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EXHIBIT 10(cxxii)
THE NACCO INDUSTRIES, INC. PENSION PLAN
FOR SALARIED EMPLOYEES
(As Amended and Restated as of January 1, 1993)
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60621.1
THE NACCO INDUSTRIES, INC.
PENSION PLAN FOR SALARIED EMPLOYEES
(As Amended and Restated as of January 1, 1989)
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The NACCO Industries, Inc. Pension Plan for Salaried Employees (the "Plan")
was adopted effective December 1, 1986 following the termination and
reestablishment of The NACCO Industries, Inc. Pension Plan for Salaried
Employees (as amended and restated September 1, 1986).
ARTICLE I - DEFINITIONS AND CONSTRUCTION
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1.01 DEFINITIONS. The following terms when used herein with initial
capital letters shall have the following respective meanings unless the context
clearly indicates otherwise. Terms used herein in reference to the Prior Plan
or any Other Group Plan shall have the meanings assigned to such terms by such
plans.
1.02 ACCRUED BENEFIT: The amount of Pension to which a Participant is
entitled under the terms of the Plan on any date (determined without
application of any vesting requirements) expressed as a monthly benefit payable
in the form of a single life annuity (without ancillary benefits) commencing on
the Participant's Normal Retirement Date. Notwithstanding any provision of the
Plan to the contrary, a Participant's Accrued Benefit shall be frozen effective
December 31, 1993.
1.03 ACTUARIAL EQUIVALENT: A benefit of equivalent actuarial value when
computed on the basis of the actuarial factors, assumptions and procedures
recommended by the Actuary and adopted for such purpose by the Committee. To
the extent not otherwise provided in various Sections of the Plan, such factors
and assumptions are set forth in Exhibit A attached to the Plan.
1.04 ACTUARY: An individual actuary who is an enrolled actuary under the
provisions of Section 3042 of ERISA or a firm of actuaries, at least one of
whose members is
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such an enrolled actuary, which individual or firm is selected from time to
time by the Committee and is, at the time involved, acting as actuary for the
Plan.
1.05 ADMINISTRATOR OR PLAN ADMINISTRATOR: The Company.
1.06 AGE: A person's "Age" at any time shall be his age on the then most
recent anniversary of his date of birth, except for the purpose of making
actuarial calculations and determinations. The anniversary of the date of
birth of a person born on February 29 shall, in years other than leap years, be
deemed to be February 28.
1.07 APPLICABLE INTEREST RATE: Effective as of January 1, 1987, the
interest rate or rates which would be used by the Pension Benefit Guaranty
Corporation for purposes of determining the present value of a lump sum
distribution on plan termination.
1.08 AUTOMATIC 50% SPOUSE OPTION: The normal form of benefit payment
provided in Section 4.09(b).
1.09 BENEFICIARY: The person or persons designated by the Participant as
his Beneficiary or Joint Pensioner under the Plan. Such a designation may be
made, revoked, or changed (without, except as provided below, the consent of
any Beneficiary), only by an instrument (in form acceptable to the Committee)
signed by the Participant and filed with the Secretary of the Committee before
the Participant's death. A designation by a married Participant of a person
other than his Spouse as his Beneficiary shall not take effect unless the
Participant's Spouse consents in writing thereto. A Spouse's consent required
by this Section shall (a) be signed by the Spouse, (b) acknowledge the effect
of such consent, (c) be witnessed by a Plan representative or notary public,
(d) be effective only with respect to such Spouse, and (e) designate a
Beneficiary which cannot be changed without spousal consent. Such consent is
not required if it is established to the satisfaction of a Plan representative
that the consent cannot 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 regulations. In the absence of an
effective designation of a Beneficiary, a Participant's Beneficiary shall be
his estate.
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A Spouse or any other person receiving or eligible to receive a benefit
hereunder shall also be considered a Beneficiary.
1.10 BENEFIT SERVICE: (a) (General Rule for Employment After 1975) A
Participant shall receive Benefit Service for the period of his
employment as a Covered Employee under this Plan on and after December 1, 1986.
Calculation of Benefit Service shall begin with a Participant's most recent
date of hire as a Covered Employee under the Plan or as a covered employee
under the Prior Plan and shall end with his next following Severance from
Service. In addition, a Participant shall receive the Benefit Service he was
credited with under the Prior Plan on and after January 1, 1976.
(b) (Previous Periods of Employment After 1975) If a Participant's last
Severance from Service occurs on or after January 1, 1985, Benefit Service
shall also include any prior periods of employment as a Covered Employee under
the Prior Plan or as a Covered Employee under the Plan (regardless of whether
there has been a break in the Participant's employment by the Controlled Group)
that end subsequent to December 31, 1975; provided, however, that Benefit
Service for purposes of this Subsection shall not include the period of a
Participant's service, if any, before January 1, 1976.
(c) (Employment Before 1976) A Participant shall also receive Benefit
Service for the period of his continuous service, if any, before the earlier of
January 1, 1976 and his Normal Retirement Date, in accordance with the
definition of "NACCO Service" in Amendment A to the January 1, 1976 restatement
of the Prior Plan.
(d) (Employment as Non-Covered Employee) (i) A Participant who was covered
under a UMW Negotiated Plan shall also receive Benefit Service equal to any
period of his employment by a Controlled Group Member which counts for benefit
purposes under the UMW Negotiated Plan and which is subsequent to December 31,
1975 and prior to the commencement
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of the period of employment for which the Participant receives Benefit Service
under Subsection (a).
(ii) A Participant who was covered under an Other Group Plan shall also
receive Benefit Service equal to any period of his employment by a Controlled
Group Member which counts as Benefit Service under the Other Group Plan and
which is subsequent to November 30, 1986 and prior to the commencement of the
period of employment for which the Participant receives Benefit Service under
Subsection (a); provided, however, that a Participant shall not receive Benefit
Service under this paragraph (ii) for any period of employment for which he
receives Benefit Service under Subsection (b) or paragraph (i) of this
Subsection.
(e) (Disability) A Covered Employee having at least one year of Vesting
Service as a salaried Employee who is disabled and receiving benefits under a
Disability Income Plan shall also receive Benefit Service for the period for
which he receives (or is entitled to receive) such Disability Income Plan
benefits.
(f) (Additional Restrictions) For purposes of this Section, a Covered
Employee shall be considered to be employed and shall, therefore, receive
Benefit Service only while he is receiving Compensation or is on approved leave
of absence, temporary lay-off or suspension; provided, however, that the period
during which a former Employee receives severance pay shall not be credited as
Benefit Service.
(g) (Military Service) To the extent required by applicable law, an
Employee shall receive Benefit Service (and/or Vesting Service) for periods of
military service in the armed forces of the United States during which he had
re-employment rights under the Vietnam Era Veterans Readjustment Assistance Act
of 1974 (or under any prior or subsequent similar law), based on an assumed
continuation of his customary employment during such period, provided that he
was an Employee at the time he entered such military service and that he
returned to employment as an Employee while he retained such re-employment
rights.
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(h) (Rounding) When an Employee's Benefit Service or Vesting Service is
computed, it shall be computed in full years and full months; the remaining
days that are not included in such computation shall be ignored. Where more
than one period of employment are to be aggregated in order to determine an
Employee's Benefit Service or Vesting Service, his Benefit Service and Vesting
Service from all periods shall be aggregated and rounded following such
aggregation. For purposes of such computations, a full year shall consist of
365 days and a full month shall consist of 30 days.
(i) (Previous Exclusions) For the purposes of this Section, an Employee
who becomes a Participant on January 1, 1988 as a result of the elimination of
the Plan provision prohibiting participation by persons hired after Age 60
shall be deemed to have been a Participant for that period of his employment
with the Employers which would otherwise have been counted as Benefit Service
pursuant to the provisions of this Section or which otherwise would have been
counted as Benefit Service under the applicable provisions of the Plan prior to
this Amendment and Restatement. With respect to a Participant who attained Age
65 prior to January 1, 1988 and who performs an Hour of Service for the
Controlled Group on or after January 1, 1988, all of the Participant's periods
of employment with the Employers after his attainment of Age 65 during which he
was a Covered Employee shall be counted as Benefit Service in accordance with
the provisions of this Section.
(j) (Non-duplication) Notwithstanding any other provision hereof, no
Participant shall receive Benefit Service credit hereunder more than once for
the same period of employment.
1.10A CAPPED PARTICIPANT: A Participant whose Accrued Benefit on December
31, 1988 is based upon Compensation in excess of the limit contained in Section
401(a)(17) of the Code as in effect after such date.
1.11 CODE: The Internal Revenue Code of 1986, as amended.
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1.12 COMMITTEE OR PENSION COMMITTEE: The Pension Committee provided for in
Article VII hereof.
1.13 COMPANY: NACCO Industries, Inc., a Delaware corporation.
1.14 COMPENSATION: (a) All remuneration paid to an Employee by a
Controlled Group Member, or which would have been paid to such Employee had he
not signed a compensation deferral agreement which satisfies the requirements
of Sections 401(k), 125 or 129 of the Code, which is subject to withholding for
federal income tax purposes, or which would have been subject to such
withholding if the Employee had not signed such a compensation deferral
agreement, excluding, however, relocation allowances, tuition refunds, foreign
service premiums, severance payments (including any salary continuation in lieu
of severance payments) and other similar fringe benefits or perquisites.
(b) Notwithstanding the foregoing, Compensation in excess of the limitation
contained in Section 401(a)(17) of the Code shall not be taken into account for
any purpose under the Plan. In applying the Code Section 401(a)(17) limit for
the 1989 through (and including) 1993 Plan Years, the Code Section 401(a)(17)
limit in effect during the Year of calculation shall be applied for all
purposes when calculating a Capped Participant's Accrued Benefit. For purposes
of calculating the limit contained in Section 401(a)(17) of the Code, in the
case of a Highly Compensated Employee who is a 5-percent owner (as defined in
Section 416(i)(1) of the Code) or one of the ten most Highly Compensated
Employees, (i) such Highly Compensated Employee and his family members (as such
term is hereinafter defined) shall be treated as a single Employee and the
Compensation of each such family member shall be aggregated with the
Compensation of such Highly Compensated Employee, and (ii) the limitation on
Compensation shall be allocated among such Highly Compensated Employee and his
family members in proportion to each individual's Compensation. For purposes
of this Section, the
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term "family members" shall mean an Employee's Spouse and lineal descendants
who have not attained age 19 before the close of the year in question.
1.15 CONTROLLED GROUP: The Company and any and all other corporations,
trades and/or businesses, the Employees of which together with Employees of the
Company are required by Section 414 of the Code to be treated as if they were
employed by a single employer.
1.16 CONTROLLED GROUP MEMBER: Each corporation or unincorporated trade or
business that is or was a member of the Controlled Group, but only during such
period as it is or was a member of the Controlled Group.
1.17 COVERED EMPLOYEE: A salaried Employee of the Company (other than the
Highly Compensated Employees identified on Exhibit B hereto) and any salaried
Employee of The North American Coal Corporation (a Delaware corporation) who
is associated with the Dallas Accounting Division. Notwithstanding the
preceding, no Employee who is employed in an Excluded Bargaining Unit or is a
leased employee (as defined in Section 1.23) shall be a Covered Employee.
1.18 DEFERRED VESTED PENSION: A Pension payable pursuant to Sections 3.05
and 4.04.
1.19 DISABILITY INCOME PLAN: A written plan or program adopted by a
Controlled Group Member which is designed to provide, for salaried Employees
who become disabled while covered by such Plan or program, periodic income
during periods while they are not at work for a Controlled Group Member due to
disability.
1.20 EARLIEST RETIREMENT DATE: The first date on which a Participant is
entitled to receive a Pension hereunder, or would be entitled to receive a
Pension hereunder if he terminated employment with the Controlled Group or
retired on or before such date, assuming, in the case of a deceased
Participant, that he had not died.
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1.21 EARLY RETIREMENT DATE: The Early Retirement Date described in Section
3.04.
1.22 EARLY RETIREMENT PENSION: A Pension payable pursuant to Sections 3.04
and 4.03.
1.23 EMPLOYEE: An employee of a Controlled Group Member (including a
salaried officer, but not a director as such) and, to the extent required by
Section 414(n) of the Code, any person who is a "leased employee" of a
Controlled Group Member. A "leased employee" means any person who, pursuant to
an agreement between a Controlled Group Member and any other person ("leasing
organization"), has performed services for the Controlled Group Member on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the Controlled Group Member. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to services
performed for a Controlled Group Member will be treated as provided by the
Controlled Group Member. A leased employee will not be considered an Employee
of a Controlled Group Member, however, if (A) leased employees do not
constitute more than 20 percent of the Controlled Group Member's nonhighly
compensated work force (within the meaning of Section 414(n)(5)(C)(ii) of the
Code) and (B) such leased employee is covered by a money purchase pension plan
maintained by the leasing organization that provides (i) a nonintegrated
employer contribution rate of at least 10 percent of Compensation, but
including amount contributed pursuant to a salary reduction agreement which are
excludable from the leased employee's gross income under Section 125, Section
402(a)(8), Section 402(h) or Section 403(b) of the Code, (ii) immediate
participation and (iii) full and immediate vesting.
1.24 EMPLOYER: Any person which adopts the Plan pursuant to Article XIII
hereof. As of January 1, 1989, the Employers are the Company and The North
American Coal Corporation (a Delaware corporation). In the case of any person
which adopts the Plan and
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which (a) ceases to exist, (b) ceases to be a member of the Controlled Group or
(c) withdraws or is eliminated from the Plan, it shall not thereafter be an
Employer.
1.25 ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
1.26 EXCLUDED BARGAINING UNIT: A collective bargaining unit which includes
Employees and which is recognized by a Controlled Group Member or certified by
the National Labor Relations Board (or a successor thereto), unless there is a
written agreement, between the Employer of the Employees in such collective
bargaining unit and the collective bargaining representative for such
Employees, that such Employees shall be eligible to participate in the Plan.
1.27 FIDUCIARY: Any person who (a) exercises any discretionary authority
or discretionary control respecting management of the Plan or exercises any
authority or control respecting management or disposition of its assets, (b)
renders investment advice for a fee or other compensation, direct or indirect,
with respect to any money or other property of the Plan, or has any authority
or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan or the Trust
Fund. The term "Fiduciary" shall also include any person to whom a Named
Fiduciary delegates any fiduciary responsibilities in accordance with the
provisions hereof or of the Trust Agreement as long as such delegation is in
effect.
1.28 FINAL AVERAGE MONTHLY PAY: The average rate of monthly pay determined
by dividing by 60 the total amount of a Participant's Compensation during the
five consecutive calendar years during which his aggregate Compensation was the
highest, selected from the ten consecutive calendar years ending with the
calendar year in which occurs his Qualifying Termination. However, (a) any
calendar year during which the Participant did not have any Compensation for
working shall be ignored for all purposes in calculating his Final Average
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Monthly Pay, (b) in case of a Participant whose Qualifying Termination occurs
after reaching Age 55, his Final Average Monthly Pay shall not be less than
what it would have been if his Qualifying Termination had occurred at any
earlier time after reaching Age 55, (c) if in such ten consecutive calendar
years the Participant did not have Compensation during any five consecutive
calendar years, his Final Average Monthly Pay shall not be less than the amount
determined by dividing his Compensation during such ten years by the number of
months (rounding to two decimal places any fraction of a month) in which he had
Compensation during those ten years, (d) a Participant shall be deemed to have
had no Compensation in a calendar year if he received or was entitled to
receive Disability Income Plan benefits in such year which were at a rate that
was less than his regular salary rate, but only if so deeming him to have
received no Compensation will result in a larger Final Average Monthly Pay than
will result from counting the Participant's Compensation during such year, and
(e) in the case of a Participant who ceases to be a Covered Employee but
remains an Employee and is not thereafter re-employed as a Covered Employee,
such Participant's Final Average Monthly Pay shall be calculated as if he had a
Qualifying Termination on the date he ceased to be a Covered Employee.
1.29 HIGHLY COMPENSATED EMPLOYEE: (a) For a particular Plan Year, unless
an Employer elects one of the simplified methods contained in Code Section
414(q)(12) or Revenue Procedure 93-42, any Employee (i) who, during the
preceding Plan Year, (A) was at any time a 5-percent owner (as such term is
defined in Section 416(i)(1) of the Code), (B) received compensation from the
Controlled Group in excess of $75,000 (as such amount may be adjusted for
increases in the cost of living pursuant to regulations prescribed by the
Secretary of the Treasury), (C) received compensation from the Controlled Group
in excess of $50,000 (as such amount may be adjusted for increases in the cost
of living pursuant to regulations prescribed by the Secretary of the Treasury)
and was in the top-paid group of Employees for such Year, or (D) was at any
time an officer (limited to no more than 50 Employees or, if lesser, the
greater of
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3 Employees or 10 percent (10%) of the Employees) and received compensation,
effective January 1, 1987, greater than 50 percent (50%) of the amount in
effect under Section 415(b)(1)(A) of the Code for such Year, or (ii) who during
the particular Plan Year (but not the prior Plan Year) (A) was at any time a
5-percent owner (as such term is defined in Section 416(i)(l) of the Code) or
(B) was included in the foregoing clauses (B), (C) or (D) and was in the group
consisting of the 100 Employees paid the greatest compensation by the
Controlled Group during such Plan Year.
(b) "Highly Compensated Employee" shall include a former Employee whose
employment with the Controlled Group terminated prior to the Plan Year and who
was a Highly Compensated Employee for the Plan Year in which his employment
terminated or for any Plan Year ending on or after his 55th birthday.
(c) For the purposes of this Section, (i) the term "compensation" shall
mean the sum of an Employee's compensation as described in Section 11.09(a)(2)
(subject to the limitations described in Section 1.14(b)), and the Employee's
before-tax contributions (if any) under any qualified retirement plan sponsored
by a Controlled Group Member, and (ii) the term "top-paid group of Employees"
shall mean that group of Employees of the Controlled Group consisting of the
top 20 percent (20%) of such Employees when ranked on the basis of compensation
paid by the Controlled Group during the Plan Year.
1.30 HOUR OF SERVICE: An hour for which an Employee is paid, or entitled
to payment, by a Controlled Group Member for the performance of duties as an
Employee.
1.31 INVESTMENT COMMITTEE: The Investment Committee provided for in
Article VIII hereof.
1.32 JOINT PENSIONER: See Section 4.10(a)(1). The term "Joint Pensioner"
shall include the Spouse of a Participant whose Pension is payable as provided
in Section 4.09(b).
1.33 LATE RETIREMENT DATE. The Late Retirement Date described in Section
3.03.
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1.34 LATE RETIREMENT PENSION. A Pension payable pursuant to Sections 3.03
and 4.02.
1.35 NAMED FIDUCIARIES: See Section 10.02.
1.36 NORMAL RETIREMENT AGE: Age 65; provided that, effective as of January
1, 1988, with respect to a Participant who commences participation in the Plan
within 5 years before his attainment of Age 65, "Normal Retirement Age" shall
mean the fifth anniversary of the date such Participant commenced
participation in the Plan.
1.37 NORMAL RETIREMENT DATE: The first day of the month coinciding with or
next following the day the Participant attains his Normal Retirement Age.
1.38 NORMAL RETIREMENT PENSION: A Pension payable pursuant to Sections
3.02 and 4.01.
1.39 OTHER GROUP PLAN: The North American Coal Corporation Salaried
Employees Pension Plan and The North American Coal Corporation Pension Plan for
Salaried Employees, which was terminated effective December 31, 1989, both of
which were spun-off from the Prior Plan effective September 1, 1986.
1.40 OTHER PENSION: A pension, annuity or similar benefit provided under
any Other Pension Plan, including the amount of the Participant's vested
accrued benefit which has been annuitized, settled or discharged under The
North American Coal Corporation Pension Plan for Salaried Employees on December
31, 1989, the termination date of such Plan, expressed as a monthly benefit in
the form of a straight-life annuity (with no ancillary benefits) commencing on
his Normal Retirement Date.
1.41 OTHER PENSION PLAN: Any UMW Negotiated Plan and any Other Group Plan.
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1.42 PARTICIPANT: A Pensioner or a person who satisfies the participation
requirements set forth in Sections 2.01 and 2.02 and continues to be a
Participant pursuant to Section 2.03 hereof.
1.43 PENSION: A Normal Retirement Pension, a Late Retirement Pension, an
Early Retirement Pension or a Deferred Vested Pension.
1.44 PENSION COMMENCEMENT DATE: Effective as of January 1, 1985, the first
day of the first period for which an amount is payable under
the Plan as an annuity or in any other form, regardless of whether such amount
is in fact paid on such day. An individual whose Pension is suspended pursuant
to Section 4.02(b) or Section 5.02 shall be treated as not having reached his
Pension Commencement Date, and the Pension Commencement Date for any amount
which later becomes payable shall be determined pursuant to the preceding
sentence. An individual who commences to receive a Pension pursuant to Section
11.12 shall be treated as having reached his Pension Commencement Date.
1.45 PENSIONER: A former Employee whose employment with the Controlled
Group shall have terminated under such conditions that he is eligible for or
receiving a Pension under the Plan, even though such Pension has not begun and
will not begin until the arrival of the time at which such Pension becomes
payable.
1.46 PERIOD OF SEVERANCE: The period of time beginning with a Severance
from Service of an Employee and ending on the day on which he next thereafter
performs an Hour of Service.
1.47 PLAN: The pension plan known as The NACCO Industries, Inc. Pension
Plan for Salaried Employees, as the same may hereafter be amended or restated
from time to time.
1.48 PLAN YEAR: A calendar year.
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1.49 PRIOR PLAN: The NACCO Industries, Inc. Pension Plan for Salaried
Employees, as in effect from time to time prior to December 1, 1986. The Prior
Plan was terminated effective November 30, 1986.
1.50 PUBLIC PENSION: See Section 4.05(b).
1.51 QUALIFYING TERMINATION: The Retirement of a Participant, the
termination of a Participant's employment with the Controlled Group that makes
him eligible for a Deferred Vested Pension, or the death of a Participant if as
a result of his death a benefit is payable hereunder for his Beneficiary.
1.52 RETIREMENT: The termination of a Participant's employment with the
Controlled Group which makes him eligible for a Normal, Late or Early
Retirement Pension. The term "Retire" when referring to a Participant refers
to the fact that his employment with the Controlled Group is being or has been
terminated under conditions that constitute Retirement.
1.53 SERVICE TO POTENTIAL SERVICE RATIO: A percentage equal to (a) divided
by (b), where:
(a) = the number of the Participant's months of Vesting Service as of the
date of his Qualifying Termination; and
(b) = the number of months determined under (a) plus the number of months
(figured to the nearest month) between his said Qualifying
Termination and his Normal Retirement Date.
1.54 SEVERANCE FROM SERVICE: An Employee incurs a Severance from Service
on the earlier of (a) the day on which he ceases to be an Employee by reason of
his resignation, discharge, permanent layoff, Retirement or death or (b) the
first annual anniversary of the first day of a period in which he remains
absent from service with the Controlled Group (with or without pay) for any
reason other than his resignation, permanent layoff, Retirement, discharge or
death (such as vacation, holiday, sickness, suspension, disability (other than
disability entitling
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the Employee to benefits under a Disability Income Plan), leave of absence or
temporary layoff). Notwithstanding the foregoing provisions of this Section,
an Employee who is absent from service beyond the first annual anniversary of
the first date of absence
(i) by reason of the pregnancy of the individual,
(ii) by reason of the birth of a child of the individual,
(iii) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement,
shall not have a "Severance from Service" until the second annual anniversary
of the first date of such absence. The period between the first and second
anniversaries of the first date of absence from work shall not count, however,
as Benefit Service, Vesting Service, or a Period of Severance.
1.55 SOCIAL SECURITY BENEFIT: The amount of monthly old age benefit to
which the Participant would be entitled under Title II of the federal Social
Security Act (or under any successor to the old age benefit provisions of said
Title II), as in effect on the earlier of his Qualifying Termination or his
Normal Retirement Date, (a) if (pursuant to his application) such benefit were
to begin with the month after his Normal Retirement Date, (b) if during and
after the calendar year in which he reaches his Normal Retirement Date he does
not have any income that is subject to federal old age Social Security taxes,
(c) if (in case his Qualifying Termination occurs before the calendar year in
which he reaches Age 65) he had income of the type subject to such taxes during
each month in the period from his Qualifying Termination to (but not including)
the calendar year in which he reaches Age 65 equal to the greater of (1) his
rate of salary or wages (computed on a monthly basis) just before his
Qualifying Termination or (2) his Final Average Monthly Pay, (d) if after his
Qualifying Termination he is not entitled to any
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Social Security benefits which may be payable before Age 65 solely on account
of his disability, (e) if, where Section 4.07 or 4.08 is applicable, he had
continued to live as long as his surviving Spouse lives and (f) if there were
no action or inaction on his part which would reduce such benefit or bar the
payment thereof. However, in determining the amount of a Participant's
Social Security Benefit, his pre-hire salary history shall be determined
assuming that each year before he is hired by the Controlled Group he had
income of the type subject to federal old age Social Security taxes in an
amount determined by applying the following salary scale, projected
backwards, to the amount of Compensation that he had during his first year of
employment with the Controlled Group. For this purpose, the salary scale
shall be the actual change in the average wages from year to year as
determined by the Social Security Administration. Notwithstanding any other
provisions of this Section to the contrary, a Participant shall have the
right to supply to the Committee, within six months after the later of his
Qualifying Termination or the date on which he is notified by the Committee
of the pension to which he is entitled, his actual history of income earned
prior to his Qualifying Termination as evidenced by records of the Social
Security Administration or other records which the Committee deems
acceptable. If such history is provided, the amounts obtained therefrom
shall be substituted for the pre-hire income estimates otherwise used under
this Section in determining the Participant's Social Security Benefit. If
payment of a Participant's pension commences prior to the time he furnishes
such income history to the Committee, his pension payments shall be increased
or reduced, as the case may be, in accordance with such history, provided
that any reductions shall be prospective only, and any increases shall be
prospective and retroactive, with retroactive increases being paid in the
form of a lump sum payment without interest. For the purposes of this
Section, an employee described in Section 1.28(e) shall be treated as though
he had a Qualifying Termination on the date he ceased to be a Covered
Employee.
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1.56 SOCIAL SECURITY RETIREMENT AGE: The age used as the retirement age
under Section 216(1) of the Social Security Act, as amended, except that such
Section shall be applied (a) without regard to the age increase factor, and (b)
as if the early retirement age under Section 216(1)(2) of the Social Security
Act were 62.
1.57 SPOUSE: The person to whom an Employee is legally married at the time
in question; provided, however, that a former Spouse may be treated as a Spouse
or surviving Spouse to the extent required under a "qualified domestic
relations order" (as such term is defined by Section 414(p) of the Code).
1.58 TRUST: The Trust created by the Trust Agreement.
1.59 TRUST AGREEMENT: The Trust Agreement between the Company and the
Trustee as such Trust Agreement may be amended, supplemented or restated from
time to time, or any Trust Agreement superseding the same. The Trust Agreement
is hereby incorporated in the Plan by reference.
1.60 TRUST FUND: The assets held in trust under the provisions of the Plan
and the Trust Agreement, without distinction as to principal or income.
1.61 TRUSTEE: The trustee or trustees under the Trust Agreement or its or
their successor or successors in trust under the Trust Agreement.
1.62 UMW NEGOTIATED PLAN: Any plan or fund, established or maintained
pursuant to negotiations with the United Mine Workers of America or a successor
thereto or district or local thereof, which provides for pension, annuity or
similar benefits, provided a Controlled Group Member makes or has made
contributions to provide benefits under such plan or from such fund.
1.63 VESTING SERVICE: An Employee shall receive Vesting Service for the
period of his Benefit Service. In addition, an Employee shall receive Vesting
Service for (i) periods of time not counted as Benefit Service that would count
as Benefit Service except for the fact that
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he is employed (A) by an Employer in a capacity other than as a Covered
Employee or (B) by a non-Employer Controlled Group Member, or (ii) any Period
of Severance which commences by reason of a quit, discharge, permanent layoff
or Retirement and which continues for less than one year; provided, however,
that no work, employment or time before an Employee attains Age 18 shall be
counted in determining his Vesting Service.
1.64 CONSTRUCTION OF DOCUMENTS: (a) Unless the context clearly otherwise
requires, masculine words wherever used herein or in the Trust Agreement shall
include feminine and neuter words and the singular shall include the plural
wherever appropriate.
(b) The words "herein", "hereof", "hereunder" and other words of similar
import in the Plan or the Trust Agreement refer to the entire Plan or the Trust
Agreement (as the case may be) rather than to the portion of the Plan or the
Trust Agreement in which they appear.
(c) Present tense verbs herein shall be construed as being both past tense
verbs and present tense verbs where it is apparent from the context of the
passage involved that as applied to some person the event or situation involved
may have occurred in the past.
(d) Where headings have been supplied for portions of the Plan or of the
Trust Agreement (other than the headings to the defined terms in Sections 1.02
through 1.64) they have been supplied for convenience only and are not to be
taken as limiting or extending the meaning of any of such portions of such
documents.
(e) As used herein, the phrase benefits "with respect to" a Participant,
Pensioner or Employee means benefits under the Plan for such person and his
Beneficiaries.
(f) A number of the provisions hereof and of the Trust Agreement are
designed to contain provisions required or contemplated by certain federal laws
and/or regulations thereunder. Each such provision herein and in the Trust
Agreement is intended to have the meaning required or contemplated by such
provision of such law or regulations and shall be construed in accordance with
valid regulations and valid published governmental rulings and
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interpretations of such provision. In applying such provisions hereof or of
the Trust Agreement, each Fiduciary may rely (and shall be protected in
relying) on any determination or ruling made by any agency of the United States
Government that has authority to issue regulations, rulings, interpretations or
determinations with respect to the federal law thus involved.
(g) Except to the extent federal law controls, the Plan shall be governed,
construed and administered according to the laws of the State of Ohio. All
persons accepting or claiming benefits under the Plan or Trust Agreement shall
be bound by and deemed to consent to their provisions.
(h) Wherever the word "person" appears in the Plan, it shall refer to both
natural and legal persons.
(i) This Amendment and Restatement of the Plan shall constitute an
amendment, restatement and continuation of the Plan. This Amendment and
Restatement is generally effective as of January 1, 1989. During the period
from January 1, 1989 until the date of the adoption of this Amendment and
Restatement, benefits under the Plan were frozen for all Participants as a
result of the adoption of the Model Amendments No. 1, 2 and 3 from IRS Notice
88-131. The adoption of this Amendment and Restatement retroactively
extinguishes the freeze on benefit accruals to January 1, 1989.
Notwithstanding the foregoing, effective as of December 31, 1993, benefits
under the Plan will once again be frozen, permanently, for all Participants.
Certain provisions of this Amendment and Restatement of the Plan are
effective as of some other date. The provisions of this Amendment and
Restatement of the Plan which are effective prior to January 1, 1989 shall be
deemed to amend the corresponding provisions of the Plan as in effect before
this Amendment and Restatement and all amendments thereto. Events occurring
before the applicable effective date of any provision of this Amendment and
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Restatement of the Plan shall be governed by the applicable provision of the
Plan in effect on the date of the event.
(j) Nothing contained in this Amendment and Restatement of the Plan
shall reduce or have the effect of reducing the Accrued Benefit (within the
meaning of Section 411(d)(6) of the Code) of any Participant under the terms
of the Plan as in effect before this Amendment and Restatement. This
Amendment and Restatement of the Plan shall be interpreted and administered
accordingly.
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ARTICLE II - BECOMING A PARTICIPANT AND TERMINATION OF PARTICIPATION
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2.01 COMMENCEMENT OF PARTICIPATION.
(a) (Participation as of January 1, 1989). Each Employee who was a
Participant in the Plan on January 1, 1989 shall continue to be a Participant
in the Plan as hereby restated, if he is a Covered Employee on January 1, 1989.
(b) (Participation After January 1, 1989) Any other Employee shall become
a Participant in the Plan on the day on which he becomes a Covered Employee.
Notwithstanding the foregoing, no Employee shall become a Participant in the
Plan on or after January 1, 1994.
2.02 EXCLUSIONS. An Employee may not become a Participant if he works for
an Employer primarily outside of the United States and he is not a citizen of
the United States.
2.03 TERMINATION OF PARTICIPATION. A Participant who is not a Pensioner
shall only cease to be a Participant when he ceases to be an Employee. Such a
former Participant shall again become a Participant as soon as he again becomes
a Covered Employee or becomes a Pensioner.
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ARTICLE III - ELIGIBILITY FOR PENSIONS
- --------------------------------------
3.01 REQUIREMENTS FOR PENSION. An Employee or former Employee shall not be
eligible for a Pension under the Plan as hereby restated unless, in addition to
any other requirements set forth in the Plan, the termination of his employment
with the Employers occurs on or after January 1, 1989. The benefit, if any,
payable with respect to a former Employee whose employment with the Employers
terminated before January 1, 1989 (and who is not rehired by an Employer
thereafter) shall be determined by and paid in accordance with the terms and
provisions of the Plan as in effect at the date of such termination, except to
the extent that certain provisions of the Plan, as amended and restated hereby
as of January 1, 1989, apply to such individual as a result of applicable law
or to the extent that the context clearly requires the application of such
provision to such individual.
3.02 NORMAL RETIREMENT. A Participant whose employment with the Controlled
Group is terminated on his Normal Retirement Date shall be entitled to a Normal
Retirement Pension as provided in Section 4.01. A Participant's right to his
Normal Retirement Pension shall be nonforfeitable upon the attainment of his
Normal Retirement Age while he is an Employee.
3.03 LATE RETIREMENT. A Participant who postpones his Retirement to a date
subsequent to his Normal Retirement Date (his "Late Retirement Date") shall be
entitled to a Late Retirement Pension as provided in Section 4.02.
3.04 EARLY RETIREMENT. A Participant having at least ten years of Vesting
Service as a salaried Employee whose employment with the Controlled Group is
terminated at a date at or after Age 55 but before his Normal Retirement Date
and while he is a salaried Employee (his "Early Retirement Date") shall be
eligible for an Early Retirement Pension as provided in Section 4.03.
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3.05 DEFERRED VESTED TERMINATIONS. A Participant having at least five
years of Vesting Service or who was a Participant and a Covered Employee on
December 31, 1993 whose employment with the Controlled Group is terminated
before he becomes eligible for any other Pension hereunder shall be eligible
for a Deferred Vested Pension as provided in Section 4.04.
3.06 DISABILITY. If a Covered Employee having at least one year of Vesting
Service as a salaried Employee becomes disabled and as a result thereof he
receives benefits under a Disability Income Plan, (a) he shall be credited with
Benefit and Vesting Service for the period provided in Section 1.10(e) and (b)
except as provided in Section 3.07, he shall for purposes of the Plan be deemed
to be a Covered Employee during the period for which he continues to receive
(or to be entitled to receive) such Disability Income Plan benefits.
3.07 SURVIVING SPOUSE PENSION. If a Participant having at least ten years
of Vesting Service as a salaried Employee and having attained Age 52 dies
before his Pension Commencement Date and while he is a Covered Employee, and if
he is survived by his Spouse to whom he has been legally married during the
entire year immediately preceding his death, such Spouse shall be eligible for
a Surviving Spouse Pension as provided in Section 4.07. However, if such a
Participant's death occurs while he is not in fact an Employee but is deemed
(pursuant to Section 3.06) to be a Covered Employee due to the receipt of or
entitlement to benefits under a Disability Income Plan, such Spouse shall only
be entitled to a Surviving Spouse Pension if such Spouse was legally married to
the Participant when he became so disabled as to be entitled to such disability
benefits.
3.08 PRE-RETIREMENT SPOUSE PENSION. (a) If a Participant having a
nonforfeitable right to a Pension hereunder dies before his Pension
Commencement Date and after having any service or paid leave after August 22,
1984 that is recognized hereunder, and if he is survived by his Spouse to whom
he has been legally married during the entire year immediately preceding his
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death who is not eligible for the Surviving Spouse Pension, such Spouse shall
be eligible for a Pre-Retirement Spouse Pension as provided in Section 4.08.
(b) Any Participant (1) who had any service after December 31, 1975 that is
recognized hereunder, (2) to whom Subsection (a) of this Section would not
apply but for this Subsection, (3) who, when he terminated employment with the
Controlled Group, had at least ten years of Vesting Service, and (4) who was
alive, and whose Pension Commencement Date had not occurred, on July 19, 1985,
may elect, during the period beginning on July 19, 1985 and ending on the
earlier of the date of the Participant's Pension Commencement Date or the date
of his death, to have the rules of Subsection (a) of this Section apply to
him. If the Participant makes such an election, the Pension otherwise payable
with respect to him shall be reduced, to reflect the increased cost
attributable to having the pre-retirement survivor coverage for the period
during which it was in effect, on the basis of the actuarial factors,
assumptions and procedures set forth in Exhibit A. The Committee shall give
participants described in this Subsection notice of its provisions and the
reduction described herein shall not apply to the period between July 19, 1985
and the time such notice is given.
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ARTICLE IV - PENSION AND DEATH BENEFITS
- ---------------------------------------
4.01 NORMAL RETIREMENT PENSION. (a) IN GENERAL. (1) The Normal Retirement
Pension for a Participant entitled to such a Pension shall be a Pension
payable, except as otherwise provided in the Plan, for the Participant's
lifetime, in a monthly amount equal to the difference between A and B where:
A = the sum of (i) 1.7% of the Participant's Final Average Monthly Pay
times 1/12th of the number of his months of Benefit Service (not in
excess of 360 months) at the time of his Qualifying Termination plus
(ii) 0.5% of his Final Average Monthly Pay times 1/12th of the number
of months (if any) by which his months of Benefit Service at the time
of his Qualifying Termination exceeds 360 months.
B = 1.7% of the Participant's Social Security Benefit, multiplied by
1/12th of the number of months of the Participant's Benefit Service
(not exceeding 360) at the time of his Qualifying Termination.
(2) However, in the case of a Participant whose Qualifying Termination
occurs before his Normal Retirement Date, the amount specified in Clause (B) of
Paragraph (1) of this Section shall not exceed 83-1/3% of his Social Security
Benefit times the Service to Potential Service Ratio.
(b) CAPPED PARTICIPANTS. The Normal Retirement Pension of a Capped
Participant shall be a monthly amount equal to the greater of (1) the amount
determined under Subsection (a) of this Section (based on all of the Capped
Employee's months of Benefit Service not in excess of 360) or (2) the sum of A
plus B, where:
A = the amount determined under Subsection (a) of this Section, taking
into account only the Capped Employee's months of Benefit Service
earned on or after January 1, 1989; and
B = the Capped Employee's Accrued Benefit as of December 31, 1988.
The total months of Benefit Service taken into account under Paragraph (2) of
this Subsection (b) may not exceed 360. In the event that a Capped Employee
has been credited with months of Benefit Service in excess of 360, such excess
months of Benefit Service shall be subtracted from
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the portion of the benefit formula described in Clause (A) of Paragraph (2)
of this Subsection (b).
(c) COMMENCEMENT. Except as otherwise provided herein, the Normal
Retirement Pension shall begin on the first day of the month coincident with or
next following the Participant's Normal Retirement Date.
(d) BENEFIT FREEZE. Notwithstanding the foregoing, effective as of
December 31, 1993, benefit accruals under the Plan shall cease for all
Participants and consequently the Normal Retirement Pensions hereunder shall be
frozen as of such date.
4.02 LATE RETIREMENT PENSION. (a) The Late Retirement Pension for a
Participant entitled to such a Pension shall be determined in the same manner
as a Normal Retirement Pension but based on the Participant's Benefit Service,
Social Security Benefit and Final Average Monthly Pay as of his Late Retirement
Date. Except as otherwise provided herein, such Pension shall begin on the
first day of the month coincident with or next following the Participant's Late
Retirement Date.
(b) Notwithstanding Subsection (a) of this Section, a Participant's Late
Retirement Pension shall begin as of the first day of any month after his
Normal Retirement Date and before his Retirement (1) during which he is
credited with less than 40 Hours of Service (including, for this purpose, hours
for which he is paid, or entitled to payment, by a Controlled Group Member on
account of the period of time during which no duties are performed) or (2)
during which he is credited with at least 40 Hours of Service (as so defined)
and the Company has not given him the notice required by 29 C.F.R. Section
2530.203-3(b)(4) that payment of his Normal Retirement Pension is being
withheld. If a benefit becomes payable to a Participant pursuant to the
preceding sentence, the benefit accruals, if any, required by the Plan for the
period of payment with respect to such Participant shall, in accordance with
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regulations promulgated by the Secretary of the Treasury, be treated as
satisfied to the extent of the Actuarial Equivalent of such benefit payments.
4.03 EARLY RETIREMENT PENSION. (a) The Early Retirement Pension for a
Participant entitled to such a Pension shall be determined in the same manner
as a Normal Retirement Pension but based on the Participant's Benefit Service,
Social Security Benefit and Final Average Monthly Pay as of his Early
Retirement Date.
(b) The Early Retirement Pension described in Subsection (a) of this
Section shall commence on the first day of the month coincident with or next
following the Participant's Normal Retirement Date, unless the Participant
elects within the 90-day period ending on his Pension Commencement Date (with,
if he is married and if he elects a benefit option other than the Automatic 50%
Spouse Option or a Joint Pensioner Option under Section 4.10(a)(1) with his
Spouse as the Joint Pensioner, the consent of his Spouse), that the Early
Retirement Pension commence in a reduced amount on the first day of any earlier
month designated by him, which day is subsequent to his Qualifying Termination.
Such reduced Early Retirement Pension shall be equal to the amount determined
under Subsection (a) of this Section, reduced by 0.33333% for each month that
his Early Retirement Pension commences before his Normal Retirement Date.
Notwithstanding the foregoing, if the provisions of Section 4.01(b) apply, the
reduced Early Retirement Pension shall be the amount determined under
Subsection (a) of this Section, reduced by THE DIFFERENCE BETWEEN (1) THE SUM
OF (i) 0.55555% for each of the first 60 months his Early Retirement Pension
begins before his Normal Retirement Date AND (ii) 0.27778% for each month (if
any) in excess of 60 that such Pension begins before his Normal Retirement
Date, AND (2) 0.33333% for each month that such Pension begins before his
Normal Retirement Date.
4.04 DEFERRED VESTED PENSION. (a) The Deferred Vested Pension for a
Participant entitled to such a Pension shall be determined in the same manner
as the Normal
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Retirement Pension but based on the Participant's Benefit Service, Social
Security Benefit and Final Average Monthly Earnings at the time of his
Qualifying Termination.
(b) A Participant's Deferred Vested Pension shall commence on the first day
of the month coincident with or next following his Normal Retirement Date;
provided, however, that a Participant who had at least 10 years of Vesting
Service as a salaried Employee on his Qualifying Termination may elect, within
the 90-day period ending on his Pension Commencement Date (with, if he is
married and if he elects a benefit option other than the Automatic 50% Spouse
Option or a Joint Pensioner Option under Section 4.10(a)(1) with his Spouse as
the Joint Pensioner, the consent of his Spouse), to have his Deferred Vested
Pension commence in a reduced amount on the first day of any earlier month
designated by him which day is within the ten-year period prior to his Normal
Retirement Date and is subsequent to his Qualifying Termination. Such reduced
Deferred Vested Pension shall be the Actuarial Equivalent of the Normal
Retirement Pension determined using the actuarial factors specified in Exhibit
A, ignoring the death benefit specified in section 4.06.
(c) The Accrued Benefit of a Participant who terminates his employment with
the Controlled Group at a time when he does not have a nonforfeitable right to
any Pension hereunder shall be deemed to have been distributed to the
Participant immediately upon such termination of employment, and the
Participant's entire Accrued Benefit shall thereupon be forfeited. Such
forfeitures shall not be applied to increase the benefits any Employee would
otherwise receive under the Plan, but shall be used to reduce the future
contributions of the Employers. If the Participant is subsequently
re-employed, the deemed distribution described in the first sentence of this
Subsection shall be deemed to have been repaid to the Plan upon such
re-employment if there were fewer than five consecutive 1-year Periods of
Severance during the period between the Participant's original termination of
employment with the Controlled Group and his subsequent re-employment with the
Controlled Group.
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4.05 REDUCTIONS FOR OTHER PRIVATE AND PUBLIC BENEFITS. (a) If a
Pensioner is (or would upon application be) entitled to an Other Pension under
any Other Pension Plan and if (in a case where the Other Pension Plan is an
Other Group Plan) he was a Covered Employee under the Plan after the last date
on which he was a Covered Employee under the Other Group Plan, his monthly
Pension hereunder (determined after reductions for early commencement but
before adjustments for any optional form of benefit) shall be reduced by the
monthly amount, beginning when his Pension hereunder is to begin and payable
monthly for his then remaining lifetime and no longer, that is the Actuarial
Equivalent of such Other Pension. However, his monthly Pension hereunder shall
not be reduced by any portion of such Other Pension that was paid for by his
own contributions to such Other Pension Plan and any portion thereof that was
not attributable to employment with the Controlled Group. If a Pensioner is
entitled to a benefit as a result of the termination of the Prior Plan (the
"Prior Plan Termination Benefit"), his monthly Pension hereunder shall be
reduced by the monthly amount that is the Actuarial Equivalent of such Prior
Plan Termination Benefit. The amount of such Other Pension and such Prior Plan
Termination Benefit shall be determined after reductions for early commencement
but before adjustments for any optional form of benefit and without regard for
any optional election of a contingent annuitant, joint and survivor or period
certain option or any similar option. Where all or a part of an Other Pension
or a Prior Plan Termination Benefit is or has been discharged or settled by a
lump sum payment or a similar payment, the provisions hereof shall be applied
to such Other Pension or Prior Plan Termination Benefit the same as if it had
not been so discharged or settled. The Pension Committee may, after
consultation with an Actuary, equitably adjust a Pensioner's monthly Pension
hereunder if the Pensioner's Pension hereunder is suspended in accordance with
Section 4.02(b) or 5.02 and the Pensioner's benefit (if any) under the Other
Group Plan or the Prior Plan is not suspended.
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(b) The term "Public Pension" shall mean any benefit for disability, old
age or retirement (including workers' compensation benefits and black lung
benefits, but excluding benefits under the federal Social Security Act or any
successor thereto) which is paid from a governmental fund or is provided for or
required by statutory law; provided that (1) such benefit is paid (i) by one or
more Controlled Group Members, or (ii) pursuant to an insurance policy under
which a Controlled Group Member pays or has paid premiums and such benefits are
in fact paid from such policy, or (iii) from a fund to which a Controlled Group
Member contributes or has contributed by the payment of premiums, taxes or
otherwise (other than taxes for the general purposes of a government) and (2)
the term "Public Pension" shall not include payment of or reimbursement for
medical expenses. Notwithstanding the foregoing, in the event that a
Pensioner's black lung benefits are attributable (in whole or in part) to
employment with a non-Controlled Group Member, the Pensioner's Pension
hereunder shall be offset only by the portion of such benefits attributable to
employment with the Controlled Group. The applicable offset will be calculated
by multiplying each benefit payment by a fraction, the numerator of which is
the Pensioner's years of service with the Controlled Group and the denominator
of which is the Pensioner's years of total employment in the coal industry.
(c) A Pensioner's Pension hereunder shall be reduced by any Public Pension
to which he is (or would upon application be) entitled. This reduction shall
be accomplished by reducing the Pensioner's Pension hereunder for each month by
the amount of such Public Pension that is payable with respect to such month
for the Pensioner, and his Spouse, or dependents if any. No reduction shall be
made pursuant to this Subsection (c) with respect to (1) any portion of a
Public Pension for a Pensioner that is payable for any period of time that
precedes the date his Pension hereunder is to begin, or (2) any Public Pension
from which the Pensioner's Pension hereunder is deducted. In the event a
Pensioner receives a Public Pension that includes any retroactive payment for
any prior month during which he received a Pension
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hereunder, the Committee shall adjust future payments or distributions to such
Pensioner or his Beneficiaries to recover any excess payments theretofore made
from the Trust Fund to such Pensioner.
(d) The Committee shall have full authority to determine under the
foregoing provisions of this Section the amount of reductions provided for in
this Section and may adopt rules, applying uniformly to all Participants
similarly situated, as it may deem advisable to carry out the purpose and
provisions of this Section.
4.06 POST-RETIREMENT DEATH BENEFIT. If a Pensioner, other than one
entitled to a Deferred Vested Pension, dies while receiving his Pension
hereunder (or while he would have been receiving such Pension except for
Section 5.06(a)), there shall be payable to his Beneficiary the difference (if
any) between (a) $5,000 and (b) the value (as of the date of the Pensioner's
death) of any death benefit payable (or payable upon application) with respect
to such Pensioner under any group life insurance which had been paid for in
whole or in part by a Controlled Group Member; provided, however, that the
death benefit provided for in this Section shall not be payable if the
Pensioner qualifies for a substantially similar benefit provided by an Other
Group Plan (or under the terms of the annuity contracts issued to such person
upon the termination of the Prior Plan or upon the termination of The North
American Coal Corporation Pension Plan for Salaried Employees on December 31,
1989) and if the Pensioner was a Participant in such Other Group Plan after the
last date on which he was a Covered Employee hereunder.
4.07 SURVIVING SPOUSE PENSIONS. (a) The Surviving Spouse Pension for the
surviving Spouse of a deceased Participant which Spouse is entitled to such
benefit (1) shall be (for Spouses of Participants who die prior to their Normal
Retirement Date) a monthly benefit equal to 50% of what would have been such
Participant's Normal Retirement Pension (payable in the form of a single life
annuity with no reduction for early commencement) if he had reached
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his Normal Retirement Date on the date he died and if (instead of dying) he had
continued to live or (in the case of Spouses of Participants who die on or
after their Normal Retirement Date) a monthly benefit equal to 50% of what
would have been such Participant's Normal or Late Retirement Pension, as
applicable, (payable in the form of a single life annuity with no reduction for
early commencement) if he would have retired on the date of his death, (2)
shall begin on the first day of the month after the Participant's death if such
Spouse is living on such day, (3) shall, except as otherwise provided herein,
be payable monthly thereafter (on the first of each month) during such Spouse's
remaining lifetime and (4) shall cease with the payment due on the first day of
the last month in which such Spouse is living.
(b) If the surviving Spouse is eligible for a survivorship pension,
annuity, or similar benefit under an Other Group Plan or the Prior Plan because
of the death of the Participant prior to the date on which such Participant's
pension was due to begin under such Other Group Plan or the Prior Plan and if
the deceased Participant was a Covered Employee under the Plan after the last
date on which he was a Covered Employee under the Other Group Plan or the Prior
Plan, the surviving Spouse's monthly benefit hereunder shall be reduced,
beginning when such Spouse's benefit under such Other Group Plan or the Prior
Plan is to begin, by the monthly amount of the survivorship benefit to which
the Spouse is entitled under such Other Group Plan or the Prior Plan. Where
all or part of such survivorship benefit under such Other Group Plan or the
Prior Plan is or has been discharged or settled by a lump sum payment or a
similar payment, the provisions hereof shall be applied to such survivorship
benefit the same as if it had not been so discharged or settled.
(c) Any death, survivor or similar benefit under a plan or program that
provides for a Public Pension, which is (or would upon application be) payable
on account of the death of the Participant and because of a disease that is
designated by law or governmental regulation as an occupational disease of an
industry that includes the coal mining industry or businesses, shall
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be deducted from the Surviving Spouse Pension under this Section until the
amount deducted equals the amount of such death, survivor or similar benefit.
Such deduction shall be accomplished by reducing the Surviving Spouse Pension
determined under Subsection (a) of this Section for each month by the amount of
such death, survivor or similar benefit that is payable with respect to such
month for the surviving Spouse. The monthly offset provided under the
preceding sentence shall be calculated at the time the Surviving Spouse Pension
begins or, if later, the date the death, survivor or similar benefit under the
plan or program providing for a Public Pension begins, and shall not thereafter
be changed or adjusted notwithstanding any change in the amount of the Public
Pension. No reduction shall be made pursuant to the preceding three sentences
of this Subsection with respect to (1) any portion of a Public Pension for a
surviving Spouse that is payable for any period of time that precedes the date
his Pension hereunder is to begin, or (2) any Public Pension from which the
Surviving Spouse Pension hereunder is deducted. In the event a surviving
Spouse receives a Public Pension that includes any retroactive payment for any
prior month during which he received a Pension hereunder, the Committee shall
adjust future pension payments with respect to such Spouse to recover any
excess payments theretofore made from the Trust Fund to such Spouse.
4.08 PRE-RETIREMENT SPOUSE PENSION. (a) Subject to the provisions of
Sections 4.07(b) and 4.07(c), the monthly amount of the Pre-Retirement Spouse
Pension for the Spouse of a deceased Participant entitled to such benefit shall
be the Actuarial Equivalent (as of the date such benefit commences) of that
amount which the surviving Spouse would have been entitled to receive
(determined by counting only the Participant's Benefit Service as of the date
of his death) if:
(1) in the case of a Participant who dies after his Earliest Retirement
Date, the Participant had retired or otherwise terminated employment with the
Controlled Group during the month before his death with his Pension payable
under the Automatic 50% Spouse
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Option (or, in the case of a Participant who (i) elected a Joint Pensioner
option under Section 4.10(a)(1) with his Spouse as the Joint Pensioner to
receive payments after the death of the Participant of 66-2/3%, 75% or 100% of
the reduced Pension payable to the Participant under such option and (ii) dies
before the Pension Commencement Date, under the option elected by the
Participant) commencing on the first day of the month following the month in
which he died; or
(2) in the case of a Participant who dies on or before his Earliest
Retirement Date,
(i) the Participant's (in the case only of a Participant who dies while he
is an Employee) employment with the Controlled Group had terminated on the date
of his death,
(ii) the Participant had survived to his Earliest Retirement Date,
(iii) the Participant had retired at his Earliest Retirement Date, with a
Pension payable immediately under the Automatic 50% Spouse Option (or, in the
case of a Participant who (A) elected a Joint Pensioner option under Section
4.10(a)(1) with his Spouse as the Joint Pensioner to receive payments after the
death of the Participant of 66-2/3%, 75% or 100% of the reduced Pension payable
to the Participant under such option and (B) dies before the Pension
Commencement Date, under the option elected by the Participant), and
(iv) the Participant died on the day after his Earliest Retirement Date.
(b) The Pre-Retirement Spouse Pension described in this Section shall begin
on the first day of the month following the month in which occurs the
Participant's Earliest Retirement Date or, if the Participant dies after his
Earliest Retirement Date, on the first day of the month following the month in
which the Participant dies, unless, in the case of a Pre-Retirement Spouse
Pension first payable in a month prior to the month following the month in
which the Participant would have attained his Normal Retirement Age had he not
died, the surviving Spouse elects later commencement on the first day of any
subsequent month up to the
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month following the month in which the Participant would have attained his
Normal Retirement Age had he not died, but in any case only if the Spouse is
living on such date. If the Spouse elects to defer commencement of the
Pre-Retirement Spouse Pension, the benefit such Spouse shall receive shall be
the Actuarial Equivalent of the benefit such Spouse would have received had
there been no deferral.
4.09 NORMAL FORMS OF BENEFITS. (a) Notwithstanding any other provision of
the Plan, a Pension payable to a Participant shall be paid in the applicable
form described in Subsection (b) or (c) of this Section unless payment in such
form is effectively waived pursuant to Subsection (b) or (c) of this Section.
(b)(1) A Participant who is married on his Pension Commencement Date shall
have his Pension paid in the form of an "Automatic 50% Spouse Option" unless
the Participant elects to waive such Option during the 90-day period ending
on his Pension Commencement Date, provided that any election to waive such
Option shall not take effect unless (i) the Participant's Spouse consents in
writing to such election, and the Spouse's consent acknowledges the effect of
such election and is witnessed by a Plan representative or a notary public,
or (ii) it is established to the satisfaction of a Plan representative that
the consent required under (i) cannot 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 regulations. Effective
January 1, 1987, the election to waive the Automatic 50% Spouse Option must
designate a Beneficiary (or a form of benefits) that may not be changed
without the written consent of the electing Participant's Spouse, unless the
written consent of the Spouse expressly permits designations by the
Participant without any requirement of further consent by the Spouse. The
Automatic 50% Spouse Option shall provide payments as if the Participant had
elected a Joint Pensioner Option under Section 4.10(a)(1) with his Spouse as
his Joint
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Pensioner and 50% as the percentage of the reduced Pension payable to the
Participant to be continued to the Spouse after the death of the Participant,
if the Spouse survives the Participant. Any election by the Participant to
waive the Automatic 50% Spouse Option may be revoked by the Participant
during the 90-day period ending on the Participant's Pension Commencement
Date. A Participant's election to waive the Automatic 50% Spouse Option and
any revocation of such election may be made solely by an instrument (in form
acceptable to the Committee) signed by the Participant and filed with the
Secretary of the Committee during such election period.
(2) The Committee in accordance with applicable law and regulations shall
provide to each Participant, not more than 90 days nor less than 30 days
before the Participant's Pension Commencement Date, a written explanation of
(i) the terms and conditions of the Automatic 50% Spouse Option, (ii) the
Participant's right to make, and the effect of, an election to waive the
Automatic 50% Spouse Option, (iii) the rights of the Participant's Spouse
hereunder, (iv) the right to make, and the effect of, a revocation of an
election to waive the Automatic 50% Spouse Option, and (v) a general
description of the eligibility features and relative values of a single life
annuity and the other optional forms of benefit described in Section 4.10.
(3) Pension payments for the Spouse shall commence on the first day of the
month following the month in which the Participant dies, provided the Spouse
is living on such day and is otherwise eligible to receive such payments
under this Section, and shall continue during the Spouse's remaining
lifetime, the last monthly payment being payable on the first day of the
month in which the Spouse dies. If a Participant's Spouse predeceases the
Participant before the Participant's Pension Commencement Date, the
Participant shall be treated as though he had elected to waive the Automatic
50% Spouse
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Option. If a Participant's Spouse dies on or after the Participant's Pension
Commencement Date, the Participant's reduced Pension will not be increased
thereby.
(c) A Participant who is not married on his Pension Commencement Date shall
have his Pension paid in the form of a single life annuity, as provided in
Section 4.01 hereof, unless such Participant elects, within the 90-day period
ending on his Pension Commencement Date, to waive the payment of his benefits
in such form.
4.10 OPTIONAL FORMS OF BENEFITS. (a) A Participant who has waived the
payment of his Pension in the form provided in Section 4.09 may elect (subject
to the provisions of this Section and to such rules as may be adopted by the
Committee) any one, or a compatible combination, of the optional forms of
benefits specified in the following paragraphs or to have his Pension paid in
the form of a single life annuity as specified in Section 4.01 (which form
shall be considered an optional form of benefit for purposes of this Section.)
Any such optional form of benefit or combination of optional forms of benefits
shall be the Actuarial Equivalent of the Pension otherwise payable from the
Trust Fund. In determining such Actuarial Equivalent, the death benefit
specified in Section 4.06 shall be ignored.
(1) (JOINT PENSIONER OPTIONS) A Participant may elect to receive a reduced
Pension payable for him during his lifetime on and after his Pension
Commencement Date, and after his death to have a Pension payable during the
surviving lifetime of and for a natural person (herein called his "Joint
Pensioner") designated by the Participant for such purpose at the rate of
50%, 66-2/3%, 75% or 100% of the reduced Pension payable for the Participant.
Pension payments for the Joint Pensioner shall begin with the first day of
the month after the month in which the Participant dies, provided his death
does not void this Option as provided in Subsection (c) of this Section, and
provided his Joint Pensioner is living on such day, and the last monthly
payment for the Joint Pensioner shall be payable on the first day of the last
month in which the Joint Pensioner is living.
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If a Participant's Joint Pensioner dies before the Participant's Pension
hereunder is to begin, the election shall be of no effect and the Participant
shall be treated the same as though he had not elected a Joint Pensioner
Option. If a Participant's Joint Pensioner dies on or after the date the
Participant's Pension hereunder is to begin and while the Participant is
living, the Joint Pensioner Option elected shall continue in force and the
Participant's reduced Pension will not be increased thereby.
(2) (10 YEAR CERTAIN) A Participant may elect to receive a reduced Pension
payable for him during his lifetime on and after his Pension Commencement
Date with the provision that, in the event of his death on or after such date
and before 120 monthly Pension payments have been paid for him, monthly
Pension payments will be continued (at the same reduced rate) to his
Beneficiary until the number of monthly Pension payments made for his
Beneficiary, when added to the number of monthly Pension payments made for
the Participant, equals a total of 120 (referred to herein as the "10 Year
Certain").
(3) (SOCIAL SECURITY OPTION) A Participant whose Pension commences prior
to his Social Security Retirement Age may elect to have the amount of
monthly pension payable for him increased before his Social Security
Retirement Age (or, if requested by the Participant, before an earlier date
on which he may elect to have his old age benefits under the Social Security
Act begin) and decreased thereafter, to the end that his Pension hereunder,
when combined with the old age benefits payable under the Social Security Act
(as estimated as of the date his Pension hereunder is to begin), will provide
a level amount of retirement income insofar as practicable.
(b) (ELECTION OF OPTIONS) An election of an Option or Options under this
Section may be made (and may be rescinded), and the Participant's Joint
Pensioner and the percentage of the Participant's reduced Pension to be paid
after his death to his Joint Pensioner
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may be designated (and such designations may be changed), solely by an
instrument (in form acceptable to the Committee) signed by the Participant
and filed with the Secretary of the Committee while the Participant is living
and within the 90-day period ending on his Pension Commencement Date. A
Participant whose Pension has commenced under the Plan may not change the
terms of any Option he has elected, may not change his designated Joint
Pensioner and may not rescind any Option he has elected. Except for spousal
consent required under any other Section hereof, the consent of a
Participant's Beneficiary to any rescission or change in an Option or the
terms thereof or to a change in the Participant's Joint Pensioner, in any
case before the Participant's Pension commences, shall not be required. The
Committee shall require proof satisfactory to it of the Participant's good
health at the time he makes an election of an Option, before such election is
allowed, unless such election is made at least 60 days before his Pension
Commencement Date.
(c) (OTHER TERMS OF THESE OPTIONS) The time for the commencement of
Pension payments for the Participant shall not be affected by the election of a
Joint Pensioner Option (which term includes the Automatic 50% Spouse Option) or
the 10 Year Certain. If a Participant elects an Option under Subsection (a) of
this Section and dies before his Pension Commencement Date, the election shall
be void. However, if a Pensioner dies after his Pension Commencement Date, but
on or before the date his Pension actually commences, and if no Surviving
Spouse Pension or Pre-Retirement Spouse Pension is payable for his surviving
Spouse, his Pension shall, for purposes of the Joint Pensioner and 10 Year
Certain Options, be deemed to have begun on the first day of the month in which
he died.
(d) (LIMITATION ON OPTIONS) Notwithstanding any other provision of this
Section, a Participant's election of an Option provided for in this Section
shall not become effective unless the present value of the payments expected to
be made to him under such Option is more than 50% of the present value of the
total of the payments expected to be made under such
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Option to him and his Beneficiaries, but this limitation shall not apply to the
Joint Pensioner Options (which term includes the Automatic 50% Spouse Option)
if the Participant's Spouse is the Participant's Joint Pensioner. Such present
values shall be determined as of the date the Participant's Pension hereunder
begins (or, if earlier, the date which is one month before the Participant's
death), using the actuarial assumptions specified in Exhibit A to the Plan.
(e) If a Participant elects an Option under this Section and his Pension is
to be reduced in the manner provided by Section 4.05(c) on account of a Public
Pension, the monthly amount payable under such Option shall be the Actuarial
Equivalent of the amount determined by reducing his Pension by the Public
Pension as specified in Section 4.05(c).
(f) The Committee rules with respect to optional forms of benefits may be
changed by the Committee from time to time, but they shall be uniform in their
application to all Participants who are similarly situated. However, except as
otherwise permitted by the Code, no such rule or change herein shall result in
the elimination or reduction of an "optional form of benefit" (as defined in
Treasury Regulation Section 1.411(d)-4; Q&A-1).
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ARTICLE V - VARIOUS PROVISIONS CONCERNING PENSIONS
- --------------------------------------------------
5.01 APPLICATION FOR PENSIONS. (a) A Participant eligible to receive a
Pension hereunder and wishing to Retire, and any Pensioner who is eligible for
but is not receiving a Pension hereunder, shall obtain a form of application
for that purpose from the Company and shall sign and file with the Secretary of
the Committee his application on such form, furnishing such information as the
Committee may reasonably require, including satisfactory proof of his Age and
that of his Spouse (if any) and any authority in writing that the Company may
request authorizing it to obtain pertinent information, certificates,
transcripts and/or other records from any public office. An application for a
Pension may not be filed more than 90 days before such Pension is to begin.
(b) Except as provided in Sections 4.02(b), 5.03(b) and 11.12, no Pension
shall be payable hereunder for a Participant if he dies before his Pension
Commencement Date and before he files an application pursuant to Subsection (a)
of this Section and a Pensioner's Pension hereunder shall not begin until the
Participant (or surviving Spouse) files an application for such Pension
pursuant to Subsection (a) of this Section. Notwithstanding the foregoing, if
a proper application is filed by a Participant after his Normal Retirement Date
and after his Pension otherwise would have begun pursuant to the Plan, or by
his surviving Spouse after the benefit otherwise would have begun pursuant to
Sections 4.07 or 4.08, then, subject to Section 5.03(a), a lump-sum retroactive
payment shall be made (without interest) on account of the months for which
such Pension or benefit would otherwise have been paid pursuant to this Plan.
5.02 DURATION OF PENSIONS. After a Pensioner's Normal Retirement Pension,
Late Retirement Pension, Early Retirement Pension or Deferred Vested Pension
has begun, it shall, except as otherwise provided in the Plan with respect to
optional forms of benefits, continue during his remaining lifetime, the last
monthly payment of such Pension being payable on the first day of the month in
which he dies, except that no Pension shall be payable for any Pensioner for
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any month on the first day of which he is an Employee and is receiving
Compensation for work currently being performed and during which he completes
40 or more Hours of Service (as defined in Section 4.02(b)) provided his
Employer has given him notice in accordance with applicable law that his
Pension payments are being withheld pursuant to the foregoing provisions.
5.03 PAYMENT OF BENEFITS. (a) Except as otherwise provided in the Plan,
any benefit hereunder shall be paid monthly on the first day of each month for
which such benefit is payable, but no benefit shall be payable for a Pensioner
unless he is living on the Pension Commencement Date and no benefit shall be
payable for a Beneficiary unless he is living on the date such benefit becomes
payable.
(b) If the amount of benefit is less than $30 a month, the benefit shall be
paid quarterly, half yearly or yearly in advance as the Participant or
Beneficiary directs; provided, however, that if the present value of such
benefit, at any time after the Participant's termination of employment or death
and prior to the Pension Commencement Date, is $3,500 or less, such benefit
shall be paid as soon as administratively practicable following such
termination or death in a lump sum that is the Actuarial Equivalent of such
benefit. Such $3,500 amount shall be calculated by using an interest rate
equal to the Applicable Interest Rate in effect on January 1 of the Plan Year
in which the distribution is made.
(c) No interest shall be due on any benefit payment by reason of the fact
that it is not paid on or before the date it is payable.
(d) Notwithstanding any provision of the Plan to the contrary, to the
extent required under Section 401(a)(31) of the Code, if a Participant or
Beneficiary (provided such Beneficiary is a Spouse) is eligible to receive a
distribution from the Plan that constitutes an "eligible rollover
distribution" (as defined in Section 402(c)(4) of the Code), the Participant
or Beneficiary may elect to directly transfer all or a portion of such
distribution from the Plan to an eligible retirement plan (as defined in
Section 402(c)(8)(B) of the Code). The Committee shall
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prescribe reasonable procedures for the elections to be made pursuant to this
Subsection and shall provide written notice to the Participant or Spouse
(within the time period prescribed by Treasury regulations or rulings)
describing the rights under this Subsection and such other information required
to be provided under Section 402(f) of the Code.
5.04 REHIRE OF PENSIONERS. If after the Qualifying Termination of a
Participant he again becomes an Employee, such re-employment shall not have any
effect on benefits under the Plan with respect to him which are payable on
account of such Qualifying Termination, except as provided in Sections 4.02(b)
and 5.02. If on or after such re-employment he again becomes a Participant in
the Plan or in any Other Group Plan and later again incurs a Qualifying
Termination, any benefits hereunder which become payable with respect to him on
account of such subsequent Qualifying Termination (a) shall be calculated (1)
in accordance with other Sections hereof after adding to the length of his
Benefit Service after his previous Qualifying Termination his length of Benefit
Service at the time of his previous Qualifying Termination and taking into
account Compensation earned both before and after his previous Qualifying
Termination and (2) without regard to the benefits that have been paid and
that are or may become payable with respect to him on account of his previous
Qualifying Termination and (b) shall be reduced, in accordance with regulations
promulgated by the Secretary of the Treasury, by the Actuarial Equivalent of
all benefits with respect to him that have been paid and that are or may become
payable under the Plan on account of his previous Qualifying Termination
(including his election of any optional form of benefit).
5.05 SPENDTHRIFT PROVISIONS. To the extent permitted by law and except as
otherwise provided under a qualified domestic relations order pursuant to
Section 414(p) of the Code, no right or interest of any kind in the Trust Fund
shall be transferable, alienable or assignable by any Participant or
Beneficiary, nor, except as otherwise provided or permitted by the
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Plan, shall any such right or interest be subject to anticipation, encumbrance,
garnishment, attachment, execution or levy of any kind, voluntary or
involuntary.
5.06 FACILITY OF PAYMENT. (a) If the Committee finds that any Participant
or Beneficiary to whom a benefit is payable hereunder is unable to care for his
affairs because of physical, mental or legal incompetence, the Committee shall
cause any payment due to him hereunder for which prior claim has not been made
by a duly qualified guardian or other legal representative to be paid to the
person deemed by the Committee to be maintaining or responsible for the
maintenance of such Participant or Beneficiary; and any such payment shall be
deemed a payment for the account of such Participant or Beneficiary and shall
constitute a complete discharge of any liability therefor under the Plan.
(b) If an individual dies before receiving all the payments to be made to
him hereunder or before cashing any or all of the checks representing such
payment or payments, such payment(s) shall be made to one of the following
persons with preference being given to classes in the order named: (1) his
Spouse, (2) his children who are of legal age and/or the guardian of his minor
children, (3) his father or mother, or both, (4) his other relatives by blood
or marriage, or (5) his estate; and the receipt of such payment(s) shall be a
valid and complete discharge for the payment of such benefit. However, if such
deceased individual was a Participant and (i) a Joint Pensioner Option
(including an Automatic 50% Spouse Option) was in effect for him on his death,
such payment(s) so payable (but not paid) to him shall be paid to his Joint
Pensioner, if living, or (ii) if a Joint Pensioner Option was not so in effect
and the Participant had designated a then living Beneficiary, such payment(s)
so payable (but not paid) to him shall be paid to his Beneficiary.
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ARTICLE VI - FINANCING THE PLAN
- -------------------------------
6.01 EMPLOYER CONTRIBUTIONS. (a) The Plan shall be funded through the
Trust Fund. Employees shall not be required or permitted to make any
contributions hereunder.
(b) The Employers shall contribute and pay into the Trust Fund, in cash or
in property of any kind (to be administered and disposed of as provided herein
and in the Trust Agreement), such amounts and at such times as may be required
by applicable law and such additional amounts and at such times as the Board of
Directors of the Company may from time to time determine. The value of any
property so contributed shall be its fair market value at the time it is so
contributed.
6.02 TRUST AGREEMENT. The Company has executed the Trust Agreement to
create the Trust Fund. The Trustee in its relation to the Plan shall be
entitled to all the rights, privileges, immunities and benefits conferred upon
it, and shall be subject to all the duties and responsibilities imposed upon
it, under the Plan and Trust Agreement. The Trust Agreement is hereby
incorporated into the Plan by reference. Each Employer, by adopting the Plan,
approves the Trust Agreement and each amendment or supplement thereto which may
be adopted in accordance with the terms of the Trust Agreement.
6.03 TRUST FUND. The Trust Fund shall be held in trust by the Trustee and
shall be administered in accordance with the provisions of the Trust Agreement.
Neither the Trustee, nor the Actuary, nor the Employers, nor the Pension or
Investment Committees nor any member of either of such Committees in any
manner guarantees the Trust Fund against loss or depreciation.
6.04 PAYMENT OF BENEFITS. Except as otherwise provided by applicable law,
(a) all benefits provided for in the Plan (less deductions provided for in the
Plan) shall be paid solely out of the Trust Fund, (b) neither the Actuary, nor
any Employer, nor the Trustee (in its individual capacity), nor the Pension or
Investment Committees nor their members shall be in any manner
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liable for benefits payable under the Plan and (c) such benefits shall be only
such as can be provided by the assets in the Trust Fund.
6.05 EXPENSES OF THE PLAN. The reasonable expenses incident to the
management and operation of the Plan, including the compensation of the
Actuary, the Trustee, attorneys, auditors, accountants, or investment managers
or advisors for the Plan, if any, and such other technical and clerical
assistance as may be required, shall be payable out of the Trust Fund;
provided, however, that the Employers, in their absolute discretion, may elect
at any time to pay part or all thereof directly, but any such election shall
not bind the Employers as to their right to elect with respect to the same or
other expenses at any other time to have such expenses paid from the Trust
Fund.
6.06 FUNDING POLICY. The Investment Committee shall determine, establish
and carry out a funding policy and method consistent with the objectives of the
Plan and the requirements of Title I of ERISA. Subject to the right to amend
and/or terminate the Plan, the Company shall contribute (or cause the
Employers to contribute) under the Plan from time to time any minimum amounts
that may be required by applicable law or by any other Section of the Plan.
6.07 RETURN OF CONTRIBUTIONS. (a) In the case of a contribution which is
made to the Trust Fund by a mistake of fact, such a contribution shall be
returned to the contributing Employer to the extent that it shall exceed the
amount which would have been contributed had there not occurred a mistake of
fact within one year following the date of the payment of the contribution.
(b) If a contribution to the Trust Fund is conditioned upon the
deductibility of the contribution under Section 404 of the Code, then, to the
extent the deduction is disallowed, the contribution shall be returned to the
extent disallowed to the contributing Employer within after one year following
the disallowance of the deduction.
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(c) If the Internal Revenue Service shall determine that the Plan as
applied to an Employer who has adopted the Plan pursuant to Article XIII hereof
is not qualified under Section 401(a) of the Code for the initial Plan Year in
which such adoption is effective, all contributions made by or on behalf of
such Employer shall be returned to such Employer within one year after the
denial of qualification; provided that the application for determination was
filed within the time prescribed by law for filing the Employer's return for
the taxable year in which the Plan was adopted.
(d) Earnings attributable to excess contributions made under Subsections
(a) or (b) of this Section may not be returned, but losses attributable thereto
must reduce the amounts to be so returned.
(e) After satisfaction of all liabilities of the Plan as set forth in
Section 15.02, any excess assets remaining in the Trust Fund shall revert to
the Company.
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ARTICLE VII - PENSION COMMITTEE
- -------------------------------
7.01 MEMBERSHIP. The Pension Committee shall consist of three or more
members who may be, but are not required to be, Participants, Employees or
directors of an Employer. The President of the Company shall be an ex officio
member and the Chairman of the Committee and shall appoint the other members.
The number of members of the Committee (not less than three) shall be fixed by
the Chairman of the Committee, who may at any time increase, or decrease to not
less than three, the number of members. Any member may be removed by the
Chairman of the Committee at any time or may resign at any time by delivering
his written resignation to the Chairman of the Committee. Upon the existence
of any vacancy in the membership of the Committee, a successor shall be
appointed by the Chairman of the Committee, unless the number of members is
decreased as above provided.
7.02 CERTIFICATION OF MEMBERSHIP. The President of the Company shall
certify the number and names of the Committee members to the Trustee. The
Trustee may rely on any such certification until it receives written notice
from the President of the Company as to a change in the membership of the
Committee.
7.03 DUTIES. The members of the Committee shall serve without remuneration
for such services unless the Board of Directors of the Company shall provide
for remuneration for such services. The Committee shall have such functions
and duties with respect to the Plan and only such functions and duties with
respect to the Plan as are specifically conferred upon it by the Plan or the
Trust Agreement or as may be delegated to it pursuant to Section 10.03. The
Committee may also have functions and duties with respect to any Other Group
Plan to the extent that such functions and duties are given to the Committee by
the President of the Company. A Committee member shall not be disqualified
from acting because of any interest, benefit or advantage, inasmuch as members
of the Committee may be directors of an Employer, Participants or Employees,
but no such member shall vote or act in connection with the Committee's action
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relating solely to himself. Except as may be required by law, no bond or other
security need be required of any Committee member in such capacity in any
jurisdiction.
7.04 REVOCABILITY OF COMMITTEE ACTION. Any action taken by the Committee
with respect to the rights or benefits under the Plan of any Participant or
Beneficiary shall be revocable by the Committee as to payments or distributions
not theretofore made from the Trust Fund pursuant to such action; and
appropriate adjustments may be made in future payments or distributions to a
Participant or his Beneficiaries to offset any excess payment or underpayment
theretofore made from the Trust Fund to such Participant or his Beneficiaries.
7.05 COMMITTEE PROCEDURES. The Committee may adopt and amend, from time to
time, such rules for its government and the conduct of its business as it deems
advisable, including a rule authorizing one or more of its members or officers
to execute instruments in its behalf evidencing its action and, to the extent
not prohibited by applicable law, the Trustee and other persons may rely on any
instrument signed by such person or persons so authorized as properly
evidencing the action of the Committee. The Committee may from time to time,
by resolution adopted by it, delegate to one or more of its members or
officers, to an employee or employees, to a subcommittee or subcommittees or to
an agent or agents of the Committee, such of the Committee's functions and
duties as the Committee deems advisable. The Committee may elect such officers
in addition to a Chairman as it deems advisable and such officers need not be
members of the Committee. Except as may otherwise be provided by rules or
procedures adopted by the Committee, the Committee may act by majority action
either at a meeting or in writing without a meeting and an action which
purports to be an action of the Committee and which is evidenced by the
signatures of a majority of the Committee members shall be deemed to be the
action of the Committee.
7.06 COMMITTEE RULES. The Committee may from time to time adopt rules for
the administration of the Plan. Such rules may be amended by the Committee
from time to time, but
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such rules, as the same may be amended, (a) insofar as they apply to the rights
of Participants, shall be uniform in their application to all Participants who
are similarly situated and (b) shall not be inconsistent with the terms of the
Plan or the Trust Agreement.
7.07 PLAN INTERPRETATION AND FINDINGS OF FACT. The Committee shall have
sole and absolute discretion to interpret the provisions of the Plan
(including, without limitation, by supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities in, the language
of the Plan), to determine the rights and status under the Plan of Participants
and other Persons, to decide disputes arising under the Plan and to make any
determinations and findings with respect to the benefits payable thereunder and
the Persons entitled thereto as may be required for the purposes of the Plan.
In furtherance of, but without limiting, the foregoing, the Committee is hereby
granted the following specific authorities, which it shall discharge in its
sole and absolute discretion in accordance with the terms of the Plan (as
interpreted, to the extent necessary, by the Committee):
(a) To resolve all questions arising under the provisions of the Plan as
to any individual's entitlement to become a Participant;
(b) To determine the amount of benefits, if any, payable to any Person
under the Plan; and
(c) To conduct the review procedure specified in Section 9.03.
All decisions of the Committee as to the facts of any case, as to the
interpretation of any provision of the Plan or its application to any case, and
as to any other interpretative matter or other determination or question under
the Plan shall be final and binding on all parties affected thereby, subject to
the provisions of Section 7.04 and Article IX. The Committee shall direct the
Trustee relative to benefits to be paid under the Plan and shall furnish the
Trustee with any information reasonably required by it for the purpose of
paying benefits under the Plan.
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7.08 ACTUARIAL FACTORS. The Committee may adopt, and amend from time to
time, such actuarial factors, assumptions and procedures to be used for
actuarial valuations and determinations of the normal costs and actuarial
requirements of the Plan as may be recommended by the Actuary and as the
Committee deems necessary or desirable.
7.09 ASSISTANCE; EXPENSES. The Committee may employ such clerical, legal,
actuarial, accounting or other assistance or services as it deems necessary or
advisable in connection with the performance of its functions or duties. The
reasonable expenses of the Committee shall be paid out of the Trust Fund,
unless paid directly by the Employers.
7.10 ABSENCE OF COMMITTEE. If the Committee ceases to exist or if and
while, for any other reason, there is no Pension Committee, the Investment
Committee, Company or Trustee, in that order, may exercise any or all of the
powers and perform any or all of the functions of the Committee.
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ARTICLE VIII - INVESTMENT COMMITTEE
- -----------------------------------
8.01 MEMBERSHIP. (a) Subject to the provisions of Subsection (b) of this
Section, the Investment Committee shall consist of three or more members who
may be, but are not required to be, Participants, Employees or directors of an
Employer. Such members and their successors shall be appointed by the Board of
Directors of the Company to serve for such terms as said Board may fix, and
future appointees shall signify their acceptance thereof to the President or
Secretary of the Company. Any member of the Investment Committee may be
removed at any time by the Board of Directors of the Company, which may also
increase or decrease the number of members of such Committee. Any member of
the Investment Committee may resign at any time by delivering his written
resignation to the President or Secretary of the Company. Upon the existence
of any vacancy in the membership of such Committee, the President of the
Company may appoint a successor to serve until the next meeting of the Board of
Directors of the Company.
(b) Effective January 1, 1994, NACCO Industries, Inc. established the
"NACCO Industries, Inc. Retirement Funds Investment Committee" pursuant to the
terms of an Instrument of Creation and Delegation, as such Instrument may be
amended from time to time. In addition to the responsibilities specifically
given to the Investment Committee under the Plan and Trust Agreement, the
Investment Committee shall have such other responsibilities with respect to the
Plan (and other defined benefit plans and defined contribution plans of the
Controlled Group) as are granted to such Committee in the Instrument. In the
absence of an Investment Committee, the Company shall perform the duties
allocated to the Investment Committee under the Plan and Trust Agreement.
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ARTICLE IX - CLAIMS AND REVIEW PROCEDURES
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9.01 METHOD OF FILING CLAIM. Any Participant or Beneficiary who believes
that he is entitled to have received a benefit under the Plan which he has not
received may file with the Secretary of the Pension Committee a written claim
specifying the basis for his claim and the facts upon which he relies in making
such claim. Such a claim must be signed by the claimant or his authorized
representative and shall be deemed filed when delivered to such agent for
service of process who shall promptly transmit such written claim to the
Pension Committee.
9.02 NOTIFICATION TO CLAIMANT. Unless such claim is allowed in full by the
Committee, the Committee shall (within 90 days after such claim was filed, plus
an additional period of 90 days if required for processing and if notice of the
additional 90 day extension of time indicating the specific circumstances
requiring the extension and the date by which a decision shall be rendered is
given to the claimant with the first 90-day period) cause written notice to be
mailed or delivered to the claimant of the total or partial denial of such
claim. Such notice shall be written in a manner calculated to be understood by
the claimant and shall include (a) one or more specific reasons for the denial
of the claim, (b) specific reference(s) to provisions of the Plan and/or Trust
Agreement on which the denial of the claim is based, (c) a description of any
additional material or information necessary for the claimant to perfect the
claim, (d) an explanation of why such material or information is necessary, and
(e) an explanation of the review procedure specified in Section 9.03.
9.03 REVIEW PROCEDURE. Within three months after the mailing or delivery
of a notice of denial of a claim, the claimant or his duly authorized
representative may appeal such denial by filing with such agent for service of
process his written request for a review of said claim. If the claimant does
not file such request within such three-month period, the claimant shall be
conclusively presumed to have accepted as final and binding the initial
decision of the Committee on his claim. If such an appeal is so filed within
such three months, the Committee, or a Named
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Fiduciary designated by the Committee, shall conduct a full and fair review of
such claim. During such full review, the claimant (or his duly authorized
representative) shall be given an opportunity to review documents that are
pertinent to his claim and to submit issues and comments in writing and (if he
requests a hearing on his claim and the Committee or such Named Fiduciary
concludes such a hearing is advisable and schedules such a hearing) to present
his case in person or by an authorized representative at such hearing. After
the completion of such full review, the reviewer shall mail or deliver to the
claimant a written decision on the matter based on the facts and pertinent
provisions of the Plan, Trust Agreement and/or applicable law. Such decision
shall be mailed or delivered within a period of 60 days after the receipt of
the request for review unless special circumstances require an extension of
time, in which case such decision shall be rendered not later than 120 days
after receipt of such request. If an extension of time for review is required,
written notice of the extension shall be furnished to the claimant prior to the
commencement of the extension. Such decision (a) shall be written in a manner
calculated to be understood by the claimant, (b) shall state one or more
specific reasons for the decision, including specific reference(s) to
provisions of the Plan and/or Trust Agreement on which the decision is based,
and (c) shall, to the extent not prohibited by applicable law, be final and
binding on all interested persons.
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ARTICLE X - ADMINISTRATION OF THE PLAN AND FIDUCIARY RESPONSIBILITY
- -------------------------------------------------------------------
10.01 RESPONSIBILITY FOR ADMINISTRATION. Except to the extent that
particular responsibilities are assigned or delegated to other Fiduciaries
pursuant to the Trust Agreement or some other Section hereof, the Company (as
the Plan Administrator) shall be responsible for the administration of the
Plan. Each other Fiduciary shall have only such powers, duties,
responsibilities and authorities as are specifically conferred upon him or
delegated to him pursuant to provisions of the Plan or Trust Agreement. Any
person may serve in more than one fiduciary capacity with respect to the Plan
or Trust Fund if, pursuant to the Plan and/or Trust Agreement, he is assigned
or delegated any multiple fiduciary capacities.
10.02 NAMED FIDUCIARIES. For purposes of the Plan, the Named Fiduciaries
shall be the Company, the Pension Committee, the Investment Committee, the
President of the Company and the Trustee. The Company may, by an instrument
authorized and signed by the President of the Company and delivered to the
Committee, designate any other person as a Named Fiduciary to perform functions
specified in such instrument (or in a delegation pursuant to Section 10.03)
which relate to the administration of the Plan or the Trust Fund, provided such
designee accepts such designation. Such a designation may be terminated at any
time by written notice from the President of the Company to the designee or by
written notice from the designee to the President.
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10.03 DELEGATION OF FIDUCIARY RESPONSIBILITIES. (a) The President of
the Company may delegate to any person any one or more powers, functions,
duties and/or responsibilities with respect to the Plan or the Trust Fund,
other than (1) those assigned to the Investment Committee pursuant to the
Trust Agreement or some other Section hereof and (2) trustee responsibilities
(as defined in Section 405(c) of ERISA) assigned to the Trustee by the Trust
Agreement or some other Section hereof. However, no such power, function, duty
or responsibility which is assigned to a Fiduciary (other than to the Company)
pursuant to the Trust Agreement or some other Section hereof shall be so
delegated without the written consent of such Fiduciary.
(b) Any delegation pursuant to Subsection (a) of this Section:
(1) shall be signed by the President of the Company, be delivered to and
accepted In writing by the delegatee and be delivered to the Secretary of
the Committee, (2) shall contain such provisions and conditions relating to
such delegation as the President deems appropriate, (3) shall specify the
powers, functions, duties and/or responsibilities therein delegated,
(4) may be amended from time to time by written agreement signed by
the President of the Company and by the delegatee and delivered to the
Secretary of the Committee and (5) may be revoked (in whole or in part) at any
time by written notice (i) from the President of the Company delivered to the
delegatee and the Secretary of the Committee or (ii) from the delegatee
delivered to the President of the Company and the Secretary of the Committee.
10.04 IMMUNITIES. Except as otherwise provided in Section 10.05 or by
applicable law, (a) no Fiduciary shall have the obligation to discharge any
duty, function or responsibility which is specifically assigned to another
Fiduciary by the terms of the Plan or Trust Agreement or is delegated to
another Fiduciary pursuant to procedures for such delegation provided for
herein or in the Trust Agreement; (b) no Fiduciary shall be liable for any
action taken or not taken with respect to the Plan or Trust Fund except for his
own negligence, bad faith or willful misconduct;
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(c) no Fiduciary shall be personally liable upon any contract or other
instrument made or executed by him or in his behalf in the administration of
the Plan or Trust Fund; (d) no Fiduciary shall be liable for the neglect,
omission or wrongdoing of another Fiduciary; (e) the Company and each Employer
and each officer or director thereof, Employees, the Pension Committee and each
member thereof, the Investment Committee and each member thereof, and any other
person to whom the President of the Company delegates (or any provision hereof
or of the Trust Agreement assigns) any duty with respect to the Plan or Trust
Fund, may rely and shall be fully protected in acting in good faith (1) upon
the advice of counsel acceptable to the Company (who may be counsel for an
Employer or another Fiduciary), (2) upon the records of a Controlled Group
Member, (3) upon the opinion, certificate, valuation, report, recommendation or
determination of the Actuary or the Trustee or of any person acceptable to the
Company that is employed by such Fiduciary to render advice with regard to any
responsibility such Fiduciary has under the Plan or Trust Agreement and (4)
upon any certificate, statement or other representation made by or any
information furnished by the Actuary, an Employee, a Participant, a Beneficiary
or the Trustee; and (f) the Committee and its members shall not be required to
make inquiry into the propriety of any action by the Company, an Employer, the
Actuary or the Trustee.
10.05 LIMITATION ON EXCULPATORY PROVISIONS. Notwithstanding any other
provision of the Plan or the Trust Agreement, no provision of the Plan or the
Trust Agreement shall be construed to relieve (or have the effect of relieving)
any Fiduciary from any responsibility or liability for any obligation,
responsibility or duty imposed on such Fiduciary by Part 4 of Title I of ERISA.
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ARTICLE XI - MISCELLANEOUS PROVISIONS REQUIRED BY THE CODE
- ----------------------------------------------------------
11.01 GENERAL. Subsequent Sections of this Article are included in the
Plan pursuant to requirements of the Code, and shall prevail over any provision
of the Plan or the Trust Agreement which is inconsistent therewith.
11.02 PROVISION PURSUANT TO CODE SECTION 401(a)(2). Except as specifically
provided in the Plan, it shall be impossible, at any time prior to the
satisfaction of all liabilities with respect to Employees and their
Beneficiaries under the Trust, for any part of the corpus or income of the
Trust Fund to be (within the taxable year or thereafter) used for, or diverted
to, purposes other than for the exclusive benefit of the Employees or their
Beneficiaries.
11.03 PROVISION PURSUANT TO CODE SECTION 401(a)(8). Forfeitures shall not
be applied to increase the benefits any Employee would otherwise receive under
the Plan.
11.04 PROVISION PURSUANT TO CODE SECTIONS 401(a)(12) and 414(1). There
shall not be any merger or consolidation of this Plan with, or transfer of
assets or liabilities of this Plan to, any other plan, unless each Participant
in the merged, consolidated or transferee plan would (if that 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 this Plan had then terminated). The Company reserves the right to merge or
consolidate this Plan with, and to transfer the assets of the Plan to, any
other plan, without the consent of any other Employer.
11.05 PROVISION PURSUANT TO CODE SECTION 401(a)(14). Unless the
Participant otherwise elects, the payment of benefits under the Plan to the
Participant will begin not later than the 60th day after the latest of the
close of the Plan Year in which
(a) occurs the date on which the Participant attains the earlier of age 65
or his Normal Retirement Age,
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(b) occurs the l0th anniversary of the year in which the Participant
commenced participation in the Plan, or
(c) the Participant terminates his service with the Controlled Group.
11.06 PROVISION PURSUANT TO CODE SECTION 401(a)(15). In the case of a
Participant or Beneficiary who is receiving benefits under the Plan,
or in the case of a Participant who has terminated his employment with the
Controlled Group and who has nonforfeitable rights to benefits, such benefits
shall not be decreased by reason of any increase in the benefit levels payable
under Title II of the Social Security Act or any increase in the wage base
under such Title II, if such increase takes place after the earlier of the date
of first receipt of such benefits or the date of such termination, as the case
may be.
11.07 PROVISION PURSUANT TO CODE SECTION 411(a)(10)(B). If any Plan
amendment changes any vesting schedule under the Plan, each Participant
having not less than three years of Vesting Service whose nonforfeitable
percentage under the Plan, as amended, would be less than such percentage
determined without regard to such amendment shall be permitted to elect,
within a reasonable period after the adoption of such amendment, to have
his nonforfeitable percentage computed under the Plan without regard to such
amendment.
11.08 PROVISION PURSUANT TO CODE SECTION 411(d)(3). Upon the termination
or partial termination of the Plan, the rights of all affected Employees to
benefits accrued to the date of such termination or partial termination, to the
extent funded as of such date, shall be nonforfeitable to the extent they do
not exceed any limitations on such benefits in Article XVI hereof.
11.09 PROVISION PURSUANT TO CODE SECTION 415(b).
(a) As used in this Section, (1) the term "annual benefit" means a benefit
payable annually in the form (in this Section called "life annuity form") of a
straight life annuity (with no ancillary benefits) under a plan to which
Employees do not contribute and under which no rollover
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contributions are made and (2) the term "Compensation" means Compensation as
defined in Section 1.14 but excluding amounts, if any, which were not paid to
an Employee because he signed a Compensation deferral agreement in connection
with The North American Coal Corporation Retirement Savings Plan.
(b) Except as otherwise provided in this Section, the benefits under the
Plan with respect to a Participant for any Plan Year (which shall be the
limitation year) shall not exceed, when expressed as an annual benefit, the
lesser of:
(1) the dollar limitation in effect for such year under Section 415(b)
(1)(A) of the Code, or
(2) 100 percent of the Participant's average Compensation for the period
of three consecutive calendar years during which the Participant both was an
active Participant in the Plan and had the greatest aggregate Compensation from
the Controlled Group.
(c) Notwithstanding the foregoing:
(1) if the benefit under the Plan is payable in any form other than the
life annuity form, or if the Employees contribute to the Plan or make rollover
contributions or plan to plan transfers, for purposes of determining whether
the limitations described in Subsection (b) of this Section have been
satisfied, such benefit shall be adjusted, in accordance with regulations
prescribed by the Secretary of the Treasury or his delegate, so that such
benefit is equivalent to an annual benefit, provided that for purposes of this
paragraph any ancillary benefit which is not directly related to retirement
income benefits shall not be taken into account, and that portion of any joint
and survivor annuity which constitutes a qualified joint and survivor annuity
(as defined in Section 417(b) of the Code) shall not be taken into account, and
(2) if the benefit under the Plan begins before the Social Security
Retirement Age, for purposes of determining whether the limitation set forth in
paragraph (1) of Subsection (b) has been satisfied, such benefit shall be
reduced, in accordance with regulations
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prescribed by the Secretary of the Treasury, so that such limitation (as so
reduced) equals an annual benefit (beginning when such benefit under the Plan
begins) which is equivalent to an annual benefit equal to the limitation
beginning at the Social Security Retirement Age, provided that the reduction
under this part shall be made in such manner as the Secretary of the Treasury
may prescribe which is consistent with the reduction under the Social Security
Act for old age insurance benefits commencing before the Social Security
Retirement Age; and
(3) if the benefit begins after the Social Security Retirement Age, for
purposes of determining whether the limitation set forth in paragraph (1) of
Subsection (b) has been satisfied, such limitation shall be increased, in
accordance with regulations prescribed by the Secretary of the Treasury, so
that such limitation (as so increased) equals an annual benefit (beginning when
such benefit begins under the Plan) which is equivalent to an annual benefit
equal to the limitation set forth in such paragraph (1) beginning at the Social
Security Retirement Age; and
(d) Except as provided in Subsection (e) of this Section, the benefits
payable with respect to a Participant under any defined benefit plan shall be
deemed not to exceed the limitations set forth in Subsection (b) of this
Section if:
(1) the retirement benefits payable with respect to such Participant
under such plan and under all other defined benefit plans of the Controlled
Group do not exceed $10,000 for the Plan Year, or for any prior Plan Year, and
(2) the Controlled Group has not at any time maintained a defined
contribution plan in which the Participant participated.
(e) In the case of an Employee who has less than ten years of
participation in the Plan, the limitation set forth in paragraph (1) of
Subsection (b) of this Section shall be the limitation determined under such
paragraph (without regard to this Subsection), multiplied by a fraction, the
numerator of which is the number of years (or parts thereof) of the Employee's
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participation in the Plan and the denominator of which is ten, and in the case
of an Employee who has less than 10 years of Vesting Service with the
Controlled Group, the limitations set forth in paragraph (2) of Subsection (b),
and in Subsection (d) of this Section shall be such limitations (determined
without regard to this Subsection) multiplied by a fraction, the numerator of
which is the number of years (or parts thereof) of Vesting Service which the
Employee has with the Controlled Group and the denominator of which is 10.
Notwithstanding the foregoing provisions of this Subsection, in no event shall
the limitations in Subsections (b) and (d) of this Section be reduced to an
amount less than 1/10 of such limitations (determined without regard to this
Subsection). To the extent provided in regulations prescribed by the Secretary
of the Treasury, this Subsection shall be applied separately with respect to
each change in the benefit structure of the Plan.
(f) Notwithstanding anything in this Section to the contrary, if the annual
benefit of a Participant who has terminated employment with the Controlled
Group is limited pursuant to the limitations set forth in paragraphs (1) or (2)
of Subsection (b) of this Section, such annual benefit shall be increased in
accordance with the cost-of-living adjustments of Section 415(d) of the Code.
11.10 PROVISION PURSUANT TO CODE SECTION 415(e). (a) In any case in
which an individual is a Participant in both a defined benefit plan and a
defined contribution plan maintained by the Controlled Group, the sum of the
defined benefit plan fraction and the defined contribution plan fraction for
any Plan Year shall not exceed 1.0. For purposes of the preceding sentence:
(1) The defined benefit plan fraction for any year is a fraction,
(i) the numerator of which is the projected annual benefit of the
Participant under the Plan (determined as of the close of the Plan Year),
and (ii) the denominator of which is the lesser of (A) the product of 1.25,
multiplied by the dollar limitation in effect under Section 415(b)(1)(A) of
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the Code for the Plan Year or (B) the product of 1.4, multiplied by the
amount which may be taken into account under Section 415(b)(1)(B) of the
Code with respect to such Participant under the Plan for the Plan Year; and
(2) The defined contribution plan fraction for any year is a fraction,
(i) the numerator of which is the sum of the annual additions to the
Participant's account as of the close of the Plan Year and for all prior
Plan Years, and (ii) the denominator of which is the sum of the lesser of
the following amounts determined for the Plan Year and for each prior year
of service with Controlled Group:
(A) The product of 1.25, multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for the Plan Year, or
(B) The product of 1.4, multiplied by the amount which may be taken
into account under Section 415(c)(1)(B) of the Code with respect to
such Participant under the Plan for the Plan Year.
(b) Except as may otherwise be provided in any defined contribution
plan which is material to the limitations stated in this Section, such
reductions shall be made in benefits hereunder with respect to a Participant in
this Plan as is necessary to comply with the limitations of this Section.
11.11 OTHER CODE SECTION 415 PROVISIONS. (a) For purposes of applying
the limitations set forth in Sections 11.09 and 11.10, (1) all defined benefit
plans (whether or not terminated) of the Controlled Group shall be treated
as one defined benefit plan, and (2) all defined contribution plans (whether
or not terminated) of the Controlled Group shall be treated as one defined
contribution plan.
(b) If the Controlled Group has more than one defined benefit plan
(1) Section 11.09(b)(2) shall be applied separately to each such plan, but
(2) in applying Section 11.09(b)(2) to the aggregate of such defined benefit
plans for purposes of this Section, the
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high three years of Compensation taken into account shall be the period of
three consecutive calendar years during which the individual had the greatest
compensation from the Controlled Group.
(c) As used in Sections 11.09, 11.10 and this Section, the phrase
"Controlled Group" shall be construed in the light of Sections 414(b) and
414(c) of the Code, as modified by Sections 415(h), 414(m) and 414(n) of the
Code; the word "plan" shall include any plan or program required pursuant to
Section 415 of the Code to be taken into account in applying to this Plan the
limitations of Section 415 of the Code; and the terms "defined contribution
plan" and "defined benefit plan" shall have the respective meanings specified
in Section 415(k) of the Code.
(d) Where a Spouse's benefit hereunder is based on the Pension to which a
Participant is otherwise entitled, such Pension shall be calculated without
regard to the limitations set forth in Sections 11.09 and 11.10. Such
limitations shall then be applied to the Spouse's benefit as so calculated.
11.12 PROVISION PURSUANT TO CODE SECTION 401(a)(9).
(a) Notwithstanding any other provision of the Plan, the Accrued
Benefit of any Participant who, as of April 1 of the calendar year following
the calendar year in which he attains Age 70-1/2 has not commenced to receive
distribution of such Accrued Benefit, will commence to be distributed to him
as of such date, based on the amount of such Participant's Accrued Benefit as
of such date.
(b) The Accrued Benefit of a Participant described in Subsection (a)
of this Section shall be distributed in the manner described in Article IV
hereof, treating the date described in Subsection (a) of this Section as the
Participant's Pension Commencement Date. Without limiting the generality of
the foregoing, a Participant required to commence receiving his Pension
pursuant to Subsection (a) of this Section shall be permitted to elect to
receive such
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Pension in any optional form of benefit available hereunder, provided that any
applicable spousal consent requirements are satisfied with respect to such
election.
(c) If a Participant accrues any additional benefits under the Plan after
the date described in Subsection (a) of this Section, such additional benefits
shall commence to be distributed, in the same form as the Pension then
currently being paid to such Participant, beginning with the first monthly
payment made in the calendar year following the calendar year in which such
additional benefit accrues. Notwithstanding the foregoing, such additional
benefit accruals shall be offset (in whole or in part), in accordance with the
regulations promulgated by the Secretary of the Treasury, by any benefit
payments then being made to the Participant hereunder.
(d) Distributions under the Plan shall be made in accordance with Section
401(a)(9) of the Code and Treasury Regulations issued thereunder, including
Treas. Reg. Section 1.401(a)(9)-2, provided that such provisions shall override
the other distribution provisions of the Plan only to the extent that they are
inconsistent with such other Plan provisions.
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ARTICLE XII - MISCELLANEOUS PROVISIONS
- --------------------------------------
12.01 EMPLOYMENT RIGHTS. Nothing herein contained shall constitute or be
construed as a contract of employment between any Employer and any Employee or
Participant and all Employees shall remain subject to discipline, discharge and
layoff to the same extent as if the Plan had never gone into effect. An
Employer by adopting the Plan, making payments into the Trust Fund or taking
any other action with respect to the Plan does not obligate itself to continue
the employment of any Employee or Participant for any period or, except as
provided in Sections 6.01 and 13.02, to make any payments into the Trust Fund.
12.02 RIGHTS IN TRUST FUND. No person shall have any rights in or to the
Trust Fund or any part thereof except as and to the extent expressly provided
in the Plan or the Trust Agreement.
12.03 SEVERABILITY PROVISION. If any provision of the Plan or Trust
Agreement or the application thereof to any circumstance or person is declared
invalid by a court of competent jurisdiction, the remainder of the Plan or
Trust Agreement and the application of such provision to other circumstances or
persons shall not be affected thereby.
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ARTICLE XIII - EMPLOYERS
- ------------------------
13.01 EMPLOYERS. As of January 1, 1989, the Employers under the Plan are
the Company and The North American Coal Corporation. Any other person who is
a Controlled Group Member may, with the consent of the Nominating, Organization
and Compensation Committee of the Board of Directors of the Company, adopt the
Plan and thereby become an Employer hereunder by (a) executing an instrument
evidencing such adoption which shall have been approved by its governing body
(if any) and (b) filing a copy of such instrument with the Trustee. Such
adoption may be subject to such terms and conditions as the Nominating,
Organization and Compensation Committee of the Board of Directors of the
Company requires or approves.
13.02 COSTS TO BE SHARED. The costs of the Plan (including Employer
contributions pursuant to the Plan and expenses incurred in connection with the
Plan or the Trust Fund which are to be paid by the Employers) shall be shared
by the Employers on such basis as may be agreeable to the Company and the other
Employers and as will permit, to the extent possible, the deduction (for
purposes of federal taxes on income) by each Employer of its payments toward
such costs.
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ARTICLE XIV - AMENDMENT
- -----------------------
14.01 RIGHT TO AMEND. The Company has reserved, and does hereby reserve,
the right to amend at any time and from time to time, by action of the
Nominating, Organization and Compensation Committee of its Board of Directors,
any or all of the provisions of the Plan without the consent of any Employee,
Participant or Beneficiary or other person and without the consent of any other
Employer. By adopting the Plan and thereby becoming an Employer hereunder,
each Employer shall be deemed to have authorized the Company at any time and
from time to time to adopt amendments to the Plan that will be effective with
respect to such Employer. The Trust Agreement may be amended in the manner and
to the extent provided therein.
14.02 PROCEDURE. Any amendment of the Plan (a) shall be expressed in an
instrument executed by the Company on the order of the Nominating, Organization
and Compensation Committee of its Board of Directors and filed with the
Trustee, (b) shall become part of the Plan and (c) shall become effective as of
the date designated in such instrument. If no such effective date is so
designated, such amendment shall become effective on the date of the execution
of such amendment.
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ARTICLE XV - TERMINATION
- ------------------------
15.01 RIGHT TO TERMINATE OR WITHDRAW. (a) The Company has reserved, and
does hereby reserve, the right (by action of the Nominating, Organization and
Compensation Committee of its Board of Directors) to terminate the Plan at any
time (without the consent of any other Employer or of any Employee,
Participant, Beneficiary or other person) either in whole or in part or as to
any or all of the Employers or as to any designated group of Employees
(including former Employees) and their Beneficiaries. Any such termination
(1) shall be expressed in an instrument executed by the Company on the order of
the Nominating, Organization and Compensation Committee of its Board of
Directors and filed with the Trustee and (2) shall (except as may otherwise be
required by applicable law) become effective as of the date designated in such
instrument or, if no such effective date is so designated, on the date of the
execution of such instrument.
(b) Any Employer (other than the Company) may elect separately to withdraw
from the Plan, without the consent of any other Employer or of any Employee,
Participant, Beneficiary or other person, and such withdrawal shall constitute
a termination of the Plan solely as to such Employer. Any such withdrawal and
termination (1) shall be expressed in an instrument executed by the terminating
Employer on the order of the Nominating, Organization and Compensation
Committee of its Board of Directors or other governing body (if any) and filed
with the Company and the Trustee and (2) shall (except as may otherwise be
required by applicable law) become effective when so filed unless some other
effective date is designated in such instrument and approved by the Company.
15.02 APPLICATION OF ASSETS UPON TERMINATION. If the Plan is terminated
pursuant to Section 15.01 as to all Employees, Participants and Beneficiaries,
the assets remaining in the Trust Fund (available to provide benefits) shall be
allocated in accordance with applicable law for the purpose of paying benefits
provided for in the Plan. Any assets remaining in the Trust Fund after
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the satisfaction of all liabilities under the Plan to Participants and
Beneficiaries shall be distributed to the Company.
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ARTICLE XVI - LIMITATION ON BENEFITS OF CERTAIN PARTICIPANTS
- ------------------------------------------------------------
16.01 RESTRICTION OF BENEFITS ON PLAN TERMINATION. Notwithstanding any
other provision of the Plan to the contrary, in the event of a termination of
the Plan, the benefit of any highly compensated Employee (and highly
compensated former Employee) shall be limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
16.02 RESTRICTION ON PLAN DISTRIBUTIONS. (a) Notwithstanding any other
provision of the Plan or Trust Agreement, the annual payments provided by
the Plan with respect to any Participant who is a highly compensated Employee
or highly compensated former Employee and who is one of the 25 highest paid
Employees of the Controlled Group (a "Restricted Participant") shall be
restricted to an amount equal to the payments that would be made on behalf of
the Restricted Participant under a single life annuity that is the Actuarial
Equivalent of the sum of (1) the Restricted Participant's Accrued Benefit, and
(2) the Restricted Participant's other benefits under the Plan.
(b) The limitations described in Subsection (a) of this Section shall not
apply if (1) after payment to a Restricted Participant of all of his benefits
under the Plan, the value of Plan assets equals or exceeds 110 percent of the
value of current liabilities, or (2) prior to payment to a Restricted
Participant of all of his benefits under the Plan, the value of the Restricted
Participant's benefits is less than one (1) percent of the value of the Plan's
current liabilities.
16.03 MISCELLANEOUS PROVISIONS. (a) For purposes of this Article, the
term "highly compensated employee" shall mean an Employee described in Section
414(q) of the Code; the term "highly compensated former Employee" shall mean a
former Employee described in Section 414(q)(9) of the Code; the term "current
liabilities" shall mean those liabilities described in Section 412(l)(7) of the
Code; and the term "benefit" shall mean the Accrued Benefit of a Restricted
Participant, loans in excess of the amount specified in Section 72(p)(2)(A) of
the Code, any
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periodic income, any withdrawal values payable to a living Employee, and any
death benefits not provided for by insurance on the Employee's life.
(b) The provisions of this Article are meant to comply with the
requirements of Treasury Regulation Section 1.401(a)(4)-5(b) and shall be
interpreted accordingly.
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ARTICLE XVII - TOP-HEAVY PLAN REQUIREMENTS
- ------------------------------------------
17.01 DEFINITIONS. For the purposes of this Article, the following terms,
when used with initial capital letters, shall have the following respective
meanings:
(a) AGGREGATION GROUP: Permissive Aggregation Group or Required
Aggregation Group as the context shall require.
(b) ANNUAL RETIREMENT BENEFIT: A benefit payable annually in the form
of a single life annuity (with no ancillary benefits) beginning at a
Participant's Normal Retirement Date.
(c) COMPENSATION: Except as specifically provided elsewhere in
this Article, "compensation" as defined in Section 11.09(a)(2), subject to the
limitations described in Section 1.14(b).
(d) DETERMINATION DATE: For any Plan Year, the last day of the
immediately preceding Plan Year.
(e) EXTRA TOP-HEAVY GROUP: An Aggregation Group if, as of a
Determination Date, the aggregate present value of accrued benefits for Key
Employees in all plans in the Aggregation Group is more than ninety percent
(90%) of the aggregate present value of all accrued benefits for all Employees
in such plans.
(f) EXTRA TOP-HEAVY PLAN: See Section 17.03.
(g) FORMER KEY EMPLOYEE: A Non-Key Employee with respect to a
Plan Year who was a Key Employee in a prior Plan Year, and his Beneficiary in
the event of his death.
(h) KEY EMPLOYEE: An Employee or former Employee who, at any
time during the current Plan Year or any of the four preceding Plan Years, is
(1) an officer of a Controlled Group Member (as the term "officer" is limited
in Section 416(i)(1)(A) of the Code) having an annual Compensation, effective
as of January 1, 1987, greater than 50 percent of the amount in effect under
Section 415(b)(1)(A) of the Code for any such Plan Year, (2) one of the 10
Employees having annual Compensation from the Controlled Group of more than the
limitation in
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effect under Section 415(c)(1)(A) of the Code and owning (or considered as
owning within the meaning of Section 318 of the Code) the largest interests in
a Controlled Group Member, (3) a 5-percent owner (as such term is defined in
Section 416(i)(1)(B)(i) of the Code) of a Controlled Group Member, or (4) a
1-percent owner (as such term is defined in Section 416(i)(1)(B)(ii) of the
Code) of a Controlled Group Member having an annual Compensation from the
Controlled Group of more than $150,000. For purposes of paragraph (2) of this
Subsection, if two Employees have the same interest in a Controlled Group
Member, the Employee having greater annual Compensation therefrom shall be
treated as having a larger interest. The term "Key Employee" shall also
include such Employee's Beneficiary in the event of his death. For purposes of
this Subsection, "Compensation" has the meaning given such term by Section
414(q)(7) of the Code.
(i) NON-KEY EMPLOYEE: An Employee or former Employee who is not a Key
Employee, and his Beneficiary in the event of his death.
(j) PERMISSIVE AGGREGATION GROUP: The group of qualified plans of the
Controlled Group consisting of:
(1) the plans in the Required Aggregation Group; plus
(2) one or more plans designated from time to time by the Pension
Committee that are not part of the Required Aggregation Group but that
satisfy the requirements of Sections 401(a)(4) and 410 of the Code when
considered with the Required Aggregation Group.
(k) REQUIRED AGGREGATION GROUP: The group of qualified plans of
the Controlled Group consisting of,
(1) each plan in which a Key Employee participates; and
(2) each other plan which enables a plan in which a Key Employee
participates to meet the requirements of Section 401(a)(4) or 410 of
the Code.
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(l) TOP-HEAVY ACCRUED BENEFIT: A Participant's (including a
Participant who has received a total distribution from the Plan) or a
Beneficiary's Accrued Benefit under the Plan as of the valuation date
coinciding with or immediately preceding the Determination Date, provided,
however, that (1) such Accrued Benefit shall include the aggregate
distributions made to such Participant or Beneficiary during the five
consecutive Plan Years ending with the Plan Year that includes the
Determination Date (including distributions under a terminated plan which if it
had not been terminated would have been included in a Required Aggregation
Group) and (2) if an Employee or former Employee has not performed services for
any Employer maintaining the Plan at any time during the five-year period
ending on the Determination Date, any Accrued Benefit for such Employee or
former Employee (or the Accrued Benefit of his Beneficiary) shall not be taken
into account. Effective January 1, 1987, a Participant's Accrued Benefit
under this paragraph shall be determined (i) under the method which is used for
accrual purposes for all plans of the Employer, or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the lowest accrual
rate permitted under Section 411(b)(1)(C) of the Code.
(m) TOP-HEAVY GROUP: An Aggregation Group if, as of a Determination
Date, the aggregate present value of accrued benefits for Key Employees
in all plans in the Aggregation Group is more than sixty percent (60%) of
the aggregate present value of accrued benefits for all Employees in such
plans.
(n) TOP-HEAVY PLAN: See Section 17.02.
17.02 DETERMINATION OF TOP-HEAVY STATUS.
The Plan shall be a Top-Heavy Plan if, as of a Determination Date,
the Plan is not included in a Permissive Aggregation Group which is not a
Top-Heavy Group, and:
(a) the aggregate present value of Top-Heavy Accrued
Benefits for Key Employees is more than sixty percent (60%) of the
aggregate present value of Top-Heavy Accrued Benefits of
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all Employees, excluding for this purpose the aggregate Top-Heavy Accrued
Benefits of Former Key Employees; or
(b) the Plan is included in a Required Aggregation Group which is a
Top-Heavy Group.
17.03 DETERMINATION OF EXTRA TOP-HEAVY STATUS. The Plan shall be an Extra
Top-Heavy Plan if, as of the Determination Date, the Plan is not included in a
Permissive Aggregation Group which is not an Extra Top-Heavy Group, and:
(a) the aggregate present value of Top-Heavy Accrued Benefits
for Key Employees is more than ninety percent (90%) of the aggregate present
value of all Top-Heavy Accrued Benefits of all Employees, excluding for this
purpose the aggregate present value of Top-Heavy Accrued Benefits of Former Key
Employees; or
(b) the Plan is included in a Required Aggregation Group which is an
Extra Top-Heavy Group.
17.04 TOP-HEAVY PLAN REQUIREMENTS. Notwithstanding any other provisions of
the Plan to the contrary, if the Plan is a Top-Heavy Plan for any Plan Year,
the Plan shall then satisfy the following requirements for such Plan Year:
(a) MINIMUM VESTING REQUIREMENT. An Employee who has completed at
least two years of Vesting Service shall have a nonforfeitable right to a
percentage of his Accrued Benefit derived from Employer contributions
determined under the following table:
Years of Vesting Nonforfeitable
Service Percentage
------------------------------------------------
less than 2............... 0
2......................... 20
3......................... 40
4......................... 60
5......................... 100
(b) Minimum Benefit Requirement. Except as otherwise provided in
Subsection (d) of this Section, the Accrued Benefit derived from Employer
contributions of each Participant who
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is a Non-Key Employee, when expressed as an Annual Retirement Benefit, shall be
not less than the lesser of:
(1) two percent (2.0%) of the Participant's average Compensation for
years in the testing period times his years of Benefit Service; or
(2) twenty percent (20%) of the Participant's average Compensation for
years in the testing period.
For purposes of this Subsection, years of Benefit Service completed in a Plan
Year of the Prior Plan beginning before January 1, 1984 and years of Benefit
Service during which a Plan Year ended for which the Plan was not a Top-Heavy
Plan shall not be taken into account. The testing period under this
Subsection shall be the period of consecutive years (not exceeding five) during
which the Participant had the greatest aggregate Compensation from the
Controlled Group, provided that years shall not be included
(i) which are not included in years of Benefit Service under this
Subsection;
(ii) which end in a Plan Year of the Prior Plan beginning before
January 1, 1984; and
(iii) which begin after the close of the last year in which the Plan
was a Top-Heavy Plan or an Extra Top-Heavy Plan.
(c) ADJUSTMENT TO MAXIMUM BENEFITS AND ALLOCATIONS. If the Plan is a
Top-Heavy Plan for any Plan Year, and if the Controlled Group maintains a
defined contribution plan which could or does provide benefits to Participants
in this Plan:
(1) If the Plan is not an Extra Top-Heavy Plan (but is a Top-Heavy
Plan), then "three percent (3%)" shall be substituted for "two percent (2%)"
in paragraph (1) of Subsection (b) of this Section and "20 percent" in
paragraph (2) of Subsection (b) of this Section shall be increased by one
percentage point for each year for which such Plan was taken into account
under this Subsection.
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(2) If the Plan is an Extra Top-Heavy Plan, then the limitation of
Section 11.10 shall be calculated by substituting "1.0" for "1.25" each
place such "1.25" figure appears therein.
17.05 COORDINATION WITH OTHER PLANS. (a) In applying this Article, an
Employer and all Controlled Group Members shall be treated as a single
employer, and the qualified plans maintained by such single employer shall be
taken into account.
(b) In the event that another defined contribution plan or defined benefit
plan maintained by the Controlled Group provides contributions or benefits on
behalf of Participants in this Plan, such other plan shall be taken into
account in determining whether this Plan satisfies Section 17.04, and the
minimum benefit required for a Non-Key Employee in this Plan under
Section 17.04(b) will be eliminated if the Controlled Group maintains another
qualified plan under which such minimums are required to be provided.
17.06 CONSTRUCTION. The term "present value of accrued benefits" as used
in this Article shall in all appropriate cases include account balances of
affected Employees.
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Dated as of January 1, 1989, but actually executed on this 14th day of
December, 1993.
NACCO INDUSTRIES, INC.
By /S/ Charles A. Bittenbender
-------------------------------
Title: Vice President
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EXHIBIT A
BASIS FOR DETERMINING ACTUARIAL EQUIVALENCE
1. Interest rate: 8%
2. Mortality rates:
Age Rate Age Rate
------------------------- -------------------------
16 0.000448 54 0.007193
17 0.000460 55 0.007882
18 0.000473 56 0.008558
19 0.000487 57 0.009261
20 0.000502 58 0.010020
21 0.000520 59 0.010922
22 0.000540 60 0.011943
23 0.000560 61 0.013055
24 0.000583 62 0.014224
25 0.000609 63 0.015479
26 0.000638 64 0.016979
27 0.000669 65 0.018759
28 0.000704 66 0.020910
29 0.000742 67 0.023328
30 0.000785 68 0.025942
31 0.000832 69 0.028746
32 0.000883 70 0.031946
33 0.000941 71 0.035399
34 0.001004 72 0.038901
35 0.001074 73 0.042364
36 0.001150 74 0.045938
37 0.001234 75 0.049823
38 0.001328 76 0.054344
39 0.001432 77 0.059738
40 0.001547 78 0.065725
41 0.001688 79 0.071994
42 0.001874 80 0.078765
43 0.002101 81 0.085828
44 0.002369 82 0.093242
45 0.002673 83 0.101204
46 0.003014 84 0.109522
47 0.003395 85 0.118078
48 0.003820 86 0.126967
49 0.004287 87 0.136064
50 0.004794 88 0.145500
51 0.005339 89 0.155369
52 0.005921 90 0.165680
53 0.006540 91 0.176256
92 0.187006 105 0.467925
93 0.198616 106 0.518910
94 0.212105 107 0.580985
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2
Age Rate Age Rate
------------------------- -------------------------
95 0.226631 108 0.653535
96 0.241705 109 0.740757
97 0.257915 110 0.867089
98 0.275371 111 0.879256
99 0.294220 112 0.894333
100 0.315161 113 0.912921
101 0.338074 114 0.934796
102 0.362977 115 0.961170
103 0.391756 116 1.000000
104 0.426170
3. Notwithstanding the foregoing, the reduction factors for the
Pre-Retirement Spouse Pension shall be based on the Participant's age
while covered as follows:
Age Reduction
--- ---------
Up to age 45 .1% per year covered
45 up to 55 .3% per year covered
55 up to 65 .5% per year covered
83
EXHIBIT B
HIGHLY COMPENSATED EMPLOYEES WHO ARE
INELIGIBLE TO PARTICIPATE IN THE PLAN
Ward Smith (effective December 31, 1987)
Alfred M. Rankin, Jr. (effective March 1, 1989)