1
Exhibit 10.18
FALCON BUILDING PRODUCTS, INC.
CASH BALANCE PENSION PLAN
Effective January 1, 1996
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TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS 1
SECTION 2 - ELIGIBILITY AND PARTICIPATION 6
SECTION 3 - ACCOUNTS AND CREDITS TO ACCOUNTS 8
SECTION 4 - RETIREMENT BENEFITS 10
SECTION 5 - BENEFITS UPON TERMINATION OF EMPLOYMENT 12
SECTION 6 - DEATH BENEFITS 14
SECTION 7 - PAYMENT OF BENEFITS 16
SECTION 8 - CONTRIBUTIONS 20
SECTION 9 - AMENDMENT AND TERMINATION 21
SECTION 10 - LIMITATIONS ON BENEFITS 23
SECTION 11 - ADMINISTRATION 27
SECTION 12 - ADOPTION OF PLAN BY EMPLOYING UNITS 31
SECTION 13 - SUCCESSOR COMPANY 32
SECTION 14 - GENERAL PROVISIONS 33
SECTION 15 - IN EVENT PLAN BECOMES TOP-HEAVY 35
APPENDIX A: Pay Credit Dates of Employing Units
APPENDIX B: Specified Basis for Determination of Actuarial Equivalents
APPENDIX C: Pay-Based Credits to Accounts
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FOREWORD
Falcon Building Products, Inc. (the "Company") hereby establishes the Falcon
Building Products, Inc. Cash Balance Pension Plan (the "Plan") effective
January 1, 1996, (the "Effective Date") for the benefit of eligible employees
of the Company and its affiliates which adopt the Plan (the "Employees") and
their beneficiaries. Eligible employees who were participants in the Eagle
Industries Products Corporation Cash Balance Pension Plan (the "Eagle Cash
Balance Plan") immediately before the Effective Date became Participants under
this Plan as of the Effective Date. The Company intends that this Plan and the
related Trust qualify under all applicable provisions of the Internal Revenue
Code of 1986 and meet the requirements of the Employee Retirement Income
Security Act of 1974, and each of the terms of this Plan and the related Trust
Agreement shall be so interpreted.
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SECTION 1
DEFINITIONS
As used herein, unless otherwise defined or required by the context, the
following words and phrases shall have the meanings indicated. Some of the
words and phrases used in the Plan are not defined in this Section 1, but, for
convenience are defined as they are introduced into the text.
1.1 "Account" means the Account established and maintained for each
Participant pursuant to the provisions of Section 3. Such Accounts are
intended to be only bookkeeping accounts and neither the maintenance nor the
making of credits thereto shall be construed as an allocation of assets of the
Plan to, or a segregation of such assets in, any such Account, or otherwise as
creating a right in any person to receive specified assets of the Plan.
Benefits provided under the Plan shall be paid from the general assets of the
Fund in the amounts, in the forms and at the times provided under the terms of
the Plan.
1.2 "Accrued Benefit" means, as of the time of reference, an annual amount
of benefit, payable in the form of a single life annuity, commencing on a
Participant's Normal Retirement Date (or, if later, his Late Retirement Date),
which such single life annuity is the Actuarial Equivalent of the then current
value of his Account.
1.3 "Actuarial Equivalent" with respect to any specified annuity or
benefit means another annuity or benefit, commencing at a different date and/or
payable in a different form than the specified annuity or benefit, but which
has the same present value as the specified annuity or benefit, when measured
on the basis of the interest rate, mortality table and other factors, if any,
applicable to such other annuity or benefit, as specified in Appendix B as in
effect at the date of commencement of such other annuity or benefit, which
Appendix B is attached hereto and made a part hereof. In its approval of any
other actuarially equivalent option to be made available under the Plan, the
Committee shall specify the mortality basis, interest basis, and the basis of
any other factors applicable in the determination of actuarial equivalence
under such options; and such specification shall constitute an addendum to
Appendix B of the Plan.
1.4 "Actuary" means one or more actuaries chosen by the Company to provide
actuarial services in connection with the administration of the Plan and who
shall be enrolled under Subtitle C of Title III of ERISA.
1.5 "Authorized Leave of Absence" means any absence authorized by an
Employing Unit following standard personnel practices applied in a
nondiscriminatory manner, and provided that the Participant returns within the
period specified in the Authorized Leave of Absence.
1.6 "Beneficiary" means the person or persons, or other legal entity, who
has been designated in accordance with Section 6.2 hereof to receive any
benefits payable upon the death of a Participant.
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1.7 "Benefit Commencement Date" means, in the case of an annuity form of
distribution, the first day of the first period with respect to which an amount
is received as a benefit pursuant to the Plan; in the case of a lump sum
payment, the date as of which payment is to be made pursuant to the Plan.
1.8 "Board" means the Board of Directors of the Company or its successor
corporation.
1.9 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.10 "Committee" means the Falcon Benefit Plans Committee, which is
described in Section 11.1 of the Plan.
1.11 "Company" means Falcon Building Products, Inc. or any successor
corporation which assumes the obligations of the Company hereunder.
1.12 "Compensation" means the compensation reported for a calendar year on
Form W-2 as paid by an Employing Unit to the Participant, exclusive of any
severance pay, moving allowance, car allowance, awards or prizes, or imputed
income under Code Sections 79 and 132 and such other similar payments under the
Code and regulations thereunder, but inclusive of any before-tax contributions
made under any 401(k) plan or any life insurance or medical plan maintained by
the Company pursuant to Code Section 125.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not
exceed the Omnibus Budget Reconciliation Act of 1993 ("OBRA '93") annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner of the Internal Revenue Service for increases in
the cost of living in accordance with Section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding twelve (12) months, over which
compensation is determined (the "determination period") beginning in that
calendar year. If a determination period consists of fewer than twelve (12)
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is twelve (12). Any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this provision. If Compensation for
any prior determination period is taken into account in determining an
Employee's benefits accruing in the current Plan Year, the Compensation for
that prior determination period is subject to the OBRA '93 annual Compensation
limit in effect for that prior determination period. If Compensation for any
prior Plan Year is taken into account in determining an Employee's benefits for
the current year, the Compensation for such prior year is subject to the
applicable annual Compensation limit in effect for that prior year.
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A Participant who is Totally and Permanently Disabled pursuant to Section
4.3(a) shall be deemed for purposes of Section 3.2 to receive Compensation
during such period of Total and Permanent Disability prior to attaining age
sixty-five (65) at the same rate of Compensation as was in effect immediately
prior to the commencement of such Total and Permanent Disability.
1.13 "Eligible Employee" means an Employee of an Employing Unit (other
than a leased employee within the meaning of section 414(n) of the Code) who is
compensated on a salaried basis or any other Employee at a location and/or in a
classification specifically designated by the Board and who is described in
Appendix A attached hereto; provided that in either case such Employee is not
currently an active participant in any other defined benefit pension plan to
which the Employing Unit contributes.
1.14 "Employee" with respect to the Group, means an individual who is
employed by a member of the Group (including a leased employee within the
meaning of section 414(n) of the Code), but shall not include a person employed
at a rate of less than one thousand (1,000) "hours of employment" (as
hereinafter defined) per year unless such person shall have accumulated one
thousand (1,000) or more hours of employment with a member of the Group during
the period from the date such person was first employed by a member of the
Group to the first anniversary of such date, or during any Plan Year commencing
after such date, in which case such person shall be deemed to have first become
an Employee on the last day of such period or calendar year, as applicable, or
on the date such person's regular rate of employment was increased to a rate of
one thousand (1,000) or more hours per year, whichever is the earlier. For
purposes of this Section l.l4, an hour of employment shall be determined in
accordance with Department of Labor Regulations Section 2530.200b-2 and shall
mean an hour for which a person was directly or indirectly paid (including any
back pay award) or entitled to payment by the Group for the performance of
duties, or pursuant to a vacation or sick leave or other plan or pay practice
maintained by a member of the Group to provide compensation for certain hours
in which no duties were performed, provided that no more than five hundred and
one (501) hours are credited for any year in which no duty is performed.
1.15 "Employing Unit" means the Company or any subsidiary or affiliate of
the Company which is a member of the Group and which, with the consent of the
Company, adopts the Plan for the benefit of some or all of its employees. A
list of such Employing Units is set forth in Appendix A, attached hereto.
1.16 "ERISA" means Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.17 "Fiduciary" means the Company, the Committee and the Funding Agent,
but only with respect to the specific responsibilities of each for Plan and
Fund administration, all as described in Section 11.
1.18 "Fund" means all sums of money, insurance or annuity contracts, and
all other property of every kind, from time to time held by the Funding Agent
from which the benefits provided by this Plan will be paid.
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1.19 "Funding Agent" means the trustee or trustees and/or insurance
company or companies selected by the Board to hold the funds of the Plan
pursuant to a trust agreement or agreements or an insurance contract or
contracts.
1.20 "Group" means the Company and any other company which is related to
the Company as (i) a member of a controlled group of corporations in accordance
with Section 414(b) of the Code, (ii) a trade or business under common control
in accordance with Section 414(c) of the Code, (iii) an affiliated service
group within the meaning of section 414(m) of the Code, or (iv) entities
required to be aggregated with the Company under Section 414(o) of the code.
For the purposes under the Plan of determining whether or not a person is an
Employee and the period of employment of such person, each such other company
shall be included in the "Group" only for such period or periods during which
such other company is also a member of a controlled group, affiliated service
group or under common control.
1.21 "Late Retirement Date" means the first day of the month coincident
with or next following the date the Participant actually retires after his
Normal Retirement Date pursuant to Section 4.2.
1.22 "Normal Retirement Date" means the first day of the month coincident
with or next following the date on which a Participant attains his sixty-fifth
(65th) birthday.
1.23 "Participant" means an Eligible Employee who has qualified for
participation in accordance with the terms of Section 2 hereof.
1.24 "Pay Credit Date" means January 1, 1996, or, if later, the date of
the Employing Unit's inclusion in the Plan as set forth in Appendix A,
attached.
1.25 "Plan" means the Falcon Building Products, Inc. Cash Balance Pension
Plan as set forth herein or as amended from time to time.
1.26 "Plan Year" means the calendar year.
1.27 "Retirement Benefit" means a lump sum payment or a series of monthly
payments which are payable to an individual who is entitled to receive benefits
under the Plan.
1.28 "Service" means the aggregate of all periods of employment as an
Employee with the Company or any other member of the Group.
Service shall include (i) a period of up to twelve (12) months of absence
from employment for any reason other than because of quit, retirement or
discharge, (ii) the period from the date an Employee quits, retires or is
discharged to the date of his reemployment if he again becomes employed with
the Company or other member of the Group within twelve (12) months of such
quit, retirement or discharge and (iii) for periods on or before January 1,
1996, the aggregate of all "Service" earned under the Eagle Cash Balance Plan.
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For purposes of determining Service, an Employee who is on leave of
absence under the Family and Medical Leave Act of 1993 shall be credited
Service for the hours of employment that the Employee would have worked had he
not taken the leave.
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.
1.29 "Total and Permanent Disability" means a physical or mental condition
resulting from a bodily injury or disease which entitles the Participant to
receive disability insurance benefits under Title II of the Federal Social
Security Act; provided, however, that in no event will a Participant be deemed
to be Totally and Permanently Disabled after his attainment of his Normal
Retirement Date. If a Participant who is Totally and Permanently Disabled
ceases to be such prior to his Normal Retirement Date, his employment shall be
deemed to be terminated as of the date he so ceases to be Totally and
Permanently Disabled, unless he returns to employment with an Employing Unit
within such period as the Committee shall prescribe.
1.30 "Vested Terminated Participant" means a Participant whose employment
has terminated but who is entitled to a benefit under the Plan in accordance
with the provisions of Section 5.1.
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SECTION 2
ELIGIBILITY AND PARTICIPATION
2.1 Participants in the Eagle Cash Balance Plan. Any Employee who was a
participant in the Eagle Cash Balance Plan immediately before the Effective
Date shall be eligible to participate in the Plan as of the Effective Date.
2.2 Eligible Employees on Pay Credit Date. Each Eligible Employee in the
active employment of an Employing Unit on its Pay Credit Date shall become a
Participant in the Plan on such Pay Credit Date.
2.3 Other Eligible Employees. Each other person who becomes an Eligible
Employee after the Pay Credit Date shall become a Participant in the Plan on
the date he becomes an Eligible Employee.
2.4 Authorized Leave of Absence. Any person who is absent from the active
employment of an Employing Unit on the date he would otherwise become a
Participant, by reason of an Authorized Leave of Absence granted by the
Employing Unit or by reason of military service, shall automatically become a
Participant as of the date of his return to active employment as an Eligible
Employee.
2.5 Reemployment. If a Participant who previously terminated his
employment is subsequently reemployed, the following additional rules shall be
applicable.
(a) Such Participant's Service to the date he ceased
employment shall be reinstated upon reemployment.
(b) If the Participant forfeited any percentage of his
Accrued Benefit under Section 5.1, there shall be credited
to his Account upon reemployment an amount equal to the
amount of such forfeiture increased by the interest credits
under Section 3.3 from the date he ceased employment to the
date of reemployment.
(c) If the Participant received a lump sum payment
under Section 5.2(b) in connection with his prior
termination and the Participant forfeited any percentage of
his Accrued Benefit under Section 5.1, there shall be
credited to his Account upon reemployment an amount equal
to the sum of the amount of such lump sum payment plus
interest credits thereon under Section 3.3 from the date
such lump sum payment was made to the date of reemployment.
(d) If the Participant is receiving periodic payments
of his benefit and the Participant forfeited any percentage
of his Accrued Benefit under Section 5.1, such periodic
payments shall cease unless (1) he is reemployed on or
after the April 1 of the
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calendar year after the calendar year in which he attained
age seventy and one-half (70-1/2) or (2) he elects not to
have his periodic payments suspended.
In either event, there shall be credited to his
Account upon reemployment the amount necessary to restore
his Account to the amount that would have been in such
Account at the date of reemployment had he not received any
periodic payments (i.e., to the amount that was in such
Account at such termination of employment (after any
forfeiture pursuant to Section 5.1) increased by interest
credits under Section 3.3 from the date he ceased
employment to the date of his reemployment).
(e) When the Participant subsequently terminates
employment, there shall be deducted from his Account (after
any forfeiture under Section 5.1) an amount equal to
(i) that portion of his Account that
is attributable to the amount credited to his Account
at his reemployment under paragraph (c) or (d),
whichever is applicable, increased by the interest
credits thereon under Section 3.3 after his
reemployment, and
(ii) the Actuarial Equivalent amount,
if any, of any periodic benefit payments made to the
Participant after reemployment increased by interest
credits under Section 3.3 from the date of payment.
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SECTION 3
ACCOUNTS AND CREDITS TO ACCOUNTS
3.1 Accounts. An Account shall be established and maintained for each
Participant to which credits shall be made pursuant to the provisions of this
Section 3, subject to the limitations of Section 10. Such Accounts are
intended to be only bookkeeping accounts and neither the maintenance nor the
making of credits thereto shall be construed as an allocation of assets of the
Plan to, or a segregation of such assets in, any such Account, or otherwise as
creating a right in any person to receive specific assets of the Plan.
Benefits provided under this Plan shall be paid from the general assets of the
Fund in the amounts, in the forms and at the times provided under the terms of
the Plan.
3.2 Pay-Based Credits To Accounts. Except as is provided in Section 3.1
or Section 3.4, for each calendar month that an individual is both a
Participant and an Eligible Employee on and after the Pay Credit Date and prior
to the Benefit Commencement Date, there shall be credited to his Account an
amount equal to a percentage of his Compensation for such month. The amount of
such percentage, which shall vary depending on the Participant's Employing Unit
and on the number of years of Service standing to the Participant's credit as
of the last day of such month, is set forth in Appendix C, attached.
3.3 Interest Credits to Accounts. Except as is provided in Section 3.1 or
Section 3.4, as of the first day of each "Plan Year Month" (as hereinafter
defined) after the Pay Credit Date and prior to the Benefit Commencement Date,
each Participant's Account shall be increased by a factor equal to one twelfth
of the interest credit percentage for the applicable Plan Year. Interest
credits granted during a Plan Year Month shall be based on a Participant's
Account balance as of the end of the previous Plan Year Month. The interest
credit percentage for the applicable Plan Year shall, except as is hereafter
provided, be equal to the greater of (a) or (b) below:
(a) such percentage with respect to such Plan Year
as the Company may prospectively prescribe and which shall be
specified in the Plan, or
(b) the one (1) month average of One-Year Treasury
Constant Maturities as published in the Federal Reserve
Statistical Release H.15(519) of the Board of Governors of
the Federal Reserve System, over the period from (A) November
1 of the year immediately preceding the applicable Plan Year
to (B) November 30 of the year immediately preceding the
applicable Plan Year.
If the average is not a multiple of 1/4 percent, the closest higher
interest rate which is a multiple of 1/4 percent shall be used.
"Plan Year Month" means each calendar month of the Plan Year.
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3.4 Limitation on Credits. Notwithstanding the foregoing provisions of
this Section 3, except as is hereinafter provided, no credits pursuant to the
foregoing provisions of this Section 3 shall be made to the Account of any
Participant on and after the Benefit Commencement Date applicable to such
Participant. However, with respect to any Plan Year that a Participant who is
still employed by an Employing Unit receives benefits by reason of having
attained his "required beginning date" within the meaning of Section 401(a)(9)
of the Code, such Participant shall continue to have amounts credited to his
Account pursuant to Sections 3.2 and 3.3. The additional benefit that
otherwise would have accrued during any such Plan Year by reason of his
continued employment during such Plan Year shall be reduced (but not below
zero) by the Actuarial Equivalent value of the total benefit payments made to
such individual during such Plan Year.
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SECTION 4
RETIREMENT BENEFITS
4.1 Normal Retirement Benefit. Each Participant who retires from
employment on his Normal Retirement Date shall be entitled to receive a
Retirement Benefit, commencing on his Normal Retirement Date, equal to his
Accrued Benefit as of his Normal Retirement Date, payable as provided in
Section 7.
4.2 Late Retirement Benefit. If a Participant remains employed beyond his
Normal Retirement Date, he shall be entitled to receive a Retirement Benefit
equal to his Accrued Benefit as of his Late Retirement Date, commencing on his
Late Retirement Date, payable as provided in Section 7.
4.3 Disability Retirement Benefit. In the event a Participant becomes
Totally and Permanently Disabled while in the employ of an Employing Unit prior
to his attainment of his Normal Retirement Date, he may elect either (a) or (b)
below:
(a) he may elect to be deemed for purposes of
Section 3.2 to continue to receive Compensation for the
duration of the period during which he remains Totally and
Permanently Disabled (but in no event after his attainment of
his Normal Retirement Date) at the same rate of Compensation
he was receiving immediately prior to becoming Totally and
Permanently Disabled. Accordingly, an Account shall continue
to be maintained under the Plan on his behalf during such
period of Total and Permanent Disability, and credits to such
Account shall continue to be made for the duration of his
Total and Permanent Disability in accordance with the
applicable provisions of Section 3. Upon such Participant's
attainment of his Normal Retirement Date, he shall be
entitled to receive a Retirement Benefit in accordance with
the provisions of Section 4.1.
(b) he may elect
(i) to have his Benefit Commencement
Date occur as soon as practicable after the date on
which he becomes Totally and Permanently Disabled, in
which case he shall commence to receive a benefit as
of such date, payable as provided in Section 7, which
such benefit shall be the Actuarial Equivalent of his
Accrued Benefit as of the date on which he so became
Totally and Permanently Disabled, or
(ii) to receive the value of his
Account as of such Benefit Commencement Date.
Notwithstanding the foregoing, no such election
pursuant to this subsection 4.3(b)(ii) may be made by
a married Participant unless the Participant's
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spouse consents to such election, the spousal consent
acknowledges the effect of such election, and the
consent is witnessed by a Plan representative or a
notary public.
If he elects (b), there will be no further pay credits.
4.4 Early Retirement Benefit. An actively employed Participant who has
attained his fifty-fifth (55th) birthday may elect to retire prior to his
Normal Retirement Date. In such case, he shall receive a Retirement Benefit,
commencing on his Normal Retirement Date, equal to his vested Accrued Benefit,
if any, as of his Normal Retirement Date, payable as provided in Section 7.
In lieu of such Retirement Benefit commencing on his Normal Retirement
Date, the Participant may, at any time on or after his termination of
employment, elect a reduced Retirement Benefit to commence as of the first day
of any month thereafter which is prior to his Normal Retirement Date. In such
case the Participant shall receive a Retirement Benefit which is the Actuarial
Equivalent of his vested Accrued Benefit as of such Benefit Commencement Date,
payable as provided in Section 7.
4.5 Nonduplication of Benefits. The amount of a Participant's Retirement
Benefits shall be reduced by that portion of any retirement income, payable
from any source other than the Fund, to which he is entitled under any
tax-qualified retirement plan maintained by a member of the Group (other than a
profit sharing plan which is qualified under Section 401(a) of the Code) which
is attributable to a period of employment for which he receives a benefit from
this Plan, except that no such reduction shall be made with respect to that
part of such retirement income which is attributable to contributions made by
him. For the purpose of computing the amount of such reduction, any such
retirement income, payment of which is to commence other than at the Employee's
Normal Retirement Date under this Plan, or payment of which is to be made on a
basis other than a retirement income for life, shall be recomputed to its
Actuarial Equivalent value on the basis of a retirement income for life
commencing on such Normal Retirement Date.
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SECTION 5
BENEFITS UPON TERMINATION OF EMPLOYMENT
5.1 Benefit on Termination of Employment Prior to Retirement. Except as
is otherwise hereinafter provided, in the event of the termination of
employment of a Participant, for any reason other than death under the Plan,
after completion of three (3) or more years of Service, he shall have a
nonforfeitable right to a percentage of his Accrued Benefit. The percentage of
the Accrued Benefit to which such a Participant shall have a nonforfeitable
right shall be determined from the following table by reference to the
completed years of Service at the date of termination of employment:
Percentage of
Completed Years of Service Accrued Benefit
- -------------------------------------------
Less than 3 0%
- -------------------------------------------
3 20%
- -------------------------------------------
4 40%
- -------------------------------------------
5 60%
- -------------------------------------------
6 80%
- -------------------------------------------
7 or more 100%
- -------------------------------------------
Notwithstanding the foregoing, the Accrued Benefit of a Participant shall
be one hundred percent (100%) vested and non-forfeitable upon the first to
occur of his (i) his attainment of age sixty-five (65) while still employed by
an Employing Unit (or other member of the Group), or (ii) his termination of
employment by reason of Total and Permanent Disability. In addition, a
Participant whose termination of employment is by reason of death shall be
treated as being one hundred percent (100%) vested for purposes of Section 6.
5.2 Commencement of Benefits to Vested Terminated Participants. A
Participant whose employment terminates and who is entitled to the benefit
specified in the first paragraph of Section 5.1 above shall hereinafter be
referred to as a "Vested Terminated Participant." Except as is otherwise
hereinafter provided, if a Vested Terminated Participant survives to his Normal
Retirement Date, he shall be entitled to receive a Retirement Benefit,
commencing on his Normal Retirement Date, equal to his vested Accrued Benefit
as of his Normal Retirement Date, payable as provided in Section 7.
Notwithstanding the foregoing,
(a) A Vested Terminated Participant may elect to commence
receiving benefits as of the first day of any month
following the attainment of age fifty-five (55) and prior to
his Normal Retirement Date, in
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which event he shall be entitled to a Retirement Benefit
which is the Actuarial Equivalent of his vested Accrued
Benefit as of such Benefit Commencement Date, payable as
provided in Section 7.
(b) (i) If the Actuarial Equivalent present value
of a Vested Terminated Participant's Accrued Benefit (or, if
greater, the vested value of the Vested Terminated
Participant's Account) as of the date of his termination of
employment exceeds three thousand, five hundred dollars
($3,500), the Participant may elect that such benefit shall
be paid to him, commencing as soon as practicable thereafter
in the form provided for in Section 7.2 or Section 7.4, as
applicable, or, subject to the spousal consent requirements
of Section 7.4(c), in a cash lump sum; and
(ii) If the Actuarial Equivalent present value of a Vested
Terminated Participant's Accrued Benefit (or, if greater,
the vested value of a Vested Terminated Participant's
Account) as of the date of his termination of employment
does not exceed three thousand, five hundred dollars
($3,500), such benefit shall be paid to him as soon as
practicable thereafter in a cash lump sum.
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SECTION 6
DEATH BENEFITS
6.1 Benefit Payable in the Event of Death Before Retirement Benefit
Commencement Date. If a Participant (other than a Vested Terminated
Participant) dies before the date on which Retirement Benefit payments commence
to be paid to him, a benefit shall be payable to his Beneficiary as follows:
(a) If the Participant's Beneficiary is any person
other than his spouse, there shall be paid to such
Beneficiary as of the first day of the month following the
month in which the Participant's death occurs an amount
equal to the value of his Account as of the last day of the
month in which the death of the Participant occurs.
(b) If the Participant's Beneficiary is his spouse,
such spouse shall be entitled to receive a Retirement
Benefit for her life commencing on the date the Participant
would have attained his Normal Retirement Date if he had
survived to such date. Such benefit to the spouse shall be
a single life annuity, payable monthly, where such annuity
is the Actuarial Equivalent of the Accrued Benefit to which
such Participant would have been entitled had he terminated
employment on his date of death, survived to his Normal
Retirement Date, and commenced to receive a Retirement
Benefit as of such date. Notwithstanding the foregoing,
the spouse of a Participant may elect to commence receiving
a Retirement Benefit for her life in the form of a single
life annuity commencing on the first day of any month on or
after the date the Participant would have attained age
fifty-five if he had survived to such date. The monthly
amount of such benefit to the spouse shall equal the
monthly amount payable under a single life annuity where
such single life annuity is the Actuarial Equivalent of the
Retirement Benefit to which such Participant would have
been entitled had he terminated employment on his date of
death, survived to such commencement date, and commenced to
receive a Retirement Benefit as of such date.
Alternatively, the spouse may request to receive, in lieu
of any other benefits under the Plan to which she would
otherwise be entitled, a distribution of the value of the
Participant's Account as of his date of death, payable as
soon as practicable after the Participant's death.
(c) The foregoing provisions of this Section 6.1 shall
apply in the case of the death of a Vested Terminated
Participant who was less than one hundred percent (100%)
vested on his termination of employment only with respect
to that portion of his Account (or Accrued Benefit) in
which he is so vested on his date of death.
18
6.2 Beneficiary.
(a) A Participant who has a spouse at the date of his
death shall automatically be deemed to have designated such
spouse as his Beneficiary unless (i) the Participant
designates a different Beneficiary and the spouse of such
Participant consents to such designation in writing, which
consent acknowledges the effect of such designation and
which is witnessed by a notary public or plan
representative, or (ii) it is established to the
satisfaction of the Committee that the consent of the
spouse cannot be obtained because the spouse cannot be
located or because of other special circumstances.
For purposes of this Paragraph (a), the term spouse shall also include an
individual to whom the Participant was previously married to the extent so
required under the terms of a qualified domestic relations order (within the
meaning of Section 414(p) of the Code).
(b) Subject to the provisions of Paragraph (a) above,
a Participant may designate a Beneficiary or Beneficiaries
to receive any death benefit payable under the Plan (other
than amounts which are required to be paid to a surviving
spouse). Any such designation shall be made, and may be
changed or revoked, by filing the appropriate form with the
Committee. If more than one person is designated each
shall have an equal share unless the designation directs
otherwise. Any designation, change or revocation by a
Participant shall be effective only if it is received by
the Committee before the death of such Participant. For
purposes of this Paragraph (b), the term "person" includes
an individual, a trust or an estate. If no Beneficiary
designation is on file with the Committee at the
Participant's death, or if any designation is not effective
for any reason as determined by the Committee the benefit
payable under the Plan shall be paid to such Participant's
executor or administrator.
19
SECTION 7
PAYMENT OF BENEFITS
7.1 Time of Payment. Payment of any benefit to which a Participant is
entitled pursuant to the Plan shall commence as of such Participant's Benefit
Commencement Date. In no event shall payment of any benefit commence later
than sixty days after the close of the Plan Year during which such Participant
attains, or would have attained, his Normal Retirement Date or, if later,
terminates his employment with the Company or other member of the Group,
provided however, payment must commence no later than April 1st of the calendar
year following the calendar year in which he attains age seventy and one-half
(70-1/2).
7.2 Standard Benefit. Except as is otherwise hereinafter provided in this
Section 7, the normal form of benefit payable to a Participant shall be an
annuity for the life of the Participant.
7.3 Claim for Benefit.
(a) A Participant must file a claim for benefits
before payment of benefits shall commence. The claim for
benefits shall be in writing, in such form as the Committee
shall designate.
(b) The claim for benefits shall specify the date on
which pension payments are to commence, consistent with the
provisions of the Plan with respect to commencement of
benefits in case of normal, early or late retirement, as
the case may be.
(c) The claim for benefits shall include a
certification by the Participant either (i) that the
Participant is not married or (ii) that the Participant is
married and the name and date of birth of the individual to
whom the Participant is married. The certification by the
Participant as to the Participant's marital status shall be
binding upon the Participant.
7.4 Qualified Joint and Survivor Annuity Form
(a) In general
Subject to the conditions set forth in this Section
7.4, if a Participant is married on the Benefit
Commencement Date, the amount of each pension payment which
otherwise would be payable to the Participant, shall be
reduced on an Actuarial Equivalent basis; and if the
Participant's spouse shall survive the Participant, pension
payments shall be payable under the Plan to the
Participant's surviving spouse during the surviving
spouse's remaining lifetime after the Participant's death,
in an amount equal to fifty percent (50%), or, if the
Participant shall so elect, one hundred percent (100%), of
the Participant's reduced pension payment.
20
(b) Election to Waive the Qualified Joint and Survivor
Annuity Form.
A Participant may elect, during the election period
specified below, to waive the qualified joint and survivor
annuity form, in which case pension payments shall be made
in the normal form as provided in Section 7.2 or under the
optional form as the Participant shall elect in accordance
with Section 7.5.
An election to waive shall not take effect unless the
Participant's spouse gives written consent on a form
provided by the Committee for such purpose, which consent
acknowledges the effect of the election to waive, and which
written consent is witnessed by a notary public (or an
individual designated by the Committee). The Committee, in
its sole discretion, may waive the requirement for consent
of the spouse if the Participant establishes to the
Committee's satisfaction that the spouse cannot be located,
or because of other special circumstances.
An election to waive the qualified joint and survivor
annuity form may be made at any time within the election
period beginning on the date which is the ninetieth (90th)
day preceding the Participant's Benefit Commencement Date
and ending on such Benefit Commencement Date. A
Participant may revoke a waiver of the qualified joint and
survivor annuity form at any time during the election
period.
There is no limit on the number of times during the
election period that a Participant may elect to waive the
qualified joint and survivor annuity form or revoke a
waiver.
(c) Explanation
No earlier than ninety (90) days, and no later than thirty
(30) days, before the Participant's Benefit Commencement
Date, the Committee shall furnish the Participant with a
written explanation of (i) the terms and conditions of the
qualified joint and survivor annuity form, (ii) the
Participant's right to make, and the effect of, an election
to waive the joint and survivor annuity form of benefit,
(iii) the rights of the Participant's spouse to consent, or
refuse to consent, to such waiver, and (iv) the
Participant's right to make, and the effect of, a
revocation of an election to waive.
(d) Termination of Marriage
The spouse to whom the Participant was married at the
Participant's Benefit Commencement Date is entitled to the
survivor annuity upon the death of the Participant after
the Benefit Commencement Date, whether or
21
not the Participant and such spouse were married at the
date of the Participant's death.
7.5 Optional Forms of Benefit.
(a) The optional forms of benefit provided in this
Section 7.5 (which shall be the Actuarial Equivalent of the
standard form of benefit set forth in Section 7.2 and which
in all cases shall, as a precondition to being available as
optional forms of benefit under the Plan, comply with the
requirements of Section 401(a)(9) of the Code) shall be
available only to (i) a Participant who is not married on
the Benefit Commencement Date and (ii) a Participant who is
married on the Benefit Commencement Date if an election to
waive the qualified joint and survivor annuity form, made
in accordance with Section 7.4(b), is in effect on such
Benefit Commencement Date.
(b) The other optional forms of benefit are:
(i) a single lump sum payment, and
(ii) a reduced lifetime retirement income, and
in the event of the Participant's death prior to
receiving one hundred and twenty (120) monthly
payments, the same amount of retirement income is
continued to his Beneficiary, until a combined total
of one hundred and twenty (120) monthly payments have
been made. If both the Participant and his
Beneficiary shall have died before a total of one
hundred and twenty (120) monthly payments have been
made, the monthly retirement income payments will
continue to the Beneficiary of the last payee for the
remainder of the one hundred and twenty (120) month
period.
7.6 Cash-out of Accrued Benefit. Any other provision of the Plan to the
contrary notwithstanding, if the vested value of a Participant's Account as of
the date of his termination of employment does not exceed three thousand, five
hundred dollars ($3,500), such vested Account value shall be paid to him as
soon as practicable thereafter in a cash lump sum.
7.7 Required Distributions. Subject to Section 1121(d)(4) of the Tax
Reform Act of 1986 and Proposed Treasury Regulation Section 1.401(a)(9)-1, a
Participant who attains age seventy and one-half (70-1/2) after December 31,
1987, or who is a five percent (5%) owner (as defined in Section 416(i) of the
Code) at any time after the attainment of age sixty-six and one-half (66-1/2),
shall commence to receive payment of his retirement income no later than the
April 1 of the calendar year following the calendar year in which such
Participant attains age seventy and one-half (70-1/2).
Any payments under this Plan shall be adjusted to meet the requirements of
Section 401(a)(9) of the Code and the regulations thereunder. Thus, the entire
interest of each Participant shall be distributed, beginning not later than the
required beginning date, in accordance with regulations, over the life of the
Participant or over the life of the Participant and Beneficiary (or
22
over a period not extending beyond the life expectancy of the Participant or
the life expectancy of the Participant and Beneficiary). A Participant may
make an irrevocable election as to the form of benefit payment, with spousal
consent if applicable, in accordance with the provisions of this Plan, within
the ninety (90) day period ending on the Benefit Commencement Date. A
Participant who fails to make an election, within such ninety (90) day period,
shall have the amount, timing and duration of his benefit payment determined in
accordance with regulations promulgated under Sections 401(a)(9) and
411(b)(1)(H) of the Code, in the form of benefit payment described in Section
7.
A Participant who begins to receive benefit payments in accordance with
this Section 7.7, while remaining an Eligible Employee, shall continue to
accrue benefits in accordance with the applicable provisions of the Plan.
In addition, any distribution required under the incidental death benefit
rule of Section 401(a)(9)(G) of the Code shall be treated as a distribution
required under this Section.
7.8. Direct Rollovers.
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section 7.8, a Distributee
may elect, at the time and in the manner prescribed by the Committee, to have
any portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover.
(b) An Eligible Rollover Distribution is any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: (i) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's designed beneficiary, or for a specified period of ten (10) years
or more, (ii) any distribution to the extent the distribution is required under
Code Section 401(a)(9) and (iii) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) An Eligible Retirement Plan is (i) an individual retirement account
described in Code Section 408(a), (ii) an individual retirement annuity
described in Code Section 408(b), (iii) an annuity plan described in Code
Section 403(a) or (iv) a qualified trust described in Section 401(a) of the
Code, which accepts the Distributee's Eligible Rollover Distribution. However,
if an Eligible Rollover Distribution is to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(d) A Distributee includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), are
Distributees with regard to the interest of the spouse or former spouse.
(e) A Director Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
23
7.9 Rollover Contributions. An Employee may roll over a cash distribution
from a qualified plan or conduit individual retirement account to this Plan,
provided that (a) the distribution is (i) received from a qualified plan as an
Eligible Rollover Distribution (as defined in Section 7.8(b)) and (ii) rolled
over directly from the qualified plan or within the sixty (60) days following
the date the Employee received the distribution, or (b) the distribution is (i)
received from a conduit individual retirement account that has no assets other
than assets attributable to an Eligible Rollover Distribution or a "qualified
total distribution," within the meaning of Code Section 402 as in effect before
January 1, 1993, and had been deposited in the conduit individual retirement
account within sixty (60) days of the date the Employee received the
distribution, plus earnings, (ii) eligible for tax free rollover to a qualified
plan, and (iii) rolled over within sixty (60) days following the date the
Employee received the distribution. Before accepting a rollover contribution,
the Trustee may require the Employee to furnish satisfactory evidence that the
proposed transfer is in fact a rollover contribution that the Code permits an
Employee to make to a qualified plan. The foregoing contributions, which shall
be Rollover Contributions, shall be accounted for separately and shall be
credited to an Employee's Rollover Account. An Employee shall not be permitted
to withdraw any portion of his or her Rollover Account until such time as the
Employee is otherwise eligible to make a withdrawal from or receive a
distribution of his or her Account. An Employee who has made a Rollover
Contribution shall be deemed to be a Participant with respect to his or her
Rollover Account even if he or she is not otherwise a Participant.
24
SECTION 8
CONTRIBUTIONS
8.1 Contributions by Participants. The entire cost of this Plan shall be
borne by the Company and the Employing Units and no contributions shall be
required or permitted of Participants.
8.2 Contributions by Employing Units. The Company and the Employing Units
intend, but do not guarantee, to make such contributions as are required to
maintain the Fund, established for the purposes of the Plan, on a sound
actuarial basis. Contributions will be in such amounts and made at such times
as determined by their respective boards of directors in accordance with the
funding policy established by the Board and consistent with Plan objectives.
Neither the Company, the Employing Units, nor any of their officers or
Employees, nor any Participant of their boards of directors or agents, nor any
member of the Committee, nor the Funding Agent guarantees, in any manner, the
payments of the benefits hereunder.
All contributions made by the Company and each Employing Unit shall become
a part of the Fund and shall be held by the Funding Agent subject to the terms
and provisions of the Plan.
Forfeitures arising under the Plan because of termination of employment
before a Participant becomes eligible for a Retirement Benefit, or for any
other reason, shall be applied to reduce the cost of the Plan and shall not be
used to increase the benefits otherwise payable hereunder.
No part of the Fund shall be used for, or diverted to, purposes other than
for the exclusive benefit of Employees (and their Beneficiaries), except that
such part of the Fund, if any, which remains therein after the satisfaction of
all liabilities to persons entitled to benefits under the Plan, as described in
Section 9.2 hereof with respect to termination of the Plan, shall be returned
to the Company.
Notwithstanding anything herein to the contrary, upon the request of the
Company or an Employing Unit, a contribution which was made by a mistake of
fact, or conditioned upon qualification of the Plan or any amendment thereof or
upon the deductibility of the contribution under Section 404 of the Code, shall
be returned to the Company or the Employing Unit within one (1) year after the
payment of the contribution, the denial of the qualification or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable. Any obligation of the Company or the Employing Units to make
contributions to the Fund hereby is conditioned upon the continued
qualification of the Plan under Section 401(a) of the Code, the exempt status
of the Fund under Section 501(a) of the Code, and each contribution made by the
Company or an Employing Unit hereby is conditioned upon its deductibility under
Section 404(a)(1) of the Code.
25
SECTION 9
AMENDMENT AND TERMINATION
9.1 Amendment. While it is intended that the Plan shall continue in
effect indefinitely, the Company may at any time and from time to time modify,
alter or amend the Plan or Trust. Any such modification, alteration or
amendment shall be adopted by the Board, or by any duly authorized Board
committee, by formal resolution in a regularly or specially constituted meeting
of the Board or such committee, or by resolution without a meeting, provided
that no part of the assets of the Plan shall, by reason of any amendment, be
used for or diverted to purposes other than for the exclusive benefit of
Participants and Beneficiaries; and further provided that any amendment adopted
by the Board, or any duly authorized Board committee, that would cause the Plan
and the Fund established under the Plan to cease to meet the requirements of
Section 401(a) of the Code (unless such result shall have been specifically
intended as evidenced by an express statement of such intention in the
resolution of such Board adopting such amendment) shall be null and void; and
any actions taken under the Plan pursuant to such amendment, any benefit
increases (or decreases) accruing under the Plan as a result of such amendment
or any increases (or decreases) in benefit payments under the Plan made as a
result of such amendment, during the period from the date of adoption of such
amendment to the date it is determined that such amendment would so cause the
Plan and the Fund under the Plan to cease to meet such requirements, shall be,
respectively, rectified, nullified, and restored as soon as possible to the
extent necessary to permit the Plan and Fund under the Plan to continue to meet
the requirements of Section 401(a) of the Code. Notwithstanding the foregoing,
any amendment that increases benefits provided under the Plan must be approved
by the Compensation Committee of the Board.
Notwithstanding anything in the Plan to the contrary and subject to the
limitations in the previous paragraph, the Committee may amend the Plan in such
respects as may be necessary or appropriate to maintain the qualified status of
the Plan under Section 401(a) of the Code or to satisfy the requirements of
other applicable laws.
9.2 Right to Terminate. The Company shall have the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate at
any time, in whole or in part, this Plan and the Trust. Any such suspension,
discontinuance or termination shall made effective by the Board of Directors of
the Company, or by any duly authorized Committee, by formal resolution in a
regularly or specially constituted meeting of the Board or such Committee or by
formal resolution without a meeting. Written notice of such suspension,
discontinuance or termination shall be given to the Committee and to the
Funding Agent, but only upon condition that such action is taken as shall
render it impossible at any time prior to the satisfaction of all liabilities
with respect to Participants, surviving spouses and Beneficiaries and with
respect to the expenses of the Fund, for any part of the corpus or income of
the Fund to be used for or diverted to purposes other than for the exclusive
benefit of Participants, surviving spouses and Beneficiaries under the Plan and
for the payment of expenses.
9.3 Effect of Termination. Upon termination of the Plan pursuant to
Section 9.2 each Participant's accrued benefit shall become nonforfeitable to
the extent then funded and the Committee shall cause the Fund to be allocated
in a manner approved by the Internal Revenue
26
Service in accordance with the provisions of, and regulations issued pursuant
to, Section 4044 of the Employee Retirement Income Security Act of 1974.
The total amount so allocated shall be applied either by a cash payment,
by insurance company contract or by the continuance of the Fund and the payment
of retirement income therefrom in such amounts as may be provided by the funds
so allocated, all as the Committee shall determine, subject to the requirements
of applicable law. However, in the event that the assets available for
allocation are less than the value of insured vested benefits, the Pension
Benefit Guaranty Corporation may direct how the allocated amounts are to be
applied.
If any of the assets of the Fund remain after the satisfaction of all
liabilities of the Plan the remaining funds shall be paid by the Funding Agent
to the Company.
9.4 Continuation of Fund. If the Plan is terminated but the Board of
Directors determines that the Fund shall be continued pursuant to its terms and
the provisions of this Section, no further contributions will thereafter be
made by the Company, the rights of each affected Participant to benefits
accrued to the date of termination of the Plan, to the extent then funded,
shall be nonforfeitable but the Fund shall be administered as though the Plan
were otherwise in full force and effect, except that no further benefits will
accrue after the date of termination. If the trust is subsequently terminated,
the Fund shall then be allocated and disbursed in accordance with procedures
set forth in Section 9.3.
9.5 Mergers, Etc.. In the case of any merger or consolidation with, or
transfer of assets or liabilities to, any other plan, each Participant in the
Plan shall in all cases, if the Plan then terminated, receive a benefit
immediately after the merger or consolidation or transfer of assets which is
equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer, if the Plan had then
terminated.
9.6 Partial Termination. Upon a partial termination of the Plan, the
rights of all affected Participants to benefits accrued to the date of such
partial termination, to the extent then funded, shall be nonforfeitable.
If a partial termination of the plan shall occur, a terminated group's
share of the Fund shall equal (i) the sum of that part of the fair market value
of the Fund on the Plan's partial termination date which would have been
allocated to each person in the terminated group in accordance with Section 9.3
if the Plan had been terminated on such date as to all Participants in the Plan
minus (ii) the expenses of the Plan and the Fund incurred in connection with
the termination of the Plan as to such group.
27
SECTION 10
LIMITATIONS ON BENEFITS
10.1 Maximum Limitation. In addition to other limitations set forth in
the Plan and notwithstanding any other provisions of the Plan, the accrued
benefit, including the right to any optional benefits provided in the Plan (and
all other defined benefit plans required to be aggregated with this Plan under
the provisions of section 415 of the Code), shall not increase to an amount in
excess of the amount permitted under section 415 of such Code at any time.
Notwithstanding any provision of this Plan to the contrary, for purposes of the
preceding sentence and for purposes of determining whether benefits of this
Plan exceed the limitations of section 415 of such Code, the term "annual
addition" shall include all employee contributions to the Plan. For purposes
of this paragraph and determining compliance with section 415 of the Code,
compensation shall mean compensation as defined in section 415(b)(3) and the
regulations thereunder.
10.2 Early Termination Provisions.
(a) The purpose of this Section 10.2 is to conform the
Plan to the requirements of Treasury Regulation Section
1.401(c)-1 and Treasury Regulation Section
1.401(a)(4)-5(b).
(i) In the event of the termination of the Plan,
the benefit of any highly compensated employee
(within the meaning of Section 414(q) of the Code)
shall in no event exceed an amount that is
nondiscriminatory under Section 401(a)(4) of the
Code.
(ii) The annual payments to an Employee
described in Section 10.2(a)(iii) may not exceed an
amount equal in each year to the payments that would
be made on behalf of the Employee under a straight
life annuity that is the Actuarial Equivalent value
of the Employee's accrued benefit and the other
benefits to which the Employee is entitled under the
Plan (other than a social security supplement), and
the amount of the payments that the Employee is
entitled to receive under a social security
supplement. Notwithstanding the foregoing, the
restrictions of this subparagraph (ii) do not apply
if any one of the following requirements is
satisfied:
(A) after payment to an Employee
described in Section 10.2(a)(iii) of all
"benefits" described in Section 10.2(a)(iv),
the value of Plan assets equals or exceeds 110
percent of the value of current liabilities,
as defined in Section 412(l)(7) of the Code,
28
(B) the value of the benefits described
in Section 10.2(a)(iv) for an Employee
described in Section 10.2(a)(iii) is less than
one (1) percent of the value of current
liabilities of the Plan, or
(C) the value of the benefits described
in Section 10.2(a)(iv) for an Employee
described in Section 10.2(a)(iii) does not
exceed three thousand, five hundred dollars
($3,500).
Furthermore, this subparagraph (ii) and
Treasury Regulation Section 401(a)(4)-5(b)(3)
shall not restrict any distribution to a
Participant who agrees, by an adequately
secured written agreement with the Committee
as prescribed by Section 10.2(b) (an
"Agreement") to repay to the Plan and Fund any
amount necessary for the distribution of
assets upon Plan termination to satisfy
Section 401(a)(4) of the Code.
(iii) The Employees whose benefits are
restricted on distribution consist of the twenty-five
(25) highly compensated employees (including former
Employees who were highly compensated employees when
they separated from service and Employees who were
highly compensated employees at any time after
attaining age fifty-five (55)) whose compensation,
within the meaning of Section 414(g) of the Code, was
the highest in the current or any prior Plan Year.
(iv) For purposes of Section 10.2(a)(ii)(A) the
term "benefits" includes, in addition to other
benefits payable under the Plan, loans in excess of
the amounts set forth in Section (72)(p)(2)(A) of the
Code, any periodic income, any withdrawal values
payable to a living Employee, and any death benefits
not provided for by insurance on the Employee's life.
(b) Terms of Agreement
(i) During any Plan Year, the amount that may be
required to be repaid to the Trust Fund pursuant to
an Agreement is the Restricted Amount.
(A) The "Restricted Amount" is the excess
of the Accumulated Amount of distributions
made to the Employee over the Accumulated
Amount of the Employee's Nonrestricted Limit.
(B) The Employee's "Nonrestricted Limit"
is equal to the payments that could
29
have been distributed to the Employee,
commencing when distribution commenced to the
Employee, had the Employee received payments
in the form described in Treasury Regulations
Sections 1.401(a)(4)-5(b)(3)(i)(A) and (B).
(C) An "Accumulated Amount" is the amount
of a payment, increased by a reasonable amount
of interest from the date the payment was made
(or would have been made) until the date for
the determination of the Restricted Amount.
(ii) Prior to receipt of a distribution under
the terms of an Agreement, an Employee must (A) agree
that upon such distribution the Employee will
promptly deposit in an escrow account (an "Escrow
Account") with a depository acceptable to the
Committee property having a fair market value equal
to at least one hundred and twenty-five percent
(125%) of the Restricted Amount, or (B) post as
collateral a bond or bank letter of credit equal to
at least one hundred percent (100%) of the Restricted
Amount, which bond is furnished by an insurance
company, bonding company, or other surety approved by
the U.S. Treasury Department as an acceptable surety
for federal bonds.
(iii) Amounts in the Escrow Account in excess of
one hundred and twenty-five percent (125%) of the
Restricted Amount may be withdrawn by the Employee.
The Employee's liability under a bond or letter of
credit in excess of one hundred percent (100%) of the
Restricted Amount may be released, where the
Agreement has been secured by a bond or a letter of
credit. If the market value of the property in the
Escrow Account falls below one hundred and ten
percent (110%) of the Restricted Amount, the Employee
is obligated to deposit additional property to bring
the value of the property held by the depository up
to one hundred and twenty-five percent (125%) of the
Restricted Amount. An Employee has the right to
receive any income from the property placed in the
Escrow Account, subject to the foregoing obligation
to maintain the value of the property.
(iv) A depository may not redeliver to an
Employee any property held under an Agreement, other
than amounts in excess of one hundred and twenty-five
percent (125%) of the Restricted Amount, and a surety
or bank may not release any liability on a bond or
letter of credit unless the Committee certifies to
the depository, surety or bank that the Employee (or
the Employee's estate) is no longer obligated to
repay any amount under the Agreement. The Committee
will make such a certification if, any time after the
distribution commences, either
30
(A) the value of Plan assets equals or exceeds one
hundred and ten percent (110%) of the value of
current liabilities, (B) the value of the Employee's
future Nonrestricted Limit constitutes less than one
percent of the value of current liabilities, (C) the
value of the Employee's future Nonrestricted Limit
does not exceed three thousand, five hundred dollars
($3,500), or (D) the Plan has terminated and the
benefit received by the Employee is
nondiscriminatory. Such a certification by the
Committee shall terminate the Agreement.
(c) In the event that Congress should provide by
statute, or the Internal Revenue Service should provide by
regulation or ruling, that any or all of the conditions set
forth in Sections 10.2(a) and 10.2(b) are no longer
necessary for the Plan to meet the requirements of Section
401 or other applicable provisions of the Code then in
effect, such conditions shall immediately become void and
shall no longer apply, without the necessity of further
amendment to the Plan.
31
SECTION 11
ADMINISTRATION
11.1 Appointment and Term of Office. The Board shall appoint a committee
of at least three (3) persons to be known as the Benefit Plans Committee
("Committee"), the members of which shall hold office during the pleasure of
the Board. Any person shall be eligible to be appointed a member of the
Committee. Any member may resign at any time by notice in writing filed with
the Board and with the Chairman or Secretary of the Committee. Vacancies shall
be filled promptly by the Board in such manner that the composition shall be as
herein prescribed. The Committee shall be the "administrator" within the
meaning of Section 3(16)(A) of ERISA.
11.2 Organization of the Committee. The Committee shall appoint a
Chairman, who must be a member, and a Secretary, who need not be a member. It
may appoint such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties, whether ministerial
or discretionary, as the Committee may deem expedient or appropriate. The
compensation of such agents may be fixed by the Committee within limits set by
the Board. The action of the Committee shall be determined by the vote or
other expression of a majority of its members.
The Committee shall hold meetings upon such notice, at such place or
places and at such time or times as the Committee may from time to time
determine. Meetings may be called by the Chairman or any two (2) members. A
majority of the members of the Committee at the time in office shall constitute
a quorum for the transaction of business. Members of the Committee shall serve
without compensation for services as such, but the Company shall pay or
reimburse the Committee for all expenses reasonably incurred by it or its
members.
11.3 Powers of the Committee. The Committee shall have complete control
of the administration of the Plan, subject to the provisions hereof, with all
powers necessary to enable it to properly carry out its duties in that respect.
Not in limitation, but in amplification of the foregoing, the Committee shall
have the uncontrolled discretionary authority and power to interpret and
construe this Plan and to determine all questions that may arise thereunder,
including all questions relating to the eligibility of Employees to participate
in this Plan, and the amount of Retirement Benefit or other benefits to which
any Participant or Beneficiary may become entitled hereunder. The decisions of
the Committee upon all matters within the scope of its authority shall be
final. No member of the Committee shall take part in any action or any matter
solely concerning his own participation in the Plan. The Committee shall
approve forms and establish rules and procedures to be followed by the
Participants or Beneficiaries in filing applications for benefits and in
furnishing and verifying proofs necessary to establish age, service, and any
other matter required in order to establish the right to benefits in accordance
with the Plan.
The Committee shall receive all applications for benefits. Upon receipt
by the Committee of such an application, it shall determine all facts which are
necessary to establish the right of the applicant to benefits under the
provisions of the Plan and shall approve the amount thereof as herein provided.
The Committee shall afford a reasonable opportunity, to any
32
applicant who gives written notice to the Committee of his request for a
review, for a reconsideration of any finding of fact or determination affecting
his benefits.
The Committee may authorize one or more of its members or any agent, to
execute any instrument or make any payment on its behalf, and all persons
having dealings with the Committee may rely upon the signature of any person so
authorized.
The Committee shall prepare and distribute to the Employees, at the
expense of the Company and in such manner as it shall deem appropriate,
information concerning the Plan.
To enable the Committee to perform its functions, the various Employing
Units shall supply full and timely information to it of all matters relating to
the length of service of all Participants, their retirement, death or other
cause of termination of employment, and such other pertinent facts as the
Committee may require.
The Board shall notify the Funding Agent in writing of the members of the
Committee and any changes therein, and shall certify to the Funding Agent the
signatures of said members. From time to time and as necessary, the Committee
shall advise the Funding Agent of such facts and issue to the Funding Agent
such instructions as may be required by the Funding Agent in the administration
of the Plan.
The Committee shall from time to time adopt the actuarial, financial and
other tables and procedures which shall be used in the various actuarial
calculations required in connection with the Plan, and may modify, change or
revoke any thereof, and substitute a new table or procedure therefor, as it may
see fit. As an aid to the Committee in adopting tables and in determining the
level of contributions to the Fund, the Actuary shall make annual actuarial
valuations of the Plan and shall present to the Committee the tables and
contributions which he recommends.
11.4 Records of the Committee. All acts and determinations of the
Committee shall be duly recorded by the Secretary thereof, or under his
supervision, and all such records, together with such other documents as may be
necessary for the administration of the Plan shall be preserved in the custody
of such Secretary. Such records and documents shall, during normal business
hours, be open for inspection and for the purpose of making copies by any
person designated by the Board.
11.5 Limitation of Fiduciary Liability. A Fiduciary shall be liable for a
breach of fiduciary responsibility of another Fiduciary only in the following
circumstances:
(a) If he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other
Fiduciary, knowing such act or omission is a breach;
(b) If, by his failure to comply with Section 11.6 in
the administration of his specific responsibilities which
give rise to his status as a Fiduciary, he has enabled such
other Fiduciary to commit a breach; or
33
(c) If he has knowledge of a breach by such other
Fiduciary, unless he makes reasonable effort under the
circumstances to remedy the breach.
The Fiduciaries shall be entitled to rely upon all tables, valuations,
certificates and reports furnished by the Actuary, and upon all certificates
and reports made by an accountant selected by the Committee, and upon all
opinions given by any counsel selected by the Committee; and the Fiduciaries
shall be fully protected in respect to any action taken or suffered by them in
good faith in reliance upon the advice or opinion of any such Actuary,
accountant or counsel, and all actions so taken or suffered shall be conclusive
upon each of them and upon all other persons interested in the Plan.
A Fiduciary may designate persons other than named Fiduciaries to carry
out Fiduciary responsibilities under the Plan. Such Fiduciary shall not be
liable for an act or omission of such person in carrying out such
responsibility except to the extent that:
(a) The Fiduciary violated Section 11.6 in making or
continuing such allocation or designation, or
(b) The Fiduciary would otherwise be liable in
accordance with Section 11.6.
11.6 Allocation of Responsibility Among Fiduciaries for Plan and Fund
Administration. The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan
or the Fund. The Company shall have the sole authority to appoint and remove
the Funding Agent and any investment manager which may be provided for under
the Fund, and to amend or terminate, in whole or in part, this Plan or the
Fund. The Committee shall have the sole responsibility for the administration
of this Plan, which responsibility is specifically described in this Plan and
the Fund. The Funding Agent shall have the sole responsibility for the
administration of the Fund and the management of the assets held under the
Fund, all as specifically provided in the Fund. Each Fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan or the Fund, as the case may be,
authorizing or providing for such direction, information or action.
Furthermore, each Fiduciary may rely upon any such direction, information or
action of another Fiduciary as being proper under this Plan or the Fund, and is
not required under this Plan or the Fund to inquire into the propriety of any
such direction, information or action. It is intended under this Plan and the
Fund that each Fiduciary shall be responsible for the proper exercise of its
own powers, duties, responsibilities and obligations under this Plan and the
Fund and shall not be responsible for any act or failure to act of another
Fiduciary. No Fiduciary guarantees the Fund in any manner against investment
loss or depreciation in asset value.
11.7 Claims Procedure. The Committee shall make all determinations as to
the right of any person to a benefit. Any denial by the Committee of the claim
for benefits under the Plan by a Participant or Beneficiary shall be stated in
writing by the Committee and delivered or mailed to the Participant or
Beneficiary; and such notice shall set forth the specific reasons for the
denial, written in a manner that may be understood by the average Participant.
In addition, the
34
Committee shall afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a review of the
decision denying the claim.
11.8 Indemnification of Certain Persons. Each individual who has been
designated to carry out any Fiduciary or administrative responsibility, whether
an Employee, officer or director of the Company shall be indemnified by the
Company against all expenses (including costs and attorney's fees) actually and
necessarily incurred or paid by him in connection with the defense of any
action, suit or proceeding in any ways relating to or arising from the Plan to
which he may be made a part by reason of his being or having been so
designated, or by reason of any action or omission or alleged action or
omission by him in such capacity, and against any amount or amounts which may
be paid by him (other than to the Company) in reasonable settlement of any such
action, suit or proceeding, where it is in the interest of the Company that
such settlement be made. In cases where such action, suit or proceeding shall
proceed to final adjudication, such indemnification shall not extend to matters
as to which it shall be adjudged that such Employee, officer or director is
liable for gross negligence or willful misconduct in the performance of his
duties as such. The right of indemnification herein provided shall not be
exclusive of other rights to which any such Employee, officer or director may
now or hereafter be entitled, shall continue as to a person who has ceased to
be so designated and shall inure to the benefit of the heirs, executors and
administrators of such Employee, officer or director.
35
SECTION 12
ADOPTION OF PLAN BY EMPLOYING UNITS
12.1 Procedure. Any Employing Unit may adopt this Plan for the benefit of
its Employees, with the consent of the Company, which consent may be given by
the President or a Vice President of the Company. In adopting this Plan the
Employing Unit may, with the consent of the Company, elect to provide for some
benefits to be under a special formula for some or all of its employees. Such
benefit variations will be detailed in addenda which are deemed a part of this
Plan with respect to such Employees. The Employing Unit desiring to adopt the
Plan shall submit a certified copy of the resolution of its board of directors
to the Company, stating its desire to adopt said Plan for its Employees and the
effective date thereof. All contributions made by the Company and each
Employing Unit shall become a part of the Fund and shall be held by the Funding
Agent subject to the terms and provisions of the Plan.
12.2 Effect. In addition to subjecting it to the provisions of this Plan,
the adoption of the Plan and Fund by the Employing Unit's board of directors
shall also constitute the automatic delegation by it to the Company of full
authority to amend, alter or modify the Plan, and any such amendment,
alteration or modification made by the Company shall be binding upon and
effective with respect to each Employing Unit.
12.3 Withdrawal of an Employing Unit. Any Employing Unit shall, upon
ceasing to be an Employing Unit, or may without ceasing to be an Employing
Unit, through the action of its board of directors, withdraw from the Plan.
36
SECTION 13
SUCCESSOR COMPANY
13.1 Successor Company. In the event of the dissolution, merger,
consolidation or reorganization of the Company, provision may be made by which
the Plan and Fund will be continued by the successor; and, in that event, such
successor shall be substituted for the Company under the Plan. The
substitution of the successor shall constitute an assumption of Plan
liabilities by the successor and the successor shall have all of the powers,
duties and responsibilities of the Company under the Plan.
37
SECTION 14
GENERAL PROVISIONS
14.1 Construction. In the construction of the Plan the masculine shall
include the feminine and the singular the plural in all cases where such
meanings would be appropriate. The headings and sub-headings in this Plan
(other than in Section 1) have been inserted for convenience of reference only,
and are to be ignored in any construction of the provisions hereof. All
references to specific sections of the Code are references to such sections as
contained in the Internal Revenue Code of 1986 (Title 26 of the United States
Code), and shall be deemed to be references to such sections as they may be
amended or superseded, and to the corresponding sections or provisions, if any,
of any subsequent United States Code, as appropriate at the time of reference.
Except as required by ERISA or any other applicable law of the United States of
America, the Plan and Fund shall be construed, governed, regulated and
administered according to the laws of the State of Illinois.
14.2 Employment. Participation in the Plan shall not give any Employee
the right to be retained in the employ of an Employing Unit, or upon dismissal
or upon his voluntary termination of employment, to have any right, legal or
equitable, under this Plan or in the Fund or any portion thereof, except as
expressly granted by this Plan.
14.3 Benefits Supported Only by Fund. Except as may be otherwise provided
under Title IV of ERISA, any person having any claim under the Plan will look
solely to the assets of the Fund for the satisfaction thereof and the Company,
the Employing Units, the Committee, the Funding Agent, or any of their
stockholders, officers, members of their boards of directors, or agents, shall
not be liable in their individual capacities to any person whomsoever.
14.4 Spendthrift Clause. No benefit under the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void, and no
such benefit shall in any manner be liable for or subject to the debts,
liabilities, engagements or torts of the person entitled to such benefit,
except as specifically provided in the Plan. Any other provision of the Plan
to the contrary notwithstanding, however, the creation, assignment, or
recognition of a right to any benefit payable with respect to an Employee
pursuant to a "qualified domestic relations order" (as defined in subsection
414(p) of the Code) shall not be treated as an assignment or alienation
prohibited by this Section 14.4, and if a qualified domestic relations order
requires the distribution of all or part of an Employee's benefits under the
Plan, the establishment or acknowledgment of the alternate payee's right to
benefits under the Plan in accordance with the terms of such qualified domestic
relations order shall in all events be deemed to be consistent with the terms
of the Plan.
14.5 Benefits Payable to Incompetents. If any recipient of benefits is,
in the judgment of the Committee, legally incapable of personally receiving and
giving a valid receipt for any payment due him under the Plan, the Committee
may, unless and until claims shall have been made by a duly appointed guardian
or committee of such person, make such payment or any part thereof to such
person's spouse, children, or other legal entity deemed by the Committee to
have incurred expenses or assumed responsibility for the expenses of such
person. Any payment so made shall be a complete discharge of any liability
under the Plan for such payment.
38
14.6 Expenses of Administration. The Company and/or the Employing Units
may pay all expenses incurred in the administration of the Plan, including
expenses and fees of the Funding Agent, but they shall not be obligated to do
so. Any such expenses and fees not so paid by the Company and/or the Employing
Units shall be paid from the Fund.
14.7 Non-Discrimination. The Committee shall administer the Plan and Fund
in a uniform and consistent manner with respect to all persons similarly
situated and shall not permit discrimination in favor of highly compensated
employees (within the meaning of section 414(q) of the Code).
14.8 Purchase of Annuity Contracts. Notwithstanding any provision of the
Plan to the contrary, any benefit specified herein may be provided, by
direction from the Committee to the Funding Agent, through the means of an
annuity contract purchased from such life insurance company as the Committee
may direct.
14.9 Failure of Plan to Qualify. No right or interests under the Plan
shall come into existence for an Employing Unit unless and until the Plan is
initially determined by the Internal Revenue Service to be a qualified plan
with respect to such Employing Unit under Section 401(a) of the Code, and that
the Fund is exempt from tax under Section 501(a) thereof, provided however,
that until the Internal Revenue Service reaches a determination respecting the
status of this Plan and Fund with respect to an Employing Unit, persons who
retire, or whose service is otherwise terminated subsequent to the Effective
Date, shall receive their benefits as if the Plan and Fund had been the subject
of a favorable determination.
39
SECTION 15
IN EVENT PLAN BECOMES TOP-HEAVY
15.1 Special Definitions. For purposes of this Section 15, the following
terms shall have the following meanings:
(a) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(b) "Key Employee" means a Participant or former
Participant who is a "key employee" as defined in Section
416(i) of the Code.
(c) "Determination Date" means, with respect to any
Plan Year, the last day of the preceding Plan Year, except
that the Determination Date with respect to the first Plan
Year shall be the last day of that Plan Year.
(d) "Plan Year" has the meaning set forth in
Section 1.26.
(e) "Present Value of Accrued Benefits" means, as of a
given Determination Date, the present value, as of the most
recent Valuation Date which is within a twelve (12) month
period ending on the Determination Date, of the benefits
accrued under the Plan as of such Valuation Date with
respect to a Participant determined as if such Participant
terminated service as of such Valuation Date. The
determination of the Present Value of Accrued Benefits
shall be based on the actuarial assumptions used by the
Plan's actuary in the actuarial valuation as of such
Valuation Date.
(f) "Required Aggregation Group" means with respect to
a given Plan Year, this Plan and all other plans of the
Group which, in the aggregate, meet the requirements of the
definition contained in Section 416(g)(2)(A)(i) of the
Code.
(g) "Valuation Date" means, with respect to a given
Plan Year, the same valuation date used for computing Plan
costs for minimum funding purposes, regardless of whether a
valuation is performed that year.
(h) "Permissive Aggregation Group" means, with respect
to a given Plan Year, this Plan and all other plans of the
Group which may be aggregated in accordance with Section
416(g)(2)(A)(ii) of the Code.
(i) "Top-Heavy" means, with respect to the Plan for a
Plan Year (1) that the Present Value of Accrued Benefits of
Key Employees exceeds sixty percent (60%) of the Present
Value of Accrued Benefits of all Participants, or (2) the
Plan is part of a Required Aggregation Group
40
and such Required Aggregation Group is a Top-Heavy Group,
unless the Plan or such Top-Heavy Group is itself part of
the Permissive Aggregation Group which is not a Top-Heavy
Group.
(j) "Top-Heavy Group" means, with respect to a given
Plan Year, a group of Plans of the Group which, in the
aggregate, meet the requirements of the definition
contained in Section 416(g)(2)(B) of the Code.
15.2 Special Top-Heavy Rules. Notwithstanding any other provisions of the
Plan to the contrary, the following provisions of this Section 15.2 shall
automatically become operative and shall supersede any conflicting provisions
of the Plan, if, in any Plan Year, the Plan is Top-Heavy.
(a) The minimum monthly normal retirement income for a
Participant who is not a Key Employee, commencing at his
Normal Retirement Date, shall equal the lesser of (i)
product of (1) two percent (2%) of his average monthly
earnings during his five (5) highest-paid consecutive
calendar years of Service, multiplied by (2) the number of
his years of Service (to a maximum of ten (10) such years),
disregarding for this purpose any such years during which
the Plan is not Top-Heavy.
(b) In the event of the termination of employment
(other than by death or retirement) of a Participant who
had completed at least three (3) years of Service, such
Participant shall be one hundred percent (100%) vested and
shall be entitled to retirement income commencing on his
Normal Retirement Date, determined in accordance with
Section 4.1 (or, if greater subsection (a) above).
(c) For any Plan Year in which the Plan is Top-Heavy,
Compensation shall in no event exceed one hundred and fifty
thousand dollars ($150,000) or such higher amount in effect
in accordance with such applicable provisions of the Code.
(d) If the Plan becomes Top-Heavy and subsequently
ceases to be such, the vesting schedule in subsection (b)
above shall continue to apply in determining the rights to
benefits of any Participant who had at least three (3)
years of Service as of the last day of the last Plan Year
in which the Plan was Top-Heavy. For other Participants,
said schedule shall apply only to their accrued benefits as
of such last day of such Plan Year.
(e) In order to comply with the requirements of
Section 416(h) of the Code, in the case of a Participant
who is or has also participated in a defined contribution
plan of the Company (or any other company required to be
aggregated with the Company in accordance with Section
415(h) of the Code) in any Plan Year in which the Plan is
Top-Heavy there shall be imposed the following limitation
in addition to any limitation which may be imposed in
accordance with Section 10. In any such year, for purposes
41
of satisfying the aggregate limit on contributions and
benefits imposed by Section 415(e) of the Code, benefits
payable from the Plan shall, except as hereinafter
provided, be reduced so as to comply with a limit
determined in accordance with Section 415(e) of the Code,
but based on the assumption that the number 1.0 is
substituted for the number 1.25 in the definition of the
"defined benefit plan fraction" (as defined in Section
415(e)(2) of the Code) and in the "defined contribution
plan fraction" (as defined in Section 415(e)(3) of the
Code). Notwithstanding the foregoing, if the application
of the additional limitation set forth in this subsection
(e) would result in the reduction of accrued benefits of
any Participant under this Plan, such additional limitation
shall not become operative, so long as (1) no additional
Company contributions, forfeitures or voluntary
nondeductible contributions are allocated to such
Participant's accounts under any defined contribution plan
maintained by the Company and (2) no additional benefits
accrue to such Participant under any defined benefit plan
maintained by the Company, including this Plan.
Accordingly, in any Plan Year that the Plan is Top-Heavy,
no additional benefits shall accrued under this Plan on
behalf of any Participant whose overall benefits under this
Plan would otherwise be reduced in accordance with the
limitation imposed by this subsection (e).
(f) In the event that Congress should provide by
statute, or the Treasury Department should provide by
regulation or ruling, that the limitations provided in this
Section 15 are no longer necessary for the Plan to meet the
requirements of Section 401 or other applicable provisions
of the Internal Revenue Code in effect, such limitations
shall become void and shall no longer apply, without the
necessity of further amendment to the Plan.
42
IN WITNESS WHEREOF, Falcon Building Products, Inc. has caused this duly
amended and restated Plan to be executed below by its duly authorized officer
or representative on this 2nd day of December 1996 to be effective as of the
Effective Date stated herein.
FALCON BUILDING PRODUCTS, INC.
By: /s/ Sam Cottone
---------------------------
Name: Sam Cottone
Title: Sr. V.P. Finance/CFO
ATTEST:
By: /s/ Gus J. Athas
-----------------------------
Name: Gus J. Athas
Title: Secretary
43
APPENDIX A
Pay Credit Dates of Employing Units
Pay Credit
Employing Unit Date
Mansfield Plumbing Products, Inc. 1/1/96
Hart & Cooley, Inc. 1/1/96
Kilgore Plumbing Products, Inc. 1/1/96
Norris Plumbing Products, Inc. 1/1/96
DeVilbiss Air Power Company 1/1/96
44
APPENDIX B
Specified Basis for Determination of Actuarial Equivalents
Except as otherwise specified in the Plan, Actuarial Equivalents shall be
determined on the following basis:
1. Mortality Table -- UP 1984.
2. Interest Rate -- the interest rate or rates which would be
used by the Pension Benefit Guaranty Corporation for single-employer
plans terminating as of the beginning of the Plan Year in which such
lump sum is payable to determine the value of the Participant's
benefit.
3. Other Factors -- None.
For the purpose of calculating the forms of benefits described in Sections
7.4 and 7.5, the tables attached to the end of this document shall be used.
45
APPENDIX C
Pay-Based Credits to Accounts
Percentage of Percentage of
Compensation of a Compensation of a
Participant who has Participant who has
less than 15 years 15 or more years of
Employing Unit of Service Service
- ---------------------------------------------------------------------------
Mansfield Plumbing 5 6-1/2
- ---------------------------------------------------------------------------
Hart & Cooley, Inc. 5 6-1/2
- ---------------------------------------------------------------------------
Kilgore Plumbing Products, Inc. 5 6-1/2
- ---------------------------------------------------------------------------
Norris Plumbing Products, Inc. 5 6-1/2
- ---------------------------------------------------------------------------
DeVilbiss Air Power Company 5 6-1/2
- ---------------------------------------------------------------------------
46
TEN-YEAR CERTAIN AND LIFE ANNUITY FACTOR
Mortality basis - UP1984. Interest rate basis - 8.0%.
The Ten-Year Certain and Life Annuity Factor will be based on the
participant's age on date of annuity commencement (linear interpolation
required) as follows:
Age Factor Age Factor
20 0.997 50 0.980
21 0.997 51 0.978
22 0.998 52 0.976
23 0.998 53 0.973
24 0.998 54 0.970
25 0.998 55 0.967
26 0.998 56 0.964
27 0.998 57 0.960
28 0.997 58 0.956
29 0.997 59 0.951
30 0.997 60 0.946
31 0.997 61 0.940
32 0.997 62 0.934
33 0.997 63 0.927
34 0.996 64 0.919
35 0.996 65 0.911
36 0.995 66 0.902
37 0.995 67 0.893
38 0.994 68 0.883
39 0.994 69 0.872
40 0.993 70 0.860
41 0.992 71 0.847
42 0.992 72 0.833
43 0.991 73 0.818
44 0.990 74 0.801
45 0.988 75 0.784
46 0.987 76 0.766
47 0.986 77 0.746
48 0.984 78 0.726
49 0.982 79 0.705