Exhibit 10.1
R. G. BARRY CORPORATION
ASSOCIATES' RETIREMENT PLAN
(As Amended and Restated
Effective January 1, 1997)
R. G. BARRY CORPORATION
ASSOCIATES' RETIREMENT PLAN
(As Amended and Restated Effective January 1, 1997)
CONTENTS
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SECTION PAGE
ARTICLE I. THE PLAN
1.1 Establishment and Amendment of the Plan.........................................................1
1.2 Applicability of Plan...........................................................................1
ARTICLE II. DEFINITIONS
2.1 Definitions.....................................................................................2
2.2 Construction....................................................................................9
ARTICLE III. PARTICIPATION AND SERVICE
3.1 Active Participation...........................................................................10
3.2 Participation Status; Membership; Reemployment.................................................10
3.3 Transferred Employees..........................................................................11
3.4 Vesting Service................................................................................12
3.5 Benefit Service................................................................................14
3.6 Prior Service..................................................................................15
3.7 Hours of Service...............................................................................16
3.8 Special Provisions Relating to Acquired Businesses.............................................16
3.9 Leased Employees...............................................................................17
3.10 Special Provisions for Participants Who Enter the Armed Forces.................................17
3.11 Special Provisions for Class A Commissioned Sales Representatives..............................17
ARTICLE IV. BENEFITS
4.1 Normal Retirement Benefits.....................................................................18
4.2 Late Retirement Benefits.......................................................................19
4.3 Early Retirement Benefits......................................................................20
4.4 Disability Retirement Benefits.................................................................20
4.5 Vested Retirement Benefits.....................................................................22
4.6 Death Benefit..................................................................................24
4.7 Preretirement Surviving Spouse's Benefit.......................................................24
4.8 Automatic Joint and Surviving Spouse Annuity...................................................25
4.9 Normal and Optional Methods of Benefit Payments................................................26
4.10 Adjustment for In-Service Payments.............................................................28
4.11 Maximum Annual Benefits........................................................................28
4.12 Plan in Effect at Termination of Employment Controls...........................................31
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4.13 Optional Direct Rollovers of Eligible Rollover Distributions...................................32
4.14 Payment of Small Amounts.......................................................................34
4.15 Special Commencement Rule For Certain Former Participants......................................34
ARTICLE V. COMMENCEMENT OF BENEFIT PAYMENTS AND DURATION
5.1 Commencement and Duration......................................................................36
5.2 Required and Minimum Distribution Rules........................................................37
5.3 Reemployment After Benefit Commencement but Prior to Normal Retirement Age.....................39
5.4 Reemployment After Benefit Commencement and After Attaining Normal Retirement Age..............40
5.5 Suspension of Benefits Notice and Procedures...................................................41
ARTICLE VI. PLAN ADMINISTRATION
6.1 Appointment of Committee.......................................................................42
6.2 Compensation and Expenses......................................................................42
6.3 Manner of Action...............................................................................42
6.4 Chairman, Secretary and Employment of Specialists..............................................43
6.5 Delegation of Responsibilities.................................................................43
6.6 Records........................................................................................43
6.7 Rules..........................................................................................43
6.8 Administration.................................................................................44
6.9 Appeals from Denial of Claims..................................................................44
6.10 Notice of Address and Missing Persons..........................................................45
6.11 Application for Benefits and Data..............................................................45
6.12 Indemnity for Liability........................................................................45
ARTICLE VII. FINANCING
7.1 Funding........................................................................................47
7.2 Contributions..................................................................................47
ARTICLE VIII. AMENDMENT AND TERMINATION
8.1 Amendment and Termination......................................................................48
8.2 Limitations on Amendments......................................................................49
8.3 Distribution on Termination....................................................................49
8.4 Effect of Contingencies Affecting the Employer.................................................50
8.5 Restrictions on Benefits and Distributions to Certain Members..................................51
ARTICLE IX. PARTICIPATION IN AND WITHDRAWAL FROM THE PLAN BY AN EMPLOYER
9.1 Participation in the Plan......................................................................52
9.2 Withdrawal from the Plan.......................................................................52
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ARTICLE X. MISCELLANEOUS
10.1 Nonalienation..................................................................................54
10.2 Incompetency...................................................................................54
10.3 Merger, Consolidation or Transfer..............................................................54
10.4 Litigation.....................................................................................56
10.5 Effect of Mistake..............................................................................56
10.6 No Enlargement of Employee Rights..............................................................56
10.7 No Guarantee...................................................................................56
10.8 Internal Revenue Service Approval..............................................................56
10.9 Exclusive Benefit; Nonreversion................................................................57
10.10 Applicable Law.................................................................................57
10.11 Severability...................................................................................58
10.12 Mistakes.......................................................................................58
10.13 Qualified Transportation Fringe Payments.......................................................58
ARTICLE XI. TOP-HEAVY PROVISIONS
11.1 Application of Top-Heavy Provisions............................................................59
11.2 Definitions....................................................................................59
11.3 Vesting Requirements...........................................................................61
11.4 Minimum Benefit................................................................................62
11.5 Limit on Annual Additions; Combined Plan Limit.................................................62
11.6 Collective Bargaining Agreements...............................................................63
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ARTICLE I. THE PLAN
1.1 ESTABLISHMENT AND AMENDMENT OF THE PLAN
R. G. Barry Corporation ("Sponsor") previously maintained the R. G. Barry
Corporation Salaried Employees' Pension Plan for the benefit of its salaried
employees, which plan was previously established effective January 1, 1973, and
was last restated as a separate plan effective as of January 1, 1989. In
addition, the Sponsor previously maintained as a separate plan the Retirement
Income Plan for Non-Salaried Employees of R. G. Barry Corporation for the
benefit of its nonsalaried, noncommissioned employees, which plan was previously
established effective January 1, 1964, and was last restated as a separate plan
effective as of January 1, 1989. Effective as of January 1, 1996, the Retirement
Income Plan for Non-Salaried Employees of R. G. Barry Corporation was merged
into the R. G. Barry Corporation Salaried Employees' Pension Plan. The combined
plans were amended and restated generally effective as of January 1, 1996, and
became known as the "R. G. Barry Corporation Associates' Retirement Plan"
("Plan"). The Plan is now amended and restated, as set forth herein, effective
as of January 1, 1997 (except to the extent otherwise provided herein).
1.2 APPLICABILITY OF PLAN
The provisions of this Plan as set forth herein are applicable only to the
Eligible Employees (and their surviving Spouses or Beneficiaries) of the
Employer in current employment on or after January 1, 1997. The restated Plan
shall preserve all benefits accrued and not forfeited by Members under the terms
of the Plan prior to this restatement.
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided herein; and when
the defined meaning is intended, the term is capitalized.
(a) "ACTUARIAL EQUIVALENT" means a benefit having the same value as the
benefit which it replaces, computed on the basis of the 1971 Group
Annuity Mortality Table for Males projected to 1990 by Scale D with an
age setback of four years for the Participant and two years for any
Spouse or Beneficiary and a 7 percent annual interest rate assumption,
except as otherwise specified in the document. For purposes of
determining the Actuarial Equivalent present value and single sum
amount of a Member's monthly Retirement Benefit [and for purposes of
Section 5.1(b)], subject to the limitations of Sections 4.9 and 8.2,
such determination shall be made using:
(1) the annual interest rate set forth in Code Section 417(e) for
the second full month preceding the first day of the Plan
Year, which rate shall remain constant for the Plan Year; and
(2) the mortality projections taken from the 1983 Group Annuity
Mortality Table with a 50 percent male and 50 percent female
weighting of the mortality rates as described in Revenue
Ruling 95-6 or the successor mortality tables as prescribed by
the Secretary of the Treasury;
provided, however, that prior to January 1, 1997, such determination
shall be made on the basis of the 1971 Group Annuity Mortality Table
for Males projected to 1990 by Scale D with an age setback of four
years for the Participant and two years for any Spouse or Beneficiary
and using an interest rate not greater than--
(A) the "applicable interest rate" if the present value
of such Benefit (using such rate) is not in excess of
$25,000; or
(B) 120 percent of the "applicable interest rate" if the
present value of such Benefit exceeds $25,000 [as
determined under (A) above]. In no event shall the
present value determined under this Section 2.1(a)(B)
be less than $25,000.
For purposes of this Section 2.1(a)(A) and (B), "applicable interest
rate" shall mean the interest rate or rates which would be used by the
Pension Benefit Guaranty Corporation for purposes of determining the
present value of a Member's lump sum benefit under the Plan if the Plan
had terminated on the date distribution commences with insufficient
assets to provide benefits guaranteed by the Pension Benefit Guaranty
Corporation ("PBGC") on such date, provided that the "applicable
interest rate" shall be determined
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as of the second calendar month preceding the month in which the single
sum is payable rather than as of the date distribution commences.
Notwithstanding the preceding provisions of this Section 2.1(a), for
distributions beginning on any date in 1997, the annual rate of 30-year
Treasury securities under Section 2.1(a)(1) shall be determined as of
the second full month preceding the first day of the Plan Year in which
the distribution commences or as of the second calendar month preceding
the month in which the single sum is payable, whichever results in the
larger Actuarial Equivalent.
The foregoing assumptions shall be used for benefit calculations but
shall not restrict the right of the Sponsor and the Actuary to use
different assumptions for determining the appropriate funding of the
Plan. In the event of a termination of the Plan, this Section 2.1(a)
shall be subject to the regulations of the PBGC.
(b) "ACTUARY" means the actuary for the Plan who is appointed or selected
by the Committee but is independent of the Sponsor. The Actuary
designated shall serve for so long as shall be mutually agreeable to
the Committee and the Actuary. The Actuary shall be a person who is an
"enrolled actuary" under ERISA, or shall be an actuarial consulting
firm or corporation which employs or has on its staff such an enrolled
actuary.
(c) "AFFILIATE" means--
(1) any corporation other than the Sponsor, i.e., either a
subsidiary corporation or an affiliated or associated
corporation of the Sponsor, which together with the Sponsor is
a member of a "controlled group" of corporations [as defined
in Code Section 414(b)];
(2) any organization which together with the Sponsor is under
"common control" [as defined in Code Section 414(c)];
(3) any organization which together with the Sponsor is an
"affiliated service group" [as defined in Code Section
414(m)];
(4) any organization required to be aggregated with an Employer
pursuant to Code Section 414(o); or
(5) any other corporation or entity designated as an Affiliate by
resolution of the Board of Directors of the Sponsor.
(d) "ANNUITY STARTING DATE" means, in the case of benefits payable in the
form of an annuity, the earlier of the first day of the first period
for which a benefit is payable under the Plan; or the date on which a
Member, surviving Spouse or Beneficiary begins to receive benefits
under the Plan. In the case of a benefit payable in the form of a
single sum payment, Annuity Starting Date means the date on which all
events have occurred which entitle the Member to receive such benefit.
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(e) "AUTOMATIC JOINT AND SURVIVING SPOUSE ANNUITY" means the annuity form
of benefit payments described in Section 4.8.
(f) "BENEFICIARY" means the person or persons designated under Section
4.9(c).
(g) "BOARD OF DIRECTORS" means the Board of Directors of the Sponsor.
(h) "CODE" means the Internal Revenue Code of 1986 and the regulations
issued thereunder, as amended from time to time.
(i) "COMMITTEE" means the committee which is responsible for the
administration of the Plan, as provided in Article VI.
(j) "COMPENSATION" means a Participant's pay, determined as follows:
(1) For all purposes under the Plan, except as otherwise
specified, Compensation means:
(A) for Plan Years beginning on or after January 1, 1991,
the Participant's salary and excludes overtime, cash
bonuses, and sales incentive payments.
(B) for Plan Years beginning before January 1, 1991, the
Participant's salary and commissions, but shall
exclude overtime and cash bonuses as well as
commissions while a Class A salesman.
(2) For purposes of applying the limitations described in Section
4.11, the definition of Highly Compensated Employee and the
provisions of Article XI, Compensation means the Member's
"compensation" as defined in Code Section 415(c)(3), including
amounts set forth in Code Section 415(c)(3)(D), excluding for
Plan Years and Limitation Years beginning prior to January 1,
2001, amounts set forth in Section 132(f)(4) of the Code, as
determined by the Committee.
Notwithstanding the foregoing provisions of this Section 2.1(j), the
Compensation of each Employee that may be taken into account under the
Plan shall not exceed the first "applicable dollar amount" of an
Employee's annual Compensation; provided, however, that such annual
dollar limitation shall not apply to Compensation for purposes of
Section 4.11. For purposes of this Section 2.1(j), the term "applicable
dollar amount" means the maximum annual compensation limit set forth in
Code Section 401(a)(17)(A), as adjusted for the cost of living in
accordance with Code Section 401(a)(17)(B).
(k) "EFFECTIVE DATE" of this amended and restated Plan means, except where
separately stated, January 1, 1997.
(l) "ELIGIBILITY SERVICE" means the service of an Employee, as determined
under Section 3.1.
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(m) "ELIGIBLE EMPLOYEE" means any Salaried Employee or Nonsalaried Employee
of an Employer.
(n) "EMPLOYEE" means a person who is classified by the Sponsor or an
Affiliate as an employee; excluding, however, any person who is
classified by the Sponsor or an Affiliate as an independent contractor
or leased employee (as defined in Section 3.9). If an individual who is
not classified by the Employer or an Affiliate as a common law employee
is determined by a court of law or governmental agency to be a common
law employee, such Employee will remain excluded from participation in
the Plan unless otherwise provided pursuant to Section 3.9.
(o) "EMPLOYER" means the Sponsor or any Affiliate which has elected to
become a participating Employer under the Plan in accordance with
Article IX.
(p) "EMPLOYMENT COMMENCEMENT DATE" means the first day on which an Employee
is credited with an Hour of Service with the Employer or an Affiliate
or, if applicable, the first day following a Break in Service on which
an Employee is credited with an Hour of Service with the Employer or an
Affiliate.
(q) "ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations issued thereunder, as amended from time to time.
(r) "FINAL AVERAGE COMPENSATION" means one-sixtieth of the Participant's
total Compensation for the highest five consecutive Plan Years out of
the last ten consecutive Plan Years of employment as a Salaried
Employee with an Employer; provided that if he has fewer than five Plan
Years of employment as a Salaried Employee with an Employer, then his
Final Average Compensation shall be determined using such Participant's
total period of employment as a Salaried Employee with the Employer and
the actual number of months worked. With respect to a reemployed
Participant, the period during which he is not employed as a Salaried
Employee by an Employer shall not be considered an interruption for
purposes of the meaning of "consecutive."
(s) "HIGHLY COMPENSATED EMPLOYEE" means, with respect to any Plan Year, any
Employee who--
(1) was a 5-percent owner [as determined under Code Section
416(i)(1)] at any time during the current or preceding Plan
Year; or
(2) received Compensation in the preceding Plan Year from the
Employers and Affiliates in excess of $80,000 (or such
increased amount as permitted by the Secretary of the
Treasury) and who, at the election of the Committee, was in
the "top-paid group" [as defined by Code Section 414(q)(3)]
during such year.
(t) "HOUR OF SERVICE" means the hours for which an Employee shall receive
credit for various purposes under the Plan, as described in Section
3.7.
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(u) "LEAVE OF ABSENCE" means any absence without pay, authorized on a
nondiscriminatory basis by an Employer or nonparticipating Affiliate
under its standard personnel practices (which may be granted for
reasons other than termination of employment, discharge, retirement or
death), such as illness, accident, emergency or other unusual condition
affecting the Employee or persons dependent upon him or for any reason
sufficient in the discretion of the Sponsor; provided, however, that in
granting leaves of absence, all Employees shall be treated alike.
(v) "MEMBER" means an Active Participant, an Inactive Participant or a
Former Participant who is entitled to receive a Retirement Benefit
under the Plan, as provided in Section 3.2.
(w) "NONSALARIED BENEFIT SERVICE" means the service of a Nonsalaried
Participant as determined under Section 3.5.
(x) "NONSALARIED EMPLOYEE" or "NONSALARIED PARTICIPANT" means an Employee
or Participant, respectively, who is not compensated by a salary paid
on a biweekly basis and who is not compensated by commissions.
(y) "PARTICIPANT" means an "Active Participant" or "Inactive Participant,"
as such terms are defined in Section 3.2. The term "Former Participant"
shall have the meaning provided for in Section 3.2.
(z) "PLAN" means the R. G. BARRY CORPORATION ASSOCIATES' RETIREMENT PLAN,
as amended and restated generally effective as of January 1, 1997, and
as may be subsequently amended from time to time.
(aa) "PLAN YEAR" means the 12-consecutive-month period beginning January 1
of a year and ending on December 31 of the same year.
(bb) "PRERETIREMENT SURVIVING SPOUSE'S BENEFIT" means the monthly benefit
payable to a Member's surviving Spouse, as described in Section 4.7.
(cc) "PRIMARY SOCIAL SECURITY BENEFIT" means the estimated monthly primary
insurance amount to which a Participant would be entitled at age 65 if
not otherwise disqualified under the Federal Social Security Act as
amended, whether or not he applies for or actually receives such
benefit. For purposes of the Plan, such estimated amount prior to his
Normal Retirement Date shall be determined based upon the method of
calculations described below.
In determining the Primary Social Security Benefit under this Plan, the
Social Security Act as in effect on January 1 of the then current
calendar year shall be applied. Wage history prior to employment with
the Employer shall be estimated by applying a salary scale with the
salary scale to be the actual change in the average national wages as
determined by the Social Security Administration. For any year in which
the Social Security Administration has not published the increase in
national average wages, a six
6
percent increase shall be assumed. Wages for future years shall be
assumed to be the same as the wages received in the last full calendar
year of employment.
Provided, however, that any Participant shall be permitted to have his
actual salary history used as of the date of the calculation if the
Participant supplies documentation of that history. Such documentation
must be provided no later than a reasonable period of time (as
established by the Committee) following the later of the date of
separation from service (by retirement or otherwise) and the time when
the Participant is notified of the benefit to which he is entitled. To
the extent required by applicable law, the Committee shall furnish each
Member with a written notice of his right to supply actual past wages
and the financial effect of his failure to supply such actual wage
information.
Post-separation increases in a Member's Social Security benefit shall
not affect the Retirement Benefits determined under this Plan.
(dd) "PRIOR PLANS" means the R. G. Barry Corporation Salaried Employees'
Pension Plan and the Retirement Income Plan for Non-Salaried Employees
of R. G. Barry Corporation.
(ee) "RETIREMENT AGE" means a Member's Normal Retirement Age, Early
Retirement Age or Vested Retirement Age, whichever is applicable, as
follows:
(1) "NORMAL RETIREMENT AGE" means the sixty-fifth birthday of a
Participant.
(2) "EARLY RETIREMENT AGE" means a Member's age when he has
attained his fifty-fifth birthday (but not his sixty-fifth
birthday) and he is credited with at least ten years of
Vesting Service.
(3) "VESTED RETIREMENT AGE" means a Member's age when he is
credited with at least five years of Vesting Service but has
not attained his Early Retirement Age.
(ff) "RETIREMENT BENEFIT" means the monthly benefit payment to which a
Member is entitled under whichever of the following is applicable to
the Member:
(1) "NORMAL RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.1.
(2) "LATE RETIREMENT BENEFIT" means the monthly benefit described
in Section 4.2.
(3) "EARLY RETIREMENT BENEFIT" means the monthly benefit described
in Section 4.3.
(4) "DISABILITY RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.4.
(5) "VESTED RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.5.
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(gg) "RETIREMENT DATE" means a Member's Normal Retirement Date, Late
Retirement Date or Early Retirement Date, whichever is applicable, as
follows:
(1) "NORMAL RETIREMENT DATE" means the first day of the calendar
month coincident with or next following the date on which a
Member attains his Normal Retirement Age.
(2) "LATE RETIREMENT DATE" means the first day of the calendar
month coincident with or next following the date a Participant
terminates his employment as an Employee after his Normal
Retirement Date.
(3) "EARLY RETIREMENT DATE" means the first day of the calendar
month coincident with or next following the date a Participant
terminates his employment as an Employee on or after attaining
his Early Retirement Age but before his Normal Retirement Age.
An Early Retirement Date may also be such later date as
provided in Section 5.1(a)(2).
(4) "DISABILITY RETIREMENT DATE" means the first day of the
calendar month coincident with or next following the date on
which the Committee determines that a Nonsalaried Participant
has a Disability, as described in Section 4.4(a).
(5) "VESTED RETIREMENT DATE" means for a Participant who
terminates his employment as an Employee on or after he
attains his Vested Retirement Age, and who is not eligible for
a Normal Retirement Benefit, Early Retirement Benefit or
Disability Retirement Benefit as a result of such termination
of employment, the Participant's Normal Retirement Date;
provided, however, if such Participant was credited with at
least 10 years of Vesting Service prior to the termination of
his employment as an Employee, his Vested Retirement Date
shall be the first day of any calendar month coincident with
or next following his fifty-fifth birthday for which he makes
application for his Vested Retirement Benefit to begin, but in
no event later than his Normal Retirement Date.
(hh) "SALARIED BENEFIT SERVICE" means the service of a Salaried Participant
as determined under Section 3.5.
(ii) "SALARIED EMPLOYEE" or "SALARIED PARTICIPANT" means an Employee or
Participant, respectively, who is compensated by a salary paid on a
biweekly basis.
(jj) "SOCIAL SECURITY RETIREMENT AGE" means the "social security retirement
age" of a Member, as determined under Code Section 415(b)(8).
(kk) "SPONSOR" means R. G. BARRY CORPORATION, or any successor thereto.
(ll) "SPOUSE" means the person to whom a Member is legally married on any
relevant date or who is treated as if married to the Member pursuant to
a qualified domestic relations order as defined in Code Section 414(p).
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(mm) "TRUST AGREEMENT" means any agreement in the nature of a trust, or in
the nature of a custodial or funding agreement (including any group
annuity contract and/or funding investment contract issued pursuant
thereto) between the Sponsor and the Trustee and/or insurer, that is
established to form a part of the Plan to receive, hold, invest and
dispose of the Trust Fund.
(nn) "TRUSTEE" means the Trustee or Trustees named in the Trust Agreement
and/or the insurer named in any other funding agreement, and any
additional or successor Trustee or Trustees from time to time acting as
Trustee or Trustees of the trust assets under the Plan, or the insurer
acting in the capacity of a custodian or funding agent of such trust
assets.
(oo) "TRUST FUND" or "TRUST" means the funds or assets which are held and
administered by the Trustee pursuant to the Trust Agreement and the
Plan.
(pp) "VESTING SERVICE" means the service of an Employee, as determined under
Section 3.4.
2.2 CONSTRUCTION
Unless the context clearly requires otherwise, (a) the masculine pronoun
whenever used shall include the feminine and neuter pronoun, and the singular
shall include the plural; and (b) headings of Articles and Sections herein are
included solely for convenience and if there is any conflict between such
headings and the text of the Plan, the text shall control.
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ARTICLE III. PARTICIPATION AND SERVICE
3.1 ACTIVE PARTICIPATION
Each individual who was a Participant in the Plan on December 31, 1996, in
accordance with the terms of such Plan as in effect on said date shall remain a
Participant, subject to the provisions of this Plan. Each other Employee shall
become an Active Participant under the Plan on the January 1 nearest to the
latest to occur of--
(a) the date he is employed as an Eligible Employee;
(b) the date on which he is credited with at least one year of Eligibility
Service (defined below); or
(c) the date, on or after the Effective Date, that the Plan was made
applicable to the Employer of the individual;
provided he is employed as an Eligible Employee on such January 1. For the
purpose of determining eligibility to participate, one year of "Eligibility
Service" shall mean the first 12-consecutive-month period, beginning on the
Employee's Employment Commencement Date, during which the Employee completes
1,000 or more Hours of Service. If he does not actually have 1,000 or more Hours
of Service during the 12-month period beginning with his Employment Commencement
Date, but he actually has 1,000 or more Hours of Service during any Plan Year
(beginning with the Plan Year in which such initial 12-month period ends), then
he shall become an active Participant on the first day of the Plan Year
immediately following such Plan Year.
An Employee who satisfies the eligibility requirements of Sections 3.1(a), (b)
and (c) but who is not employed as an Eligible Employee on the applicable entry
date shall become an Active Participant under the Plan upon his reemployment as
an Eligible Employee following such entry date; provided, however, that if he is
not credited with at least one year of Vesting Service at the time of such
reemployment, he shall become an Active Participant in accordance with the
second sentence of this Section 3.1.
3.2 PARTICIPATION STATUS; MEMBERSHIP; REEMPLOYMENT
A Participant shall either be an "Active Participant" or an "Inactive
Participant" under the Plan. An Eligible Employee who has become an Active
Participant, as provided in Section 3.1, shall continue his status as an "Active
Participant" so long as he remains employed as an Eligible Employee. An Employee
who has become an Active Participant under the Plan, as provided in Section 3.1,
shall be an "Inactive Participant" during any period when he is employed as an
Employee but not as an Eligible Employee. Such an Inactive Participant shall
resume the status of an "Active Participant" at the time he resumes employment
as an Eligible Employee. An Active Participant or Inactive Participant who
ceases employment as an Employee shall become a "Former Participant." A Former
Participant shall become an "Inactive Participant" upon his reemployment as an
Employee or shall become an "Active Participant" upon his reemployment
10
as an Eligible Employee; provided, however, that if such Eligible Employee is
not credited with at least one year of Vesting Service at the time of his
reemployment as an Eligible Employee, he shall become an Active Participant in
accordance with the provisions of Section 3.1. As provided in Section 2.1(v), an
individual shall be classified as a "Member" under the Plan so long as he is an
Active Participant, an Inactive Participant or a Former Participant who is
entitled to receive a Retirement Benefit under the Plan. A Participant who
terminates his employment as an Employee and who is not entitled to receive a
Retirement Benefit under the Plan shall cease to be a Member covered under the
Plan.
3.3 TRANSFERRED EMPLOYEES
(a) TRANSFER TO NONPARTICIPATING AFFILIATE. Should a Participant cease to
be an Eligible Employee as defined in Section 2.1(m), but remain an
Employee of the Sponsor or an Affiliate, the following provisions will
apply:
(1) No Salaried or Nonsalaried Benefit Service shall be credited
during such period, and any benefit he may become entitled to
under the Plan shall be determined using the benefit formula
under the Plan in effect at the time of transfer and his Final
Average Compensation, Primary Social Security Benefit,
Compensation and Salaried and/or Nonsalaried Benefit Service,
whichever are applicable, while he was an Active Participant
in the Plan.
(2) A Participant shall continue to accrue Vesting Service during
such period.
(3) If such person again becomes an Eligible Employee, he shall
become an Active Participant in the Plan the first of the
calendar month coinciding with or next following his
reclassification.
(4) Should the status of an Affiliate change so that it is
disassociated with the Sponsor, the Participant will then be
considered to have terminated his or her employment and shall
be entitled to receive his Retirement Benefit as provided in
Article IV of the Plan.
(b) TRANSFER TO ANOTHER PARTICIPATING EMPLOYER. It is anticipated that an
Employee may be transferred between participating Employers; and in the
event of any such transfer, the Employee involved shall carry with him
his accumulated Salaried and/or Nonsalaried Benefit Service and Vesting
Service. No such transfer shall effect a termination of employment
hereunder, and the Employer to which the Employee is transferred shall
thereupon become obligated hereunder with respect to such Employee in
the same manner as was the Employer from whom the Employee was
transferred. For the Plan Year of the transfer, both Employers shall
pay their proportionate share of the cost, if any, of the Plan with
respect to the transferring Employee for that Plan Year. Appropriate
adjustments shall be made between participating Employers to reflect
the transfers of employment.
11
(c) MULTIPLE BENEFITS. The benefits under this Plan for the period during
which an individual is a Nonsalaried Employee and a Salaried Employee
shall be determined independently; provided, however, that no more than
30 years of combined Salaried and Nonsalaried Benefit Service shall be
considered in determining total benefits under the Plan. Salaried and
Nonsalaried Benefit Service are each limited to 30 years.
Notwithstanding any Plan provisions to the contrary, if the sum of a
Participant's years of Salaried and Nonsalaried Benefit Service exceeds
30, then the benefit with the more generous accrual (generally, the
benefit earned as a Salaried Participant) shall be offset by a fraction
of the amount of the other benefit. The numerator of said fraction
shall equal the difference between (1) total years of Salaried and
Nonsalaried Benefit Service and (2) 30, and the denominator shall be
the years of Salaried or Nonsalaried Benefit Service, whichever
provides the less generous benefit. The benefit with the less generous
accrual (generally, the benefit earned as a Nonsalaried Participant)
shall be provided without adjustment.
3.4 VESTING SERVICE
A Member's eligibility for benefits under the Plan shall be determined by his
period of Vesting Service. Vesting Service means a Member's period or periods of
employment by the Employers and Affiliates determined in accordance with
reasonable and uniform standards and policies adopted by the Committee from time
to time, which standards and policies shall be consistently observed. A Member
will be credited with years of Vesting Service in accordance with the following
provisions:
(a) Vesting Service prior to January 1, 1996: For a Member as of the
Effective Date who had been covered under the prior provisions of the
Plan, the Member's period of employment with the Employer prior to
January 1, 1996 shall be counted as Vesting Service in accordance with
Section 3.6.
(b) Vesting Service from and after January 1, 1996: Subject to the Break in
Service provisions, a year of Vesting Service means any Plan Year
during which the Member has at least 1,000 Hours of Service. A Member
shall be credited with Vesting Service in whole and fractional years of
such Member's period(s) of employment (whether or not such period(s) of
employment were consecutive) which are not disregarded as a result of
the application of the break rules of Section 3.4(d). Nonsuccessive
periods of employment must be aggregated, and less than whole year
periods of employment (whether or not consecutive) shall be aggregated
on the basis that each fractional year of Vesting Service is rounded to
the nearest one-hundredth. Hours of Service for this purpose shall also
include periods of vacation, regular holidays, illness, incapacity,
layoff, jury duty, military duty or Leave of Absence. An Employee shall
receive credit for Vesting Service from his Employment Commencement
Date until his Break in Service. No more than one year of Vesting
Service shall be credited to a Member under this Plan in any Plan Year.
12
(c) Vesting Service shall not be deemed to have been broken--
(1) by any transfer of employment of an Employee between
Affiliates regardless of whether the Affiliate is an Employer
hereunder; or
(2) during such period as an Employee is receiving credit for
Hours of Service under Section 3.7.
(d) If an Employee who has had a Break in Service is subsequently
reemployed as an Employee--
(1) if he is reemployed before a One-Year Break in Service occurs
after such Break in Service, the Vesting Service he had at
such Break in Service shall be reinstated from such Employee's
most recent Employment Commencement Date after the Employee
completes a year of Vesting Service following the Break in
Service.
(2) if he is reemployed after a One-Year Break in Service occurs
after such Break in Service, he shall be considered a new
Employee for purposes of the Plan, except--
(A) if at such Break in Service he had a vested interest
in any portion of his accrued benefit, Vesting
Service he had at such Break in Service shall be
reinstated from such Employee's most recent
Employment Commencement Date after the Employee
completes a year of Vesting Service following the
One-Year Break in Service.
(B) if Section 3.4(d)(2)(A) as provided above is not
applicable, and if the number of consecutive One-Year
Breaks in Service does not equal or exceed the
greater of five or the number of years of Vesting
Service he had before such Break in Service, the
years of Vesting Service he had at such Break in
Service shall be reinstated from such Employee's most
recent Employment Commencement Date after the
Employee completes a year of Vesting Service
following the One-Year Break in Service.
(e) In determining an Employee's Vesting Service pursuant to this Section
3.4, the following terms shall apply:
(1) "BREAK IN SERVICE" shall mean the earlier of (A) or (B) below:
(A) the date the Employee quits, retires, is discharged
or dies; or
(B) the first anniversary of the first day of an
Employee's absence from employment as an Employee
(with or without pay) for any reason other than in
(A) above, such as vacation, sickness, Leave of
Absence, layoff or military service, or special leave
of absence as provided in Section 3.10. An Employee
who fails to return to employment as an Employee at
the
13
expiration of such absence shall be deemed to have
had a Break in Service on the first to occur of the
expiration of his absence or the first anniversary of
the first day of his absence.
(2) A "ONE-YEAR BREAK IN SERVICE" shall mean each Plan Year
beginning with the Plan Year which includes the date an
Employee incurs a Break in Service, provided that the Employee
is credited with 500 or fewer Hours of Service during such
period. Solely for purposes of determining whether a One-Year
Break in Service has occurred, in the case of an Employee who
is absent from work beyond the first anniversary of the first
date of an absence and the absence is for one of the following
reasons, the date the Employee incurs a Break in Service shall
be the second anniversary of the Employee's absence from
employment:
(A) the pregnancy of the Employee;
(B) the birth of a child of the Employee;
(C) the adoption of a child by the Employee; or
(D) caring for such child for a period immediately
following birth or adoption.
The period between the first and second anniversaries of the
first date of absence shall not constitute Vesting Service.
3.5 BENEFIT SERVICE
The amount of the benefit payable to or on behalf of a Member shall be
determined on the basis of his Salaried and/or Nonsalaried Benefit Service, in
accordance with the following:
(a) SALARIED AND/OR NONSALARIED BENEFIT SERVICE PRIOR TO JANUARY 1, 1996.
For a Member as of January 1, 1996, who had been covered under the
prior provisions of either of the Prior Plans, the amount of Salaried
and/or Nonsalaried Benefit Service to be credited for employment prior
to January 1, 1996 shall be determined in accordance with Section 3.6.
(b) SALARIED BENEFIT SERVICE FROM AND AFTER JANUARY 1, 1996. The Member's
Salaried Benefit Service shall be equal to his Vesting Service reduced
by--
(1) any period of Vesting Service prior to the date on which the
Member first became a Salaried Participant under the Plan (or
the R. G. Barry Corporation Salaried Employees' Pension Plan
as in effect prior to January 1, 1996) during which the Member
was not a Salaried Employee of the Employer;
(2) any period of Vesting Service from and after the date on which
the Member first became a Salaried Participant under the Plan
(or the R. G. Barry Corporation Salaried Employees' Pension
Plan as in effect prior to January 1, 1996) during which the
Member was not a Salaried Employee of the Employer, including,
but
14
not limited to, any period between a Break in Service, as
defined in Section 3.4(e)(1), and reemployment as an Eligible
Employee and any period during which he was an Inactive
Participant; and
(3) any period of Vesting Service reinstated pursuant to the
provisions of Section 3.4(d) if the Member was entitled, upon
such termination, to a monthly Retirement Benefit under the
Plan, and the full Actuarial Equivalent value of such
Retirement Benefit had been paid on behalf of such Member
under the provisions of Section 4.9(c)(3) or 5.1(a)(6).
(c) NONSALARIED BENEFIT SERVICE FROM AND AFTER JANUARY 1, 1996. The
Member's Nonsalaried Benefit Service shall be equal to his Vesting
Service reduced by--
(1) any period of Vesting Service prior to the date on which the
Member first became a Nonsalaried Participant under the Plan
(or the Retirement Income Plan for Non-Salaried Employees of
R. G. Barry Corporation as in effect prior to January 1, 1996)
during which the Member was not a Nonsalaried Employee of the
Employer;
(2) any period of Vesting Service from and after the date on which
the Member first became a Nonsalaried Participant under the
Plan (or the Retirement Income Plan for Non-Salaried Employees
of R. G. Barry Corporation as in effect prior to January 1,
1996) during which the Member was not a Nonsalaried Employee
of the Employer, including, but not limited to, any period
between a Break in Service, as defined in Section 3.4(e)(1),
and reemployment as an Eligible Employee and any period during
which he was an Inactive Participant; and
(3) any period of Vesting Service reinstated pursuant to the
provisions of Section 3.4(d) if the Member was entitled, upon
such termination, to a monthly Retirement Benefit under the
Plan, and the full Actuarial Equivalent value of such
Retirement Benefit had been paid on behalf of such Member
under the provisions of Section 4.9(c)(3) or 5.1(a)(6).
No more than one year of Salaried or Nonsalaried Benefit Service shall be
credited to a Member under this Plan in any Plan Year.
3.6 PRIOR SERVICE
For periods prior to January 1, 1996, an Employee's service shall consist of his
years and fractions of a year of Vesting Service, Salaried Benefit Service under
the R. G. Barry Corporation Salaried Employees' Pension Plan and Nonsalaried
Benefit Service under the Retirement Income Plan for Non-Salaried Employees of
R. G. Barry Corporation as reflected in the Employer's records for such Prior
Plans. Such service shall be subject to the effect of any Break in Service
incurred under provisions of the Prior Plans in effect prior to January 1, 1996,
and shall be determined in accordance with the prior provisions of the Prior
Plans including rules which relate to required minimum hours or other length of
service.
15
3.7 HOURS OF SERVICE
Hours of Service shall be determined by including the following:
(a) each Hour of Service for which the Employer or Affiliate, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties. The Committee
credits Hours of Service under this paragraph (a) to the Employee for
the computation period in which the Employee performs the duties,
irrespective of when paid;
(b) each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer or Affiliate has agreed or for which the
Employee has received an award. The Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(s)
to which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made;
(c) each Hour of Service for which the Employer or Affiliate, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the performance
of duties during a computation period, such as Leave of Absence,
vacation, holiday, sick leave, illness, incapacity, layoff, jury duty
or military duty. The Committee will credit no more than 501 Hours of
Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single Plan Year).
The Committee credits Hours of Service under this paragraph (c) in
accordance with the rules of paragraphs (b) and (c) of Labor Reg.
Section 2530.200b-2, which the Plan, by this reference, specifically
incorporates in full within this paragraph (c). The Committee will not
credit an Hour of Service under more than one of the above paragraphs.
A computation period for purposes of this Section 3.7 is the calendar
year. The Committee will resolve any ambiguity with respect to the
crediting of an Hour of Service in favor of the Employee; and
(d) each Employee shall be credited with Hours of Service on the basis of
an assumed 45 Hours of Service per week for each week for which the
Employee would have received at least one Hour of Service in accordance
with this definition to the extent it does not result in crediting
Hours of Service more than once with respect to any period.
3.8 SPECIAL PROVISIONS RELATING TO ACQUIRED BUSINESSES
In any case in which an individual becomes an Employee upon the acquisition of
all or a portion of the business of his former employer by an Employer or an
Affiliate, whether by merger, acquisition of assets or stock, or otherwise, his
service and compensation with such acquired employer prior to the date on which
such employer became an Affiliate (or part of an Affiliate) shall not be taken
into account under the Plan for purposes of calculating his Vesting Service,
16
Salaried or Nonsalaried Benefit Service, and Compensation under the Plan, except
to the extent that such service is required to be recognized under Code Section
414(a).
3.9 LEASED EMPLOYEES
A person who is not classified by the Employer or an Affiliate as an Employee
and who performs services for an Employer or an Affiliate pursuant to an
agreement between the Employer or Affiliate and a leasing organization shall be
considered a "leased employee" if such person performed the services on a
substantially full-time basis for at least one year and the services are under
the primary direction and control of the Employer or Affiliate. A person who is
considered a "leased employee" of an Employer shall not be considered an
Employee for purposes of the Plan. If such a person becomes a Participant under
the Plan as a result of being classified by the Employer as an Employee, he
shall receive credit for his service as a leased employee in calculating his
Vesting Service under the Plan but not for calculating his Salaried or
Nonsalaried Benefit Service.
3.10 SPECIAL PROVISIONS FOR PARTICIPANTS WHO ENTER THE ARMED FORCES
Notwithstanding any provision in this Plan to the contrary, effective on and
after December 12, 1994, contributions, benefits and service credit with respect
to qualified military service will be provided in accordance with Code Section
414(u). If a Participant is absent from employment for voluntary or involuntary
qualified military service with the armed forces of the United States, does not
receive a dishonorable discharge and returns to employment as an Employee within
the period required under the law pertaining to veterans' reemployment rights,
he shall receive Vesting Service and Salaried or Nonsalaried Benefit Service
(based on his employment status when the absence began) for the period of his
absence from employment.
3.11 SPECIAL PROVISIONS FOR CLASS A COMMISSIONED SALES REPRESENTATIVES
If a Class A commissioned sales representative of the Employer becomes a
Participant under the Plan as a result of subsequent employment as an Eligible
Employee with an Employer, he shall receive credit for his service as a Class A
commissioned sales representative in calculating his Vesting Service under the
Plan, but such service shall be considered Salaried Benefit Service only with
respect to Plan Years beginning on or after January 1, 1991; provided, however,
that despite the provisions of Section 2.1(j), commissions earned while a person
is a Class A commissioned sales representative of the Employer shall not be
considered to be Compensation for purposes of this Plan.
17
ARTICLE IV. BENEFITS
4.1 NORMAL RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Normal Retirement Age while
employed as an Employee and retires on or before his Normal Retirement
Date shall be eligible to receive a Normal Retirement Benefit
commencing on his Normal Retirement Date. Upon attaining his Normal
Retirement Age, such Participant shall have a nonforfeitable right to
his Normal Retirement Benefit.
(b) AMOUNT FOR SALARIED PARTICIPANT. A Salaried Participant who terminates
his employment as an Employee and who is eligible for a Normal
Retirement Benefit under Section 4.1(a) shall be entitled to a Normal
Retirement Benefit commencing on his Normal Retirement Date. Such
Normal Retirement Benefit shall be calculated based on his years of
Salaried Benefit Service, Final Average Compensation and his Primary
Social Security Benefit as a Salaried Employee as of his Normal
Retirement Date. The monthly amount of a Salaried Participant's Normal
Retirement Benefit payable for the lifetime of the Participant shall be
equal to 48 percent of the Salaried Participant's Final Average
Compensation reduced by 50 percent of his Primary Social Security
Benefit if the Salaried Participant has accrued at least 30 years of
Salaried Benefit Service. If the Salaried Participant has less than 30
years of Salaried Benefit Service at his Normal Retirement Date, then
the resulting amount shall be multiplied by a fraction, the denominator
of which is 30 and the numerator of which is the Salaried Participant's
years, including partial years, of Salaried Benefit Service.
Notwithstanding any Plan provision to the contrary, a Retirement
Benefit shall not be reduced below the value of the benefit determined
as of December 31, 1993 (or, if greater, December 31, 1988) due to the
effects of any changes in the limits of recognizable Compensation under
Code Section 401(a)(17).
(c) AMOUNT FOR NONSALARIED PARTICIPANT. A Nonsalaried Participant who
terminates his employment as an Employee and who is eligible for a
Normal Retirement Benefit under Section 4.1(a) shall be entitled to a
Normal Retirement Benefit commencing on his Normal Retirement Date.
Such Normal Retirement Benefit shall be a monthly amount payable during
the life of the Member, determined by multiplying (1) the Participant's
years, including fractional years, of Nonsalaried Benefit Service (up
to a maximum of 30 years) by (2) the benefit factor in effect on the
date of his termination of employment as an Eligible Employee
(regardless of when he ceased to be a Nonsalaried Employee) in
accordance with the following table:
18
TERMINATION DATE
-----------------------------------------------------------------------
On or After But Before Amount
-----------------------------------------------------------------------
1/1/64 1/1/87 $ 5.00
1/1/87 1/1/89 $ 7.00
1/1/89 1/1/90 $ 8.00
1/1/90 6/30/91 $ 9.00
7/1/91 1/1/96 $10.00
1/1/96 -- $11.00
-----------------------------------------------------------------------
Notwithstanding the provisions of the previous paragraph, certain
Members whose employment as Nonsalaried Employees with the Employer was
terminated prior to July 1, 1991 shall nevertheless be eligible to
receive a Normal Retirement Benefit determined by multiplying their
respective years of Nonsalaried Benefit Service, up to a maximum of 30
years, by $10. These individuals shall include Members (a) employed in
the Goldsboro, North Carolina, sewing plant on the final day of such
facility's operation; (b) employed in cutting and laminating operations
at the San Angelo, Texas, facility on the final day of those
operations; and (c) employed in Columbus, Ohio, whose employment with
the Employer was terminated by layoff on December 3, 1990 and who had
at least 15 years of Nonsalaried Benefit Service at the time of layoff.
(d) NONDUPLICATION OF BENEFITS. There shall be no duplication of benefits.
The Normal Retirement Benefits under Section 4.1(b) and (c) shall in no
event be less than the largest respective Early Retirement Benefit
which the Participant would have been entitled to receive under Section
4.3 by retiring at any time after meeting early retirement eligibility
requirements for an Early Retirement Benefit.
4.2 LATE RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Normal Retirement Age while
employed as an Employee shall be eligible to receive a Late Retirement
Benefit under the Plan, commencing on his Late Retirement Date.
(b) AMOUNT. A Participant who terminates his employment as an Employee and
who is eligible for a Late Retirement Benefit under Section 4.2(a)
shall be entitled to a monthly Late Retirement Benefit commencing on
his Late Retirement Date. Such Late Retirement Benefit shall be
computed in the same manner as a Normal Retirement Benefit under
Section 4.1(b) and/or (c), whichever applies, except that it shall be
based on his years of Salaried or Nonsalaried Benefit Service, his
Final Average Compensation, his Primary Social Security Benefit and the
applicable provisions of the Plan as in effect at his Late Retirement
Date.
The benefits of a Participant shall not be determined based on a
formula which became effective after his separation from service. If a
Member continues in employment beyond
19
his Normal Retirement Age at a rate such that his Normal Retirement
Benefits are suspended pursuant to Section 5.1(a), his benefit upon
retirement shall be calculated using the Plan formula in effect when he
actually terminates employment. If a Member continues in employment
beyond his Normal Retirement Age at a rate such that his Normal
Retirement Benefits are payable during such employment pursuant to
Section 5.1(a), his benefit shall be calculated using the Plan formula
in effect when his benefit payments begin.
4.3 EARLY RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Early Retirement Age while
employed as an Employee shall be eligible to receive an Early
Retirement Benefit under the Plan, commencing on his Early Retirement
Date.
(b) AMOUNT. A Participant who terminates his employment as an Employee and
who is eligible for an Early Retirement Benefit under Section 4.3(a)
shall be entitled to a monthly Early Retirement Benefit under the Plan.
Application for commencement prior to his Normal Retirement Date must
be made in writing to the Committee not more than 90 days prior to the
date he elects to have distributions commence. Such Early Retirement
Benefit shall be computed in the same manner as a Normal Retirement
Benefit under Section 4.1(b) and/or (c), except that it shall be based
on his years of Salaried or Nonsalaried Benefit Service, his Final
Average Compensation, his Primary Social Security Benefit and the
applicable provisions of the Plan as in effect at his termination of
employment as an Eligible Employee. The benefits of a Participant shall
not be determined based on a formula which became effective after his
separation from service as an Eligible Employee. If the Retirement
Benefit thus determined commences prior to the Member's Normal
Retirement Age, it shall be reduced as of the date the first Early
Retirement Benefit payment commences by 5/9 of one percent for each of
the first 60 months and 5/18 of one percent for each of the next 60
months, as applicable, by which his Early Retirement Benefit payment
precedes his Normal Retirement Age.
The Early Retirement Benefit under this Section 4.3(b) will in no event
be less than the largest Early Retirement Benefit that the Member would
have been entitled to receive under this Section 4.3 by retiring at any
time after meeting Early Retirement eligibility requirements.
4.4 DISABILITY RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who is actively employed as an Employee, who
has completed at least 15 years of Vesting Service, who has attained at
least age 50 but not his Normal Retirement Age, who incurs a
Disability, as defined below, while so employed, and who terminates his
employment as an Employee as a result of such Disability shall be
eligible to receive a Disability Retirement Benefit under the Plan,
commencing on his Normal Retirement Date with respect to benefits
earned as a Salaried Employee and commencing on his Disability
Retirement Date with respect to benefits earned as a Nonsalaried
Employee. For purposes of this Section 4.4, "Disability" means that the
Employee is so
20
totally and permanently incapacitated as established by a licensed
physician selected by the Committee that he is not able to perform his
job or any job for the Employer for which he is reasonably suited as a
result of his education, training and experience and that the Employee
qualifies for Social Security disability benefits. A Member who
commences Disability Retirement Benefit payments under the Plan shall
not be eligible to receive any other Retirement Benefit under the Plan
while he is receiving Disability Retirement Benefit payments.
Disability Retirement Benefits payable to Nonsalaried Employees prior
to Normal Retirement Age shall terminate with the last payment made
prior to the date on which the earliest of the following events occurs:
(1) the Member engages in any regular gainful employment or
occupation for remuneration or profit;
(2) the Committee determines on the basis of a medical examination
that the Member is no longer permanently or totally disabled;
(3) the Member refuses to undergo a medical examination ordered by
the Committee not more frequently than semi-annually; or
(4) the date of the Member's death.
(b) AMOUNT FOR A SALARIED PARTICIPANT. A Member who has terminated
employment as an Employee and who is eligible for a Disability
Retirement Benefit under Section 4.4(a) shall be entitled to a monthly
Disability Retirement Benefit commencing on his Normal Retirement Date.
Such Disability Retirement Benefit shall be an amount equal to the
product of: (1) the Normal Retirement Benefit as described in Section
4.1(b) to which the Member would have been entitled on his Normal
Retirement Date if his employment as a Salaried Employee had continued
without change until he attained Normal Retirement Age, and using his
Final Average Compensation, his Primary Social Security Benefit and the
provisions of the Plan in effect at his termination of employment as a
Salaried Employee due to Disability in lieu of the corresponding
amounts determined as of this Normal Retirement Date multiplied by (2)
a fraction, the numerator of which is the Member's Salaried Benefit
Service as of such termination date, and the denominator of which is
the Salaried Benefit Service that would accrue as of his Normal
Retirement Date.
(c) AMOUNT FOR NONSALARIED PARTICIPANT. A Member who has terminated
employment as an Employee and who is eligible for a Disability
Retirement Benefit under Section 4.4(a) shall be entitled to a monthly
Disability Retirement Benefit commencing on his Disability Retirement
Date. Such Disability Retirement Benefit shall be computed in the same
manner as a Normal Retirement Benefit under Section 4.1(c), except that
it shall be based on his years of Nonsalaried Benefit Service and the
provisions of the Plan as in effect at his Disability Retirement Date
and that it shall be reduced by workers' compensation benefits (except
awards or fixed statutory payments for loss or loss of use of any
bodily member) payable to him with respect to his Disability. In the
case of lump sum settlements under workers' compensation, the lump sum
shall be divided by the weekly
21
workers' compensation benefit which would otherwise have been payable
to determine the period over which the reduction should be made and the
amount of the reduction. Benefits shall not be payable to a Member
under more than one provision hereof for the same period of time.
4.5 VESTED RETIREMENT BENEFITS
(a) ELIGIBILITY. A Member who attains his Vested Retirement Age shall be
eligible to receive a Vested Retirement Benefit under the Plan,
commencing on his Vested Retirement Date. If the terminated Member dies
before the date he would have been eligible to receive a Vested
Retirement Benefit, no benefit shall be paid to or for him except under
the terms of Sections 4.6, 4.7 and 4.8.
(b) AMOUNT. A Member who has terminated his employment as an Employee, who
is eligible for a Vested Retirement Benefit under Section 4.5(a) and
who is not eligible for another Retirement Benefit under the Plan at
the time of such termination of employment shall be entitled to a
monthly Vested Retirement Benefit commencing on his Vested Retirement
Date. Application for commencement prior to his Normal Retirement Date
must be made in writing to the Committee not more than 90 days prior to
the date he elects to have distributions commence. For a Salaried
Participant, such Vested Retirement Benefit shall be an amount equal to
the product of: (1) the Normal Retirement Benefit as described in
Section 4.1(b) to which the Member would have been entitled on his
Normal Retirement Date if his employment as a Salaried Employee had
continued without change until he attained Normal Retirement Age, and
using his Final Average Compensation, his Primary Social Security
Benefit and the provisions of the Plan in effect at his termination of
employment as an Eligible Employee in lieu of the corresponding amounts
determined as of this Normal Retirement Date multiplied by (2) a
fraction, the numerator of which is the Member's Salaried Benefit
Service as of such termination date, and the denominator of which is
the Salaried Benefit Service that he would accrue as of his Normal
Retirement Date. For a Nonsalaried Participant, such Vested Retirement
Benefit shall be computed in the same manner as a Normal Retirement
Benefit under Section 4.1(c), except that it shall be based on his
years of Nonsalaried Benefit Service and the provisions of the Plan as
in effect on the date he ceases to be a Nonsalaried Employee. If the
Vested Retirement Benefit thus determined commences prior to the
Member's Normal Retirement Age, it shall be reduced as of the date the
first Vested Retirement Benefit payment commences by 5/9 of one percent
for each of the first 60 months and 5/18 of one percent for each of the
next 60 months, as applicable, by which his Vested Retirement Benefit
payment precedes his Normal Retirement Age.
(c) IMMEDIATE DISTRIBUTION OPTION. Notwithstanding any provisions of the
Plan to the contrary, effective as of January 1, 1997, if the Member is
not eligible for an immediate distribution under Section 4.5(b) above
on the date of his termination of employment as an Employee and elects
to have his distribution commence as soon as practicable following his
termination of employment as an Employee in accordance with Section
5.1(a)(4), then his Vested Retirement Benefit shall be equal to an
immediate reduced
22
Vested Retirement Benefit commencing as soon as administratively
practicable following his termination of employment as an Employee
computed as provided in Section 4.5(b) payable at Normal Retirement Age
and adjusted as provided below. Notwithstanding any provisions of the
Plan to the contrary, an immediate distribution option shall not be
available if the lump sum value of the total benefits earned as a
Salaried Employee and as a Nonsalaried Employee as determined below
exceeds $7,500.
Notwithstanding any provisions of the Plan to the contrary, the
immediate reduced Vested Retirement Benefit described in this Section
4.5(c) shall be payable only in the following forms:
(1) subject to the consent requirements referenced in Section
4.8(a) or (b), a lump sum distribution equal to the Actuarial
Equivalent of the amount determined in Section 4.5(b) payable
at Normal Retirement Age. Any Member who receives such a
distribution shall have no further interest in the Plan; or
(2) an immediate annuity payable in the Member's normal form of
benefit payment as described in Section 4.8(a) or (b),
whichever is applicable. Such immediate annuity shall be the
Actuarial Equivalent of the lump sum distribution as
calculated above in Section 4.5(c)(1).
The other optional forms of benefit described in Section 4.8(c) shall
not be available for any distribution made under this Section 4.5(c).
The Committee shall notify each Member who is eligible to elect to
receive a distribution under this Section 4.5(c). An application for
commencement must be made within the election period determined in
accordance with the administrative procedures established by the
Committee. The distribution shall commence as soon as administratively
practicable following the receipt of the Member's completed consent
form. If the Member does not file a timely consent to a current
distribution in accordance with this Section 4.5(c), then distribution
of his Retirement Benefit shall not commence prior to the date
otherwise provided in this Plan or the Prior Plans, whichever is
applicable.
Should a Member who receives a benefit under this Section 4.5 be
reemployed by an Employer, any Retirement Benefits payable after his
reemployment shall be reduced by the Actuarial Equivalent of the
benefit he previously received under this Section 4.5.
(d) FORFEITURES. To the extent that the present lump sum value of a
Member's vested accrued benefit derived from Employer contributions is
zero at the time he ceases to be an Employee, the Member shall be
deemed to have received a distribution of such vested accrued benefit,
and such Member's Salaried and Nonsalaried Benefit Service shall be
disregarded for purposes of accrual of benefits under the Plan unless
such Member resumes covered employment with the Employer before the
Member accrued a period of five (5) or more consecutive One-Year Breaks
in Service [as defined in Section 3.4(e)(2)], in which event the
Member's accrued benefit derived from Employer
23
contributions shall be restored to the amount of such accrued benefit
on the date of the deemed distribution.
4.6 DEATH BENEFIT
Except as provided under Section 4.7, 4.8 or 4.9, no benefit shall be payable to
any person after the death of a Member. Sections 4.7 and 4.8 will not apply with
respect to Participants who terminated employment prior to September 2, 1974.
4.7 PRERETIREMENT SURVIVING SPOUSE'S BENEFIT
(a) ELIGIBILITY. In the case of a Member who (1) is eligible for a Vested
Retirement Benefit; (2) has a surviving Spouse; and (3) dies prior to
his Annuity Starting Date for his Retirement Benefit (whether or not
such Member is employed as an Employee), there shall be payable to his
surviving Spouse a Preretirement Surviving Spouse's Benefit as
described in Section 4.7(b) and (c).
(b) AMOUNT. The deceased Member's surviving Spouse who is eligible to
receive a Preretirement Surviving Spouse's Benefit shall receive a
monthly benefit payable for the life of such Spouse equal to--
(1) if the Member died on or before the earliest date upon which
he could have received Retirement Benefit payments under the
Plan ("Earliest Commencement Date"), 50 percent of the monthly
Retirement Benefit amount the Member would have received had
he terminated employment as an Employee on the date of his
death (if he had not already terminated such employment),
survived to his Earliest Commencement Date, elected to begin
receiving Retirement Benefit payments on his Earliest
Commencement Date with the automatic form of payment under
Section 4.8 in effect and died on the day after his Earliest
Commencement Date; or
(2) if the Member died after his Earliest Commencement Date, 50
percent of the monthly Retirement Benefit amount the Member
would have received had he retired on the day before his
death, with his Retirement Benefit payable in the automatic
form of payment under Section 4.8 on the date preceding the
day on which he died.
(c) COMMENCEMENT. Payment of the Preretirement Surviving Spouse's Benefit
to a Member's surviving Spouse shall, unless otherwise elected by such
Spouse, commence on the later of the Member's Earliest Commencement
Date or the first day of the month following the Member's death. In no
event shall the payment of such Benefit commence later than the later
of the date the Member would have attained his Normal Retirement Date
or the first day of the month following the Member's death.
24
4.8 AUTOMATIC JOINT AND SURVIVING SPOUSE ANNUITY
(a) ELIGIBILITY AND CONDITIONS. In lieu of the monthly Retirement Benefit
otherwise payable under Section 4.1, 4.2, 4.3, 4.4 or 4.5, a married
Member who has terminated employment as an Employee and who is eligible
for a Retirement Benefit payable under said sections shall be deemed to
have automatically elected a reduced amount of such monthly Retirement
Benefit payable to him for his life with the provision that if his
surviving Spouse shall be living on his Annuity Starting Date and also
at his death after such automatic election shall have become effective,
a surviving Spouse benefit [as described in Section 4.8(b)(2)] shall be
payable to his surviving Spouse. Such automatic election is subject to
the following conditions:
(1) The automatic election provided in this Section 4.8 shall
become effective as of his Annuity Starting Date for the
payment of the Member's reduced monthly Retirement Benefit
under the automatic election in the form of an immediate
annuity.
(2) A Member may prevent the automatic election provided in this
Section 4.8 from becoming effective only by executing a
specific written rejection of such election on a form approved
by the Committee and filing it with the Committee. This
written rejection of the automatic election shall not be
effective unless (A) the Spouse of the Member consents in
writing to such rejection; (B) such rejection designates a
form of benefit payment which may not be changed without
written spousal consent (or the consent of the Spouse
expressly permits designations by the Member without any
requirement of further consent by the Spouse); and (C) the
Spouse's consent acknowledges the financial consequences of
such consent and designation and is witnessed by a Plan
representative or a notary public. Such spousal consent shall
not be required if the Member establishes to the satisfaction
of the Committee that such consent may not be obtained because
there is no Spouse, because the Spouse cannot be located or
because of such other circumstances as the Secretary of the
Treasury may prescribe by regulation. Such rejection must be
filed during the "election period" described in Section
4.8(a)(3). If the Member has filed a specific written
rejection of such automatic election, he may revoke such
rejection at any time during the "election period" described
in Section 4.8(a)(3) by executing a specific revocation
thereof on a form approved by the Committee and filing it with
the Committee. Further, a subsequent specific written
rejection of the automatic election may then be made in
accordance with the preceding provisions of this Section
4.8(a)(2).
(3) For purposes of this Section 4.8(a), the Member's "election
period" shall be the 90-day period ending on his Annuity
Starting Date. The Committee shall provide (or cause to be
provided) to each Member a written explanation regarding the
election and rejection of the Automatic Joint and Surviving
Spouse Annuity. Such written explanation shall include the
information as required by Code Section 417 relating to
qualified joint and survivor annuities and, except as provided
in the following sentence, shall be provided no less than 30
days and no
25
more than 90 days prior to the Annuity Starting Date or at
such times as required by such regulations as currently in
effect. The Annuity Starting Date for a distribution in a form
other than an Automatic Joint and Surviving Spouse Annuity may
be less than 30 days (but not less than 8 days) after the
receipt of the written explanation described above, PROVIDED
THAT: (A) the Member has been provided with information that
clearly indicates that the Member has been given at least 30
days to consider whether to waive the Automatic Joint and
Surviving Spouse Annuity; (B) the Member is permitted to
revoke any affirmative distribution election not later than
the later of the Annuity Starting Date or the eighth day after
the day the explanation is provided to the Member; and (C) the
Annuity Starting Date is a date after the date that the
written explanation was provided to the Member.
(4) For purposes of this Section 4.8, a Member shall be considered
to be a "married Member" if he has a Spouse on the Member's
Annuity Starting Date. If the Spouse becomes divorced from the
Member after his benefits commence, the Automatic Joint and
Surviving Spouse Annuity shall still be payable to the
divorced former Spouse, except as otherwise provided in the
divorce decree.
(b) AMOUNT OF BENEFITS.
(1) For a Member who is deemed to have made the automatic election
pursuant to this Section 4.8 [and who does not reject it as
provided in Section 4.8(a)(2)], the reduced amount of his
monthly Retirement Benefit referred to in Section 4.8(a) shall
be the Actuarial Equivalent of the Retirement Benefit
otherwise payable to such Member under Section 4.1, 4.2, 4.3,
4.4 or 4.5, based on the Member's age and his Spouse's age as
of the Member's and Spouse's nearest birthday prior to the
Annuity Starting Date of his Retirement Benefit, after giving
effect to the increased costs of the automatic election under
this Section 4.8.
(2) The surviving Spouse benefit payable to the surviving Spouse
of a Member who is deemed to have made an automatic election
pursuant to this Section 4.8 and who dies after such election
becomes effective shall be a monthly benefit of 50 percent of
the reduced amount of such Member's monthly Retirement Benefit
as determined in Section 4.8(b)(1).
(c) COMMENCEMENT AND DURATION. The monthly surviving Spouse benefit shall
be payable to the surviving Spouse for life, beginning as of the first
day of the calendar month coincident with or next following the
Member's death.
4.9 NORMAL AND OPTIONAL METHODS OF BENEFIT PAYMENTS
(a) NORMAL FORM FOR UNMARRIED MEMBERS. In the case of an unmarried Member
who is not subject to the automatic election under Section 4.8, the
normal form of benefit payment of the monthly Retirement Benefit
payable under Section 4.1, 4.2, 4.3, 4.4 or 4.5 shall be a single life
annuity option, so the Member would receive a monthly payment for
26
the remainder of his lifetime or until payment is suspended pursuant to
Section 5.3. Such unmarried Member may elect to receive payment of the
monthly Retirement Benefit payable to him in one of the optional forms
of benefit payment described in Section 4.9(c). To make such election,
such unmarried Member must file a specific written rejection with the
Committee (on a form approved by the Committee) of the normal form of
benefit payment applicable to him and elect such optional form of
benefit payment within the 90-day period ending on his Annuity Starting
Date ("election period"). If the unmarried Member has filed a specific
written rejection of such normal form of benefit payment, he may revoke
such rejection at any time during such election period by executing a
specific revocation thereof on a form approved by the Committee.
Further, a subsequent specific written rejection of the normal form of
benefit payment applicable to the unmarried Member may then be made in
accordance with the preceding provisions of this Section 4.9(a).
(b) NORMAL FORM FOR MARRIED MEMBERS. In the case of a married Member who is
subject to the automatic election under Section 4.8, the normal form of
benefit payment of the monthly Retirement Benefit payable under Section
4.1, 4.2, 4.3, 4.4 or 4.5 shall be the automatic form of benefit
payment described in Section 4.8. A married Member who has rejected the
automatic election of the Automatic Joint and Surviving Spouse Annuity
as provided in Section 4.8 may elect to receive payment of the monthly
Retirement Benefit payable to him in one of the optional forms of
benefit payment described in Section 4.9(c). The rejection of the
Automatic Joint and Surviving Spouse Annuity and the election of such
optional form of benefit payment shall be made in accordance with the
provisions of Section 4.8 and the applicable provisions of this Section
4.9.
(c) OPTIONAL FORMS OF BENEFIT. The election of an optional form of benefit
payment shall be made in writing on a form approved by the Committee
and, to the extent required, with spousal consent in the manner
provided in Section 4.8. Such election shall be considered made as of
the date on which the application is received by the Committee. The
option shall not become effective until the Annuity Starting Date for
the payment of the Member's monthly Retirement Benefit under the
option. After the election has been made by such Member, and prior to
the effective date of the option, it may be canceled by the Member at
any time. A new option may be elected to replace the canceled option,
subject to the option becoming effective on the Annuity Starting Date
and subject to Section 4.8. After the effective date of the option, it
may not be canceled by such Member, but it shall be automatically
canceled if such Member (or his contingent annuitant under option 2)
dies before the effective date of the option. If the contingent
annuitant dies before the effective date, then the Member shall be
permitted to select another contingent annuitant or optional form of
benefit, subject to applicable spousal consent requirements. Any
optional form of benefit must be the Actuarial Equivalent of the
benefit payable to the Member as a single life annuity.
27
The optional forms of benefit payment provided under this Section 4.9
are as follows:
(1) SINGLE LIFE ANNUITY OPTION. A Member may elect a monthly
Retirement Benefit payable for the life of the Member, with no
further payments made after his death.
(2) JOINT AND SURVIVOR BENEFIT OPTION. A Member may elect an
actuarially reduced monthly Retirement Benefit payable for his
lifetime with all, two-thirds or one-half of the reduced
amount of monthly benefit continued after his death to his
designated Beneficiary as a contingent annuitant. A Member
electing this option must designate one person individually as
Beneficiary to whom the survivor's benefit under this option
is to be paid upon the Member's death. Such designation shall
be made in accordance with Section 4.8, if applicable. Each
such designation shall be made on a form provided by the
Committee, shall be effective only when filed in writing with
the Committee prior to the death of the Member and shall
revoke all prior designations of a Beneficiary. Upon the death
of the designated Beneficiary, no alternate Beneficiary can be
substituted unless the Member executes a new election prior to
his Annuity Starting Date. All benefit payments shall cease
under this option upon the death of the Member and his
surviving Spouse or other designated Beneficiary.
(3) LUMP SUM OPTION. A Member may elect to receive a single sum in
the amount of the Actuarial Equivalent value of his total
accrued Retirement Benefit earned as a Salaried Employee
and/or as a Nonsalaried Employee if such total value is less
than or equal to $7,500 ($3,500 prior to January 1, 1997).
Such lump sum payment(s) shall be in complete satisfaction of
the Retirement Benefit earned as a Salaried Employee and/or as
a Nonsalaried Employee, whichever is applicable.
In no event shall any optional method of benefit payment reduce the
value of the Retirement Benefit otherwise payable to the Member by an
amount greater than the amount permitted under Section 5.2(h). In
addition, benefit payments with respect to a Member's Retirement
Benefit shall be subject to the provisions of Section 5.2.
4.10 ADJUSTMENT FOR IN-SERVICE PAYMENTS
In the case of a Participant whose benefit payments commence prior to the date
of his termination of employment as an Employee pursuant to Section 5.2, amounts
payable after the date of his termination of employment as an Employee shall be
reduced to reflect the Actuarial Equivalent value of amounts paid prior to such
termination of employment.
4.11 MAXIMUM ANNUAL BENEFITS
(a) Notwithstanding any other provisions of the Plan to the contrary, in no
event may the annual benefit provided under the Plan (together with
that provided by all other defined benefit plans of the Employers or
any Affiliate) for any Member for a "Limitation Year," which shall be
the Plan Year, exceed the lesser of--
28
(1) the dollar limit set forth in Code Section 415(b)(1)(A) [as
adjusted by Code Section 415(d)] or
(2) 100 percent of the Member's average annual Compensation over
the three consecutive years of active participation during
which he had the greatest aggregate Compensation from the
Employers and all Affiliates.
If the Member has completed less than ten years of participation, the
limitation in Section 4.11(a)(1) shall be multiplied by a fraction, the
numerator of which is the Member's number of years (or part thereof) of
participation in the Plan, and the denominator of which is ten. If the
Member has completed less than ten years of Vesting Service, the
limitation in Section 4.11(a)(2), Code Section 415(b)(4) and Section
4.11(d) shall be adjusted by multiplying such amounts by a fraction,
the numerator of which is the Member's number of years of Vesting
Service (or part thereof), and the denominator of which is ten. In no
event shall the adjustments in the two preceding sentences reduce the
limitations in Section 4.1l(a)(1) and (2), Code Section 415(b)(4) and
Section 4.11(d) to an amount less than one-tenth of the applicable
limitation (determined without regard to such adjustments).
(b) The provisions of this Section 4.11(b) are effective beginning January
1, 1997.
The maximum benefit permitted under Section 4.11(a) shall be in the
form of a single life annuity (with no ancillary benefits) under a plan
to which Employees do not contribute and under which no rollover
contributions are made. If the form of retirement benefits payable to a
Member is other than a single life annuity or a joint and survivor
annuity in which the contingent annuitant is the Member's Spouse, the
retirement benefit for that form of payment shall be adjusted to an
actuarially equivalent straight life annuity before the application of
the maximum limitation and, so modified, shall be subject to the
limitation. The actuarial equivalent shall be the greater of (a) the
equivalent amount computed using the factors used in determining the
Actuarial Equivalent for early retirement benefits under the Plan as
described in Section 4.3 or (b) the equivalent amount computed using 5
percent interest and the mortality assumptions described in Section
2.1(a)(2). However, for purposes of adjusting any retirement benefit
amount that is subject to Section 417(e)(3) of the Code, the interest
rate described in Section 2.1(a)(1) shall be substituted for the 5
percent interest rate in the preceding sentence.
If the retirement benefit of a Member begins before a Member's Social
Security Retirement Age, but on or after his sixty-second birthday, the
dollar limitation shall be determined as follows: (a) If a Member's
Social Security Retirement Age is 65, the dollar limitation for the
retirement benefit commencing on or after age 62 is determined by
reducing the dollar limitation by 5/9 of one percent for each month in
which benefits commence before the month in which the Member attains
age 65; (b) if a Member's Social Security Retirement Age is greater
than 65, the dollar limitation for benefits commencing on or after age
62 is determined by reducing the dollar limitation by 5/9 of one
percent for each of the first 36 months and 5/12 of one percent for
each of the
29
additional months (up to 24 months) in which the retirement benefit
commences before the month of the Member's Social Security Retirement
Age.
If the retirement benefit of a Member begins before a Member's
sixty-second birthday, the dollar limitation shall be the Actuarial
Equivalent of the retirement benefit beginning at age 62, as determined
above, reduced for each month in which benefits commence before the
month in which the Member attains age 62. The Actuarial Equivalent
shall be the lesser of (a) the equivalent amount computed using the
factors used in determining the Actuarial Equivalent for early
retirement benefits under the Plan as described in Section 4.3 and (b)
the equivalent amount computed using 5 percent interest and the
mortality assumptions described in Section 2.1(a)(2). Any decrease in
the dollar limitation determined in accordance with this provision
shall not reflect the mortality decrement to the extent that benefits
will not be forfeited upon the death of the Member.
If the retirement benefit of a Member begins after the Member's Social
Security Retirement Age, the dollar limitation shall be adjusted so
that it is the Actuarial Equivalent of an annual benefit of such dollar
limitation beginning at the Member's Social Security Retirement Age.
The Actuarial Equivalent shall be the lesser of (a) the equivalent
amount computed using the factors used in determining the Actuarial
Equivalent as described in Section 2.1(a)(1) and (2) and (b) the
equivalent amount computed using 5 percent interest and the mortality
assumptions described in Section 2.1(a)(2).
(c) The provisions of this Section 4.11(c) are effective prior to January
1, 1997, and shall be replaced by Section 4.11(b) as of January 1,
1997.
The maximum benefit permitted under Section 4.11(a) shall be in the
form of a single life annuity (with no ancillary benefits) under a plan
to which Employees do not contribute and under which no rollover
contributions are made. If the form of retirement benefits payable to a
Member is other than a single life annuity or a joint and survivor
annuity in which the contingent annuitant is the Member's Spouse, the
Member's annual retirement benefit shall not exceed the Actuarial
Equivalent (using an interest rate not less than 5 percent) of the
maximum benefit permitted under Section 4.11(a) payable in the form of
a single life annuity.
If the retirement benefit of a Member commences before the Member's
Social Security Retirement Age, the amount in Section 4.11(a)(1) shall
be adjusted so that it is the Actuarial Equivalent (using an interest
rate not less than 5 percent) of an annual benefit in such amount,
beginning at the Social Security Retirement Age. The adjustment
provided for in the preceding sentence shall be made in the following
manner:
(1) the dollar limitation for benefits commencing on or after age
62 is determined by reducing the defined benefit dollar
limitation by 5/9 of 1 percent for each of the first 36 months
and 5/12 of 1 percent for any additional months (up to 24
months) by which the benefits commence before the month in
which the Member attains his Social Security Retirement Age;
and
30
(2) if the annual benefit of a Member commences before age 62, the
defined benefit dollar limitation shall be the Actuarial
Equivalent of an annual benefit beginning at age 62 as
determined above, reduced for each month by which benefits
commence before the month in which the Member attains age 62;
provided, however, that the mortality decrement shall not be
applied to the extent that benefits will not be forfeited upon
the death of the Member.
If the retirement benefit of a Member commences after the Member's Social
Security Retirement Age, the amount in Section 4.11(a)(1) shall be adjusted so
that it is the Actuarial Equivalent (using an interest rate no greater than 5
percent) of an annual benefit in such amount, beginning at the Social Security
Retirement Age.
(d) If a Member's annual benefit does not exceed $10,000 and if he did not
participate in any defined contribution plan maintained by the
Employers or any Affiliate, the limitation described in Section 4.11(a)
shall not apply.
(e) The amount in Section 4.11(a)(1) and the amount in Section 4.11(a)(2)
for a Member who has terminated his employment with the Employers and
Affiliates shall be automatically adjusted annually for increases in
the cost of living as provided in Code Section 415(d).
(f) In applying the limitations on benefits under this Section 4.11, the
qualified plans of any employer that is an Affiliate shall be
aggregated with the Plan or any other plan of the Employers or an
Affiliate if the employer would be an Affiliate if the phrase "at least
80 percent" in Code Section 1563(a)(1), in applying such section to
Code Sections 414(b) or 414(c), were replaced with "more than 50
percent."
(g) Effective for Limitation Years beginning prior to January 1, 2000, in
the event that any Member is a participant in a defined contribution
plan or plans of the Employers or any Affiliate, the sum of the
"defined benefit plan fraction" and the "defined contribution plan
fraction" [as such terms are defined in Code Section 415(e)] for any
Limitation Year with respect to such Member shall not exceed one. If
such sum would otherwise exceed one, then the Member's Retirement
Benefit under the Plan shall be reduced to comply with the requirements
of this Section 4.11(g), unless such reduction is provided for under
the terms of such defined contribution plan or plans. It is intended to
reduce the benefits payable under any defined benefit plan to the
extent possible, if necessary, to prevent the sum of the defined
benefit plan fraction and the defined contribution plan fraction from
exceeding 1.0 before reducing contributions to any defined contribution
plan. In applying the foregoing provisions, the transition rules of
Section 1106(i)(3), (4) and (6) of the Tax Reform Act of 1986 shall be
applicable.
4.12 PLAN IN EFFECT AT TERMINATION OF EMPLOYMENT CONTROLS
The terms and provisions of the Plan shall not apply in determining the benefits
payable to any Employee whose employment relationship as an Employee was severed
(for any reason) prior to
31
January 1, 1997. In such event, the terms and provisions of the Plan in effect
on the date when his employment relationship as an Employee was terminated shall
apply.
4.13 OPTIONAL DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
(a) IN GENERAL. Notwithstanding any provision of the Plan to the contrary,
a "Distributee" may elect to have any portion of an "Eligible Rollover
Distribution" paid directly to an "Eligible Retirement Plan" specified
by the "Distributee" in a "Direct Rollover" to the extent permitted by
Code Section 401(a)(31). Terms in quotation marks are defined in
Section 4.13(b) below.
(b) DEFINITIONS.
(1) "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(2) "DISTRIBUTEE" means each of the following persons who may
elect a Direct Rollover of an Eligible Rollover Distribution
of the Member's Retirement Benefit:
(A) the Member;
(B) the Member's Beneficiary, if the Beneficiary was
married to the Member on the date of his death; and
(C) an alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p),
if that person is the Spouse or former Spouse of the
Member.
(3) "ELIGIBLE RETIREMENT PLAN" means an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a) or a qualified
trust described in Code Section 401(a) that accepts the
Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
Spouse, an "Eligible Retirement Plan" is an individual
retirement account or an individual retirement annuity, as
such terms are defined in the preceding sentence.
(4) "ELIGIBLE ROLLOVER DISTRIBUTION" means any distribution of all
or any portion of the Retirement Benefit payable to the
Distributee, except that an "Eligible Rollover Distribution"
does not include:
(A) 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)
32
of the Distributee or the Distributee's designated
Beneficiary, or for a specified period of 10 years or
more;
(B) any distribution to the extent such distribution is
required under Code Section 401(a)(9);
(C) 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); and
(D) any other amounts which are not considered "Eligible
Rollover Distributions" under Code Section
401(a)(31).
(c) No amount shall be directly rolled over pursuant to this Section 4.13
unless and until it would otherwise be distributed to the Distributee
and all consents and written elections required to make the
distribution have been obtained. Nothing in this Section 4.13 shall be
construed to permit a Distributee to select more than one of the
optional forms of benefit described in Section 4.9 or elsewhere in the
Plan.
(d) The Committee shall provide notice to each Distributee who will receive
an Eligible Rollover Distribution of the Distributee's right to elect a
Direct Rollover in accordance with Code Section 401(a)(31). The
Committee shall provide such notice at the time and in the manner
required by regulations.
(e) The Distributee shall notify the Committee in writing by such deadline
as the Committee shall prescribe whether or not he wishes to have any
part of the Eligible Rollover Distribution directly rolled over. If the
Distributee fails to elect a Direct Rollover by the deadline
established by the Committee, then the entire amount of the Eligible
Rollover Distribution shall be distributed directly to the Distributee.
(f) A Distributee may elect that either of the following amounts shall be
directly rolled over:
(1) the entire amount of the Eligible Rollover Distribution; or
(2) such portion of the Eligible Rollover Distribution as the
Distributee specifies (in accordance with rules established by
the Committee).
(g) The Distributee may only request a Direct Rollover to one Eligible
Retirement Plan.
(h) No amount will be directly rolled over pursuant to this Section 4.13
unless the Distributee provides the Committee, by such deadline as the
Committee shall prescribe, such information as it shall require--
(1) to determine that the amount directly rolled over will be
received by an Eligible Retirement Plan that will accept the
Direct Rollover; and
33
(2) to make the Direct Rollover and make such reports and keep
such records as are required under applicable law. The
Committee may rely on all such information provided by the
Distributee and shall not be required to verify any such
information.
(i) The Committee shall select the manner in which to make the Direct
Rollover.
(j) Any amount directly rolled over in accordance with this Section 4.13
shall be a distribution from this Plan and shall discharge any
liability to the Distributee under this Plan to the same extent as a
payment directly to the Distributee.
(k) This Plan shall not accept Eligible Rollover Distributions from any
plan.
4.14 PAYMENT OF SMALL AMOUNTS
Notwithstanding the foregoing provisions of this Article IV, effective as of
January 1, 1997, if the Actuarial Equivalent value of all benefits earned as a
Salaried Employee and a Nonsalaried Employee payable under the Plan (including a
benefit payable in a form as described in Sections 4.7 or 4.8) is less than or
equal to $3,500, such benefit shall be paid in a single sum payment as soon as
administratively practicable following the Member's termination of service. For
purposes of this Section 4.14, the lump sum present value shall be computed
according to the interest rate and mortality assumptions used to calculate the
Actuarial Equivalent. Effective on and after January 1, 2002, "$5,000" shall be
substituted for "$3,500" in the first sentence of this Section 4.14.
4.15 SPECIAL COMMENCEMENT RULE FOR CERTAIN FORMER PARTICIPANTS
(a) ELIGIBILITY. Notwithstanding any Plan provisions to the contrary, any
Former Participant who is not in current employment on or after January
1, 1997, who is entitled to receive a Retirement Benefit under the Plan
or Prior Plans as in effect on his date of termination of employment as
an Employee and who is not otherwise eligible to commence distribution
of his Retirement Benefits under such plan before January 1, 1997 shall
be eligible to receive an immediate reduced Vested Retirement Benefit
as described in this Section 4.15.
(b) AMOUNT. A Former Participant who has terminated his employment as an
Employee and satisfies the other eligibility requirements described in
Section 4.15(a) shall be entitled to elect to receive a Vested
Retirement Benefit commencing as provided in Section 4.15(c).
Notwithstanding any provisions of the Plan to the contrary, such Vested
Retirement Benefit shall be equal to an immediate reduced Vested
Retirement Benefit commencing as provided in Section 4.15(c) computed
as of the first day of the month coincident with or next following
attainment of his Normal Retirement Age in the manner set forth in this
Plan or the Prior Plans, whichever is applicable, based on the factors
and the provisions of said plan, provided that he has a vested interest
as determined under the terms of said plan and further adjusted as
provided below.
34
Notwithstanding any provisions of the Plan to the contrary, the
immediate reduced Vested Retirement Benefit described in this Section
4.15 shall be payable only in the following forms:
(1) subject to the consent requirements referenced in Section
4.8(a) or (b), a lump sum distribution equal to the Actuarial
Equivalent as of the Annuity Starting Date of the amount
determined in the preceding paragraph of this Section 4.15(b).
Any Former Participant who receives such a distribution shall
have no further interest in the Plan; or
(2) an immediate annuity payable in the Former Participant's
normal form of benefit payment as described in Section 4.8(a)
or (b), whichever is applicable. Such immediate annuity shall
be actuarially equivalent to the lump sum distribution as
calculated above in Section 4.15(b)(1).
The other optional forms of benefit described in Section 4.8(c) shall
not be available for any distribution under this Section 4.15.
(c) COMMENCEMENT. The Committee shall notify each Former Participant who is
eligible to elect to receive a distribution under this Section 4.15 by
sending a notice to his last known address. An application for
commencement must be made within the election period determined in
accordance with the administrative procedures established by the
Committee. The distribution shall commence as soon as administratively
practicable following the receipt of his completed consent form, but in
no event prior to January 1, 1997.
If the Former Participant does not file a timely consent to a current
distribution in accordance with this Section 4.15, then distribution of
his Retirement Benefit shall not commence prior to the date otherwise
provided in the Prior Plan.
35
ARTICLE V. COMMENCEMENT OF BENEFIT PAYMENTS AND DURATION
5.1 COMMENCEMENT AND DURATION
(a) The monthly Retirement Benefit payments to which an eligible Member is
entitled under Section 4.1, 4.2, 4.3, 4.4 or 4.5 shall begin as
described below:
(1) NORMAL AND LATE RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.1 or 4.2 shall start
receiving such Benefit as of the retired Member's Normal
Retirement Date (in the case of a Normal Retirement Benefit),
the retired Member's Late Retirement Date (in the case of a
Late Retirement Benefit) or on the first day of the month
following the month that he is employed at a rate at which he
will work fewer than eight days during any calendar month. A
Member who continues in employment as an Employee after
attaining his Normal Retirement Age at a greater rate shall
have his Normal Retirement Benefit or his Late Retirement
Benefit (as the case may be) suspended in the manner described
in Section 5.4, and he shall receive the notice described in
Section 5.5.
(2) EARLY RETIREMENT BENEFITS. A Member entitled to a Retirement
Benefit under Section 4.3 shall start receiving such
Retirement Benefit as of the retired Member's Early Retirement
Date if he has given the Committee sufficient written notice
of his intention to take early retirement. If the Member does
not elect immediate distribution, then he may elect to defer
commencement until a later date which is not later than his
Normal Retirement Date, provided that he gives the Committee
not more than 90 days' notice of such later commencement date.
(3) DISABILITY RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.4 shall start receiving
such Retirement Benefit as of the terminated Member's Normal
Retirement Date with respect to such benefit earned as a
Salaried Participant and as of the terminated Member's
Disability Retirement Date with respect to such benefit earned
as a Nonsalaried Participant.
(4) VESTED RETIREMENT BENEFITS. A Member entitled to a Retirement
Benefit under Section 4.5 shall start receiving such
Retirement Benefit as of the terminated Member's Vested
Retirement Date. Application for commencement prior to his
Normal Retirement Date must be made at least 30 days but not
more than 90 days prior to the date he elects to have
distribution commence. Notwithstanding any provisions to the
contrary, if the Member is under age fifty-five on the date of
his termination of employment as an Employee and wants to
receive an immediate reduced Vested Retirement Benefit, his
application for commencement must be made within the election
period determined in accordance with the administrative
procedures established by the Committee and the distribution
shall commence as soon as administratively practicable
following his termination of employment as an Employee. If the
Member does not file a timely consent to distribution, then
36
distribution shall not commence prior to his Normal Retirement
Date unless he elects to receive a reduced benefit following
his fifty-fifth birthday.
(5) SALARIED AND NONSALARIED BENEFITS. If a Member is entitled to
benefits as a Salaried Employee and as a Nonsalaried Employee,
then the form of benefit payment, commencement date and the
duration of each such Retirement Benefit shall be determined
independently, except as otherwise expressly provided. No
Retirement Benefit can begin until the Participant ceases to
be an Employee.
(6) PAYMENT OF SMALL AMOUNTS. Notwithstanding any Plan provisions
to the contrary, if the Actuarial Equivalent value of a
Member's total benefit earned as a Salaried Employee and as a
Nonsalaried Employee payable under the Plan (including a
benefit payable in a form as described in Sections 4.8 or 4.9)
is less than or equal to $3,500, such benefit shall
automatically be distributed as provided under Section 4.14;
provided, however, that prior to January 1, 1997, the
distribution shall not be automatic but the Member may elect
to have such benefit paid to him in a single lump sum payment
as soon as administratively practicable following such
Member's termination of employment as an Employee. Effective
on and after _______________, "$5,000" shall be substituted
for $3,500" in the preceding sentence. For purposes of this
Section 5.1(a), the lump sum present value shall be computed
according to the interest rate and mortality assumptions used
to calculate the Actuarial Equivalent.
(b) Notwithstanding the provisions of Section 5.1(a), if the value of a
Member's total nonforfeitable Retirement Benefit earned as a Salaried
Employee and as a Nonsalaried Employee exceeds $3,500, then payment of
the Member's Retirement Benefit shall not commence at any time before
the Member attains his Normal Retirement Age without his written
consent (or where the Member has died and a Spouse's benefit is to be
paid to his surviving Spouse, the written consent of such Spouse).
Effective on and after ________, "$5,000" shall be substituted for
$3,500" in the preceding sentence.
(c) Unless the Member otherwise elects, the commencement of a Member's
Retirement Benefit payments shall begin not later than the sixtieth day
after the latest to close of the Plan Year in which--
(1) the Member attains or would have attained his Normal
Retirement Age;
(2) the tenth anniversary of the year in which the Member
commenced participation in the Plan occurs; or
(3) the Member's termination of employment as an Employee occurs.
5.2 REQUIRED AND MINIMUM DISTRIBUTION RULES
Notwithstanding any of the preceding provisions of this Article V, the following
provisions shall apply to the payment of Retirement Benefits:
37
(a) In no event may the payment of a Member's Retirement Benefit commence
later than the April 1 of the calendar year following the calendar year
in which the Member attains age 70 1/2; provided, however, that in the
case of a Member who attained age 70 1/2prior to January 1, 1988, and
who is not a "5-percent owner" [as defined in Code Section 416(i)(1)(B)
and as further described under the regulations under Code Section
401(a)(9)], such payment shall be required to be commenced on or before
the April 1 of the calendar year following the calendar year in which
the Member terminates employment as an Employee or, if earlier, April 1
of the calendar year following the calendar year in which the Member
becomes such a "5-percent owner"; and, provided further, that in the
case of a Member who attained age 70 1/2during the 1988 calendar year
and who is not such a "5-percent owner," such payment shall be required
to commence by no later than April 1, 1990. For purposes of this
Section 5.2(a), a "5-percent owner" means any Employee who was a
"5-percent owner" at any time during the five-Plan-Year period ending
in the calendar year in which the Employee attains age 70 1/2or in any
subsequent Plan Year.
Notwithstanding the foregoing, effective for participants who attain
age 70 1/2 on and after January 1, 2002, in no event may the payment of
a Member's Retirement Benefit (provided the member is not a "5-percent
owner", as defined above) commence later than the later of (i) the
April 1 of the calendar year following the calendar year in which the
Member attains age 70 1/2; or (ii) the April 1 of the calendar year
following the calendar year in which the participant retires. If a
Member retires in a calendar year after the calendar year in which the
Member attains age 70 1/2, the Member's retirement benefit shall be
actuarially increased in accordance with Notice 97-75, or other
applicable guidance, to take into account the period after age 70 1/2
in which the Member was not receiving any benefits under the Plan.
(b) A Member's Retirement Benefit shall be distributed by a method of
benefit payment beginning not later than the date required pursuant to
Section 5.2(a), over the life of the Member or over the lives of such
Member and a designated Beneficiary or surviving Spouse or within or
over a period not extending beyond the life expectancy of such Member
or the life expectancy of such Member and a designated Beneficiary or
surviving Spouse.
(c) If the payment of a Member's Retirement Benefit has begun in accordance
with Section 5.2(a) and the Member dies before his entire interest has
been paid to him, the remaining portion of the Member's Retirement
Benefit shall be paid at least as rapidly as under the method of
benefit payment being used under Section 5.2(b) as of the date of his
death.
(d) If a Member dies prior to the commencement of the payment of his
Retirement Benefit, any survivor benefit paid with respect to the
Member's Retirement Benefit shall be paid within five years after the
death of such Member, except as permitted under Sections 5.2(e) and
(f).
(e) If--
38
(1) any portion of the Member's Retirement Benefit is payable to
his surviving Spouse;
(2) such portion is to be paid over the life of such surviving
Spouse or within or over a period not extending beyond the
life expectancy of the surviving Spouse; and
(3) such payments begin not later than one year after the date of
the Member's death, or such later date as the Secretary of the
Treasury may by regulations prescribe, the portion referred to
in Section 5.2(e)(1) shall be treated as distributed within
the time required under Section 5.2(d).
(f) The date on which payments are required to begin under Section
5.2(e)(3) shall not be earlier than the date on which the Member would
have attained age 70-1/2.
(g) In addition to the foregoing provisions of this Section 5.2, all
distributions of or with respect to any Retirement Benefit shall be
made in accordance with Code Section 401(a)(9) (including the
regulations thereunder), and the provisions of the Plan relating to the
payment of such distributions shall be interpreted and applied in
accordance with Code Section 401(a)(9). The provisions of such Code
Section 401(a)(9) shall control over any distribution option or other
provision of the Plan which is inconsistent with the provisions of Code
Section 401(a)(9).
(h) In any case where the payment of a Member's Retirement Benefit is
payable in a joint and survivor annuity form, the periodic survivor
annuity payment payable to the Member's contingent annuitant shall not
exceed the "applicable percentage" of the annuity payments payable to
the Member. In addition, if the payment of a Member's Retirement
Benefit is payable in either a life annuity or joint and survivor
annuity form with an associated period certain guaranteed payment
feature, the period certain shall not exceed the "applicable divisor"
period determined by reference to the Member's age at the time his
benefit payments commence. The foregoing limitations of this Section
5.2(h) shall not apply if the contingent annuitant or designated
Beneficiary of the Member is the Member's surviving Spouse. The
"applicable percentage" and "applicable divisor" shall be the
"applicable percentage" and "applicable divisor" determined pursuant to
regulations issued by the Secretary of the Treasury under Code Section
401(a)(9).
5.3 REEMPLOYMENT AFTER BENEFIT COMMENCEMENT BUT PRIOR TO NORMAL RETIREMENT AGE
If a Member whose Retirement Benefit has commenced is reemployed as an Eligible
Employee before attaining his Normal Retirement Age, his Retirement Benefit
payments shall be suspended and shall not be paid or accrue during the period of
such reemployment, his previous election of form of benefit payment shall be
canceled and he shall have the Vesting Service and Salaried and/or Nonsalaried
Benefit Service he had at the time of his retirement reinstated. Upon his
subsequent termination of employment as an Employee, his eligibility for a
Retirement Benefit and the amount of such Retirement Benefit shall be
determined, calculated and paid as if
39
he were then first retired based upon such reinstated Vesting Service and
Salaried and/or Nonsalaried Benefit Service, plus Vesting Service and Salaried
and/or Nonsalaried Benefit Service earned following the date of reemployment;
but such Retirement Benefit shall be actuarially reduced to account for any
Retirement Benefit payments he may have received prior to his reemployment. In
no event shall a Member's Retirement Benefit at his subsequent termination of
employment as an Employee be less than his Retirement Benefit at his prior
termination of employment. The foregoing notwithstanding, if a Member reemployed
as described above subsequently reaches his Normal Retirement Age and is
employed at a rate at which he will work fewer than eight days during any
calendar month, the Member may continue to receive any benefits which he is
receiving at the time of reemployment. Such payments shall continue every month
thereafter until his employment is at a rate at which he would work eight or
more days per calendar month, at which time his benefits shall be suspended
under the terms and conditions described in Section 5.4. The foregoing
notwithstanding, if an Employee is rehired on a "temporary" basis (i.e.,
expected duration of employment is three months or less), his Retirement Benefit
payments shall continue to be paid during such period of temporary employment.
5.4 REEMPLOYMENT AFTER BENEFIT COMMENCEMENT AND AFTER ATTAINING NORMAL
RETIREMENT AGE
If a Member is reemployed as an Eligible Employee after attaining his Normal
Retirement Age at a rate at which he would work eight or more days in a calendar
month, his Retirement Benefit payments shall be suspended and shall not be paid
or accrue during the period of such reemployment, his previous election of form
of benefit payment shall be canceled and he shall have the Vesting Service and
Salaried and/or Nonsalaried Benefit Service he had at the time of his retirement
reinstated. Such suspension of benefits shall be done in accordance with
Department of Labor Regulation Section 2530.203-3 and shall include the notice
described in Section 5.5. Upon his subsequent termination of employment as an
Employee, his eligibility for a Retirement Benefit and the amount of such
Retirement Benefit shall be determined, calculated and paid as if he were then
first retired based upon such reinstated Vesting Service and Salaried and/or
Nonsalaried Benefit Service plus Vesting Service and Salaried and/or Nonsalaried
Benefit Service earned following the date of reemployment; but such Retirement
Benefit shall be actuarially reduced to account for any Retirement Benefit
payments he may have received prior to his reemployment. In no event shall a
Member's Retirement Benefit at subsequent termination of employment as an
Employee be less than his Retirement Benefit at his prior termination of
employment. If a Member is reemployed as an Employee after attaining his Normal
Retirement Age at a rate at which he would not work at least eight days during a
calendar month, he shall receive the same type and amount of Retirement Benefit
payment he was entitled to receive preceding his reemployment during such period
of reemployment. Such payments shall continue every month thereafter until his
employment is at a rate at which he would work eight days during a calendar
month, at which time his Retirement Benefit shall be suspended as described
above. The foregoing notwithstanding, if an Employee is rehired on a "temporary"
basis (i.e., expected duration of employment is three months or less), his
Retirement Benefit payments shall continue to be paid during such period of
temporary employment.
40
5.5 SUSPENSION OF BENEFITS NOTICE AND PROCEDURES
If an Employee's Retirement Benefit payments are to be suspended as a result of
his continued employment or reemployment, the Plan shall notify the Employee, by
personal delivery or first-class mail during the first calendar month in which
the Plan withholds payments, that his Retirement Benefit payments are suspended.
The notice shall contain--
(a) a general description of the reasons why payments are suspended;
(b) a general description of the Plan provisions relating to the suspension
of benefits;
(c) a copy of such Plan provisions;
(d) a statement that a review of the suspension may be requested under the
claims procedure found in the Plan;
(e) if the Plan requires a benefit resumption notice, the procedure and
forms; and
(f) if the Plan requires verification by the Employee that his benefits
should not be suspended, the procedure and forms for such verification.
The Plan shall adopt a procedure whereby an individual may request a
determination of whether specific contemplated employment will result in a
suspension of benefits.
41
ARTICLE VI. PLAN ADMINISTRATION
6.1 APPOINTMENT OF COMMITTEE
The Sponsor shall be the "plan administrator" with respect to the Plan and a
"named fiduciary" with respect to the Plan and Trust Fund, as such terms are
defined under ERISA. The Board of Directors of the Sponsor shall appoint a plan
administration committee ("Committee") to administer the Plan and to handle the
day-to-day administrative responsibilities with respect to the Plan. The
Committee shall have all powers necessary to accomplish such purposes. The
Committee shall be composed of three or more members as the Board of Directors
may appoint from time to time, and such members shall hold office at the
pleasure of the Board of Directors. Each member or successor must signify
acceptance of this position in writing. Any member of the Committee may resign
at any time by delivering his written resignation to the Sponsor and to the
Chairman of the Committee to take effect on a date specified therein, or upon
delivery to the Sponsor, if no date is specified. Termination of employment of
an Employee who is a member of the Committee shall automatically constitute a
resignation. The Board of Directors may remove any member of the Committee with
or without cause by so notifying the member and the Chairman of the Committee in
writing to take effect not less than 30 days after delivery thereof, unless such
notice shall be waived. Vacancies on the Committee shall be filled by action of
the Sponsor. In the event no successor member is appointed, the remaining
member(s) or, if none remain, the Sponsor shall function as the Committee until
a new Committee has been appointed and has accepted such appointment.
6.2 COMPENSATION AND EXPENSES
(a) A member of the Committee shall serve without compensation for services
as such if he is receiving full-time pay as an Employee. Any other
member of the Committee may receive compensation for services as a
member. Any member of the Committee may receive reimbursement of
expenses properly and actually incurred. Any such compensation or
reimbursement shall be paid in accordance with the provisions of
Section 6.2(b).
(b) All expenses incident to the administration, termination or protection
of the Plan and Trust including, but not limited to, fees of actuaries,
accountants, premiums payable to the PBGC, counsel and other
specialists and other costs of administering the Plan shall be paid by,
and constitute a charge upon, the Trust Fund, except to the extent that
such expenses, or any portion thereof, may have been paid by the
Employer in its sole and absolute discretion.
6.3 MANNER OF ACTION
A majority of the members of the Committee at that time in office shall
constitute a quorum for the transaction of business. All resolutions adopted,
and other actions taken by the Committee at any meeting, shall be by the vote of
a majority of those present at any such meeting. Upon concurrence in writing of
a majority of the members at that time in office, action of the Committee may be
taken otherwise than at a meeting.
42
6.4 CHAIRMAN, SECRETARY AND EMPLOYMENT OF SPECIALISTS
The members of the Committee shall elect one of their number as Chairman and
shall elect a Secretary who is an employee of the Employer and may, but need
not, be a member of the Committee. They may authorize one or more of their
number or any agent to execute or deliver any instrument or instruments on their
behalf and may employ such counsel, auditors and other specialists; and such
clerical, medical, actuarial and other services as they may require in carrying
out the provisions of the Plan. Such expenses shall be paid in accordance with
the provisions of Section 6.2(b).
The Committee and the Employer shall be entitled to rely conclusively upon the
tables, valuations, certificates and reports furnished by an actuary or
accountant employed by the Committee or an insurer issuing life insurance
contracts under this Plan and/or upon opinions of counsel or other experts; and
such members, and each of them, shall be fully protected as to any action taken
or allowed by them in good faith and reliance upon any such tables, valuations,
certificates, reports or opinions; and all actions taken or allowed by them
shall be conclusive upon all persons having or claiming any interest under the
Plan.
6.5 DELEGATION OF RESPONSIBILITIES
The Committee may appoint one or more individuals and delegate such of its power
and duties as it deems desirable to any such individual, in which case, every
reference herein made to the Committee shall be deemed to mean or include the
individuals as to matters within their jurisdiction. Such individuals shall be
such officers or other Employees of the Employers and such other persons as the
Committee may appoint.
6.6 RECORDS
All resolutions, proceedings, acts and determinations of the Committee shall be
recorded by the Secretary thereof or under his supervision; and all such records
together with such documents and instruments as may be necessary for the
administration of the Plan shall be preserved in the custody of the Secretary or
his delegate(s).
6.7 RULES
Subject to the limitations contained in the Plan, the Committee shall be
empowered from time to time in its discretion to adopt bylaws and establish
rules for the conduct of its affairs and the exercise of the duties imposed upon
it under the Plan.
43
6.8 ADMINISTRATION
The Committee shall be responsible for the administration of the Plan. The
Committee shall have all such powers as may be necessary to carry out the
provisions of the Plan and may from time to time establish rules for the
administration of the Plan and the transaction of the Plan's business. In making
any such determination or rule, the Committee shall pursue uniform policies as
from time to time established by the Committee and shall not discriminate in
favor of or against any Member. The Committee shall have the exclusive right to
make any finding of fact necessary or appropriate for any purpose under the Plan
including, but not limited to, the determination of whether a Beneficiary or
Member is eligible for any benefit payable under the Plan and the amount of such
benefit. The Committee shall have sole and absolute discretion to interpret the
terms and provisions of the Plan and to determine any and all questions arising
under the Plan or in connection with the administration thereof, including,
without limitation, the right to remedy or resolve possible ambiguities,
inconsistencies or omissions by general rule or particular decision. The
Committee shall make, or cause to be made, such reports as are required by law.
To the extent permitted by law, all findings of fact, determinations,
interpretations and decisions of the Committee in respect of any matter or
question arising under the Plan shall be final, conclusive and binding upon all
persons having or claiming to have any interest or right under the Plan and
shall be given the maximum possible deference allowed by law. If challenged in
court, any decision of the Committee shall not be subject to DE NOVO review and
shall not be overturned unless proven to be arbitrary and capricious under the
evidence considered at the time of such decision.
6.9 APPEALS FROM DENIAL OF CLAIMS
If any claim for benefits under the Plan is wholly or partially denied, the
claimant shall be given notice in writing of such denial within a reasonable
period of time (not to exceed 90 days after receipt of the claim, or if special
circumstances require an extension of time, written notice of the extension
shall be furnished to the claimant and an additional 90 days will be considered
reasonable) setting forth the following information:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on which the denial is
based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary;
(d) an explanation that a full and fair review by the Committee of the
decision denying the claim may be requested by the claimant or his
authorized representative by filing with the Committee, within 60 days
after such notice has been received, a written request for such review;
and
(e) if such request is so filed, the claimant or his authorized
representative may review pertinent documents and submit issues and
comments in writing within the same 60-day period specified in Section
6.9(d).
44
The decision of the Committee shall be made promptly, and not later than 60 days
after the Committee's receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case, the
claimant shall be so notified and a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review.
The claimant shall be given a copy of the decision promptly. The decision shall
be in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant and specific references to
the pertinent Plan provisions on which the decision is based.
6.10 NOTICE OF ADDRESS AND MISSING PERSONS
Each person entitled to benefits under the Plan must file with the Committee, in
writing, his post office address and each change of post office address. Any
communication, statement or notice addressed to such a person at his latest
reported post office address will be binding upon him for all purposes of the
Plan and neither the Committee nor the Employers or Trustee shall be obliged to
search for or ascertain his whereabouts. In the event that such person cannot be
located, after reasonable efforts to locate such person have been made, the
Committee may direct that such benefits and all further benefits with respect to
such person shall be discontinued, all liability for the payment thereof shall
terminate and such person's remaining accrued benefit under the Plan shall be
deemed a forfeiture; provided, however, that in the event of the subsequent
reappearance of such person prior to the termination of the Plan, the benefits
which were due and payable and which such person missed shall be paid in a
single sum without interest and the future benefits due such person shall be
reinstated in full.
6.11 APPLICATION FOR BENEFITS AND DATA
All persons claiming benefits under the Plan must make application and furnish
to the Committee or its designated agent, such documents, evidence, or
information as the Committee or its designated agent considers necessary or
desirable for the purpose of administering the Plan; and each such person must
furnish such information promptly and sign such documents as the Committee or
its designated agent may require before any benefits become payable under the
Plan.
6.12 INDEMNITY FOR LIABILITY
The Sponsor or any Employer may indemnify and hold harmless the members of the
Committee, members of the Board of Directors, any administrator and any other
person who is deemed to be a "fiduciary" under either statutory or common law
and who is also an Employee, officer or director of the Employer from and
against any damages, judgments, settlements, costs, charges or expenses incurred
in connection with the defense of any action, suit or proceeding to which any
such person may be a party or which may be threatened against any such person or
in connection with any appeal therefrom by virtue of any wrongful act or
omission in their respective capacities for the Plan; provided, however, that
notwithstanding anything to the contrary herein, the foregoing indemnification
shall extend and be effective only to the extent
45
that the same shall be valid and enforceable under all applicable laws. The
extent of such indemnification shall be expressed in a resolution by the Board
of Directors.
When making a determination or calculation, the Committee shall be entitled to
rely conclusively upon, and shall be fully protected by the Employer in any
action it may suffer in reliance upon, information furnished by the Employer.
The Employer and the Committee shall be entitled to rely upon all certificates
and reports furnished by any consultant and actuary and upon all opinions given
by legal counsel selected by the Employer and Committee.
46
ARTICLE VII. FINANCING
7.1 FUNDING
A Trustee shall be designated by the Sponsor, and a Trust Agreement maintained
between the Sponsor and the Trustee, under the terms of which a Trust Fund shall
be established to receive and hold contributions payable by the Employer,
interest and other income and to pay the benefits provided by the Plan. The
Sponsor may, by appropriate action and in accordance with any terms of the Trust
Agreement, employ an investment manager to invest and manage all or any
specified portion of the Trust Fund. Said investment manager shall designate in
writing that he is a fiduciary with respect to Trust assets under his control,
and the Trustee shall not be liable for nor have any responsibility in
connection with acts or omissions of the investment manager with regard to any
assets subject to his management. Any Trust Agreement entered into shall be
deemed to form a part of the Plan, and any and all rights and benefits which may
accrue to any person under the Plan shall be subject to all the terms and
provisions of such Trust Agreement. The Sponsor may modify the Trust Agreement
from time to time to accomplish the purpose of the Plan and may replace any
Trustee and appoint a successor Trustee or Trustees.
7.2 CONTRIBUTIONS
The Employer shall make such contributions to the Trust Fund as shall be
determined by the Actuary to be required under accepted actuarial principles to
at least be sufficient to maintain the Plan as a qualified employee defined
benefit pension plan meeting the plan qualification requirements of the Code and
the minimum funding standard requirements of the Code and ERISA for the Employer
contributions for any Plan Year. In no event shall an Employer make a
contribution to the Plan on behalf of any Member which is not otherwise
deductible by the Employer under Code Section 404. Forfeitures arising under the
Plan for any reason shall be used as soon as possible to reduce Employer
contributions under the Plan. Employee contributions under the Plan shall
neither be required nor permitted. All benefits under the Plan shall be payable
only from the Trust Fund and no liability for the payment of benefits under the
Plan shall be imposed upon the Employer, the Committee, officers, directors or
shareholders of the Employer.
47
ARTICLE VIII. AMENDMENT AND TERMINATION
8.1 AMENDMENT AND TERMINATION
(a) The Sponsor does hereby expressly and specifically reserve the sole and
exclusive right at any time, and from time to time, by action of the
Board of Directors to amend, modify or terminate the Plan to the extent
that it may deem advisable; provided, however, the Board of Directors
may delegate to the Committee or any other party it deems appropriate
the authority to amend, modify or terminate the Plan in all respects or
with regard to specified limited powers. Any amendment, modification or
termination as aforesaid shall not require the assent, concurrence or
any other action by any Employer or the Trustee notwithstanding that
such action by the Sponsor may relate in whole or in part to persons in
the employ of any Employer. The amendments or modifications made to the
Plan by the Sponsor shall apply to the Plan as a whole, except to the
extent any such amendment or modification is made to the Plan as it
relates to any particular Employer and is made on the basis of
information communicated to the Sponsor by the Employer and approved by
the Sponsor.
(b) While each Employer contemplates carrying out the provisions of the
Plan indefinitely with respect to its Employees, no Employer shall be
under any obligation or liability whatsoever to maintain the Plan for
any minimum or other period of time.
(c) Any action taken to amend, modify or terminate the Plan shall be
evidenced by a written instrument duly executed and/or certified by an
officer of the Sponsor. Any such instrument evidencing an amendment to
the Plan shall be delivered by the Sponsor to the Committee, the
Trustee and any Employer involved.
(d) Upon any termination of the Plan (full or partial), the Sponsor shall
give written notice thereof to the Committee, the Trustee and any
Employer involved. Each of the affected Members shall have a fully
vested and nonforfeitable interest in his accrued benefit to the extent
funded.
(e) Upon a complete or partial termination of the Plan [within the meaning
of Code Section 411(d)(3)], the right of each affected Member to
benefits accrued to the date of such termination or partial termination
shall become nonforfeitable to the extent such benefits are funded as
of such date; provided, however, a Member's recourse towards
satisfaction of his nonforfeitable benefits shall be limited to the
assets of the Trust Fund and the benefits of certain Members shall be
further restricted as provided in Sections 4.11 and 8.5.
(f) Upon any termination of the Plan, no Employer with respect to whom the
Plan is terminated (including the Sponsor) shall thereafter be under
any obligation, liability or responsibility whatsoever to make any
contribution or payment to the Trust Fund, the Plan, any Member, any
Beneficiary or any other person or trust or fund whatsoever, for any
purpose whatsoever under or in connection with the Plan.
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8.2 LIMITATIONS ON AMENDMENTS
The provisions of this Article VIII relating to amendments to the Plan shall be
subject to and limited by the following restrictions:
(a) No amendment shall operate either directly or indirectly to give any
Employer any interest whatsoever in any funds or property held by the
Trustee under the terms of the Plan, or to permit the corpus or income
of the Trust Fund to be used for or diverted to purposes other than the
exclusive benefit of Members, their surviving Spouses or Beneficiaries
or the payment of the reasonable expenses of administering the Plan.
(b) No such amendment shall operate either directly or indirectly to
deprive any Member, surviving Spouse or Beneficiary of his vested and
nonforfeitable interest as of the time of such amendment. Any amendment
which modifies the vesting provisions under the Plan shall either
provide for a rate of vesting which is more rapid than the vesting
schedule previously in effect, or provide that any Participant with at
least three years of Vesting Service may elect, in writing, to remain
under the vesting schedule in effect prior to the amendment. Such
election must be made within 60 days after the latest of (1) the day
the amendment is adopted; (2) the day the amendment becomes effective;
or (3) the day the Participant has received notice of the amendment.
(c) No amendment shall decrease the accrued benefit of any Member within
the meaning of Code Section 411(d)(6), except as may be permitted under
Code Section 411(d)(6).
(d) No amendment shall change the rights, duties or responsibilities of the
Trustee under the Plan without its written consent.
Subject to the foregoing limitations, any amendment which, in the judgment of
the Committee is necessary or advisable, may be made retroactively, provided
that such retroactive amendment does not deprive a Member, surviving Spouse or
Beneficiary, without his consent, of a right to receive benefits under the Plan
which have already vested and matured, except as such modification or amendment
shall be necessary in order to comply with any laws or regulations of the United
States or of any state to qualify this as a tax exempt Plan and Trust, or
otherwise.
8.3 DISTRIBUTION ON TERMINATION
(a) Upon any termination (full or partial), all unallocated amounts shall
be allocated in accordance with the provisions hereof. Upon termination
of the Plan, the Employer with the consent of the Sponsor, by written
notice to the Trustee, may direct either--
(1) continuation of the Trust and the distribution of benefits at
such time and in such manner as though the Plan had not been
terminated; or
(2) subject to Section 8.3(b), complete distribution of the assets
in the Trust Fund to the Members and their surviving Spouses
or Beneficiaries, in one lump-sum cash payment, or in the form
of a deferred annuity payable at Normal Retirement Date,
49
as soon as the Committee deems it in the best interest of the
Members and their surviving Spouses or Beneficiaries (no later
than three years after such termination).
(b) Upon the termination of the Plan, that portion of any assets then held
in the Trust Fund which remain after payment of all expenses of
administration or liquidation shall be allocated for the purpose of
paying benefits under the Plan in the order of precedence and in the
amounts indicated for plans covered under Section 4044 of ERISA,
according to the principles set forth in said Section 4044. The benefit
of a missing Member shall be distributed in accordance with ERISA
Section 4050. Following the termination of the Plan, benefit
distributions to Members and their surviving Spouses or Beneficiaries
shall be made through the continuation of the Plan and Trust Fund, as
such benefits become due and payable under the Plan; provided, however,
that if the assets of the Trust Fund are sufficient to provide the
Members' current accrued benefits, the Committee shall direct the
Trustee to liquidate the Trust Fund and make benefit distributions to
Members and their surviving Spouses or Beneficiaries. In such case,
such distributions shall be made in accordance with applicable
amendments to the Plan relating to the termination of the Plan. To the
extent necessary, such amendments shall require that the Plan be
terminated in accordance with the Single-Employer Pension Plan
Amendments Act of 1986, and applicable regulations thereunder, prior to
the commencement of such distributions. In any case where there are
assets in the Trust Fund remaining after the satisfaction of all
accrued benefit liabilities to Members and their surviving Spouses or
Beneficiaries following the termination of the Plan, such assets shall
revert to and be distributed to the Employers.
(c) Notwithstanding any of the above provisions of this Section 8.3,
distributions to married Members shall be subject to the provisions of
Section 4.8.
8.4 EFFECT OF CONTINGENCIES AFFECTING THE EMPLOYER
In the event an Employer terminates its connection with the Plan, or in the
event an Employer is dissolved or liquidated, or in the event judicial
proceedings of any kind result in the involuntary dissolution of an Employer,
the Plan shall be terminated as respects such Employer. The merger,
consolidation or reorganization of an Employer, or the sale by it of all or
substantially all of its assets, shall not terminate the Plan if there is
delivery to such Employer by the successor to such Employer or by the purchaser
of all or substantially all of its assets, a written instrument requesting that
it be substituted for the Employer and agreeing to perform all the provisions
which such Employer is required to perform, a copy of which shall be delivered
to the Trustee. Upon receipt of said instrument, with the approval of the
Sponsor, the successor or the purchaser shall be substituted for such Employer
herein, and such Employer shall be relieved and released from any obligations of
any kind, character or description herein or in any Trust Agreement imposed upon
it.
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8.5 RESTRICTIONS ON BENEFITS AND DISTRIBUTIONS TO CERTAIN MEMBERS
(a) RESTRICTION OF BENEFITS. Notwithstanding any other provisions in the
Plan to the contrary, in the event of the termination of the Plan, the
benefit of any Highly Compensated Employee (and any Highly Compensated
Former Employee) is limited to a benefit that is nondiscriminatory
under Code Section 401(a)(4). For purposes of this Section 8.5, the
term "Highly Compensated Former Employee" shall mean any Member who has
terminated employment as an Employee in a prior Plan Year and who was a
Highly Compensated Employee either when he terminated employment as an
Employee or any Plan Year ending on or after his fifty-fifth birthday.
(b) RESTRICTIONS ON DISTRIBUTIONS. Notwithstanding any other provisions to
the contrary, the annual benefits provided under the Plan for
participating Highly Compensated Employees and Highly Compensated
Former Employees who are among the 25 most highly paid Employees of the
Employer are restricted to an amount equal to the annual payments that
would be made on behalf of the Participant under a single life annuity
that is the Actuarial Equivalent of the sum of such Participant's
accrued benefit and other benefits under the Plan. In any one year, the
total number of Members whose benefits are subject to the restriction
under this Section 8.5(b) shall be limited to the group of the 25
Highly Compensated Employees and Highly Compensated Former Employees
who received the greatest compensation. The restrictions of this
Section 8.5(b) shall not apply, however, if--
(1) after payment to such Member of all benefits under the Plan,
the value of Plan assets equals or exceeds 110 percent of the
value of the current liabilities [defined in Code Section
412(l)(7)] of the Plan; or
(2) the value of the benefits payable to such Member is less than
1 percent of the value of the current liabilities [as defined
in Code Section 412(l)(7)] of the Plan.
51
ARTICLE IX. PARTICIPATION IN AND WITHDRAWAL FROM THE PLAN BY AN EMPLOYER
9.1 PARTICIPATION IN THE PLAN
Any Affiliate of the Sponsor which desires to become an Employer under the Plan
may elect, with the consent of the Board of Directors of the Sponsor, to become
a party to the Plan and Trust Fund by adopting the Plan for the benefit of its
Eligible Employees, effective as of the date specified in such adoption--
(a) by filing with the Sponsor a certified copy of a resolution of its
board of directors (or equivalent governing authority) to that effect,
and such other instruments as the Sponsor may require; and
(b) by the Sponsor's filing with the Committee and the Trustee a copy of
such resolution, together with a certified copy of resolutions of the
Board of Directors of the Sponsor approving such adoption.
The adoption resolution, supplement or instrument may contain such specific
changes and variations in Plan or Trust Agreement terms and provisions
applicable to such adopting Employer and its Eligible Employees as may be
acceptable to such Employer, the Sponsor and the Trustee. However, the sole,
exclusive right to make any amendment of whatever kind or extent to the Plan or
Trust Agreement is reserved by the Sponsor, subject to its right of delegation
under Section 8.1(a). It shall not be necessary for the adopting Employer to
sign or execute the original or then amended Plan and Trust Agreement documents.
The effective date of the Plan for any such adopting Employer shall be that
stated in the adoption resolution or instrument; and from and after such
effective date, such adopting Employer shall assume all the rights, obligations
and liabilities of an Employer under the Plan and Trust Agreement.
The administrative powers and control of the Sponsor, as provided in the Plan
and Trust Agreement, including the sole right of appointment and removal of the
members of the Committee, the Trustee and their successors shall not be
diminished by reason of the participation of any such adopting Employer in the
Plan and Trust Agreement.
9.2 WITHDRAWAL FROM THE PLAN
Any Employer other than the Sponsor, by actions of its board of directors or
other governing body, may elect to withdraw from the Plan and Trust Agreement by
giving 90 days' advance written notice of its election to the Board of Directors
of the Sponsor, unless the Board of Directors of the Sponsor waives such advance
notice or agrees to a shorter advance notice period. Such Employer's election to
withdraw from the Plan and Trust Agreement shall be subject to the consent of
the Board of Directors of the Sponsor. Distributions following such withdrawal
may be implemented through continuation of the Trust Fund or transfer to another
trust fund exempt from tax under Code Section 501 or to a group annuity contract
qualified under Code Section 403 or, subject to Section 8.3, distributions may
be made as immediate distributions in accordance with the directions of the
Committee; provided, however, that no such action shall direct any part of the
Trust Fund relating to the Members of such Employer to
52
any purpose other than the exclusive benefit of the Members of such Employer, or
the surviving Spouses or Beneficiaries of such Members, prior to the
satisfaction of all benefit liabilities under the Plan with respect to the
Members of such Employer.
53
ARTICLE X. MISCELLANEOUS
10.1 NONALIENATION
Except as provided in Code Section 401(a)(13)(A)(B) or (C), no benefit payable
at any time under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, attachment, garnishment or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefit, whether presently or hereafter payable, shall be
void. No benefit nor the Trust Fund shall in any manner be liable for or subject
to the debts or liabilities of any Member, surviving Spouse or Beneficiary
entitled to any benefit except as may be provided in a "qualified domestic
relations order" under Code Section 414(p). The Committee shall establish
procedures to determine whether domestic relations orders are "qualified
domestic relations orders" and to administer distributions under such qualified
domestic relations orders.
10.2 INCOMPETENCY
Every person receiving or claiming benefits under the Plan shall be conclusively
presumed to be mentally competent until the date on which the Committee receives
a written notice, in a form and manner acceptable to it, that such person is
incompetent, for whom a guardian or other person legally vested with the care of
his estate has been appointed; provided, however, that if the Committee shall
find that any person to whom a benefit is payable under the Plan is unable to
care for his affairs because of any disability or infirmity, any payment due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative of his estate) may be paid to the spouse, a child, a parent, or a
brother or sister or to any person deemed by the Committee to have incurred
expense for such person otherwise entitled to payment. Any such payment so made
shall be a complete discharge of any liability therefor under the Plan. In the
event a guardian of the estate of any person receiving or claiming benefits
under the Plan shall be appointed by a court of competent jurisdiction, benefit
payments may be made to such guardian, provided that proper proof of appointment
and continuing qualification is furnished in a form and manner acceptable to the
Committee. Any such payment so made shall be a complete discharge of any
liability therefor under the Plan.
10.3 MERGER, CONSOLIDATION OR TRANSFER
In the case of any merger or consolidation of the Plan with, or in the case of
any transfer of assets or liabilities of the Plan to or from, any other plan,
each Member in the Plan shall (if the Plan then terminated) receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated).
To the extent required by Code Section 411(d)(6), the Plan will preserve the
forms of benefits that relate to a Member's benefit that is transferred to this
Plan.
The provisions of this Plan that are adopted in order that the Plan comply with
Section 401(a) of the Code within the time period set forth in Section 401(b) of
the Code are deemed to amend, to the
54
extent necessary, the corresponding provisions of any prior plan that was
merged, consolidated, or transferred into this Plan.
55
10.4 LITIGATION
In order to protect the Trust Fund against depletion as a result of litigation,
in the event that any Member or other person may bring any legal or equitable
action arising under the Plan against the Trustee or an Employer or the
Committee, or in the event that an Employer or the Trustee or the Committee may
find it necessary to bring any legal or equitable action arising under the Plan
against any Member or any person claiming any interest by or through such
Member, the Committee shall have the right to join the Trustee as a party
defendant or party plaintiff in any such action, and all expenses of defending
or bringing such action shall be paid by the Trustee from the Trust Fund, to the
extent permitted by ERISA.
10.5 EFFECT OF MISTAKE
In the event of a mistake or misstatement as to the eligibility or participation
of a Member, or the amount of benefit payments made or to be made to or with
respect to a Member, the Committee shall, if possible, cause an adjustment to be
made so as to correct such mistake and provide for the correct amount of benefit
payments with respect to such Member.
10.6 NO ENLARGEMENT OF EMPLOYEE RIGHTS
Nothing contained in the Plan shall be deemed to give any Employee the right to
be retained in the service of an Employer or Affiliate or to interfere with the
right of an Employer or Affiliate to discipline, discharge or retire any
Employee at any time.
10.7 NO GUARANTEE
Neither the Committee, the Sponsor, the Employers nor the Trustee in any way
guarantees the Trust Fund from loss or depreciation nor the payment of any money
which may be or become due to any person from the Trust Fund. Nothing herein
contained shall be deemed to give any Member, surviving Spouse or Beneficiary an
interest in any specific part of the Trust Fund or any other interest except the
right to receive benefits out of the Trust Fund in accordance with the
provisions of the Plan.
10.8 INTERNAL REVENUE SERVICE APPROVAL
It is the intention of the Sponsor to obtain a ruling or rulings by the District
Director of the Internal Revenue Service that--
(a) the Plan, as in effect from time to time, with respect to the Employer,
meets the requirements of Code Section 401(a); and
(b) any and all contributions made by the Employer under the Plan are
deductible for income tax purposes under Code Section 404(a) or any
other applicable provisions of the Code.
56
10.9 EXCLUSIVE BENEFIT; NONREVERSION
The Trust Fund shall be used and applied only in accordance with the provisions
of the Plan and Trust Agreement to provide the benefits provided under the Plan;
and the Employers shall not have any right, title or interest in the assets of
the Trust Fund; and no part of the corpus or income of the Trust Fund shall be
used for or diverted to purposes other than for the exclusive benefit of
Members, surviving Spouses and Beneficiaries and for the payment of the
reasonable expenses of administering the Plan and Trust Fund, except that--
(a) Upon termination of the Plan with respect to any Employer and the
allocation and distribution of the Trust Fund as provided herein, any
funds remaining in the Trust Fund with respect to the Employer because
of an erroneous actuarial computation after the satisfaction of all
fixed and contingent benefit liabilities under the Plan with respect to
that Employer shall revert to such Employer.
(b) If contributions under the Plan are made to the Trust Fund by an
Employer by a mistake of fact, then such contributions shall be
returned to such Employer within one year after the payment of such
contributions; and if any part or all of the contributions are
disallowed as a deduction under Code Section 404, then to the extent
such contributions are disallowed as a deduction they shall be returned
to such Employer within one year after the disallowance. All
contributions are conditioned upon the deductibility of the
contributions under Code Section 404 as provided in Section 7.2 of the
Plan.
(c) In the case of a contribution which would otherwise be an excess
contribution [as defined in Code Section 4979(c)], a correcting
distribution with respect to such contribution from the Plan to the
Employer shall be made to the extent permitted in the Code to avoid
payment of an excise tax on excess contributions under Code Section
4979(c).
(d) If the Internal Revenue Service determines that the Plan does not
initially meet the requirements of Code Section 401 with respect to an
Employer, the Plan shall be null and void from the effective date of
the Plan applicable to such Employer; and any contributions shall be
returned to the Employer within one year following the determination
that the Plan does not initially meet such requirements, unless the
Sponsor elects to make the changes to the Plan necessary to receive a
determination from the Internal Revenue Service that the requirements
of Code Section 401 are met. Contributions may be returned pursuant to
this Section 10.9(d) only if the application for the determination of
Plan qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was adopted or
such later date as the Secretary of Treasury may prescribe.
10.10 APPLICABLE LAW
The Plan and all rights hereunder shall be governed by and construed in
accordance with the laws of the State of Ohio to the extent such laws have not
been preempted by applicable federal law.
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10.11 SEVERABILITY
If a provision of the Plan shall be held illegal or invalid, the illegality or
invalidity shall not affect the remaining parts of the Plan and the Plan shall
be construed and enforced as if the illegal or invalid provision had not been
included in the Plan.
10.12 MISTAKES
In the event of a mistake or a misstatement by a Member or Beneficiary as to any
item of information that is furnished pursuant to the terms of the Plan that has
an effect on the amount paid or to be paid to such Member or Beneficiary, or a
mistake by the Plan as to the amount paid or to be paid to a Member or
Beneficiary, the Committee shall take such action as in its judgment will
provide such person with the benefit to which he is properly entitled. The
actions that may be taken by the Committee may include, without limitation, the
reduction of future payments to the Member or Beneficiary, the restatement of
such person's accrued benefit on the books and records of the Committee, a
request to the Member or Beneficiary that such person repay the amounts paid in
error or any other action as the Committee deems desirable.
10.13 QUALIFIED TRANSPORTATION FRINGE PAYMENTS
To the extent that any provision of the Plan directly or indirectly references
the definition of "compensation" set forth in either Section 415(c)(3) or
Section 414(s)(2) of the Code, and such provision provides that certain deferred
compensation pursuant to Section 415(c)(3)(D) of the Code or Section 414(s)(2)
of the Code will be included in the definition of "compensation," then effective
for Plan Years or Limitation Years beginning on and after January 1, 2001, the
amount of compensation determined pursuant to such provision will include
elective amounts that are not includable in the gross income of the Participant
by reason of Section 132(f)(4) of the Code.
58
ARTICLE XI. TOP-HEAVY PROVISIONS
11.1 APPLICATION OF TOP-HEAVY PROVISIONS
(a) SINGLE PLAN DETERMINATION. Except as provided in Section 11.1(b)(2), if
as of a Determination Date, the sum of the amount of the Code Section
416 Benefit of Key Employees and the surviving Spouses and
Beneficiaries of deceased Key Employees exceeds 60 percent of the
amount of the Code Section 416 Benefits of all Members and their
surviving Spouses or Beneficiaries (excluding former Key Employees),
the Plan is top-heavy and the provisions of this Article XI shall
become applicable.
(b) AGGREGATION GROUP DETERMINATION.
(1) If as of a Determination Date the Plan is part of an
Aggregation Group which is top-heavy, the provisions of this
Article XI shall become applicable. Top-heaviness for the
purpose of this Section 11.1(b)(1) shall be determined with
respect to the Aggregation Group in the same manner as
described in Section 11.1(a).
(2) If the Plan is top-heavy under Section 11.1(a), but the
Aggregation Group is not top-heavy, the Plan shall not be
top-heavy and this Article XI shall not be applicable.
(3) In determining whether the Plan, or any other plan included in
a required aggregation group [within the meaning of Code
Section 416(g)] is top-heavy, the accrued benefit of any
Employee (other than a Key Employee) shall be determined under
(A) the accrual method which is used for accrual purposes
under all such plans; or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest rate
permitted under Code Section 411(b)(1)(C).
(c) COMMITTEE. The Committee shall have responsibility to make all
calculations to determine whether the Plan is top-heavy.
11.2 DEFINITIONS
(a) "AGGREGATION GROUP" means the Plan and all other plans maintained by
the Employers and Affiliates which cover a Key Employee and any other
plan which enables a plan covering a Key Employee to meet the
requirements of Code Section 401(a)(4) or 410. In addition, at the
election of the Committee, the Aggregation Group may be expanded to
include any other qualified plan maintained by an Employer or Affiliate
if such expanded Aggregation Group meets the requirements of Code
Sections 401(a)(4) and 410. The Aggregation Group shall include any
terminated plan if it was maintained within the last five years ending
on the Determination Date for the Plan Year in question and would, but
for the fact that it terminated, be described in the preceding sentence
for such Plan Year.
59
(b) "DETERMINATION DATE" means the last day of the Plan Year immediately
preceding the Plan Year for which top-heaviness is to be determined or,
in the case of the first Plan Year of a new plan, the last day of such
Plan Year.
(c) "KEY EMPLOYEE" means a Member who for the Plan Year containing the
Determination Date or any of the four preceding Plan Years is--
(1) an officer of an Employer or Affiliate who has annual
Compensation greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for such Plan Year; provided,
however, that no more than the lesser of--
(A) 50 Employees; or
(B) the greater of (i) three Employees or (ii) 10 percent
of all Employees shall be treated as officers, and
such officers shall be those with the highest annual
Compensation in the five-year period;
(2) one of the ten Employees having annual Compensation from all
Employers and Affiliates for such Plan Year greater than the
dollar limit specified in Code Section 415(c)(1)(A) and
owning both more than a one-half of 1 percent interest and
the largest interests in an Employer or Affiliate;
(3) a 5-percent owner of an Employer or Affiliate; or
(4) a 1-percent owner of an Employer or Affiliate having annual
Compensation of more than $150,000.
For purposes of this Section 11.2(c), "Compensation" shall mean
compensation as defined in Section 2.1(j)(2), plus amounts that would
otherwise be excluded from the Participant's compensation thereunder by
reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B)
and amounts that would otherwise be excluded by reason of the
application of Code Section 403(b) pursuant to a salary reduction
agreement; provided, however, that Compensation for purposes of this
Section 11.2(c) shall not exceed the maximum annual compensation limit
as provided for in Code Section 401(a)(17), as such amount may be
adjusted or changed from year to year in accordance with the adjustment
provisions or changes to Code Section 401(a)(17). Ownership shall be
determined in accordance with Code Section 416(i)(1)(B) and (C). For
purposes of Section 11.2(c)(2), if two Employees have the same
ownership interest in an Employer or Affiliate, the Employee having the
greater annual Compensation from the Employers and Affiliates shall be
treated as having a larger interest.
(d) "SECTION 416 BENEFIT" means the sum of--
(1) the amount credited as of a Determination Date to a Member's,
surviving Spouse's or Beneficiary's account under any
qualified defined contribution plan
60
which is part of an Aggregation Group (including amounts to be
credited as of the Determination Date but which have not yet
been contributed);
(2) the present value of the accrued benefit credited as of a
Determination Date to a Member, surviving Spouse or
Beneficiary under the Plan and any other qualified defined
benefit plan which is part of an Aggregation Group; and
(3) the amount of distributions to the Member, surviving Spouse or
Beneficiary during the five-year period ending on the
Determination Date other than a distribution which is a
tax-free rollover contribution (or similar transfer) that is
not initiated by the Member or that is contributed to a plan
which is maintained by an Employer or Affiliate reduced by--
(4) the amount of rollover contributions (or similar transfers)
and earnings thereon credited as of a Determination Date under
a plan forming part of an Aggregation Group which is
attributable to a rollover contribution (or similar transfer)
accepted after December 31, 1983, initiated by the Member and
derived from a plan not maintained by an Employer or
Affiliate.
The account or accrued benefit of a Member who was a Key Employee and
who subsequently meets none of the conditions of Section 11.2(c) for
the Plan Year containing the Determination Date is not a Section 416
Benefit and shall be excluded from all computations under this Article
XI. Furthermore, if a Member has not performed any service for an
Employer or Affiliate during the five-year period ending on the
Determination Date, any accrued benefit of such Member (and any account
for such Member) shall not be taken into account in computing
top-heaviness under this Article XI. The present value of the accrued
benefits shall be determined as of the most recent valuation date used
for the purposes of Code Section 412 which is within the 12-month
period ending on the Determination Date. The accrued benefit of a
current Member shall be determined as if the Member terminated service
as of such valuation date. For purposes of this Article XI, the
actuarial assumptions used for determining an Actuarial Equivalent
benefit shall be used to compute the present value of the accrued
benefits.
11.3 VESTING REQUIREMENTS
Notwithstanding the vesting formula in Section 4.5(a), if the Plan is determined
to be top-heavy with respect to a Plan Year under the provisions of Section
11.1, then a Member's interest in his accrued benefit shall vest by substituting
"three years of Vesting Service" for "five years of Vesting Service" in
determining a Member's Vested Retirement Age under the Plan.
The vesting provisions described in this Section 11.3 shall not apply to a
Member who does not have an Hour of Service after the Plan becomes top-heavy. If
in a subsequent Plan Year the Plan is no longer top-heavy, the vesting
provisions that were in effect prior to the time the Plan became top-heavy shall
be reinstated; provided, however, that the vesting provisions of this Section
11.3 shall continue to apply in the case of a Member who has at least three
years of Vesting Service at the time of such reinstatement.
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11.4 MINIMUM BENEFIT
(a) MINIMUM ACCRUAL FORMULA. If the Plan is determined to be top-heavy
under the provisions of Section 11.1 with respect to a Plan Year, the
accrued benefit, when expressed as an Annual Retirement Benefit (as
defined below), of a Member who is not a Key Employee and who has
completed at least 1,000 Hours of Service (or the equivalent) during
the Plan Year regardless of his level of compensation or whether he is
employed on a specified date shall not be less than the difference
between (1) and (2) where--
(1) is the product of--
(A) the number of years of Top-Heavy Service (as defined
below); and
(B) 2 percent of the Member's average Compensation during
the period of the five consecutive years of Top-Heavy
Service during which the Member had the greatest
aggregate Compensation, but such product shall not
exceed 20 percent of the average Compensation; and
(2) is the amount of the Annual Retirement Benefit that would be
provided by the Member's account balance attributable to
Employer contributions under a defined contribution plan which
is included in an Aggregation Group.
11.5 LIMIT ON ANNUAL ADDITIONS; COMBINED PLAN LIMIT
(a) GENERAL. This Section 11.5 shall be effective for Limitation Years
commencing prior to January 1, 2000. If the Plan is determined to be
top-heavy under Section 11.1, Section 4.11(g) shall be applied by
substituting "1.0" for "1.25" in applying the provisions of Code
Section 415(e)(2) and (e)(3).
(b) EXCEPTION. Section 11.5(a) above shall not be applicable if--
(1) Section 11.4 is applied by substituting "3 percent" for "2
percent";
(2) Section 11.4 is applied by increasing (but not by more than 10
percentage points) "20 percent" by 1 percentage point for each
year for which the Plan was taken into account under this
Section 11.5; and
(3) the Plan would not be top-heavy if "90 percent" is substituted
for "60 percent" in Section 11.1.
(c) TRANSITION RULE. If, but for this Section 11.5, Section 11.5(a) would
begin to apply with respect to the Plan, the application of Section
11.5(a) shall be suspended with respect to a Member so long as there
are--
(1) no Employer contributions or forfeitures allocated to such
Member; and
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(2) no accruals under a qualified defined benefit plan for such
Member.
11.6 COLLECTIVE BARGAINING AGREEMENTS
The requirements of Sections 11.3 and 11.4 shall not apply with respect to any
Employee included in a unit of employees covered by a collective bargaining
agreement between employee representatives and an Employer or Affiliate if
retirement benefits were the subject of good faith bargaining between such
employee representatives and such Employer or Affiliate.
*********
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IN WITNESS WHEREOF, R. G. Barry Corporation has caused this document to be
executed by its duly authorized officers on this 31 day of December, 2001,
effective as of the 1st day of January, 1997, unless otherwise stated herein.
R. G. BARRY CORPORATION
By: /s/ Harry Miller
------------------------------------------------
Vice-President of Human Resources
By: /s/ Daniel D. Viren
------------------------------------------------
Senior Vice-President of
Finance and Treasurer
By: /s/ Michael S. Krasnoff
------------------------------------------------
Vice-President of Finance
and Assistant Treasurer
64