LIBERTY FINANCIAL COMPANIES, INC.
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PENSION PLAN
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Amended and Restated
Effective January 1, 1999
Exec. Ver.
TABLE OF CONTENTS
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PREAMBLE ----
ARTICLE I DEFINITIONS
1.1 "Accrued Benefit" 1
1.2 "Active Participant" 1
1.3 "Actuarial Equivalent" 1
1.4 "Actuary" 2
1.5 "Affiliated Employer" 2
1.6 "Annuity Starting Date" 2
1.7 "Authorized Leave of Absence" 2
1.8 "Average Earnings" 3
1.9 "Beneficiary" 3
1.10 "Board" 3
1.11 "Covered Compensation" 3
1.12 "Code" 4
1.13 "Contingent Annuitant" 4
1.14 "Credited Service" or "Years of Credited Service" 4
1.15 "Early Retirement Date" 4
1.16 "Earnings" or "Annual Earnings" 4
1.17 "Effective Date" 6
1.18 "Eligible Employee" 6
1.19 "Employee" 6
1.20 "Employer" 6
1.21 "Employment Date" 7
1.22 "Fiduciary" 7
1.23 "Fund", "Trust" or "Trust Fund" 7
1.24 "Hour of Service" 7
1.25 "Normal Form" 9
1.26 "Normal Retirement Age" 9
1.27 "Normal Retirement Date" 9
1.28 "One Year Break in Service" 9
1.29 "Parental Absence" 9
1.30 "Participant" 9
1.31 "Participating Employer" 10
1.32 "Plan" 10
1.33 "Plan Administrator" 10
1.34 "Plan Year" 10
1.35 "Postponed Retirement Date" 10
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Pension Plan
Exec. Ver.
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1.36 "Prior Plan" 10
1.37 "Reemployment Date" 10
1.38 "Retired Participant" 10
1.39 "Retirement Benefit" 11
1.40 "Service Termination Date" 11
1.41 "Spouse" 12
1.42 "Trust Agreement" 12
1.43 "Trustee" 12
1.44 "Vested Inactive Participant" 12
1.45 "Years of Service" 12
ARTICLE II PARTICIPATION AND SERVICE
2.1 Participation Requirements 13
2.2 Years of Service 13
2.3 Years of Credited Service 15
2.4 Reemployment Before Benefits Commence 16
2.5 Postponed Retirement or Reemployment After
Benefits Commence 17
2.6 Suspension of Benefits 19
2.7 Transfers 21
ARTICLE III NORMAL RETIREMENT BENEFIT
3.1 Normal Retirement Benefit 22
3.2 Minimum Accrued Benefit 23
3.3 Maximum Benefit 25
3.4 Continuing Employment 29
3.5 Accrued Benefit Upon Reemployment After
Annuity Starting Date 29
3.6 Accrued Benefit Upon Reemployment Before
Annuity Starting Date 31
ARTICLE IV EARLY RETIREMENT DATE AND EARLY RETIREMENT BENEFIT
4.1 Early Retirement Date 32
4.2 Early Retirement Benefit 32
4.3 Minimum Benefit 33
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Exec. Ver.
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ARTICLE V POSTPONED RETIREMENT DATE AND
POSTPONED RETIREMENT BENEFIT
5.1 Postponed Retirement Date 34
5.2 Postponed Retirement Benefit 34
5.3 Death Prior to Postponed Retirement Date 36
ARTICLE VI TERMINATION OF EMPLOYMENT
6.1 Non-Vested Termination 37
6.2 Vested Termination 37
6.3 Early Payment 38
ARTICLE VII DEATH AND DISABILITY BENEFITS
7.1 Pre-Retirement Surviving Spouse Benefit
For Death Occurring On or After Early
Retirement Eligibility 39
7.2 Pre-Retirement Surviving Spouse Benefit
For Death Occurring Before Early
Retirement Eligibility 39
7.3 Death Benefits After Retirement
Benefits Commenced 40
7.4 Disability 41
7.5 Continued Benefit Accruals 42
7.6 Payment of Disability Pension 42
7.7 Form of Payment for Disability Pension 43
7.8 Cessation of Disability Pension 43
ARTICLE VIII PAYMENT OF RETIREMENT BENEFITS
8.1 Automatic Payment Forms 44
8.2 Election of Optional Forms 44
8.3 Joint and Survivor Option 45
8.4 Life Annuity Option 46
8.5 Life Annuity With Guaranteed Payment
Period Option 46
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Exec. Ver.
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8.6 General Provisions 46
8.7 Small Benefit Cash-Out Provision 49
8.8 Missing Persons 49
8.9 Restrictions on Distributions 50
8.10 Direct Rollovers 51
ARTICLE IX PLAN ADMINISTRATION
9.1 Responsibility for Plan and Trust
Administration 53
9.2 Retirement Plan Administrator 53
9.3 Agents of the Plan Administrator 53
9.4 Plan Administrator Procedures 53
9.5 Administrative Powers of the Plan Administrator 54
9.6 Benefit Claims Procedures 54
9.7 Reliance on Reports and Certificates 55
9.8 Other Plan Administrator Powers and Duties 56
9.9 Compensation of Plan Administrator 57
9.10 Plan Administrator's Own Participation 57
9.11 Liability of Plan Administrator 57
9.14 Indemnification 57
ARTICLE X FUNDING AND CONTRIBUTIONS
10.1 Establishment of Fund 58
10.2 Contribution to the Fund; Plan Expenses 58
10.3 Contributions Conditional 59
10.4 Employee Contributions 59
ARTICLE XI FIDUCIARY RESPONSIBILITIES
11.1 Basic Responsibilities 60
11.2 Actions of Fiduciaries 60
11.3 Fiduciary Liability 61
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Exec. Ver.
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ARTICLE XII AMENDMENT AND TERMINATION
12.1 Right to Amend or Terminate 62
12.2 Partial Termination 62
12.3 Vesting and Distribution of Funds Upon
Termination 62
12.4 Determination of Funds Upon Termination 64
12.5 Restriction on Benefits 65
12.6 Right to Accrued Benefits 65
ARTICLE XIII TOP-HEAVY PLAN PROVISIONS
13.1 General Rule 66
13.2 Vesting Provisions 66
13.3 Minimum Benefit Provisions 66
13.4 Limitation on Benefits 67
13.5 Top-heavy Plan Definition 67
13.6 Key Employee 71
13.7 Non-Key Employee 71
ARTICLE XIV GENERAL PROVISIONS
14.1 Plan Voluntary 72
14.2 Payments to Minors and Incompetents 72
14.3 Non-Alienation of Benefits 73
14.4 Use of Masculine and Feminine; Singular and
Plural 75
14.5 Merger, Consolidation or Transfer 75
14.6 Leased Employees 75
14.7 Governing Law 76
14.8 Severability 76
14.9 Captions 76
APPENDIX A GRANDFATHERING FOR KEYPORT LIFE
INSURANCE COMPANY
A.1 Definitions 79
A.2 Eligibility 81
A.3 Normal Retirement Benefit 82
A.4 Early Retirement Date and Early Retirement
Benefit 84
(v)
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Exec. Ver.
(vi)
Pension Plan
Exec. Ver.
PREAMBLE
Effective December 13, 1988, Keystone Provident Life Insurance Company
established a defined benefit retirement plan referred to as the Retirement Plan
for Employees of Keystone Provident Life Insurance Company (the "Prior Plan").
In 1990, Keystone Provident Life Insurance Company changed its name to Keyport
Life Insurance Company. Employees of Keyport Life Insurance Company continued to
participate in the Prior Plan. Effective July 1, 1992, Liberty Financial
Companies, Inc. (the "Employer") changed the name of the Prior Plan to the
Liberty Financial Companies, Inc. Pension Plan (the "Plan") and amended and
restated the Plan. In addition to changes in the Plan reflecting a new formula
and compliance with requirements of the Tax Reform Act of 1986, the restated
Plan extended participation to certain subsidiaries and affiliates of Liberty
Financial Companies, Inc. in addition to Keyport Life Insurance Company.
Grandfathering provisions for certain employees of Keyport Life Insurance
Company were included in the restated Plan. For employees of Keyport Life
Insurance Company who participated in the Prior Plan, an additional benefit
equal to 25% of such employee's accrued benefit under the Prior Plan as of June
30, 1992 is included as part of their Accrued Benefit hereunder. Such additional
benefit as described in Section 3.1(d) represents the Actuarial Equivalent
present value of the automatic cost-of-living adjustment provided under the
Prior Plan.
The Plan was amended and restated effective January 1, 1989 and thereafter to
comply with theTax Reform Act of 1986 and certain other IRS requirements. The
Plan is again being amended effective January 1, 1999 to incorporate all
previous amendments, to comply with recent legislation and IRS requirements, and
to improve certain aspects of Plan administration.
(vii)
Pension Plan
Exec. Ver.
It is intended that the Plan, as amended and restated herein, will continue to
meet the requirements for qualification under Section 401(a) of the Internal
Revenue Code of 1986 (the "Code") as amended from time to time and that the
Trust shall continue to be exempt from taxation as provided under Code Section
501(a). As such, the Plan contains provisions required by the Tax Reform Act of
1986, and subsequent legislation and regulations affecting pension plan
qualification requirements under Code Section 401(a). The Plan is intended to
provide Eligible Employees with periodic income after retirement in addition to
benefits under the Social Security Act. A Trust Agreement (the "Trust") has been
adopted by the Employer and forms a part of this Plan..
Except as otherwise specifically and expressly provided herein:
(a) the provisions of this Plan shall apply only to individuals who are
Eligible Employees afterDecember 31, 1998;
(b) a former Employee's eligibility for and amount of benefits, if any,
payable to or on behalf of such former Employee, shall be determined in
accordance with the provisions of the Plan in effect when his employment
terminated. The benefit payable to or on behalf of a Participant
included under the Plan in accordance with the following provisions
shall not be affected by the terms of any amendment to the Plan adopted
after such Participant's employment terminates, unless the amendment
expressly provides otherwise.
(viii)
Pension Plan
Exec. Ver.
ARTICLE I
DEFINITIONS
The following words and phrases when used in the Plan shall have the meanings
indicated in this Article I unless a different meaning is plainly required by
the context:
1.1 "Accrued Benefit" shall mean the amount of monthly Retirement Benefit
determined under Article III payable in the Normal Form beginning at a
Participant's Normal Retirement Date or, if applicable, beginning on his
Postponed Retirement Date and determined in accordance with Article V.
The Accrued Benefit shall not be less than the minimum accrued benefit
determined under Section 3.2 and shall not be greater than the maximum
benefit determined under Section 3.3.
1.2 "Active Participant" shall mean an Eligible Employee who has become
covered under the Plan under Section 2.1(a) or (b). This term includes
any disabled Participant who has deferred receipt
of his Retirement Benefit under Section 7.5.
1.3 "Actuarial Equivalent" shall mean a benefit of equivalent value to
another benefit, determined on the following bases:
(a) the applicable mortality table and applicable interest rate, as
of January preceding the payment, specified under Code Section
417(e)(3);
(b) for all other purposes:
(i) Mortality: 1983 Group Annuity Mortality Table (male)
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Exec. Ver.
(ii) Interest: 8.5% annual
1.4 "Actuary" shall mean an actuary who meets the standards and
qualifications established by the Joint Board for the Enrollment of
Actuaries, or an actuarial firm that employs such individuals,
as selected by the Plan Administrator from time to time.
1.5 "Affiliated Employer" shall mean any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b))
which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section
414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Code Section 414(m)) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to
regulations under Code Section 414(o).
1.6 "Annuity Starting Date" shall mean:
(a) the first day of the first period for which a benefit is payable
to the Participant under the Plan as an annuity, (or to the Spouse
in the case of death before Retirement Benefits commence), or
(b) in the case of a benefit not payable in the form of an annuity,
the first day on which all events have occurred which entitle the
Participant (or Spouse) to such benefit.
1.7 "Authorized Leave of Absence" shall mean any absence authorized by an
Employer under the Employer's standard personnel practices, provided
that all persons under similar circumstances are treated alike in the
granting of such Authorized Leave of Absence, and provided further that
the Participant returns or retires within the period specified in the
Authorized Leave of Absence. An absence due to service in the Armed
Forces of the United States shall be considered an Authorized Leave of
Absence provided that the Employee complies with all of the requirements
of federal law in order to be entitled to
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Pension Plan
Exec. Ver.
reemployment and provided further that the Employee returns to
employment with the Employer or an Affiliated Employer within the period
provided by such law.
1.8 "Average Earnings" shall mean, on any date of determination, the average
of a Participant's Annual Earnings for the 60 consecutive months
included in the 120-month period ending on the date of determination for
which his aggregate Earnings were the highest. In the case of a
Participant who has not received Earnings for 60 consecutive months in
the aforementioned 120-month period, Average Earnings means the average
of his Annual Earnings during the consecutive calendar quarters in such
period in which he received Earnings.
1.9 "Beneficiary" shall mean the individual designated by a Participant to
receive payments upon the death of the Participant under one of the
options elected under Section 8.3 or Section 8.5. If a Participant is
married on the Annuity Starting Date, the election of an option under
Sections 8.3, 8.4 or 8.5 and the naming of any Beneficiary shall be
invalid unless a waiver meeting the requirements of Section 8.6(e) has
been made. Death benefits which become payable under Article VII before
Retirement Benefits are paid may only be paid to a Participant's Spouse.
1.10 "Board" shall mean the Board of Directors of the Employer.
1.11 "Covered Compensation" shall mean the average of the "taxable wage
bases", without indexing, for the thirty-five (35) calendar years ending
with the Plan Year in which a Participant attains Social Security
Retirement Age as defined in Section 3.3. "Taxable wage base" means,
with respect to any year, the maximum amount of earnings which may be
considered wages for such year under Code Section 3121(x)(1). For an
individual who terminates employment prior to Social Security Normal
Retirement Age, the taxable wage bases for years until such age shall be
deemed to be equal to the taxable wage base in effect on the date the
individual is no longer an Eligible Employee and the
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Pension Plan
Exec. Ver.
provisions of the Social Security Act on such date alone shall govern
the calculation of the Covered Compensation.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any regulations issued thereunder. Reference to any
Code Section shall include any successor provision thereto.
1.13 "Contingent Annuitant" shall mean the person designated by the
Participant to receive lifetime monthly benefit payments in the event of
the Participant's death after Retirement Benefits have started as
provided under the joint and survivor payment forms in Section 8.3. If
the Participant is married on the date Retirement Benefits are to
commence, the Contingent Annuitant is his Spouse, unless a waiver
meeting the requirements of Section 8.6(c) provides for the designation
of a Contingent Annuitant who is not the Spouse.
1.14 "Credited Service" or "Years of Credited Service" shall mean the
Participant's period of service determined in accordance with Article
II. In the case of a former Eligible Employee who was transferred or
deemed to have transferred to IFMG on or prior to April 1, 1997,
Credited Service shall be granted for employment through March 31, 1997,
even if a portion of such Credited Service would not otherwise be
considered Credited Service because IMFG is not a Participating
Employer.
1.15 "Early Retirement Date" shall mean the date on which a Participant
becomes eligible to retire with an early retirement benefit under the
Plan, as determined in accordance with Article IV.
1.16 "Earnings" or "Annual Earnings" shall mean, subject to the transfer
provisions of Section 2.7, with respect to any 12-month period, the
total Monthly Earnings paid to the Employee by the Employer or an
Affiliated Employer for that 12-month period. "Monthly Earnings" shall
mean, for any month, the amount of base salary paid, plus any pre-tax
contributions made at the Participant's election to a qualified cash or
deferred
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Exec. Ver.
arrangement as defined in Code Section 401(k) or a cafeteria plan as
defined in Code Section 125 sponsored by the Employer, plus sales
commissions paid, but not more than $100,000 of commissions in a
calendar year ($150,000 of commissions for employees of Keyport Life
Insurance Company), plus overtime pay, sick pay, pay for vacations and
holidays, salary continuation payments, whether made under plans of the
Employer or plans mandated by a State or Commonwealth, plus bonuses paid
under the Management Incentive Program.
The bonuses paid under the Management Incentive Program shall be
included in Monthly Earnings in the month paid.
Earnings shall not include reimbursed education expenses, relocation
expenses, car allowances, employment referral awards, sales incentive
awards, long-term incentive awards or income imputed for federal income
tax purposes due to life insurance in excess of $50,000, loans or any
other income required to be imputed for federal income tax purposes for
non-cash benefits provided by the Employer.
Earnings shall not include any standstill bonuses paid to employees of
Keyport Life Insurance Company in 1988 or 1989.
Earnings shall not include any amount deferred or paid under the Liberty
Financial Companies, Inc. Supplemental Savings Plan, the Keyport Life
Insurance Company Non-Qualified Deferred Compensation Plan, the Liberty
Financial Companies, Inc. Voluntary Non-Qualified Deferred Compensation
Plan, or any other non-qualified deferred compensation plan which a
Participating Employer may adopt.
Annual Earnings for a Plan Year shall not include any amount in excess
of the limit prescribed under Code Section 401(a)(17) ($160,000 for
1999) adjusted for cost-of-living as permitted under such Code Section
and regulations thereunder.
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Pension Plan
Exec. Ver.
Earnings shall not include any compensation paid to an Employee prior to
the date he first becomes an Eligible Employee.
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Exec. Ver.
1.17 "Effective Date" shall mean January 1, 1989, or such other date as
required by the Tax Reform Act of 1986 (or subsequent legislation
or regulations); provided, however, that the Plan contains
voluntary amendments effective July 1, 1992 or such other date as
specified herein.
1.18 "Eligible Employee" shall mean an Employee who:
(a) is employed by a Participating Employer in an employment
classification designated by such Employer as eligible to
participate under the Plan;
(b) is not a "leased employee" as defined in Code Section
414(n)(2);
(c) is not covered by a collective-bargaining agreement, unless
such agreement specifically provides for eligibility herein;
and
(d) is not an Employee of the Chemical Investment Services
division of Liberty Securities Corporation; and
(e) is not a "highly compensated employee" (as defined in Code
Section 414(q)) who is an Employee of Copley Venture Capital,
Inc.
1.19 "Employee" shall mean a regular common-law employee of the
Employer or an Affiliated Employer. A shared employee, as
determined by the Plan Administrator, shall not be an Employee
under this Plan. A leased employee as described in Code Section
414(n)(2) shall be considered an Employee to the extent provided
under Section 14.6.
1.20 "Employer" shall mean Liberty Financial Companies, Inc. a
corporation organized and existing under the laws of the
Commonwealth of Massachusetts, or its successor or successors.
Prior to July 1, 1992, "Employer" meant Keyport Life Insurance
Company.
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Pension Plan
Exec. Ver.
1.21 "Employment Date" shall mean the first day on which an Employee is
credited with an Hour of Service.
1.22 "Fiduciary" shall mean any person who exercises any discretionary
authority or discretionary control respecting the management of
the Plan, assets held under the Plan, or disposition of Plan
assets; who renders investment advice for a fee or other
compensation, direct or indirect, with respect to assets held
under the Plan or has any authority or responsibility to do so; or
who has any discretionary authority or discretionary
responsibility in the administration of the Plan. Any person who
exercises authority or has responsibility of a fiduciary nature as
described above shall be considered a Fiduciary under the Plan.
1.23 "Fund", "Trust" or "Trust Fund" shall mean the cash and other
investments of the Plan, and income attributable thereto, held and
administered by the Trustee in accordance with the Trust
Agreement.
1.24 "Hour of Service" shall mean:
(a) Each hour for which an Employee is directly or indirectly paid
or entitled to payment by the Employer and any Affiliated
Employer for the performance of duties;
(b) Each hour for which an individual is directly or indirectly
paid or entitled to payment by the Employer and any Affiliated
Employer (including payments made or due from a trust fund or
insurer to which the Employer or Affiliated Employer
contributes or pays premiums) on account of a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to periods of
vacation, holidays, illness, incapacity, disability, layoff,
jury duty, military duty, or leave of absence, provided that:
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Pension Plan
Exec. Ver.
(i) No more than 501 Hours of Service shall be credited
under this paragraph (b) to an Employee on account of
any single continuous period during which the Employee
performs no duties; and
(ii) Hours of Service shall not be credited under this
paragraph (b) to an Employee for a payment which solely
reimburses the Employee for medically related expenses
incurred by the Employee or which is made or due under a
plan maintained solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws; and
(c) Each hour not already included under paragraph (a) or (b)
above for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or by
an Affiliated Employer, provided that crediting of Hours of
Service under this paragraph with respect to periods described
in paragraph (b) above shall be subject to the limitation
therein set forth.
The number of Hours of Service to be credited under paragraph (b)
or (c) above on account of a period during which an Employee
performs no duties, and the Plan Years to which Hours of Service
shall be credited under paragraphs (a), (b), or (c) above shall be
determined by the Plan Administrator in accordance with Sections
2530.200b-2(b) and (c) of the Regulations of the U.S. Department
of Labor.
To the extent not credited above, Hours of Service shall also be
credited based on the customary work week of the Employee for
periods of military duty (as required by applicable law),
Authorized Leave of Absence and periods during which the Employee
is receiving salary continuation payments under any salary
continuation plan of the Employer or any mandated salary
continuation plan of a State or Commonwealth.
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Pension Plan
Exec. Ver.
1.25 "Normal Form" shall mean a monthly annuity payable to a
Participant commencing on his designated Annuity Starting Date and
ending with the payment due for the month in which his death
occurs.
1.26 "Normal Retirement Age" shall mean the later of:
(a) the Participant's 65th birthday, and
(b) the fifth anniversary of the date the individual became an
active Participant.
1.27 "Normal Retirement Date" shall mean the first day of the month
coincident with or next following the Participant's Normal
Retirement Age.
1.28 "One Year Break in Service" shall mean each 12-consecutive-month
period commencing on an Employee's Service Termination Date (or
anniversary thereof) provided that during such 12-consecutive
month period the individual fails to complete one Hour of Service.
1.29 "Parental Absence" shall mean an Employee's absence from work
which has commenced for any of the following reasons:
(a) the pregnancy of the Employee;
(b) the birth of the Employee's child;
(c) the adoption of a child by the Employee; or
(d) the need to care for the Employee's child immediately
following its birth or adoption.
1.30 "Participant" shall mean an Active Participant currently
participating in the Plan pursuant to Article II or a Vested
Inactive Participant.
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Exec. Ver.
1.31 "Participating Employer" shall mean Liberty Financial Companies,
Inc. and any Affiliated Employer (or a division of either) which
has adopted this Plan and which has been authorized by the Board
to participate in this Plan.
1.32 "Plan" shall mean the Liberty Financial Companies, Inc. Pension
Plan as set forth in this document and as it may be amended from
time to time. This Plan constitutes an amendment and restatement
of the Prior Plan.
1.33 Plan Administrator" shall mean the persons appointed pursuant to
Article IX to administer the plan.
1.34 "Plan Year" shall mean the calendar year for calendar years
beginning on or after January 1, 1993. The Plan Year which began
on December 13, 1991 shall end on December 12, 1992. There will be
a short Plan Year for the period December 13, 1992 to December 31,
1992.
1.35 "Postponed Retirement Date" shall mean the date after his Normal
Retirement Date on which a Participant elects to retire, as
determined in accordance with Article V.
1.36 "Prior Plan" shall mean the Plan, as in effectDecember 31, 1998.
The Prior Plan is amended and restated effective January 1, 1999
as the Plan, defined above.
1.37 "Reemployment Date" shall mean the day an Employee returns to work
and is credited with an Hour of Service following a Service
Termination Date or an Authorized Leave of Absence from the
Employer or an Affiliated Employer.
1.38 "Retired Participant" shall mean a former Employee who is
receiving a Retirement Benefit or a former Employee who has
received a lump sum Retirement Benefit pursuant to Section 8.7.
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Pension Plan
Exec. Ver.
1.39 "Retirement Benefit" shall mean either:
(a) a lump sum payment made pursuant to Section 8.7, or
(b) an annual pension paid in monthly installments.
1.40 "Service Termination Date" shall mean the earliest of the
following:
(a) the date on which the Employee resigns, is discharged, or
retires from employment with the Employer and all Affiliated
Employers;
(b) the date the Employee dies;
(c) except as provided below, the first anniversary of the date on
which the Employee is laid off, starts an Authorized Leave of
Absence, or is absent from work for any other reason other
than a Parental Absence on or after January 1, 1985; or
(d) effective January 1, 1985, the second anniversary of the date
on which the Employee commenced a Parental Absence, if such
Employee has not yet returned to work with the Employer or an
Affiliated Employer.
Notwithstanding subsection (c) above, an Employee who is on an
Authorized Leave of Absence due to military service in the armed
forces of the United States of America shall not incur a Service
Termination Date with respect to such military duty providing he
returns to employment with the Employer or an Affiliated Employer
within the time prescribed by law for reinstatement of employment
rights. Similarly, if an Authorized Leave of Absence is granted
for reasons other than military duty and the period of such
authorized leave is more than 12 months, a Service Termination
Date shall not occur if the Employee returns to work within the
time period specified in such Authorized Leave
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Pension Plan
Exec. Ver.
of Absence. If such individual does not return to employment with
the Employer or an Affiliated Employer within the time period
specified in the Authorized Leave of Absence, a Service
Termination Date shall occur on the first anniversary of the date
on which the Authorized Leave of Absence began.
1.41 "Spouse" shall mean the legal spouse to whom a Participant is
married on the Annuity Starting Date under applicable state law.
However, if the Participant should die before his Annuity Starting
Date, then the Spouse shall be the legal spouse to whom the
Participant was married on the Participant's date of death.
1.42 "Trust Agreement" shall mean the agreement or agreements governing
the investment of Plan assets as amended from time to time,
entered into between the Employer and the Trustee to carry out the
purpose of the Plan.
1.43 "Trustee" shall mean the trustee or trustees duly appointed by the
Board.
1.44 "Vested Inactive Participant" shall mean a former Active
Participant who is vested in a Plan benefit, is no longer an
Eligible Employee, and has not begun to receive a Retirement
Benefit.
1.45 "Years of Service" shall mean the period of an Employee's
employment with the Employer and all Affiliated Employers as
determined in accordance with Article II.
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Exec. Ver.
ARTICLE II
PARTICIPATION AND SERVICE
2.1 Participation Requirements.
(a) Each Eligible Employee on January 1, 1999 who was an Active
Participant under the Prior Plan onDecember 31, 1998, shall
continue to be an Active Participant onJanuary 1, 1999.
(b) On and after January 1, 1999 each Eligible Employee who has
completed one Year of Service and has attained age 21 shall
become an Active Participant on the January 1st or July 1st
coincident with or next following the date he meets such
requirements.
(c) A person who is not an Eligible Employee shall not be entitled
to participate in the Plan.
If an individual terminates employment and is later reemployed as
an Eligible Employee, subsequent participation in the Plan shall
be subject to the provisions of Section 2.4.
2.2 Years of Service. Years of Service shall determine an individual's
eligibility to participate in the Plan under Section 2.1 and a
Participant's vested right to retirement benefits accrued under
the Plan, except that upon reaching Normal Retirement Age as an
Employee, a Participant shall be fully vested in his Accrued
Benefit, irrespective of Years of Service. Subject to the One Year
Break in Service rule under subparagraph (c), Years of Service
shall be accumulated as follows:
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Pension Plan
Exec. Ver.
(a) (i) One Year of Service shall be credited to an Employee for
each 12-month period, whether or not consecutive,
between his Employment Date and his Service Termination
Date, except as provided under (b) below. In no event
shall an Employee receive duplicate service credit for
any single period of employment.
(ii) For periods not already counted in (a) above, a
fractional Year of Service calculated to three decimal
places shall be credited to an Employee for the period
of time (based on the number of days) between his
Employment Date and his Service Termination Date.
(b) The determination of Years of Service and fractional Years of
Service shall also include the following additional periods of
time:
(i) a period of absence between an Employee's Service
Termination Date and subsequent Reemployment Date
provided a One Year Break in Service does not occur
before the Reemployment Date;
(ii) a period of Authorized Leave of Absence before a Service
Termination Date is incurred;
(iii) the first 12-month period of a Parental Absence;
(iv) any period of absence because of service in the military
forces of the United States, provided the Employee
returns to work within 90 days after first becoming
eligible for discharge from active duty; and
(v) any single period of layoff not in excess of one year in
duration.
-15-
Pension Plan
Exec. Ver.
The determination of Years of Service and fractional Years of
Service shall not include a period of absence, if any, between
the first anniversary of the Parental Absence and the second
anniversary of the Parental Absence.
(c) If an Employee incurs a One Year Break in Service, his Years
of Service accumulated before such break shall be forfeited
unless:
(i) he was vested in Retirement Benefits under the Plan in
accordance with Article VI prior to the One Year Break
in Service or
(ii) the number of consecutive One Year Breaks in Service is
less than the greater of five or the number of his Years
of Service earned before such One Year Breaks in
Service.
(d) No Years of Service or fractional Years of Service shall be
credited for any period between a Service Termination Date and
a Reemployment Date except as provided in (b) above.
Employment with Liberty Mutual shall be counted as employment with
the Employer or an Affiliated Employer, but solely for the purpose
of meeting the participation and vesting requirements of the Plan.
2.3 Years of Credited Service. Credited Service is used in the
calculation of a Participant's Accrued Benefit under Section 3.1.
(a) Subject to the exclusions in Section 2.3(b) below, Years of
Credited Service are equal to Years of Service.
(b) Credited Service shall not include:
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Pension Plan
Exec. Ver.
(i) any period of time during which an individual is not
actively employed;
(ii) any period of time during which an Employee is not an
Eligible Employee;
(iii) any unpaid period of Parental Absence;
(iv) service before the Participant's 18th birthday;
(v) service prior to January 1, 1980 for Employees who were
employed at that time by Keyport Life Insurance Company;
(vi) service prior to July 17, 1985 for Employees who were
employed at that time by Liberty Investment Services,
Inc., Liberty Real Estate Group, Inc., Copley Venture
Capital, Liberty Financial Services, Inc., Liberty
Securities Corporation or Liberty Asset Management
Company; and
(vii) service prior to March 17, 1988 for Employees who were
employed at that time by the former Liberty PAMCO,
including LSC Insurance Agency of Ohio, Inc., NFS
Agency, Inc., and Liberty Securities Corporation
(PAMCO).
2.4 Reemployment Before Benefits Commence. Upon reemployment before an
Annuity Starting Date, the following rules shall apply:
(a) The individual's Years of Service shall be determined under
Section 2.2 and his Years of Credited Service shall be
determined under Section 2.3.
(b) If the Employee was not vested in his Accrued Benefit and he
has a One Year Break in Service, on his Reemployment Date he
shall be treated as a new
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Pension Plan
Exec. Ver.
Employee under the Plan. However, if the period of time
between his Service Termination Date and his Reemployment Date
is less than the greater of (i) his Years of Service prior to
the Service Termination Date and (ii) five years, his prior
Years of Service shall be counted and he shall become an
Active Participant on his Reemployment Date, if he is then an
Eligible Employee. If he is not an Eligible Employee, he shall
become an Active Participant on the date he meets the
requirements of Section 2.1.
(c) If the Employee was not vested in his Accrued Benefit but does
not have a One Year Break in Service, his prior Years of
Service, if any, shall be counted and he shall become an
Active Participant on his Reemployment Date, if otherwise
eligible as provided in Section 2.1. If he does not meet the
requirements of Section 2.1 on his Reemployment Date, he shall
become an Active Participant on the date he meets such
requirements.
(d) If the individual was a Vested Inactive Participant
immediately prior to his Reemployment Date, he shall become a
Participant on his Reemployment Date, if otherwise eligible as
provided in Section 2.1. If he does not meet the requirements
of Section 2.1 on his Reemployment Date, he shall become an
Active Participant on the date he meets such requirements.
(e) Upon reemployment, the Accrued Benefit of an individual
covered by this Section 2.4 is determined under Section 3.6.
2.5 Postponed Retirement or Reemployment After Benefits Commence. If
an Employee works beyond his Normal Retirement Date or if a
Retired Participant returns to work with a Participating Employer
after Retirement Benefits had become payable to him, the following
rules shall apply:
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Pension Plan
Exec. Ver.
(a) If he is a Retired Participant returning to work and he is an
Eligible Employee, he shall become an Active Participant on
his Reemployment Date; if he is an Active Participant
continuing to work he shall remain an Active Participant as
long as he is an Eligible Employee;
(b) (i) if he has attained Normal Retirement Age and his
Retirement Benefit was being paid, or had not yet
commenced because of continued employment, such benefit
shall be suspended upon proper notification, during any
calendar month in which he is scheduled to complete 40
or more Hours of Service.
Retirement Benefits shall resume (or commence) as
hereinafter provided if the Employee is thereafter
scheduled to complete less than 40 Hours of Service in
any calendar month;
(ii) if he has not attained Normal Retirement Age at the time
of his reemployment with a Participating Employer, all
Retirement Benefits shall automatically cease upon such
reemployment;
(c) He shall be eligible for additional Years of Service and
Credited Service as a result of his reemployment in accordance
with the provisions of the Plan;
(d) Any Retirement Benefit subsequently paid shall be reduced to
reflect the Actuarial Equivalent of the benefits previously
received before Normal Retirement Age as provided under
Section 3.5, but in the event that Section 2.5(b)(i) applies,
the reduction in any month shall not exceed 25% of the
Retirement Benefits payable to the Participant without regard
to the reduction, except as provided in Section 2530.203-3 of
the Code of Federal Regulations;
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Pension Plan
Exec. Ver.
(e) If he shall die during the period of subsequent or continuing
employment, death benefits, if any, shall be payable only in
accordance with the provisions of Article VII and shall be
reduced to reflect the Actuarial Equivalent of the Retirement
Benefits previously received but in no event shall the
reduction exceed 25% of the Retirement Benefits payable to the
Participant without regard to the reduction, except as
provided in Section 2530.203-3 of the Code of Federal
Regulations.
(f) If an Employee is covered by this Section 2.5, then his
Retirement Benefit prior to any adjustment under Sections
2.5(c), 3.5 or 5.2, shall be based on the greater of:
(i) his benefit determined under Section 3.1 hereof
considering all his Years of Credited Service; and
(ii) his benefit determined under the Plan in effect when
such One Year Break in Service commenced, considering
only his Years of Credited Service earned up to such
time.
2.6 Suspension of Benefits.
(a) During the first calendar month in which an Employee's
benefits are suspended pursuant to Section 2.5(b)(i), the Plan
Administrator shall deliver to the Employee, by personal
delivery or first class mail, a notice setting forth a
description of the specific reasons why benefit payments are
being suspended, a general description of the Plan provisions
relating to the suspension of benefits, a copy of the Plan
provisions relating to the suspension of benefits, the
statement that applicable Department of Labor Regulations may
be found in Section 2530.203-3 of the Code of Federal
Regulations, a description of the procedures set forth in the
Plan for obtaining a review of the suspension of benefits, and
a description of any notice procedure (including any forms
which must be filed by the Employee) as a prerequisite for the
Employee's obtaining the resumption or commencement of benefit
payments.
-20-
Pension Plan
Exec. Ver.
The notice shall also set forth the periods of employment
which gave rise to the offset, the suspendable amounts which
are subject to offset, and the manner in which the Plan
Administrator intends to offset the suspendable amounts. In no
event shall the amount of benefits offset by the Plan
Administrator in any month exceed 25% of the benefits to which
an Employee would have been entitled but for the offset.
(b) (i) If, during a calendar month, an Employee's Retirement
Benefits are no longer suspendable pursuant to Section
2.5(b)(i), such payments shall resume to the Employee no
later than the first day of the third calendar month
after such calendar month. The initial payment upon
resumption shall include the payment scheduled to occur
in the calendar month when payments resume, less any
offset for payments when benefits should have been
suspended.
(ii) If a Participant's Retirement Benefits were suspended
prior to Normal Retirement Age, pursuant to Section
2.5(b)(ii), Retirement Benefits to the Participant shall
resume after the Participant's subsequent retirement,
except as required under Section 8.6(b).
(c) In the event an Employee submits a written request to the Plan
Administrator for a review of the suspension of his benefits,
such request shall be deemed to be a request for a review of
the denial of a claim for benefits for purposes of the benefit
claims procedure set forth in Article IX.
In the event an Employee submits a written request to the Plan
Administrator for a determination whether specific
contemplated employment will result in the suspension of
benefits, the Plan Administrator shall, within 30 days of the
receipt
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Pension Plan
Exec. Ver.
of such request, notify the Employee in writing whether said
employment will result in suspension of benefits.
-22-
Pension Plan
Exec. Ver.
2.7 Transfers.
(a) Any individual who ceases to be an Eligible Employee by reason
of employment with an Affiliated Employer or a change in
employment classification, either prior to or subsequent to
commencement of his participation in this Plan, shall be
credited with Years of Service during such period of
employment pursuant to Sections 2.2 and 2.4 solely for
purposes of vesting and eligibility to receive benefits.
Credited Service for determining a Participant's Accrued
Benefit under Section 2.3 shall not be credited during such
period of employment. Credited Service shall only be earned
for periods during which the Employee is an Eligible Employee.
Such Participant shall be entitled only to benefits under the
provisions of the Plan as in effect while he is eligible to
participate in the Plan. Notwithstanding any other provisions
of the Plan to the contrary, Earnings shall include all
compensation, subject to the restrictions of Section 1.16,
paid by the Employer or an Affiliated Employer, whether or not
the individual is an Eligible Employee.
It is recognized that in the case of an Employee who is not an
Eligible Employee, it may be difficult or impracticable to
obtain Monthly Earnings information for periods of employment
when the Employee is not an Eligible Employee. In determining
Earnings for such period, the Plan Administrator may use
reasonable approximations to determine Monthly Earnings. For
example, in the discretion of the Plan Administrator,
annualized rates of earnings divided by 12 may be used to
determine the base Monthly Earnings paid to the Employee
rather than the Employee's actual compensation for one or more
months.
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Pension Plan
Exec. Ver.
ARTICLE III
NORMAL RETIREMENT BENEFIT
3.1 Normal Retirement Benefit. Subject to the minimum benefit
provisions under Section 3.2 and the maximum benefit limitations
under Section 3.3, the amount of monthly Retirement Benefit
payable to a Participant in the Normal Form beginning on his
Normal Retirement Date shall be equal to one-twelfth of the sum of
(a) plus (b) plus (c) plus (d) (if applicable), as follows:
(a) (i) 1.35% of the Participant's Average Earnings not
exceeding the Covered Compensation
multiplied by
(ii) his Years of Credited Service up to 25 such years.
(b) (i) 1.80% of the Participant's Average Earnings which exceed
the Covered Compensation
multiplied by
(ii) his Years of Credited Service up to 25 such years.
(c) (i) 2/3% of the Participant's Average Earnings
multiplied by
(ii) his Years of Credited Service in excess of 25 such
years, if any, up to 15 such excess years.
-24-
Pension Plan
Exec. Ver.
(d) 25% of the Participant's accrued benefit under the Prior
Plan determined as of June 30, 1992 under the terms of the
Prior Plan in effect on such date. This subsection (d)
shall only apply to Participants employed by Keyport Life
Insurance Company as of July 1, 1992.
The Participant's Retirement Benefit shall be paid pursuant to
Article VIII.
3.2 Minimum Accrued Benefit.
(a) (i) For a Participant who was a participant under the Prior
Plan and who is a "super highly compensated employee"
(an individual described under Code Section 414(q)(1)(A)
or (B)) for the Plan Year ending December 12, 1989, the
Accrued Benefit payable at Normal Retirement Date
hereunder shall not be less than:
(A) such Participant's accrued benefit on December 12,
1989 under the formula of the Prior Plan on such
date, plus
(B) the amount determined under Section 3.1(d) above;
(ii) For a Participant who was a participant under the Prior
Plan and who first becomes a "super highly compensated
employee" (an individual described under Code Section
414(q)(1)(A) or (B)) between the period December 13,
1989 and June 30, 1992 (both dates inclusive), the
Accrued Benefit payable at Normal Retirement Date
hereunder shall not be less than:
(A) such Participant's accrued benefit on the last day
of the Plan Year during which the Participant became
a "super highly compensated employee" under the
formula of the Prior Plan in effect on such date,
plus
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Pension Plan
Exec. Ver.
(B) the amount determined under Section 3.1(d) above.
(b) For any other individual who was a participant under the Prior
Plan after December 12, 1989, the Accrued Benefit payable at
Normal Retirement Date shall not be less than (A) such
individual's accrued benefit under the Prior Plan of such
participant determined as of June 30, 1992 under the formula
of the Prior Plan in effect on such date, plus (B) the amount
determined under Section 3.1(d) above.
(c) Notwithstanding any other provision of this Plan to the
contrary, the monthly Accrued Benefit payable at Normal
Retirement Date shall not be less than one-twelfth of the
Grandfathered Keyport Benefit, as defined in and determined
according to Appendix A of the Plan.
(d) Effective January 1, 1994, each "Section 401(a)(17)
Employee's" Accrued Benefit as of any determination date will
be the greater of (i) or (ii) below where:
(i) equals the Employee's Accrued Benefit calculated as of
such determination date using the Employee's total Years
of Credited Service, and
(ii) equals the sum of (A) plus (B) where:
(A) equals the Employees Accrued Benefit determined as
of December 31, 1993, frozen in accordance with
Treasury Regulation Section 1.401(a)(4)-13, and
(B) equals the Employee's Accrued Benefit calculated as
of such determination date using the Employee's
Years of Credited Service attributable solely to
Plan Years beginning on or after January 1, 1994.
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Pension Plan
Exec. Ver.
A "Section 401(a)(17) Employee" means an Employee
whose Accrued Benefit as of December 31, 1993 is
based on Compensation for a year beginning prior to
January 1, 1994 that exceeded $150,000.
3.3 Maximum Benefit. Effective January 1, 1987, notwithstanding any
other provision of the Plan to the contrary, a Participant's
annual retirement benefit under the Plan and any other defined
benefit pension plan of an Employer or an Affiliated Employer may
not exceed the lesser of (a) or (b) below, except as provided in
(c) below:
(a) The lesser of (i) or (ii) below, but subject to subparagraphs
(iii) through (x) below:
(i) 100% of his average compensation in the three
consecutive highest paid calendar years while a
Participant in the Plan.
(ii) $90,000 (as adjusted for increases in the cost of
living as provided in rules and regulations adopted by
the Secretary of the Treasury) hereinafter referred to
as the "Dollar Limitation".
(iii) In the case where a benefit is payable prior to the
Participant's Social Security Retirement Age (defined
in (x) below), the Dollar Limitation in subsection (ii)
above shall be adjusted so that it is the actuarial
equivalent of the Dollar Limitation, beginning at the
Participant's Social Security Retirement Age. For the
period between age 62 and the Participant's Social
Security Retirement Age, the actuarial equivalence
adjustment provided for in the preceding sentence shall
be made in such manner as the Secretary of the Treasury
may prescribe which is consistent with the reduction
for old-age insurance benefits commencing before the
Social Security Retirement Age under the Social
Security Act. For benefit commencing prior to age 62,
the Dollar Limitation shall be the actuarial
-27-
Pension Plan
Exec. Ver.
equivalent of the limitation for benefits commencing at
age 62 (as adjusted in accordance with the preceding
sentence). For purposes of determining actuarial
equivalence hereunder, the interest assumption shall
not be less than the greater of 5% per year or the
underlying rate used to determine the reduction of
benefits for early payment under the Early Retirement
provisions of Section 4.2.
(iv) In the case where a benefit commences after a
Participant has attained Social Security Retirement
Age, the Dollar Limitation shall be adjusted so that it
is the Actuarial Equivalent of the Dollar Limitation
beginning at the Social Security Retirement Age by
multiplying an adjustment factor as prescribed by the
Secretary of the Treasury. For purposes of determining
Actuarial Equivalence hereunder, the interest
assumption shall not be greater than the lesser of 5%
per year or the rate specified in Section 1.3.
(v) Unless subsection (vi) applies to a Participant, the
limits of subsections (i) and (ii) above shall be
deemed met if:
(A) the annual benefit payable to the Participant from
this Plan and all other qualified defined benefit
plans of the Employer does not exceed $10,000; and
(B) the individual has never participated in a qualified
defined contribution plan sponsored by the Employer
or an Affiliated Employer.
(vi) If a Participant has completed less than ten years of
participation in the Plan, the Participant's Accrued
Benefit shall not exceed the Dollar Limitation as
adjusted by multiplying such amount by a fraction, the
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Pension Plan
Exec. Ver.
numerator of which is the Participant's number of years
(or part thereof) of participation in the Plan, and the
denominator of which is ten.
(vii) If a Participant has completed less than ten Years of
Service, the limitations described in Code Sections
415(b) (1)(B) and 415(b)(4) shall be adjusted by
multiplying such amounts by a fraction, the numerator
of which is the Participant's number of Years of
Service (or part thereof), and the denominator of which
is ten.
(viii) In no event shall subsections (vi) and (vii) above
reduce the limitations provided under (i), (ii) and (v)
above to an amount less than one-tenth of the
applicable limitation.
(ix) Except in the case where a benefit is payable pursuant
to Section 8.1(a), if a benefit is payable in a benefit
form other than a life annuity, the amount otherwise
determined under this subparagraph (a) shall be the
actuarial equivalent of the amount payable as a life
annuity. For this purpose, the interest rate assumption
shall not be less than the greater of 5% or the rate
specified in Section 1.3 and the applicable mortality
table under Code Section 417(e).
(x) For purposes of this Section 3.3, Social Security
Retirement Age shall mean such age as defined in Code
Section 415(b)(8).
(b) In the case of a Participant who has participated in a defined
contribution plan maintained by an Employer or an Affiliated
Employer, the amount determined pursuant to subparagraph (a)
above shall be multiplied by 1.40 in the event (a)(i) applies
or by 1.25 in the event (a)(ii) applies and shall further be
multiplied by a fraction equal to one minus a fraction with a
numerator equal to (i) below and a denominator equal to (ii)
below:
-29-
Pension Plan
Exec. Ver.
(i) The sum of the annual additions made to the
Participant's account under all defined contribution
plans maintained by the Employer and its Affiliated
Employers, where the annual additions are equal to the
sum of (A) Employer contributions allocated to the
Employee's account, (B) any forfeitures allocated to the
Employee's account, (C) the portion of the Employee's
after-tax contributions made prior to January 1, 1987,
that represented the lesser of one-half of such
contributions or the amount of such contributions in
excess of 6% of his compensation, (D) all Employee
after-tax contributions made after December 31, 1986,
and (e) amounts described in Code Sections 415(l)(1) and
419(A)(d)(2).
(ii) The sum for each calendar year of the Participant's
employment with an Employer or an Affiliated Employer of
the lesser of (A) 1.4 multiplied by 25% of the
Participant's compensation for the calendar year, or (B)
1.25 multiplied by $30,000, as adjusted for increases in
the cost of living as provided under rules and
regulations adopted by the Secretary of the Treasury.
(c) The provisions of subsection (a) above shall not reduce a
Participant's benefit under the Plan to an amount which is
less than either
(i) the Participant's Accrued Benefit on December 31, 1982;
or
(ii) the Participant's Accrued Benefit on December 31, 1986.
For purposes of this subsection (c), the Participant's Accrued
Benefit on either of the foregoing dates shall be the Accrued
Benefit as restricted by the Code Section 415 limitations in
effect on each such respective date.
-30-
Pension Plan
Exec. Ver.
Similarly, the combined plan limits of subsection (b) above
shall be modified to protect the combined plan limits in
effect on December 31, 1982 and December 31, 1986
respectively, for those Participants whose combined plan
benefits were within the Code Section 415 limits on each such
respective date.
(d) If, in any limitation year, the benefit under this Plan
exceeds the lesser of (a) or (b) above, then appropriate
reductions shall first be applied to the Participant's Accrued
Benefit under this Plan in order to reduce such benefit to the
lesser of (a) or (b).
For the purpose of this Section 3.3, an Affiliated Employer
shall be determined by assuming the phrase "more than 50%" is
substituted for the phrase "at least 80%" wherever it appears
in Code Section 1563, as it may be amended from time to time
and limitation year shall mean Plan Year.
3.4 Continuing Employment. The retirement of any Participant under
this Article III shall not become effective while he is in the
employment of an Employer or an Affiliated Employer, except as
provided in Section 2.5. If an Employee continues to work for the
Employer or an Affiliated Employer beyond his Normal Retirement
Date, the provisions of Article V and Article VIII shall be
applicable.
3.5 Accrued Benefit Upon Reemployment After An Annuity Starting Date.
If a Retired Participant has a Reemployment Date after an Annuity
Starting Date, the following shall be applicable:
(a) if he is an Eligible Employee upon his reemployment and he had
previously received all or some of his Retirement Benefit and
such benefits are suspended pursuant to Section 2.5(b):
(i) his prior Years of Service and Credited Service shall
be restored;
-31-
Pension Plan
Exec. Ver.
(ii) his Accrued Benefit prior to his Reemployment Date
shall be restored; and
(iii) the Retirement Benefit payable after a subsequent
Service Termination Date shall be reduced by the
Actuarial Equivalent value of all Retirement Benefit(s)
previously distributed, provided however that the net
Retirement Benefit payable upon subsequent retirement
shall not be less than the Actuarial Equivalent value
of the Participant's prior Retirement Benefit.
For this purpose, the prior Retirement Benefit is the
benefit last being paid before its suspension. Its
Actuarial Equivalent value, however, is determined as
of the date Retirement Benefits recommence.
(b) if he is an Eligible Employee upon his reemployment and his
Retirement Benefits continue to be paid because he is working
less than 40 hours per month or because he is over age 70-1/2,
(i) the Retirement Benefit currently in pay status shall
continue to be paid;
(ii) his prior Years of Service and Credited Service shall
be restored;
(iii) as of the last day of each Plan Year during which
Retirement Benefits continue, an adjusted Accrued
Benefit shall be calculated for such Participant as
prescribed under Section 5.2(c). If there is a net
increase in the Participant's Accrued Benefit as
determined under Section 5.2(c), such additional
Accrued Benefit shall be converted to the "current form
of payment" and commence to be paid as soon as
practicable, provided such form of payment remains
"appropriate". The following conditions must be in
place for the "current form of payment" to remain
"appropriate":
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Pension Plan
Exec. Ver.
(A) the Annuity Starting Date applicable to the
"current form of payment" occurred on or after the
Participant's 65th birthday;
(B) all aspects of the Participant's marital status are
the same as when the "current form of payment"
commenced; and
(C) the Spouse, Beneficiary or Contingent Annuitant
under the "current form of payment" is not
deceased.
If one or more of the foregoing conditions is not
present, the net increase in the Accrued Benefit,
if any, will be treated as a separate benefit and
paid in accordance with Article VIII. For purposes
of this paragraph, "current form of payment" means
the form under which the most recent net increase
in the Participant's Accrued Benefit, if any, is
being paid. If there has been no net increase in
the Participant's Accrued Benefit, "current form of
payment" means the form of payment under which the
entire Retirement Benefit is currently being paid.
3.6 Accrued Benefit Upon Reemployment Before An Annuity Starting Date.
Upon the Reemployment Date of an individual who is either a Vested
Inactive Participant or a former Participant whose prior Credited
Service is restored under Section 2.3, his Accrued Benefit before
application of adjustments under Section 2.5 or 5.2 shall be the
greater of:
(a) his Accrued Benefit under the terms in effect on his
Reemployment Date considering all his Years of Credited
Service; and
(b) his Accrued Benefit under the terms of the Plan when his
employment last terminated considering only his Years of
Credited Service, Average Earnings and Covered Compensation at
such time.
-33-
Pension Plan
Exec. Ver.
If the individual's prior Credited Service is not restored
pursuant to Section 2.3, he shall have no Accrued Benefit as of
his Reemployment Date.
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Pension Plan
Exec. Ver.
ARTICLE IV
EARLY RETIREMENT DATE AND EARLY RETIREMENT BENEFIT
4.1 Early Retirement Date. A Participant may retire prior to his
Normal Retirement Date on the first day of any month coincident
with or next following the earlier of:
(a) his attainment of age 55 and his completion of ten or more
Years of Service; or
(b) his attainment of age 60 and his completion of five or more
Years of Service.
If a Participant intends to retire early under this Article
IV, he must file a written notice of his intent with the Plan
Administrator. The date of his retirement must be stated in
the notice.
The date on which a Participant retires under this Paragraph 4.1
shall be his Early Retirement Date.
4.2 Early Retirement Benefit. Subject to the minimum benefit
provisions of Sections 3.2 and 4.3 and the maximum benefit
limitations of Section 3.3, a Participant may elect to retire on
an Early Retirement Date and receive a Retirement Benefit. The
monthly amount of the Retirement Benefit payable in the Normal
Form shall be equal to his Accrued Benefit multiplied by a
percentage as set forth in the following schedule:
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Pension Plan
Exec. Ver.
Number of Years Early Retirement Date
Precedes Normal Retirement Date Percentage of Benefit
1 100%
2 100%
3 100%
4 97.5%
5 95%
6 90%
7 85%
8 80%
9 75%
10 70%
If the period between Early and Normal Retirement Dates is not a
whole number of years, the percentage to be applied shall be the
percentage for the next lower whole number of years decreased by a
proportionate part of the difference between that percentage and
the percentage for the next higher whole number of years.
A Participant retiring on an Early Retirement Date may elect the
form of payment of his Retirement Benefit in accordance with
Article VIII.
4.3 Minimum Benefit. In no event shall the early retirement income
payable under this Plan be less than the Accrued Benefit
determined under the provisions of the Plan immediately before the
adoption of this amended and restated Plan, adjusted to reflect
early receipt based on the early retirement reduction factors
specified in the Plan as of such date.
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Exec. Ver.
ARTICLE V
POSTPONED RETIREMENT DATE AND POSTPONED RETIREMENT BENEFIT
5.1 Postponed Retirement Date. The Postponed Retirement Date of a
Participant will be the day of his actual retirement after his
Normal Retirement Date.
5.2 Postponed Retirement Benefit.
(a) If a Participant attained age 70-1/2 prior to January 1, 1988
or if his Postponed Retirement Date occurs during or prior to
the calendar year in which he attained age 70-1/2, his Accrued
Benefit under Section 3.1 (subject to the minimum benefit
provisions of Section 3.2 and maximum benefit limitations of
Section 3.3) shall be determined and payable as of his
Postponed Retirement Date.
(b) If a Participant's Postponed Retirement Date has not occurred
by the end of the calendar year in which he attains age 70-1/2
and Retirement Benefits must commence pursuant to Section
8.6(b), then his Retirement Benefit shall be his Accrued
Benefit calculated pursuant to Article III as of the close of
the calendar year in which he attains age 70-1/2, adjusted, if
applicable, under Section 3.5(a) for previous benefit
payments. For subsequent required distributions, his Accrued
Benefit shall be recalculated at the end of each calendar year
thereafter until his actual Postponed Retirement Date or his
date of death. Recalculation of the Accrued Benefit is
described in the following subparagraph (c).
Once Retirement Benefits commence under this Section 5.2, a
Participant may not elect a different form of payment,
Beneficiary or Contingent Annuitant for any additional Accrued
Benefit which is calculated hereunder. If there is a net
increase in the Accrued Benefit hereunder and the Participant
dies before such increase has been added to the benefit in pay
status, such increase will be added to the benefit in pay
status once payments, if any, begin to the Spouse, Contingent
Annuitant or
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Exec. Ver.
Beneficiary under that form of payment. No Pre-Retirement
Survivor's benefit under Article VII shall be payable with
respect to such net increase.
(c) The recalculation of the Participant's Accrued Benefit under
Section 5.2(b) shall be performed as follows:
(i) a new Accrued Benefit shall be calculated using the
Participant's Average Earnings and Years of Credited
Service at the close of the calendar year;
(ii) the new Accrued Benefit as determined under (i) above
shall be adjusted, as applicable, under Section 3.5(a)
for any benefits received prior to the first required
distribution under this Section 5.2. Following such
adjustment, if any, the Accrued Benefit for the
calendar year shall be reduced by the Actuarial
Equivalent value of the sum of Retirement Benefits
received by the Participant between age 65 and the
close of such calendar year during months in which
Retirement Benefits could otherwise have been suspended
pursuant to Section 2.5(b), provided that the resulting
benefit shall not be less than the Actuarial Equivalent
value of the Accrued Benefit before it is recalculated
under (i) above;
(iii) if there is a net increase in the Participant's Accrued
Benefit, as determined under (ii) above, it shall be
converted to the form of payment in which the current
Retirement Benefit is being paid considering the
current age of the Participant and, if applicable, his
Spouse, Beneficiary or Contingent Annuitant. This
amount, if any, shall be added to the Retirement
Benefit already in pay status; no change of payment
form is permitted.
(d) Notwithstanding the foregoing, any adjustment to the
Participant's postponed Retirement Benefits due to the
mandatory commencement of benefits required
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Exec. Ver.
under Code Section 401(a)(9) shall be made in accordance with
regulations prescribed by the Secretary of the Treasury.
(e) Postponed Retirement Benefits hereunder shall commence to the
Participant upon the earlier of
(i) his Postponed Retirement Date, or
(ii) if required pursuant to Section 8.6(b), the April 1
following the calendar year in which he has attained
age 70-1/2.
The Participant's Postponed Retirement Benefit shall be paid
pursuant to Article VIII.
5.3 Death Prior to Postponed Retirement Date. If a Participant dies
after his Normal Retirement Date, but prior to retiring on his
Postponed Retirement Date, his Spouse, Contingent Annuitant or
Beneficiary shall be entitled to benefits under the Plan in
accordance with the applicable provisions of Sections 7.1 and 7.3.
Pursuant to such provisions, there may be separate and distinct
death benefits payable with respect to Retirement Benefits which
have already commenced and to those which have accrued, but have
not yet started to be paid.
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Pension Plan
Exec. Ver.
ARTICLE VI
TERMINATION OF EMPLOYMENT
6.1 Non-Vested Termination. Effective January 1, 1989, a Participant
whose employment is terminated with the Employer and all
Affiliated Employers prior to:
(a) his Normal Retirement Age,
(b) his completion of five Years of Service, and
(c) the complete or partial termination of the Plan with respect
to such Participant, shall have no vested interest in his
Accrued Benefit and shall not be entitled to receive a
Retirement Benefit from the Plan.
Upon the Service Termination Date of a Participant who has no
vested right to his Accrued Benefit, the entire value of his
vested benefit hereunder shall be deemed to be distributed to him.
In the event such Participant is credited with an Hour of Service
before incurring five consecutive One Year Breaks in Service
following his Service Termination Date, his vested benefit
previously deemed to be distributed to him hereunder will be
deemed repaid to the Plan.
6.2 Vested Termination. Effective January 1, 1989, a Participant shall
have a nonforfeitable right to his Accrued Benefit upon the
earliest of the following events:
(a) his Normal Retirement Age if he is then an Employee,
(b) his completion of five Years of Service, or
(c) the complete or partial termination of the Plan with respect
to such Participant.
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Exec. Ver.
A Vested Inactive Participant who is no longer an Employee shall
be entitled to receive a deferred Retirement Benefit commencing on
his Normal Retirement Date in an amount equal to his Accrued
Benefit. For purposes of determining such Accrued Benefit, only
the provisions of the Plan in effect at the time of the
Participant's Service Termination Date shall be considered. The
Participant's Retirement Benefit shall be paid pursuant to Article
VIII.
6.3 Early Payment. In lieu of the deferred Retirement Benefit
described in Section 6.2, a Vested Inactive Participant who has
completed at least 10 Years of Service and is no longer an
Employee may elect in writing to receive a reduced benefit
commencing on the first day of any month between his 55th birthday
and his Normal Retirement Date, and a Vested Inactive Participant
who has completed at least five Years of Service and is no longer
an Employee may elect in writing to receive a reduced benefit
commencing on the first day of any month between his 60th birthday
and his Normal Retirement Date. If the Vested Inactive Participant
elects to receive his Retirement Benefit before his Normal
Retirement Date, his Accrued Benefit shall be reduced by 5/12% for
each calendar month by which commencement of his Retirement
Benefit precedes his Normal Retirement Date.
The Vested Inactive Participant's Retirement Benefit shall be paid
pursuant to Article VIII.
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Exec. Ver.
ARTICLE VII
DEATH AND DISABILITY BENEFITS
7.1 Pre-Retirement Surviving Spouse Benefit For Death Occurring On or
After Early Retirement Eligibility. If a Participant who is
eligible to retire on an Early Retirement Date pursuant to Section
4.1 or is eligible to early payment of his Retirement Benefit
under Section 6.3 dies before his Annuity Starting Date, a monthly
Retirement Benefit shall be payable to his surviving Spouse. The
amount of the benefit is the amount that would have been payable
to the Spouse had the Participant retired on the date of his death
with an immediate benefit payable under the 50% Joint and Survivor
annuity form described in Article VIII with his Spouse as
Contingent Annuitant. If the Participant had not reached his
Normal Retirement Date, such benefit shall reflect the reduction
for early payment provided under Section 4.2(a) or Section 6.3,
whichever is applicable.
Unless Section 8.7 applies, such Spouse's benefit shall commence
on the first day of the month coincident with or next following
the Participant's date of death and continue for the surviving
Spouse's lifetime.
If the involuntary cash-out provisions of Section 8.7 apply, a
monthly death benefit which becomes due hereunder but which has
not yet commenced shall be paid in one lump sum amount to the
Spouse in lieu of all other benefits under the Plan.
If the Participant had no Spouse on the date of his death, no
benefits are payable hereunder.
7.2 Pre-Retirement Surviving Spouse Benefit For Death Occurring Before
Early Retirement Eligibility. If a Participant who has completed
five Years of Service dies before he is eligible for early
retirement under Section 4.1 or Section 6.3 and before his Annuity
Starting Date, a monthly Retirement Benefit shall be payable to
his surviving Spouse.
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Exec. Ver.
The amount of such benefit is the amount that would have been
payable to the Spouse as Contingent Annuitant had:
(a) the Participant terminated employment with the Employer and
all Affiliated Employers on the day before his death (or
actual termination date if earlier) and elected Retirement
Benefits to begin at Early Retirement Age, and
(b) his Accrued Benefit had been payable in the 50% Joint and
Survivor annuity form described in Article VIII with his
Spouse as Contingent Annuitant, entitled to receive 50% of the
amount of the Participant's Retirement Benefit subject to the
early payment reductions in Section 4.2(a), if the Participant
was an Employee on his date of death, or Section 6.3 if the
Participant was a Vested Inactive Participant on his date of
death.
Unless Section 8.7 applies, such Spouse's benefit shall be payable
commencing on the first day of the month coincident with or next
following the date the Participant would have been eligible to
elect early payment of benefits and continue for the surviving
Spouse's lifetime.
If the involuntary cash-out provisions of Section 8.7 are
operative, a monthly death benefit which becomes due hereunder but
which has not yet commenced shall be paid in one lump sum amount
to the Spouse in lieu of all other benefits.
If the Participant had no Spouse on the date of his death, no
benefits are payable hereunder.
7.3 Death Benefits After Retirement Benefits Have Commenced. If a
Participant dies at any time after Retirement Benefits have begun,
death benefits, if any, shall be payable as follows:
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Exec. Ver.
(a) if Retirement Benefits were being paid to the Participant
immediately before his death,
(i) no death benefit shall be payable to anyone unless the
form in which the Retirement Benefit was being paid
provided for a continuing payment. If the Retirement
Benefit form of payment provided for a continuing
payment, the death benefit shall be the amount payable
under such form of payment;
(ii) if there is a net increase in the Participant's Accrued
Benefit as determined under Section 5.2(c) and such net
increase has not begun to be paid to the Participant as
a Retirement Benefit upon the Participant's death, such
increase in the Participant's Accrued Benefit shall be
added to the benefit form in pay status when
determining the amount payable to any Spouse,
Beneficiary or Contingent Annuitant under such form of
payment. The pre-retirement death benefit provisions of
Section 7.1 shall not be effective.
(b) if Retirement Benefits had commenced, but were suspended
pursuant to Section 2.5(b), Sections 7.1 and 7.2 shall apply
with respect to the Participant's Accrued Benefit, as adjusted
under Section 3.5 and, if applicable, Section 5.2(c).
7.4 Disability. The following individuals shall be considered disabled
for purposes of this Plan:
(a) Active Participants under the Prior Plan on June 30, 1992 who
continue to be Active Participants on July 1, 1992 and were
considered disabled under the terms of the Prior Plan, and
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Exec. Ver.
(b) Eligible Employees who become Active Participants on or after
July 1, 1992, who are eligible to receive disability benefits
under the long-term disability plan of the Participating
Employer for which they work due to a disability which occurs
on or after July 1, 1992.
Such individual's rights to disability benefits are described in
the following Sections 7.5, 7.6, 7.7 and 7.8.
7.5 Continued Benefit Accruals. During the time a Participant is
receiving benefits under the long-term disability plan of a
Participating Employer, he shall continue to accrue Years of
Service and Years of Credited Service for any concurrent period
during which Retirement Benefits are not being paid hereunder. For
purposes of determining the Participant's Accrued Benefit, the
Participant's Earnings in the last full calendar year of
employment before disability was incurred shall be deemed to be
the Participant's Earnings for each year during which he remains
disabled and eligible for long-term disability plan payments.
Providing the Participant does not return to active employment
with the Employer or an Affiliated Employer, Retirement Benefits
hereunder will commence on the Participant's Normal Retirement
Date or, if later, the date benefits under the Participating
Employer's Long Term Disability Plan cease. A Participant may,
however, elect to commence Retirement Benefits prior to such date
as provided in Section 7.6. In no event may payments be deferred
beyond the required beginning date in Section 8.6(b).
7.6 Payment of Disability Pension. In lieu of continuing benefit
accruals as provided in Section 7.5, a Participant who continues
to be eligible to receive benefits under a Participating
Employer's Long-Term Disability Plan may elect to receive: (a) his
Retirement Benefit on or after his Normal Retirement Date; or (b)
a reduced Retirement
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Pension Plan
Exec. Ver.
Benefit prior to his Normal Retirement Date providing he meets the
requirements for early retirement under Section 4.1.
In the event the Participant elects to commence such Retirement
Benefit prior to his Normal Retirement Date, his Accrued Benefit,
including benefit accruals which continued under Paragraph 7.5
until the Participant's Annuity Starting Date shall be determined
in accordance with Section 4.2.
7.7 Form of Payment of Disability Pension. Any Retirement Benefit
payable because of a Participant's disability shall be paid in
accordance with the provisions of Article VIII.
7.8 Cessation of Disability Pension. Disability Retirement Benefits
shall continue hereunder until the earlier of
(a) The date the Participant recovers from his disability, which
shall be the date he is deemed to be recovered from disability
under the Participating Employer's long-term disability plan,
and
(b) the date of the Participant's death.
In the event that a Participant's disability payments terminate in
accordance with paragraph (a), he may be eligible for Retirement
Benefits under Articles III, IV, V or VI. Such Retirement Benefits
will be adjusted for the disability benefits previously received
in the manner prescribed under Section 3.5(a)(iii).
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Exec. Ver.
ARTICLE VIII
PAYMENT OF RETIREMENT BENEFITS
8.1 Automatic Payment Forms. Unless the involuntary cash-out
provisions of Section 8.7 apply, the automatic form of Retirement
Benefit shall be as described in this Section 8.1. A Participant
may, however, elect an optional form of Retirement Benefit in
accordance with Section 8.2.
(a) A Participant who has a Spouse on the Annuity Starting Date
shall receive a reduced retirement income which shall be the
Actuarial Equivalent of the Retirement Benefit payable in the
Normal Form as described in (b) below. Such Retirement Benefit
shall be payable monthly commencing on the first day of the
month coincident with or next following the date his
retirement occurs, and if he shall die prior to such Spouse,
continuing to the Spouse at 50% of the reduced amount and
ending with the payment due for the month in which the death
of the Spouse occurs.
(b) A Participant who does not have a Spouse on the Annuity
Starting Date shall receive the Retirement Benefit to which he
is entitled under the Plan, payable monthly commencing on the
first day of the month coincident with or next following the
date his retirement occurs and ending with the payment due for
the month in which his death occurs. Such form of benefit
shall be the Normal Form of payment.
8.2 Election of Optional Forms. Prior to an Annuity Starting Date, a
Participant may elect an optional form of payment for his
Retirement Benefit as may be available under Section 8.3, 8.4, or
8.5. Such election will not take effect unless the Participant's
Spouse consents to the election if required under Section 8.6(e).
The Plan Administrator shall provide an election form to each such
eligible Participant. Such form shall describe in plain
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Pension Plan
Exec. Ver.
language the terms and conditions of the normal form of payment
described in Section 8.1 and the optional forms of benefit and
shall provide for election of optional forms of benefit and a
benefit commencement date. The completed election form must be
returned to the Plan Administrator within the 90 day period ending
on the designated Annuity Starting Date. In addition, the form
will provide a description of the Participant's right to reinstate
coverage under the normal form of benefit described in Section 8.1
prior to his Annuity Starting Date by revoking an election of an
optional form of benefit. If a Participant files a subsequent
election form prior to the date benefits commence, the prior form
shall be of no effect. If no election has been made at the
expiration of the election period, Retirement Benefits will be
payable in accordance with Section 8.1. Election of optional forms
of benefits under the following Sections 8.3, 8.4, and 8.5 shall
be subject to the restrictions of Section 8.6. After an Annuity
Starting Date, no other option may be elected, changed or revoked,
except as provided in Section 3.5(b).
The Plan Administrator may, on a uniform and nondiscriminatory
basis, provide for such other election periods as comply with
regulations issued under Code Sections 401(a)(11) and 417. Subject
to the provisions of Section 8.6, the Plan Administrator shall
defer a Participant's Annuity Starting Date for a period of up to
90 days if the Plan Administrator determines that the deferral is
desirable in order to provide for an orderly election procedure or
if it is necessary to do so in order to comply with applicable
regulations.
8.3 Joint and Survivor Option. Subject to Section 8.6(c):
(a) A Participant may elect, by submitting an election form to the
Plan Administrator, to have his Retirement Benefit converted
to the Actuarial Equivalent of the Normal Form under Section
8.1(b) and paid monthly during his life with the provision
that after his death, 50% or 100% of such reduced Retirement
Benefit will be payable to his Contingent Annuitant during the
remaining life of such Contingent Annuitant.
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Exec. Ver.
(b) If a Participant elects the Joint and Survivor Option and his
Contingent Annuitant dies before such Participant's benefit
actually commences and the Participant does not change his
election in accordance with Section 8.2, his Retirement
Benefit shall be paid under the normal form under Section 8.1.
(c) If a Participant elects the Joint and Survivor Option and dies
before benefits commence to be paid to him, his Contingent
Annuitant will not be entitled to any rights or benefits under
the Plan, except as may be provided under Article VII.
(d) If a Participant elects the Joint and Survivor Option and his
Contingent Annuitant dies before the Participant, but after
the retirement of such Participant, such Participant will
continue to receive the reduced Retirement Benefit payable to
him in accordance with such option.
8.4 Life Annuity Option. Subject to Section 8.6(c), a Participant may
elect, by submitting an election form to the Plan Administrator,
to have his Retirement Benefit paid in the Normal Form under
Section 8.1(b). The Normal Form provides for monthly payments
during the Participant's life, ending with the payment due for the
month in which his death occurs.
8.5 Life Annuity With Guaranteed Payment Period Option. Subject to
Section 8.6(e), a Participant may elect, by submitting an election
form to the Plan Administrator, to have his Retirement Benefit
paid as a life annuity as described in Section 8.4, but guaranteed
for a period of 120 months, with the provision that if the
Participant dies before payment of the guaranteed installments,
payment of any remaining installments shall be paid to his
Beneficiary. Such form of payment shall be the Actuarial
Equivalent of the normal form of payment under Section 8.1(b).
8.6 General Provisions.
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Pension Plan
Exec. Ver.
(a) Anything in the foregoing to the contrary notwithstanding, no
method of distribution of Retirement Benefit may be made under
this Article which would violate the requirements of Code
Section 401(a)(9) and related regulations.
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Pension Plan
Exec. Ver.
(b) Effective January 1, 1999, and notwithstanding any other
provision of the Plan to the contrary, an Employee who attains
age 70 1/2 and who has not commenced receiving his benefit
hereunder shall commence receiving his benefit on the April 1
following the calendar year in which he attains age 70 1/2,
and any additional benefit he may accrue shall commence to be
paid no later than the April 1 following the calendar year in
which the benefit accrues. Any Employee who commenced
receiving distributions according to the corresponding rules
of the Plan as in effect prior to January 1, 1999 shall
continue to receive distributions pursuant to those rules.
In any event, distributions hereunder shall be made in
accordance with Code Section 401(a)(9), including the
incidental death benefit requirements of such Code Section,
and regulations thereunder, including Treasury Regulation
1.401(a)(9)-2. Such regulations and applicable rulings or
announcements, including any grandfather provisions or
provisions delaying the effective date of Code Section
401(a)(9), are hereby incorporated by reference. The
provisions of Code Section 401(a)(9) override any distribution
options under the Plan that are inconsistent with the
requirements of such Code Section.
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Pension Plan
Exec. Ver.
(c) Upon the death of a Participant any remaining interest he may
have in the Plan shall be distributed within the later of five
years after his death or after the death of his Beneficiary,
unless another form of payment was already in effect at the
time of his death, in which case benefits may be made in
accordance with such form of payment.
(d) If the Actuarial Equivalent value of any Plan benefit is in
excess of $5,000, such benefit may not be immediately
distributed prior to the Participant's Normal Retirement Date
unless the Participant consents in writing.
(e) If a married Participant elects to receive his Retirement
Benefit in any form other than the automatic form for married
individuals as described in Section 8.1(a) or under the Joint
and Survivor annuity form described in Section 8.3 with his
Spouse as the Contingent Annuitant, then such election shall
not take effect unless either:
(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 notary
public or
(ii) it is established to the satisfaction of the Plan
Administrator that the Participant has no Spouse, or
that the Spouse's consent cannot be obtained because
the Spouse cannot be located, or because of such other
circumstances as may be prescribed in regulations
issued pursuant to Code Section 417.
(f) It is the intent of the Plan that all benefits be paid
promptly when due. In the absence of any inability to
determine the amount of benefit payable or the eligibility for
a benefit due to the lack of adequate information with respect
to the
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Pension Plan
Exec. Ver.
Participant or Spouse, the first benefit shall be paid no
later than the 60th day after the close of the latest Plan
Year in which:
(i) the Participant attains age 65;
(ii) the Participant reaches the 10th anniversary of his
date of commencement of participation in the Plan, or
(iii) the Participant's Service Termination Date occurs.
8.7 Small Benefit Cash-Out Provision. In the event that benefits
become due or payable under the Plan because of the occurrence of
a Service Termination Date, such benefits shall be cashed out if
the Actuarial Equivalent present value of any such benefit is
$5,000 or less and the benefit has not yet commenced. A lump sum
payment of such Actuarial Equivalent present value shall be made
to the appropriate individual as soon as practicable following the
Participant's Service Termination Date, in lieu of all other
benefits hereunder.
Subject to the spousal consent requirements described in Section
8.6(e) in the event the Actuarial Equivalent present value of the
Participant's benefit is greater than $5,000 but less than
$10,000, the Participant may elect to receive a lump sum payment
of such Actuarial Equivalent Present Value as soon as practicable
following his Service Termination Date, in lieu of all other
benefits hereunder.
A Participant who terminates employment without a vested benefit
shall be deemed to have received a lump sum distribution of his
benefit under the rules of this Section 8.7 even though no actual
benefit payment is due or made.
8.8 Missing Persons. If the Plan Administrator shall be unable, within
five years after any amount becomes due and payable from the Plan
to a Participant, Retired Participant,
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Exec. Ver.
Contingent Annuitant, Spouse or Beneficiary, to make payment
because the identity or whereabouts of such person cannot be
ascertained, the Plan Administrator may mail a notice by
registered mail to the last known address of such person outlining
the action to be taken unless such person makes written reply to
the Plan Administrator within 60 days from the mailing of such
notice. The Plan Administrator may direct that such amount and all
further benefits with respect to such person shall be forfeited
and all liability for the payment thereof shall terminate.
However, in the event of the subsequent reappearance of the
Participant, Retired Participant, Spouse, Beneficiary or
Contingent Annuitant prior to termination of the Plan, the benefit
which was forfeited (but not any earnings attributable to such
forfeiture) shall be reinstated in full.
8.9 Restrictions on Distributions. This Section 8.9 shall apply to the
amount of Annual Benefits (defined below) under this Plan for any
Participant who is considered a Restricted Participant as defined
hereunder. Such Annual Benefits shall be limited to an amount
equal to the payments that would have been made on behalf of the
Restricted Participant under the life annuity form of payment
described in Section 8.4 that is the Actuarial Equivalent of the
Restricted Participant's Accrued Benefit under the Plan plus any
Social Security supplement which may be payable under the Plan.
For purposes of this Section 8.9, the term Restricted Participant
shall mean all highly compensated employees as defined in Code
Section 414(q) and highly compensated former employees. In any one
Plan Year, the total number of Participants whose benefits are
subject to restriction under this Section 8.9 shall be limited by
the Plan to a group of not less than 25 highly compensated
employees and highly compensated former employees with the
greatest Earnings.
For purposes of this Section 8.9, the term Annual Benefits shall
include Retirement Benefits provided by the Plan and any death
benefits not provided for by insurance on the Participant's life.
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Exec. Ver.
The limitations set forth in this Section 8.9 shall not restrict
the current payment of the full amount of Retirement Benefits
provided by the Plan if:
(a) after payment to a Restricted Participant of all of the Annual
Benefits described above, the value of Plan assets equals or
exceeds 110% of the value of current liabilities, as defined
in Code Section 412(l)(7), or
(b) the value of the Annual Benefits described above for a
Restricted Participant is less than 1% of the value of current
liabilities, as defined in Code Section 412(l)(7), or.
(c) the value of the Annual Benefits described above for a
Restricted Participant does not exceed $3,500 or such higher
amount described in Code Section 411(a)(11)(A).
8.10 Direct Rollovers. Effective January 1, 1993, notwithstanding any
provision of the Plan to the contrary, a "distributee" may elect,
at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an "eligible rollover
distribution" paid directly to an "eligible retirement plan"
specified by the distributee as a "direct rollover". The Plan
Administrator may require evidence that the Plan to which the
rollover is intended to be made is, in fact an "eligible
retirement plan". The Plan is not required to make wire transfers
nor to make direct rollovers to more than one eligible retirement
plan on behalf of a distributee.
The following definitions shall apply for purposes of this Section
8.10:
(a) an "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of
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Exec. Ver.
ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities);
(b) an "eligible retirement plan" is an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity;
(c) a "distributee" includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the
spouse or former spouse.
(d) a "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
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ARTICLE IX
PLAN ADMINISTRATION
9.1 Responsibility for Plan and Trust Administration. The Employer
shall have the sole authority to appoint and remove the Trustee,
the Plan Administrator and any investment manager which may be
provided for under the Trust, and to amend or terminate, in whole
or in part this Plan or the Trust. The Employer, through the Plan
Administrator, shall have the responsibility for the
administration of this Plan, which is specifically described in
this Plan and the related Trust Agreement. The Employer shall be
the "named fiduciary" for purposes of the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
9.2 Plan Administrator. The Plan shall be administered by the Employer
through a Plan Administrator, within the meaning of Section 3(16)A
of ERISA, appointed by and to serve at the pleasure of the Board
of Directors of the Employer. Any person or persons appointed as
the Plan Administrator may resign by delivering his written
resignation to the Board of Directors of the Employer.
9.3 Agents of the Plan Administrator. The Plan Administrator may
delegate specific responsibilities to other persons as the Plan
Administrator shall determine. The Plan Administrator may
authorize any agent to execute or deliver any instrument or to
make any payment in their behalf. The Plan Administrator may
employ and rely on the advice of counsel, accountants, and such
other persons as may be necessary in administering the Plan.
9.4 Plan Administrator Procedures. The Plan Administrator may adopt
such rules as it deems necessary, desirable, or appropriate. All
rules and decisions of the Plan Administrator shall be uniformly
and consistently applied to all Participants in similar
circumstances. When making a determination or calculation, the
Plan Administrator shall be entitled to
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rely upon information furnished by a Participant, Retired
Participant, Spouse, Contingent Annuitant, Beneficiary, the
Employer, the legal counsel of the Employer or the Trustee.
9.5 Administrative Powers of the Plan Administrator. The Plan
Administrator may from time to time establish rules for the
administration of the Plan. Except as otherwise herein expressly
provided, the Plan Administrator will have the exclusive right and
discretionary authority, to the fullest extent provided by law, to
interpret the Plan and decide any matters arising hereunder in the
administration and operation of the Plan, and any interpretations
or decisions so made will be conclusive and binding on all persons
having an interest in the Plan; provided, however, that all such
interpretations and decisions will be applied in a uniform and
nondiscriminatory manner to all Employees. The Plan Administrator
shall have no right to modify any provisions of the Plan as herein
set forth.
9.6 Benefit Claims Procedures. All claims for benefits under the Plan
shall be in writing and shall be submitted to the Plan
Administrator. If any application for payment of a benefit under
the Plan shall be denied, the Plan Administrator shall notify the
claimant within 90 days of such application setting forth the
specific reasons therefor and shall afford such claimant a
reasonable opportunity for a full and fair review of the decision
denying his claim. If special circumstances require an extension
of time for processing the claim, the claimant will be furnished
with a written notice of the extension prior to the termination of
the initial 90-day period. In no event shall such extension exceed
a period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan
Administrator expects to render its decision.
Notice of such denial shall set forth, in addition to the specific
reasons for the denial, the following:
(a) reference to pertinent provisions of the Plan;
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(b) such additional information as may be relevant to the denial
of the claim;
(c) an explanation of the claims review procedure; and
(d) notice that such claimant may request the opportunity to
review pertinent Plan documents and submit a statement of
issues and comments.
Within 60 days following notice of denial of his claim, upon
written request made by any claimant for a review of such denial
to the Plan Administrator, the Plan Administrator shall take
appropriate steps to review its decision in light of any further
information or comments submitted by such claimant.
The Plan Administrator shall render a decision within 60 days
after the claimant's request for review and shall advise said
claimant in writing of its decision on such review, specifying its
reasons and identifying appropriate provisions of the Plan. If
special circumstances require an extension of time for processing,
a decision will be rendered as soon as possible, but not later
than 120 days after receipt of a request for the review. If the
extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished
to the claimant prior to the commencement of the extension. If the
decision is not furnished within such time, the claim shall be
deemed denied on review. The decision on review shall be in
writing and shall include specific reasons for the decision,
written to the best of the Plan Administrator's ability in a
manner calculated to be understood by the claimant without legal
counsel, as well as specific references to the pertinent Plan
provisions on which the decision is based. In the event of
continued disagreement, the claimant may thereafter appeal to the
Employer, whose decision is final.
9.7 Reliance on Reports and Certificates. The Employer (or the Plan
Administrator if so designated by the Employer) will be entitled
to rely conclusively upon all valuations, certificates, opinions,
and reports which may be furnished by the Actuary, or any
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accountant, controller, counsel, or other person who is employed
or engaged for such purposes and shall exercise the authority and
responsibility as it deems appropriate to comply with all of the
legal and governmental regulations affecting this Plan.
9.8 Other Plan Administrator Powers and Duties. The Plan Administrator
shall have such duties and powers as may be necessary to discharge
its duties hereunder, including, but not by way of limitation, the
following:
(a) to prescribe written procedures to be followed by
Participants, Retired Participants, Spouses, Contingent
Annuitants and Beneficiaries filing applications for benefits;
(b) to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information
explaining the Plan;
(c) to receive from the Employer, Participants, Retired
Participants, Spouses, Contingent Annuitants and Beneficiaries
such information as shall be necessary for the proper
administration of the Plan;
(d) to furnish the Employer, upon request, such annual reports
with respect to the administration of the Plan as are
reasonable and appropriate;
(e) to receive and review the periodic valuations of the Plan made
by the Actuary;
(f) to compute and certify (or have the Actuary do so) the amount
of Retirement Benefit payable to any person hereunder;
(g) to designate an Actuary to perform all actuarial calculations
required in connection with the Plan; and
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(h) to receive, review and keep on file (as it deems convenient or
proper) reports of benefit payments by the Trustee and reports
of disbursements for expenses directed by the Plan
Administrator.
The Plan Administrator shall have no power to add to, subtract
from or modify any of the terms of the Plan, or to change or add
to any benefits provided by the Plan, or to waive or fail to apply
any requirements of eligibility for a benefit under the Plan.
9.9 Compensation of Plan Administrator. If the person or persons
serving as Plan Administrator is an Employee, such individual(s)
will not receive any compensation for his services as such, but
will be reimbursed for reasonable expenses incident to the
performance of such services. The reimbursement of expenses shall
be paid in whole or in part by the Employer, and any expenses not
paid by the Employer shall be paid by the Trustee out of the
principal or income of the Trust Fund.
9.10 Plan Administrator's Own Participation. The Plan Administrator may
not act, vote, or otherwise influence a decision relating to his
own participation under the Plan.
9.11 Liability of Plan Administrator. The Plan Administrator will not
be liable for any act of omission or commission except as provided
by federal law.
9.12 Indemnification. The Board of Directors of the Employer and the
Plan Administrator shall be indemnified by the Employer and not
the Trust Fund against any and all expenses, costs, and
liabilities arising by reason of any act or failure to act, unless
such act or failure to act is judicially determined to be gross
negligence or willful misconduct.
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ARTICLE X
FUNDING AND CONTRIBUTIONS
10.1 Establishment of Fund. The Fund shall be held and administered by
the Trustee in accordance with the terms of the Trust. The Fund
shall hold all contributions made by the Employer and earnings and
other income attributable thereto. All benefits payable under the
Plan shall be disbursed from the Fund.
10.2 Contributions to the Fund; Plan Expenses. The Employer will
contribute to the Fund such sums and at such times as may be
determined by the Board of Directors of the Employer in accordance
with the funding method and policy to be established by the Board
which are consistent with Plan objectives. The Board of Directors
of the Employer, in consultation with the Actuary and the Plan
Administrator, shall have the right to change the method of
funding, subject only to any contractual restrictions of the
existing method of funding. Forfeitures arising from termination
of service will be used to reduce Employer contributions and will
not be applied to increase any benefits under the Plan. Except as
provided in Section 10.3 and Article XII, all contributions when
made to the Fund and all property and assets of the Fund,
including income from investments and from all other sources, will
be retained for the exclusive benefit of Participants, Spouses,
Contingent Annuitants and Beneficiaries included in the Plan and
will be used to pay benefits provided hereunder or to pay expenses
of administration of the Plan and the Fund to the extent not paid
by the Employer. The Employer shall not be required to make, but
may make, any contributions to the Fund in an amount which is
greater than the amount which is deductible for federal income tax
purposes.
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10.3 Contributions Conditional. Each Employer contribution to the Plan
is expressly conditioned on its deductibility. If any Employer
contribution is deemed to be nondeductible or made by the Employer
by a mistake of fact, such contribution shall be returned to the
Employer within one year of the date of the disallowance of such
deduction or the date the contribution was made to the Fund,
respectively.
10.4 Employee Contributions. No Employee will be required or permitted
to make any contributions under this Plan.
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ARTICLE XI
FIDUCIARY RESPONSIBILITIES
11.1 Basic Responsibilities. Any Fiduciary under the Plan, whether
specifically designated or not, shall:
(a) discharge all duties solely in the interest of Participants,
Spouses, Contingent Annuitants and Beneficiaries and for the
exclusive purpose of providing benefits and defraying
reasonable administrative expenses under the Plan;
(b) discharge his responsibilities with the care, skill, prudence,
and diligence a prudent man would use in similar
circumstances; and
(c) conform with the provisions of the Plan.
No person who is ineligible by law will be permitted to serve as
Fiduciary.
11.2 Actions of Fiduciaries. Any Fiduciary:
(a) may serve in more than one fiduciary capacity with respect to
the Plan;
(b) may employ one or more persons to render advice with regard to
or to carry out any responsibility that such Fiduciary has
under the Plan; and
(c) may rely upon any discretion, information, or action of any
other Fiduciary, acting within the scope of its
responsibilities under the Plan, as being proper under the
Plan.
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11.3 Fiduciary Liability. No Fiduciary shall be personally liable for
any losses resulting from his action except as provided by federal
law. Each Fiduciary shall have only the authority and duties which
are specifically allocated to him, shall be responsible for the
proper exercise of his own authority and duties, and shall not be
responsible for any act or failure to act of any other Fiduciary.
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ARTICLE XII
AMENDMENT AND TERMINATION
12.1 Right to Amend or Terminate. The Employer reserves the right to
amend, modify, suspend, or terminate the Plan in whole or in part
at any time through action by the Board (or its delegate). No
amendment will be effective unless the Plan, as so amended, is for
the exclusive benefit of Participants, Spouses, Contingent
Annuitants and Beneficiaries, and no amendment will deprive any
Participant without his consent of any benefit to which he was
previously entitled, provided that any and all amendments may be
made which are necessary to maintain the qualification of the Plan
under the Code and provided further that such amendments may be
retroactively effective. The Plan shall not be automatically
terminated by any Employer's acquisition by or merger or
consolidation into any other corporation. In the event of a
reorganization, consolidation, dissolution or merger of an
Employer, the Plan can be continued by the successor, and in such
event the successor shall be substituted for such Employer and
shall assume all of the Plan liabilities and all of the powers,
duties and responsibilities of such Employer under the Plan.
12.2 Partial Termination. Upon a partial termination of the Plan with
respect to a group of Participants, as determined by a ruling of
the Internal Revenue Service as to which all rights to appeal have
expired, the Employer shall direct the Actuary to determine the
proportionate share of the assets for Participants affected by
such partial termination. After such proportionate share has been
determined, the Trustees shall segregate the assets of the Fund
allocable to such group of Participants for payment of benefits in
accordance with the provisions of Section 12.3.
12.3 Vesting and Distribution of Funds Upon Termination. Upon
termination of the Plan by the Employer, in whole or in part, all
affected Participants will become fully vested and entitled to
their Accrued Benefits under the Plan. In such event, the assets
in the Fund (or
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the portion of the Fund determined in accordance with Section
12.2) will be allocated as follows:
(a) There shall first be credited to each Participant who was
receiving Retirement Benefits or who was eligible to receive
Retirement Benefits at least three years prior to the date of
Plan termination and to each Spouse, Contingent Annuitant and
Beneficiary who was receiving Retirement Benefits or who was
eligible to receive Retirement Benefits at least three years
prior to the date of Plan termination an amount which will
provide for him the amount of Retirement Benefits then accrued
to him under the Plan, but not in excess of the benefit
insured by the Pension Benefit Guaranty Corporation.
(b) There shall next be credited to each Participant who was
receiving Retirement Benefits or who was eligible to receive
Retirement Benefits on the date of Plan termination and to
each Spouse, Contingent Annuitant and Beneficiary who was
receiving Retirement Benefits or who was eligible to receive
Retirement Benefits on the date of Plan termination an amount
which will provide for him the amount of Retirement Benefits
then accrued to him under the Plan, but not in excess of the
benefit insured by the Pension Benefit Guaranty Corporation.
(c) There shall next be credited to each other Participant who, on
the date on which the Plan shall terminate, is eligible for
Retirement Benefits in accordance with Article VI an amount
which will provide for him the amount of the Retirement
Benefits then accrued to him under the Plan, but not in excess
of the benefit insured by the Pension Benefit Guaranty
Corporation.
(d) There shall next be credited to each other Participant who
would be entitled to additional Retirement Benefits in
accordance with (a), (b), and (c) above, were such additional
income not in excess of the amount insured by the Pension
Benefit
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Guaranty Corporation, an amount which will provide for him the
amount of retirement income then accrued to him under the
Plan.
(e) There shall next be credited to each other Participant an
amount which will provide for him the amount of Retirement
Benefits then accrued to him under the Plan.
Allocation in any of the above classes shall be adjusted for any
allocation made to the same Participant under a prior class.
12.4 Determination of Funds Upon Termination.
(a) The application of the Fund on the foregoing basis shall be
calculated as of the date on which the Plan shall
terminate. When the calculation shall be completed, the
respective interest in the Fund will be distributed to or
on behalf of the respective Participants, Spouses,
Contingent Annuitants and Beneficiaries under the Plan in
the order stated in Section 12.3 only after the Employer
has sent written notice to the Trustee, that all of the
applicable requirements governing the termination of
qualified retirement plans have been, or are being complied
with or that appropriate authorizations, waivers,
exemptions or variances have been, or are being, obtained.
(b) If the assets in the Fund on the date the Plan is terminated
are not sufficient to provide in full the amounts required
within classes (a), (b), (c), and (d) of Section 12.3, any
benefit in excess of $10,000 paid within a 12-month period
during the 36- month period immediately preceding the date of
termination of the Plan to a Participant, Spouse, Contingent
Annuitant or Beneficiary who owns 10% or more of the
outstanding voting stock of any Employer may be deemed a part
of the Fund for purposes of allocation.
(c) If the assets are not sufficient to provide in full for the
amounts required for a class in the order listed in Section
12.3, the balance of the assets shall be allocated to
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each member of a class in the proportion which his amount
bears to the total amount in such class.
(d) Distribution upon termination of the Plan may be in the form
of an annuity contract, cash, or securities or other assets in
kind as determined by the Plan Administrator in a uniform,
nondiscriminatory manner and applicable to all Participants.
(e) Any funds remaining after the satisfaction of all liabilities
to Participants, Spouses, Contingent Annuitants and
Beneficiaries under the Plan shall be returned to the
Employer.
12.5 Restriction on Benefits. In the event of plan termination, the
benefit of any highly compensated employee as defined in Code
Section 414(q) and highly compensated former employee is limited
to a benefit that is nondiscriminatory under Code Section
401(a)(4).
12.6 Right to Accrued Benefits. Any other provision of the Plan
notwithstanding, upon termination or partial termination of the
Plan, the right of each Participant to benefits accrued to the
date of such termination or partial termination to the extent then
funded or to the extent guaranteed by the Pension Benefit Guaranty
Corporation shall be nonforfeitable.
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ARTICLE XIII
TOP-HEAVY PLAN PROVISIONS
13.1 General Rule. For any Plan Year for which this Plan is a
"top-heavy plan" as defined in Section 13.5, any other provisions
of the Plan to the contrary notwithstanding, the Plan shall be
subject to the following provisions:
(a) The vesting provisions of Section 13.2.
(b) The minimum benefit provisions of Section 13.3.
(c) The limitation on benefits set by Section 13.4.
13.2 Vesting Provisions. Each Participant who (a) has completed at
least three Years of Service and (b) has completed an Hour of
Service during any Plan Year in which the plan is "top-heavy",
shall have a nonforfeitable right to his Accrued Benefit. If the
Plan ceases to be "top-heavy", the vesting provisions of Section
6.2 shall be applicable. This provision shall not cause a
Participant's vested percentage to be reduced.
Each such Participant shall have the right to elect the applicable
schedule within 60 days after the day the Participant is issued
written notice by the Plan Administrator, or as otherwise provided
in accordance with regulations issued under the provision of the
Code, relating to changes in the vesting schedule.
13.3 Minimum Benefit Provisions. Each Participant who (a) is a "non-key
employee" (as defined in Section 13.7) and (b) has completed 1,000
Hours of Service in any Plan Year shall be entitled to an annual
retirement income equal to 2% of the Participant's average annual
Earnings in the "testing period" multiplied by his Years of
Service during which the Plan is top heavy, up to a maximum of
20%. For purposes of this Section 13.3, "testing period" means the
period of five consecutive Years of Service during which the
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Participant had the highest aggregate Earnings, provided that
Earnings for any Plan Year after the close of the Plan Year in
which the Plan was last top-heavy shall be disregarded.
13.4 Limitation on Benefits. In the event that the Employer also
maintains a defined contribution plan providing contributions on
behalf of Participants in this Plan, then a Participant's annual
retirement benefit will be limited by:
(a) the denominator of both the defined contribution plan fraction
and the defined benefit plan fraction shall be calculated as
set forth in Section 3.3(b) for such Plan Year by substituting
"1.0" for "1.25" in each place such figure appears.
(b) Paragraph (a) shall not apply if conditions (i) and (ii) below
are met:
(i) if for the Plan Year the Plan would not be a "top-heavy
plan" (as defined in Section 13.5) if "90 percent" were
substituted for "60 percent", and
(ii) if the minimum benefit described in Section 13.3 is
increased to 3% of average annual compensation in the
"testing period" multiplied by the Participant's Years
of Service during which the Plan is a "top-heavy plan",
up to a maximum of 30%.
13.5 Top-heavy Plan Definition. This Plan shall be a "top-heavy plan"
for any Plan Year if, as of the determination date, the present
value of the Accrued Benefits under the Plan for Participants
(including former Participants) who are "key employees" (as
defined in Section 13.6) exceeds 60% of the present value of
Accrued Benefits for all Participants (excluding former "key
employees"), or if this Plan is required to be in an aggregation
group which for such Plan Year is a "top-heavy group." For
purposes of this Article XIII,
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(a) "Determination date" means for any Plan Year the last day of
the immediately preceding Plan Year (except that for the first
Plan Year the determination date means the last day of such
Plan Year).
(b) "Present value of Accrued Benefits" shall be determined as of
the most recent valuation date that is within the 12-month
period ending on the determination date and as described under
the Code.
(c) "Aggregate of the Accounts" means the sum of (i) the Accounts
determined as of the most recent Valuation Date that is within
the 12-month period ending on the determination date, and (ii)
the adjustment for contributions due as of the determination
date, and as described in the regulations under the Code.
(d) "Aggregation group" means the group of plans, if any, that
includes both the group of plans that are required to be
aggregated and the group of plans that are permitted to be
aggregated.
(i) The group of plans that are required to be aggregated
(the "required aggregation group") includes: each plan
of the Employer in which a key employee is a
participant, including collectively-bargained plans;
and each other plan of the Employer including
collectively-bargained plans, which enables a plan in
which a key employee is a participant to meet the
requirements of the Code Sections 401(a)(4) and 410(b).
(ii) The group of plans that are permitted to be aggregated
(the "permissive aggregation group") includes the
required aggregation group plus one or more plans of
the Employer that is not part of the required
aggregation group and that the Plan Administrator
certifies as constituting a plan within the permissive
aggregation group. Such plan or plans may be added to
the permissive aggregation group only if, after the
addition, the
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aggregation group as a whole continues not to
discriminate as to contributions or benefits in favor
of officers, shareholders or the highly-compensated and
to meet the minimum participation standards under the
Code.
(e) "Top-heavy group" means the aggregation group, if as of the
applicable determination date, the sum of the present value of
the cumulative accrued benefits for "key employees" under all
defined benefit plans included in the aggregation group plus
the aggregate of the accounts of "key employees" under all
defined contribution plans included in the aggregation group
exceeds 60% of the sum of the present value of the cumulative
accrued benefits for all employees, excluding former "key
employees," under all such defined benefit plans plus the
aggregate accounts for all employees, under such defined
contribution plans. If the aggregation group that is a
top-heavy group is a required aggregation group, each plan in
the group will be top-heavy. If the aggregation group that is
a top-heavy group is a permissive aggregation group, only
those plans that are part of the required aggregation group
will be treated as top-heavy. If the aggregation group is not
a top-heavy group, no plan within such group will be
top-heavy.
(f) In determining whether this Plan constitutes a "top-heavy
plan", the Plan Administrator shall make the following
adjustments in connection therewith:
(i) When more than one plan is aggregated, the Plan
Administrator shall determine separately for each plan
as of each plan's determination date the present value
of the accrued benefits or account balance. The results
shall then be aggregated by adding the results of each
plan as of the determination dates for such plans that
fall within the same calendar year.
(ii) In determining the present value of the Accrued Benefit
or the amount of the account of any Employee, such
present value or account shall include
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the dollar value of the aggregate distributions made to
such Employee under the applicable plan during the
five-year period ending on the determination date,
unless reflected in the value of the accrued benefit or
account balance as of the most recent valuation date.
Such amounts shall include distributions to Employees
which represented the entire amount credited to their
accounts under the applicable plan.
(iii) Further, in making such determination, such present
value or such account shall include any rollover
contribution (or similar transfer), as follows:
(A) If the rollover contribution (or similar transfer)
is initiated by the Employee and made to or from a
plan maintained by another employer the plan
providing the distribution shall include such
distribution in the value of such account; the plan
accepting the distribution shall not include such
distribution in the value of such account unless
the plan accepted it before December 31, 1983.
(B) If the rollover contribution (or similar transfer)
is not initiated by the Employee or made from a
plan maintained by another employer the plan
accepting the distribution shall include such
distribution in the value or such account, whether
the plan accepted the distribution before or after
December 31, 1983; the plan making the distribution
shall not include such distribution in the value of
such account.
(iv) Further, in making such determination, in any case
where an individual is a "non-key employee" (as defined
in Section 13.7) with respect to an applicable plan,
but was a "key employee" with respect to such plan for
any prior plan year, any Accrued Benefit and any
account of such Employee shall be altogether
disregarded. For this purpose, to the extent that a key
employee is deemed to be a "key employee" if he met the
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definition thereof within any of the four preceding
plan years, this provision shall apply following the
end of such period of time.
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(v) Further, in making such determination, the accrued
benefit of an Employee other than a Key Employee shall
be determined under (A) the method, if any, that
uniformly applies for accrual purposes under all plans
maintained by the Employer and its Affiliated
Employers, or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual
rule of Code Section 411(b)(1)(C).
13.6 Key Employee. The term "key employee" means any Employee or former
Employee who would be considered a key employee under Code Section
416(i)(1) excluding any individual who has not performed services
for the Employer or any of its Affiliated Employers during the
five-year period ending on a particular "determination date".
13.7 Non-Key Employee. The term "non-key employee" means any Employee
(and any beneficiary of an Employee) who is not a "key employee".
An individual who has not performed services for the Employer or
any of its Affiliated Employers during the five-year period ending
on a particular "determination date", however, shall not be
considered a "non-key employee".
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ARTICLE XIV
GENERAL PROVISIONS
14.1 Plan Voluntary. Although it is intended that the Plan shall be
continued and that contributions shall be made as herein provided,
this Plan is entirely voluntary on the part of each Participating
Employer and the continuance of this Plan and the payment of
contributions hereunder are not to be regarded as contractual
obligations of any Employer, and no Employer guarantees or
promises to pay or to cause to be paid any of the benefits
provided by this Plan. Each person who shall claim the right to
any payment or benefit under this Plan shall be entitled to look
only to the Fund for any such payment or benefit and shall not
have any right, claim, or demand therefore against any Employer,
except as provided by federal law. The Plan shall not be deemed to
constitute a contract between any Employer and any Employee or to
be a consideration for, or an inducement for, the employment of
any Employee by any Employer. Nothing contained in the Plan shall
be deemed to give any Employee the right to be retained in the
service of any Employer or to interfere with the right of any
Employer to discharge or to terminate the service of any Employee
at any time without regard to the effect such discharge or
termination may have on any rights under the Plan.
14.2 Payments to Minor and Incompetents. If any Participant, Spouse,
Contingent Annuitant, or Beneficiary entitled to receive any
benefits hereunder is a minor or is deemed by the Plan
Administrator or is adjudged to be legally incapable of giving
valid receipt and discharge for such benefits, they will be paid
to such person or institution as the Plan Administrator may
designate or to the duly appointed guardian. Such payment shall,
to the extent made, be deemed a complete discharge of any
liability for such payment under the Plan.
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Exec. Ver.
14.3 Non-Alienation of Benefits.
(a) No amount payable to, or held under the Plan for the account
of, any Participant shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be void; nor shall any amount payable to, or
held under the Plan for the account of, any Participant be in
any manner liable for his debts, contracts, liabilities,
engagements, or torts, or be subject to any legal process to
levy upon or attach, except as may be provided under a
qualified domestic relations order as defined in Code Section
414(p).
However, upon authority of any Retired Participant and with
the consent of the Employer, the Plan Administrator may direct
the Trustee to withhold a portion of any benefit payable to
the Retired Participant under this Plan for the purpose of
paying the costs or premiums by the Retired Participant as a
result of being included in another plan of an Employer, such
as a hospital-surgical plan. The Trust shall not in any manner
be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any person entitled to
benefits hereunder.
(b) Under a qualified domestic relations order, an alternate payee
who had been married to the Participant for at least one year
may be treated as a Spouse with respect to the portion of the
Participant's benefit in which such alternate payee has an
interest provided that the qualified domestic relations order
provides for such treatment. However, under no circumstances
may the spouse of any alternate payee (who is not a
Participant hereunder) be treated as a Spouse under the terms
of the Plan.
Upon receipt of any judgement, decree or order (including
approval of a property settlement agreement) relating to the
provision of payment by the Plan to an alternate payee
pursuant to a state domestic relations law, the Plan
Administrator
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Exec. Ver.
shall promptly notify the affected Participant and any
alternate payee of the receipt of such judgement, decree or
order and shall notify the affected Participant and any
alternate payee of the Plan Administrator's procedure for
determining whether or not the judgement, decree or order is a
qualified domestic relations order.
The Plan Administrator shall establish a procedure to
determine the status of a judgement, decree or order as a
qualified domestic relations order and to administer Plan
distributions in accordance with qualified domestic relations
orders. Such procedure shall be in writing, shall include a
provision specifying the notification requirements enumerated
in the preceding paragraph, shall permit an alternate payee to
designate a representative for receipt of communications from
the Plan Administrator and shall include such other provisions
as the Plan Administrator shall determine, including
provisions describing the interest rate to be used in making
present value determinations as well as provisions required
under regulations promulgated by the Secretary of the
Treasury.
During any period in which the issue of whether a judgement,
decree or order is a qualified domestic relations order is
being determined (by the Plan Administrator, a court of
competent jurisdiction or otherwise), the Plan Administrator
shall separately account for the amount, if any, which would
have been payable to the alternate payee during such period if
the judgement, decree or order had been determined to be a
qualified domestic relations order.
If the judgement, decree or order is determined by the Plan
Administrator to be a qualified domestic relations order
before the first payments would otherwise be due under such
order, then payment of the appropriate amount shall be paid to
the alternate payee(s) as required under the order. If a
domestic relations order is determined by the Plan
Administrator to be a qualified order within the 18 month
period beginning on the date that the first payment would have
been due under such order, the separately accounted for
amounts (plus reasonable interest thereon) shall
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Exec. Ver.
be retroactively paid to the alternate payee(s) named in the
order. Subsequent payments shall not include any interest
component. If the Plan Administrator first determines that the
order is a qualified domestic relations order after the
18-month period beginning on the date on which the first
payment would have been due under the order, then the
provisions of such order shall be applied on a prospective
basis only.
14.4 Use of Masculine and Feminine; Singular and Plural. Wherever used
in this Plan, the masculine gender will include the feminine
gender and the singular will include the plural, unless the
context indicates otherwise.
14.5 Merger, Consolidation, or Transfer. In the event that the Plan is
merged or consolidated with any other plan, or should the assets
or liabilities of the Plan be transferred to any other plan, each
Participant shall be entitled to a benefit immediately after such
merger, consolidation, or transfer if the Plan should then
terminate equal to or greater than the benefit he would have been
entitled to receive immediately before such merger, consolidation,
or transfer if the Plan had then terminated.
14.6 Leased Employees. Any individual who performs services for the
Employer and who, by application of Code Section 414(n)(2) and
regulations issued pursuant thereto, would be considered a "leased
employee", shall, for purposes of the requirements enumerated in
Code Section 414(n)(3), be considered an Employee of the Employer
with regard to services performed after December 31, 1986.
When the total of all leased employees constitutes less than 20%
of the Employer's non-highly compensated work force within the
meaning of Code Section 414(n)(5)(c)(ii), however, a "leased
employee" shall not be considered an Employee of the Employer if
the organization from which the individual is leased maintains a
qualified safe harbor plan (as defined in Code Section 414(n)(5))
in which such individual participates.
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"Leased employees" who are deemed to be Employees of the Employer
for purposes of this Section 14.7 shall not be eligible to
participate in the Plan unless specifically provided for in
Article II.
14.7 Governing Law. The provisions of the Plan will be construed,
administered, and enforced in accordance with the Code and the
Employee Retirement Income Security Act of 1974, as amended from
time to time, and, to the extent applicable, the laws of the
Commonwealth of Massachusetts.
14.8 Severability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability will not affect
any other provision of the Plan, and the Plan will be construed
and enforced as if such provision had not been included.
14.9 Captions. The captions contained in the Plan are inserted only as
a matter of convenience and for reference and in no way define,
limit, enlarge, or describe the scope or intent of the Plan nor in
any way affect the construction of any provision of the Plan.
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APPENDIX A
GRANDFATHERING FOR KEYPORT LIFE INSURANCE COMPANY
Pension Plan
Exec. Ver.
TABLE OF CONTENTS
Section
SECTION A1 DEFINITIONS
A1.1 "Grandfathered Keyport Employee" 81
A1.2 "Social Security Benefit" 81
A1.3 "Social Security Bridge Benefit" 82
SECTION A2 ELIGIBILITY
A2.1 Eligibility Requirements 83
A2.2 Grandfathered Keyport Employee 83
SECTION A3 NORMAL RETIREMENT BENEFIT
A3.1 Normal Retirement Benefit 84
A3.2 Maximum Benefit 85
SECTION A4 EARLY RETIREMENT DATE AND
EARLY RETIREMENT BENEFIT
A4.1 Early Retirement Date 86
A4.2 Early Retirement Benefit 86
A4.3 Social Security Bridge Benefit 86
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SECTION A1
DEFINITIONS
All words and phrases used in this Appendix shall have the meanings as defined
in Articles I through XIV of the Plan unless such words and phrases are defined
in this Section A1.
The following words and phrases when used in this Appendix shall have the
meanings indicated below unless a different meaning is plainly required by the
context:
A1.1 "Grandfathered Keyport Employee" shall mean a Participant who
meets the additional requirements of Section A2.
A1.2 "Social Security Benefit" shall mean the annual amount of the
Participant's Primary Insurance Amount determined in accordance
with the provisions of Title II of the Social Security Act as now
in effect subject to such automatic change or subsequent amendment
as may occur in accordance with the rules as set forth in (a) or
(b) below:
(a) If the Participant retires under the Plan, the Social Security
Benefit to be used in determining the retirement benefit in
accordance with Section A3 shall be the Primary Insurance
Amount to which the Participant would be entitled, if applied
for when first entitled, at or after retirement, other than
for disqualification for earnings. For purposes of determining
Social Security entitlement, the Participant's Primary
Insurance Amount shall be determined in accordance with Title
II of the Federal Social Security Act as in effect as of the
Participant's date of retirement.
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(b) If the Participant terminates employment prior to eligibility
for retirement under the Plan, but is entitled to a benefit
under the provisions of Article VI, the Primary Insurance
Amount to be used in the accrued benefit calculation as set
forth in Section A4 shall be the Primary Insurance Amount to
which the Participant would be entitled, other than for
disqualification for earnings, if first applied for at the
later of the Participant's Normal Retirement Date or date of
termination of employment. For the purpose of determining
Social Security entitlement, the Participant's Primary
Insurance Amount shall be determined in accordance with Title
II of the Federal Social Security Act as in effect as of the
Participant's date of termination of employment assuming that
he continued to receive earnings at the rate being received at
termination of employment. If such Participant is subsequently
reemployed by the Employer, the Primary Insurance Amount shall
not include amounts in respect of any Social Security increase
effective during the period beginning with his termination of
employment and ending upon his reemployment with the Employer.
A1.3 "Social Security Bridge Benefit" shall mean the benefit determined
in accordance with Section A4.
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Exec. Ver.
SECTION A2
ELIGIBILITY
A2.1 Eligibility Requirements. Each Employee:
(a) who was employed by Keyport Life Insurance Company as of July
1, 1992;
(b) who was a Participant in the Prior Plan as of June 30, 1992;
and
(c) whose age plus Years of Service as of January 1, 1989 were at
least equal to 55
shall be eligible for benefits under this Appendix A.
A2.2 Grandfathered Keyport Employee. Each Participant who meets the
eligibility requirements under Section A2.1 above shall be
entitled to receive benefits under this Appendix A. The following
Employees are Grandfathered Keyport Employees:
Factor to
Social Age & be Used in
Security Date of Date of Service on Section
Number Name Birth Hire January 1, 1989 A3.1(d)(ii)
------ ---- ----- ---- --------------- -----------
###-##-#### I. Chiuchiolo 11/10/28 06/16/69 69.14 9.00
###-##-#### E. Edminster 08/18/23 01/05/76 74.37 9.00
###-##-#### I. Larkin 01/07/39 04/01/69 58.98 3.98
###-##-#### A. Mills 07/23/26 11/24/80 70.54 8.10
###-##-#### C. Paulis 03/28/38 06/14/82 57.31 2.31
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SECTION A3
NORMAL RETIREMENT BENEFIT
A3.1 Normal Retirement Benefit. The amount of annual Grandfathered
Keyport Benefit payable to a Participant who is a Grandfathered
Employee in the Normal Form beginning on his Normal Retirement
Date shall be equal to the sum of (a) minus (b) plus (c) plus (d)
plus (e), as follows:
(a) (i) 2.0% of the Participant's Average Earnings
multiplied by
(ii) his Years of Credited Service up to 25 such years.
(b) (i) 2.0% of the Participant's Social Security Benefit
multiplied by
(ii) his Years of Credited Service up to 25 such years.
(c) (i) 2/3% of the Participant's Average Earnings
multiplied by
(ii) his Years of Credited Service in excess of 25 such
years, if any, up to 15 such excess years.
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Exec. Ver.
(d) (i) 0.55% of the Participant's Average Earnings
multiplied by
(ii) the excess, if any, of his age plus Years of Credited
Service as of January 1, 1989 over 55, but not more
than his Years of Credited Service as of January 1,
1989.
A3.2 Maximum Benefit. As of July 1, 1992 no Employee listed in Section
A2.2 was a "highly compensated employee" (as defined in Code
Section 414(q)). If, however, for any Plan Year an Employee listed
in Section A2.2 becomes a "highly compensated employee", the
Employee shall not accrue additional benefits under Section A3.1
for such Plan Year or any subsequent Plan Year in which the
Employee remains a "highly compensated employee". Such
Participant's monthly Accrued Benefit under the Plan shall be the
greater of (i) the benefit determined under this Appendix
determined as of the end of the Plan Year preceding the Plan Year
in which the Participant became a "highly compensated employee",
and (ii) his accrued benefit as determined under Section 3.1 of
the Plan.
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Exec. Ver.
SECTION A4
EARLY RETIREMENT DATE AND EARLY RETIREMENT BENEFIT
A4.1 Early Retirement Date. A Participant's Early Retirement Date prior
to his Normal Retirement Date for purposes of this Appendix A is
the Early Retirement Date as determined under Section 4.1 of the
Plan. The date of early payment for a Vested Inactive Participant
for purposes of this Appendix A is the date determined under
Section 6.3 of the Plan.
A4.2 Early Retirement Benefit. The Retirement Benefit payable on an
Early Retirement Date to a Participant who is a Grandfathered
Keyport Employee equals the Benefit determined under Section 4.2
of the Plan.
The Retirement Benefit payable on an early payment date to a
Vested Inactive Participant who is a Grandfathered Keyport
Employee equals the Benefit determined under Section 6.3 of the
Plan.
A4.3 Social Security Bridge Benefit. A Participant who is a
Grandfathered Keyport Employee and whose Early Retirement Date is
earlier than July 1, 1999 and is earlier than his 62nd birthday
shall receive, in addition to all other benefits under the Plan, a
Social Security Bridge Benefit. The amount of monthly Social
Security Bridge Benefit payable on the life annuity basis shall be
equal to one-twelfth of the benefit determined under Section
A3.1(b) multiplied by the applicable percentage determined under
Section 4.2 of the Plan.
The Social Security Bridge Benefit shall be paid monthly with the
final payment being made on the first day of the month coincident
with or immediately preceding the earlier of:
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Exec. Ver.
(a) the Grandfathered Keyport Employee's date of death;
(b) the Grandfathered Keyport Employee's 62nd birthday; or
(c) June 1, 1999.
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IN WITNESS WHEREOF, Liberty Financial Companies, Inc. has caused this instrument
to be executed by its duly authorized officer this _________________________ day
of ___________________, 19___.
LIBERTY FINANCIAL COMPANIES, INC.
By:________________________________
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