Reversion of Plan Assets if Plan Terminated .. 93
18.7 Conditions and Limitations ....................................... 95
18.8 Prohibition Against Amendment .................................... 96
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EXHIBIT A
SUPPLEMENT 1
Titles of Supplements in Effect Immediately Prior to the Restatement
Effective Date
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USG CORPORATION RETIREMENT PLAN
(As Amended and Restated Effective as of January 1, 1999)
SECTION 1
INTRODUCTION
1.1 PLAN, COMPANY
USG Corporation (the "company") maintains USG Corporation Retirement
Plan (the "Plan") for the benefit of its eligible employees. The plan was
originally established effective as of July 1, 1958 by United States Gypsum
Company and was then known as the United States Gypsum Company Retirement Plan.
On January 1, 1985 United States Gypsum Company became a wholly-owned subsidiary
of USG Corporation and the subsidiaries of United States Gypsum Company became
direct or indirect subsidiaries of USG Corporation. By agreement made as of
December 20, 1984 the plan was amended effective January 1, 1985 to substitute
USG Corporation for United States Gypsum Company as the "company" under the
plan, to provide for United States Gypsum Company continuing as an employer
under the plan, and to change the name of the plan to USG Corporation Retirement
Plan. The provisions of this subsection and the following provisions constitute
an amendment and restatement of the plan (as previously amended) effective as of
January 1, 1999, subject to any subsequent amendments. The term "company" as
used in the plan means USG Corporation.
1.2 PURPOSE
The purpose of the plan is to provide retirement and other benefits
for eligible employees of the company and of its subsidiaries that are employers
under the plan.
1.3 RESTATEMENT EFFECTIVE DATE, PLAN YEAR
The term "restatement effective date" as used in the plan means
January 1, 1999. The plan is administered on the basis of a plan year (the "plan
year") beginning on the applicable January 1 and ending on the next following
December 31.
1.4 SUBSIDIARIES, EMPLOYERS, USG COMPANIES
Certain subsidiaries of the company adopted the plan prior to the
restatement effective date for the benefit of their employees. Any other
subsidiary of the company may adopt the plan on or after the restatement
effective date in accordance with the provisions of subsection 13.2 with the
consent of the pension committee described in subsection 1.5. For purposes of
the plan, a "subsidiary" of the company is any corporation 80 percent or more of
the voting stock of which is owned, directly or indirectly, by the company. The
company and its subsidiaries which adopt the plan are referred to below
collectively as the "employers" and individually as an "employer". The term "USG
Companies" means the employers and all subsidiaries that have not adopted the
plan and each such corporation is referred to as a "USG Company". Any
corporation that is not an employer and does not qualify as a subsidiary but is
a member of a controlled group of corporations (within the meaning of Section
1563(a) of the Internal Revenue Code, determined without regard to Sections
1563(a)(4) and 1563(e)(3)(C) thereof) which contains an employer and each trade
or business (whether or not incorporated) which, along with an employer, is
considered to be under common control pursuant to Section 414(c) of the Internal
Revenue Code shall, for purposes of the plan, be considered as a subsidiary that
has not adopted the plan.
1.5 PLAN ADMINISTRATION, THE COMMITTEE
The plan is administered by the Pension and Investment Committee (the
"committee") consisting of three or more members appointed by the company, as
provided in Section 11.
1.6 TRUSTEES, TRUST AGREEMENTS, TRUST FUNDS
Funds contributed by the employers and employees participating in the
plan are held and invested in one or more trust funds, until distributed, by one
or more corporate trustees appointed by the committee. The trustee of each such
trust fund acts under a trust agreement between the employers and that trustee.
Unless indicated otherwise by the context, the terms "trustee", "trust fund" and
"trust agreement" shall mean, respectively, all trustees, trust funds and trust
agreements described above.
1.7 PRESERVATION OF BENEFITS
The benefits provided under the plan on and after the restatement
effective date for or with respect to any participant who retired or whose
employment with the USG Companies otherwise terminated prior to the restatement
effective date will, except as otherwise specifically provided herein or
required by law, continue to be governed by the
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terms of the plan as in effect as of the date of the participant's retirement or
other termination of employment. As to employees participating in the plan on
the restatement effective date, it is intended that the benefits they earned
under the plan prior to that date shall be preserved unless limited by Section
8. If the committee determines that any such benefits have not been provided for
under the terms and provisions of the plan as in effect on and after the
restatement effective date, the committee shall direct the payment of such
benefits from the plan to the participant or other person entitled to them. The
benefits provided under the plan for or with respect to any participant who
retired or whose employment with the USG Companies otherwise terminated prior to
the date an amendment to the plan became effective or a provision of the plan
was deleted pursuant to an amendment will, except as otherwise specifically
provided herein or required by law, continue to be governed by the terms of the
plan as in effect on the date of the participant's retirement or other
termination of employment.
1.8 PREDECESSOR PLANS
Certain pension plans maintained by subsidiaries of the company were
merged into this plan prior to the restatement effective date and special
provisions relating to persons covered under those plans were or are attached to
this plan as a part thereof. Any such pension plan merged into this plan before
the restatement effective date and any pension or profit sharing plan merged
into this plan on or after the restatement effective date is referred to below
as a "predecessor plan". Any other pension plan or any profit sharing plan
maintained by the company or any subsidiary which adopts this plan may be merged
into this plan with the consent of the company. Special provisions relating to
employees or other persons covered under any such pension or profit sharing plan
when it is merged into this plan may be set forth in one or more supplements
which, by amendment, will be attached to and form a part of this plan.
1.9 SUPPLEMENTS
In addition to supplements described in subsection 1.8, from time to
time, by amendment, supplements have been and may continue to be attached to
this plan, which supplements shall form a part of this plan for the purpose of
modifying provisions of the plan to the extent such provisions apply to any
particular group of employees or other persons entitled to benefits under the
plan. If it is deemed necessary or desirable to set forth additional, substitute
or retroactive terms and provisions of the plan as applied to such group of
employees or other persons, including provisions to preserve benefits
attributable to an employee's participation in any other pension plan maintained
by an employer or predecessor of an employer, such supplement will specify the
group of employees or other persons to which it applies and will supersede the
provisions of this plan to the extent necessary to eliminate any inconsistencies
between the plan and such
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supplement. Prior to the restatement effective date, the plan had eleven
Supplements (the titles of which are listed in Supplement 1). The provisions of
such supplements as in effect immediately prior to the restatement effective
date are incorporated herein by reference.
1.10 EXAMINATION OF PLAN DOCUMENTS
Copies of the plan and trust agreement, and any amendments thereto,
will be on file at the principal office of each employer where they may be
examined by any participant. The provisions of and benefits under the plan are
subject to the terms and provisions of the trust agreement.
1.11 GENDER AND NUMBER
Where the context admits, words in the masculine gender shall include
the feminine and neuter genders, the plural shall include the singular, and the
singular shall include the plural.
1.12 NOTICES
Any notice or document required to be given to or filed with the
committee shall be considered as given or filed if delivered or mailed by
registered mail, postage prepaid, to the corporate secretary of the company, 125
South Franklin Street, Chicago, Illinois 60606.
1.13 COMBINATION DEFINED BENEFIT AND DEFINED CONTRIBUTION PLAN
Since its establishment, the plan has been designed to meet the
requirements of a qualified defined benefit plan under Section 401(a) of the
Internal Revenue Code. As described in subsection 2.5 and pursuant to Section
414(k) of the Internal Revenue Code, each participant's contributions made for
periods beginning on or after January 1, 1991 have been or shall be credited to
a separate account maintained under the plan in the participant's name.
Participant contributions credited to separate accounts shall be invested under
the trust fund, and the separate accounts shall be adjusted to reflect
investment gain or losses and unrealized appreciation or depreciation in the
value of the trust fund, all as provided for in subsection 2.6. As a result of
the establishment of separate accounts, Section 414(k) of the Internal Revenue
Code requires that the plan be treated as a defined contribution plan for
purposes of Section 410 of the Internal Revenue Code (relating to minimum
participation standards) and that for purposes of Internal Revenue Code Sections
72(d) (relating to treatment of employee
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contributions as a separate contract), 411(a)(7)(A) (relating to minimum vesting
standards), 415 (relating to limitations on benefits and contributions under
qualified plans), and 401(m) (relating to nondiscrimination tests for employee
after-tax contributions) the plan be treated as a defined contribution plan to
the extent benefits are based on the separate accounts of participants and as a
defined benefit plan with respect to the remaining portion of benefits provided
under the plan.
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SECTION 2
ELIGIBILITY FOR PARTICIPATION AND
PARTICIPANT CONTRIBUTIONS
2.1 COVERED EMPLOYEE, PARTICIPANT, ELIGIBILITY DATE
The term "covered employee" means an employee who is a member of a
group of employees of an employer to which the plan has been and continues to be
extended by the company or by agreement, and who, effective January 1, 2000, is
not classified by the employer as a temporary employee. The term "participant"
means an employee of a USG Company who, after becoming eligible for
participation in the plan, is enrolled in the plan pursuant to this Section 2
and also means a former employee of the USG Companies who either is receiving
benefits under the plan or is entitled to receive benefits under the plan
commencing on a future date. The term "eligibility date" means for any employee
the first day of the calendar month that is determined, in accordance with
uniform and consistent rules established by the committee, by reference to (and
not later than the 90 days after) the date on which the employee first performs
an hour of service as a covered employee. In the case of an employee who
declines to make contributions under subsection 2.5 when the employee is first
eligible to do so, the term "eligibility date" means the first day of a
subsequent calendar month. In the case of a former employee who is reemployed by
an employer, the term "eligibility date" also includes any other date described
in subparagraphs 9.1(a) and 9.2(b) on which such employee is entitled to become
enrolled in the plan. If an employee of a USG Company becomes a covered employee
more than six months after the date the employee completes twelve months of
employment with the USG Companies, the date the employee so becomes a covered
employee also shall be an "eligibility date." For purposes of determining
eligibility to become a participant in the plan, the term "employee" for any
plan year means any individual who is treated and/or classified by the employer
for such plan year as an employee for purposes of employment taxes and wage
withholding for Federal income tax. Except as specifically provided in
subparagraph 2.8(c), individuals who perform services for an employer as
independent contractors, leased employees, or through agencies are not employees
of the employer and therefore are not eligible for benefits under this plan. If
an individual is not considered to be an employee of an employer for purposes of
employment taxes and wage withholding, a subsequent determination by the
employer, any governmental agency or court that the individual is a common law
employee of the employer, even if such determination is applicable to prior
years, will not have a retroactive effect for purposes of eligibility to
participate in the plan for any plan year. A temporary employee is an employee
who is classified as such by the employer and is employed usually for less than
90 days with a specified date beyond which employment will not continue; interns
(i.e. students who are employed during
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summer and other vacations) and co-op students (i.e. students who receive school
credit for employment with the employer) are considered temporary employees.
2.2 ELIGIBILITY
Subject to the conditions and limitations of the plan, each employee
of an employer who is a participant in the plan immediately before the
restatement effective date will continue as such on and after that date so long
as the employee remains a covered employee. Each other employee of an employer
will be eligible to become enrolled in the plan and become a participant on any
eligibility date occurring on or after that date if the employee then is a
covered employee.
2.3 NOTICE OF ELIGIBILITY, ENROLLMENT
Each employee will be notified of the date the employee is eligible to
become enrolled in the plan and become a participant and will be furnished with
appropriate enrollment materials pursuant to procedures established by the
committee in regard to enrollment. An eligible employee will be deemed to have
elected to make the contributions described in subsection 2.5 unless the
employee elects not to become a participant in accordance with such procedures.
By becoming enrolled in the plan, the participant authorizes the employer to
deduct from the compensation otherwise payable to the employee by such employer
the contributions the employee is required to make under subsection 2.5 in order
to become a participant in the plan.
2.4 LEAVE OF ABSENCE
A "leave of absence" as used in the plan means:
(a) A leave of absence required by law or granted by a USG Company on
account of service in military or governmental branches described
in any applicable statute granting reemployment rights to
employees who entered such branches, or any other military or
governmental branch designated by the company.
(b) Any other absence from active employment with a USG Company under
conditions which are not treated by it as a termination of
employment. A participant shall be considered on a paid leave of
absence for the period over which the participant receives
payment from an employer as a "continuing employee" in accordance
with the terms of a
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written employment or other agreement between the participant and
the employer.
Leaves of absence granted by a USG Company will be governed by rules uniformly
applied to all employees similarly situated. An employee on a leave of absence
will be considered an employee of an employer for all purposes of the plan, and
a participant on a paid leave of absence will continue to be eligible to
participate in the plan.
2.5 PARTICIPANT CONTRIBUTIONS
Prior to January 1, 1999, an employee elected to enroll in the plan by
affirmatively electing to make contributions to the plan through payroll
deduction in such amount as provided in the plan as amended from time to time.
Effective January 1, 1999, an employee who is eligible to participate in the
plan under subsection 2.2 shall be deemed to have elected to make contributions
to the plan by payroll deduction in an amount equal to 2 percent of the
employee's earnings unless the employee affirmatively elects not to make such
contributions, any such election to be made at such time and in such manner as
the committee may determine. A participant's earnings shall be subject to the
limitation imposed by Section 401(a)(17) of the Internal Revenue Code for the
purpose of determining the amount of the participant's contributions, as well as
for other purposes, as described in subsection 8.5. However, if a participant
should discontinue making contributions, the period of discontinuance shall not
be included in the participant's number of years of credited service and benefit
service (as defined in subsections 4.2 and 4.3). If a participant discontinues
making contributions under the plan, at any time thereafter the participant may
elect to resume making contributions (provided the participant is a covered
employee) by electing, in such form and at such time as the committee may
determine to authorize the employer to deduct contributions from the
participant's earnings. The committee shall maintain a separate account under
the plan in the name of each participant ("separate account") pursuant to
Section 414(k) of the Internal Revenue Code and all participant contributions
for periods commencing on or after January 1, 1999 shall be credited to
participant separate accounts as provided in subsection 2.6, (along with any
such contributions made for the period commencing January 1, 1991 and ending
December 31, 1998).
2.6 SEPARATE ACCOUNTS
Pursuant to Section 414(k) of the Internal Revenue Code, the committee
shall maintain separate accounts in the name of each participant, and the
following shall apply:
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(a) No participant contributions may be made to the plan other than
participant contributions in amounts determined under subsection
2.5 that are allocated and credited to participants' separate
accounts. Such contributions shall be invested in one or more
investment funds (the "investment funds") maintained within the
trust funds that are selected by the committee, as provided in
the trust agreement. Participant contributions made and credited
to their separate accounts shall be subject to the
nondiscrimination requirements of Section 401(m) of the Internal
Revenue Code, as described in subsections 8.12 and 8.13. Prior to
January 1, 1991, participants made contributions to the plan but
such contributions were not allocated to separate accounts in the
participant's name; participant contributions for periods on or
after January 1, 1991 have been or will be allocated to the
separate accounts described in this subsection.
(b) At the end of each plan year participants' separate accounts
shall be adjusted to reflect actual investment gains or losses
and unrealized appreciation or depreciation in the value of the
assets of the investment funds; provided, however, that the
separate account of a participant whose retirement date or
employment termination date occurs during a plan year shall be
adjusted as of the end of the calendar month in which the
participant's retirement or employment termination occurs to
reflect the account's pro rata share of investment experience of
the investment funds since the end of the next preceding plan
year.
(c) A participant always shall have a fully vested and nonforfeitable
interest in the participant's separate account as adjusted from
time to time as described in subparagraph (b) next above and in
the participant's monthly separate account benefit in the event
the participant's separate account balance is converted into such
a benefit.
(d) If upon a participant's retirement date or employment termination
date the participant becomes entitled to a monthly retirement
income or a deferred vested benefit in addition to a monthly
benefit provided by the balance in the participant's separate
account, the amount of such monthly retirement income or deferred
vested benefit shall be
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determined in accordance with the applicable provisions of
Section 5 or Section 6, but with the resulting amount reduced on
an actuarially equivalent basis by the amount of monthly benefit
that could be provided with the participant's separate account
balance. Unless within the 90-day period next following the
participant's retirement date or employment termination date the
participant is eligible to and elects that the participant's
separate account balance be distributed in a lump sum pursuant to
subsection 5.5 or 6.3, or unless the participant's entire plan
benefits are to be distributed either pursuant to the
participant's election, if eligible therefor, of the lump sum
option provided under subparagraph 7.4(d) or because of the
provisions of subsection 7.9, the participant's separate account
balance shall be converted to a monthly separate account benefit
which shall be combined with the monthly retirement income or
deferred vested benefits the participant is entitled to receive
under the plan and distributed pursuant to the provisions of
Section 7.
(e) If a participant's employment with the USG Companies terminates
for a reason other than retirement under the plan or death, and
prior to completion of five years of credited service, then,
subject to the consent requirements set forth in subparagraph
7.8(a), the balance in the participant's separate account as
adjusted as of the end of the calendar month in which the
participant's employment termination occurred shall be
distributed to the participant in a lump sum as provided in
subsection 6.4 along with benefits attributable to the
participant's pre-1991 participant contributions.
(f) If a participant's death occurs during employment, death benefits
attributable to the participant's separate account as well as the
participant's pre-1991 participant contributions shall be payable
as provided in subsection 6.5.
(g) The entire benefits a participant becomes entitled to under the
plan, including the accrued benefits derived from the
participant's separate account (as defined in subparagraph
7.10(d)), shall be subject to the provisions of Section 7
relating to the normal and optional forms of benefit payments,
including qualified joint and survivor annuity requirements.
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2.7 U.S. FOREIGN SERVICE EMPLOYEE
It is intended that a U.S. foreign service employee (as defined below)
may become eligible to become a participant in the plan and share in the
benefits provided under the plan to the same extent as if the employee were
employed by the company. A "U.S. foreign service employee" means a person who is
a citizen of the United States and is employed:
(a) By a subsidiary incorporated outside the United States that
qualifies as a "foreign affiliate", as defined in Section 406 of
the Internal Revenue Code, and as to which the company has
entered into an agreement under Section 3121(1) of the Internal
Revenue Code; or
(b) By a subsidiary that qualifies as a "domestic subsidiary" of an
employer that qualifies as a "domestic parent corporation", both
as defined in Section 407 of the Internal Revenue Code,
and for whom contributions under a funded plan of deferred compensation (whether
or not a plan described in Section 401(a) or 403(a) of the Internal Revenue
Code) are not provided by any other person with respect to remuneration paid to
such individual by that foreign affiliate or domestic subsidiary.
2.8 LEASED EMPLOYEES
Leased employees shall be treated under the plan as follows:
(a) Leased employees shall be considered employees of the USG
Companies for purposes of determining whether the plan satisfies
the requirements for plan qualification set forth in Section
414(n)(3) of the Internal Revenue Code. In making this
determination, contributions and benefits provided by the leasing
organization that are attributable to services performed for the
USG Companies shall be treated as provided by the USG Companies.
(b) If leased employees do not constitute more than 20 percent of the
USG Companies' nonhighly compensated workforce, subparagraph (a)
next above shall not apply to a leased employee who is covered by
a plan described in Section 414(n)(5)(B) of the Internal Revenue
Code.
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(c) Leased employees shall be eligible to participate in this plan
only if and to the extent necessary to satisfy the applicable
requirements set forth in Section 414(n)(3) of the Internal
Revenue Code. With respect to any leased employee (including a
leased employee who becomes a participant in this plan through
operation of this subsection 2.9 or otherwise), the requirements
of Section 414(n)(4)(B) of the Internal Revenue Code relating to
"years of service" shall be taken into account for purposes of
subsection 9.3.
(d) A "leased employee" means any person who is not otherwise an
employee of a USG Company and who, pursuant to an agreement
between USG Corporation and any other person, has performed
services for USG Corporation, or for USG Corporation and related
persons (determined in accordance with Section 414(n)(6) of the
Internal Revenue Code), on a substantially full-time basis for a
period of at least one year, and effective January 1, 1997 such
services are performed under the primary direction or control of
USG Corporation.
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SECTION 3
RETIREMENT DATES, EMPLOYMENT TERMINATION DATE
3.1 NORMAL RETIREMENT DATE
A participant's "normal retirement date" will be the first day of the
calendar month next following the calendar month in which the participant
attains age 65 years ("normal retirement age").
3.2 DEFERRED RETIREMENT DATE
A participant's "deferred retirement date" will be the first day of
the calendar month next following the calendar month in which the participant
retires or is retired from the employ of the USG Companies after the
participant's normal retirement date.
3.3 EARLY RETIREMENT DATE
A participant's "early retirement date" will be the first day of the
calendar month next following the calendar month in which the participant
retires or is retired from the employ of the USG Companies before the
participant attains normal retirement age but after the participant has:
(a) both attained age 55 years and completed ten years of credited
service; or
(b) both attained age 50 years and completed fifteen years of
credited service.
3.4 DISABILITY RETIREMENT DATE
A participant's "disability retirement date" will be the first day of
the calendar month next following the calendar month in which the participant is
retired from the employ of the USG Companies before the participant's normal
retirement date because of total and permanent disability (as described in
subsection 5.7), but after the participant has completed ten years of credited
service.
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3.5 RETIREMENT DATE
Reference to the "retirement date" of a participant who retires or is
retired under the plan means the participant's normal retirement date if the
participant's retirement date occurs on that date, but otherwise means the
participant's deferred retirement date, early retirement date or disability
retirement date, whichever applies in the participant's case.
3.6 EMPLOYMENT TERMINATION DATE
A participant's "employment termination date" will be the date on
which the participant's employment with the USG Companies terminates before the
participant qualifies for retirement on a retirement date.
3.7 RETIREMENT OR TERMINATION WHILE ON LEAVE OF ABSENCE
A participant otherwise eligible to retire or terminate employment and
become entitled to retirement income or deferred vested benefits under the plan
may do so without returning to active employment with the USG Companies if the
participant is absent from work because of a leave of absence (as defined in
subsection 2.4).
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SECTION 4
BASES OF RETIREMENT INCOME AND OTHER BENEFITS
4.1 GENERAL
A participant's eligibility for benefits under the plan will be based
on the participant's credited service, as well as the participant's age, and the
amount of the benefits payable to a participant will be based on the
participant's age and on the participant's benefit service, final average
earnings and primary social security benefit, as defined in, or determined in
accordance with, the following provisions of this Section 4. To the extent the
records of the USG Companies are not sufficient to provide all required data and
information in making such determinations, reasonable estimates shall be used.
4.2 CREDITED SERVICE
Subject to the provisions of subsections 2.2 and 4.4, and Section 9, a
participant's "credited service" means the total of the period or periods of
credited service granted to the participant in accordance with the following:
(a) Pre-1976 Service. The participant shall be granted credited
service attributable to the participant's last continuous period
of employment with the USG Companies, if any, up to January 1,
1976, as determined in accordance with the provisions of the plan
as in effect prior to that date.
(b) Post-1976 Service.
(i) If the participant had joined the plan before January 1,
1976 the participant shall be granted a month of credited
service for each calendar month beginning on or after that
date in which the participant is a participant in the plan
and makes the contributions required of the participant
under subsection 2.5.
(ii) If the participant joins the plan on or after January 1,
1976 and on the first eligibility date the participant is
eligible to do so:
(A) The participant shall be granted a year of credited
service for
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each plan year beginning on or after January 1, 1976 in
which the participant has been employed by one or more
of the USG Companies for at least 90 days, and a month
of credited service for each calendar month within each
plan year beginning on or after January 1, 1985 in
which the participant works for the USG Companies less
than 90 days, provided each such plan year occurs prior
to the plan year in which the participant becomes a
participant; and
(B) The participant shall be granted a month of credited
service for each calendar month in which the
participant is a participant in the plan and makes the
contributions required of the participant under
subsection 2.5 and, if the eligibility date on which
the participant was first eligible to join and on which
the participant joined the plan occurred on July 1, the
participant will be granted a month of credited service
for each calendar month occurring during the six month
period ending immediately before that eligibility date.
(iii) If the participant joins the plan after January 1, 1976 and
after the first eligibility date the participant is eligible
to do so:
(A) The participant shall be granted a year of credited
service for each plan year beginning on or
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after January 1, 1976 in which the participant has been
employed by one or more of the USG Companies for at
least 90 days, and a month of credited service for each
calendar month within each plan year beginning on or
after January 1, 1985 in which the participant works
for the USG Companies less than 90 days, provided each
such plan year occurs prior to the plan year in which
the participant is first eligible to join the plan; and
(B) The participant shall be granted a month of credited
service for each calendar month occurring prior to the
first eligibility date on which the participant could
have joined the plan but in the plan year in which that
date occurs and a month of credited service for each
subsequent calendar month in which the participant is a
participant in the plan and makes the contributions
required of the participant under subsection 2.5, but
the period beginning on the first eligibility date on
which the participant could have joined the plan and
ending immediately before the eligibility date on which
the participant did join the plan shall not be
considered as credited service.
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4.3 BENEFIT SERVICE
Subject to the provisions of subsections 2.2, 4.4, and Section 9, a
participant's "benefit service" means the total of the period or periods of
benefit service granted to the participant in accordance with the following:
(a) Pre-1976 Service. The participant, if eligible therefor pursuant
to subsection 4.4, shall be granted benefit service equal to the
period of credited service granted to the participant, if any,
under subparagraph 4.2(a) based upon the participant's last
continuous period of employment with the USG Companies up to
January 1, 1976; except that the participant shall not be granted
benefit service for any portion of such credited service which
extends beyond the participant's normal retirement date.
(b) Post-1976 Service.
(i) If the participant had joined the plan before January 1,
1976 the participant shall be granted a month of benefit
service for each calendar month beginning on or after that
date in which the participant is a participant in the plan
and makes the contributions required of the participant
under subsection 2.5.
(ii) If the participant joins the plan on or after January 1,
1976 and on the first eligibility date the participant is
eligible to do so, the participant shall be granted a month
of benefit service for each calendar month beginning on or
after January 1, 1976 in which the participant is employed
by one or more of the USG Companies as a covered employee
and which ends prior to the date the participant became a
participant, unless the committee determines otherwise or
unless the participant is granted additional benefit service
based on employment with a predecessor company pursuant to
subparagraph 4.4(d), and the participant also will be
granted a month of benefit service for each calendar month
in which the participant is a participant in the
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plan and makes the contributions required of the participant
under subsection 2.5.
(iii) If the participant joins the plan after January 1, 1976 and
after the first eligibility date the participant is eligible
to do so, the participant shall be granted a month of
benefit service for each calendar month in which the
participant is a participant in the plan and makes the
contributions required of the participant under subsection
2.5, but any period of service beginning after January 1,
1976 and ending prior to the eligibility date on which the
participant joined the plan shall not be considered as
benefit service.
4.4 SPECIAL RULES AS TO CREDITED SERVICE AND BENEFIT SERVICE
(a) The period a participant is on an unpaid leave of absence
described in subsection 2.4 shall be disregarded in determining
the participant's credited service and benefit service for
purposes of the plan except that the portion of a leave of
absence described in subparagraph 2.4(a) due to active military
service not in excess of five years shall be considered as
credited service and benefit service for all purposes of the plan
if:
(i) In the case of a leave of absence that ended on or prior to
December 4, 1994, the leave satisfied the requirements of
the Plan as in effect on the date such leave ended.
(ii) In the case of any such leave that ends on or after December
4, 1994, credited service and benefit service shall be
granted in accordance with Section 414(u) of the Internal
Revenue Code, provided within a period of time not in excess
of three times the period of military service (but not in
excess of five years), the participant contributes to the
plan an amount equal to the contributions the participant
would have been required to make had the participant
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not been on such leave of absence (assuming that the
participant received compensation during the entire period
of such leave of absence at the same level or rate of the
participant's compensation immediately prior to the
commencement of such leave).
(b) If a participant in another pension plan maintained by an
employer or by a USG Company that has not adopted this plan is
transferred to a group of employees of an employer to which this
plan has been extended, if the committee determines that the
provisions of this subparagraph (b) apply with respect to such
transfer, and if the participant enrolls in the plan and becomes
a participant when first eligible to do so and makes all
contributions required of the participant under this plan prior
to the participant's retirement date or employment termination
date, then, in addition to the credited service and benefit
service the participant is granted under this plan as a result of
the participant's employment with the USG Companies, the
participant shall be granted credited service and benefit service
for purposes of the plan equal to the service the participant had
been granted under such other pension plan for the same purposes,
but any benefits the participant is entitled to receive under
this plan shall be offset by any benefits the participant is
entitled to receive under such other pension plan to the extent
provided in subsection 8.10 of this plan.
(c) A period of concurrent employment with two or more employers will
be considered as employment with only one employer during that
period.
(d) Unless otherwise provided in the plan, or unless otherwise
specified by the committee or required by law:
(i) an employee's service with a predecessor company will not be
considered as service with a USG Company if the employee is
transferred to employment with a USG Company; and
(ii) if a predecessor company becomes a subsidiary of the
company, service with the predecessor
-20-
company before it becomes a subsidiary will not be
considered as service with a USG Company.
For the purpose of determining a participant's eligibility to receive a
retirement income or deferred vested benefit, or for the purpose of computing
the amount of a participant's retirement income or deferred vested benefit, the
participant's "number of years of credited service" or "number of years of
benefit service" means the total of the participant's years and months of such
service determined in accordance with the foregoing provisions of this
subsection for that purpose.
4.5 EARNINGS
Subject to the annual compensation limit (as defined in subsection
8.5), a participant's "earnings" means the total compensation payable to the
participant for services rendered to the employers as an employee that is
subject to withholding for United States federal income tax purposes (before
taking into account any withholding exemptions), or would be subject to such
withholding if the participant were employed by a United States employer, and
also means the participant's before-tax contributions made under USG Corporation
Investment Plan and before-tax contributions, if any, made under an employer's
cafeteria plan described in Section 125 of the Internal Revenue Code, and any
qualified transportation fringe payable by an employer that is not includible in
income by reason of Section 132 (f)(4) of the Internal Revenue Code, exclusive
of:
(a) any compensation paid in a form other than cash (except that
awards granted in the form of travel paid for by the company
shall be included), or paid for a period the participant either
has discontinued contributions the participant otherwise is
required to make or has ceased to be a covered employee, and any
compensation paid, or deemed to have been paid for tax purposes,
under a nonqualified deferred compensation plan or program that
had been earned but deferred in the current or a prior taxable
year;
(b) any transfer or relocation bonus;
(c) any amounts paid to the participant pursuant to a Termination
Compensation Agreement and any other severance payments made as a
result of the participant's termination of employment;
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(d) any income realized as a result of the exercise of an option or
options to acquire employer stock, the receipt of a cash
appreciation payment in lieu of the exercise of such an option or
options, the disposition of stock acquired as a result of the
exercise of such an option or options, or the transfer of
restricted employer stock or property; and
(e) any SELECTBENEFITS credits realized as a result of the exchange
of vacation time or medical plan coverage for compensation under
USG SelectBenefits.
Compensation paid to a participant by a USG Company or a predecessor company for
a period of service before the participant became a participant that is
designated as benefit service pursuant to subparagraph 4.4(b) or (d) shall be
considered as compensation paid by the employers in determining the
participant's "earnings". Except as otherwise provided in the next preceding
sentence, any compensation paid to an employee or participant by a USG Company
that is not an employer under the plan or by a predecessor company (or that
would have been paid but for the employee's or participant's salary reduction
authorization in effect under a defined contribution plan or cafeteria plan by
any such corporation) shall not be considered as "earnings" for purposes of the
plan. Any lump sum payment payable to a participant as a "hiring bonus" or cash
incentive to become employed by a USG Company (even if such payment is
contingent on the participant remaining employed by a USG Company for a
specified period of time) shall be considered earnings for purposes of the plan.
4.6 FINAL AVERAGE EARNINGS
The "final average earnings" of a participant means the monthly
average of the earnings paid to the participant (or, because of a salary
reduction authorization, deemed to have been paid) during the period of 36
consecutive calendar months in which the participant received the participant's
highest earnings within the period of 180 consecutive calendar months ending
with the calendar month next preceding the calendar month in which the
participant's employment with all of the USG Companies terminates by retirement
or otherwise. Such average shall be computed by dividing the total of the
participant's earnings for such period of 36 consecutive calendar months by 36,
or by the number of calendar months within that period for which the participant
received earnings, if less than 36. A participant's earnings shall be subject to
the annual compensation limit in determining the amount of the participant's
final average earnings, as described in subsection 8.5.
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4.7 PRIMARY SOCIAL SECURITY BENEFIT
The term "primary social security benefit" means:
(a) With respect to a participant who retires:
(i) on a normal retirement date or who retires on a deferred
retirement date but did not accrue any benefits after the
participant's normal retirement date, the Primary Insurance
Amount payable to the participant under the Social Security
Act as in effect as of the date the participant attains
normal retirement age; or
(ii) on a deferred retirement date and had accrued benefits after
the participant's normal retirement date, the Primary
Insurance Amount payable to the participant under the Social
Security Act as in effect as of the participant's deferred
retirement date.
(b) With respect to a participant who retires on an early retirement
date, or becomes entitled to receive a deferred vested benefit
under Section 6, the Primary Insurance Amount payable to the
participant at the participant's normal retirement date under the
Social Security Act as in effect on the date the participant's
employment with all of the USG Companies terminates because of
retirement or otherwise, based upon the assumptions that (i) the
participant's annual compensation in the calendar years prior to
the year of the participant's retirement or earlier termination
of employment (annualized, where the participant worked for less
than a full year) had increased at the same rate as the actual
change in average national wages as determined by the Social
Security Administration, (ii) the participant would have
continued in covered employment for purposes of the Act until the
participant would have attained normal retirement age under the
Act, and (iii) the participant would have continued to receive
earnings from a USG Company until the participant attained normal
retirement age at a rate equal to the rate in effect immediately
prior to the participant's early retirement date or employment
termination date, but multiplied by a fraction, the numerator of
which is the participant's years of
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benefit service at the participant's retirement or earlier
termination of employment and the denominator of which is the
years of benefit service the participant would have had in the
event the participant had continued in the employ of the USG
Companies until the participant's normal retirement date.
Notwithstanding the foregoing, within a reasonable period of time
following the participant's early retirement date or employment
termination date and the time the participant is notified of the
benefit to which the participant is entitled under the plan, a
participant may provide the committee with a record prepared by
the Social Security Administration of the participant's covered
compensation for prior years, which record of prior compensation
will be used in determining the participant's estimated Primary
Insurance Amount payable to the participant at the participant's
normal retirement date.
(c) With respect to a participant who is retired on a disability
retirement date, the Disability Insurance Benefit payable to the
participant at or after the participant's disability retirement
date under the Social Security Act as in effect on that date.
The applicable portion of a participant's primary social security benefit will
be deducted in accordance with the provisions of Section 5 or 6, as the case may
be, in determining the amount of benefits payable to the participant under the
plan even though the participant may not be receiving or may not be eligible to
receive social security benefits because of failure to apply for them, entry
into covered or restricted employment, or otherwise.
4.8 MONTHLY SEPARATE ACCOUNT BENEFIT
For purposes of the plan, a participant's "monthly separate account
benefit" means the amount of monthly benefit that could be provided to the
participant for life commencing on the participant's normal retirement date (or
on the participant's deferred retirement date if the participant's normal
retirement date has occurred) with the balance in the participant's separate
account as adjusted as described in subparagraph 2.6(b) as at the end of the
calendar month in which the participant's retirement or other termination of
employment occurs, determined on the basis of the actuarial factors and
assumptions set forth in paragraphs A-4 and A-6 of Exhibit A.
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4.9 DETERMINATION OF BASES OF BENEFITS
A participant's credited service, benefit service, final average
earnings, primary social security benefit and any other factors relating to
benefits payable to the participant under the plan shall be determined by the
committee pursuant to the foregoing provisions of this Section 4 on the basis of
the employers' records and on the basis of reasonable estimates where such
records are not sufficient to provide all required data and information.
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SECTION 5
AMOUNT OF RETIREMENT INCOME
5.1 NORMAL RETIREMENT
Subject to the conditions and limitations of the plan, if on or after
the restatement effective date, a participant retires during the calendar month
in which the participant attains normal retirement age, the participant will be
entitled to a monthly retirement income for life commencing on the participant's
normal retirement date in an amount equal to the greater of:
(a) 1 percent of the participant's final average earnings multiplied
by the participant's number of years of benefit service; or
(b) 1.6 percent of the participant's final average earnings
multiplied by the participant's number of years of benefit
service, reduced by an amount equal to 50 percent of the
participant's primary social security benefit,
but reduced by the participant's monthly separate account benefit, and the
participant also shall be entitled to a monthly benefit for life commencing on
the participant's normal retirement date equal to the participant's monthly
separate account benefit.
5.2 DEFERRED RETIREMENT
Subject to the conditions and limitations of the plan, if a
participant retires after the calendar month in which the participant attains
normal retirement age the participant will be entitled to the participant's
monthly separate account benefit plus a monthly retirement income for life
commencing on the participant's deferred retirement date, determined as follows:
(a) If the participant did not make participant contributions after
the participant's normal retirement date pursuant to subsection
2.5, the participant's monthly retirement income will equal the
monthly amount that would have been payable in accordance with
subsection 5.1 if the participant had retired during the calendar
month in which the participant attained normal retirement age,
but the portion of the participant's monthly retirement income
equal to the accrued benefits derived from the participant's
pre-1991 contributions
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(as defined in subparagraph 7.10(c)) shall be increased on an
actuarially equivalent basis to reflect the commencement of the
participant's monthly retirement income on the participant's
deferred retirement date rather than on the participant's normal
retirement date, determined on the basis of the actuarial factors
and assumptions set forth in paragraphs A-5 and A-6 of Exhibit A.
(b) If the participant made participant contributions after the
participant's normal retirement date pursuant to subsection 2.5,
the participant's monthly retirement income will be determined in
accordance with subsection 5.1 but based on the participant's
final average earnings, number of years of benefit service,
primary social security benefit, and monthly separate account
benefit as at the participant's deferred retirement date.
(c) If during any calendar month within the period beginning on the
participant's normal retirement date and ending immediately prior
to the participant's deferred retirement date the participant
received compensation from the employers for hours of service (as
defined in United States Department of Labor Regulations
2530.200(b)-2(a)(1) and (2)) performed in fewer than eight days
or separate work shifts, the portion of the participant's monthly
retirement income equal to the accrued benefits derived from
employer contributions (as defined in subparagraph 7.10(e)) shall
be increased on an actuarially equivalent basis to reflect such
calendar month as required by United States Department of Labor
Regulation 2530.203-3, but, if subparagraph (b) next above
applies to the participant, only to the extent such increased
amount would exceed the monthly benefit the participant accrues
for the same calendar month.
5.3 EARLY RETIREMENT BENEFITS
The provisions of this subsection and of subsections 5.4 and 5.5 and
any other provisions of the plan relating to the payment of early retirement
benefits shall not apply to participants who terminate employment with the USG
Companies after having completed ten or more years of credited service but
before their early retirement date (as defined in subsection 3.3) nor to
participants who are retired because of total and permanent disability after
having completed ten or more years of credited service,
-27-
irrespective of their age. Subject to the conditions and limitations of the
plan, if a participant retires or is retired on an early retirement date the
participant will be entitled to a monthly retirement income for life commencing
on the participant's normal retirement date plus the participant's monthly
separate account benefit. The amount of the participant's monthly retirement
income shall be in an amount equal to the participant's accrued monthly benefit
(as defined in subsection 5.9) as at the participant's early retirement date.
5.4 ELECTION OF EARLY COMMENCEMENT OF EARLY RETIREMENT BENEFITS
Subject to the conditions and limitations of the plan, a participant
who because of the participant's retirement on an early retirement date is
entitled to the participant's monthly separate account benefit and a monthly
retirement income under subsection 5.3 commencing on the participant's normal
retirement date may elect to receive in lieu thereof a reduced monthly separate
account benefit and reduced monthly retirement income commencing on the
participant's early retirement date or on the first day of any subsequent
calendar month that occurs before the participant's normal retirement date by
filing a written election with the committee prior to the date on which payment
of such benefits is to commence. If such a participant elects early commencement
of the participant's monthly separate account benefit and monthly retirement
income, the amount of monthly separate account benefit and monthly retirement
income that otherwise would have been payable to the participant at the
participant's normal retirement date but for the participant's election shall be
reduced by 5/12 of 1 percent for each full calendar month that the commencement
date of such monthly separate account benefit and monthly retirement income
precedes the participant's normal retirement date, except that:
(a) If the participant had attained age 62 years and the
participant's attained age and number of years of benefit service
at the participant's early retirement date equaled 82 or more but
less than 90, the reduction shall be at the rate of 1/4 of 1
percent rather than 5/12 of 1 percent.
(b) If the participant had attained age 62 years and the
participant's attained age and number of years of benefit service
at the participant's early retirement date equaled 90 or more,
there shall be no reduction.
(c) If the participant had not attained age 62 years but the
participant's attained age and number of years of benefit service
at the participant's early retirement date equaled 90 or more,
the reduction shall be the percentage set forth below
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which corresponds to the age the participant had attained on the
participant's early retirement date, but adjusted on a pro rata
basis to reflect the fractional period, if any, in excess of the
full years of the participant's attained age at the participant's
early retirement date:
Age Percentage
--- ----------
61 3%
60 6%
59 9%
58 12%
57 15%
56 18%
55 21%
5.5 LUMP SUM PAYMENT OF EARLY RETIREMENT BENEFITS DERIVED FROM PARTICIPANTS'
CONTRIBUTIONS
Subject to the consent requirements set forth in subparagraph 7.8(a),
a participant who retires or is retired on an early retirement date may file a
written election with the committee within the 90-day period next following the
participant's early retirement date for a lump sum payment equal to the
participant's pre-1991 participant contributions with interest thereon computed
in accordance with paragraph A-2 of Exhibit A up to the date such lump sum
payment is made plus an amount equal to the participant's separate account
balance as adjusted as of the end of the calendar month immediately prior to the
date such lump sum payment is made. Such lump sum payment shall be made to the
participant as soon as practicable thereafter; provided, however, that:
(a) If the lump sum actuarially equivalent value of the participant's
accrued benefits derived from employer contributions does not
exceed $5,000 (but subject to the consent requirements set forth
in subparagraph 7.8(a) if the lump sum actuarially equivalent
value of the participant's total accrued benefits exceeds
$5,000), the lump sum payment will be an amount equal to the lump
sum actuarially equivalent value of the participant's total
accrued benefits. Unless the participant subsequently is
reemployed by an employer and again becomes an active participant
and makes the required contributions, no other benefits shall be
payable under the plan to, or with respect to, the participant.
-29-
(b) If the lump sum actuarially equivalent value of the participant's
total accrued benefits is not paid to the participant pursuant to
subparagraph (a) next above, the monthly retirement income
otherwise payable to the participant commencing at the
participant's normal retirement date (or any earlier date
permitted above) shall be based on the participant's total
accrued benefits reduced on an actuarially equivalent basis to
reflect the lump sum payment made under this subsection, unless
the participant subsequently is reemployed by an employer and
again becomes an active participant and makes required
contributions.
5.6 DISABILITY RETIREMENT
The provisions of this subsection and subsections 5.7 and 5.8, and any
other provisions of the plan, relating to the payment of disability benefits
shall not apply to a participant who terminates employment with the USG
Companies for a reason other than retirement under the plan (including
retirement because of total and permanent disability) and for a reason other
than the participant's death but after having completed ten or more years of
credited service, irrespective of whether the participant may later become
totally and permanently disabled. Subject to the conditions and limitations of
the plan, if a participant is retired on a disability retirement date because of
total and permanent disability, then, commencing on the participant's disability
retirement date, the participant will be entitled to a monthly retirement income
equal to the participant's accrued monthly benefit (as defined in subsection
5.9) plus an amount that is actuarially equivalent as at that date to the
participant's monthly separate account benefit. However, the portion of the
participant's monthly retirement income derived from employer contributions
shall be reduced by any benefits payable from time to time under Workers
Compensation or Occupational Disease laws for which the participant's employer
is liable (except fixed statutory payments for the loss of, or 100 percent loss
of use of, any bodily member). The offset required under subsection 5.1 with
respect to a participant's primary social security benefit shall assume the
participant is entitled to receive primary disability insurance benefits under
the Social Security Act. Any lump sum payment on account of Workers'
Compensation or Occupational Disease laws that is deductible pursuant to this
subsection shall be prorated on a monthly basis from the date of payment and no
monthly retirement income shall be due under the plan until such lump sum (as
prorated) is exhausted.
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5.7 TOTAL AND PERMANENT DISABILITY
A participant will be considered to be totally and permanently
disabled for the purposes of the plan if the participant is unable to engage in
any substantially gainful activity by reason of a medically determinable
physical or mental disability which has existed for six continuous months and
which can be reasonably expected to continue for at least 60 additional months
or result in death, exclusive of disability resulting from service in the armed
forces of any country or resulting from an intentional self-inflicted injury, or
participation in a felonious criminal act. The committee shall have the
responsibility for determining whether a participant has incurred a total and
permanent disability and, before approving payment of any disability retirement
income, may require reasonable proof of such disability.
5.8 CONDITIONS AS TO PAYMENT OF DISABILITY BENEFITS
For purposes of this subsection, reference to a participant's
"disability retirement income" means the sum of the monthly retirement income
the participant becomes entitled to receive under subsection 5.6 commencing on
the participant's disability retirement date and an amount that as of that date
is actuarially equivalent to the participant's monthly separate account benefit.
A participant's disability retirement income will be payable to the participant
pursuant to the applicable provisions of Section 7, subject to the following:
(a) If prior to the participant's normal retirement date the
committee determines that the participant no longer is totally
and permanently disabled (applying the description of total and
permanent disability set forth in subsection 5.7, but
irrespective of the period that has elapsed since the participant
first became totally and permanently disabled), or if the
participant refuses to submit to a medical examination at any
reasonable time prior to the participant's normal retirement date
(but not more frequently than semiannually) for the purpose of
verifying the continuance of the participant's disability,
payment of the participant's disability retirement income shall
cease and the participant shall be treated as if the participant
had terminated employment with the USG Companies on the
participant's disability retirement date for a reason other than
retirement because of disability. However, no disability
retirement income payments previously made to the participant
shall be deducted from any deferred vested benefit payments or
monthly retirement income payments to which the participant is
entitled
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thereafter; no lump sum payment shall be made to the participant
pursuant to subsection 6.3; and, in applying the provisions of
the plan relating to minimum benefits payable thereunder to a
participant, the disability retirement income payments previously
made to the participant shall be considered to have been deferred
vested benefit payments or monthly retirement income payments.
(b) If the participant's disability retirement income is not
discontinued prior to the participant's normal retirement date
pursuant to the provisions of subparagraph (a) next above, the
participant shall continue to be entitled to the same disability
retirement income on and after the participant's normal
retirement date, subject to the provisions of Section 7.
5.9 ACCRUED MONTHLY BENEFIT
For purposes of subsections 5.3, 5.6 and 6.1, a participant's "accrued
monthly benefit" as at any date means an amount equal to the greater of:
(a) 1 percent of the participant's final average earnings multiplied
by the participant's number of years of benefit service; or
(b) 1.6 percent of the participant's final average earnings
multiplied by the participant's number of years of benefit
service, reduced by an amount equal to 50 percent of the
participant's primary social security benefit,
but reduced by an amount that is actuarially equivalent to the participant's
monthly separate account benefit.
5.10 INCREASED BENEFITS FOR CERTAIN RETIRED PARTICIPANTS
Prior to the restatement effective date, the plan provided for an
increase in benefits payable for certain retirees effective prior to the
restatement effective date, and such increases shall continue after the
restatement effective date to those eligible under the terms of the plan as in
effect prior to such date. In addition, the monthly benefits otherwise payable
under the plan for the month of January 1999 (or such later calendar month
specified below), and for each subsequent calendar month, to the persons
described below shall be increased by 10 percent; provided, however, that such
monthly increase
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shall not be less than thirty dollars nor more than fifty dollars. Such increase
shall be made with respect to each participant who retired under the plan on or
before January 1, 1988 on the participant's normal retirement date or on an
early, disability or deferred retirement date and whose entire benefits were not
distributed to the participant in a lump sum or, if such participant's death
occurred before January 1, 1988, the person, if any, to whom survivor benefits
are payable under the plan because of the participant's death; provided such
increase shall only be paid to a person who immediately prior to the increase is
receiving a payment from the plan of $500 or less.
5.11 BENEFIT COMMENCEMENT CONSENT REQUIREMENTS
If the lump sum actuarially equivalent value of a participant's
nonforfeitable accrued benefits is greater than $5,000, written consent of the
participant and, if the participant has an eligible spouse at the time of the
commencement of the distribution of such benefits, the participant's eligible
spouse (or, if either the participant or the participant's eligible spouse has
died, the survivor), may be required before the commencement of the distribution
of any part of the participant's accrued benefits as described in subparagraph
7.8(a).
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SECTION 6
TERMINATION BEFORE RETIREMENT,
DEATH DURING EMPLOYMENT
6.1 MONTHLY DEFERRED VESTED BENEFIT
Subject to the conditions and limitations of the plan, if a
participant's employment with the USG Companies terminates for a reason other
than retirement under the plan or the participant's death, but after the
participant has completed five years of credited service, the participant shall
be eligible to receive a monthly deferred vested benefit commencing at the
participant's normal retirement date and continuing for the balance of the
participant's life. The participant's monthly deferred vested benefit commencing
at the participant's normal retirement date shall equal the sum of the
participant's accrued monthly benefit (as defined in subsection 5.9) as at the
participant's employment termination date and the participant's monthly separate
account benefit as at that date.
6.2 ELECTION OF EARLY COMMENCEMENT OF DEFERRED VESTED BENEFITS
Subject to the conditions and limitations of the plan, a participant
who is entitled to a monthly deferred vested benefit under subsection 6.1
commencing on the participant's normal retirement date in addition to the
participant's monthly separate account benefit may elect to receive, in lieu
thereof, a reduced monthly deferred vested benefit and monthly separate account
benefit commencing on the first day of the calendar month next following the
month in which the participant attains age 50 years or on the first day of any
calendar month thereafter that occurs prior to the participant's normal
retirement date by filing a written election with the committee prior to the
date on which payment of such benefits is to commence. If a participant elects
early commencement of the participant's monthly deferred vested benefit and
monthly separate account benefit, the total amount of such benefits otherwise
payable to the participant at the participant's normal retirement date shall be
reduced by 5/12 of 1 percent for each full calendar month that the commencement
date of payment of such benefits precedes the participant's normal retirement
date.
6.3 LUMP SUM PAYMENT OF DEFERRED VESTED BENEFITS DERIVED FROM PARTICIPANTS'
CONTRIBUTIONS
Subject to the consent requirements set forth in subparagraph 7.8(a),
a participant who is entitled to monthly deferred vested benefits may elect by
writing filed with the committee within the 90-day period next following the
participant's employment
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termination date to receive a lump sum payment equal to the participant's
undistributed pre-1991 participant contributions with interest thereon computed
in accordance with paragraph A-2 of Exhibit A up to the date such lump sum
payment is made plus an amount equal to the participant's separate account
balance as adjusted as at the end of the calendar month immediately prior to the
date such lump sum payment is made. Such lump sum payment shall be made to the
participant as soon as practicable thereafter; provided, however, that:
(a) If the lump sum actuarially equivalent value of the participant's
accrued benefits derived from employer contributions does not
exceed $5,000 (but subject to the consent requirements set forth
in subparagraph 7.8(a) if the lump sum actuarially equivalent
value of the participant's total accrued benefits exceeds
$5,000), the lump sum payment will be an amount equal to the lump
sum actuarially equivalent value of the participant's total
accrued benefits. Unless the participant subsequently is
reemployed by an employer and again becomes an active participant
and makes the required contributions, no other benefits shall be
payable under the plan to, or with respect to, the participant.
(b) If the lump sum actuarially equivalent value of the participant's
total accrued benefits is not paid to the participant pursuant to
subparagraph (a) next above, the monthly deferred vested benefit
and monthly separate account benefit otherwise payable to the
participant commencing at the participant's normal retirement
date (or any earlier date permitted above) shall be based on the
participant's total accrued benefits reduced on an actuarially
equivalent basis to reflect the lump sum payment made under this
subsection, unless the participant subsequently is reemployed by
an employer, again becomes an active participant and makes the
required contributions.
6.4 TERMINATION PRIOR TO FIVE YEARS OF CREDITED SERVICE
If a participant's employment with the USG Companies terminates for a
reason other than retirement under the plan or the participant's death, and
prior to the participant's completion of five years of credited service, no
benefits shall be payable to the participant under the plan attributable to the
participant's employment with the employers except that as soon as practicable
after the participant's employment termination date there shall be paid to the
participant in a lump sum an amount equal to:
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(a) The greater of:
(i) the participant's undistributed pre-1991 participant
contributions made under the plan with interest thereon
computed up to the date such lump sum payment is made in
accordance with paragraph A-3 of Exhibit A; or
(ii) the lump sum actuarially equivalent value of the accrued
benefits derived from the participant's pre-1991 participant
contributions (as defined in subparagraph 7.10(c)); plus
(b) The balance in the participant's separate account as adjusted as
of the end of the calendar month in which the participant's
employment termination occurred.
6.5 DEATH DURING EMPLOYMENT
If a participant's death occurs prior to the participant's termination
of employment with the USG Companies, the only benefits attributable to the
participant's employment with the employers payable under the plan shall be
those described below (but subject to the minimum death benefits provided for in
subsection 8.9):
(a) If at the time of the participant's death the participant had not
attained normal retirement age and had completed less than five
years of credited service (irrespective of whether the
participant then had an eligible spouse), as soon as practicable
after the participant's death a lump sum payment shall be made to
the participant's beneficiary (as defined in subsection 7.11)
equal to the sum of the participant's undistributed pre-1991
participant contributions with interest thereon as determined
under paragraph A-3 of Exhibit A and the balance in the
participant's separate account as adjusted as of the end of the
calendar month in which the participant's death occurred.
(b) If at the time of the participant's death the participant had not
attained normal retirement age but was eligible to retire on an
early retirement date or had completed five or more years of
credited service, the participant's eligible spouse at the time
of the participant's death, if any, shall be entitled to a
pre-
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retirement spouse's benefit in accordance with subsection 6.6. If
such participant did not have an eligible spouse at the time of
the participant's death, as soon as practicable thereafter a lump
sum payment shall be made to the participant's beneficiary equal
to the sum of the participant's undistributed pre-1991
participant contributions with interest thereon as determined
under paragraph A-3 of Exhibit A and the balance in the
participant's separate account as adjusted as of the end of the
calendar month in which the participant's death occurred.
(c) If at the time of the participant's death the participant had
attained normal retirement age and had an eligible spouse, the
participant's eligible spouse shall be entitled to a
pre-retirement spouse's benefit in accordance with subsection
6.6. Notwithstanding the next preceding sentence, if the
participant had elected the life and period certain option or the
joint and survivor option under subsection 7.4, and that option
was in effect at the time of the participant's death, benefits
shall be payable under the option as if the participant's
retirement date had occurred immediately prior to the
participant's death; provided, however, that a portion of the
benefit shall be paid to the surviving spouse sufficient to
provide the pre-retirement's spouse's benefit in accordance with
the last paragraph of subsection 7.3.
(d) If at the time of the participant's death the participant had
attained normal retirement age but did not have an eligible
spouse, then, unless the participant had elected the life and
period certain option or joint and survivor option under
subsection 7.4 and the option was in effect at the time of the
participant's death, as soon as practicable thereafter a lump sum
payment shall be made to the participant's beneficiary equal to
the sum of the participant's undistributed pre-1991 participant
contributions with interest thereon as determined under paragraph
A-3 of Exhibit A and the balance in the participant's separate
account as adjusted as of the end of the calendar month in which
the participant's death occurred. If the participant had elected
either option, the benefits payable under the plan attributable
to the participant's employment shall be paid under the option as
if the participant's
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retirement date had occurred immediately prior to the
participant's death.
6.6 PRE-RETIREMENT SPOUSE'S BENEFIT
If a participant's eligible spouse qualifies for a pre-retirement
spouse's benefit as described in subparagraph 6.5(b) or (c), a monthly benefit
shall be payable to the participant's eligible spouse for life in an amount
equal to 50 percent of the sum of the monthly retirement income and monthly
separate account benefit that would have been payable to the participant under
subsection 5.1 as a life annuity if the participant had retired on the last day
of the calendar month in which the participant's death occurred and died
thereafter and if the participant had attained normal retirement age prior to
the participant's retirement but with such sum determined on the basis of the
participant's benefit service, final average earnings, primary social security
benefit and separate account balance as at the end of the calendar month in
which the participant's death occurs. The first payment to a participant's
eligible spouse under this subsection shall be made as of the beginning of the
calendar month next following the calendar month during which the participant's
death occurs and the final payment shall be made as of the beginning of the
calendar month during which the eligible spouse's death occurs.
6.7 BENEFIT COMMENCEMENT CONSENT REQUIREMENTS
If the lump sum actuarially equivalent value of a participant's
nonforfeitable accrued benefits is greater than $5,000, written consent of the
participant and, if the participant has an eligible spouse at the time of the
commencement of the distribution of such benefits, the participant's eligible
spouse (or, if either the participant or the participant's eligible spouse has
died, the survivor), may be required before the commencement of the distribution
of any part of the participant's accrued benefits as described in subparagraph
7.8(a).
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SECTION 7
PAYMENT OF RETIREMENT INCOME AND OTHER BENEFITS
7.1 BENEFIT COMMENCEMENT DATE, COMBINED BENEFIT REFERENCE
For purposes of this Section 7, except where the context provides
otherwise, reference to a participant's monthly retirement income or deferred
vested benefit shall mean the monthly retirement income or deferred vested
benefit the participant becomes entitled to plus the participant's monthly
separate account benefit. A participant's "benefit commencement date" means the
date on which payment of the participant's monthly retirement income or deferred
vested benefit commences or the lump sum actuarially equivalent value of such
monthly benefit is distributed to the participant. If a lump sum payment is made
to a participant pursuant to subsection 5.5 or 6.3 equal to the sum of the
participant's pre-1991 participant contributions and interest thereon and the
participant's separate account balance before the participant receives or
commences to receive additional benefits to which the participant is entitled
under the plan, the participant's benefit commencement date will not be deemed
to have occurred until the date the participant receives or commences to receive
such additional benefits.
7.2 ELIGIBLE SPOUSE
For purposes of the plan, the spouse of a participant will be
considered as an "eligible spouse" as of any date only if at least six months
prior thereto the participant and spouse were lawfully married under the laws of
the state where the marriage was contracted and the marriage remains legally
effective.
7.3 NORMAL FORM OF PAYMENT OF BENEFITS
Except as otherwise specifically provided, payment of a participant's
monthly retirement income or deferred vested benefits shall be made to the
participant, and payment of monthly benefits shall be made to the participant's
spouse, if eligible for such benefits, as follows:
(a) Life Annuity. A participant whose retirement date or employment
termination date has occurred shall receive payment of the
participant's monthly retirement income or deferred vested
benefit on a life annuity basis if the participant either is not
eligible for a qualified joint and survivor annuity under
subparagraph (b) next below and the participant's monthly benefit
is not payable under a benefit
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option described in subsection 7.4 or during the applicable
election period the participant had elected not to receive
payment in the form of a qualified joint and survivor annuity
under subparagraph (b) next below (and the participant's eligible
spouse, if any, had consented to such election).
(b) Qualified Joint and Survivor Annuity. A participant whose
retirement date or employment termination date has occurred and
who has an eligible spouse immediately preceding the
participant's benefit commencement date shall receive payment of
the participant's monthly benefit in the form of a "qualified
joint and survivor annuity" unless in lieu thereof and during the
applicable election period (as defined in subsection 7.6) the
participant had elected to receive payment either in the form of
a life annuity under subparagraph (a) next above or under a
benefit option described in subsection 7.4 that was in effect on
the participant's benefit commencement date (and the
participant's eligible spouse had consented to such election).
Such qualified joint and survivor annuity, which shall be the
actuarial equivalent of a single annuity for the life of the
participant, shall consist of a reduced monthly benefit
continuing during the participant's lifetime and, if the
participant's eligible spouse is living at the time of the
participant's death, payment of one-half of such reduced monthly
benefit shall be made to the participant's eligible spouse until
the spouse's death occurs.
If a participant who otherwise is entitled to receive payment of the
participant's monthly retirement income in the form of a life annuity or
qualified joint and survivor annuity dies before the participant's benefit
commencement date, or if a participant who has an hour of service or an hour of
paid leave after August 22, 1984 and who otherwise is entitled to receive
payment of the participant's deferred vested benefit in the form of a life
annuity or a qualified joint and survivor annuity dies before the participant's
benefit commencement date, the participant's eligible spouse shall be entitled
to receive a monthly benefit for life equal to 50 percent of the amount of
monthly benefit that would have been payable to the participant as a life
annuity commencing on the later to occur of the participant's normal retirement
date or the date of the participant's death if such date had been the
participant's benefit commencement date. The first payment to the participant's
eligible spouse shall be made as of the beginning of the calendar month next
following the later to occur of the date of the participant's death or the date
the participant would have attained age 55 years or, if the participant
terminated employment on or after December 1, 1994, age 50 years
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and the final payment shall be made as of the beginning of the calendar month
during which the eligible spouse's death occurs.
7.4 BENEFIT OPTIONS
In lieu of the normal forms and amounts of retirement income or
deferred vested benefits specified in subsection 7.3, but subject to the
provisions of subsection 7.5 (including rules as to benefit options established
by the committee pursuant to that subsection), a participant may elect a
retirement income or deferred vested benefit of actuarially equivalent value in
one or more of the following forms:
(a) Life and Period Certain Option. A smaller retirement income or
deferred vested benefit terminating at the participant's death
and, if the participant dies before the tenth anniversary of the
participant's benefit commencement date, a continuing payment of
the same amount to a person or persons designated by the
participant for the balance of such ten-year period.
(b) Joint and Survivor Option. A smaller retirement income or
deferred vested benefit payable to the participant during the
participant's lifetime and, if another person the participant had
designated is living at the time of the participant's death,
payment of the same amount or 75 percent or 50 percent of that
amount to such other person as long as such other person lives;
provided, however, that if the participant designates someone
other than the participant's spouse, the lump sum actuarially
equivalent value of the monthly retirement income or deferred
vested benefit payable to the participant under the option over
the participant's life expectancy shall be greater than 50
percent of the lump sum actuarially equivalent value of the
monthly retirement income or deferred vested benefit that
otherwise would be payable to the participant on a life annuity
basis.
(c) Level Payment Option. If a participant retires on an early
retirement date and payment of the participant's monthly
retirement income begins before the earlier of the date the
participant is eligible to receive, or the date the participant
commences receiving, Old Age Insurance Benefits under the Social
Security Act, or if a participant terminates employment before
retirement under the plan but after
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becoming entitled to receive a monthly deferred vested benefit
and payment of the participant's monthly deferred vested benefit
begins before the participant commences receiving Old Age
Insurance Benefits under the Social Security Act, a larger
monthly retirement income or deferred vested benefit payable to
the participant until the first to occur of the date of the
participant's death or the earliest date on which the participant
becomes eligible to apply for and receive Old Age Insurance
Benefits under the Social Security Act (either reduced or
unreduced, as specified in the election), and, where the full
actuarial equivalent of the normal form and amount of the
participant's retirement income or deferred vested benefit has
not been provided under the option, with a continuance of a
smaller amount of retirement income or deferred vested benefit
after the latter date and until the participant's death.
(d) Lump Sum Option. If a participant retires on the participant's
normal retirement date, a deferred retirement date, or an early
retirement date after having attained age 55 years, a lump sum
payment as soon as practicable after the participant's retirement
date of an amount equal to the lump sum actuarially equivalent
value at the participant's retirement date of the monthly
retirement income otherwise payable to the participant in
accordance with the plan.
7.5 RULES AS TO ELECTION AND DISCONTINUANCE OF BENEFIT OPTIONS
A participant's election of an optional form of retirement income or
deferred vested benefit specified in subsection 7.4 shall be subject to the
following:
(a) A participant's election of a benefit option shall be subject to
the provisions of the plan as in effect at the time of such
election and its approval by the committee. A participant may
elect a benefit option under subsection 7.4 at any time prior to
the participant's retirement date or earlier termination of
employment date. The election must be in writing and signed by
the participant. If the participant has an eligible spouse, the
written consent of the eligible spouse to the benefit option
election must be provided to the extent required by the
Retirement Equity Act of 1984, as it may be amended from time to
time.
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(b) If a participant is retired on a disability retirement date
within twelve months of the date the participant elects the life
and period certain option, joint and survivor option or level
payment option under subsection 7.4, or if a participant who had
elected the lump sum option under subsection 7.4 is retired on a
disability retirement date or terminates employment and becomes
entitled to a monthly deferred vested benefit, such option
election then shall be automatically cancelled.
(c) If payment of a participant's retirement income or deferred
vested benefit otherwise would be required in the form of a
qualified joint and survivor annuity, the participant's option
election also must contain the participant's election that
payment not be made in that form, and the participant's eligible
spouse must consent to that election pursuant to subparagraph
7.7(c).
(d) A participant who has elected a benefit option may revoke it at
any time prior to the participant's retirement date or earlier
termination of employment date by writing filed with the
committee. A participant who has elected an option may change it
at any time prior to the participant's retirement date or earlier
retirement or termination of employment date. If and to the
extent required by the Retirement Equity Act of 1984, as it may
be amended from time to time, a revocation of a benefit option
election made by a participant shall constitute a revocation of
the participant's election that payment of the participant's
benefits not be made in the form of a qualified joint and
survivor annuity and a change in an option elected by a
participant shall be treated as a new election of a benefit
option by that participant for purposes of the spousal consent
requirements described in subparagraph (a) next above.
(e) Except as otherwise provided below, if a participant who had
elected a benefit option under subsection 7.4 dies before the
participant's retirement date or earlier termination of
employment date, or if a participant who had elected a benefit
option under subsection 7.4 dies after the participant's
retirement date or earlier termination of employment date but
before the participant's benefit commencement date, the
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option elected automatically will be cancelled and no benefits
will be paid to any person under the option. If the participant
had elected the life and period certain or joint and survivor
option under subsection 7.4 and had continued in the employ of
the USG Companies after attaining normal retirement age, then
survivorship benefits will be paid in accordance with the option
elected in the same manner and amount as would have been payable
if the participant had retired on the last day of the calendar
month in which the participant's death occurred and died on that
day immediately after the participant's retirement, except that
if the participant had elected the life and period certain option
all payments under the option shall be made within five years of
the date of the participant's death; provided, however, that a
portion of the benefit shall be paid to the surviving spouse
sufficient to provide the pre-retirement spouse's benefit in
accordance with the last paragraph of subsection 7.3.
(f) If a participant elects the life and period certain option under
subparagraph 7.4(a) and the person or persons designated by the
participant under the option predecease the participant, the
option shall remain in effect. Unless the participant designates
another person or persons to receive any benefits payable under
the option after the participant's death, such benefits shall be
payable to the participant's beneficiary. If the participant
wishes to designate another person or persons to receive any
benefits payable under the option after the participant's death,
such designation shall be treated as a new benefit option
election for purposes of the spousal consent requirements
described in subparagraph (a) next above.
(g) If the participant elects the joint and survivor option under
subparagraph 7.4(b) and the person the participant had designated
to receive payment under the option after the participant's death
dies before the participant's retirement date or earlier
termination of employment date, the option elected automatically
will be cancelled. The participant's retirement income or
deferred vested benefit will be paid to the participant in the
normal form and amount unless a new election can be and is made
by the participant.
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(h) If a participant does not have an eligible spouse when the
participant elects a benefit option under subsection 7.4 but the
participant does have an eligible spouse after such election but
on or prior to the participant's benefit commencement date, the
option automatically will be cancelled. Whether the participant
again may elect a benefit option under subsection 7.4 shall be
determined under the provisions thereof as well as the provisions
of this subsection, and any such election shall be subject to the
requirements described in subparagraph (c) next above that the
participant elect that payment of the participant's benefits not
be made in the form of a qualified joint and survivor annuity
and, if the participant's benefit commencement date will occur
after December 31, 1984, the participant's eligible spouse
consent to such election, as well as the provisions of
subparagraph (e) next above.
7.6 APPLICABLE ELECTION PERIOD
The term "applicable election period" means, with respect to an
election by a participant pursuant to subparagraph 7.3(b) to waive the qualified
joint and survivor annuity, the 90-day period ending on the participant's
benefit commencement date.
7.7 RELATING TO QUALIFIED JOINT AND SURVIVOR ANNUITY
The foregoing provisions of the plan which relate to qualified joint
and survivor annuities shall be subject to the following:
(a) The committee will provide each participant with a general
explanation of the qualified joint and survivor annuity form of
payment, the circumstances under which it will be provided, and
the availability of the election that distribution not be made in
that form. The committee also will provide a general explanation
of the relative financial effect upon the participant's plan
benefits of an election that distribution not be made in the form
of a qualified joint and survivor annuity, the right of the
participant's eligible spouse to consent to such an election and
the right of a participant to revoke (and the effect of a
revocation) of such an election.
-45-
(b) Subject to such regulations as the Secretary of the Treasury
issues for this purpose, the explanation described in
subparagraph (a) next above as to the qualified joint and
survivor annuity will be provided within a reasonable period of
time before the participant's benefit commencement date.
(c) An election out of the qualified joint and survivor annuity must
be in writing and filed with the committee during the applicable
election period. Such election will not be effective unless the
participant's spouse consents to and acknowledges the effect of
the election. Such consent and acknowledgment must be in writing,
filed with the committee, and witnessed by the committee, an
authorized representative of the committee or a notary public.
Consent shall not be required if the committee establishes to its
satisfaction that consent cannot be obtained because the spouse
cannot be located, or because of such other reason as may be
specified by regulations issued by the Secretary of the Treasury.
(d) An election out of the qualified joint and survivor annuity may
be revoked by a participant at any time prior to the
participant's benefit commencement date by writing filed with the
committee. Subsequent elections (and revocations) may be made by
the participant in accordance with subparagraph (c) next above
during the applicable election period. The committee may
establish rules from time to time as to whether consents given by
eligible spouses to participants' elections out of the qualified
joint and survivor annuity may be revoked or shall be
irrevocable, which rules shall meet the requirements of
applicable law and shall be applied on a uniform and
nondiscriminatory basis.
7.8 BENEFIT COMMENCEMENT REQUIREMENTS
The distribution of benefits under the plan shall be subject to the
following requirements:
(a) Consent to the Commencement of Benefits Prior to Normal
Retirement Age. Irrespective of the manner in which benefits are
to be distributed under the plan to a participant or to the
participant's eligible spouse, if the lump sum
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actuarially equivalent value of the participant's accrued
benefits exceeds $5,000:
(i) Distributions to the participant may not be made or commence
before the participant attains normal retirement age without
the written consent of the participant and the participant's
eligible spouse, if any.
(ii) Distributions to the participant's eligible spouse may not
be made or commence before the date the participant would
have attained normal retirement age but for the
participant's death without the written consent of the
participant's eligible spouse.
Written consent as to any distribution must be obtained not more
than 90 days before the commencement of the distribution of any
part of the participant's accrued benefits. For purposes of this
subparagraph, the lump sum actuarially equivalent value of a
participant's accrued benefits shall be treated as greater than
$5,000 at all times after the commencement of a distribution of
all or part of the participant's accrued benefits that was
subject to the foregoing consent requirement. The committee may
establish rules from time to time as to whether consents required
by the foregoing provisions of this subparagraph may be revoked
or shall be irrevocable, which rules shall meet the requirements
of applicable law and shall be applied on a uniform and
nondiscriminatory basis. The foregoing provisions of this
subparagraph shall be applied by the committee only to the extent
required by the Retirement Equity Act of 1984, as it may be
amended from time to time.
(b) Latest Benefit Commencement Date. Unless an election by a
participant to defer payment is made in accordance with rules
established by the committee, payment of benefits under the plan
to a participant shall commence not later than the 60th day after
the latest of the end of the calendar year in which:
(i) The participant attains normal retirement age;
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(ii) The tenth anniversary of the year in which the participant
commenced participation in the plan occurs; or
(iii) The participant terminates the participant's employment
with the USG Companies.
Payment of a participant's benefits must commence by the
participant's required commencement date. A participant's
"required commencement date" means:
(A) Except as provided in Paragraph (B) below, April 1 of
the calendar year following the later to occur of the
calendar year in which the participant attained age
70-1/2 years or the calendar year in which the
participant's retirement date occurred;
(B) In the case of a participant who is a five percent
owner (as defined in Section 416 of the Internal
Revenue Code) with respect to the plan year ending in
the calendar year in which the participant attains age
70-1/2, April 1 of the calendar year next following the
calendar year in which the participant attains age
70-1/2.
Notwithstanding the foregoing provisions of this subparagraph,
(I) the required commencement date of a participant who attained
age 70-1/2 prior to January 1, 2000, shall be April 1 of the
calendar year following the calendar year in which the
participant attained age 70-1/2; and (II) the required
commencement date of a participant who filed a written election
with the committee before January 1, 1984 to have payment of the
participant's benefits commence on a date permitted under the
terms of the plan as in effect on December 31, 1983 shall be the
date specified in the election.
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In the event payment of a participant's benefits begins after
April 1 of the calendar year following the calendar year in which
the participant attains age 70-1/2 years, the participant's
accrued benefit under the plan shall be actuarially increased
(net of any additional benefit accrual) to take into account the
period after such April 1 during which the participant was not
receiving benefit payments under the plan.
7.9 PAYMENT OF SMALL AMOUNTS
If the lump sum actuarially equivalent value of a participant's
accrued benefits (as defined in subparagraph 7.10(a)) does not exceed $5,000, or
if the participant's accrued benefits are payable to a participant's eligible
spouse or any other person because of the death of the participant before the
participant's benefit commencement date and the lump sum actuarially equivalent
value of such benefits does not exceed $5,000, a lump sum payment equal to the
lump sum actuarially equivalent value of such benefits shall be paid to the
participant, the participant's eligible spouse or such other person, as the case
may be. For purposes of this subsection, the lump sum actuarially equivalent
value shall be determined in accordance with paragraph A-4 of Exhibit A. If a
participant's accrued benefits derived from employer contributions are zero, the
participant shall be deemed to have received a distribution of such benefits.
7.10 BENEFITS DERIVED FROM EMPLOYER AND PARTICIPANT CONTRIBUTIONS
For purposes of the plan, the terms "accrued benefits", "accumulated
pre-1991 contributions", "accrued benefits derived from pre-1991 participant
contributions", "accrued benefits derived from the participant's separate
account" and "accrued benefits derived from employer contributions" shall have
the following meanings as of any applicable date:
(a) "Accrued benefits" means a participant's monthly separate account
benefit plus the amount of monthly retirement income or deferred
vested benefit payable to the participant on a life annuity
basis, commencing on the participant's normal retirement date (or
deferred retirement date if the participant's normal retirement
date has occurred) as determined in accordance with the plan as
of the applicable date.
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(b) "Accumulated pre-1991 contributions" as of the applicable date
means a participant's undistributed pre-1991 participant
contributions with interest thereon as determined under paragraph
A-3 of Exhibit A to the date the participant would attain normal
retirement age.
(c) "Accrued benefits derived from pre-1991 participant
contributions" means an amount equal to a participant's
accumulated pre-1991 contributions as of the applicable date
expressed as a monthly benefit commencing on the participant's
normal retirement date, determined on the basis of actuarial
factors and assumptions set forth in paragraphs A-4 and A-6 of
Exhibit A as of that date.
(d) "Accrued benefits derived from the participant's separate
account" as of the applicable date means the amount that then is
actuarially equivalent to the participant's monthly separate
account benefit, calculated by applying the actuarial factors and
assumptions set forth in paragraphs A-4 and A-6 of Exhibit A as
of that date.
(e) "Accrued benefits derived from employer contributions" means the
excess of a participant's accrued benefits as of the applicable
date over the sum of the accrued benefits derived from the
participant's pre-1991 participant contributions and the accrued
benefits derived from the participant's separate account as of
that date.
7.11 DESIGNATION OF BENEFICIARIES
Each participant may, from time to time, designate any person or
persons (who may be designated concurrently, contingently or successively) to
whom any death benefits payable on behalf of such participant are to be
distributed (other than any death benefits required to be paid to the
participant's eligible spouse pursuant to subsection 6.6 or 7.3 or any death
benefits payable to the participant's eligible spouse or any other person
pursuant to an option in effect at the time of the participant's death pursuant
to subsection 7.4). A beneficiary designation will be effective only when it is
signed and filed with the committee while the participant is still alive and
will cancel all beneficiary forms previously signed and filed by the
participant. Except as otherwise provided in the next sentence, if a participant
fails to designate a beneficiary as provided above, or if the beneficiary
designated by a deceased participant dies before the participant or before
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complete payment of the benefits payable on account of the participant's death,
the committee in its discretion may direct payment of such benefits as follows:
(a) To or for the benefit of any one or more of the participant's
relatives by blood, marriage or adoption, in such proportions as
the committee determines; or
(b) To the legal representative or representatives of the estate of
the last to die of the participant and the designated
beneficiary.
If permitted by law, a participant's beneficiary designation in effect under a
predecessor plan immediately before its merger into this plan shall be deemed to
be a valid beneficiary designation filed with the committee under this plan
unless and until the participant revokes such beneficiary designation or makes a
new beneficiary designation under this plan. The term "designated beneficiary"
as used in the plan means the person or persons designated by a participant as
the participant's beneficiary in the last effective form filed with the
committee under this subsection and to whom a deceased participant's benefits
are payable under the plan. The term "beneficiary" as used in the plan means the
person or persons to whom a deceased participant's benefits are payable under
this subsection.
7.12 MISSING PARTICIPANTS OR BENEFICIARIES
Each participant and each designated beneficiary must file with the
committee from time to time in writing the participant's or the beneficiary's,
as the case may be, post office address and each change of post office address.
Any communication, statement or notice addressed to a participant or beneficiary
at the last post office address filed with the committee, or if no address is
filed with the committee then at the last post office address as shown on the
records of the USG Companies, will be binding on the participant and the
participant's beneficiary for all purposes of the plan. None of the committee,
the trustee and the USG Companies shall be required to search for or locate a
participant or beneficiary. If the committee notifies a participant or
beneficiary that the participant or beneficiary is entitled to a distribution
and also notifies the participant or beneficiary of the provisions of this
subsection, and the participant or beneficiary fails to claim benefits under the
plan or make the participant's or beneficiary's whereabouts known to the
committee within five years after the notification, the benefits under the plan
of the participant or beneficiary will be disposed of as follows:
(a) If the whereabouts of the participant is unknown but the
whereabouts of the participant's designated beneficiary then is
known to the committee, distribution will be made to the
beneficiary.
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(b) If the whereabouts of the participant and the participant's
designated beneficiary then is unknown to the committee, but the
whereabouts of one or more relatives by blood or marriage of the
participant is known to the committee, the committee may direct
the trustee to distribute such benefits to any one or more of
such relatives and in such proportions as the committee
determines.
(c) If the whereabouts of the participant, the participant's
designated beneficiary and any relatives by blood or marriage of
the participant then is unknown to the committee, such benefits
shall be forfeited to the extent permitted by federal law.
7.13 DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS
If a participant's distribution constitutes an eligible rollover
distribution under Section 402(c)(4) of the Internal Revenue Code, then the
participant may elect to have such distribution paid directly to an eligible
retirement plan described in Section 402(c)(8)(B) of the Internal Revenue Code.
Each election by a participant under this subsection 7.13 shall be made at such
time and in such manner as the committee shall determine, and shall be effective
only in accordance with such rules as shall be established from time to time by
the committee.
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SECTION 8
MAXIMUM AND MINIMUM BENEFIT LIMITATIONS,
OFFSET FOR OTHER PLAN BENEFITS
8.1 MAXIMUM RETIREMENT INCOME AND DEFERRED VESTED BENEFITS
Section 415 of the Internal Revenue Code imposes certain limitations
on the amount of benefits that may be provided for a participant in a defined
benefit plan (as defined in Section 414(j) of the Internal Revenue Code) and in
a defined contribution plan (as defined in Section 414(i) of the Internal
Revenue Code). This plan is a defined benefit plan but for certain purposes,
including the application of Section 415, the plan is required to be treated as
a defined contribution plan to the extent it provides benefits based on pre-1991
participant contributions and participants' separate accounts. For purposes of
this Section 8, references to a participant's monthly retirement income or
monthly deferred vested benefit shall be deemed to include the participant's
monthly separate account benefit or, where appropriate, an amount that is
actuarially equivalent to such benefit.
8.2 LIMITATION YEAR AND TOTAL COMPENSATION
For purposes of this Section 8:
(a) A "limitation year" means the twelve-month period ending on
December 31 of each year; and
(b) A participant's "total compensation" means, with respect to any
limitation year, the total amount of compensation (as defined in
Internal Revenue Code Section 415(c)(3)) paid to the participant
during that year for services rendered to the USG Companies as an
employee.
8.3 DEFINED BENEFIT PLAN AND DEFINED CONTRIBUTION PLAN LIMITATIONS
With respect to each participant whose retirement date (as defined in
subsection 3.5) or employment termination date occurs on or before December 31,
1999, there will be determined with respect to the participant a defined benefit
plan fraction and a defined contribution plan fraction in accordance with
Section 415 of the Internal Revenue Code, but taking into account adjustments to
defined benefit or defined contribution plan limitations, or combined
limitations, permitted under public laws that modify Section 415 where a
participant's accrued benefits immediately prior to the effective date of any
such law exceed the maximum accrued benefits permitted by such
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law; the benefits provided for any such participant under this plan will be
adjusted to the extent necessary so that the sum of such fractions determined
with respect to the participant does not exceed 1.0. The provisions of this
subsection 8.3 shall not apply to a participant who retires or otherwise
terminates employment on or after January 1, 2000.
8.4 COMBINING OF PLANS
In applying the limitations set forth in subsections 8.2 and 8.3,
reference to the plan shall mean the plan and all other defined benefit plans
(whether or not terminated) maintained by the USG Companies, reference to a
defined contribution plan maintained by the USG Companies shall mean that plan
and all other defined contribution plans (whether or not terminated) maintained
by the USG Companies, and reference to the USG Companies shall include any
subsidiary of the company more than 50 percent of the voting stock of which is
owned, directly or indirectly, by the company.
8.5 MAXIMUM BENEFITS AS A RESULT OF THE ANNUAL COMPENSATION LIMIT
A participant's earnings as defined in subsection 4.5 are subject to
the annual compensation limit (as defined below) for purposes of determining the
amount of the participant's contributions required under subsection 2.5 and
determining the amount of the retirement income or deferred vested benefit
(exclusive of the participant's separate account benefit) the participant may
become entitled to receive under the plan. The "annual compensation limit" means
the limitation on compensation imposed by Section 401(a)(17) of the Internal
Revenue Code, applied as follows:
(a) For purposes of determining the amount of a participant's
contributions required under subsection 2.5, the annual
compensation limit is $160,000 for the plan year commencing on
January 1, 1999 and for each subsequent plan year shall be
$160,000 (or such greater amount as permitted as a result of an
adjustment under Section 401(a)(17)(B)(II) of the Internal
Revenue Code effective for that plan year).
(b) For the purpose of determining a participant's final average
earnings, the annual compensation limit for any 12 month period
commencing in a plan year shall be $160,000 (or such greater
amount as permitted as a result of an adjustment under Section
401(a)(17)(B) of the Internal Revenue Code effective for the plan
year in which such 12 month period begins).
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As a result of the annual compensation limit the retirement
income or deferred vested benefit (exclusive of the participant's
separate account benefit) of a participant in the plan on January
1, 1994 who then was employed by a USG Company shall be the
greater of:
(i) the participant's December 31, 1993 accrued benefit (as
defined below), if any, plus the participant's post-1993
accrued benefit (as defined below); or
(ii) the participant's final accrued benefit (as defined below).
For purposes of this subsection:
(A) A participant's "December 31, 1993 accrued benefit"
means the participant's accrued retirement income or
deferred vested benefit as of December 31, 1993 as
determined under the terms and provisions of the plan
as then in effect. The terms of the plan as in effect
on December 31, 1993 shall be construed (both in
determining the December 31, 1993 accrued benefit and
the accrued benefit of a participant who retired or
otherwise terminated employment on or before that date)
so as to apply the limitations of Section 401(a)(17) of
the Internal Revenue Code in the manner most favorable
to the participant as permitted by the Internal Revenue
Service.
(B) A participant's "post-1993 accrued benefit" means the
retirement income or deferred
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vested benefit the participant accrues after December
31, 1993 on the basis of the portion of the
participant's benefit service attributable to
employment with the employers after that date and the
participant's final average earnings as determined as
of the end of the calendar month next preceding the
calendar month in which the participant's retirement or
other termination of employment with the USG Companies
occurs, calculated by applying the annual compensation
limit to all of the participant's earnings.
(C) The social security offset under subparagraph 5.1(b) or
subparagraph 5.9(b) shall be applied to the aggregate
of the December 31, 1993 accrued benefit and the
post-1993 accrued benefit, as determined under
subparagraph 5.1(b) or subparagraph 5.9(b), whichever
is applicable.
(D) A participant's "final accrued benefit" means the
participant's retirement income or deferred vested
benefit as determined at the time of the participant's
actual retirement or other termination of employment on
the basis of the participant's total period of benefit
service and the participant's final average earnings as
determined as of the end of the calendar month next
preceding the calendar month in
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which the participant's retirement or other termination
of employment with the USG Companies occurs, calculated
by applying the applicable annual compensation limit to
all of the participant's earnings.
8.7 MAXIMUM RETIREMENT INCOME AND DEFERRED VESTED BENEFIT
The amount of retirement income or deferred vested benefit payable
under the plan to a participant for any month shall not exceed an amount which
would cause the sum of such monthly benefit, the benefits payable to the
participant for that month under Workers' Compensation or Occupational Disease
laws for which an employer is liable (except fixed statutory payments for the
loss of any bodily member) and the participant's primary social security benefit
to exceed an amount equal to 1/12 of 100 percent of the participant's final
average earnings.
8.8 MINIMUM RETIREMENT INCOME AND DEFERRED VESTED BENEFIT
Notwithstanding the provisions of Sections 5 and 6, but subject to the
foregoing provisions of this Section 8, the monthly retirement income or
deferred vested benefit payable to a participant who qualifies for such monthly
benefit shall not be less than an amount that is actuarially equivalent to the
participant's accrued benefits derived from pre-1991 participant contributions
and the accrued benefits derived from the participant's separate account,
determined on the basis of the actuarial factors and assumptions set forth in
paragraphs A-4 and A-6 of Exhibit A. The monthly retirement income payable on a
life annuity basis to a participant who retires on or after the participant's
normal retirement date but had qualified for retirement on an early retirement
date shall not be less than the largest monthly retirement income the
participant would have been entitled to receive on a life annuity basis, without
regard to any payment option, if the participant had retired on an early
retirement date.
8.9 MINIMUM DEATH BENEFITS
Notwithstanding any other provisions of the plan, in no event shall
the aggregate benefits payable under the plan to a participant and to any other
person entitled to receive benefits thereunder as a result of the participant's
employment with the employers and participation in the plan be less than an
amount equal to the sum of the participant's pre-1991 participant contributions,
with interest thereon as determined under
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paragraph A-3 of Exhibit A to the date payment commences to the participant or
such other person or to the date of the participant's death, if earlier, plus an
amount equal to what the balance in the participant's separate account would
have been as of the end of the calendar month in which the participant's
termination of employment occurs or the date of the participant's death, if
earlier, if such separate account had continued to be maintained and adjusted
through the end of that calendar month. If the aggregate benefits paid under the
plan to the participant and such other person up to the death of the participant
or such other person, whichever occurs later, should be less than the amount
described in the next preceding sentence, an amount equal to the difference
shall be payable to the participant's beneficiary.
8.10 OFFSET FOR OTHER PLAN BENEFITS
Notwithstanding any other provisions of the plan, the amount of any
monthly retirement income or deferred vested benefit a participant otherwise is
entitled to under the plan will be reduced by the actuarial equivalent of any
pension benefits that the participant becomes entitled to (or previously
received) under any other pension plan qualified under Section 401(a) of the
Internal Revenue Code that a USG Company (or by a former USG Company) maintains
or contributes to, to the extent that the pension benefits paid or payable to
the participant under such other pension plan are attributable to the same
period of employment for which benefits are otherwise payable to the participant
under this plan. The committee shall apply the provisions of this subparagraph
in a uniform manner to participants similarly situated for the purpose of
avoiding duplication of benefits.
8.11 SPECIAL RULES FOR BENEFIT TRANSFERS
From time to time, an employee will be transferred to an employer from
employment with a USG Company in Canada or from an employer to employment with a
USG Company in Canada. Except as otherwise required by law, in any such case,
the employee's pension benefit, if any, will be paid from the pension plan in
which the employee participates at the time of the participant's retirement or
other termination of employment with all USG Companies, taking into account the
participant's credited service and benefit service with all USG Companies, as
determined under the terms of the plan that pays the participant's benefits,
provided, however, that the benefit shall never be less than the benefit payable
under the terms of this plan calculated as of the date the participant last
participates in this plan; provided further that benefit payments from one plan
shall be offset to take into account any payments made from the other plan.
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8.12 SECTION 401(M) LIMITATIONS AS TO PARTICIPANT SEPARATE ACCOUNT CONTRIBUTIONS
Participants' contributions made to their separate accounts shall be
subject to the nondiscrimination requirements of Section 401(m) of the Internal
Revenue Code, as follows:
(a) Section 401(m) of the Internal Revenue Code requires that such
participant contributions be tested each plan year and, where
required, be limited in order to meet the actual contribution
percentage test set forth in Section 401(m) of the Internal
Revenue Code (the "ACP test"). The ACP test shall be met by this
plan using the "current year testing method" (as defined in
Internal Revenue Service Notice 98-1), and for this purpose the
provisions of Section 401(m) of the Internal Revenue Code, the
regulations thereunder and any Internal Revenue Service guidance
issued subsequent to the effective date are incorporated in this
plan by reference.
(b) If any such participant contributions are made under the plan for
any plan year with respect to one or more highly compensated
participants (as defined in subsection 8.14) that otherwise would
result in the plan's failure to meet the ACP test, such
contributions will be reduced to the extent necessary to meet the
ACP test, in descending order, beginning with participant
contributions made with respect to highly compensated
participants who prior to such reduction have made the largest
contributions. The portion of participant contributions that are
so reduced are referred to as "excess participant separate
account contributions".
(c) The committee shall direct that excess participant separate
account contributions (and income allocable to such contributions
as determined under subsection 8.13) for any plan year be
distributed to the highly compensated participants who made them
not later than 12 months after the end of that plan year.
(d) If an excess participant separate account contribution has been
distributed to a participant pursuant to subparagraph (c) next
above then, notwithstanding any other provisions of the plan,
only for the purpose of reducing the amount of monthly retirement
income or monthly deferred vested benefit that
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otherwise would be payable to the participant under subsection
5.1, 5.2, 5.3 or 6.1 by the participant's monthly separate
account benefit or by an amount that is actuarially equivalent to
such benefit, the participant's separate account balance shall be
increased to equal what the balance in such account would be if
no excess participant separate account contributions had been
distributed to the participant.
8.13 SPECIAL PROVISIONS APPLICABLE TO SECTION 401(m) LIMITATIONS
The following provisions shall apply to subsection 8.12:
(a) Multiple Use of Alternative Limitation. In accordance with
Treasury Regulation Section 1.401(m)-(2)(c), multiple use of the
alternative limitation that occurs as a result of testing under
this plan in accordance with subsection 8.12 and under qualified
plans maintained by USG Companies as required by Section 401(k)
and 401(m) of the Internal Revenue Code will be corrected in the
manner described in Treasury Regulation Section 1.401(m)-1(e).
The term "alternative limitation" as used above means the
alternative methods of compliance with Sections 401(k) and 401(m)
of the Internal Revenue Code contained in Sections 401(k)(3)(A)
(ii)(II) and 401(m)(2)(A)(ii) thereof, respectively.
(b) Income Allocable for Plan Year. The income allocable to an
excess participant separate account contribution for the plan
year in which such excess amount arose shall be determined by
multiplying the income for that plan year allocable to the
participant contributions for that plan year to which such excess
amount pertains by a fraction. The numerator of the fraction is
the excess amount and the denominator is the total balance in the
participant's separate account to which such excess amount was
credited as determined as of the end of that plan year, reduced
by the gain allocable to such account balance for that plan year
and increased by the loss allocable to such account balance for
that plan year.
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8.14 HIGHLY COMPENSATED PARTICIPANT
For purposes of subsection 8.12, effective as of January 1, 1997, a "highly
compensated participant" means any participant (and any employee who would have
been a participant but for the participant's failure to enroll in the plan) who:
(a) was a five percent or greater owner of a USG Company during the
year or the preceding year; or;
(b) for the preceding plan year received annual compensation from the
USG Companies of more than $80,000 (or such greater amount as may
be determined by the Commissioner of Internal Revenue for the
applicable year) and, if elected by the employer for such
preceding year, was in the top-paid group, as defined below.
The term "annual compensation" as used above with respect to any participant
means as to any plan year the total amount of the participant's compensation
within the meaning of Section 415(c)(3) of the Internal Revenue Code for that
year for services rendered to the USG Companies as an employee plus amounts
deferred by the participant for that year through compensation reductions
pursuant to Sections 125 and 401(k) of the Internal Revenue Code under any plans
maintained by the USG Companies, including this plan. For purposes of
subparagraph (b) next above, the term "top-paid group" means the top-paid 20
percent of the employees of the USG Companies, exclusive of (i) employees who
have not completed six months of service, (ii) employees who normally work less
than 17-1/2 hours per week, (iii) employees who normally work not more than six
months during any year, (iv) employees who have not attained age 21, (v) except
to the extent provided in regulations, employees who are included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and the
employer, and (vi) employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Internal Revenue
Code) from the employer which constitutes income from sources within the United
States (within the meaning of Section 861(a)(3) of the Internal Revenue Code). A
former employee shall be treated as a highly compensated participant if such
employee was a highly compensated participant when such employee separated from
service with the USG Companies or such employee was a highly compensated
participant at any time after attaining age 55 years.
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SECTION 9
REEMPLOYMENT
9.1 REHIRED EMPLOYEE
If a former employee of the USG Companies who had not previously
become a participant in the plan is reemployed by a USG Company and becomes a
covered employee (a "rehired employee"), the following provisions shall apply,
subject to subsection 2.2 of the plan:
(a) Participation. The rehired employee shall become eligible to be
enrolled in the plan and become a participant on the later to
occur of the date the employee so becomes a covered employee and
the employee's initial eligibility date, or on any subsequent
eligibility date on which the employee is a covered employee.
(b) Service. The rehired employee's credited service and benefit
service shall be determined in accordance with the applicable
provisions of Section 4 and subsection 9.4 as if the employee
were a rehired participant (as defined in subsection 9.2).
9.2 REHIRED PARTICIPANT
If a participant or former participant is reemployed by a USG Company
(a "rehired participant"), the following provisions shall apply, subject to
subsection 2.2 of the plan:
(a) Suspension of Benefits. No benefits shall be payable under the
plan to the rehired participant during the participant's period
of reemployment.
(b) Participation. The rehired participant shall be eligible to
reenroll in the plan and resume active participation on the date
the participant again becomes a covered employee, or on any
subsequent eligibility date on which the participant is a covered
employee.
(c) Benefits. The benefits a rehired participant becomes entitled to
after the participant's period of reemployment ends shall be
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determined in accordance with the following provisions of this
Section 9.
9.3 ONE-YEAR BREAK IN SERVICE, EXTENDED BREAK IN SERVICE
A rehired employee or rehired participant will have incurred a
"one-year break in service" if the participant is not reemployed by a USG
Company until after the first anniversary of the date the participant's prior
period of employment with all of the USG Companies terminated. A rehired
employee or rehired participant will have incurred an "extended break in
service" if the number of the participant's consecutive one-year breaks in
service occurring after the participant's prior period of employment and before
the participant's reemployment equals or exceeds the greater of:
(a) Five; or
(b) The aggregate number of the participant's years of credited
service before the participant's reemployment.
Notwithstanding the foregoing provisions of this subsection, if an employee
commences a maternity or paternity absence (as defined below) on or after
January 1, 1985 and the participant's termination of employment with the USG
Companies occurs during such absence and the participant is not reemployed by a
USG Company on or before the first anniversary of the participant's termination
of employment, the employee shall not incur a one-year break in service until
the later to occur of the third anniversary of the date such maternity or
paternity absence began or the first anniversary of the date of the
participant's termination of employment with the USG Companies. "Maternity or
paternity absence" means an employee's absence from work because of the
pregnancy of the employee or the birth of a child of the employee, the placement
of a child with the employee in connection with the adoption of such child by
the employee, or for purposes of caring for the child immediately following such
birth or placement. The committee may require an employee to furnish such
information as the committee considers necessary to establish that the
employee's absence would constitute a maternity or paternity absence as defined
above.
9.4 CREDITED AND BENEFIT SERVICE
Before January 1, 1984, the term "credited service" was used to denote
service counted for the purpose of determining eligibility to receive a benefit
under the plan as well as for the purpose of determining the amount of such
benefit. On and after January 1, 1984, the term "credited service" is used for
the purpose of determining eligibility to receive a benefit under the plan, but
the term "benefit service" is used for the purpose of determining the amount of
such benefit. References below to "benefit service"
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with respect to any period of employment before January 1, 1984 means credited
service as applied under the plan before that date for the purpose of
determining eligibility to receive benefits. If a rehired participant reenrolls
in the plan as provided in subsection 9.2, determination of the participant's
credited and benefit service under Section 4 shall be subject to the following:
(a) Credited Service - Eligibility for Benefits. The credited
service to which the participant was entitled at the time of the
participant's prior termination of employment for the purpose of
determining the participant's eligibility to receive a monthly
retirement income or deferred vested benefit shall be added to
the participant's credited service earned after the participant's
reemployment, irrespective of whether the participant had
incurred an extended break in service. If the participant had not
incurred a one-year break in service, the period elapsed between
the date of the participant's prior termination of employment and
the date of the participant's reemployment also shall be
considered as credited service to the extent such period would
not otherwise be considered as credited service.
(b) Benefit Service - Reemployment Before One-year Break in Service.
(i) Prior Vested Benefits. If the rehired participant had
become entitled to a monthly retirement income or deferred
vested benefit at the time of the participant's prior
termination of employment and if the participant was
reemployed before the participant had incurred a one-year
break in service, the benefit service to which the
participant was entitled at the time of the participant's
prior termination of employment shall be added to the
participant's benefit service earned after the participant's
reemployment unless the participant had previously received
a lump sum payment equal to the lump sum actuarially
equivalent value of the participant's entire accrued
benefits at the time of the participant's prior termination
of employment.
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(ii) No Prior Vested Benefits. If the rehired participant had
not become entitled to a monthly retirement income or
deferred vested benefit at the time of the participant's
prior termination of employment and if the participant was
reemployed before the participant had incurred a one-year
break in service, the benefit service to which the
participant was entitled at the time of the participant's
prior termination of employment shall be added to the
participant's benefit service earned after the participant's
reemployment.
(c) Benefit Service - Reemployment After One-year Break in Service.
(i) Prior Vested Benefits. If the rehired participant had
become entitled to a monthly retirement income or deferred
vested benefit at the time of the participant's prior
termination of employment and if the participant was
reemployed after the participant had incurred a one-year
break in service, the benefit service to which the
participant was entitled at the time of the participant's
prior termination of employment will be retained and
reflected in the participant's prior accrued benefit (as
defined in subsection 9.5).
(ii) No Prior Vested Benefits. If the rehired participant had
not become entitled to a monthly retirement income or
deferred vested benefit at the time of the participant's
prior termination of employment and if the participant was
reemployed after the participant had incurred a one-year
break in service, the benefit service to which the
participant was entitled at the time of the participant's
prior termination of employment will not be added to the
participant's benefit service earned after the participant's
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reemployment. However, if the participant was reemployed
without having incurred an extended break in service, the
benefit service to which the participant was entitled at the
time of the participant's prior termination of employment
will be retained and reflected in the participant's prior
accrued benefit.
9.5 PRIOR ACCRUED BENEFIT
For purposes of this Section 9, the "tentative amount of the
participant's prior accrued benefit" means with respect to a rehired
participant:
(a) If the participant was rehired before attaining normal retirement
age and was receiving an actuarially reduced monthly benefit at
the time of the participant's reemployment, the amount of monthly
benefit that would have been payable to the participant
commencing on the participant's normal retirement date (assuming
earlier commencement had not occurred) based on the participant's
period of employment and participation in the plan up to the
participant's prior termination of employment, but reduced by the
actuarial equivalent of all monthly and lump sum benefits
previously paid to the participant under the plan (other than
disability retirement income benefits); or
(b) If subparagraph (a) next above does not apply in the
participant's case, the amount of monthly benefit that would have
been payable to the participant commencing on the participant's
normal retirement date (or on the participant's initial
retirement date, if later) based on the participant's period of
employment and participation in the plan up to the participant's
prior termination of employment, irrespective of whether the
participant had become eligible for such benefit at the time of
the participant's prior termination of employment, but reduced by
the actuarial equivalent of all monthly and lump sum benefits, if
any, previously paid to the participant under the plan (other
than disability retirement income benefits);
but with such amount reduced or increased if and to the extent provided below.
If the rehired participant's period of reemployment ends before the
participant's normal
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retirement date, and the participant elects commencement of payment of the
participant's plan benefits prior to that date, the tentative amount of the
participant's prior accrued benefit as determined above shall be actuarially
reduced on the same basis as the participant's other plan benefits and the
resulting amount shall be the rehired participant's "prior accrued benefit." If
the rehired participant's period of reemployment or any portion thereof occurs
after the participant attains normal retirement age, the tentative amount of the
participant's prior accrued benefit as determined above shall be increased as
follows:
(i) The portion of such tentative amount equal to the
participant's accrued benefits derived from pre-1991
participant contributions (as defined in subparagraph
7.10(b)), computed only with respect to the rehired
participant's prior employment, shall be increased on an
actuarially equivalent basis to reflect the period of the
participant's reemployment occurring after the participant's
normal retirement date (other than any portion thereof for
which the participant makes participant contributions and
accrues monthly benefits) and the commencement of the
participant's prior accrued benefit only after the
participant's period of reemployment ends; and
(ii) The portion of such tentative amount equal to the accrued
benefits derived from employer contributions (as defined in
subparagraph 7.10(e)), computed only with respect to the
rehired participant's prior employment, shall be increased
on an actuarially equivalent basis to reflect any calendar
month during the portion, if any, of the participant's
period of reemployment that occurs after the participant's
normal retirement date in which the participant received
compensation from the employers for hours of service (as
defined in United States Department of Labor Regulations
2530.200(b)-2(a)(1) and (2)) performed in fewer than eight
days or separate work shifts) but did not make participant
contributions and accrue benefits;
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and the resulting amount shall be the rehired participant's "prior accrued
benefit."
9.6 BENEFITS AFTER REEMPLOYMENT ENDS
No benefits shall be payable to a rehired participant under the plan
during the period of the participant's reemployment and the following shall
apply when the participant's period of reemployment ends:
(a) If Reemployed Before One-year Break in Service. If the rehired
participant was reemployed before the participant had incurred a
one-year break in service and if the participant's benefit
service at the time of the participant's prior termination of
employment was reinstated pursuant to subparagraph 9.4(b)(i) or
(ii), benefits payable to the participant after the participant's
period of reemployment ends shall be determined in accordance
with the provisions of the plan as in effect as of the end of
that period, but such benefits shall be reduced by the actuarial
equivalent of any benefits previously paid to the participant
under the plan (other than disability retirement income
benefits). In determining such rehired participant's earnings and
final average earnings when the participant's period of
reemployment ends for the purpose of computing the amount of any
benefits payable to the participant, the participant's prior
period of employment and the participant's period of reemployment
shall be considered as a single period of employment with the USG
Companies. If the rehired participant's benefit service was not
reinstated pursuant to subparagraph 9.4(b)(i) because the
participant previously had received a lump sum payment, benefits
payable to the participant after the participant's period of
reemployment ends shall be determined in accordance with the
provisions of the plan as in effect as of the end of that period
and shall be based only upon the participant's benefit service
and earnings attributable to the participant's period of
reemployment.
(b) If Reemployed After One-year Break in Service. If a rehired
participant was reemployed after the participant had incurred a
one-year break in service (and, therefore, the participant's
benefit service at the time of the participant's prior
termination of employment was not added to the participant's
benefit service earned after the participant's reemployment
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for the purpose of computing any benefits payable to the
participant under the plan), the benefits payable to the
participant after the participant's period of reemployment ends,
if the participant then is entitled to a monthly retirement
income or deferred vested benefit, shall be equal to the
participant's prior accrued benefit, if any, plus the amount of
the benefits the participant has accrued and become eligible to
receive under the plan with respect to the participant's period
of reemployment.
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SECTION 10
GENERAL PROVISIONS
10.1 INTERESTS NOT TRANSFERABLE
Except as may be required by the tax withholding provisions of the
Internal Revenue Code or any state or local income tax act or pursuant to a
qualified domestic relations order as defined in Section 414(p) of the Internal
Revenue Code, or for an offset described in Section 401(a)(13)(C) of the
Internal Revenue Code, the interests of participants and their beneficiaries
under the plan are not in any way subject to their debts or other obligations
and may not be voluntarily or involuntarily sold, transferred, alienated or
assigned. Pursuant to regulations under Section 401(a)-(13) of the Internal
Revenue Code, a retired or terminated participant, or the eligible spouse or
beneficiary of a deceased participant, only for the purpose of payment of any
amounts such person owes to a USG Company or is required to contribute to a
third party (that is, a USG Company, a trust established by a USG Company or an
insurance company) for medical benefit, hospitalization, life insurance or other
available welfare benefit coverage:
(a) may make a voluntary and revocable assignment to a third party of
not more than 10 percent of any payment due that person under the
plan; or
(b) may direct the committee that all or any portion of a benefit
payment to which such person is entitled under the plan be paid
to a third party, provided that such direction is revocable at
any time by such participant, spouse or beneficiary and the third
party files a written acknowledgment with the committee within
the time period required by such regulations that the third party
has no enforceable right in or to any part or all of a benefit
payment to which such person becomes entitled to under the plan
(exclusive of payments actually received pursuant to such
person's direction prior to its revocation).
In no event may an assignment or direction made pursuant to the provisions of
the next preceding sentence be for the purpose, or have the effect, of defraying
plan administration costs.
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10.2 FACILITY OF PAYMENT
When a participant or other person entitled to benefits under the plan
is under a legal disability or, in the committee's opinion, is in any way
incapacitated so as to be unable to manage the participant's financial affairs,
the committee may direct the trustee to make payments or distributions to which
the participant otherwise is entitled to the participant's legal representative
or to a relative or friend of such person for the participant's benefit, or the
committee may direct the trustee to apply the payment or distribution for the
benefit of such person in any manner that the committee may select which is
consistent with the plan. If the committee receives proper authorization by a
participant or any other person entitled to benefits under the plan, and unless
and until the committee is notified or becomes aware that such authorization no
longer is in effect, the committee will direct the trustee to make periodic
deposits of the benefits which otherwise would be payable directly to the
participant into a savings or checking account established in the participant's
name at a bank or other financial institution. Any payments made in accordance
with the foregoing provisions of this subsection shall be a full and complete
discharge of any liability for such payments.
10.3 ABSENCE OF GUARANTY
Neither the committee nor any USG Company in any way guarantees the
trust fund from loss or depreciation. Subject to subsection 14.5, the USG
Companies do not guarantee any payment to any person. The liability of the
trustee or the committee to make any payment or distribution under the plan is
limited to the available assets of the trust fund.
10.4 EMPLOYMENT RIGHTS
The plan does not constitute a contract of employment, and
participation in the plan will not give any employee the right to be retained in
the employ of the USG Companies, nor any right or claim to any benefit under the
plan, unless such right or claim has specifically accrued under the terms of the
plan.
10.5 LITIGATION BY PARTICIPANTS OR OTHER PERSONS
To the extent permitted by law, if a legal action begun against a USG
Company, the committee (or any member thereof), or the trustee by or on behalf
of any person with respect to benefits under the plan results adversely to that
person, or if a legal action arises because of conflicting claims to a
participant's or beneficiary's benefits, the cost to any USG Company, the
committee (or any member thereof), or the trustee of
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defending the action will be charged to the extent possible to the sums, if any,
that were involved in the action or were payable to the participant or
beneficiary concerned.
10.6 ACTUARIALLY EQUIVALENT BENEFITS
Except as otherwise provided by law, a benefit shall be actuarially
equivalent to any other benefit if the actuarial reserve required to provide the
same is equal to the actuarial reserve required to provide such other benefit,
computed on the basis of the actuarial rates, tables and procedures specified in
Exhibit A or set forth elsewhere in the plan. No adjustment in a determination
of an actuarially equivalent value or amount shall be made if such rates, tables
and procedures are changed subsequent to such determination.
10.7 EVIDENCE
Evidence required of anyone under the plan may be by certificate,
affidavit, document or other information which the person acting on it considers
pertinent and reliable, and signed, made or presented by the proper party or
parties.
10.8 WAIVER OF NOTICE
Any notice required under the plan may be waived by the person
entitled to notice.
10.9 CONTROLLING LAW
To the extent not superseded by federal law, the laws of Illinois
shall be controlling in all matters relating to the plan.
10.10 SEVERABILITY
In case any provisions of the plan shall be held illegal or invalid
for any reason, such illegality or invalidity shall not affect the remaining
provisions of the plan, and the plan shall be construed and enforced as if such
illegal and invalid provisions had never been set forth in the plan.
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10.11 FIDUCIARY RESPONSIBILITIES
It is specifically intended that all provisions of the plan shall be
applied so that all fiduciaries with respect to the plan shall be required to
meet the prudence and other requirements and responsibilities imposed by
applicable law to the extent such requirements or responsibilities apply to
them, but that, subject to applicable law, each such fiduciary shall be
responsible only for the carrying out of the responsibilities, obligations and
duties placed upon the fiduciary by the provisions of the plan to the extent not
allocated or delegated to other persons. In general, a fiduciary shall discharge
the fiduciary's duties with respect to the plan and trust solely in the
interests of plan participants and beneficiaries and with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims.
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SECTION 11
THE COMMITTEE
11.1 MEMBERSHIP
The plan is administered by the Pension and Investment Committee (the
"committee") consisting of three or more members appointed by the company. The
appointment of a committee member pursuant to the provisions of this subsection
shall be effective not earlier than receipt by such person of written notice of
the member's appointment from the company and the member's written acceptance of
such appointment. A committee member may resign at any time by giving thirty
days' advance written notice to the company and the other committee members. The
company may remove a committee member by giving advance written notice to the
member, the other committee members, and the other employers. The company may
fill any vacancy in the membership of the committee, or may appoint an
additional member or members of the committee, and shall give prompt written
notice thereof to the other committee members and the other employers. While
there is a vacancy in the membership of the committee, the remaining committee
members shall have the same powers as the full committee until the vacancy is
filled.
11.2 GENERAL POWERS, RIGHTS AND DUTIES
The committee has the following powers, rights and duties in addition
to those given it elsewhere in the plan and the trust agreement:
(a) To select a chairman and secretary, if it believes it advisable,
who may, but need not be, committee members.
(b) To determine in its discretion all questions arising under the
plan, including the power to determine the rights or eligibility
of employees or participants and their beneficiaries, and the
amount of their respective benefits under the plan, and to remedy
ambiguities, inconsistencies or omissions.
(c) To adopt such rules of procedure and regulations as in its
opinion may be necessary for the proper and efficient
administration of the plan and as are consistent with the plan.
(d) To enforce the plan and the rules and regulations, if any,
adopted by the committee as above.
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(e) To direct the trustee as respects benefit payments or other
distributions from the trust fund pursuant to the provisions of
the plan.
(f) To furnish the employers with such information as may be required
by them for tax or other purposes as respects the plan.
(g) To employ agents, attorneys, accountants, actuaries or other
persons (who also may be employed by any employer or the
trustee), and to allocate or delegate to them such powers, rights
and duties as the committee may consider necessary or advisable
to properly carry out the administration of the plan, provided
that such allocation or delegation and the acceptance thereof by
such agents, attorneys, accountants, actuaries or other persons,
shall be in writing.
11.3 MANNER OF ACTION
During a period in which two or more committee members are acting, the
following provisions apply where the context admits:
(a) A committee member by writing may delegate any or all of the
member's rights, powers, duties and discretions to any other
committee member, with the consent of the latter.
(b) The committee members may act by meeting, or by writing signed
without meeting, and may sign any document by signing one
document or concurrent documents.
(c) An action or decision of a majority of the committee members as
to a matter shall be as effective as if taken or made by all
pension committee members.
(d) If, because of the number qualified to act, there is an even
division of opinion among the committee members as to a matter,
the company shall decide the matter.
(e) The certificate of the secretary of the committee or of a
majority of the committee members that the committee has taken or
authorized any action shall be conclusive in favor of any person
relying on the certificate.
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11.4 INFORMATION REQUIRED BY COMMITTEE
The USG Companies shall furnish the committee with such data and
information as the committee may deem necessary or desirable in order to
administer the plan. The records of a USG Company as to an employee's or
participant's period or periods of employment, termination of employment and the
reason therefor, leave of absence, reemployment and earnings will be conclusive
on all persons unless determined to the committee's satisfaction to be
incorrect. Participants and other persons entitled to benefits under the plan
also shall furnish the committee with such evidence, data or information as the
committee considers necessary or desirable to administer the plan.
11.5 COMMITTEE DECISION FINAL
Subject to applicable law and the provisions of subsection 11.6, any
interpretations of the provisions of the plan and any decision on any matter
within the discretion of the committee made by the committee in good faith shall
be binding on all persons. A misstatement or other mistake of fact shall be
corrected when it becomes known and the committee shall make such adjustment on
account thereof as it considers equitable and practicable.
11.6 REVIEW OF BENEFIT DETERMINATIONS
The committee will provide notice in writing to any participant,
beneficiary or other person whose claim for benefits under the plan is denied
and the committee shall afford such participant, beneficiary or other person a
full and fair review of its decision, if so requested.
11.7 UNIFORM RULES
The committee shall administer the plan on a reasonable and
nondiscriminatory basis and shall apply uniform rules to all participants
similarly situated.
11.8 COMMITTEE MEMBER WHO IS A PARTICIPANT
If a member of the committee is a participant in the plan, the member
may not decide or determine any matter or question concerning the member's
benefits or as to how they are to be paid to the member that the member would
not have the right to decide or determine if the member were not a member of the
committee.
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SECTION 12
FUNDING OF PLAN BENEFITS
12.1 EMPLOYER AND PARTICIPANT CONTRIBUTIONS
Subject to the provisions of Section 15, the employers expect and
intend to contribute to the plan from time to time, after taking into account
participants' contributions made pursuant to subsection 2.5, such amounts as
shall be required under accepted actuarial principles to maintain the plan in a
sound condition and to meet all applicable funding requirements imposed by
federal law.
12.2 MINIMUM FUNDING STANDARDS
The employers maintain a funding standard account which is credited
with contributions and gains and charged with costs and losses for each plan
year in accordance with Section 412 of the Internal Revenue Code. Contributions
to the plan for each plan year shall be made at such times and in such amounts
as are required by Section 412 of the Internal Revenue Code.
12.3 APPLICATION OF FORFEITED BENEFITS
Benefits that would have been payable to a participant if the
participant's employment with the USG Companies had not terminated before the
participant was eligible to receive a monthly retirement income or deferred
vested benefit and benefits that would have been payable to the participant or
any other person but for the participant's death shall not be applied to
increase the benefits of any other participants or any other persons entitled to
benefits under the plan. However, the limitation contained in the next preceding
sentence shall not in any way limit the right reserved to the company under
subsection 14.1 to amend the plan to provide for increases or decreases in the
amount of benefits or to modify the form of any benefits payable under the plan.
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SECTION 13
RELATING TO THE EMPLOYERS
13.1 ACTION BY EMPLOYERS
Any action required or permitted of an employer under the plan shall
be by resolution of its Board of Directors or by a duly authorized committee of
its Board of Directors, or by a person or persons authorized by resolution of
its Board of Directors or such committee.
13.2 ADDITIONAL EMPLOYERS
Any subsidiary that is not an employer may adopt the plan and become
an employer and a party to the trust agreement:
(a) By filing with the committee and the trustee a certified copy of
a resolution of the Board of Directors of the subsidiary
providing for its adoption of the plan; and
(b) By filing with the trustee a written certification signed by a
majority of the members of the committee or the secretary of the
committee that the committee has consented to such adoption.
13.3 SUCCESSOR EMPLOYERS
In the event of the dissolution, merger, consolidation or
reorganization of an employer, or the sale by that employer of all or
substantially all of its assets, with the consent of the company the successor
to that employer or the purchaser of all or substantially all of its assets may
be substituted for that employer under the plan and the trust agreement.
13.4 RESTRICTIONS AS TO REVERSION OF TRUST ASSETS TO EMPLOYERS
The employers shall have no right, title or interest in the assets of
the trust fund, nor will any part of the assets of the trust fund at any time
revert or be repaid to an employer, directly or indirectly, except as follows:
(a) If the Internal Revenue Service initially determines that the
plan, as applied to any employer that adopts the plan after the
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effective date, does not meet the requirements of a "qualified
plan" under Section 401(a) of the Internal Revenue Code, that
portion of the assets of the trust fund attributable to
contributions made by that employer under the plan shall be
returned to that employer within one year of the date of denial
of qualification of the plan as applied to that employer.
(b) If a contribution or a portion of a contribution is made by an
employer as a result of a mistake of fact, such contribution or
portion of a contribution shall not be considered to have been
contributed under the plan by that employer and, after having
been reduced by any losses of the trust fund allocable thereto,
shall be returned to that employer from the trust fund within one
year of the date the amount is contributed under the plan.
(c) Each contribution made by an employer is conditioned upon the
continued qualification of the plan and the deductibility of such
contribution as an expense for federal income tax purposes and,
therefore, to the extent that a contribution is made by an
employer under the plan for a period for which the plan is not a
qualified plan or the deduction for a contribution made by the
employer is disallowed, then such contribution or portion of a
contribution, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that employer
within one year of the date of determination of the nonqualified
status of the plan or the date of disallowance of the deduction.
(d) If after all fixed and contingent liabilities or obligations to
persons entitled to benefits under the plan shall have been paid
or provided for in full any assets remain in the trust fund
because of an erroneous actuarial computation, such assets shall
be returned to the employers.
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SECTION 14
AMENDMENT, TERMINATION OR PLAN MERGER
14.1 AMENDMENT
While the employers expect and intend to continue the plan, the
company reserves the right to amend the plan (in accordance with the procedures
set forth in subsection 13.1) from time to time, except as follows:
(a) The duties and liabilities of the committee under the plan cannot
be changed substantially without its consent; and
(b) Except as provided in subsection 13.4, under no condition shall
any amendment result in the return or repayment to any employer
of any part of the trust fund or the income therefrom, or result
in the distribution of the trust fund for the benefit of anyone
other than employees and former employees of the employers and
any other persons entitled to benefits under the plan.
14.2 TERMINATION
The plan will terminate as to all employers on any date specified by
the company (in accordance with the procedures set forth in subsection 13.1) if
30 days advance written notice of the termination is given to the trustee, the
committee and the other employers.
14.3 PLAN MERGER OR CONSOLIDATION
In no event shall there be any merger or consolidation of the plan
with, or transfer of assets or liabilities to, any other plan unless each
participant in the plan would (if the plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit the participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the plan had then
terminated).
14.4 NOTICE OF AMENDMENT, TERMINATION OR PLAN MERGER
Participants affected thereby will be notified of an amendment,
termination, plan merger or consolidation within a reasonable time.
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14.5 NONFORFEITABILITY ON TERMINATION
On termination or partial termination of the plan as respects any
employer, the rights of all affected participants to benefits accrued to the
date of such termination or partial termination shall be non- forfeitable;
provided that in such event each affected participant shall not have any
recourse towards satisfaction of the participant's nonforfeitable benefits from
other than the assets of the plan allocable to the participant under Section 15
or the Pension Benefit Guaranty Corporation.
14.6 LIMITATIONS ON TERMINATION
Notwithstanding any other provisions of the plan, in the event of
termination of the plan, the benefits of any highly compensated employee or
highly compensated former employee (as defined in Section 414(q) of the Internal
Revenue Code) shall be limited to benefits that are nondiscriminatory under
Section 401(a)(4) of the Internal Revenue Code.
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SECTION 15
ALLOCATION AND DISTRIBUTION
OF ASSETS ON TERMINATION
On termination of the plan, the committee will direct the allocation
and distribution of the assets of the trust fund to participants and other
persons entitled to benefits under the plan. After payment of any expenses of
administration and liquidation, the assets remaining in the trust fund shall be
allocated and distributed to such participants and other persons, to the extent
of the sufficiency of such assets, in accordance with the provisions of Section
4044 of the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time, and the regulations thereunder. Any assets remaining
after such allocation and distribution shall be subject to the provisions of
subsection 13.4. Distribution may be made in cash or property or partly in each,
provided property is distributed at its fair market value as of the date of
distribution as determined by the trustee. If the committee so determines, the
benefits distributable to any participant under this Section 15 who is employed
by a USG Company may be retained in the trust fund until the participant's
employment with the USG Companies is terminated.
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SECTION 16
ANNUAL BENEFIT PAYMENT RESTRICTIONS
16.1 RESTRICTIONS ON ANNUAL PAYMENTS
Notwithstanding any other provisions of the plan or the trust
agreement, for any plan year the benefits paid to a participant who was among
the 25 highly compensated employees and highly compensated former employees (as
defined in Section 414(q) of the Internal Revenue Code) receiving the greatest
compensation from the employers for that plan year shall be restricted to an
amount equal to the payments that would be made on behalf of the participant for
that year under a single life annuity that is the actuarial equivalent of the
participant's accrued benefits under the plan. The foregoing restriction shall
not apply for any plan year if:
(a) After payment of all benefits payable under the plan for that
year to such highly compensated employee or highly compensated
former employee, the value of plan assets equals or exceeds 110
percent of the value of current liabilities to participants and
beneficiaries under the plan; or
(b) The value of all current and contingent benefits payable under
the plan to or with respect to such highly compensated employee
or highly compensated former employee is less than one percent of
the value of current liabilities to participants and
beneficiaries under the plan.
16.2 RESPONSIBILITY OF COMMITTEE
The committee shall have sole responsibility to see that the
restrictions of this Section 16 are applied.
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SECTION 17
SPECIAL RULES FOR TOP-HEAVY PLANS
17.1 PURPOSE
The purpose of this Section 17 is to comply with the requirements of
Section 416 of the Internal Revenue Code. The provisions of this Section 17
shall be effective for each plan year beginning after December 31, 1983 in which
the plan is a "top-heavy plan" within the meaning of Section 416(g) of the
Internal Revenue Code.
17.2 TOP-HEAVY PLAN
In general, the plan will be a top-heavy plan for any plan year if, as
of the last day of the preceding plan year (the "determination date"), the
present value of the cumulative accrued benefits and account balances of
participants who are key employees (as defined in Section 416(i)(l) of the
Internal Revenue Code) who are covered by this plan and any other defined
benefit plans and any defined contribution plans that are aggregated as required
or permitted by subsection 17.7 exceed 60 percent of the present value of the
cumulative accrued benefits and account balances of all employees who are
covered by such plans. In making the foregoing determination, the following
special rules shall apply:
(a) The present value of a participant's accrued benefits or account
balances shall be determined in accordance with Section 416(g) of
the Internal Revenue Code and any regulations issued and in
effect thereunder, as applied to the terms of the plans involved.
The present value of a participant's accrued benefits or account
balances shall be determined as of the most recent valuation date
occurring within the 12-month period ending on the applicable
determination date, subject to adjustments required by Section
416 of the Internal Revenue Code and any regulations issued and
in effect thereunder. The "valuation date" in determining (i) the
present value of accrued benefits shall be the same date used for
computing plan costs for minimum funding, regardless of whether a
valuation is performed in the applicable year, and (ii) the
present value of account balances shall be the most recent
accounting date within the applicable 12-month period as of which
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participants' accounts are adjusted to reflect the value of plan
assets.
(b) The present value of a participant's accrued benefits or account
balances shall be increased by the aggregate distributions if
any, made with respect to the participant during the five-year
period ending on the determination date.
(c) The accrued benefits or account balances of a participant who
previously was a key employee, but who no longer is a key
employee, shall be disregarded.
(d) The accrued benefits or account balances of a beneficiary of a
participant shall be considered as accrued benefits or account
balances of the participant.
(e) The accrued benefits or accrued balances of a participant who was
not credited with an hour of service by an employer at any time
during the five year period ending on the determination date
shall be disregarded.
17.3 KEY EMPLOYEE
In general, a "key employee" is an employee or former employee who, at
any time during the five-year period ending on the determination date, is or
was:
(a) An officer of a USG Company receiving annual compensation greater
than 150 percent of the limitation in effect under Section
415(b)(1)(A) of the Internal Revenue Code for the calendar years
in which such plan years end; provided, that for purposes of this
subparagraph (a), no more than 50 employees of the USG Companies
(or if lesser, the greater of 3 employees or 10 percent of the
employees) shall be treated as officers;
(b) One of the ten employees of the USG Companies receiving annual
compensation of more than the limitation in effect under Section
415(c)(l)(A) of the Internal Revenue Code for the calendar years
in which such plan years end and owning both more than a one-half
percent interest and the largest interests in the USG Companies;
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(c) A 5 percent owner (as defined in Section 416(i)(l)(B)(i) of the
Internal Revenue Code) of a USG Company; or
(d) A 1 percent owner (as defined in Section 416(i)(l)(B)(ii) of the
Internal Revenue Code) of a USG Company receiving annual
compensation from the USG Companies of more than $150,000.
17.4 MINIMUM VESTING
For any plan year in which the plan is a top-heavy plan, a
participant's vested percentage in the participant's accrued benefit shall not
be less than the percentage determined under the following table:
Years of Credited Service Vested
(as defined in subsection 4.2) Percentage
- ------------------------------ ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 or more 100%
If the foregoing provisions of this subsection 17.4 become effective, and the
plan subsequently ceases to be a top-heavy plan, each participant who has then
completed three or more years of credited service may elect to continue to have
the vested percentage of the participant's accrued benefit determined under the
provisions of this subsection. If the foregoing provisions of this subsection
17.4 become effective, and the plan subsequently ceases to be a top-heavy plan,
each participant who has then completed three or more years of employment
service may elect to continue to have the vested percentage of the participant's
accrued benefit determined under the provisions of this subsection 17.4. Such
election shall be made no later than 60 days after the later of (i) the first
day of the plan year in which the plan ceases to be a top-heavy plan; or (ii)
the date participants are notified in writing of the change in the plan's status
and their right to make such election. Any benefit that was nonforfeitable
before the plan ceased to be top-heavy shall remain nonforfeitable.
17.5 MINIMUM BENEFIT
A participant's monthly retirement income or monthly deferred vested
benefit, commencing on the participant's normal retirement date and payable as a
life annuity, shall not be less than an amount equal to 2 percent of the
participant's average compensation (as defined below) multiplied by the number
of years (not to exceed ten) of
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the participant's top-heavy service (as defined below). A participant's "average
compensation" means the monthly average of the participant's total compensation
for the five consecutive years for which the participant's total compensation
was highest, disregarding any compensation paid after the last year in which the
plan is a top-heavy plan. A participant shall be entitled to a year of
"top-heavy service" for each year of the participant's credited service ending
after December 31, 1983 during which the plan is a top-heavy plan and the
participant is a participant thereunder, regardless of whether the participant
is a participant at the end of that year or had ceased making participant
contributions under subsection 2.5 because of the participant's election to do
so, the participant's transfer to a group of employees to which the plan has not
been extended, or otherwise.
17.6 AGGREGATION OF PLANS
In accordance with Section 416(g)(2) of the Internal Revenue Code,
each other defined benefit plan and defined contribution plan maintained by the
USG Companies which cover a key employee as a participant, or which is
maintained by the USG companies in order for a plan covering a key employee to
be qualified, shall be aggregated with this plan in determining whether this
plan is top-heavy. In addition, any other defined benefit or defined
contribution plan of the USG Companies may be included if all such plans which
are included, when aggregated, will not discriminate in favor of officers,
shareholders or highly compensated employees. The plans referred to above also
shall include qualified plans that had been maintained by the USG Companies
within the five year period ending on the determination date that have been
terminated.
17.7 NO DUPLICATION OF BENEFITS
If a participant in this plan also participates in another qualified
plan maintained by the USG Companies the minimum benefit otherwise required
under subsection 17.5 above may be adjusted in accordance with Section 416(f) of
the Internal Revenue Code and regulations issued thereunder by the Secretary of
the Treasury to prevent inappropriate omissions or require duplication of
minimum benefits or contributions.
17.8 ADJUSTMENT OF COMBINED BENEFIT LIMITATIONS
With respect to each participant whose retirement date or employment
termination date occurs on or before December 31, 1999, the determination of the
defined benefit plan fraction and defined contribution plan fraction pursuant to
subsection 8.3 shall be adjusted in accordance with Section 416(h) of the
Internal Revenue Code.
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17.9 USE OF TERMS
All terms and provisions of the plan shall apply to this Section 17,
except that where the terms and provisions of the plan and this Section 17
conflict, the terms and provisions of this Section 17 shall govern.
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SECTION 18
SPECIAL RESTRICTIONS AND OVERRIDING
PROVISIONS APPLICABLE DURING A
RESTRICTED PERIOD
18.1 OVERRIDING PROVISIONS EFFECTIVE DURING RESTRICTED PERIOD
The following provisions of this Section 18 shall become effective on
a Restricted Date as the result of a Change in Control and shall remain in
effect during the Restricted Period beginning on that date until the following
related Unrestricted Date. During the Restricted Period the provisions of this
Section 18 shall supersede any other provisions of the plan to the extent
necessary to eliminate any inconsistencies between the provisions of this
Section 18 and any other provisions of the plan, including any exhibits and
supplements thereto.
18.2 DEFINITIONS
For purposes of this Section 18, the definitions set forth in
subparagraphs (a) through (n) below shall apply. Definitions set forth elsewhere
in the plan also shall apply to the provisions of this Section 18, except that
where a definition set forth elsewhere in the plan and a definition set forth in
this subsection conflict, the definition set forth in this subsection shall
govern.
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, is the
Beneficial Owner of shares of Common Stock of the Company
constituting more than 20 percent of the Common Stock then
outstanding, but such term does not include USG Corporation, any
subsidiary of USG Corporation, any employee benefit plan of USG
Corporation or any subsidiary of USG Corporation or any entity
holding Common Stock for or pursuant to the terms of any such
plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities;
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has either (A) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights
(other than "stock purchase rights" granted by the Company
to its stockholders which by their terms become exercisable
upon a Person acquiring a stated percentage of stock of the
Company or a Person announcing a tender or exchange offer
for a stated portion of stock of the Company), warrants or
options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security
pursuant to this clause (B) if the agreement, arrangement or
understanding to vote such security (l) arises solely from a
revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange
Act and (2) is not then reportable under Item 5 of Schedule
13D under the Exchange Act (or any comparable or successor
report); and
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(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the
Company.
(d) A "Change in Control" shall be deemed to occur upon any Person
becoming an Acquiring Person.
(e) "Common Stock" shall mean the Common Stock, par value $.10 per
share, of the Company (as the same may be changed by reason of
any combination, subdivision or reclassification of the Common
Stock).
(f) "Company" shall mean USG Corporation and any successor thereto
because of merger, consolidation or other reason.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
it may be amended from time to time.
(h) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any "group" as that term is used in
Rule 13d-5(b) under the Exchange Act.
(i) "Post-Retirement Medical Fund" shall mean the portion of the
trust fund that contains assets to be applied pursuant to Section
401(h) of the Internal Revenue Code to provide medical benefits
described in USG Retiree Medical Plan.
(j) "Restricted Date" shall mean the date on which a Change in
Control occurs.
(k) "Restricted Period" shall mean the period beginning on a
Restricted Date and ending on the fifth anniversary of such
Restricted Date.
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(l) "Unrestricted Date" shall mean the last day of a Restricted
Period.
(m) "USG Retiree Medical Plan" means the Retiree Medical Plan
maintained by the Company and the other employers under the plan
for participants therein who at the time of their retirement are
entitled to retirement income benefits under the plan.
(n) "USG Retiree Life Insurance Plan" means the group life insurance
program maintained by the Company and the other employers under
the plan with respect to participants therein who at the time of
their retirement are entitled to retirement income benefits under
the plan.
18.3 RESTRICTIONS ON ELIGIBILITY TO PARTICIPATE
During the Restricted Period, no employee of a USG Company or any
other corporation, partnership or sole proprietorship may become eligible to
participate in the plan unless the employee is a member of a group of employees
that immediately prior to the Restricted Date was covered under the plan at a
facility or location of an employer under the plan immediately prior to the
Restricted Date.
18.4 PROHIBITION AGAINST MERGERS AND TRANSFERS OF ASSETS AND LIABILITIES
During the Restricted Period, the plan may not be merged into any
other defined benefit plan or defined contribution plan maintained by any USG
Company or other corporation, partnership or sole proprietorship, nor may any
other defined benefit plan or defined contribution plan be merged into the plan,
and no portion of the assets and benefit liabilities of the plan may be
transferred to any other defined benefit plan or defined contribution plan, nor
may any assets and benefit liabilities of any other defined benefit plan or
defined contribution plan be transferred to the plan.
18.5 TIMING AND METHOD OF DISTRIBUTION
During the Restricted Period, the timing and methods of distributions
of participants' retirement income and deferred vested benefits and death
benefits payable under the plan and the determination of actuarially equivalent
values shall be governed by the applicable provisions of the plan as in effect
on the date immediately preceding the Restricted Date. Notwithstanding the next
preceding sentence, any such participant whose retirement income or deferred
vested benefit is not required to be distributed in the
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form of a qualified joint and survivor annuity or in the form of a
pre-retirement spouse's benefit (either because such participant has no spouse
at the time payment of such retirement income or deferred vested benefit
commences or, in the case of the qualified joint and survivor annuity or
pre-retirement spouse's benefit, because the participant waived such form of
payment with the participant's spouse's consent where permitted) may select, in
the participant's sole discretion, the method of distribution of the
participant's retirement income or deferred vested benefit (including, if
applicable, distribution to the participant's beneficiary, where any portion of
such retirement income or deferred vested benefit is to be distributed under the
terms of the plan to the participant's beneficiary) from among the optional
methods of distribution available to such participant with respect to the
participant's retirement income or deferred vested benefit under the provisions
of the plan as in effect on the date immediately preceding the Restricted Date.
18.6 PROHIBITION AGAINST REVERSION OF PLAN ASSETS IF PLAN TERMINATED
The plan may not be terminated during the Restricted Period in a
manner that would result in a reversion or diversion of any portion of the
assets of the trust fund to any USG Company or other Person. If the plan is
terminated during the Restricted Period:
(a) Concurrent with and after the termination of the plan all former
employees who previously had retired under the plan and at the
time of their retirement were entitled to receive retirement
income benefits under the plan and all employees who at the time
of the termination of the plan are participants in the plan and
either previously satisfied the eligibility requirements for
retirement under the plan in effect immediately prior to such
termination or will satisfy such requirements prior to the end of
the Restricted Period shall have a nonforfeitable right for the
balance of their lives to the postretirement medical benefits
provided under the USG Retiree Medical Plan as in effect
immediately prior to the date of the termination of the plan and
also shall have a nonforfeitable right for the balance of their
lives to the basic life insurance coverage provided by the USG
Retiree Life Insurance Plan as in effect immediately prior to the
date of the termination of the plan.
(b) All assets of the trust fund, after payment of expenses of
administration and liquidation, shall be allocated and
distributed to participants and other persons entitled to
benefits under the plan in accordance with the provisions of
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Section 4044 of the Employee Retirement Income Security Act of
1974, as it may be amended from time to time, and the regulations
thereunder, to the extent necessary to satisfy all liabilities
for retirement income, deferred vested and death benefits payable
under the plan. If any assets remain in the trust fund after all
such liabilities have been paid or provided for in full:
(i) Subject to the conditions and limitations set forth in
subsection 18.7 and the sufficiency of such assets, such
remaining assets shall be transferred to the Post-Retirement
Medical Fund to the extent required to provide benefits
payable pursuant to the USG Retiree Medical Plan with
respect to retired employees and employees described in
subparagraph (a) next above, their spouses and dependents.
(ii) Subject to the conditions and limitations set forth in
subsection 18.7 and the sufficiency of such assets, such
remaining assets, to the extent not transferred to the
Post-Retirement Medical Fund pursuant to subparagraph (i)
next above, shall be applied to purchase individual or group
paid-up life insurance contracts issued on the lives of
retired employees and employees described in subparagraph
(a) next above to the extent required to provide the life
insurance coverage described in USG Retiree Life Insurance
Plan other than life insurance coverage that otherwise would
be provided by employee contributions.
(iii) Such remaining assets, to the extent not transferred to the
Post-Retirement Medical Fund pursuant to subparagraph (i)
next above nor applied to provide individual or group
paid-up life insurance contracts pursuant to subparagraph
(ii) next above, shall be applied to provide from the trust
fund additional retirement income, deferred vested and death
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benefits to employees participating in the plan immediately
prior to its termination, former employees who immediately
prior to the termination of the plan were receiving
retirement income or deferred vested benefits, or were
entitled to receive such benefits commencing on a future
date, and spouses or other persons who immediately prior to
the termination of the plan were receiving death benefits
thereunder, or were entitled to receive death benefits
commencing on a future date. Such additional benefits shall
be those which can be provided (payable in the same form and
at the same times as the benefits to which they are added)
with the remaining assets described above in this
subparagraph after allocating such remaining assets on the
basis of the respective lump sum actuarially equivalent
values of the benefits payable to such persons under the
plan from the trust fund (computed on the basis of the
applicable actuarial factors and assumptions set forth in
Exhibit A to the plan, assuming, in the case of a
participant who then is eligible to retire under the plan
but has not done so, that the participant will immediately
retire and, in the case of a participant who is not yet
eligible to retire under the plan, that the participant will
retire when the participant otherwise would have first
become eligible to do so).
18.7 CONDITIONS AND LIMITATIONS
The provisions of subsection 18.6 shall be subject to the following
conditions and limitations:
(a) Medical Benefit Limitations. Assets may be transferred to the
Post-Retirement Medical Fund to provide medical benefits pursuant
to subparagraph 18.6(b)(i) only on a basis and in amounts which
would not result in discrimination in favor of employees of the
employers who are officers,
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shareholders or highly compensated and only to the extent
permitted by Section 401(h) of the Internal Revenue Code and the
regulations thereunder and no medical benefits may be funded
under or provided by the Post-Retirement Medical Fund for a
participant who is a 5 percent owner as defined in Section
416(i)(l)(B)(i) of the Internal Revenue Code during the plan year
in which the plan is terminated or any prior plan year.
(b) Life Insurance Limitations. Assets may be applied to provide
individual or group paid-up life insurance contracts pursuant to
subparagraph 18.6(b)(ii) only on a basis and in amounts which
would not result in discrimination in favor of employees of the
employers who are officers, shareholders or highly compensated
and assets may not be so applied which would provide life
insurance benefits with respect to any retired participant that
would exceed 50 percent of the participant's earnings (as defined
in subsection 4.5) during the last 12 months of the participant's
employment by the USG Companies.
(c) Post-Retirement Medical Fund Non-Diversion and Reversion
Requirements. Prior to the satisfaction of all liabilities for
benefits payable from the Post-Retirement Medical Fund pursuant
to the USG Retiree Medical Plan, no portion of the assets of the
Post-Retirement Medical Fund may be used for, or diverted to, any
purpose other than the providing of such benefits. Assets of the
Post-Retirement Medical Fund may be applied to pay any necessary
or appropriate expenses attributable to the administration of the
Post-Retirement Medical Fund. If the USG Retiree Medical Plan is
terminated, any assets remaining in the Post-Retirement Medical
Fund after all liabilities for benefits payable from that fund
shall be returned to the employers.
18.8 PROHIBITION AGAINST AMENDMENT
During the Restricted Period, the provisions of this Section 18 may
not be amended or deleted and may not be superseded by any other provision of
the plan (including the provisions of any exhibit or supplement thereto).
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EXHIBIT A
TO
USG CORPORATION RETIREMENT PLAN
Actuarial Factors and Assumptions
A-1. Purpose. The purpose of this Exhibit A is to set forth all
actuarial factors and assumptions used in USG Corporation Retirement Plan.
A-2. Plan Interest Rate. Interest compounded annually for the
applicable period at the following rates:
(a) 2-1/2 percent per annum through May 31, 1965;
(b) 3 percent per annum from June 1, 1965 through December 31, 1975;
(c) 5 percent per annum from January 1, 1976 through December 31,
1983;
(d) 8 percent per annum from January 1, 1984 through December 31,
1984;
(e) 9 percent per annum from January 1, 1985 through December 31,
1985;
(f) 7 percent per annum from January 1, 1986 through December 31,
1986;
(g) 6 percent per annum from January 1, 1987 through December 31,
1989;
(h) 8 percent per annum from January 1, 1990 through December 31,
1991; and
(i) 8 percent per annum after December 31, 1991 or such higher or
lower rate equal to the nearest whole percentage point below the
average rate then available for 90-day U.S. Government Treasury
Bills, as may be specified for a designated period by the
committee at its discretion by writing filed with the plan's
actuary.
A-3. Statutory Interest Rate. Interest compounded annually for the
applicable period at the following rates:
A-1
(a) 2-1/2 percent per annum through May 31, 1965;
(b) 3 percent per annum from June 1, 1965 through December 31, 1975;
(c) 5 percent per annum from January 1, 1976 through December 31,
1983;
(d) 8 percent per annum from January 1, 1984 through December 31,
1984;
(e) 9 percent per annum from January 1, 1985 through December 31,
1985;
(f) 7 percent per annum from January 1, 1986 through December 31,
1986;
(g) 6 percent per annum from January 1, 1987 through December 31,
1987.
(h) 120 percent of the Federal mid-term rate (as in effect for the
first month of a plan year) for the period beginning January 1,
1988 and ending on the date on which the amount of a
participant's accumulated pre-1991 contributions is being
determined (the "determination date"); and
(i) At the interest rate that would be used as of the determination
date under paragraph A-4 of this Exhibit A for the period
beginning with the determination date and ending on the date on
which the participant would attain normal retirement age.
A-4. Lump Sum Rate. The "lump sum rate" is used to calculate the lump
sum actuarially equivalent value of a participant's benefits under the plan and,
effective for participants whose retirement date or employment termination date
occurs on or after January 1, 1999, shall be the lesser of (a) the "GATT rate"
(as defined below) in effect for the month that is two months prior to the month
in which occurs the participant's last day of employment (i.e., for retirees the
rate in effect for the month that is three months prior to the participant's
retirement date), or (b) the average of the GATT rates in effect for the month
described in subparagraph (a) and the prior five months. The GATT rate for any
month shall be the average for the month of the annual rates of interest on
30-year Treasury securities, as announced by The Treasury Department pursuant to
Section 417(e)(3)(A)(ii)(II) of the Internal Revenue Code. Notwithstanding the
above, the lump sum actuarially equivalent value of the benefit of a participant
whose retirement date
A-2
occurs on or after January 1, 1999 and on or prior to January 1, 2000, or whose
employment termination date occurs on or after January 1, 1999 and prior to
January 1, 2000, shall not be less than such value determined under Paragraphs
A-4 and A-6 of Exhibit A of the plan as in effect on December 31, 1998.
A-5. Other Forms. For purposes of determining actuarial equivalence
between forms of benefit payment under the plan (other than calculation of lump
sum actuarially equivalent values in accordance with paragraph A-4), the
interest rate used under the plan is 7 percent.
A-6. Mortality. The mortality factors under the plan shall be taken
from the 1983 Group Annuity Table with weighted annuity factors assuming a
population of 90 percent males and 10 percent females. Notwithstanding the
above, for purposes of determining the lump sum actuarially equivalent value of
a participant's benefit, the mortality factors shall be those set forth in the
table described in Section 417(e)(3)(A)(ii)(I) of the Internal Revenue Code.
A-7. Amendment of Actuarial Factors and Assumptions. If the actuarial
factors and assumptions in this Exhibit A are amended, the actuarial equivalent
of a participant's accrued benefits shall be determined in accordance with the
factors and assumptions as amended; provided, however, the actuarial equivalent
of a participant's accrued benefits on and after the date of such amendment
shall not be less than the actuarial equivalent of the participant's accrued
benefits determined as of the date immediately before such amendment in
accordance with the actuarial factors and assumptions then in use.
A-3
SUPPLEMENT 1
TITLES OF SUPPLEMENTS IN EFFECT IMMEDIATELY
PRIOR TO THE RESTATEMENT EFFECTIVE DATE
SUPPLEMENT A - January 1, 1976 merger of the Kinkead and Durabond plans.
SUPPLEMENT B - January 1, 1977 merger of the Kewanee plan.
SUPPLEMENT C - Special deferred vested rights for Fiberesin Plastics Division.
SUPPLEMENT D - January 1, 1978 merger of Trenton plan.
SUPPLEMENT E - April 26, 1985 sale of Hollytex. Full vesting for all terminating
Hollytex employees.
SUPPLEMENT F - Asset/Liability Transfers. USG Industries and AP Green
Refractories, Wood Fiber Industries and Masonite, USG Commercial Architectural
Products, Inc. and Integrated Ceilings, Inc.
SUPPLEMENT G - January 1, 1988 merger of the Donn Incorporated Retirement Income
Plan No. 2 (salaried plan).
SUPPLEMENT H - January 1, 1989 merger o the DAP, Inc. plan.
SUPPLEMENT I - January 1, 1992 merger of the USG Interiors, Inc. Hourly
Employees' Pension Plan (former Donn hourly plan). Termination of the two money
purchase pension plans at Cartersville and Stockton.
SUPPLEMENT J - DAP, Inc. spinoff into Wassall Plan (assets transferred). Special
provisions for three former DAP employees hired by USG, Sam Constan, Phillip
Kohut, Joanne Twomey.
SUPPLEMENT K - Benefit transfers between this plan and Retirement Income Plan
for Salaried Employees of Masonite Corporation. Special provisions for Randall
Catt, Richard Fleming and Vincent Flood.